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 122
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 122
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.
Preliminary Prospectus Dated May 30, 1995
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 122
10,000 Units (A Unit Investment Trust)
The attached final Prospectus for a prior Series of the Fund
is hereby used as a preliminary Prospectus for the above stated
Series. The narrative information and structure of the attached
final Prospectus will be substantially the same as that of the
final Prospectus for this Series. Information with respect to
pricing, the number of Units, dates and summary information
regarding the characteristics of securities to be deposited in
this Series is not now available and will be different since each
Series has a unique Portfolio. Accordingly the information
contained herein with regard to the previous Series should be
considered as being included for informational purposes only.
Ratings of the securities in this Series are expected to be
comparable to those of the securities deposited in the previous
Series. However, the Estimated Current Return for this Series
will depend on the interest rates and offering prices of the
securities in this Series and may vary materially from that of
the previous Series.
A registration statement relating to the units of this
Series will be filed with the Securities and Exchange Commission
but has not yet become effective. Information contained herein
is subject to completion or amendment. Such Units may not be
sold nor may offer 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 the Units in any state in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such state.
Target 5 Trust, Series 2
Target 10 Trust, Series 8
The Trusts. The First Trust (registered trademark) Special Situations
Trust, Series 119 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts" and each as a "Trust." Each
Trust consists of a portfolio containing common stocks issued
by companies which provide income and are considered to have the
potential for capital appreciation (the "Equity Securities").
Target 5 Trust, Series 2 consists of common stock of the five
companies with the lowest per share stock price of the ten companies
in the Dow Jones Industrial Average having the highest dividend
yield as of the opening of business on the date of this Prospectus.
Target 10 Trust, Series 8 consists of common stock of the ten
companies in the Dow Jones Industrial Average having the highest
dividend yield as of the opening of business on the date of this
Prospectus. Dow Jones Industrial Average is not affiliated with
the Sponsor and is the property of Dow Jones & Company, Inc. Dow
Jones & Company, Inc. has not granted to the Trusts or the Sponsor
a license to use the Dow Jones Industrial Average. Dow Jones &
Company, Inc. has not participated in any way in the creation
of the Trusts or in the selection of stocks included in the Trusts
and has not approved any information herein relating thereto.
The objective of each Trust is to provide an above-average total
return through a combination of dividend income and capital appreciation
by investing such Trust's portfolio in selected common stocks
of companies which meet the criteria stated above. See "Schedule
of Investments" for each Trust. Units are not designed so that
their prices will parallel or correlate with movements in the
Dow Jones Industrial Average, and it is expected that their prices
will not parallel or correlate with such movements. Each Trust
has a mandatory termination date (the "Mandatory Termination Date"
or "Trust Ending Date") of approximately one year from the date
of this Prospectus as set forth under "Summary of Essential Information."
There is, of course, no guarantee that the objective of either
Trust will be achieved.
Each Unit of a Trust represents an undivided fractional interest
in all the Equity Securities deposited in such Trust. The Equity
Securities deposited in a 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 after the Initial Date of Deposit,
deposit additional Equity Securities in a 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
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
The date of this Prospectus is May 18, 1995
Page 1
different than the original proportionate relationship. Any such
difference may be due to the sale, redemption or liquidation of
any Equity Securities deposited in such 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 a Trust?"
Public Offering Price. The Public Offering Price per Unit of the
Target 5 Trust, Series 2 and the Target 10 Trust, Series 8, respectively,
is equal to the aggregate underlying value of the Equity Securities
in such Trust (generally determined by the closing sale prices
of the Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of such Trust, plus
an initial sales charge for each Trust equal to the difference
between the maximum sales charge for each Trust (2.75% and 2.90%
of the Public Offering Price, respectively) and the maximum remaining
deferred sales charge (initially $0.195 per Unit for each Trust).
For Unit holders of the Target 5 Trust, Series 2 and the Target
10 Trust, Series 8, commencing September 1, 1995, and on the first
day of each month thereafter, through June 1, 1996, a deferred
sales charge of $0.0195 will be assessed per Unit. Units purchased
subsequent to the initial deferred sales charge payment will also
be subject to the remaining deferred sales charge payments. For
each Trust, the deferred sales charge will be paid from funds in the
Capital Account, if sufficient, or from the periodic
sale of Equity Securities. The total maximum sales charge assessed
to Unit holders on a per Unit basis will be 2.75% and 2.90% of
the Public Offering Price (equivalent to 2.772% and 2.928% of
the net amount invested) for the Target 5 Trust, Series 2 and
the Target 10 Trust, Series 8, respectively. A pro rata share
of accumulated dividends, if any, in the Income Account is included
in the Public Offering Price. The minimum purchase for each Trust
is $1,000. The sales charge for each Trust is reduced on a graduated
scale for sales involving at least 5,000 Units. See "How is the
Public Offering Price Determined?"
Estimated Net Annual Distributions. The estimated net annual dividend
distributions to Unit holders (based on the most recent quarterly
or semi-annual ordinary dividend declared with respect to the
Equity Securities in each Trust) at the opening of business on
the Initial Date of Deposit for Target 5 Trust, Series 2 was $.2885
per Unit, and for Target 10 Trust, Series 8 was $.3435 per Unit.
The estimated net annual dividend distributions per Unit will
vary with changes in fees and expenses of each Trust, with changes
in dividends received and with the sale or liquidation of Equity
Securities; therefore, there is no assurance that the estimated
net annual dividend distributions will be realized in the future.
Dividend and Capital Distributions. Distributions of dividends
received by a Trust will be paid in cash on the Distribution Date
to Unit holders of record on the Record Date as set forth in the
"Summary of Essential Information" for each Trust. The first such
distribution for each Trust will be made on December 30, 1995
to Unit holders of record on December 15, 1995. The last distribution
will be made as part of the final liquidation distribution. Distributions
of funds in the Capital Account, if any, will be made as part
of the final liquidation distribution, and in certain circumstances,
earlier. Any distribution of income and/or capital will be net
of the expenses of a Trust. See "What is the Federal Tax Status
of Unit Holders?" Additionally, upon termination of a Trust, the
Trustee will distribute, upon surrender of Units for redemption,
to each remaining Unit holder his pro rata share of such Trust's
assets, less expenses, in the manner set forth under "Rights of
Unit Holders-How are Income and Capital Distributed?" The Sponsor
intends to create a separate 1996 Trust for both the Target 5
Trust, Series and the Target 10 Trust, Series (the "1996 Trusts")
in conjunction with the termination of this series of the Target
5 Trust, Series and Target 10 Trust, Series. Unit holders who
elect to become Rollover Unit holders will not receive the final
liquidation distribution, but will receive units in either 1996
Trust as selected by the Unit holder. See "Special Redemption,
Liquidation and Investment in New Trusts." Any Unit holder may
elect to have each distribution of income or capital on his Unit,
other than the final liquidating distribution in connection with
the termination of a Trust, automatically reinvested in additional
Units of such Trust subject only to the remaining deferred sales
charge payments as set forth below. See "Rights of Unit Holders-How
are the Income and Capital Distributed?"
Secondary Market for Units. While under no obligation to do so,
the Sponsor may maintain a market for Units of a Trust and offer
to repurchase such Units at prices which are based on the aggregate
underlying value of Equity Securities in such Trust (generally
determined by the closing sale prices of the Equity Securities,
Page 2
plus or minus cash, if any, in the Capital and Income Accounts
of such Trust. If a secondary market is not maintained, a Unit
holder may redeem Units through redemption at prices based upon
the aggregate underlying value of the Equity Securities in such
Trust (generally determined by the closing sale prices of the
Equity Securities) plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of such Trust. A Unit
holder tendering 2,500 Units or more of a Trust 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?" Units sold or tendered
for redemption prior to such time as the entire deferred sales
charge on such Units has been collected will be assessed the amount
of the remaining deferred sales charge at the time of sale or
redemption.
Special Redemption, Liquidation and Investment in New Trusts.
Unit holders who hold their Units in book entry form will have
the option of specifying by June 10, 1996 (the "Rollover Notification
Date") to have all of their Units redeemed in-kind on the Rollover
Notification Date and the distributed Equity Securities sold by
the Trustee, in its capacity as Distribution Agent, during the
Special Redemption and Liquidation Period. (Unit holders so electing
are referred to herein as "Rollover Unit holders.") The Distribution
Agent will appoint the Sponsor as its agent to determine the manner,
timing and execution of sales of underlying Equity Securities.
The proceeds of the redemption will then be invested in Units
of a 1996 Trust, if one or more such Trusts are offered. The Sponsor
may, however, stop creating new Units of a 1996 Trust at any time
in its sole discretion without regard to whether all the proceeds
to be invested have been invested. Cash which has not been invested
on behalf of the Rollover Unit holders in a 1996 Trust will be
distributed at the end of the Special Redemption and Liquidation
Period. However, the Sponsor anticipates that sufficient Units
can be created, although moneys in either Trust may not be fully
invested on the next business day. Rollover Unit holders may purchase
Units of a 1996 Trust at a reduced sales charge. The portfolio
for the 1996 Trust of the Target 5 Trust, Series will contain
common stock of the five companies with the lowest per share stock
price of the ten companies in the Dow Jones Industrial Average
having the highest dividend yield as of the business day prior
to the Initial Date of Deposit of the 1996 Trust. The portfolio
of the 1996 Trust of the Target 10 Trust, Series will contain
the ten common stocks in the Dow Jones Industrial Average having
the highest dividend yield as of the business day prior to the
Initial Date of Deposit of the 1996 Trust. Rollover Unit holders
will receive credit for the amount of dividends in the Income
Account of a Trust which will be included in the reinvestment
in Units of such 1996 Trust. The exchange option described above
is subject to modification, termination or suspension.
Termination. Each Trust will terminate approximately one year
after the Initial Date of Deposit regardless of market conditions
at that time. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination
of a Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of a Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of such Trust maintained by
the Trustee. At least 30 days prior to the Mandatory Termination
Date of a 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 such Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. 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 a Trust.
Unit holders not electing the "Rollover Option" or a distribution
of shares of the Equity Securities will receive a cash distribution
within a reasonable time after a Trust is terminated. See "Rights
of Unit Holders-How are Income and Capital Distributed?"
Risk Factors. An investment in a 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 or an economic recession. An investment
Page 3
in Target 5 Trust, Series 2 may subject a Unit holder to additional
risk due to the relative lack of diversity in its portfolio since
the portfolio contains only five stocks. Therefore, Units of Target
5 Trust, Series 2 may be subject to greater market risk than other
Trusts which contain a more diversified portfolio of securities.
The Trusts are not actively managed and Equity Securities will
not be sold by a Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation. See "What are
Equity Securities?-Risk Factors."
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-May 18, 1995
<TABLE>
<CAPTION>
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
Target 5 Trust
Series 2
______________
General Information
<S> <C>
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $ 495,959
Aggregate Offering Price Evaluation of Equity
Securities per Unit $ 9.9192
Maximum Sales Charge 2.75% of the Public Offering Price
per Unit (2.772% of the net amount invested) (2) $ .2750
Less Deferred Sales Charge per Unit $ (.1950)
Public Offering Price per Unit (2) $ 9.9992
Sponsor's Initial Repurchase Price per Unit $ 9.7242
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (3) $ 9.7242
</TABLE>
CUSIP Number 33734W 848
First Settlement Date May 25, 1995
Rollover Notification Date June 10, 1996
Special Redemption and Liquidation
Period Beginning on June 14, 1996
until no later than June 27, 1996.
Mandatory Termination Date June 28, 1996
Discretionary Liquidation Amount A Trust may be terminated if
the value of the Equity Securities is
less than the lower of $2,000,000 or
20% of the total value of Equity
Securities deposited in a Trust during
the primary offering period.
Trustee's Annual Fee $0.0090 per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding. Evalua-
tions 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 (4) Maximum of $0.0035 per Unit outstand-
ing annually payable to an affiliate of
the Sponsor.
Income Distribution Record Date December 15, 1995
Income Distribution Date (5) December 30, 1995
[FN]
________________
(1) Each Equity Security listed on a national securities exchange
is valued at the last closing sale price on the New York Stock
Exchange, or if no such price exists at the closing ask price
thereof.
(2) The maximum sales charge consists of an initial sales charge
and a deferred sales charge. The initial sales charge applies
to all Units and represents an amount equal to the difference
between the maximum sales charge for the Trust of 2.75% of the
Public Offering Price and the amount of the maximum remaining
deferred sales charge (initially $0.195 per Unit). Subsequent
to the initial date of deposit, the amount of the initial sales
charge will vary with changes in the aggregate underlying value
of the Equity Securities underlying the Trust. In addition to
the initial sales charge, Unit holders of Target 5 Trust, Series
2 will pay a deferred sales charge of $0.0195 per Unit per month
commencing September 1, 1995 and on the first day of each month
thereafter through June 1, 1996. Units purchased subsequent to
the initial deferred sales charge payment will be subject to only
the remaining deferred sales charge payments. These deferred sales
charge payments will be paid from funds in the Capital Account,
if sufficient, or from the periodic sale of Equity Securities.
See "Fee Table" and "Public Offering" for additional information.
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) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0010 per Unit.
(5) At the Rollover Notification Date for Rollover Unit holders
or upon termination of the Trust for other Unit holders, amounts
in the Income Account (which consist of dividends on the Equity
Securities) will be included in amounts distributed to or on behalf
of Unit holders. 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 as part of the final liquidation distribution.
Page 5
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-May 18, 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
Target 10 Trust
Series 8
_______________
General Information
<S> <C>
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $ 495,294
Aggregate Offering Price Evaluation of Equity
Securities per Unit $ 9.9059
Maximum Sales Charge 2.90% of the Public Offering Price
per Unit (2.928% of the net amount invested) (2) $ .2900
Less Deferred Sales Charge per Unit $ (.1950)
Public Offering Price per Unit (2) $ 10.0009
Sponsor's Initial Repurchase Price per Unit $ 9.7109
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (3) $ 9.7109
</TABLE>
CUSIP Number 33734W 830
First Settlement Date May 25, 1995
Rollover Notification Date June 10, 1996
Special Redemption and Liquidation
Period Beginning on June 14, 1996
until no later than June 27, 1996.
Mandatory Termination Date June 28, 1996
Discretionary Liquidation Amount A Trust may be terminated if
the value of the Equity Securities is
less than the lower of $2,000,000 or
20% of the total value of Equity
Securities deposited in a Trust during
the primary offering period.
Trustee's Annual Fee $0.0090 per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding. Evalua-
tions 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 (4) Maximum of $0.0035 per Unit outstand-
ing annually payable to an affiliate of
the Sponsor.
Income Distribution Record Date December 15, 1995
Income Distribution Date (5) December 30, 1995
[FN]
_________________
(1) Each Equity Security listed on a national securities exchange
is valued at the last closing sale price on the New York Stock
Exchange, or if no such price exists at the closing ask price
thereof.
(2) The maximum sales charge consists of an initial sales charge
and a deferred sales charge. The initial sales charge applies
to all Units and represents an amount equal to the difference
between the maximum sales charge for the Trust of 2.90% of the
Public Offering Price and the amount of the maximum remaining
deferred sales charge (initially $0.195 per Unit). Subsequent
to the Initial Date of Deposit, the amount of the initial sales
charge will vary with changes in the aggregate underlying value
of the Equity Securities underlying the Trust. In addition to
the initial sales charge, Unit holders of Target 10 Trust, Series
8 will pay a deferred sales charge of $0.0195 per Unit per month
commencing September 1, 1995 and on the first day of each month
thereafter through June 1, 1996. Units purchased subsequent to
the initial deferred sales charge payment will be subject to only
the remaining deferred sales charge payments. These deferred sales
charge payments will be paid from funds in the Capital Account,
if sufficient, or from the periodic sale of Equity Securities.
See "Fee Table" and "Public Offering" for additional information.
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) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0010 per Unit.
(5) At the Rollover Notification Date for Rollover Unit holders
or upon termination of the Trust for other Unit holders, amounts
in the Income Account (which consist of dividends on the Equity
Securities) will be included in amounts distributed to or on behalf
of Unit holders. 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 as part of the final liquidation distribution.
Page 6
FEE TABLE-Target 5 Trust, Series 2
This Fee Table is intended to help you to understand the costs
and expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" Although the
Trust has a term of only one year and is a unit investment trust
rather than a mutual fund, this information is presented to permit
a comparison of fees, assuming the principal amount and distributions
are rolled over each year into a new Trust subject only to the
deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 0.80%(a) $ 0.080
Deferred sales charge per year
(as a percentage of original purchase price) 1.95%(b) 0.195
________ ________
2.75% 0.275
======== ========
Maximum Sales Charge per year imposed on
Reinvested Dividends 1.95%(c) 0.195
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee 0.090% $ 0.0089
Portfolio supervision, bookkeeping, administrative
and evaluation fees 0.075% 0.0074
Other operating expenses 0.022% 0.0022
________ ________
Total 0.187% $ 0.0185
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years(d) 5 Years(d) 10 Years(d)
______ __________ __________ __________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment, assuming the Target 5 Trust,
Series 2 estimated operating expense ratio of
0.187% and a 5% annual return on the
investment throughout the periods $29 $74 $120 $250
</TABLE>
The example assumes reinvestment of all dividends and distributions
and utilizes a 5% annual rate of return as mandated by Securities
and Exchange Commission regulations applicable to mutual funds.
For purposes of the example, the deferred sales charge imposed
on reinvestment of dividends is not reflected until the year following
payment of the dividend; the cumulative expenses would be higher
if sales charges on reinvested dividends were reflected in the
year of reinvestment. The example should not be considered a representation
of past or future expenses or annual rate of return; the actual
expenses and annual rate of return may be more or less than those
assumed for purposes of the example.
[FN]
_____________________
(a) The Initial Sales Charge is actually the difference between
the maximum total sales charge of 2.75% and the maximum remaining
deferred sales charge (initially $0.195 per Unit for the Target
5 Trust, Series 2) and would exceed 0.8% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $0.0195 per month for the Target 5 Trust,
Series 2, per Unit, irrespective of purchase or redemption price
deducted in each of the last ten months of each one-year Trust.
If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.95% for the Target 5 Trust, Series
2. If the Unit price is less than $10.00 per Unit, the deferred
sales charge will exceed 1.95% for the Target 5 Trust, Series
2. Units purchased subsequent to the initial deferred sales charge
payment will also be subject to the remaining deferred sales charge
payments.
(c) Reinvested Dividends will be subject only to the deferred
sales charge remaining at the time of reinvestment. See "How are
Income and Capital Distributed."
(d) Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal
amount and distributions are rolled over each year into a new
Trust subject only to the deferred sales charge.
Page 7
FEE TABLE-Target 10 Trust Series 8
This Fee Table is intended to help you to understand the costs
and expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" Although the
Trust has a term of only one year and is a unit investment trust
rather than a mutual fund, this information is presented to permit
a comparison of fees, assuming the principal amount and distributions
are rolled over each year into a new Trust subject only to the
deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 0.95%(a) $ 0.095
Deferred sales charge per year
(as a percentage of original purchase price) 1.95%(b) 0.195
________ ________
2.90% 0.290
======== ========
Maximum Sales Charge per year imposed on
Reinvested Dividends 1.95%(c) 0.195
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee 0.090% $ 0.0089
Portfolio supervision, bookkeeping, administrative
and evaluation fees 0.075% 0.0074
Other operating expenses 0.022% 0.0022
________ ________
Total 0.187% $ 0.0185
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years(d) 5 Years(d) 10 Years(d)
______ __________ __________ ___________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment, assuming the Target 10 Trust,
Series 8 estimated operating expense ratio of
0.0187% and a 5% annual return on the
investment throughout the periods $31 $76 $122 $251
</TABLE>
The example assume reinvestment of all dividends and distributions
and utilizes a 5% annual rate of return as mandated by Securities
and Exchange Commission regulations applicable to mutual funds.
For purposes of the example, the deferred sales charge imposed
on reinvestment of dividends is not reflected until the year following
payment of the dividend; the cumulative expenses would be higher
if sales charges on reinvested dividends were reflected in the
year of reinvestment. The example should not be considered a representation
of past or future expenses or annual rate of return; the actual
expenses and annual rate of return may be more or less than those
assumed for purposes of the example.
[FN]
_____________________
(a) The Initial Sales Charge is actually the difference between
the maximum total sales charge of 2.90% and the maximum remaining
deferred sales charge (initially $0.195 per Unit for the Target
10 Trust, Series 8) and would exceed 0.95% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $0.0195 per month for the Target 10 Trust,
Series 8 per Unit, irrespective of purchase or redemption price
deducted in each of the last ten months of each one-year Trust.
If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.95% for the Target 10 Trust, Series
8. If the Unit price is less than $10.00 per Unit, the deferred
sales charge will exceed 1.95% for the Target 10 Trust, Series
8. Units purchased subsequent to the initial deferred sales charge
payment will also be subject to the remaining deferred sales charge
payments.
(c) Reinvested Dividends will be subject only to the deferred
sales charge remaining at the time of reinvestment. See "How are
Income and Capital Distributed."
(d) Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal
amount and distributions are rolled over each year into a new
Trust subject only to the deferred sales charge.
Page 8
Target 5 Trust, Series 2
Target 10 Trust, Series 8
The First Trust Special Situations Trust, Series 119
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 119 is one of
a series of investment companies created by the Sponsor under
the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated
by a different series number. This Series consists of underlying
separate unit investment trusts designated as: Target 5 Trust,
Series 2 and Target 10 Trust, Series 8 (collectively the "Trusts,"
and each individually a "Trust"). Each 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 issued by companies which provide income and are considered
to have the potential for capital appreciation (the "Equity Securities"),
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 Equity Securities. In exchange for the deposit of
securities or contracts to purchase securities in a Trust, the
Trustee delivered to the Sponsor documents evidencing the entire
ownership of such Trust.
The objective of the Target 5 Trust, Series 2 is to provide an
above-average total return through a combination of dividend income
and capital appreciation by investing in Equity Securities of
the five companies with the lowest per share stock price of the
ten companies in the Dow Jones Industrial Average having the highest
dividend yield as of the opening of business on the date of this
Prospectus.
The objective of the Target 10 Trust, Series 8 is to provide an
above-average total return through a combination of dividend income
and capital appreciation by investing in Equity Securities of
the ten companies which are in the Dow Jones Industrial Average
having the highest dividend yield as of the opening of business
on the date of this Prospectus. Dow Jones Industrial Average is
not affiliated with the Sponsor and is the property of Dow Jones
& Company, Inc. There is, of course, no guarantee that the objective
of either 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 a Trust's portfolio.
See "What are the Equity Securities Selected for Target 5 Trust,
Series 2?" and "What are the Equity Securities Selected for Target
10 Trust, Series 8?" From time to time following the Initial Date
of Deposit, the Sponsor, pursuant to the Indenture, may deposit
additional Equity Securities in a 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
such 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 a
Trust on the Initial, or any subsequent, Date of Deposit. See
"How May Equity Securities be Removed from a Trust?" The original
percentage relationship of each Equity Security to a Trust is
set forth herein under "Schedule of Investments" for such Trust.
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 a Trust.
On the Initial Date of Deposit, each Unit of a Trust represented
the undivided fractional interest in the Equity Securities deposited
in such Trust set forth under "Summary of Essential Information"
for such Trust. To the extent that Units of a Trust are redeemed,
the aggregate value of the Equity Securities in such Trust will
Page 9
be reduced and the undivided fractional interest represented by
each outstanding Unit of such Trust will increase. However, if
additional Units are issued by a Trust in connection with the
deposit of additional Equity Securities by the Sponsor, the aggregate
value of the Equity Securities in such Trust will be increased
by amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit of such Trust will be decreased
proportionately. See "How May Units be Redeemed?" Each Trust has
a Mandatory Termination Date as set forth herein under "Summary
of Essential Information" for such Trust.
What are the Expenses and Charges?
At no cost to a Trust, the Sponsor has borne all the expenses
of creating and establishing such Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. With
the exception of bookkeeping and other administrative services
provided to the Trusts, for which the Sponsor will be reimbursed
in amounts as set forth under "Summary of Essential Information,"
the Sponsor will not receive any fees in connection with its activities
relating to the Trusts. Such bookkeeping and administrative charges
may be increased without approval of the Unit holders by amounts
not exceeding proportionate increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index published
by the United States Department of Labor. The fees payable to
the Sponsor for such services may exceed the actual costs of providing
such services for these Trusts, but at no time will the total
amount received for such services rendered to unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar
year exceed the actual cost to the Sponsor of supplying such services
in such year. First Trust Advisors L.P. 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 Trusts. Such fee is based on the number of Units
outstanding in a 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. This fee may exceed the actual costs
of providing such supervisory services for these Trusts, but at
no time will the total amount received for portfolio supervisory
services rendered to unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate
cost to First Trust Advisors L.P. of supplying such services in
such year.
Subsequent to the initial offering period, the Evaluator, an affiliate
of the Sponsor, will receive a fee as indicated in the "Summary
of Essential Information." The fee may exceed the actual costs
of providing such evaluation services for these Trusts, but at
no time will the total amount received for evaluation services
rendered to unit investment trusts of which Nike Securities L.P.
is the Sponsor in any calendar year exceed the aggregate cost
to FT Evaluators L.P. of supplying such services in such year.
The Trustee pays certain expenses of a Trust for which it is reimbursed
by such Trust. The Trustee will receive for its ordinary recurring
services to a Trust an annual fee computed at $0.0090 per annum
per Unit in such Trust outstanding based upon the largest aggregate
number of Units of such Trust outstanding at any time during the
calendar 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 a Trust to the extent funds are available and then
from the Capital Account of such 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
a Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
The following additional charges are or may be incurred by a Trust:
all legal 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 such
Trust and the rights and interests of the Unit holders; fees of
the Trustee for any extraordinary services performed under the
Indenture; indemnification of the Trustee for
Page 10
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 such 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 such Trust; all taxes and other government
charges imposed upon the Securities or any part of such 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 a Trust. In addition, the Trustee is empowered
to sell Equity Securities in a Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of such Trust. Since the Equity
Securities are all common stocks and the income stream produced
by dividend payments is unpredictable, the Sponsor cannot provide
any assurance that dividends will be sufficient to meet any or
all expenses of a Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities
will have to be sold to meet Trust expenses. These sales may result
in capital gains or losses to Unit holders. See "What is the Federal
Tax Status of Unit Holders?"
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 a Trust.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. Each Trust is not an association taxable as a corporation
for Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of a Trust under
the Code; and the income of such 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 a Trust.
2. A Unit holder will be considered to have received all of the
dividends paid on his pro rata portion of each Equity Security
when such dividends are received by a Trust regardless of whether
such dividends are used to pay a portion of the deferred sales
charge. Unit holders will be taxed in this manner regardless of
whether distributions from a Trust are actually received by the
Unit holder or are automatically reinvested (see "How are Income and
Capital Distributed?-Distribution Reinvestment Option").
3. Each Unit holder will have a taxable event when a 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 a Trust (in proportion to the fair market
values thereof on the date the Unit holder purchases his Units)
in order to determine his initial cost for his pro rata portion
of each Equity Security held by such 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 a 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 exceeds 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.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held
by a Trust will generally be considered a capital gain except
in the case of a dealer or a financial institution and will be
long-term if the Unit holder has held his Units for more than
one year
Page 11
(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 a 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. However, a Rollover Unit holder's
loss, if any, incurred in connection with the exchange of Units
for Units in the next new series of the Target 5 Trust Series
or Target 10 Trust Series (the "1996 Trusts"), (the Sponsor intends
to create a separate 1996 Trust in conjunction with the termination
of both the Target 5 Trust Series and Target 10 Trust Series)
will generally be disallowed with respect to the disposition of
any Equity Securities pursuant to such exchange to the extent
that such Unit holder is considered the owner of substantially
identical securities under the wash sale provisions of the Code
taking into account such Unit holder's deemed ownership of the
securities underlying the Units in a 1996 Trust in the manner
described above, if such substantially identical securities were
acquired within a period beginning 30 days before and ending 30
days after such disposition. However, any gains incurred in connection
with such an exchange by a Rollover Unit holder would be recognized.
Unit holders should consult their tax advisers regarding the recognition
of gains and losses for Federal income tax purposes.
5. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by a Trust,
including fees of the Trustee and the Evaluator.
6. The Unit holder's basis in his Units will be equal to the
cost of his Units, including the initial sales charge. A portion
of the sales charge is deferred until the termination of the Trusts
or the redemption of the Units. The proceeds received by a Unit
holder upon such event will reflect deduction of the deferred
amount (the "Deferred Sales Charge"). The annual statement and
the relevant tax reporting forms received by Unit holders will
reflect the actual amounts paid to them, net of the Deferred Sales
Charge. Accordingly, Unit holders should not increase their basis
in their Units by the Deferred Sales Charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by a Trust (to the extent such dividends are taxable as ordinary
income, as discussed above) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other
than corporate 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 recently been issued which address
special rules that must be considered in determining whether the
46-day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate
Unit holder owns certain stock (or Units) the financing of which
is directly attributable to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends
received deduction.
Recognition of Taxable Gain or Loss Upon Disposition of Securities
by a Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when an Equity Security
is disposed of by a Trust or if the Unit holder disposes of a
Unit (although losses incurred by Rollover Unit holders may be
subject to disallowance, as discussed above). 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
Page 12
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, Termination of a Trust and Investment in a New Trust.
As discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns
at least 2,500 Units of a Trust may request an In-Kind Distribution
upon the redemption of Units or the termination of such Trust.
The Unit holder requesting an In-Kind Distribution will be liable
for expenses related thereto (the "Distribution Expenses") and
the amount of such In-Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Rights of Unit Holders-How
are Income and Capital Distributed?" As previously discussed,
prior to the redemption of Units or the termination of a Trust,
a Unit holder is considered as owning a pro rata portion of each
of such Trust's assets for Federal income tax purposes. The receipt
of an In-Kind Distribution upon the redemption of Units or the
termination of a Trust would be deemed an exchange of such Unit
holder's pro rata portion of each of the shares of stock and other
assets held by such Trust in exchange for an undivided interest
in whole shares of stock plus, possibly, cash.
There are generally three different potential tax consequences
which may occur under an In-Kind Distribution with respect to
each Equity Security owned by a 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 a Trust, there is no taxable
gain or loss recognized upon such deemed exchange pursuant to
Section 1036 of the Code. If the Unit holder receives whole shares
of a particular 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 a 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
such 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
Page 13
by a Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
As discussed in "Rights of Unit Holders-Special Redemption, Liquidation
and Investment in a New Trust," a Unit holder may elect to become
a Rollover Unit holder. To the extent a Rollover Unit holder exchanges
his Units for Units of either 1996 Trust in a taxable transaction,
such Unit holder will recognize gains, if any, but generally will
not be entitled to a deduction for any losses recognized upon
the disposition of any Equity Securities pursuant to such exchange
to the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions
of the Code taking into account such Unit holder's deemed ownership
of the securities underlying the Units in such 1996 Trust in the
manner described above, if such substantially identical securities
were acquired within a period beginning 30 days before and ending
30 days after such disposition under the wash sale provisions
contained in Section 1091 of the Code. In the event a loss is
disallowed under the wash sale provisions, special rules contained
in Section 1091(d) of the Code apply to determine the Unit holder's
tax basis in the securities acquired. Rollover Unit holders are
advised to consult their tax advisers.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by a Trust to such
Unit holder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by
a Trust will generally be subject to United States income taxation
and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons.
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 Trusts Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trusts for New York tax matters, under the existing income
tax laws of the State of New York, each Trust is not an association
taxable as a corporation and the income of each Trust will be
treated as the income of the Unit holders thereof.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
Target 5 Trust, Series 2 consists of the five companies with the
lowest per share stock price of the ten companies in the Dow Jones
Industrial Average ("DJIA") (which is unaffiliated with the Sponsor)
having the highest dividend yield as of the opening of business
on the date of this Prospectus. Target 10 Trust, Series 8
Page 14
consists of ten common stocks in the DJIA having the highest
dividend yield as of the opening of business on the date of this
Prospectus. The yield for each Equity Security was calculated
by annualizing the last quarterly or semi-annual ordinary dividend
declared and dividing the result by the market value of the Equity
Security as of the opening of business on the date of this Prospectus.
An investment in a Trust involves the purchase of a quality portfolio
of attractive equities with high dividend yields in one convenient
purchase. Investing in DJIA stocks with the highest dividend yields
may be effective in achieving the Trusts' investment objectives
because regular dividends are common for established companies
and dividends have accounted for a substantial portion of the
total return on DJIA stocks as a group.
The Dow Jones Industrial Average comprises 30 common stocks chosen
by the editors of The Wall Street Journal as representative of
the broad market and of American industry. The companies are major
factors in their industries and their stocks are widely held by
individuals and institutional investors. Changes in the components
of the DJIA are made entirely by the editors of The Wall Street
Journal without consultation with the companies, the stock exchange
or any official agency. For the sake of continuity, changes are
made rarely. Most substitutions have been the result of mergers,
but from time to time, changes may be made to achieve a better
representation. The components of the Dow Jones Industrial Average
may be changed at any time for any reason. Any changes in the
components of the Dow Jones Industrial Average after the date
of this Prospectus will not cause a change in the identity of
the common stocks included in the Trust Portfolios, including
any additional Equity Securities deposited in a Trust.
Investors should note that the above criteria were applied to
the Equity Securities selected for inclusion in the Trust Portfolios
as of the opening of business on the date of this Prospectus.
Since the Sponsor may deposit additional Equity Securities which
were originally selected through this process, the Sponsor may
continue to sell Units of the Trusts even though the yields on
these Equity Securities may have changed subsequent to the Initial
Date of Deposit, the Equity Securities may no longer be included
in the Dow Jones Industrial Average or in the case of Target 5
Trust, Series 2 the common stocks may no longer be the five lowest
priced per share, and therefore the Equity Securities would no
longer be chosen for deposit into the Trusts if the selection
process were to be made again at a later time.
The Dow Jones Industrial Average, Historical Perspective
The Dow Jones Industrial Average was first published in The Wall
Street Journal in 1896. Initially consisting of just 12 stocks,
the DJIA expanded to 20 stocks in 1916 and its present size of
30 stocks on October 1, 1928. The companies which make up the
DJIA have remained relatively constant over the life of the DJIA.
Taking into account name changes, 9 of the original DJIA companies
are still in the DJIA today. For two periods of 17 consecutive
years, March 14, 1939-July 1956 and June 1, 1959-August 6, 1976,
there were no changes to the list. The following is a comparison
of the list as it appeared on October 1, 1928 and the current DJIA.
Page 15
The Dow Jones Industrial Average
List as of October 1, 1928 Current List
__________________________ ________________________________
Allied Chemical AT&T Corporation
American Can AlliedSignal
American Smelting Aluminum Company of America
American Sugar American Express Company
American Tobacco Bethlehem Steel Corporation
Atlantic Refining Boeing Company
Bethlehem Steel Corporation Caterpillar Inc.
Chrysler Corporation Chevron Corporation
General Electric Company Coca-Cola Company
General Motors Corporation Walt Disney Company
General Railway Signal E.I. du Pont de Nemours & Company
Goodrich Eastman Kodak Company
International Harvester Exxon Corporation
International Nickel General Electric Company
Mack Trucks General Motors Corporation
Nash Motors Goodyear Tire & Rubber Company
North American International Business Machines
Corporation
Paramount Publix International Paper Company
Postum, Inc. McDonald's Corporation
Radio Corporation of America (RCA) Merck & Company, Inc.
Sears Roebuck & Company Minnesota Mining & Manufacturing
Company
Standard Oil of New Jersey J.P. Morgan & Company, Inc.
Texas Corporation Philip Morris Companies, Inc.
Texas Gulf Sulphur Procter & Gamble Company
Union Carbide Corporation Sears, Roebuck & Company
United States Steel Company Texaco, Inc.
Victor Talking Machine Union Carbide Corporation
Westinghouse Electric Corporation United Technologies Corporation
Woolworth Corporation Westinghouse Electric Corporation
Wright Aeronautical Woolworth Corporation
What are the Equity Securities Selected for Target 5 Trust, Series 2?
The Trust consists of common stocks of the five companies with
the lowest per share stock price of the ten companies in the Dow
Jones Industrial Average having the highest dividend yield as
of the close of business on the business day prior to the date
of this Prospectus.
Chevron Corporation, headquartered in San Francisco, California,
is an international oil company with activities in the United
States and abroad. The company is involved in worldwide, integrated
petroleum operations which explore for, develop and produce petroleum
liquids and natural gas as well as transporting the products.
The company is also involved in the mineral and chemical industry.
General Electric Company, based in Fairfield, Connecticut, has
business interests in the appliance, aerospace, financial services,
broadcasting, communications and transportation industries. The
company manufactures home appliances, light bulbs, satellites,
jet engines, diagnostic imaging systems, electricity distribution
products and diesel locomotives. General Electric Company also
owns the National Broadcasting Company.
Merck & Company, Inc., a large, worldwide firm based in Whitehouse
Station, New Jersey, is a leading researcher, developer, marketer
and manufacturer of human and animal health care products, primarily
prescription drugs. The company's product lines include anti-hypertensive,
cardiovascular, anti-inflammatory and glaucoma treatments. Merck
& Company, Inc. recently entered the prescription benefit management
(PBM) business with its acquisition of Medco Containment.
Page 16
Minnesota Mining & Manufacturing Company is headquartered in St.
Paul, Minnesota, and manufactures industrial, electronic, health,
consumer and information-imaging products for distribution worldwide.
The company's products include adhesives, abrasives, laser imagers
and "Scotch" brand products.
Sears, Roebuck & Company, headquartered in Chicago, Illinois,
operates in the retail and financial services industries. The
Company's subsidiaries include Sears, which conducts merchandising
and credit operations and Allstate Insurance Group, which provides
property-liability insurance services.
What are the Equity Securities Selected for Target 10 Trust, Series 8?
The Trust consists of common stocks of the ten companies which
are in the Dow Jones Industrial Average, having the highest dividend
yield as of the close of business on the business day prior to
the date of this Prospectus.
Chevron Corporation, headquartered in San Francisco, California,
is an international oil company with activities in the United
States and abroad. The company is involved in worldwide, integrated
petroleum operations which explore for, develop and produce petroleum
liquids and natural gas as well as transporting the products.
The company is also involved in the mineral and chemical industry.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, is a diversified international company primarily involved
in petroleum, coal and other energy sources. The company is also
a large chemical manufacturer with interests in chemicals, fibers,
transportation, construction, electronics, health care and agriculture.
Exxon Corporation, headquartered in Irving, Texas, is principally
involved in the energy industry. The company explores for and
produces crude oil and natural gas, manufactures petroleum products,
explores for and mines coal and minerals and transports and sells
crude oil, natural gas and petroleum products.
General Electric Company, based in Fairfield, Connecticut, has
business interests in the appliance, aerospace, financial services,
broadcasting, communications and transportation industries. The
company manufactures home appliances, light bulbs, satellites,
jet engines, diagnostic imaging systems, electricity distribution
products and diesel locomotives. General Electric Company also
owns the National Broadcasting Company.
Merck & Company, Inc., a large, worldwide firm based in Whitehouse
Station, New Jersey, is a leading researcher, developer, marketer
and manufacturer of human and animal health care products, primarily
prescription drugs. The company's product lines include anti-hypertensive,
cardiovascular, anti-inflammatory and glaucoma treatments. Merck
& Company, Inc. recently entered the prescription benefit management
(PBM) business with its acquisition of Medco Containment.
Minnesota Mining & Manufacturing Company is headquartered in St.
Paul, Minnesota, and manufactures industrial, electronic, health,
consumer and information-imaging products for distribution worldwide.
The company's products include adhesives, abrasives, laser imagers
and "Scotch" brand products.
J.P. Morgan & Company, Inc., headquartered in New York, New York,
is a holding company for Morgan Guaranty Trust. The company places
emphasis on its wholesale banking services and offers corporate
finance and capital markets services. The company provides bond,
precious metals and currency trading and Eurobond underwriting
and deals in government securities. Operations are both domestic
and international.
Philip Morris Companies, Inc., headquartered in New York, New
York, operates a large international consumer goods company through
its tobacco, food and beer segments. The company's major subsidiaries
include Phillip Morris U.S.A., Phillip Morris International, Inc.,
Kraft General Foods Group and The Miller Brewing Company.
Sears, Roebuck & Company, headquartered in Chicago, Illinois,
operates in the retail and financial services industries. The
Company's subsidiaries include Sears, which conducts merchandising
and credit operations and Allstate Insurance Group, which provides
property-liability insurance services.
Texaco, Inc., headquartered in White Plains, New York, is engaged
in the worldwide exploration, production, transportation, refining
and marketing of crude oil, natural gas and petroleum products,
including petrochemicals.
Page 17
Texaco owns, leases or has interests in extensive production,
manufacturing, marketing, transportation and other facilities
throughout the world.
Dow Jones & Company, Inc., owner of the Dow Jones Industrial Average,
has not granted to the Trusts or the Sponsor a license to use
the Dow Jones Industrial Average. Units are not designed so that
their prices will parallel or correlate with movements in the
Dow Jones Industrial Average, and it is expected that their prices
will not parallel or correlate with such movements. Dow Jones
& Company, Inc. has not participated in any way in the creation
of the Trusts or in the selection of stocks included in the Trusts
and has not approved any information herein relating thereto.
The following table compares the actual performance of the Dow
Jones Industrial Average and approximately equal values of the
five companies with the lowest per share stock price of the ten
companies in the DJIA having the highest dividend yield in each
of the past 20 years (the "Five Lowest Priced Stocks of the Ten
Highest Yielding DJIA Stocks"), as of December 31 in each of these
years and from January 1, 1975 through December 31, 1994.
Page 18
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
Five Lowest Priced Stocks of the
Ten Highest Yielding DJIA Stocks (1) Dow Jones Industrial Average (DJIA)
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
_____ ________________ _________ __________ ________________ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1975 61.40% 8.70% 70.10% 38.32% 6.08% 44.40%
1976 32.60 8.20 40.80 17.86 4.86 22.72
1977 1.10 3.40 4.50 -17.27 4.56 -12.71
1978 -5.90 7.60 1.70 -3.15 5.84 2.69
1979 1.80 8.10 9.90 4.19 6.33 10.52
1980 31.80 8.70 40.50 14.93 6.48 21.41
1981 -8.50 8.50 0.00 -9.23 5.83 -3.40
1982 30.40 7.00 37.40 19.60 6.19 25.79
1983 27.30 8.80 36.10 20.30 5.38 25.68
1984 5.70 6.90 12.60 -3.76 4.82 1.06
1985 30.20 7.60 37.80 27.66 5.12 32.78
1986 21.60 6.30 27.90 22.58 4.33 26.91
1987 6.20 4.90 11.10 2.26 3.76 6.02
1988 16.80 4.60 21.40 11.85 4.10 15.95
1989 5.50 5.00 10.50 26.96 4.75 31.71
1990 -20.50 5.30 -15.20 -4.34 3.77 -0.57
1991 56.40 5.50 61.90 20.32 3.61 23.93
1992 18.30 4.90 23.20 4.17 3.17 7.34
1993 30.10 4.20 34.30 13.73 2.99 16.72
1994 5.10 3.50 8.60 2.14 2.79 4.93
Source: BEATING THE DOW, Editor John Downes.
</TABLE>
[FN]
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding
DJIA Stocks for any given period were selected by ranking the
dividend yields for each of the stocks in the DJIA as of the beginning
of the period, based upon an annualization of the last quarterly
or semi-annual ordinary dividend distribution (which would have
been declared in the preceding year) divided by that stock's market
value on the first trading day on the New York Stock Exchange
in the given period.
(2) Appreciation for the Five Lowest Priced Stocks of the Ten
Highest Yielding DJIA Stocks ("Stocks") is calculated by subtracting
the market value of the Stocks as of the first trading day on
the New York Stock Exchange in a given period from the market
value of the Stocks as of the last trading day in that period,
and dividing the result by the market value of the Stocks as of
the first trading day in that period. Appreciation for the DJIA
is calculated by subtracting the opening value of the DJIA as
of the first trading day in a given period from the closing value
of the DJIA as of the last trading day in that period, and dividing
the result by the opening value of the DJIA as of the first trading
day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding
the total dividends received on the Stocks in a given period and
dividing the result by the market value of the Stocks as of the
first trading day in that period. Actual Dividend Yield for the
DJIA is calculated by taking the total dividends credited to the
DJIA and dividing the result by the opening value of the DJIA
as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual
Dividend Yield. Total Return does not take into consideration
any sales charges, commissions, expenses or taxes. Total Return
does not take into consideration any reinvestment of dividend
income. Based on the year-by-year returns contained in the table,
over the last 20 years, the Five Lowest Priced Stocks of the Ten
Highest Yielding DJIA Stocks achieved an average annual total
return of 22.03%, as compared to the average annual total return
of all of the stocks in the DJIA, which was 14.32%. These stocks
also had a higher average dividend yield in each of the last 20
years and outperformed the DJIA in 16 of these years. Although
the Trust seeks to achieve a better performance than the DJIA,
there can be no assurance that the Trust will outperform the DJIA
over its one-year life or over consecutive rollover periods, if
available.
Page 19
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The following table compares the actual performance of the Dow
Jones Industrial Average and approximately equal values of the
ten stocks in the DJIA having the highest dividend yield in each
of the past 20 years (the "Ten Highest Yielding DJIA Stocks"),
as of December 31 in each of these years and from January 1, 1975
through December 31, 1994.
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
Ten Highest Yielding DJIA Stocks (1) Dow Jones Industrial Average (DJIA)
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
_____ ________________ _________ __________ ________________ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1975 48.78% 7.95% 56.73% 38.32% 6.08% 44.40%
1976 27.70 7.10 34.80 17.86 4.86 22.72
1977 -6.75 5.92 -0.83 -17.27 4.56 -12.71
1978 -6.92 7.11 0.19 -3.15 5.84 2.69
1979 3.97 8.41 12.38 4.19 6.33 10.52
1980 17.83 8.54 26.37 14.93 6.48 21.41
1981 -0.94 8.29 7.35 -9.23 5.83 -3.40
1982 17.24 8.22 25.46 19.60 6.19 25.79
1983 30.20 8.25 38.45 20.30 5.38 25.68
1984 0.24 6.65 6.89 -3.76 4.82 1.06
1985 21.45 6.97 28.42 27.66 5.12 32.78
1986 23.74 6.13 29.87 22.58 4.33 26.91
1987 1.87 5.10 6.97 2.26 3.76 6.02
1988 15.80 5.80 21.60 11.85 4.10 15.95
1989 20.28 6.94 27.22 26.96 4.75 31.71
1990 -13.00 5.06 -7.94 -4.34 3.77 -0.57
1991 28.32 5.22 33.54 20.32 3.61 23.93
1992 3.44 4.82 8.26 4.17 3.17 7.34
1993 23.06 4.20 27.26 13.73 2.99 16.72
1994 -0.06 4.08 4.02 2.14 2.79 4.93
</TABLE>
[FN]
(1) The Ten Highest Yielding DJIA Stocks for any given period
were selected by ranking the dividend yields for each of the stocks
in the DJIA as of the beginning of the period, based upon an annualization
of the last quarterly or semi-annual ordinary dividend distribution
(which would have been declared in the preceding year) divided
by that stock's market value on the first trading day on the New
York Stock Exchange in the given period.
(2) Appreciation for the Ten Highest Yielding DJIA Stocks ("Stocks")
is calculated by subtracting the market value of the Stocks as
of the first trading day on the New York Stock Exchange in a given
period from the market value of the Stocks as of the last trading
day in that period, and dividing the result by the market value
of the Stocks as of the first trading day in that period. Appreciation
for the DJIA is calculated by subtracting the opening value of
the DJIA as of the first trading day in a given period from the
closing value of the DJIA as of the last trading day in that period,
and dividing the result by the opening value of the DJIA as of
the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding
the total dividends received on the Stocks in a given period and
dividing the result by the market value of the Stocks as of the
first trading day in that period. Actual Dividend Yield for the
DJIA is calculated by taking the total dividends credited to the
DJIA and dividing the result by the opening value of the DJIA
as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual
Dividend Yield. Total Return does not take into consideration
any sales charges, commissions, expenses or taxes. Total Return
does not take into consideration any reinvestment of dividend
income. Based on the year-by-year returns contained in the table,
over the last 20 years, the Ten Highest Yielding DJIA Stocks achieved
an average annual total return of 18.31%, as compared to the average
annual total return of all of the stocks in the DJIA, which was
14.32%. These stocks also had a higher average dividend yield
in each of the last 20 years and outperformed the DJIA in 14 of
these years. Although the Trust seeks to achieve a better performance
than the DJIA, there can be no assurance that the Trust will outperform
the DJIA over its one-year life or over consecutive rollover periods,
if available.
Page 21
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The returns shown above are not guarantees of future performance
and should not be used as a predictor of returns to be expected
in connection with a Trust Portfolio. Both stock prices (which
may appreciate or depreciate) and dividends (which may be increased,
reduced or eliminated) will affect the returns. As indicated in
the previous tables, the Ten Highest Yielding DJIA Stocks, including
the Five Lowest Priced Stocks of the Ten Highest Yielding DJIA
Stocks, underperformed the DJIA in certain years and there can
be no assurance that a Trust's Portfolio will outperform the DJIA
over the life of a Trust or over consecutive rollover periods,
if available. A Holder of Units in a Trust would not necessarily
realize as high a Total Return on an investment in the stocks
upon which the returns shown above are based. The Total Return
figures shown above do not reflect sales charges, commissions,
Trust expenses or taxes, and a Trust may not be able to invest
equally in the Ten Highest Yielding DJIA Stocks or the Five Lowest
Priced Stocks of the Ten Highest Yielding DJIA Stocks and may
not be fully invested at all times. See "What are the Equity Securities
Selected for Target 5 Trust, Series 2?"and "What are the Equity
Securities Selected for Target 10 Trust, Series 8?"
Page 22
What are Some Additional Considerations for Investors?
The Trusts consist of different issues of Equity Securities, all
of which are listed on a national securities exchange. In addition,
each of the companies whose Equity Securities are included in
a portfolio are actively traded, well established corporations.
A Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time
to time in such Trust and any additional Equity Securities acquired
and held by such 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 a 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.
Risk Factors. Because certain of the Equity Securities from time
to time may be sold under certain circumstances described herein,
and because the proceeds from such events will be distributed
to Unit holders and will not be reinvested, no assurance can be
given that a Trust will retain for any length of time its present
size and composition. Although the Portfolios are not managed,
the Sponsor may instruct the Trustee to sell Equity Securities
under certain limited circumstances. Pursuant to the Indenture
and with limited exceptions, the Trustee may sell any securities
or other property acquired in exchange for Equity Securities such
as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities
or property are nonetheless acquired by a Trust, they may be accepted
for deposit in such Trust and either sold by the Trustee or held
in such Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Portfolio Supervisor). See "How May
Equity Securities be Removed from a Trust?" Equity Securities,
however, will not be sold by a Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation or
depreciation or if the Equity Securities are no longer among the
ten common stocks in the Dow Jones Industrial Average with the
highest dividend yield, including the five lowest priced of the
ten common stocks in the Dow Jones Industrial Average with the
highest dividend yield.
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, a Trust may be restricted
under the Investment Company Act of 1940 from selling Equity Securities
to the Sponsor. The price at which the Equity Securities may be
sold to meet redemptions, and the value of a Trust, will be adversely
affected if trading markets for the Equity Securities are limited
or absent.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trusts have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided
Page 23
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 a Portfolio may be expected to fluctuate over the life of a
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 a 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 a Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
Investors should be aware of certain other considerations before
making a decision to invest in a Trust.
The value of the Equity Securities will fluctuate over the life
of a Trust and may be more or less than the price at which they
were deposited in such Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting these securities,
including the impact of the Sponsor's purchase and sale of the
Equity Securities (especially during the primary offering period
of Units of a Trust and during the Special Redemption and Liquidation
Period) and other factors.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Equity Security. In the
event of a notice that any Equity Security will not be delivered
("Failed Contract Obligations") to a 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 a Trust and the Trustee will distribute the principal
attributable to such Failed Contract Obligations not more than
120 days after the date on which the Trustee received a notice
from the Sponsor that a Replacement Security would not be deposited
in such Trust. In addition, Unit holders should be aware that,
at the time of receipt of such principal, they may not be able
to reinvest such proceeds in other securities at a yield equal
to or in excess of the yield which such proceeds would have earned
for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size
of a Trust and the number of Units thereof by the deposit of additional
Equity Securities in such Trust and the issuance of a corresponding
number of additional Units.
Each 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 such Trust and any
additional Equity Securities acquired and held by such Trust pursuant
to the provisions of the Indenture (including provisions with
Page 24
respect to deposits into such Trust of Equity Securities in connection
with the issuance of additional Units).
Once all of the Equity Securities in a Trust are acquired, the
Trustee will have no power to vary the investments of such 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 a 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 Trusts. 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 Trusts.
Petroleum Refining Companies. Target 10 Trust, Series 8 may be
considered to be concentrated in common stocks of companies engaged
in refining and marketing oil and related products. According
to the U.S. Department of Commerce, the factors which will most
likely shape the industry to 1996 and beyond include the price
and availability of oil from the Middle East, changes in United
States environmental policies and the continued decline in U.S.
production of crude oil. Possible effects of these factors may
be increased U.S. and world dependence on oil from the Organization
of Petroleum Exporting Countries ("OPEC") and highly uncertain
and potentially more volatile oil prices. Factors which the Sponsor
believes may increase the profitability of oil and petroleum operations
include increasing demand for oil and petroleum products as a
result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases
in average domestic refinery utilization rates. The existence
of surplus crude oil production capacity and the willingness to
adjust production levels are the two principal requirements for
stable crude oil markets. Without excess capacity, supply disruptions
in some countries cannot be compensated for by others. Surplus
capacity in Saudi Arabia and a few other countries and the utilization
of that capacity prevented during the Persian Gulf crisis, and
continue to prevent, severe market disruption. Although unused
capacity contributed to market stability in 1990 and 1991, it
ordinarily creates pressure to overproduce and contributes to
market uncertainty. The likely restoration of a large portion
of Kuwait and Iraq's production and export capacity over the next
few years could lead to such a development in the absence of substantial
growth in world oil demand. Formerly, OPEC members attempted to
exercise control over production levels in each country through
a system of mandatory production quotas. Because of the crisis
in the Middle East, the mandatory system has since been replaced
with a voluntary system. Production under the new system has had
to be curtailed on at least one occasion as a result of weak prices,
even in the absence of supplies from Kuwait and Iraq. The pressure
to deviate from mandatory quotas, if they are reimposed, is likely
to be substantial and could lead to a weakening of prices. In
the longer term, additional capacity and production will be required
to accommodate the expected large increases in world oil demand
and to compensate for expected sharp drops in U.S. crude oil production
and exports from the Soviet Union. Only a few OPEC countries,
particularly Saudi Arabia, have the petroleum reserves that will
allow the required increase in production capacity to be attained.
Given the large-scale financing that is required, the prospect
that such expansion will occur soon enough to meet the increased
demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued
and unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the
industry over the coming decade. Refiners are likely to be required
to make heavy capital investments and make major production adjustments
in order to comply with increasingly stringent environmental legislation,
such as the 1990 amendments to the Clean Air Act. If the cost
of these changes is substantial enough to cut deeply into profits,
smaller refiners may be forced out of the industry entirely. Moreover,
lower consumer demand due to increases in energy efficiency and
conservation, due to gasoline reformulations that call for less
crude oil, due to warmer winters or due to a general slowdown
in economic growth in this country and abroad, could negatively
affect the price of oil and
Page 25
the profitability of oil companies. No assurance can be given
that the demand for or prices of oil will increase or that any
increases will not be marked by great volatility. Some oil companies
may incur large cleanup and litigation costs relating to oil spills
and other environmental damage. Oil production and refining operations
are subject to extensive federal, state and local environmental
laws and regulations governing air emissions and the disposal
of hazardous materials. Increasingly stringent environmental laws
and regulations are expected to require companies with oil production
and refining operations to devote significant financial and managerial
resources to pollution control. General problems of the oil and
petroleum products industry include the ability of a few influential
producers significantly to affect production, the concomitant
volatility of crude oil prices and increasing public and governmental
concern over air emissions, waste product disposal, fuel quality
and the environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources
of energy and fuels or legislative changes relating to the energy
industry or the environment could have a negative impact on the
petroleum products industry. While legislation has been enacted
to deregulate certain aspects of the oil industry, no assurances
can be given that new or additional regulations will not be adopted.
Each of the problems referred to could adversely affect the financial
stability of the issuers of any petroleum industry stocks in the
Trust.
Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deductions. Enactment
into law of a proposal to reduce the rate would adversely affect
the after-tax return to investors who can take advantage of the
deduction. Unit holders are urged to consult their own tax advisers.
Further, at any time after the Initial Date of Deposit, legislation
may be enacted, with respect to the Equity Securities in the Trusts
or the issuers of the Equity Securities. Changing approaches to
regulation, particularly with respect to the environment or with
respect to the petroleum industry, may have a negative impact
on certain companies represented in the Trusts. There can be no
assurance that future legislation, regulation or deregulation
will not have a material adverse effect on the Trusts or will
not impair the ability of the issuers of the Equity Securities
to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based
on the aggregate underlying value of the Equity Securities in
the Target 5 Trust, Series 2 and the Target 10 Trust, Series 8,
respectively, plus or minus cash, if any, in the Income and Capital
Accounts of such Trust, plus an initial sales charge with respect
to each Trust equal to the difference between the maximum sales
charge for each Trust (2.75% and 2.90% of the Public Offering
Price, respectively) and the maximum remaining deferred sales
charge (initially $0.195 per Unit for each Trust) divided by the
amount of Units of such Trust outstanding. For Unit holders of
the Target 5 Trust, Series 2 and the Target 10 Trust, Series 8,
commencing September 1, 1995, and on the first day of each month
thereafter, through June 1, 1996, a deferred sales charge of $0.0195
will be assessed per Unit per month. Units purchased subsequent
to the initial deferred sales charge payment will also be subject
to the remaining deferred sales charge payments. For each Trust,
the deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale
of Equity Securities. The total maximum sales charge assessed
to Unit holders on a per Unit basis will be 2.75% and 2.90% of
the Public Offering Price (equivalent to 2.772% and 2.928% of
the net amount invested) for the Target 5 Trust, Series 2 and
the Target 10 Trust, Series 8, respectively.
During the initial offering period, the Sponsor's Repurchase Price
is based on the aggregate underlying value of the Equity Securities
in a Trust, plus or minus cash, if any, in the Income and Capital
Accounts of such Trust divided by the number of Units of such
Trust outstanding.
The minimum purchase of each Trust is $1,000, except for Rollover
Unit holders who are not subject to a minimum purchase amount.
The applicable sales charge of the Target 5 Trust, Series 2 for
primary market sales is reduced by a discount as indicated below
for volume purchases as a percentage of the Public Offering
Page 26
Price (except for sales made pursuant to a "wrap fee account"
or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Maximum
Sales Net Dealer
Number of Units Discount Charge Concession
_______________ _________ _________ ________
<S> <C> <C> <C>
5,000 but less than 10,000 0.25% 2.50% 1.65%
10,000 or more 0.60% 2.15% 1.30%
</TABLE>
The applicable sales charge of the Target 10 Trust, Series 8 for
primary market sales is reduced by a discount as indicated below
for volume purchases as a percentage of the Public Offering Price
(except for sales made pursuant to a "wrap fee account" or similar
arrangements as set forth below):
<TABLE>
<CAPTION>
Maximum
Sales Net Dealer
Number of Units Discount Charge Concession
_______________ _________ _________ _________
<S> <C> <C> <C>
5,000 but less than 10,000 0.30% 2.60% 1.75%
10,000 or more 0.65% 2.25% 1.50%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling dealer. An investor may aggregate purchases of Units of
both the Target 5 Trust, Series 2 and Target 10 Trust, Series
8 for purposes of qualifying for volume purchase discounts listed
above. The aggregate amount of Units of both Trusts purchased
will be used to determine the applicable sales charge to be imposed
on the purchase of Units of each Trust. The sales charge reduction
for quantity purchases will not apply to Rollover Unit holders.
The reduced sales charge structure will apply on all purchases
of Units in a Trust by the same person on any one day from any
one 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 dealer of any such combined purchase prior to the sale in
order to obtain the indicated discount. In addition, Unit holders
of other unit investment trusts having a similar strategy as Target
5 Trust, Series 2 and Target 10 Trust, Series 8 may utilize their
redemption or termination proceeds to purchase Units of Target
5 Trust, Series 2 and Target 10 Trust, Series 8 subject to a deferred
sales charge of $0.0195 per Unit per month to be collected on
each of the remaining deferred sales charge payment dates as provided
herein. 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, dealers and their affiliates, will be subject only
to the deferred portion of the sales charge as described above
for each Trust for purchases of Units during the primary and secondary
public offering periods.
Units may be purchased in the primary or secondary market at the
Public Offering Price less the concession the Sponsor typically
allows to dealers and other selling agents for purchases (see
"Public Offering-How are Units Distributed?") by investors who
purchase Units through registered investment advisers, certified
financial planners or registered broker-dealers who in each case
either charge periodic fees for financial planning, investment
advisory or asset management services, or provide such services
in connection with the establishment of an investment account
for which a comprehensive "wrap fee" charge is imposed.
Had the Units of the Trusts been available for sale on the business
day prior to the Initial Date of Deposit, the Public Offering Price
would have been as indicated in "Summary of Essential Information." The
Public Offering Price of Units on the date of the prospectus or during
the initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices of
the underlying Equity Securities. During the initial offering period, the
aggregate value of the Units of a Trust shall be determined on the basis
of the aggregate underlying value of
Page 27
the Equity Securities therein plus or minus cash, if any, in the
Income and Capital Accounts of such 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 a Trust plus the applicable
sales charge.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. A person
will become owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units
may be used in the Sponsor's business and may be deemed to be
a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934. Delivery of Certificates representing Units
so ordered will be made five business days following such order
or shortly thereafter. See "Rights of Unit Holders-How May Units
be Redeemed?" for information regarding the ability to redeem
Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Equity Securities are deposited by the
Sponsor, Units will be distributed to the public at the then current
Public Offering Price. During such period, the Sponsor may deposit
additional Equity Securities in a 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 a Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of such Trust)
may be resold at the then current Public Offering Price. Upon
the termination of the initial offering period, unsold Units created
or reacquired during the initial offering period will be sold
or resold at the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trusts
for sale in a number of states. With respect to the Target 5 Trust,
Series 2, sales will be made to dealers and others at prices which
represent a concession or agency commission of 1.80% of the Public
Offering Price for primary and secondary market sales. With respect
to the Target 10 Trust, Series 8, sales will be made to dealers
and others at prices which represent a concession or agency commission
of 2.00% of the Public Offering Price for primary and secondary
market sales. Dealers and others will receive a concession or
agency commission of 1.0% of the Public Offering Price on purchases
by Rollover Unit holders. However, resales of Units of the Trusts
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. In the event the Sponsor reacquires, or the
Trustee redeems, Units from brokers, dealers and others while
a market is being maintained for such Units, such entities agree
to repay immediately to the Sponsor any such concession or agency
commission relating to such reacquired Units. Certain commercial
banks may be making Units of the Trusts available to their customers
on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in
Page 28
the amounts indicated above. 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. The Sponsor expects to recoup the foregoing payments
from the deferred sales charge payments related to such Trusts.
From time to time the Sponsor may implement programs under which
dealers of a Trust may receive nominal awards from the Sponsor
for each of their registered representatives who have sold a minimum
number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under
which the sales force of a dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such 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 dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trusts. Such payments are made by the Sponsor
out of its own assets, and not out of the assets of a Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that a Trust will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on a Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as the common stocks comprising the Dow Jones Industrial
Average, 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 Trusts. U.S.
Government bonds, for example, are backed by the full faith and
credit of the U.S. Government and bank CDs and money market accounts
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal,
but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of each
Trust are described more fully elsewhere in this Prospectus.
Advertisements and other sales material for the Trusts may also
show the total returns (price changes plus dividends received,
divided by the maximum public offering price) of each completed
prior series and the total and average annualized return of all
series in the same quarterly cycle, assuming the holder rolled
over at the termination of each prior series. These returns will
reflect all applicable sales charges and expenses.
Trust performance may be compared to performance on a total return
basis of the Dow Jones Industrial Average, the S&P 500 Composite
Price Stock Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications
such as Money, 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 a Trust's relative performance for any future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal
to a maximum of 2.75% of the Public Offering Price of the Units
(equivalent to 2.772% of the net amount invested) with respect to the
Target 5 Trust, Series 2 and and a maximum of 2.90% of the Public Offering
Price of the Units (equivalent to 2.928% of the net amount invested) with
respect to the Target 10 Trust, Series 8, less any reduced sales charge
for quantity purchases as described under "Public Offering-How is the
Public Offering Price Determined?" 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 a 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 on
subsequent deposits) and the cost of such Equity Securities to the
Sponsor. See Note (2) of "Schedule of Investments" for each
Page 29
Trust. During the initial offering period, the dealers and others
also may realize profits or sustain losses as a result of fluctuations
after the Date of Deposit in the Public Offering Price received
by such dealers and others upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a maximum sales charge
of 2.75% with respect to the Target 5 Trust, Series 2 and 2.90%
with respect to the Target 10 Trust, Series 8) or redeemed. The
secondary market public offering price of Units may be greater
or less than the cost of such Units to the Sponsor. The Sponsor
may also realize profits or sustain losses in connection with
the creation of additional Units for the Distribution Reinvestment
Option.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to maintain a market for the Units
and continuously offer to purchase Units at prices, subject to
change at any time, based upon the aggregate underlying value
of the Equity Securities in a Trust plus or minus cash, if any,
in the Income and Capital Accounts of such Trust. All expenses
incurred in maintaining a secondary market, other than the fees
of the Evaluator and the costs of the Trustee in transferring
and recording the ownership of Units, will be borne by the Sponsor.
If the supply of Units exceeds demand, or for some other business
reason, the Sponsor may discontinue purchases of Units at such
prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS, HE SHOULD
INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO MAKING
A TENDER FOR REDEMPTION TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with 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.
Only Unit holders who elect to hold Units in uncertificated form
are eligible to participate as a Rollover Unit holder. 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 a Trust; the number of Units issued
or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Page 30
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 a Trust on or about the Income Distribution
Dates to Unit holders of record on the preceding Income Record
Date. See "Summary of Essential Information." 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.
Proceeds received on the sale of any Equity Securities in a Trust,
to the extent not used to meet redemptions of Units, pay the deferred
sales charge or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals
at least $0.01 per Unit. The Trustee is not required to pay interest
on funds held in the Capital Account of 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 as part of the final liquidation
distribution, and in certain circumstances, earlier. See "What
is the Federal Tax Status of Unit Holders?"
It is anticipated that the deferred sales charge will be collected
from the Capital Account and that amounts in the Capital Account
will be sufficient to cover the cost of the deferred sales charge.
To the extent that amounts in the Capital Account are insufficient
to satisfy the then current deferred sales charge obligation,
Equity Securities may be sold to meet such shortfall. Distributions
of amounts necessary to pay the deferred portion of the sales
charge will be made to an account designated by the Sponsor for
purposes of satisfying Unit holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by a Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder under certain circumstances by contacting the Trustee,
otherwise the amount may be recoverable 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 a Trust is terminated, each Unit
holder who is not a Rollover 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 such Trust, less
expenses of such Trust. Not less than 30 days prior to the Mandatory
Termination Date of a 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 such Trust, rather than to
receive payment in cash for such Unit holder's pro rata share
of the amounts realized upon the disposition by the Trustee of
Equity Securities. An In-Kind Distribution will be reduced by
customary transfer and registration charges. To be effective,
the election form, together with 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 a Trust. A Unit holder may, of course, at
any time after the Equity Securities are distributed, sell all
or a portion of the shares.
Page 31
The Trustee will credit to the Income Account of a 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 a Trust.
The Trustee may establish reserves (the "Reserve Account") within
a Trust for state and local taxes, if any, and any governmental
charges payable out of such Trust.
Distribution Reinvestment Option. Any Unit holder may elect to
have each distribution of income or capital on his Units, other
than the final liquidating distribution in connection with the
termination of a Trust, automatically reinvested in additional
Units of such Trust. Each person who purchases Units of a Trust
may elect to become a participant in the Distribution Reinvestment
Option by notifying the Trustee of their election. The Distribution
Reinvestment Option may not be available in all states. In order
to enable a Unit holder to participate in the Distribution Reinvestment
Option with respect to a particular distribution on his Units,
the card must be received by the Trustee within 10 days prior
to the Record Date for such distribution. Each subsequent distribution
of income or capital on the participant's Units will be automatically
applied by the Trustee to purchase additional Units of a Trust.
The remaining deferred sales charge payments will be assessed
on Units acquired pursuant to the Distributions Reinvestment Option.
IT SHOULD BE REMEMBERED THAT EVEN IF DISTRIBUTIONS ARE REINVESTED,
THEY ARE STILL TREATED AS DISTRIBUTIONS FOR INCOME TAX PURPOSES.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable
period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar
year was a Unit holder of a Trust the following information in
reasonable detail: (1) a summary of transactions in such Trust
for such year; (2) any Equity Securities sold during the year
and the Equity Securities held at the end of such year by such
Trust; (3) the redemption price per Unit based upon a computation
thereof on the 31st day of December of such year (or the last
business day prior thereto); and (4) amounts of income and capital
distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in a Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive in cash an amount
for each Unit equal to the Redemption Price per Unit next computed
after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received
by the Trustee, except that as regards Units received after 4:00
p.m. eastern 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. Units tendered for redemption
prior to such time as the entire deferred sales charge on such
Units has been collected will be assessed the amount of the remaining
deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more of a Trust 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
Page 32
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 a 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 a 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 a Trust.
The Trustee is empowered to sell Equity Securities of a Trust
in order to make funds available for redemption. To the extent
that Equity Securities are sold, the size and diversity of a 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 and the Public Offering Price per
Unit (which includes the sales charge) during the initial offering
period (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 a Trust plus or minus cash, if any,
in the Income and Capital Accounts of such 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 a 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 (including "when issued" contracts,
if any) held in such Trust, as determined by the Evaluator on
the basis of the aggregate underlying value of the Equity Securities
in such 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 such Trust; (2) any
amounts owing to the Trustee for its advances; (3) an amount representing
estimated accrued expenses of such Trust, including but not limited
to fees and expenses of the Trustee (including legal fees), the
Evaluator and supervisory fees, if any; (4) cash held for distribution
to Unit holders of record of such Trust as of the business day
prior to the evaluation being made; and (5) other liabilities
incurred by such Trust; and finally dividing the results
of such computation by the number of Units of such Trust outstanding
as of the date thereof.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing bid prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefore 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
Page 33
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.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will
be made of all Units of the Trusts held by any Unit holder (a
"Rollover Unit holder") who affirmatively notifies the Trustee
in writing that he so desires by the Rollover Notification Date
specified in the "Summary of Essential Information."
All Units of Rollover Unit holders will be redeemed In-Kind on
the first day of the Special Redemption and Liquidation Period
and the underlying Equity Securities will be distributed to the
Distribution Agent on behalf of the Rollover Unit holders. During
the Special Redemption and Liquidation Period (as set forth in
"Summary of Essential Information"), the Distribution Agent will
be required to sell all of the underlying Equity Securities on
behalf of Rollover Unit holders. The sales proceeds will be net
of brokerage fees, governmental charges or any expenses involved
in the sales.
The Distribution Agent will engage the Sponsor as its agent to
sell the distributed Equity Securities. The Sponsor will attempt
to sell the Equity Securities as quickly as is practicable during
the Special Redemption and Liquidation Period. The Sponsor does
not anticipate that the period will be longer than 10 business
days, and it could be as short as one day, given that the Equity
Securities are usually highly liquid. The liquidity of any Equity
Security depends on the daily trading volume of the Equity Security
and the amount that the Sponsor has available for sale on any
particular day.
Pursuant to a recent exemptive order, each terminating Target 10
Trust and Target 5 Trust (and the Distribution Agent on behalf of
Rollover Unit holders) can now sell Equity Securities to the 1996
Trusts if those Equity Securities continue to meet the Target 10 and
Target 5 Strategy by remaining among the ten highest dividend-yielding
or five lowest priced of the ten highest dividend-yielding securities
in the respective Trust. The exemption will enable each Trust
to eliminate commission costs on these transactions. The price
for those Equity Securities will be the closing sale price on
the sale date on the exchange where the Equity Securities are
principally traded, as certified by the Sponsor and confirmed
by the Trustee of each Trust.
It is expected (but not required) that the Sponsor will generally
follow the following guidelines in selling the Equity Securities:
for highly liquid Equity Securities, the Sponsor will generally
sell Equity Securities on the first day of the Special Redemption
and Liquidation Period; for less liquid Equity Securities, on
each of the first two days of the Special Redemption and Liquidation
Period, the Sponsor will generally sell any amount of any underlying
Equity Securities at a price no less than 1/2 of one point under
the closing sale price of those Equity Securities on the preceding
day. Thereafter, the Sponsor intends to sell without any price
restrictions at least a portion of the remaining underlying Equity
Securities, the numerator of which is one and the denominator
of which is the total number of days remaining (including that
day) in the Special Redemption and Liquidation Period.
The Sponsor intends to create a separate 1996 Trust for both the
Target 5 Trust Series and the Target 10 Trust Series. The Rollover
Unit holders' proceeds will be invested in either 1996 Trust (as
selected by the Unit holder), if then registered in such state
and being offered, the portfolio of which will contain, in the
case of the Target 5 Trust Series, common stock of the five companies
with the lowest per share stock price of the ten highest dividend
yielding stocks in the Dow Jones Industrial Average as of the
business day prior to
Page 34
the Initial Date of Deposit, and in the case of the Target 10
Trust Series, common stock of the ten highest dividend yielding
stocks in the Dow Jones Industrial Average as of the business
day prior to the Initial Date of Deposit. The proceeds of redemption
available on each day will be used to buy 1996 Trust Units as
the proceeds become available.
The Sponsor intends to create 1996 Trust Units as quickly as possible,
dependent upon the availability and reasonably favorable prices
of the Equity Securities included in a 1996 Trust portfolio, and
it is intended that Rollover Unit holders will be given first
priority to purchase the 1996 Trust Units. There can be no assurance,
however, as to the exact timing of the creation of the 1996 Trust
Units or the aggregate number of 1996 Trust Units which the Sponsor
will create. The Sponsor may, in its sole discretion, stop creating
new Units (whether permanently or temporarily) at any time it
chooses, regardless of whether all proceeds of the Special Redemption
and Liquidation have been invested on behalf of Rollover Unit
holders. Cash which has not been invested on behalf of the Rollover
Unit holders in 1996 Trust Units will be distributed at the end
of the Special Redemption and Liquidation Period. However, since
the Sponsor can create Units, the Sponsor anticipates that sufficient
Units can be created, although moneys in a 1996 Trust may not
be fully invested on the next business day.
Any Rollover Unit holder may thus be redeemed out of a Trust and
become a holder of an entirely different Trust, a 1996 Trust,
with a different portfolio of Equity Securities. The Rollover
Unit holders' Units will be redeemed In-Kind and the distributed
Equity Securities shall be sold during the Special Redemption
and Liquidation Period. In accordance with the Rollover Unit holders'
offer to purchase the 1996 Trust Units, the proceeds of the sales
(and any other cash distributed upon redemption) will be invested
in a 1996 Trust, at the public offering price, including the applicable
maximum sales charge per Unit (which for Rollover Unit holders
is currently expected to be $0.195 per Unit for the 1996 Series
of the Target 5 Trust Series and the Target 10 Trust Series, all
of which will be deferred as provided herein).
This process of redemption, liquidation, and investment in a new
Trust is intended to allow for the fact that the portfolios selected
by the Sponsor are chosen on the basis of growth and income potential
only for a year, at which point a new portfolio is chosen. It
is contemplated that a similar process of redemption, liquidation
and investment in a new trust will be available for the 1996 Trusts
and each subsequent series of the Trusts, approximately a year
after that Series' creation.
The Sponsor believes that the gradual redemption, liquidation
and investment in the Target 5 Trust Series and Target 10 Trust
Series will help mitigate any negative market price consequences
stemming from the trading of large volumes of securities and of
the underlying Equity Securities in Target 5 Trust Series and
Target 10 Trust Series in a short, publicized period of time.
The above procedures may, however, be insufficient or unsuccessful
in avoiding such price consequences. In fact, market price trends
may make it advantageous to sell or buy more quickly or more slowly
than permitted by these procedures. Rollover Unit holders could
then receive a less favorable average Unit price than if they
bought all their Units of the Target 5 Trust Series and Target
10 Trust, Series on any given day of the period.
It should also be noted that Rollover Unit holders may realize
taxable capital gains on the Special Redemption and Liquidation
but, in certain unlikely circumstances, will not be entitled to
a deduction for certain capital losses and, due to the procedures
for investing in a 1996 Trust, no cash would be distributed at
that time to pay any taxes. Included in the cash for the Special
Redemption and Liquidation will be an amount of cash attributable
to the second semi-annual distribution of dividend income; accordingly,
Rollover Unit holders also will not have cash distributed to pay
any taxes. See "What is the Federal Tax Status of Unit holders?"
In addition, during this period a Unit holder will be at risk
to the extent that Equity Securities are not sold and will not
have the benefit of any stock appreciation to the extent that
moneys have not been invested; for this reason, the Sponsor will
be inclined to sell and purchase the Equity Securities in as short
a period as they can without materially adversely affecting the
price of the Equity Securities.
Unit holders who do not inform the Distribution Agent that they
wish to have their Units so redeemed and liquidated ("Remaining
Unit holders") will continue to hold Units of a Trust as described
in this Prospectus
Page 35
until such Trust is terminated or until the Mandatory Termination
Date listed in the Summary of Essential Information, whichever
occurs first. These Remaining Unit holders will not realize capital
gains or losses due to the Special Redemption and Liquidation,
and will not be charged any additional sales charge. If a large
percentage of Unit holders become Rollover Unit holders, the aggregate
size of a Trust will be sharply reduced. As a consequence, expenses,
if any, in excess of the amount to be borne by the Trustee would
constitute a higher percentage amount per Unit than prior to the
Special Redemption, Liquidation and Investment in a 1996 Trust.
The Trust might also be reduced below the Discretionary Liquidation
Amount listed in the Summary of Essential Information because
of the lesser number of Units in a Trust, and possibly also due
to a value reduction, however temporary, in Units caused by the
Sponsor's sales of Equity Securities; if so, the Sponsor could
then choose to liquidate such Trust without the consent of the
remaining Unit holders. See "How May the Indenture be Amended
or Terminated?" The Equity Securities remaining in a Trust after
the Special Redemption and Liquidation Period will be sold by
the Sponsor as quickly as possible without, in its judgment, materially
adversely affecting the market price of the Equity Securities.
The Sponsor may for any reason, in its sole discretion, decide
not to sponsor the 1996 Trusts or any subsequent series of the
Trusts, without penalty or incurring liability to any Unit holder.
If the Sponsor so decides, the Sponsor shall notify the Unit holders
before the Special Redemption and Liquidation Period would have
commenced. All Unit holders will then be remaining Unit holders,
with rights to ordinary redemption as before. See "How May Units
be Redeemed?" The Sponsor may modify the terms of the 1996 Trusts
or any subsequent series of the Trusts. The Sponsor may also modify,
suspend or terminate the Rollover Option upon notice to the Unit
holders of such amendment at least 60 days prior to the effective
date of such amendment.
Investors should be aware that at the present time any proposed
1996 Trust of the Target 5 Trust Series (the "1996 Target 5 Trust")
would not be able to invest more than 5% of its assets in the
stock of any issuer that derives more than 15% of its revenues
from securities-related activities. If at the date of the creation
of the 1996 Target 5 Trust any of the common stocks chosen are
of companies that derive more than 15% of their revenues from
securities-related activities, the 1996 Target 5 Trust would not
be able to invest an equal amount in each of the selected stocks.
THE SPONSOR HAS APPLIED FOR AN EXEMPTIVE ORDER WHICH WOULD PERMIT
THE 1996 TARGET 5 TRUST TO INVEST UP TO 20% OF ITS ASSETS IN THE
STOCK OF AN ISSUER THAT DERIVES MORE THAN 15% OF ITS REVENUES
FROM SECURITIES-RELATED ACTIVITIES, BUT NO ASSURANCE CAN BE GIVEN
THAT THE SECURITIES AND EXCHANGE COMMISSION WILL ISSUE SUCH AN ORDER.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee before 1:00 p.m. eastern 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 may be tendered to the Trustee for redemption as any other
Units. In the event the Sponsor does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Equity Securities be Removed from a Trust?
The Portfolios of the Trusts are not "managed" by the Sponsor
or the Trustee; their activities described herein are governed
solely by the provisions of the Indenture. The Indenture provides
that the Sponsor may (but need not) direct the Trustee to dispose
of an Equity Security in the event that an issuer defaults in
the payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that
Page 36
the issuer of the Equity Security has breached a covenant which
would affect the payments of dividends, the credit standing of
the issuer or otherwise impair the sound investment character
of the Equity Security, that the issuer has defaulted on the payment
on any other of its outstanding obligations, that the price of
the Equity Security has declined to such an extent or other such
credit factors exist so that in the opinion of the Sponsor, the
retention of such Equity Securities would be detrimental to a
Trust. Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by a 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 a Trust, they may be accepted
for deposit in a Trust and either sold by the Trustee or held
in a 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 by the Trustee are credited to the Capital
Account of a Trust for distribution to Unit holders or to meet redemptions.
The Trustee may also sell Equity Securities designated by the
Sponsor, or if not so directed, in its own discretion, for the
purpose of redeeming Units of a 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 a Trust, it may be necessary for the Sponsor to
specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds, The First Trust GNMA, Templeton Growth and Treasury
Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and The Advantage Growth and Treasury Securities Trust. First
Trust introduced the first insured unit investment trust in 1974
and to date more than $9 billion in First Trust unit investment
trusts have been deposited. The Sponsor's employees include a
team of professionals with many years of experience in the unit
investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141.
As of December 31, 1994, the total partners' capital of Nike Securities
L.P. was $10,863,058 (audited). (This paragraph relates only to
the Sponsor and not to the Trusts or to any series thereof or
to any other Underwriter. The information is included herein only
for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations.
More detailed financial information will be made available by
the Sponsor upon request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
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 Trusts may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
Page 37
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Equity Securities. For information relating
to the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Equity Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or
upon the interest thereon or upon it as Trustee under the Indenture
or upon or in respect of a 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 and the Trustee, in
which event the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall
Page 38
not protect the Evaluator in any case of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations
and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the 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 a Trust or by the Trustee when
the value of the Equity Securities owned by such Trust as shown
by any evaluation, is less than the lower of $2,000,000 or 20%
of the total value of Equity Securities deposited in such Trust
during the primary offering period, or in the event that Units
of such Trust not yet sold aggregating more than 60% of the Units
of such Trust are tendered for redemption by the Underwriter,
including the Sponsor. If a Trust is liquidated because of the
redemption of unsold Units of such Trust by the Underwriter, the
Sponsor will refund to each purchaser of Units of such Trust the
entire sales charge paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit
holders of a Trust. Within a reasonable period after termination,
the Trustee will follow the procedures set forth under "How are
Income and Capital Distributed?" Also, because of the Special
Redemption and Liquidation in a New Trust, there is a possibility
that a Trust may be reduced below the Discretionary Liquidation
Amount and that a Trust could therefore be terminated at that
time before the Mandatory Termination Date of the Fund.
Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of a
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of a Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his address appearing on
the registration books of such Trust maintained by the Trustee.
At least 60 days prior 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 a Trust, rather than
to receive payment in cash for such Unit holder's pro rata share
of the amounts realized upon the disposition by the Trustee of
Equity Securities. 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 a Trust.
Unit holders not electing a distribution of shares of Equity Securities
and who do not elect the Rollover Option will receive a cash distribution
from the sale of the remaining Equity Securities within a reasonable
time after a Trust is terminated. Regardless of the distribution
involved, the Trustee will deduct from the funds of a Trust any
accrued costs, expenses, advances or indemnities provided by the
Trust Agreement, including estimated compensation of the Trustee
and costs of liquidation and any amounts required as a reserve
to provide for payment of any applicable taxes or other governmental
charges. Any sale of Equity Securities in a Trust upon termination
may result in a lower amount than might otherwise be realized
if such sale were not required at such time. The Trustee will
then distribute to each Unit holder his pro rata share of the
balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor.
Page 39
Carter, Ledyard & Milburn, will act as counsel for the Trustee and
as special New York tax counsel for the Trust.
Experts
The statements of net assets, including the schedules of investments,
of the Trusts at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon appearing elsewhere herein
and in the Registration Statement, and are included in reliance
upon such report given upon the authority of such firm as experts
in accounting and auditing.
Page 40
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 119
We have audited the accompanying statements of net assets, including
the schedules of investments, of The First Trust Special Situations
Trust, Series 119, comprised of Target 5 Trust, Series 2 and Target
10 Trust, Series 8, as of the opening of business on May 18, 1995.
These statements of net assets are the responsibility of the Trusts'
Sponsor. Our responsibility is to express an opinion on these
statements of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statements
of net assets are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of net assets. Our procedures included
confirmation of the letters of credit held by the Trustee and
deposited in the Trusts on May 18, 1995. An audit also includes
assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall presentation
of the statements of net assets. We believe that our audit of
the statements of net assets provides a reasonable basis for our
opinion.
In our opinion, the statements of net assets referred to above
present fairly, in all material respects, the financial position
of The First Trust Special Situations Trust, Series 119, comprised
of Target 5 Trust, Series 2 and Target 10 Trust, Series 8, at
the opening of business on May 18, 1995 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 18, 1995
Page 41
Statement of Net Assets
Target 5 Trust, Series 2
The First Trust Special Situations Trust, Series 119
At the Opening of Business on the Initial Date of Deposit
May 18, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $495,959
Liability for deferred sales charge (3) (9,750)
__________
Net assets 486,209
==========
Units outstanding 50,000
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $499,959
Less sales charge (4) (13,750)
__________
Net Assets $486,209
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $600,000 issued
by Bankers Trust Company has been deposited with the Trustee as
collateral, covering the monies necessary for the purchase of
the Equity Securities pursuant to purchase contracts for such
Equity Securities.
(3) Represents the amount of mandatory distributions from the
Trust ($0.195 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on September 1, 1995, and on the first
day of each month thereafter through June 1, 1996. If Units are
sold or redeemed prior to June 1, 1996, the remaining amount of
the deferred sales charge applicable to such Units will be payable
at the time of sale or redemption.
(4) The aggregate cost to investors includes a maximum total
sales charge computed at the rate of 2.75% of the Public Offering
Price (equivalent to 2.772% of the net amount invested), assuming
no reduction of sales charge for quantity purchases.
Page 42
Statement of Net Assets
Target 10 Trust, Series 8
The First Trust Special Situations Trust, Series 119
At the Opening of Business on the Initial Date of Deposit
May 18, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $495,294
Liability for deferred sales charge (3) (9,750)
__________
Net assets 485,544
==========
Units outstanding 50,000
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $500,044
Less sales charge (4) (14,500)
__________
Net Assets $485,544
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $600,000 issued
by Bankers Trust Company has been deposited with the Trustee as
collateral, covering the monies necessary for the purchase of
the Equity Securities pursuant to purchase contracts for such
Equity Securities.
(3) Represents the amount of mandatory distributions from the
Trust ($0.195 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on September 1, 1995, and on the first
day of each month thereafter through June 1, 1996. If Units are
sold or redeemed prior to June 1, 1996, the remaining amount of
the deferred sales charge applicable to such Units will be payable
at the time of sale or redemption.
(4) The aggregate cost to investors includes a maximum total
sales charge computed at the rate of 2.90% of the Public Offering
Price (equivalent to 2.928% of the net amount invested), assuming
no reduction of sales charge for quantity purchases.
Page 43
Schedule of Investments
Target 5 Trust, Series 2
The First Trust Special Situations Trust, Series 119
At the Opening of Business on the Initial Date of Deposit
May 18, 1995
<TABLE>
<CAPTION>
Market Cost of
Number Percentage Value Equity Current
of Ticker Symbol and of Aggregate per Securities Dividend
Shares Name of Issuer of Equity Securities (1) Offering Price Share to Trust (2) Yield (3)
______ _______________________________________ ______________ ______ _____________ _________
<C> <S> <C> <C> <C> <C>
2,030 CHV Chevron Corporation 20% $48.875 $ 99,216 3.79%
1,725 GE General Electric Company 20% 57.500 99,188 2.85%
2,362 MRK Merck & Company, Inc. 20% 42.000 99,204 2.86%
1,646 MMM Minnesota Mining &
Manufacturing Company 20% 60.250 99,172 3.12%
1,779 S Sears, Roebuck & Company 20% 55.750 99,179 2.87%
_______ ________
Total Investments 100% $495,959
======= ========
</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 purchase contracts for the Equity Securities were entered
into by the Sponsor on May 17, 1995. The Trust has a mandatory
termination date of June 28, 1996.
(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 closing sale prices of the
Equity Securities on the business day preceding 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 $495,959. Cost and loss to Sponsor relating to the Equity
Securities sold to the Trust were $496,162 and $203, respectively.
(3) Current Dividend Yield for each Equity Security was calculated
by annualizing the last quarterly or semi-annual ordinary dividend
declared on that Equity Security and dividing the result by that
Equity Security's closing sale price on May 17, 1995.
Page 44
Schedule of Investments
Target 10 Trust, Series 8
The First Trust Special Situations Trust, Series 119
At the Opening of Business on the Initial Date of Deposit
May 18, 1995
<TABLE>
<CAPTION>
Market Cost of
Number Percentage Value Equity Current
of Ticker Symbol and of Aggregate per Securities Dividend
Shares Name of Issuer of Equity Securities (1) Offering Price Share to Trust (2) Yield (3)
______ _______________________________________ ______________ ______ _____________ _________
<C> <S> <C> <C> <C> <C>
1,013 CHV Chevron Corporation 10% $48.875 $ 49,510 3.79%
726 DD E.I. du Pont de Nemours
& Company 10% 68.250 49,550 3.05%
695 XON Exxon Corporation 10% 71.250 49,519 4.21%
861 GE General Electric Company 10% 57.500 49,507 2.85%
1,179 MRK Merck & Company, Inc. 10% 42.000 49,518 2.86%
822 MMM Minnesota Mining &
Manufacturing Company 10% 60.250 49,525 3.12%
730 JPM J.P. Morgan & Company, Inc. 10% 67.875 49,549 4.42%
708 MO Philip Morris Companies, Inc. 10% 70.000 49,560 4.71%
888 S Sears, Roebuck & Company 10% 55.750 49,506 2.87%
726 TX Texaco, Inc. 10% 68.250 49,550 4.69%
_______ ________
Total Investments 100% $495,294
======= ========
</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 purchase contracts for the Equity Securities were entered
into by the Sponsor on May 17, 1995. The Trust has a mandatory
termination date of June 28, 1996.
(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 closing sale prices of the
Equity Securities on the business day preceding 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 $495,294. Cost and loss to Sponsor relating to the Equity
Securities sold to the Trust were $495,486 and $192, respectively.
(3) Current Dividend Yield for each Equity Security was calculated
by annualizing the last quarterly or semi-annual ordinary dividend
declared on that Equity Security and dividing the result by that
Equity Security's closing sale price on May 17, 1995.
Page 45
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Page 46
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Page 47
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information:
Target 5 Trust, Series 2 5
Target 10 Trust, Series 8 6
The First Trust Special Situations Trust, Series 119:
What is The First Trust Special Situations Trust? 9
What are the Expenses and Charges? 10
What is the Federal Tax Status of Unit Holders? 11
Why are Investments in the Trusts Suitable for
Retirement Plans? 14
Portfolio:
What are Equity Securities? 14
The Dow Jones Industrial Average, Historical
Perspective 15
The Dow Jones Industrial Average 16
What are the Equity Securities Selected for
Target 5 Trust, Series 2? 16
What are the Equity Securities Selected for
Target 10 Trust, Series 8? 17
What are Some Additional Considerations for
Investors? 23
Risk Factors 23
Public Offering:
How is the Public Offering Price Determined? 26
How are Units Distributed? 28
What are the Sponsor's Profits? 29
Will There be a Secondary Market? 30
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 30
How are Income and Capital Distributed? 31
What Reports will Unit Holders Receive? 32
How May Units be Redeemed? 32
Special Redemption, Liquidation and Investment in
a New Trust 34
How May Units be Purchased by the Sponsor? 36
How May Equity Securities be Removed from a
Trust? 36
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 37
Who is the Trustee? 37
Limitations on Liabilities of Sponsor and Trustee 38
Who is the Evaluator? 38
Other Information:
How May the Indenture be Amended or Terminated? 39
Legal Opinions 39
Experts 40
Report of Independent Auditors 41
Statements of Net Assets:
Target 5 Trust, Series 2 42
Target 10 Trust, Series 8 43
Schedules of Investments:
Target 5 Trust, Series 2 44
Target 5 Trust, Series 8 45
</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.
FIRST TRUST (registered trademark)
Target 5 Trust
Series 2
Target 10 Trust
Series 8
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
May 18, 1995
-APPENDIX-
The graph which appears on page 16 of the prospectus represents
a comparison between a $10,000 investment made on January 1, 1975
in those stocks which comprise the Dow Jones Industrial Average
and an identical investment in the five lowest priced stocks of
the ten common stocks in the Dow Jones Industrial Average having
the highest dividend yield as of December 31 of each respective
year. The chart indicates that $10,000 invested on January 1,
1975 in the stocks which comprise the Dow Jones Industrial Average
would on December 31, 1994 be worth $145,385 as opposed to $536,260
had the $10,000 been invested in the five lowest priced stocks
of the ten common stocks in the Dow Jones Industrial Average having
the highest dividend yield as of December 31 of each respective
year. Both figures assume that dividends received during each
year will be reinvested at year end and sales charges, commissions,
expenses and taxes were not considered in determining total returns.
The graph which appears on page 18 of the prospectus represents
a comparison between a $10,000 investment made on January 1, 1975
in those stocks which comprise the Dow Jones Industrial Average
and an identical investment in the ten common stocks in the Dow
Jones Industrial Average having the highest dividend yield as
of December 31 of each respective year. The chart indicates that
$10,000 invested on January 1, 1975 in the stocks which comprise
the Dow Jones Industrial Average would on December 31, 1994 be
worth $145,385 as opposed to $288,913 had the $10,000 been invested
in the ten common stocks in the Dow Jones Industrial Average having
the highest dividend yield as of December 31 of each respective
year. Both figures assume that dividends received during each
year will be reinvested at year end and sales charges, commissions,
expenses and taxes were not considered in determining total returns.
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 122
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 122, 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
122 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 30, 1995.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 122
(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 30, 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 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 122 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
