As filed with the Securities and Exchange Commission on August 25, 1995.
Registration No. 33-61727
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 123
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
NIKE SECURITIES L.P.
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agent for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered:
Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
_________________________
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 123
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION DATED AUGUST 25, 1995
American Financial Institutions Growth Trust, Series 1
American Technology Growth Trust, Series 1
American Technology Growth & Treasury Securities Trust,
Series 2
The Trusts. The First Trust (registered trademark) Special Situations
Trust, Series 123 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts." The American Financial Institutions
Growth Trust, Series 1 and the American Technology Growth Trust,
Series 1 are sometimes collectively referred to herein as the
"Growth Trusts." The American Technology Growth & Treasury Trust,
Series 2 is sometimes individually referred to herein as the "Growth
& Treasury Trust."
The American Financial Institutions Growth Trust, Series 1 is
a unit investment trust consisting of a portfolio containing common
stocks issued by national and regional financial institutions
which are incorporated or headquartered in the United States.
The American Technology Growth Trust, Series 1 is a unit investment
trust consisting of a portfolio containing common stocks issued
by companies in the computer and technology industry with superior
historical financial performance.
The American Technology Growth & Treasury Trust, Series 2 is a
unit investment trust consisting of a portfolio containing zero
coupon U.S. Treasury bonds and common stocks issued by companies
in the computer and technology industry with superior historical
performance.
The objective of the American Financial Institutions Growth Trust,
Series 1 is to provide for potential capital appreciation and
dividend income by investing such Trust's portfolio in common
stocks ("Equity Securities"). The objective of the American Technology
Growth Trust, Series 1 is to provide for potential capital appreciation
by investing such Trust's portfolio in common stocks ("Equity
Securities"). The objective of the American Technology Growth
& Treasury Trust, Series 2 is to protect Unit holders' capital
and provide potential capital appreciation by investing a portion
of its portfolio in zero coupon U.S. Treasury bonds ("Treasury
Obligations") and the remainder of the Trust's portfolio in common
stocks ("Equity Securities"). Collectively, the Treasury Obligations
and the Equity Securities are referred to herein as the "Securities."
The Treasury Obligations evidence the right to receive a fixed
payment at a future date from the U.S. Government and are backed
by the full faith and credit of the U.S. Government. The guarantee
of the U.S. Government does not apply to the market value of the
Treasury Obligations or the Units of the Trust, whose net asset
value will fluctuate and, prior to maturity, may be worth more
or less than a purchaser's acquisition cost. The Growth & Treasury
Trust is intended to achieve its objective over the life of the
Trust and as such, is best suited for those investors capable
of holding such Units to maturity.
See "Schedule of Investments" for each Trust. There is, of course,
no guarantee that the objective of each Trust will be achieved.
Each Trust has a mandatory termination date (the "Mandatory Termination
Date" or "Trust Ending Date") as set forth under "Summary of Essential
Information."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE
TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
First Trust (registered trademark)
The date of this Prospectus is , 1995
Page 1
Each Unit of a Trust represents an undivided fractional interest
in all the Securities deposited in such Trust. The Growth & Treasury
Trust has been organized so that purchasers of Units should receive,
at the termination of the Trust, an amount per Unit at least equal
to $10.00 (which is equal to the per Unit value upon maturity
of the Treasury Obligations), even if such Trust never paid a
dividend and the value of the Equity Securities were to decrease
to zero, which the Sponsor considers highly unlikely. This feature
of the Growth & Treasury Trust provides Unit holders who purchase
Units at a price of $10.00 or less per Unit with total principal
protection, including any sales charges paid, although they might
forego any earnings on the amount invested. To the extent that
Units are purchased at a price less than $10.00 per Unit, this
feature may also provide a potential for capital appreciation.
As a result of the volatile nature of the market for zero coupon
U.S. Treasury bonds, Units sold or redeemed prior to maturity
will fluctuate in price and the underlying Treasury Obligations
may be valued at a price greater or less than their value as of
the Initial Date of Deposit. UNIT HOLDERS DISPOSING OF THEIR UNITS
PRIOR TO THE MATURITY OF THE TRUST MAY RECEIVE MORE OR LESS THAN
$10.00 PER UNIT, DEPENDING ON MARKET CONDITIONS ON THE DATE UNITS
ARE SOLD OR REDEEMED.
The Treasury Obligations deposited in the Growth & Treasury Trust
on the Initial Date of Deposit will mature on
, 2002 (the "Treasury Obligations Maturity Date"). The Treasury
Obligations in the Growth & Treasury Trust have a maturity value
equal to or greater than the aggregate Public Offering Price (which
includes the sales charge) of the Units of the Trust on the Initial
Date of Deposit. The Equity Securities deposited in 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 and with changes in the conditions and performance
of the specific Equity Securities owned by such Trust. See "Portfolio."
With respect to the Growth Trusts, the Sponsor may, from time
to time during a period of up to approximately 360 days after
the Initial Date of Deposit, deposit additional Equity Securities
in 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 different than the original proportionate
relationship. Any difference may be due to the sale, redemption
or liquidation of any Equity Securities deposited in a Trust on
the Initial, or any subsequent, Date of Deposit. See "What is
The First Trust Special Situations Trust?" and "How May Securities
be Removed from a Trust?"
With respect to the Growth & Treasury Trust, the Sponsor may,
from time to time during a period of up to approximately 360 days
after the Initial Date of Deposit, deposit additional Securities
in the Trust, provided it maintains the original percentage relationship
between the Treasury Obligations and Equity Securities in the
Trust's portfolio. Such deposits of additional Securities will,
therefore, be done in such a manner that the maturity value of
each Unit should always be an amount at least equal to $10.00,
and that the original proportionate relationship amongst the individual
issues of the Equity Securities in the Trust shall be maintained.
Any deposit by the Sponsor of additional Securities will duplicate,
as nearly as is practicable, the original proportionate relationship
established on the Initial Date of Deposit, and not the actual
proportionate relationship on the subsequent date of deposit,
since the actual proportionate relationship may be different than
the original proportionate relationship. Any such difference may
be due to the sale, redemption or liquidation of any Securities
deposited in the Trust on the Initial, or any subsequent, Date
of Deposit. See "What is the First Trust Special Situations Trust?"
and "How May Securities be Removed from the Trusts?"
Public Offering Price. With respect to the Growth Trusts, the
Public Offering Price per Unit of a Trust during the initial offering
period is equal to the aggregate underlying value of the Equity
Securities in such Trust (generally determined by the closing
sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus a pro
rata share of cash, if any, in the Capital and Income Accounts
of such Trust, plus a maximum sales charge of 4.9% (equivalent
to 5.152% of the net amount invested). The secondary market Public
Offering Price per Unit will be based upon the aggregate underlying
value of the Equity Securities in a Trust (generally determined
by the closing sale prices
Page 2
of listed Equity Securities and the bid prices of over-the-counter
traded Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of such Trust plus
a maximum sales charge of 4.9% (equivalent to 5.152% of the net
amount invested), subject to reduction beginning October 1, 1996.
With respect to the Growth & Treasury Trust, the Public Offering
Price per Unit of the Trust during the initial offering period
is equal to a pro rata share of the offering prices of the Treasury
Obligations and the aggregate underlying value of the Equity Securities
in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of the Trust, plus
a maximum sales charge of 5.5% (equivalent to 5.820% of the net
amount invested). A pro rata share of accumulated dividends, if
any, in the Income Account is included in the Public Offering
Price. The secondary market Public Offering Price per Unit will
be based upon a pro rata share of the bid prices of the Treasury
Obligations and the aggregate underlying value of the Equity Securities
in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the bid prices of over-the-counter
traded Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of the Trust plus a
maximum sales charge of 5.5% (equivalent to 5.820% of the net
amount invested) subject to a reduction beginning October 1, 1996.
The minimum purchase for each Trust is $1,000. The sales charge
for each Trust is reduced on a graduated scale for sales involving
at least 5,000 Units with respect to the Growth Trusts and 10,000
Units with respect to the Growth & Treasury Trust. 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 American Financial Institutions
Growth Trust, Series 1 was $ per Unit, for American
Technology Growth Trust, Series 1 was $ per Unit
and for American Technology Growth & Treasury Trust, Series 2
was $ 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
and capital, if any, 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." Distributions
of funds in the Capital Account, if any, will be made at least
annually in December of each year. Any distribution of income
and/or capital will be net of the expenses of a Trust. Income
with respect to the accrual of original issue discount on the
Treasury Obligations in the Growth & Treasury Trust will not be
distributed currently, although Unit holders of the Growth & Treasury
Trust will be subject to income tax at ordinary income rates as
if a distribution had occurred. INCOME WITH RESPECT TO THE ACCRUAL
OF ORIGINAL ISSUE DISCOUNT ON THE TREASURY OBLIGATIONS IN THE
GROWTH & TREASURY TRUST WILL NOT BE DISTRIBUTED CURRENTLY, ALTHOUGH
UNIT HOLDERS OF THE GROWTH & TREASURY TRUST WILL BE SUBJECT TO
INCOME TAX AT ORDINARY INCOME RATES AS IF A DISTRIBUTION HAD OCCURRED.
See "What is the Federal Tax Status of Unit Holders?" Additionally,
upon termination of a Trust, the Trustee will distribute, upon
surrender of Units for redemption, to each 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?"
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor may maintain a
market for Units of a Trust and offer to repurchase such Units,
in the case of the Growth Trusts, at prices which are based on
the aggregate underlying value of Equity Securities in a Trust
(generally determined by the closing sale prices of listed Equity
Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of such Trust; in the case of the Growth & Treasury Trust,
at prices which are based on the aggregate bid side evaluation
of the Treasury Obligations and the aggregate underlying value
of Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the bid prices
of over-the-counter traded Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. In the
case of the Growth Trusts, if a secondary market is maintained
during the initial offering period,
Page 3
the prices at which Units will be repurchased will be based upon
the aggregate underlying value of the Equity Securities in a Trust
(generally determined by the closing sale prices of listed Equity
Securities and the ask prices of over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of such Trust. If a secondary market is maintained during
the initial offering period, in the case of the Growth & Treasury
Trust, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Treasury Obligations
and the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of
listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the Capital
and Income Accounts of the Trust. In the case of the Growth Trusts,
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 a Trust (generally determined
by the closing sale prices of listed Equity Securities and the
bid prices of over-the-counter traded Equity Securities) plus
or minus a pro rata share of cash, if any, in the Capital and
Income Accounts of such Trust. If a secondary market is not maintained,
a Unit holder may redeem Units of the Growth & Treasury Trust
through redemption at prices based upon the aggregate bid price
of the Treasury Obligations plus the aggregate underlying value
of the Equity Securities in the Trust (generally determined by
the closing sale prices of listed Equity Securities and the bid
prices of over-the-counter traded Equity Securities) plus or minus
a pro rata share of cash, if any, in the Capital and Income Accounts
of the Trust. With respect to the Growth Trusts, a Unit holder
tendering 2,500 Units of a Trust or more for redemption may request
a distribution of shares of Equity Securities (reduced by customary
transfer and registration charges) in lieu of payment in cash.
See "How May Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date for
the Growth Trusts and on the Treasury Obligations Maturity Date
for the Growth & Treasury Trust, Equity Securities will begin
to be sold in connection with the termination of each Trust. The
Sponsor will determine the manner, timing and execution of the
sale of the Equity Securities. Written notice of any termination
of each 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 for the
Growth Trusts and on the Treasury Obligations Maturity Date for
the Growth & Treasury 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. All Unit holders
of the Growth & Treasury Trust will receive their pro rata portion
of the Treasury Obligations in cash upon the termination of the
Trust. To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee,
must be returned to the Trustee at least five business days prior
to the Mandatory Termination Date for the Growth Trusts and on
the Treasury Obligations Maturity Date for the Growth & Treasury
Trust. Unit holders not electing a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after a Trust is
terminated. 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 of the Equity Securities which make up
a Trust or the general condition of the stock market, volatile
interest rates, economic recession and potential increased regulation
on the banking or communications industries. The Trusts are not
actively managed and Equity Securities will not be sold by the
Trusts to take advantage of market fluctuations or changes in
anticipated rates of appreciation. See "What are Equity Securities?-Risk
Factors."
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
American Financial Institutions Growth Trust, Series 1
General Information
<S> <C>
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Securities per Unit $
Sales Charge of 4.9% of the Public Offering Price per Unit,
(5.152% of the net amount invested) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate underlying value
of Equity Securities) $ less than Public Offering
Price per Unit; $ less than Sponsor's Initial
Repurchase Price per Unit (3) $
</TABLE>
CUSIP Number
First Settlement Date , 1995
Mandatory Termination Date , 2002
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than the lower of $2,000,000 or
20% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $ per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading (4:00
p.m. eastern 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 out-
standing annually payable to an
affiliate of the Sponsor.
Estimated Organizational Expenses (5) $ per Unit.
Income Distribution Record Date Fifteenth day of each March,
June, September and December,
commencing December 15, 1995.
Income Distribution Date (6) Last day of each March,
June, September and December,
commencing December 31, 1995.
[FN]
________________
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. eastern standard time and sold
to investors at a Public Offering Price per Unit based on this
valuation.
(3) See "How May Units be Redeemed?"
(4) The Sponsor will also be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of
$0.0010 per Unit.
(5) The Trust (and therefore Unit holders) will bear all or
a portion of its organizational costs (including costs of preparing
the registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio
and the initial fees and expenses of the Trustee but not including
the expenses incurred in the printing of preliminary and final
prospectuses, and expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. Total organizational
expenses will be amortized over a five-year period. See "What
are the Expenses and Charges?" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
(6) Distributions from the Capital Account, if any, will be made
monthly on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 5
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
American Technology Growth Trust, Series 1
General Information
<S> <C>
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Securities per Unit $
Sales Charge of 4.9% of the Public Offering Price per Unit,
(5.152% of the net amount invested) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate underlying value
of Equity Securities) $ less than Public Offering
Price per Unit; $ less than Sponsor's Initial Repurchase
Price per Unit (3) $
</TABLE>
CUSIP Number
First Settlement Date , 1995
Mandatory Termination Date , 2002
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than the lower of $2,000,000 or
20% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $ per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading (4:00
p.m. eastern 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 out-
standing annually payable to an
affiliate of the Sponsor.
Estimated Organizational Expenses (5) $ per Unit.
Income Distribution Record Date Fifteenth day of each December,
commencing December 15, 1995.
Income Distribution Date (6) Last day of each December, commencing
December 31, 1995.
[FN]
________________
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. eastern 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 also be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0010 per Unit.
(5) The Trust (and therefore Unit holders) will bear all or
a portion of its organizational costs (including costs of preparing
the registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio
and the initial fees and expenses of the Trustee but not including
the expenses incurred in the printing of preliminary and final
prospectuses, and expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. Total organizational
expenses will be amortized over a five-year period. See "What
are the Expenses and Charges?" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
(6) Distributions from the Capital Account, if any, will be made
monthly on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 6
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
American Technology Growth & Treasury Securities Trust, Series 2
General Information
<S> <C>
Aggregate Maturity Value of Treasury Obligations Initiallly Deposited $
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Securities per Unit $
Sales Charge of 5.5% of the Public Offering Price per Unit,
(5.820% of the net amount invested) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on bid price evaluation of underlying
Treasury Obligations and aggregate underlying value of Equity
Securities) $ less than Public Offering Price per Unit;
$ less than Sponsor's Initial Repurchase Price per Unit (3) $
</TABLE>
CUSIP Number
First Settlement Date , 1995
Treasury Obligations Maturity Date , 2002
Mandatory Termination Date , 2002
Trustee's Annual Fee $ per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading (4:00
p.m. eastern 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 out-
standing annually payable to an
affiliate of the Sponsor.
Estimated Organizational Expenses (5) $ per Unit.
Income Distribution Record Date Fifteenth day of each December,
commencing December 15, 1995.
Income Distribution Date (6) Last day of each December, commencing
December 31, 1995.
[FN]
________________
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof. The Treasury
Obligations are valued at their aggregate offering side evaluation.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. eastern 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 also be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0010 per Unit.
(5) The Trust (and therefore Unit holders) will bear all or
a portion of its organizational costs (including costs of preparing
the registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio
and the initial fees and expenses of the Trustee but not including
the expenses incurred in the printing of preliminary and final
prospectuses, and expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. Total organizational
expenses will be amortized over a five-year period. See "What
are the Expenses and Charges?" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
(6) Distributions from the Capital Account, if any, will be made
monthly on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 7
American Financial Institutions Growth Trust, Series 1
American Technology Growth Trust, Series 1
American Technology Growth & Treasury Securities
Trust, Series 2
The First Trust Special Situations Trust, Series 123
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 123 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: American Financial
Institutions Growth Trust, Series 1, American Technology Growth
Trust, Series 1 and American Technology Growth & Treasury Trust,
Series 2 (collectively, the "Trusts," and each individually, a
"Trust"). The American Financial Institutions Growth Trust, Series
1 and the American Technology Growth Trust, Series 1 are sometimes
collectively referred to herein as the "Growth Trusts." The American
Technology Growth & Treasury Trust, Series 2 is sometimes individually
referred to herein as the "Growth & Treasury Trust." The Series
was created under the laws of the State of New York pursuant to
a Trust Agreement (the "Indenture"), dated the Initial Date of
Deposit, with Nike Securities L.P., as Sponsor, United States
Trust Company of New York, as Trustee, First Trust Advisors L.P.,
as Portfolio Supervisor and FT Evaluators L.P., as Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the
Trustee confirmations of contracts for the purchase of zero coupon
U.S. Treasury bonds and common stocks (in the case of the Growth
Trusts, only confirmations of contracts for the purchase of common
stocks), together with an irrevocable letter or letters of credit
of a financial institution in an amount at least equal to the
purchase price of such securities. In exchange for the deposit
of securities or contracts to purchase securities in a Trust,
the Trustee delivered to the Sponsor documents evidencing the
entire ownership of such Trust.
The objective of the American Financial Institutions Growth Trust,
Series 1 is to provide for potential capital appreciation and
dividend income through an investment in equity securities issued
by national and regional financial institutions which are incorporated
or headquartered in the United States. The Trust seeks to provide
above-average capital appreciation potential from improving fundamentals
and continuing takeover activity in the banking industry.
The objective of the American Technology Growth Trust, Series
1 is to provide for potential capital appreciation through an
investment in equity securities issued by companies in the computer
and technology industry with superior historical financial performance.
The Sponsor of the Trust believes that technology is the industry
of the future. The advancements in technology and the huge demand
for the products created by these and future advancements both
here and abroad make for a compelling investment opportunity.
Technology is one of the few sectors that offers an opportunity
to invest in companies that promise both extraordinary growth
and value. Above-average risk and volatility in shares of technology
stocks are more than offset, the Sponsor believes, by above-average
returns. It is the opinion of the Sponsor that the technology
stocks selected for this Trust are priced attractively, relative
to their potential earning prospects, despite the impressive returns
for some of the selections in the last year. See "What are Equity
Securities?" There is, of course, no guarantee that the objectives
of each Trust will be achieved.
The objective of the American Technology Growth & Treasury Trust,
Series 2 is to protect Unit holders' capital and provide potential
capital appreciation by investing a portion of its portfolio in
zero coupon U.S. Treasury bonds ("Treasury Obligations") and the
remainder of the Trust's portfolio in common stocks issued by
companies in the computer and technology industry with superior
historical performance ("Equity Securities"). Collectively, the
Treasury Obligations and the Equity Securities are referred to
herein as the "Securities." See "Schedule of Investments" for
the Growth & Treasury Trust. The Growth & Treasury Trust has a
Mandatory Termination Date as set forth under "Summary of Essential
Information." The Treasury Obligations
Page 8
evidence the right to receive a fixed payment at a future date
from the U.S. Government and are backed by the full faith and
credit of the U.S. Government. The guarantee of the U.S. Government
does not apply to the market value of the Treasury Obligations
or the Units of the Trust, whose net asset values will fluctuate
and, prior to maturity, may be worth more or less than a purchaser's
acquisition cost. There is, of course, no guarantee that the objective
of the Growth & Treasury Trust will be achieved.
With respect to the Growth Trusts, with the deposit of the Securities
on the Initial Date of Deposit, the Sponsor established a percentage
relationship between the Equity Securities in each Trust's portfolio.
With the deposit of the Securities in the Growth & Treasury Trust
on the Initial Date of Deposit, the Sponsor established a percentage
relationship between the principal amounts of Treasury Obligations
and Equity Securities in the Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to
the Indenture, may deposit additional Securities in 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 a Trust. Any additional Equity Securities deposited
in a Growth Trust will maintain, as nearly as is practicable,
the original proportionate relationship of the Equity Securities
in the Trust's portfolio. Any additional Securities deposited
in the Growth & Treasury Trust will maintain, as nearly as is
practicable, the original proportionate relationship of the Treasury
Obligations and Equity Securities in such Trust's portfolio. Such
deposits of additional Securities in the Growth & Treasury Trust
will, therefore, be done in such a manner that the maturity value
of the Treasury Obligations represented by each Unit should always
be an amount at least equal to $10.00, and that the original proportionate
relationship amongst the individual issues of the Equity Securities
shall be maintained. Any deposit by the Sponsor of additional
Securities in a Trust will duplicate, as nearly as is practicable,
the original proportionate relationship and not the actual proportionate
relationship on the subsequent date of deposit, since the actual
proportionate relationship may be different than the original
proportionate relationship. Any such difference may be due to
the sale, redemption or liquidation of any of the Securities deposited
in a Trust on the Initial, or any subsequent, Date of Deposit.
See "How May Securities be Removed from a Trust?" On a cost basis
to the Growth & Treasury Trust, the original percentage relationship
on the Initial Date of Deposit was approximately % Treasury
Obligations and approximately % Equity Securities. The original
percentage relationship of each Equity Security in the Trusts
is set forth herein under "Schedule of Investments" for each Trust.
Since the prices of the underlying Equity Securities in each Growth
Trust will fluctuate daily, the ratio, on a market value basis,
will also change daily. Likewise, the prices of the underlying
Treasury Obligations and Equity Securities in the Growth & Treasury
Trust will fluctuate daily and the ratio, on a market value basis,
will also change daily. The portion of Equity Securities represented
by each Unit of a Growth Trust will not change as a result of
the deposit of additional Equity Securities in such Growth Trust.
The maturity value of the Treasury Obligations and the portion
of Equity Securities represented by each Unit of the Growth &
Treasury Trust will not change as a result of the deposit of additional
Securities in the Growth & Treasury Trust.
On the Initial Date of Deposit, each Unit of a Trust represented
the undivided fractional interest in the Securities deposited
in such Trust set forth under "Summary of Essential Information."
The Growth & Treasury Trust has been organized so that purchasers
of Units should receive, at the termination of the Trust, an amount
per Unit at least equal to $10.00 per Unit (which is equal to
the per Unit value upon maturity of the Treasury Obligations),
even if the Equity Securities never paid a dividend and the value
of the Equity Securities in the Trust were to decrease to zero,
which the Sponsor considers highly unlikely. Furthermore, the
Sponsor will take such steps in connection with the deposit of
additional Securities in the Growth & Treasury Trust as are necessary
to maintain a maturity value of the Units of the Trust at least
equal to $10.00 per Unit. The receipt of only $10.00 per Unit
upon the termination of the Growth & Treasury Trust (an event
which the Sponsor believes is unlikely) represents a substantial
loss on a present value basis. At current interest rates, the
present value of receiving $10.00 per Unit as of the termination
of the Growth & Treasury Trust would be approximately $
per Unit (the present value is indicated by the amount per Unit
which is invested in Treasury Obligations). Furthermore, the $10.00
per Unit in no respect protects investors against diminution in
the purchasing power of their investment due to inflation (although
expectations concerning inflation are a component in determining
prevailing interest rates, which in turn determine present values).
If inflation were
Page 9
to occur at the rate of 5% per annum during the period ending
at the termination of the Growth & Treasury Trust, the present
dollar value of $10.00 per Unit at the termination of the Trust
would be approximately $ per Unit. To the extent that
Units of a Trust are redeemed, the aggregate value of the Securities
in such Trust will be reduced and the undivided fractional interest
represented by each outstanding Unit of the Trust will increase.
However, if additional Units are issued by a Trust in connection
with the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in such Trust will be increased
by amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit of such Trust will be decreased
proportionately. See "How May Units be Redeemed?" The Trusts each
have a Mandatory Termination Date as set forth herein under "Summary
of Essential Information."
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to each Trust, for which the Sponsor will be reimbursed
in amounts as set forth under "Summary of Essential Information,"
the Sponsor will not receive any fees in connection with its activities
relating to each Trust. Such bookkeeping and administrative charges
may be increased without approval of the Unit holders by amounts
not exceeding proportionate increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index published
by the United States Department of Labor. The fees payable to
the Sponsor for such services may exceed the actual costs of providing
such services for 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 each Trust. 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 each Trust for which it is
reimbursed by such Trust. The Trustee will receive for its ordinary
recurring services to each Trust an annual fee computed at $
per annum per Unit in each Trust outstanding based upon
the largest aggregate number of Units of such Trust outstanding
at any time during the year. For a discussion of the services
performed by the Trustee pursuant to its obligations under the
Indenture, reference is made to the material set forth under "Rights
of Unit Holders."
The Trustee's and Evaluator's fees are payable from the Income
Account of a Trust to the extent funds are available and then
from the Capital Account of a 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.
Expenses incurred in establishing each Trust, including costs
of preparing the registration statement, the trust indenture and
other closing documents, registering Units with the Securities
and Exchange Commission and states, the initial audit of each
Trust portfolio and the initial fees and expenses of the Trustee
and any other out-of-pocket expenses, will be paid by such Trust
and amortized over a five-year period. The
Page 10
following additional charges are or may be incurred by a Trust:
all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect 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 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 each Trust. In addition, the Trustee is empowered to
sell Securities in a Trust in order to make funds available to
pay all these amounts if funds are not otherwise available in
the Income and Capital Accounts of such Trust except that the
Trustee shall not sell Treasury Obligations to pay Growth & Treasury
Trust expenses. Since the Equity Securities are all common stocks
and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of a Trust. As described
above, if dividends are insufficient to cover expenses, it is
likely that Equity Securities will have to be sold to meet such
Trust's expenses. These sales may result in capital gains or losses
to Unit holders. See "What is the Federal Tax Status of Unit Holders?"
The Indenture requires each Trust to be audited on an annual basis
at the expense of such Trust by independent auditors selected
by the Sponsor. So long as the Sponsor is making a secondary market
for the Units of a Trust, the Sponsor is required to bear the
cost of such annual audit to the extent such cost exceeds $0.0050
per Unit for such Trust. Unit holders of a Trust covered by an
audit may obtain a copy of the audited financial statements upon
request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal
income tax consequences of the purchase, ownership and disposition
of the Units. The summary is limited to investors who hold the
Units as "capital assets" (generally, property held for investment)
within the meaning of Section 1221 of the Internal Revenue Code
of 1986 (the "Code"). Unit holders should consult their tax advisers
in determining the Federal, state, local and any other tax consequences
of the purchase, ownership and disposition of Units in the Trusts.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. Each Trust is not an association taxable as a corporation
for Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of a Trust under
the Code; and the income of each Trust will be treated as income
of the Unit holders thereof under the Code. Each Unit holder will
be considered to have received his pro rata share of income derived
from each Trust asset when such income is received by a Trust.
2. Each Unit holder will have a taxable event when a Trust disposes
of an Equity Security (whether by sale, exchange, redemption,
or payment at maturity) or upon the sale or redemption of Units
by such Unit holder. The price a Unit holder pays for his Units,
including sales charges, is allocated among his pro rata portion
of each Security held by a Trust (in proportion to the fair market
values thereof on the date the Unit holder purchases his Units)
in order to determine his initial cost for his pro rata portion
of each Security held by such Trust. The Treasury Obligations
held by the Growth & Treasury Trust are treated as stripped bonds
and may be treated as bonds issued at an original issue discount
as of the date a Unit holder purchases his Units. Because the
Treasury Obligations represent interests in "stripped" U.S. Treasury
bonds, a Unit holder's initial cost for his pro rata portion of
each Treasury Obligation held by the Growth & Treasury Trust shall
be treated as its "purchase price" by the Unit holder. Original
issue discount is effectively treated as interest for Federal
income tax purposes and the amount of original issue discount
in this case is generally the difference
Page 11
between the bond's purchase price and its stated redemption price
at maturity. A Unit holder of the Growth & Treasury Trust will
be required to include in gross income for each taxable year the
sum of his daily portions of original issue discount attributable
to the Treasury Obligations held by the Trust as such original
issue discount accrues and will in general be subject to Federal
income tax with respect to the total amount of such original issue
discount that accrues for such year even though the income is
not distributed to the Unit holders during such year to the extent
it is not less than a "de minimis" amount as determined under
a Treasury Regulation issued on December 28, 1992 relating to
stripped bonds. To the extent the amount of such discount is less
than the respective "de minimis" amount, such discount shall be
treated as zero. In general, original issue discount accrues daily
under a constant interest rate method which takes into account
the semi-annual compounding of accrued interest. In the case of
the Treasury Obligations, this method will generally result in
an increasing amount of income to the Unit holders of the Growth
& Treasury Trust each year. Unit holders of the Growth & Treasury
Trust should consult their tax advisers regarding the Federal
income tax consequences and accretion of original issue discount
under the stripped bond rules. For Federal income tax purposes,
a Unit holder's pro rata portion of dividends, as defined by Section
316 of the Code, paid by a corporation with respect to an Equity
Security held by a Trust are taxable as ordinary income to the
extent of such corporation's current and accumulated "earnings
and profits." A Unit holder's pro rata portion of dividends paid
on such Equity Security which exceed such current and accumulated
earnings and profits will first reduce a Unit holder's tax basis
in such Equity Security, and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall
generally be treated as capital gain. In general, any such capital
gain will be short-term unless a Unit holder has held his Units
for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by a
Trust will generally be considered a capital gain except in the
case of a dealer or a financial institution and, in general, will
be long-term if the Unit holder has held his Units for more than
one year (the date on which the Units are acquired (i.e., the
trade date) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unit holder's
portion of loss, if any, upon the sale or redemption of Units
or the disposition of Securities held by a Trust will generally
be considered a capital loss except in the case of a dealer or
a financial institution and will be long-term if the Unit holder
has held his Units for more than one year. Unit holders should
consult their tax advisers regarding the recognition of such capital
gains and losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by a Trust,
including fees of the Trustee and the Evaluator.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by a Trust (to the extent such dividends are taxable as ordinary
income, as discussed above) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other
than corporate shareholders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics
and other than for purposes of special taxes such as the accumulated
earnings tax and the personal holding corporation tax). However,
a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Final regulations have been recently issued which address
special rules that must be considered in determining whether the
46-day holding requirement is met. Moreover, the allowable percentage
of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness
Page 12
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. For taxpayers other than corporations, net capital gains
are subject to a maximum marginal tax rate of 28%. However, it
should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences
at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Tax Act, the Tax Act includes a provision
that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993.
Unit holders and prospective investors should consult with their
tax advisers regarding the potential effect of this provision
on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Redemption
of Units (for the Growth Trusts) or Termination of a Trust. As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns
at least 2,500 Units Units of a Trust may request an In-Kind Distribution
upon the redemption of Units or the termination of a Growth Trust
and only upon the termination of the Growth & Treasury Trust.
The Unit holder requesting an In-Kind Distribution will be liable
for expenses related thereto (the "Distribution Expenses") and
the amount of such In-Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Rights of Unit Holders-How
are Income and Capital Distributed?" Treasury Obligations held
by the Growth & Treasury Trust will not be distributed to a Unit
holder as part of an In-Kind Distribution. The tax consequences
relating to the sale of Treasury Obligations are discussed above.
As previously discussed, prior to the redemption of Units or the
termination of a Trust, a Unit holder is considered as owning
a pro rata portion of each of the Trust assets for Federal income
tax purposes. The receipt of an In-Kind Distribution upon the
redemption of Units (for the Growth Trusts) 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 Security owned by a Trust. A "Security" for this purpose
is a particular class of stock issued by a particular corporation
(and does not include Treasury Obligations in the Growth & Treasury
Trust). If the Unit holder receives only whole shares of a Security
in exchange for his or her pro rata portion in each share of such
Security held by a Trust, there is no taxable gain or loss recognized
upon such deemed exchange pursuant to Section 1036 of the Code.
If the Unit holder receives whole shares of a particular Security
plus cash in lieu of a fractional share of such Security, and
if the fair market value of the Unit holder's pro rata portion
of the shares of such Security exceeds his tax basis in his pro
rata portion of such Security, taxable gain would be recognized
in an amount not to exceed the amount of such cash received, pursuant
to Section 1031(b) of the Code. No taxable loss would be recognized
upon such an exchange pursuant to Section 1031(c) of the Code,
whether or not cash is received in lieu of a fractional share.
Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unit holder's
tax basis in the shares of such particular Security which he receives
as part of the In-Kind Distribution. Finally, if a Unit holder's
pro rata interest in a Security does not equal a whole share,
he may receive entirely cash in exchange for his pro rata portion
of a particular Security. In such case, taxable gain or loss is
measured by comparing the amount of cash received by the Unit
holder with his tax basis in such Security.
Page 13
Because each Trust will own many Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Security owned by such Trust.
In analyzing the tax consequences with respect to each Security,
such Unit holder must allocate the Distribution Expenses among
the Securities (the "Allocable Expenses"). The Allocable Expenses
will reduce the amount realized with respect to each Security
so that the fair market value of the shares of such Security received
(if any) and cash received in lieu thereof (as a result of any
fractional shares) by such Unit holder should equal the amount
realized for purposes of determining the applicable tax consequences
in connection with an In-Kind Distribution. A Unit holder's tax
basis in shares of such Security received will be increased by
the Allocable Expenses relating to such Security. The amount of
taxable gain (or loss) recognized upon such exchange will generally
equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Security
owned by a Trust. Unit holders who request an In-Kind Distribution
are advised to consult their tax advisers in this regard.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by a Trust to such
Unit holder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by
a Trust will generally be subject to United States income taxation
and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons
(accrual of original issue discount on the Treasury Obligations
in the Growth & Treasury Trust may not be subject to taxation
or withholding provided certain requirements are met). Such persons
should consult their tax advisers.
Unit holders will be notified annually of the amounts of original
issue discount (in the case of the Growth & Treasury Trust) and
income dividends includable in the Unit holder's gross income
and amounts of Trust expenses which may be claimed as itemized
deductions.
Dividend income, long-term capital gains and accrual of original
issue discount (in the case of the Growth & Treasury Trust) 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 such Trust will be
treated as the income of the Unit holders thereof.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIOS
What are Treasury Obligations?
The Treasury Obligations deposited in the Growth & Treasury Trust
consist of U.S. Treasury bonds which have been stripped of their
unmatured interest coupons. The Treasury Obligations evidence
the right to receive a fixed payment at a future date from the
U.S. Government, and are backed by the full faith and credit of
the U.S. Government. Treasury Obligations are purchased at a deep
discount because the buyer obtains
Page 14
only the right to a fixed payment at a fixed date in the future
and does not receive any periodic interest payments. The effect
of owning deep discount bonds which do not make current interest
payments (such as the Treasury Obligations) is that a fixed yield
is earned not only on the original investment, but also, in effect,
on all earnings during the life of the discount obligation. This
implicit reinvestment of earnings at the same rate eliminates
the risk of being unable to reinvest the income on such obligations
at a rate as high as the implicit yield on the discount obligation,
but at the same time eliminates the holder's ability to reinvest
at higher rates in the future. For this reason, the Treasury Obligations
are subject to substantially greater price fluctuations during
periods of changing interest rates than are securities of comparable
quality which make regular interest payments. The effect of being
able to acquire the Treasury Obligations at a lower price is to
permit more of the Growth & Treasury Trust's portfolio to be invested
in Equity Securities.
What are Equity Securities?
The Trusts consist of different issues of Equity Securities, all
of which are listed on a national securities exchange, the NASDAQ
National Market System or are traded in the over-the-counter market.
The Equity Securities of the American Financial Institutions Growth
Trust, Series 1 consist of common stocks issued by national and
regional financial institutions incorporated or headquartered
in the United States. The stocks chosen for the Trust were selected
based upon, but not limited to, asset quality, earnings growth,
franchise strength, low valuations, potential acquisition value
and sound balance sheets.
The Equity Securities of the American Technology Growth Trust,
Series 1 and American Technology Growth & Treasury Securities
Trust, Series 2 consist of common stocks issued by well-established
companies in the computer and technology industry. The Trusts
purposely avoid small market capitalization stocks, newly issued
stocks and stocks with little or no earnings to help reduce excessively
high risk. The companies selected for the Trusts all have market
capitalizations of at least $500 million and have been publicly
traded for approximately two years or more. In general, the companies
chosen have above-average growth prospects for both sales and
earnings, established market shares for their products, lower-than-average
debt and pay little or no dividends.
See "What are the Equity Securities Selected for American Financial
Institutions Growth Trust, Series 1?" and "What are the Equity
Securities Selected for American Technology Growth Trust, Series
1 and American Technology Growth & Treasury Securities Trust,
Series 2?" for a general description of the companies.
Risk Factors. An investment in Units of the Trusts should be made
with an understanding of the risks such an investment may entail.
The American Financial Institutions Growth Trust, Series 1 concentrates
its Equity Securities in the financial industry and, as a result,
the value of the Units of the Trust may be susceptible to factors
affecting the financial industry. Banks, thrifts and their holding
companies are especially subject to the adverse effects of economic
recession, volatile interest rates, portfolio concentrations in
geographic markets and in commercial and residential real estate
loans, and competition from new entrants in their fields of business.
Banks and thrifts are highly dependent on net interest income.
Recent profits have benefitted from the relatively high yield
on earning assets and relatively low cost of funds. There is no
certainty that such conditions will continue, especially in a
rising interest rate environment. Commercial loan demand for banks
has been weak and an increasing number of commercial loans have
been securitized-a potential adverse affect on the market share
of the commercial banking system. Bank and thrift institutions
have received significant consumer mortgage fee income as a result
of recent activity in mortgage and refinance markets. As initial
home purchasing and refinancing activity subsides, this income
is expected to diminish to a lower level. Economic conditions
in the real estate markets, which have been weak in the recent
past, can have a substantial effect upon banks and thrifts because
they generally have a portion of their assets invested in loans
secured by real estate, as has recently been the case for a number
of banks and thrifts with respect to commercial real estate in
the northeastern and southwestern regions of the United States.
Banks, thrifts and their holding companies are subject to extensive
federal regulation and, when such institutions are state-chartered,
to state regulation as well. Such regulations impose strict capital
requirements and limitations on the nature and extent of business
activities that banks and thrifts may pursue. Furthermore, bank
regulators
Page 15
have a wide range of discretion in connection with their supervisory
and enforcement authority and may substantially restrict the permissible
activities of a particular institution if deemed to pose significant
risks to the soundness of such institution or the safety of the
federal deposit insurance fund. Regulatory actions, such as increases
in the minimum capital requirements applicable to banks and thrifts
and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a
company to pay dividends. Neither federal insurance of deposits
nor governmental regulations, however, insures the solvency or
profitability of banks or their holding companies, or insures
against any risk of investment in the securities issued by such
institutions.
The statutory requirements applicable to and regulatory supervision
of banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions
Reform, Recovery and Enforcement Act; enacted in August 1989,
the Federal Deposit Insurance Corporation Improvement Act of 1991,
the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991 and the regulations promulgated under
these laws. Many of the regulations promulgated pursuant to these
laws have only recently been finalized and their impact on the
business, financial condition and prospects of the Equity Securities
in the Trust's portfolio cannot be predicted with certainty. Periodic
efforts by recent Administrations to introduce legislation broadening
the ability of banks to compete with new products have not been
successful, but if enacted could lead to more failures as a result
of increased competition and added risks. Failure to enact such
legislation, on the other hand, may lead to declining earnings
and an inability to compete with unregulated financial institutions.
Efforts to expand the ability of federal thrifts to branch on
an interstate basis have been initially successful through promulgation
of regulations, and legislation to liberalize interstate banking
has recently been signed into law. Under the legislation, banks
will be able to purchase or establish subsidiary banks in any
state, one year after the legislation's enactment. Starting in
mid-1997, banks would be allowed to turn existing banks into branches,
though states could pass laws to permit interstate branch banking
before then. Consolidation is likely to continue in both cases.
The Securities and Exchange Commission and the Financial Accounting
Standards Board require the expanded use of market value accounting
by banks and have imposed rules requiring market accounting for
investment securities held in trading accounts or available for
sale. Adoption of additional such rules may result in increased
volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. In late 1993
the United States Treasury Department proposed a restructuring
of the banks regulatory agencies which, if implemented, may adversely
affect certain of the Equity Securities in the Trust's portfolio.
Additional legislative and regulatory changes may be forthcoming.
For example, the bank regulatory authorities have proposed substantial
changes to the Community Reinvestment Act and fair lending laws,
rules and regulations, and there can be no certainty as to the
effect, if any, that such changes would have on the Equity Securities
in the Trust's portfolio. In addition, from time to time the deposit
insurance system is reviewed by Congress and federal regulators,
and proposed reforms of that system could, among other things,
further restrict the ways in which deposited moneys can be used
by banks or reduce the dollar amount or number of deposits insured
for any depositor. Such reforms could reduce profitability as
investment opportunities available to bank institutions become
more limited and as consumers look for savings vehicles other
than bank deposits. Banks and thrifts face significant competition
from other financial institutions such as mutual funds, credit
unions, mortgage banking companies and insurance companies, and
increased competition may result from legislative broadening of
regional and national interstate banking powers as has been recently
enacted. Among other benefits, the legislation allows banks and
bank holding companies to acquire across previously prohibited
state lines and to consolidate their various bank subsidiaries
into one unit. The Sponsor makes no prediction as to what, if
any, manner of bank and thrift regulatory actions might ultimately
be adopted or what ultimate effect such actions might have on
the Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits
a bank holding company from (1) acquiring, directly or indirectly,
more than 5% of the outstanding shares of any class of voting
securities of a
Page 16
bank or bank holding company, (2) acquiring control of a bank
or another bank holding company, (3) acquiring all or substantially
all the assets of a bank, or (4) merging or consolidating with
another bank holding company, without first obtaining Federal
Reserve Board ("FRB") approval. In considering an application
with respect to any such transaction, the FRB is required to consider
a variety of factors, including the potential anti-competitive
effects of the transaction, the financial condition and future
prospects of the combining and resulting institutions, the managerial
resources of the resulting institution, the convenience and needs
of the communities the combined organization would serve, the
record of performance of each combining organization under the
Community Reinvestment Act and the Equal Credit Opportunity Act,
and the prospective availability to the FRB of information appropriate
to determine ongoing regulatory compliance with applicable banking
laws. In addition, the federal Change In Bank Control Act and
various state laws impose limitations on the ability of one or
more individuals or other entities to acquire control of banks
or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which
could only be funded in ways that would weaken its financial health,
such as by borrowing. The FRB also may impose limitations on the
payment of dividends as a condition to its approval of certain
applications, including applications for approval of mergers and
acquisitions. The Sponsor makes no prediction as to the effect,
if any, such laws will have on the Equity Securities or whether
such approvals, if necessary, will be obtained.
The American Technology Growth Trust, Series 1 and the American
Technology Growth & Treasury Securities Trust, Series 2 concentrate
their Equity Securities in the technology industry and, as a result,
the value of the Units of each Trust may be susceptible to factors
affecting the technology industry.
The market for high-technology products is characterized by rapidly
changing technology, rapid product obsolescence, cyclical market
patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Equity Securities
depends in substantial part on the timely and successful introduction
of new products. An unexpected change in one of more of the technologies
affecting an issuer's products or in the market for products based
on a particular technology could have a material adverse affect
on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Equity Securities will be able
to respond timely to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause
the market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated
to the operating performance of such companies. This market volatility
may adversely affect the market price of the Equity Securities
and therefore the ability of a Unit holder to redeem Units a price
equal to or greater than the original price paid for such Units.
Some key components of certain products of technology issuers
are currently available only from single sources. There can be
no assurance that in the future suppliers will be able to meet
the demand for components in a timely and cost effective manner.
Accordingly, an issuer's operating results and customer relationships
could be adversely affected by either an increase in price for,
or an interruption or reduction in supply of, any key components.
Additionally, many technology issuers are characterized by a highly
concentrated customer base consisting of a limited number of large
customers who may require product vendors to comply with rigorous
industry standards. Any failure to comply with such standards
may result in a significant loss or reduction of sales. Because
many products and technologies of technology companies are incorporated
into other related products, such companies are often highly dependent
on the performance of the personal computer, electronics and telecommunications
industries. There can be no assurance that these customers will
place additional orders, or that an issuer of Equity Securities
will obtain orders of similar magnitude as past orders from other
customers. Similarly, the success of certain technology companies
Page 17
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies
or from such customers could have a material adverse impact on
issuers of the Equity Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Equity
Securities to protect their proprietary rights will be adequate
to prevent misappropriation of their technology or that competitors
will not independently develop technologies that are substantially
equivalent or superior to such issuers' technology.
Each Trust consists of such Securities listed under "Schedule
of Investments" for each Trust as may continue to be held from
time to time in such Trust and any additional Securities acquired
and held by the Trusts pursuant to the provisions of the Trust
Agreements together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Securities. However, should any
contract for the purchase of any of the Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of
the moneys held in a Trust to cover such purchase are reinvested
in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract
to all Unit holders on the next distribution date.
Because certain of the Equity Securities from time to time may
be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders
and will not be reinvested, no assurance can be given that a Trust
will retain for any length of time its present size and composition.
Although each Portfolio is not managed, the Sponsor may instruct
the Trustee to sell Equity Securities under certain limited circumstances.
Pursuant to the Indenture and with limited exceptions, the Trustee
may sell any securities or other property acquired in exchange
for Equity Securities such as those acquired in connection with
a merger or other transaction. If offered such new or exchanged
securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired
by a Trust, they may be accepted for deposit in such Trust and
either sold by the Trustee or held in such Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). See "How May Securities be Removed from 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.
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 each Trust have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the
same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. The value of common stocks
is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities
in each Portfolio may be expected
Page 18
to fluctuate over the life of such 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.
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 each Trust, will be
adversely affected if trading markets for the Equity Securities
are limited or absent.
Unit holders will be unable to dispose of any of the Equity Securities
in each Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in the Trusts
and will vote such stocks in accordance with the instructions
of the Sponsor.
What are the Equity Securities Selected for American Financial
Institutions Growth Trust, Series 1?
National
BankAmerica Corporation, through its subsidiaries, Bank of America
and SeaFirst Corporation, provides retail and wholesale banking
services in the western United States and other select markets.
BankAmerica's commercial banking group focuses on commercial banking
services for middle market customers, while the world group serves
large corporate and institutional customers worldwide. BankAmerica
Corporation is headquartered in San Francisco, California.
Citicorp, Inc., the parent of Citibank, provides a broad range
of financial services. The company's operations include commercial,
mortgage and investment banking, trust services, consumer finance
and credit card services. Headquartered in New York, New York,
Citicorp's clients include individuals, businesses, institutions
and governments on a global basis.
MBNA Corporation, through its subsidiary MBNA America Bank N.A.,
is one of the country's largest consumer lenders through the issuance
of premium and standard credit cards. MBNA America Bank N.A. markets
its cards through a network of professional, fraternal, educational
and other special interest groups and membership associations,
as well as financial institutions. MBNA Corporation also provides
retail deposit and loan services to its customers, and card transaction
processing for a number of other financial institutions. MBNA
Corporation is headquartered in Newark, Delaware.
Northeast
Interchange Financial Services Corporation is the holding company
for the Interchange State Bank. Based in Bergen County, New Jersey,
the bank operates in communities throughout the county. Interchange
Financial seeks to attract deposits and serves as a commercial
banker making residential, consumer and business loans. The bank
also lends for commercial real estate development and construction
loans.
North Side Savings Bank, headquartered in Floral Park, New York,
is a chartered bank operating through offices in the Bronx, Queens,
Nassau and Stuffolk counties. The bank offers commercial and consumer
loans, mortgage loans, savings and checking accounts and other
financial services.
Page 19
UJB Financial Corporation is a bank holding company whose subsidiary
banks attract deposits and offer real estate, commercial and installment
loans. The company's subsidiaries offer trust, discount brokerage,
commercial finance and credit life insurance services. UJB Financial
Corporation is headquartered in Princeton, New Jersey, and serves
customers in New Jersey and eastern Pennsylvania.
Midwest
Banc One Corporation, headquartered in Columbus, Ohio, operates
offices throughout the United States through its banking subsidiaries.
The bank offers depository and lending services to individual
and commercial customers. Banc One Corporation provides data processing,
venture capital investment and merchant banking, trust services,
brokerage services, investment management, equipment leasing and
insurance through its other subsidiaries.
Boatmen's Bancshares, Inc., headquartered in St. Louis, Missouri,
is among the largest bank holding companies in the United States.
It also ranks among the nation's largest providers of trust services.
Boatmen's Bancshares, Inc. is a holding company for a trust company,
a mortgage company, a life insurance company and an insurance
agency.
Charter One Financial, Inc., headquartered in Cleveland, Ohio,
is a holding company for Charter One Bank, a Federal savings bank
in Ohio which operates branches throughout the greater Cleveland
area, Akron, Canton, Portsmouth, Toledo and Youngstown. In addition,
the company operates loan offices in Columbus, Ohio, and Ashland,
Kentucky.
First Financial Corporation, headquartered in Stevens Point, Wisconsin,
is a savings and loan holding company which serves Wisconsin and
Illinois. The company's subsidiary banks attract deposits and
offer residential mortgage, consumer, home equity and education
loans.
First of America Bank Corporation, headquartered in Kalamazoo,
Michigan, is a multi-state bank holding company. The company's
subsidiary banks attract deposits and offer real estate mortgage,
consumer, commercial and agricultural loans. First of America
Bank Corporation serves Michigan, Indiana and Illinois.
KeyCorp, headquartered in Cleveland, Ohio, is a national banking
franchise of banking subsidiaries. Retail, commercial and investment
management and trust services are the company's three primary
lines of business. KeyCorp also owns non-bank subsidiaries providing
trust, leasing, credit, life insurance, data processing, mortgage
banking and investment services.
Mercantile Bancorporation is a bank holding company headquartered
in St. Louis, Missouri, with banks throughout Missouri and western
Illinois. Mercantile Bank of St. Louis is the largest of numerous
banks under the Mercantile name located throughout the State of
Missouri.
Mississippi Valley Bancshares, Inc., headquartered in St. Louis,
Missouri, is the holding company for Southwest Bank of St. Louis.
The bank operates through offices in the St. Louis metropolitan
area and offers savings and checking accounts, various loans and
other financial services.
National City Corporation is headquartered in Cleveland, Ohio
and through its banking subsidiaries, the company offers a wide
range of banking and financial services throughout the States
of Ohio, Kentucky and southern Indiana. In addition to its general
commercial banking operations, the company offers trust, mortgage
banking, public finance, merchant banking, venture capital, insurance
and other financial services.
Norwest Corporation, headquartered in Minneapolis, Minnesota,
is one of the nation's larger superregional bank holding companies
providing banking, mortgage, insurance, investment and other financial
services through offices in all 50 states and all 10 Canadian
provinces.
Roosevelt Financial Group, Inc., based in Chesterfield, Missouri,
is a bank holding company for Roosevelt Savings Bank. The bank
has full service offices in the metropolitan St. Louis area, Hannibal
and Springfield, Missouri.
TCF Financial Corporation, through wholly-owned TCF Bank Savings
FSB, conducts a savings and loan business through branches located
in Minnesota, Illinois, Wisconsin and Iowa. Through other subsidiaries,
the company also provides mortgage, consumer finance and insurance
and title insurance services. The company is headquartered in
Minneapolis, Minnesota.
Page 20
Southeast
Barnett Banks, Inc., headquartered in Jacksonville, Florida, operates
banking offices in Florida and Georgia. Barnett Banks, Inc. commands
the leading market share in Florida. Its banks are complemented
by non-banking affiliates providing support services and specialized
financial services.
First Tennessee National Corporation, headquartered in Memphis,
Tennessee, is a bank holding company. The company's subsidiary
banks attract deposits and offer construction, real estate mortgage,
commercial and consumer loans.
First Virginia Banks, Inc., headquartered in Falls Church, Virginia,
is a bank holding company with operations in Virginia, Maryland
and Tennessee. Its greatest concentration of offices is in the
suburbs of Washington, D.C. The company's subsidiary banks attract
deposits and offer a broad range of lending and other financial
services.
Leader Financial Corporation, headquartered in Memphis, Tennessee,
is the holding company for Leader Federal Bank for Savings. The
Bank operates through retail branch offices in Memphis, Nashville,
and upper eastern Tennessee. The Bank's wholly-owned subsidiary,
the Mortgage Company, provides mortgage banking services to markets
in Memphis and Nashville, Tennessee, and Omaha, Nebraska.
Regions Financial Corporation, headquartered in Birmingham, Alabama,
is the holding company for First Alabama Bank and has affiliates
in Tennessee, Louisiana and Georgia. First Alabama Bank provides
commercial banking services such as loans and deposit services,
and through its real estate financial subsidiary, provides mortgage
banking services.
Southtrust Corporation, is a regional bank holding company headquartered
in Birmingham, Alabama. The company has subsidiary banks, as well
as bank-related affiliates located in the States of Alabama, Florida,
Georgia, North Carolina, South Carolina, and Tennessee. Through
its subsidiary banks and affiliates, the company offers general
banking services, as well as mortgage banking, credit life and
securities brokerage to commercial and retail customers.
Union Planters Corporation is a bank holding company headquartered
in Memphis, Tennessee, with banking and broker/dealer services.
The company conducts its operations through banking affiliates
located in Alabama, Arkansas, Kentucky, Mississippi, and Tennessee.
Union Planters National Bank, a provider of commercial bankings
services in Tennessee, is the company's largest subsidiary.
Southwest
Southwest Bancorp, Inc. is a bank holding company headquartered
in Stillwater, Oklahoma. The bank attracts deposits from the public
and extends credit in the form of commercial and consumer loans
through its sole subsidiary, Stillwater National Bank and Trust
Company. The bank has several branches located in Stillwater,
Tulsa, Oklahoma City and Chickasha, Oklahoma.
West
City National Corporation owns and operates City National Bank.
The bank operates throughout Los Angeles, Orange and San Diego
counties in California. While offering standard banking services
to the public, City National Corporation has been focusing on
expanding its presence in serving small- and medium-sized businesses,
as well as offering banking to professional and regular business
borrowers. City National Corporation is headquartered in Beverly
Hills, California.
First Interstate Bancorp is a bank holding company with headquarters
in Los Angeles, California. The subsidiaries conduct retail banking
operations in the western states, concentrating on California,
Washington and Texas. The company's banks attract deposits and
provide lending services, mainly to small, middle-market and selected
large corporations.
First Security Corporation, headquartered in Salt Lake City, Utah,
is a bank holding company. The company's subsidiary banks attract
deposits and offer residential real estate, commercial, agricultural
and consumer loans. The banks serve Utah, Idaho, Oregon, Wyoming,
Nevada and New Mexico.
Washington Mutual, Inc. is the largest thrift operating in the
state of Washington and the fourth largest in terms of assets
in the nation at the end of 1994. Washington Mutual Inc. is headquartered
in Seattle, Washington and operates savings branches and loan
offices in Washington State, Oregon and Idaho. The bank
Page 21
offers a full line of financial services to the general public
in accepting deposits and making residential, consumer and commercial
loans. The thrift is expanding its operations into additional
surrounding states such as Utah, and also operates several subsidiaries
such as investment management, securities brokerage, life insurance
and benefits consulting services.
What are the Equity Securities Selected for American Technology
Growth Trust, Series 1 and American Technology Growth & Treasury
Securities Trust, Series 2?
Computer Networking
3Com Corporation is headquartered in Santa Clara, California,
where it designs, produces and markets a broad range of ISO 9000-compliant
global data networking solutions. 3Com Corporation's products
include routers, hubs, switches and adapters for Ethernet, Token
Ring, FDDI and ATM networks.
Cabletron Systems, Inc., based in Rochester, New Hampshire, develops
and manufactures a range of local area network (LAN) and wide
area network (WAN) connectivity hardware and software. Major products
include Multi Media Access Centers (MMACs), repeaters, bridges,
cable assemblies and test equipment. MMACs, also called smart
hubs, are used to simplify network installations, resolve problems
and facilitate modifications.
Cisco Systems, Inc. is engaged in the development, manufacturing,
marketing and support of multi-protocol inter-networking systems
that enable the construction of large-scale computer networks.
The company's main products are routers with concurrent bridging
and terminal services. Cisco Systems, Inc., with its headquarters
in San Jose, California, sells its products internationally to
system integrators. The products are then resold, mainly to government
customers.
Desktop Computers & File Servers
Compaq Computer Corporation is headquartered in Houston, Texas.
Compaq Computer Corporation designs, develops, manufactures and
markets personal computers for business and professional users.
Company products include portable and desktop personal computers
that are IBM compatible and run virtually all standardized software
applications.
Dell Computer Corporation, headquartered in Austin, Texas, designs
and manufactures personal computers compatible with IBM computers.
The company sells its products to businesses, individuals, government
agencies and academic institutions. The company markets its products
internationally.
Silicon Graphics, Inc., headquartered in Mountain View, California,
designs, manufactures, markets and services a family of visual
processing computer systems that are used mainly by engineers,
scientists and other related professionals. The computer systems
are used to develop, analyze and simulate complex 3-D objects
and phenomena. MIPS Technologies, Inc., the company's subsidiary,
designs and licenses RISC processor technology for computer systems.
Sun Microsystems, Inc. is a supplier of client/server computing
solutions, which feature networked workstations and servers that
store, process and distribute information. The workstations are
primarily designed for the engineering, scientific, commercial
and technical markets. The company, headquartered in Mountain
View, California, conducts business worldwide.
Enterprise & Client/Server Software
BMC Software, Inc., headquartered in Sugar Land, Texas, develops,
markets and supports software products to enhance IBM's primary
mainframe computer data base management and data communication
systems. The company's primary target market is the "Fortune 500"
industrial corporations and similar sized organizations worldwide.
Computer Associates International, Inc., headquartered in Islandia,
New York, designs and markets standardized computer software products
which are used on mini and microcomputers, including IBM, DG and
DEC.
Oracle Systems Corporation designs, develops, markets and supports
software products with a variety of uses, including database management,
applications development, decision support, end-user applications
and office automation. Oracle Systems Corporation's primary product,
the Oracle Relational Database
Page 22
Management System, runs on a broad range of mainframes, minicomputers,
microcomputers and personal computers. The company is based in
Redwood City, California.
Enterprise Computers
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, manufactures and services electronic measurement, analysis
and computation instruments. The company produces computers, calculators,
workstations, video displays, printers, disc and tape drives,
medical diagnostic and monitoring devices and mass spectrometers.
Hewlett-Packard Company sells its products in the United States
and other countries.
International Business Machines Corporation, headquartered in
Armonk, New York, is a large manufacturer of mainframe computers
and other information processing equipment and services. The company
is a supplier of micro and personal computers, software and networking
products, and peripheral equipment. Products are sold or leased
for use in business, government, science, space, education, medicine
and other areas on a worldwide basis.
Information Highway Equipment
DSC Communications Corporation designs, develops, manufactures,
and markets digital switching, transmission, access and private
network system products for the worldwide telecommunications marketplace.
DSC products includes Airspan, a wireless access system using
digital radio technology to deliver voice, data, fax and ISDN
services. The company is based in Plano, Texas.
Personal Productivity Software
Adobe Systems, Inc., headquartered in Mountain View, California,
is a leading developer and marketer of computer software used
to create, display, print and communicate electronic documents.
Significant products include Acrobat, software that allows users
to view documents across different applications and operating
systems and Postscript, an industry standard computer language
used to transmit pages of varying complexity to printers.
Microsoft Corporation, based out of Redmond, Washington, is the
world's leading developer of personal computer software. System
software and language products include "MS-DOS," "Windows," "XENIX"
and "Lan Manager."
Semiconductor Equipment
Applied Materials, Inc. is headquartered in Santa Clara, California,
where it develops, manufactures, sells and services semiconductor
wafer fabrication equipment worldwide. The company's product line
includes deposition, etching and ion implantation systems. Applied
Materials, Inc. has an equity interest in Applied Komatsu Technology,
Inc., a producer of thin-film transistor fabrication systems for
flat-panel displays.
Lam Research Corporation, based in Fremont, California, is a developer
and manufacturer of products used in the fabrication of semiconductors.
Products include chemical vapor deposition (CVD) systems and dry
etching equipment.
Novellus Systems, Inc., headquartered in San Jose, California,
manufactures, markets, and services advanced automated wafer fabrication
systems for the semiconductor manufacturing industry. Products
include chemical vapor deposition (CVD) systems.
Ultratech Stepper, Inc. is a leading supplier of photolithographic
steppers used to manufacture semiconductors and thin film heads
for disk drives. Ultratech Stepper is headquartered in San Jose,
California.
Semiconductors
Adaptec, Inc., headquartered in Milpitas, California, is a supplier
of high-performance microcomputer input/output products including
proprietary "VLSI" circuits, personal computer and small computer
system interface-based controller and host controller boards and
a family of small computer systems. In addition, the company is
a supplier of integrated circuits to peripheral manufacturers
for use in intelligent, high-performance peripherals.
Advanced Micro Devices, Inc., known as AMD, designs, develops
manufactures and markets integrated circuits for use in telecommunications,
networking and other computer related functions. AMD focuses
Page 23
on three primary markets: processors for computers, input/output-networking
and embedded processor products, and nonvolatile (non-erasable)
memory devices. Advanced Micro Devices is headquartered in Sunnyvale,
California and markets its products worldwide.
Atmel Corporation, headquartered in San Jose, California, designs,
manufactures and markets a large range of high performance, low
power requirement non-volatile memory and logic devices. The chips
are used in items as diverse as missile navigation systems to
TV remote controls. Atmel's primary research and development focus
has been on the development of products that enhance the portability
of electronic products. By using less power, the products enable
manufacturers to decrease the size and weight of products ranging
from laptop computers to cellular phones.
Intel Corporation designs and manufactures computer components
and software. The company produces microprocessors, peripherals,
microcontrollers, microcommunications products, microcomputer
modules and systems and software for computer operating systems.
Intel Corporation sells its products internationally and is headquartered
in Santa Clara, California.
Linear Technology Corporation is headquartered in Milpitas, California,
where it manufactures linear integrated circuits. The company's
products include operational and instrumentation amplifiers, voltage
and switching regulators, voltage references, monolithic switched-capacitor
filters, high-frequency and high-current voltage converters and
other circuits. The company sells its products to original equipment
manufacturers (OEMs) in the United States and other countries.
Micron Technology, Inc., headquartered in Boise, Idaho, is one
of the leading manufacturers of computer memory chips in the world.
Microns three main products are DRAMs (dynamic random access memory),
SRAMs (static random access memory), and VRAMs (video random access
memory). Micron also operates subsidiaries in custom manufacturing
and system construction. Recently through an acquisition, Micron
has started production of PCs for office and home use.
Motorola, Inc. manufactures and sells a diverse line of electronic
equipment and components including communications systems, semiconductors,
information systems, electronic engine controls and computer systems.
Motorola is headquartered in Schaumburg, Illinois.
Texas Instruments, Inc., headquartered in Dallas, Texas, is one
of the oldest and largest semiconductor suppliers in the world,
having purchased a license in 1952 to manufacture transistors.
The company also produces electrical and electrical components,
defense electronics, software and calculators. Texas Instruments,
Inc. has a semiconductor and chip development joint venture with
Cannon, Hewlett Packard and the Singapore Economic Development
Board for the manufacturing of four-megabit DRAM (Dynamic Random
Access Memory) chips worldwide. The company also has a partnership
with Hitachi to develop a 256-megabit DRAM chip. In 1994 Texas
Instruments, Inc. and Hitachi formed a joint venture to build
a chip manufacturing facility in Richardson, Texas. The company
is also currently developing the DMD (Digital Micromirror Device),
which will enhance image quality for large-screen theater and
IDTV and HDTV televisions.
Xilinx, Inc., headquartered in San Jose, California, is a supplier
of CMOs programmable logic devices and field programmable gate
arrays. The company's logic products are off-the-shelf integrated
circuits that can be programmed by the user to perform the exact
logic function desired. Xilinix, Inc. markets these devices worldwide.
Storage
EMC Corporation, headquartered in Hopkinton, Massachusetts, is
a technological leader in the development, manufacturing and marketing
of information storage systems for large computer mainframes and
networks. EMC products feature a technology called RAID (redundant
arrays of inexpensive disks) using smaller less expensive hard
disks linked together to build cheaper and faster data retrieval
systems. EMC is expanding its business through developments in
the client/server and UNIX markets as well as remaining a supplier
to original equipment manufacturers for large computer systems.
Page 24
Quantum Corporation, headquartered in Milpitas, California, designs
and sells storage products for a broad range of computer platforms,
serving original equipment manufacturers and distribution customers
worldwide. Storage products are installed in personal computers,
workstations and notebook computers.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trusts.
The value of the Equity Securities, like the value of the Treasury
Obligations, will fluctuate over the life of a Trust and may be
more or less than the price at which they were deposited in such
Trust. The Equity Securities may appreciate or depreciate in value
(or pay dividends) depending on the full range of economic and
market influences affecting these securities. However, the Sponsor
believes that, upon termination of the Growth & Treasury Trust,
even if the Equity Securities deposited in the Growth & Treasury
Trust are worthless, an event which the Sponsor considers highly
unlikely, the Treasury Obligations will provide sufficient principal
to at least equal $10.00 per Unit (which is equal to the per Unit
value upon maturity of the Treasury Obligations). This feature
of the Growth & Treasury Trust provides Unit holders with principal
protection, although they might forego any earnings on the amount
invested. To the extent that Units are purchased at a price less
than $10.00 per Unit, this feature may also provide a potential
for capital appreciation.
Unless a Unit holder purchases Units of the Growth & Treasury
Trust on the Initial Date of Deposit (or another date when the
value of the Units is $10.00 or less), total distributions, including
distributions made upon termination of the Growth & Treasury Trust,
may be less than the amount paid for a Unit.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Security. In the event of
a notice that any Treasury Obligations or Equity Securities will
not be delivered ("Failed Contract Obligations") to a Trust, the
Sponsor is authorized under the Indenture to direct the Trustee
to acquire other Treasury Obligations (in the case of the Growth
& Treasury Trust) or Equity Securities ("Replacement Securities").
Any Replacement Security deposited in a Trust will, in the case
of Treasury Obligations in the Growth & Treasury Trust, have the
same maturity value and, as closely as can be reasonably acquired
by the Sponsor, the same maturity date or, in the case of Equity
Securities, be identical to those which were the subject of the
failed contract. The Replacement Securities must be purchased
within 20 days after delivery of the notice of a failed contract
and the purchase price may not exceed the amount of funds reserved
for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in
the event of a failed contract, the Sponsor will refund the sales
charge attributable to such Failed Contract Obligations to all
Unit holders of a Trust and the Trustee will distribute the principal
attributable to such Failed Contract Obligations not more than
120 days after the date on which the Trustee received a notice
from the Sponsor that a Replacement Security would not be deposited
in such Trust. In addition, Unit holders should be aware that,
at the time of receipt of such principal, they may not be able
to reinvest such proceeds in other securities at a yield equal
to or in excess of the yield which such proceeds would have earned
for Unit holders of such Trust.
The Indenture also authorizes the Sponsor to increase the size
of each Trust and the number of Units thereof by the deposit of
additional Securities in such Trust and the issuance of a corresponding
number of additional Units.
Each Trust consists of the Securities listed under "Schedule of
Investments" for each Trust (or contracts to purchase such Securities)
as may continue to be held from time to time in such Trust and
any additional Securities acquired and held by such Trust pursuant
to the provisions of the Indenture (including provisions with
respect to deposits into such Trust of Securities in connection
with the issuance of additional Units).
Once all of the Securities in each Trust are acquired, the Trustee
will have no power to vary the investments of the Trust, i.e.,
the Trustee will have no managerial power to take advantage of
market variations to improve a Unit holder's investment, but may
dispose of Securities only under limited circumstances. See "How
May Securities be Removed from a Trust?"
Page 25
To the best of the Sponsor's knowledge, there is no litigation
pending as of the Initial Date of Deposit in respect of any Security
which might reasonably be expected to have a material adverse
effect on a Trust. At any time after the Initial Date of Deposit,
litigation may be instituted on a variety of grounds with respect
to the Securities. The Sponsor is unable to predict whether any
such litigation will be instituted, or if instituted, whether
such litigation might have a material adverse effect on the Trusts.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, with respect to each Growth Trust, the Public
Offering Price is based on the aggregate underlying value of the
Equity Securities in the Trust, plus or minus cash, if any, in
the Income and Capital Accounts of the Trust, plus a sales charge
of 4.9% (equivalent to 5.152% of the net amount invested) divided
by the number of Units of the Trust outstanding.
During the initial offering period, with respect to the Growth
& Treasury Trust, the Public Offering Price is based on the aggregate
of the offering side evaluation of the Treasury Obligations in
each Trust and the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a sales charge of 5.5% (equivalent
to 5.820% of the net amount invested) divided by the number of
Units of the Trust outstanding.
During the initial offering period, with respect to each Growth
Trust, the Sponsor's Repurchase Price is based on the aggregate
underlying value of the Equity Securities in the Trust, plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust divided by the number of Units of the Trust outstanding.
For secondary market sales after the completion of the initial
offering period, the Public Offering Price is also based on the
aggregate underlying value of the Equity Securities in the Trust,
plus or minus cash, if any, in the Income and Capital Accounts
of the Trust, plus a maximum sales charge of 4.9% of the Public
Offering Price (equivalent to 5.152% of the net amount invested),
subject to reduction beginning October 1, 1996, divided by the
number of outstanding Units of the Trust.
During the initial offering period, with respect to the Growth
& Treasury Trust, the Sponsor's Repurchase Price is based on the
aggregate of the offering side evaluation of the Treasury Obligations
in the Trust and the aggregate underlying value of the Equity
Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust divided by the number of Units
of the Trust outstanding. For secondary market sales after the
completion of the initial offering period, the Public Offering
Price is based on the aggregate bid side evaluation of the Treasury
Obligations in the Trust and the aggregate underlying value of
the Equity Securities in each Trust, plus or minus cash, if any,
in the Income and Capital Accounts of the Trust, plus a maximum
sales charge of 5.5% of the Public Offering Price (equivalent
to 5.820% of the net amount invested), subject to reduction beginning
October 1, 1996, divided by the number of outstanding Units of
such Trust.
The minimum purchase of each Growth Trust is $1,000. The applicable
sales charge is reduced by a discount as indicated below for volume
purchases with respect to each Growth Trust (except for sales
made pursuant to a "wrap fee account" or similar arrangements
as set forth below):
Primary and Secondary
_____________________
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
________________ _________ _________
5,000 but less than 10,000 0.25% 0.2506%
10,000 but less than 25,000 0.50% 0.5025%
25,000 but less than 50,000 1.00% 1.0101%
50,000 or more 2.00% 2.0408%
Page 26
The minimum purchase of the Growth & Treasury Trust is $1,000.
The applicable sales charge is reduced by a discount as indicated
below for volume purchases with respect to the Growth & Treasury
Trust (except for sales made pursuant to a "wrap fee account"
or similar arrangements as set forth below):
Primary and Secondary
_____________________
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
________________ _________ _________
10,000 but less than 50,000 0.60% 0.6036%
50,000 but less than 100,000 1.30% 1.3171%
100,000 or more 2.10% .1450%
Any such reduced sales charge shall be the responsibility of the
selling broker/dealer, bank or other selling agent. The reduced
sales charge structure will apply on all purchases of Units in
a Trust by the same person on any one day from any one broker/dealer,
bank or other selling agent. Additionally, Units purchased in
the name of the spouse of a purchaser or in the name of a child
of such purchaser under 21 years of age will be deemed, for the
purposes of calculating the applicable sales charge, to be additional
purchases by the purchaser. The reduced sales charges will also
be applicable to a trustee or other fiduciary purchasing securities
for a single trust estate or single fiduciary account. The purchaser
must inform the broker/dealer, bank or other selling agent of
any such combined purchase prior to the sale in order to obtain
the indicated discount. In addition, with respect to the employees,
officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law,
and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor, broker/dealers, banks or other selling
agents and their affiliates, the sales charge is reduced by 2.0%
of the Public Offering Price for purchases of Units during the
primary and secondary public offering periods.
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 for each Trust would have been as indicated in "Summary
of Essential Information." The Public Offering Price of Units
on the date of the prospectus or during the initial offering period
may vary from the amount stated under "Summary of Essential Information"
in accordance with fluctuations in the prices of the underlying
Securities. During the initial offering period, the aggregate
value of the Units of each Trust shall be determined (a) on the
basis of the offering prices of the Treasury Obligations (if any)
and the aggregate underlying value of the Equity Securities therein
plus or minus cash, if any, in the Income and Capital Accounts
of such Trust, (b) if offering prices are not available for the
Treasury Obligations (if any), on the basis of offering prices
for comparable securities, (c) by determining the value of the
Treasury Obligations (if any) on the offer side of the market
by appraisal, or (d) by any combination of the above. The aggregate
underlying value of the Equity Securities will be determined in
the following manner: If the Equity Securities are listed on a
national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing ask prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefor is other than
on the exchange, the evaluation shall generally be based on the
current ask price on the over-the-counter market (unless it is
determined that these prices are inappropriate as a basis for
evaluation). If current ask prices are unavailable, the evaluation
is generally determined (a) on the basis
Page 27
of current ask prices for comparable securities, (b) by appraising
the value of the Equity Securities on the ask side of the market
or (c) by any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the bid price per
Unit of the Treasury Obligations in each Trust (if any) and the
aggregate underlying value of the Equity Securities therein, plus
or minus cash, if any, in the Income and Capital Accounts of each
Trust plus the applicable sales charge. The offering price of
the Treasury Obligations in the Growth & Treasury Trust may be
expected to be greater than the bid price of the Treasury Obligations
by less than 2%.
Although payment is normally made three business days following
the order for purchase (the date of settlement), payment may be
made prior thereto. A person will become owner of the Units on
the date of settlement provided payment has been received. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made three
business days following such order or shortly thereafter. See
"Rights of Unit Holders-How may Units be Redeemed?" for information
regarding the ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Securities are deposited by the Sponsor,
Units will be distributed to the public at the then current Public
Offering Price. The initial offering period may be up to approximately
360 days. During such period, the Sponsor may deposit additional
Securities in a Trust and create additional Units. Units reacquired
by the Sponsor during the initial offering period (at prices based
upon aggregate offering price of the Treasury Obligations (if
any) and the aggregate underlying value of the Equity Securities
in a Trust plus or minus a pro rata share of cash, if any, in
the Income and Capital Accounts of such Trust) may be resold at
the then current Public Offering Price. Upon the termination of
the initial offering period, unsold 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 each Trust
for sale in a number of states. With respect to each Growth Trust,
sales initially will be made to dealers and others at prices which
represent a concession or agency commission of 3.2% of the Public
Offering Price, and, for secondary market sales, 3.2% of the Public
Offering Price (or 65% of the then current maximum sales charge
after October 1, 1996). With respect to the Growth & Treasury
Trust, sales initially will be made to dealers and others at prices
which represent a concession or agency commission of 3.6% of the
Public Offering Price, and, for secondary market sales, 3.6% of
the Public Offering Price (or 65% of the then current maximum
sales charge after October 1, 1996). Volume concessions or agency
commissions of an additional 0.40% of the Public Offering Price
will be given to any broker/dealer or bank, who purchases from
the Sponsor at least $100,000 of a Trust on the Initial Date of
Deposit or $250,000 on any other day thereafter. The Sponsor reserves
the right to change the amount of the concession or agency commission
from time to time. Effective on each October 1, commencing October
1, 1996, the sales charge of each Growth Trust and the Growth
& Treasury Trust will be reduced by 1/2 of 1% to a minimum sales
charge of 3.0% and 3.5%, respectively. However, resales of Units
of the Trusts by such broker/dealers, banks and other selling
agents to the public will be made at the Public Offering Price
described in the prospectus. The Sponsor reserves the right to
change the amount of the concession or agency commission from
time to time. Certain commercial banks may be making Units of
a Trust available to their customers on an agency basis. A portion
of the sales charge paid by these customers is retained by or
remitted to the banks in the amounts indicated in the second preceding
sentence. Under the Glass-Steagall Act, banks are prohibited from
underwriting Units of the Trusts; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that
Page 28
these particular agency transactions are not permitted under such
Act. In Texas and in certain other states, any banks making Units
available must be registered as broker/dealers under state law.
From time to time the Sponsor may implement programs under which
broker/dealers, banks or other selling agents of a Trust may receive
nominal awards from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of a broker/dealer,
bank or other selling agent may be eligible to win other nominal
awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker/dealer, bank or other selling agent
that sponsors sales contests or recognition programs conforming
to criteria established by the Sponsor, or participates in sales
programs sponsored by the Sponsor, an amount not exceeding the
total applicable sales charges on the sales generated by such
person at the public offering price during such programs. Also,
the Sponsor in its discretion may from time to time pursuant to
objective criteria established by the Sponsor pay fees to qualifying
broker/dealers, banks or other selling agents for certain services
or activities which are primarily intended to result in sales
of Units of a Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of a Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that a Trust will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on a Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the full faith and
credit of the U.S. Government and bank CDs and money market accounts
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal,
but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of each
Trust are described more fully elsewhere in this Prospectus.
Each Trust's performance may be compared to performance on a total
return basis of the Dow Jones Industrial Average, the S&P 500
Composite Price Stock Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications
such as Money, 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 each Trust's relative performance for any future period.
What are the Sponsor's Profits?
With respect to the Growth Trusts, the Sponsor of the Trust will
receive a gross sales commission equal to 4.9% of the Public Offering
Price of the Units (equivalent to 5.152% of the net amount invested),
less any reduced sales charge for quantity purchases as described
under "Public Offering-How is the Public Offering Price Determined?"
With respect to the Growth and Treasury Trust, the Sponsor of
the Trust will receive a gross sales commission equal to 4.9%
of the Public Offering Price of the Units (equivalent to 5.152%
of the net amount invested), less any reduced sales charge for
quantity purchases as described under "Public Offering-How is
the Public Offering Price Determined?" See "Public Offering-How
are Units Distributed?" for information regarding the receipt
of additional concessions available to broker/dealers, banks and
other selling agents. In addition, the Sponsor may be considered
to have realized a profit or to have sustained a loss, as the
case may be, in the amount of any difference between the cost
of the Securities to a Trust (which is based on the Evaluator's
determination of the aggregate offering price of the underlying
Securities of a Trust on the Initial Date of Deposit as well as
on subsequent deposits) and the cost of such Securities to the
Sponsor. See Note (2) of "Schedule of Investments" for each Trust.
During the initial offering period, the broker/dealers, banks
and other selling agents also may realize profits or sustain losses
as a result of fluctuations after the Initial Date of Deposit
in the Public Offering Price received by such dealers and others
upon the sale of Units.
Page 29
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a sales charge of 4.9%
and 5.5% with respect to the Growth Trusts and the Growth & Treasury
Trust, respectively, subject to reduction beginning October 1,
1996) or redeemed. The secondary market public offering price
of Units may be greater or less than the cost of such Units to
the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to maintain a market for the Units
and continuously offer to purchase Units at prices, subject to
change at any time, based upon the aggregate 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 three
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder
and will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee
will send to the registered owner of Units a written initial transaction
statement containing a description of a Trust; the number of Units
issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
Page 30
How are Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted
interest on the Treasury Obligations in the case of the Growth
& Treasury Trust) 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." Because dividends are not received by
a Trust at a constant rate throughout the year, such distributions
to Unit holders may be more or less than the amount credited to
the Income Account as of the Record Date. Notification to the
Trustee of the transfer of Units is the responsibility of the
purchaser, but in the normal course of business such notice is
provided by the selling broker-dealer. The pro rata share of cash
in the Capital Account of each Trust will be computed as of the
fifteenth day of each month. Proceeds received on the sale of
any Securities in a Trust, to the extent not used to meet redemptions
of Units or pay expenses, will, however, be distributed on the
last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals
at least $0.01 per Unit. The Trustee is not required to pay interest
on funds held in the Capital Account of a Trust (but may itself
earn interest thereon and therefore benefit from the use of such
funds). Notwithstanding, distributions of funds in the Capital
Account, if any, will be made on the last day of each December
to Unit holders of record as of December 15. Income with respect
to the original issue discount on the Treasury Obligations in
a Trust (if any) will not be distributed currently, although Unit
holders will be subject to Federal income tax as if a distribution
had occurred. See "What is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by a Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder only when filing a tax return. Under normal circumstances
the Trustee obtains the Unit holder's tax identification number
from the selling broker. However, a Unit holder should examine
his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should
be provided as soon as possible.
Within a reasonable time after each Trust is terminated, each
Unit holder of a Trust will, upon surrender of his Units for redemption,
receive: (i) the pro rata share of the amounts realized upon the
disposition of Equity Securities, unless he elects an In-Kind
Distribution as described below, (ii) a pro rata share of the
amounts realized upon the disposition of the Treasury Obligations
(if any) and (iii) a pro rata share of any other assets of a Trust,
less expenses of such Trust, subject to the limitation that Treasury
Obligations in a Growth & Treasury Trust may not be sold to pay
for Trust expenses. Not less than 60 days prior to the Mandatory
Termination Date for the Growth Trust and not less than 60 days
prior to the Treasury Obligations Maturity Date for the Growth
& Treasury 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 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.
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 for
the Growth Trust and at least five business days prior to the
Treasury Obligations Maturity Date for the Growth & Treasury Trust.
Not less than 60 days prior to the termination of a Trust, those
Unit holders owning at least 2,500 Units Units will be offered
the option of having the proceeds from the Equity Securities distributed
"In-Kind," or they will be paid in cash, as indicated above. A
Unit holder may, of course, at any time after the Equity Securities
are distributed, sell all or a portion of the shares.
The Trustee will credit to the Income Account of each Trust any
dividends received on the Equity Securities therein. All other
receipts (e.g., return of capital, etc.) are credited to the Capital
Account of each Trust.
Page 31
The Trustee may establish reserves (the "Reserve Account") within
each Trust for state and local taxes, if any, and any governmental
charges payable out of each Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable
period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar
year was a Unit holder of a Trust the following information in
reasonable detail: (1) a summary of transactions in such Trust
for such year; (2) any Securities sold during the year and the
Securities held at the end of such year by such Trust; (3) the
redemption price per Unit based upon a computation thereof on
the 31st day of December of such year (or the last business day
prior thereto); and (4) amounts of income and capital distributed
during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in a Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with the signature guaranteed as explained above (or
by providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the third
business day following such tender, the Unit holder will be entitled
to receive in cash an amount for each Unit equal to the Redemption
Price per Unit next computed after receipt by the Trustee of such
tender of Units. The "date of tender" is deemed to be the date
on which Units are received by the Trustee, except that as regards
Units received after 4:00 p.m. eastern standard time, the date
of tender is the next day on which the New York Stock Exchange
is open for trading and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption
price computed on that day. Units so redeemed shall be cancelled.
With respect to each Growth Trust, any Unit holder tendering 2,500
Units of a Trust or more for redemption may request by written
notice submitted at the time of tender from the Trustee in lieu
of a cash redemption a distribution of shares of Equity Securities
in an amount and value of Equity Securities per Unit equal to
the Redemption Price Per Unit as determined as of the evaluation
next following tender. To the extent possible, In-Kind distributions
("In-Kind Distributions") shall be made by the Trustee through
the distribution of each of the Equity Securities in book-entry
form to the account of the Unit holder's bank or broker-dealer
at the Depository Trust Company. An In-Kind Distribution will
be reduced by customary transfer and registration charges. The
tendering Unit holder will receive his pro rata number of whole
shares of each of the Equity Securities comprising the portfolio
and cash from the Capital Account equal to the fractional shares
to which the tendering Unit holder is entitled. The Trustee may
adjust the number of shares of any issue of Equity Securities
included in a Unit holder's In-Kind Distribution to facilitate
the distribution of whole shares, such adjustment to be made on
the basis of the value of Equity Securities on the date of tender.
If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unit holder, the Trustee
may sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number
in the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be recovered
by the Unit holder only when filing a tax return. Under normal
circumstances, the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder
elects to tender Units for redemption, such Unit holder should
make sure that the Trustee has been provided a certified tax identification
number in order
Page 32
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of each Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of each Trust.
The Trustee is empowered to sell Securities of each Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of each 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. With respect to the Growth & Treasury
Trust, Equity Securities will be sold to meet redemptions of Units
before Treasury Obligations, although Treasury Obligations may
be sold if the Growth & Treasury Trust is assured of retaining
a sufficient principal amount of Treasury Obligations to provide
funds upon maturity of such Trust at least equal to $10.00 per Unit.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Treasury Obligations (if any) and the aggregate
underlying value of the Equity Securities in each Trust plus or
minus cash, if any, in the Income and Capital Accounts of such
Trust, while the Public Offering Price per Unit during the initial
offering period will be determined on the basis of the offering
price of such Treasury Obligations (if any), as of the close of
trading on the New York Stock Exchange on the date any such determination
is made and the aggregate underlying value of the Equity Securities
in each Trust, plus or minus cash, if any, in the Income and Capital
Accounts of each Trust. On the Initial Date of Deposit the Public
Offering Price per Unit (which is based on the OFFERING prices
of the Treasury Obligations (if any) and the aggregate underlying
value of the Equity Securities in each Trust and includes the
sales charge) exceeded the Unit value at which Units could have
been redeemed (based upon the current BID prices of the Treasury
Obligations (if any) and the aggregate underlying value of the
Equity Securities in each Trust) by the amount shown under "Summary
of Essential Information." The Redemption Price per Unit of each
Trust is the pro rata share of each Unit determined by the Trustee
by adding: (1) the cash on hand in the Trust other than cash deposited
in the Trust to purchase Securities not applied to the purchase
of such Securities; (2) the aggregate value of the Securities
(including "when issued" contracts, if any) held in the Trust,
as determined by the Evaluator on the basis of bid prices of the
Treasury Obligations (if any) and the aggregate underlying value
of the Equity Securities in each Trust next computed; and (3)
dividends receivable on the Equity Securities trading ex-dividend
as of the date of computation; and deducting therefrom: (1) amounts
representing any applicable taxes or governmental charges payable
out of the Trust; (2) an amount representing estimated accrued
expenses of the Trust, including but not limited to fees and expenses
of the Trustee (including legal and auditing fees), the Evaluator
and supervisory fees, if any; (3) cash held for distribution to
Unit holders of record of the Trust as of the business day prior
to the evaluation being made; and (4) other liabilities incurred
by the Trust; and finally dividing the results of such computation
by the number of Units of the Trust outstanding as of the date thereof.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing bid prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefor is other than
on the exchange, the evaluation shall generally be based on the
current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is
Page 33
restricted or any emergency exists, as a result of which disposal
or evaluation of the Securities is not reasonably practicable,
or for such other periods as the Securities and Exchange Commission
may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for
an order permitting a full or partial suspension of the right
of Unit holders to redeem their Units. The Trustee is not liable
to any person in any way for any loss or damage which may result
from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
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 Securities be Removed from a Trust?
The Portfolio of each Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that the issuer of the Equity Security has breached
a covenant which would affect the payments of dividends, the credit
standing of the issuer or otherwise impair the sound investment
character of the Equity Security, that the issuer has defaulted
on the payment on any other of its outstanding obligations, that
the price of the Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to a Trust. Treasury Obligations in the Growth & Treasury Trust
may be sold by the Trustee only pursuant to the liquidation of
such Trust or to meet redemption requests. Except as stated under
"Portfolio-What are Some Additional Considerations for Investors?"
for Failed Contract Obligations, the acquisition by a Trust of
any securities other than the Securities is prohibited. Pursuant
to the Indenture and with limited exceptions, the Trustee may
sell any securities or other property acquired in exchange for
Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged
securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired
by a Trust, they may be accepted for deposit in the Trust and
either sold by the Trustee or held in the Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). Proceeds from the sale of Securities by the Trustee
are credited to the Capital Account of a Trust for distribution
to Unit holders or to meet redemptions.
The Trustee may also sell Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose
of redeeming Units of a Trust tendered for redemption and the
payment of expenses; provided, however, for the Growth & Treasury
Trust, that in the case of Securities sold to meet redemption
requests, Treasury Obligations may only be sold if the Growth
& Treasury Trust is assured of retaining a sufficient principal
amount of Treasury Obligations to provide funds upon maturity
of the Trust at least equal to $10.00 per Unit. Treasury Obligations
may not be sold by the Trustee to meet Growth & Treasury Trust expenses.
Page 34
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
principle place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Trusts may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Securities. For information relating to
the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Page 35
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of 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 Trusts as provided herein, or (c)
continue to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is FT Evaluators L.P., an Illinois limited partnership
formed in 1994 and an affiliate of the Sponsor. The Evaluator's
address is 1001 Warrenville Road, Lisle, Illinois 60532. The Evaluator
may resign or may be removed by the Sponsor and the Trustee, in
which event the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture for the Growth Trust provides that it shall terminate
upon the Mandatory Termination Date indicated herein under "Summary
of Essential Information." The Indenture provides that the Growth
& Treasury Trust shall terminate upon the maturity, redemption
or other disposition of the last of the Treasury Obligations held
in such Trust, but in no event beyond the Mandatory Termination
Date indicated herein under "Summary of Essential Information."
A Trust may be liquidated at any time by consent of 100% of the
Unit holders of the Trust or, in the case of a Growth Trust, by
the Trustee when the value of the Equity Securities owned by the
Trust as shown by any evaluation, is less than the lower of $2,000,000
or 20% of the total value of Equity Securities deposited in such
Trust during the primary offering period, or by the Trustee in
the event that Units of a Trust not yet sold aggregating more
than 60% of the Units of the Trust are tendered for redemption
Page 36
by the Underwriter, including the Sponsor. If a Trust is liquidated
because of the redemption of unsold Units of the Trust by the
Underwriter, the Sponsor will refund to each purchaser of Units
of the Trust the entire sales charge paid by such purchaser. In
the event of termination, written notice thereof will be sent
by the Trustee to all Unit holders of a Trust. Within a reasonable
period after termination, the Trustee will follow the procedures
set forth under "How are Income and Capital Distributed?"
Commencing on the Mandatory Termination Date for each Growth Trust
and on the Treasury Obligations Maturity Date for the Growth &
Treasury Trust, Equity Securities will begin to be sold in connection
with the termination of each 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 the Trust
maintained by the Trustee. At least 60 days prior to the Mandatory
Termination Date for each Growth Trust and 60 days prior to the
Treasury Obligations Maturity Date for the Growth & Treasury 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.
All Unit holders of the Growth & Treasury Trust will receive their
pro rata portion of the Treasury Obligations in cash upon the
termination of the Growth & Treasury Trust. To be effective, the
election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the
Trustee at least five business days prior to the Mandatory Termination
Date for a Growth Trust and at least five business days prior
to the Treasury Obligations Maturity Date for the Growth & Treasury
Trust. Unit holders not electing a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after the Trusts
are terminated. Regardless of the distribution involved, the Trustee
will deduct from the funds of each Trust any accrued costs, expenses,
advances or indemnities provided by the Trust Agreement, including
estimated compensation of the Trustee and costs of liquidation
and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of
Securities in a Trust upon termination may result in a lower amount
than might otherwise be realized if such sale were not required
at such time. The Trustee will then distribute to each Unit holder
his pro rata share of the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trusts.
Experts
The statements of net assets, including the schedules of investments,
of the Trusts at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon appearing elsewhere herein
and in the Registration Statement, and are included in reliance
upon such report given upon the authority of such firm as experts
in accounting and auditing.
Page 37
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 123
We have audited the accompanying statements of net assets, including
the schedules of investments, of The First Trust Special Situations
Trust, Series 123, comprised of American Financial Institutions
Growth Trust, Series 1, American Technology Growth Trust, Series
1 and American Technology Growth & Treasury Trust, Series 2 as
of the opening of business on , 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 , 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 123, comprised
of American Financial Institutions Growth Trust, Series 1, American
Technology Growth Trust, Series 1 and American Technology Growth
& Treasury Trust, Series 2 at the opening of business on
, 1995 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1995
Page 38
Statement of Net Assets
American Financial Institutions Growth Trust, Series 1
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $
Organizational costs (3)
__________
Less accrued organizational costs (3)
__________
Net assets $
==========
Units outstanding
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $
Less sales charge (4) ( )
__________
Net assets $
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" for American Financial Institutions Growth Trust,
Series 1 is based on the aggregate underlying value of the Equity
Securities.
(2) An irrevocable letter of credit totaling $ issued
by Bankers Trust Company has been deposited with the Trustee as
collateral covering the monies necessary for the purchase of the
Equity Securities in the American Financial Institutions Growth
Trust, Series 1 pursuant to contracts for the purchase of such
Equity Securities.
(3) The Trust will bear all or a portion of its estimated organizational
costs which will be deferred and amortized over a five-year period
from the Initial Date of Deposit. The estimated organizational
costs are based on __________ Units of the Trust expected to be
issued. To the extent the number of Units issued is larger or
smaller, the estimate will vary.
(4) The aggregate cost to investors includes a sales charge computed
at the rate of 5.5% of the Public Offering Price (equivalent to
5.820% of the net amount invested), assuming no reduction of sales
charge for quantity purchases.
Page 39
Statement of Net Assets
American Technology Growth Trust, Series 1
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $
Organizational costs (3)
__________
Less accrued organizational costs (3)
Net assets $
__________
Units outstanding
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $
Less sales charge (4) ( )
__________
Net assets $
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" for American Technology Growth Trust, Series 1
is based on the aggregate underlying value of the Equity Securities.
(2) An irrevocable letter of credit totaling $ issued
by Bankers Trust Company has been deposited with the Trustee as
collateral covering the monies necessary for the purchase of the
Equity Securities in the American Technology Growth Trust, Series
1 pursuant to contracts for the purchase of such Equity Securities.
(3) The Trust will bear all or a portion of its estimated organizational
costs which will be deferred and amortized over a five-year period
from the Initial Date of Deposit. The estimated organizational
costs are based on __________ Units of the Trust expected to be
issued. To the extent the number of Units issued is larger or
smaller, the estimate will vary.
(4) The aggregate cost to investors includes a sales charge computed
at the rate of 5.5% of the Public Offering Price (equivalent to
5.820% of the net amount invested), assuming no reduction of sales
charge for quantity purchases.
Page 40
Statement of Net Assets
American Technology Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase
contracts (1) (2) $
Organizational costs (3)
_________
Less accrued organizational costs (3)
_________
Net assets $
=========
Units outstanding
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $
Less sales charge (4) ( )
_________
Net assets $
=========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" for American Technology Growth & Treasury Securities
Trust, Series 2 is based on the offering side evaluations of the
Treasury Obligations and the aggregate underlying value of the
Equity Securities.
(2) An irrevocable letter of credit totaling $ issued
by Bankers Trust Company has been deposited with the Trustee as
collateral covering the monies necessary for the purchase of the
Securities in the American Technology Growth & Treasury Securities
Trust, Series 2 pursuant to contracts for the purchase of such
Securities.
(3) The Trust will bear all or a portion of its estimated organizational
costs which will be deferred and amortized over a five-year period
from the Initial Date of Deposit. The estimated organizational
costs are based on __________ Units of the Trust expected to be
issued. To the extent the number of Units issued is larger or
smaller, the estimate will vary.
(4) The aggregate cost to investors includes a sales charge computed
at the rate of 5.5% of the Public Offering Price (equivalent to
5.820% of the net amount invested), assuming no reduction of sales
charge for quantity purchases.
Page 41
Schedule of Investments
American Financial Institutions Growth Trust, Series 1
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Approximate Cost of
Percentage of Market Equity
Number Ticker Symbol and Aggregate Value Securities
of Shares Name of Issuer of Security (1) Offering Price (3) per Share to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
National
BAC BankAmerica Corporation 1-4% $
CCI Citicorp, Inc. 1-4%
KRB MBNA Corporation 1-4%
Northeast
ISB Interchange Financial
Services Corporation 1-4%
NSBK North Side Savings Bank 1-4%
UJB UJB Financial Corporation 1-4%
Midwest
ONE Banc One Corporation 1-4%
BOAT Boatmen's Bancshares, Inc. 1-4%
COFI Charter One Financial, Inc. 1-4%
FFHC First Financial Corporation 1-4%
FOA First of America Bank Corporation 1-4%
KEY KeyCorp 1-4%
MTL Mercantile Bancorporation 1-4%
MVBI Mississippi Valley Bancshares, Inc. 1-4%
NCC National City Corporation 1-4%
NOB Norwest Corporation 1-4%
RFED Roosevelt Financial Group, Inc. 1-4%
TCB TCF Financial Corporation 1-4%
Southeast
BBI Barnett Banks, Inc. 1-4%
FTEN First Tennessee National Corporation 1-4%
FVB First Virginia Banks, Inc. 1-4%
LFCT Leader Financial Corporation 1-4%
RGBK Regions Financial Corporation 1-4%
SOTR Southtrust Corporation 1-4%
UPC Union Planters Corporation 1-4%
Southwest
OKSB Southwest Bancorp, Inc. 1-4%
West
CYN City National Corporation 1-4%
I First Interstate Bancorp 1-4%
FSCO First Security Corporation 1-4%
WAMU Washington Mutual, Inc. 1-4%
________ ____________
Total Investments 100% $
======== ============
</TABLE>
Page 42
[FN]
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on , 1995.
(2) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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 $ . Cost and loss to Sponsor relating to the Equity
Securities sold to the Trust were $ and $ ,
respectively.
(3) The portfolio may contain additional Equity Securities each
of which will not exceed approximately 4% of the Aggregate Offering
Price for Equity Securities. Although it is not the Sponsor's
intention, certain of the Equity Securities listed above may not
be included in the final portfolio. Also, the percentages of the
Aggregate Offering Price for the Equity Securities are approximate
amounts and may vary in the final portfolio.
Page 43
Schedule of Investments
American Technology Growth Trust, Series 1
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Approximate Cost of
Percentage of Market Equity
Number Ticker Symbol and Aggregate Value Securities
of Shares Name of Issuer of Security (1) Offering Price (3) per Share to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
Computer Networking
COMS 3Com Corporation 1-4% $
CS Cabletron Systems, Inc. 1-4%
CSCO Cisco Systems, Inc. 1-4%
Desktop Computers & File Servers
CPQ Compaq Computer Corporation 1-4%
DELL Dell Computer Corporation 1-4%
SGI Silicon Graphics, Inc. 1-4%
SUNW Sun Microsystems, Inc. 1-4%
Enterprise & Client/Server Software
BMCS BMC Software, Inc. 1-4%
CA Computer Associates International, Inc. 1-4%
ORCL Oracle Systems Corporation 1-4%
Enterprise Computers
HWP Hewlett-Packard Company 1-4%
IBM International Business
Machines Corporation 1-4%
Information Highway Equipment
DIGI DSC Communications Corporation 1-4%
Personal Productivity Software
ADBE Adobe Systems, Inc. 1-4%
MSFT Microsoft Corporation 1-4%
Semiconductor Equipment
AMAT Applied Materials, Inc. 1-4%
LRCX Lam Research Corporation 1-4%
NVLS Novellus Systems, Inc. 1-4%
UTEK Ultratech Stepper, Inc. 1-4%
Semiconductors
ADPT Adaptec, Inc. 1-4%
AMD Advanced Micro Devices, Inc. 1-4%
ATML Atmel Corporation 1-4%
INTC Intel Corporation 1-4%
LLTC Linear Technology Corporation 1-4%
MU Micron Technology, Inc. 1-4%
MOT Motorola, Inc. 1-4%
TXN Texas Instruments, Inc. 1-4%
XLNX Xilinx, Inc. 1-4%
Storage
EMC EMC Corporation 1-4%
QNTM Quantum Corporation 1-4%
________ ____________
Total Investments 100% $
======== ============
</TABLE>
Page 44
[FN]
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on , 1995.
(2) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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 $ . Cost and loss to Sponsor relating to the Equity
Securities sold to the Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each
of which will not exceed approximately 4% of the Aggregate Offering
Price for Equity Securities. Although it is not the Sponsor's
intention, certain of the Equity Securities listed above may not
be included in the final portfolio. Also, the percentages of the
Aggregate Offering Price for the Equity Securities are approximate
amounts and may vary in the final portfolio.
Page 45
Schedule of Investments
American Technology Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Approximate
Percentage of Market Value Cost
Aggregate per Share of
Maturity Offering of Equity Securities
Value Name of Issuer and Title of Security (1) Price (3) Securities to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
$ Zero coupon U.S. Treasury bonds % $
maturing , 2002
Number Ticker Symbol and
of Shares Name of Issuer of Equity Securities (1)
_________ _______________________________________
Computer Networking
COMS 3Com Corporation 1-4% $
CS Cabletron Systems, Inc. 1-4%
CSCO Cisco Systems, Inc. 1-4%
Desktop Computers & File Servers
CPQ Compaq Computer Corporation 1-4%
DELL Dell Computer Corporation 1-4%
SGI Silicon Graphics, Inc. 1-4%
SUNW Sun Microsystems, Inc. 1-4%
Enterprise & Client/Server Software
BMCS BMC Software, Inc. 1-4%
CA Computer Associates International, Inc. 1-4%
ORCL Oracle Systems Corporation 1-4%
Enterprise Computers
HWP Hewlett-Packard Company 1-4%
IBM International Business
Machines Corporation 1-4%
Information Highway Equipment
DIGI DSC Communications Corporation 1-4%
Personal Productivity Software
ADBE Adobe Systems, Inc. 1-4%
MSFT Microsoft Corporation 1-4%
Semiconductor Equipment
AMAT Applied Materials, Inc. 1-4%
LRCX Lam Research Corporation 1-4%
NVLS Novellus Systems, Inc. 1-4%
UTEK Ultratech Stepper, Inc. 1-4%
Semiconductors
ADPT Adaptec, Inc. 1-4%
AMD Advanced Micro Devices, Inc. 1-4%
ATML Atmel Corporation 1-4%
INTC Intel Corporation 1-4%
LLTC Linear Technology Corporation 1-4%
MU Micron Technology, Inc. 1-4%
MOT Motorola, Inc. 1-4%
________ ____________
Total Investments 100% $
======== ============
</TABLE>
Page 46
Schedule of Investments (cont.)
American Technology Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 123
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Approximate
Percentage of Market Value Cost
Aggregate per Share of
Maturity Offering of Equity Securities
Value Name of Issuer and Title of Security (1) Price (3) Securities to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
Semiconductors (cont.)
TXN Texas Instruments, Inc. 1-4%
XLNX Xilinx, Inc. 1-4%
Storage
EMC EMC Corporation 1-4%
QNTM Quantum Corporation 1-4%
________ ____________
Total Investments 100% $
======== ============
</TABLE>
[FN]
______________
(1) The Treasury Obligations were purchased at a discount from
their par value because there is no stated interest income thereon
(such securities are often referred to as zero coupon U.S. Treasury
bonds). Over the life of the Treasury Obligations the value increases,
so that upon maturity the holders will receive 100% of the principal
amount thereof. All Securities are represented by regular way
contracts to purchase such Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Securities were entered into by the Sponsor
on , 1995.
(2) The cost of the Securities to the Trust represents the the
offering side evaluation as determined by the Evaluator, an affiliate
of the Sponsor, with respect to the Treasury Obligations and the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the
Equity Securities on the business day preceding the Initial Date
of Deposit). The offering side evaluation of the Treasury Obligations
is greater than the bid side evaluation of such Treasury Obligations
which is the basis on which the Redemption Price per Unit will
be determined after the initial offering period. The aggregate
value, based on the bid side evaluation of the Treasury Obligations
and the aggregate underlying value of the Equity Securities on
the Initial Date of Deposit, was $ . Cost and profit
to the Sponsor relating to the Treasury Obligations sold to the
Trust were $ and $ , respectively. Cost and
profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each
of which will not exceed approximately 4% of the Aggregate Offering
Price for Equity Securities. Although it is not the Sponsor's
intention, certain of the Equity Securities listed above may not
be included in the final portfolio. Also, the percentages of the
Aggregate Offering Price for the Equity Securities are approximate
amounts and may vary in the final portfolio.
Page 47
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information
American Financial Institutions Growth Trust, Series 1 5
American Technology Growth Trust, Series 1 6
American Technology Growth & Treasury Trust, Series 2 7
The First Trust Special Situations Trust, Series 123:
What is The First Trust Special Situations Trust? 8
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
Portfolios:
What are Treasury Obligations? 14
What are Equity Securities? 15
Risk Factors 15
What are the Equity Securities Selected for
American Financial Institutions Growth
Trust, Series 1? 19
What are the Equity Securities Selected for
American Technology Growth Trust, Series 1 and
American Technology Growth & Treasury Securities
Trust, Series 2? 22
What are Some Additional Considerations for
Investors? 25
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
How May Units be Purchased by the Sponsor? 34
How May Securities be Removed from a Trust? 34
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 35
Who is the Trustee? 35
Limitations on Liabilities of Sponsor and Trustee 36
Who is the Evaluator? 36
Other Information:
How May the Indenture be Amended or Terminated? 36
Legal Opinions 37
Experts 37
Report of Independent Auditors 38
Statements of Net Assets:
American Financial Institutions Growth Trust, Series 1 39
American Technology Growth Trust, Series 1 40
American Technology Growth & Treasury Securities
Trust, Series 2 41
Schedules of Investments:
American Financial Institutions Growth Trust, Series 1 42
American Technology Growth Trust, Series 1 44
American Technology Growth & Treasury Securities
Trust, Series 2 46
</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)
American Financial
Institutions
Growth Trust
Series 1
American
Technology
Growth Trust
Series 1
American
Technology Growth
& Treasury
Securities Trust
Series 2
FIRST TRUST (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
, 1995
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
123 has duly caused this Amendment No. 2 to Form S-6 to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Village of Lisle and State of Illinois on August 24, 1995.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 123
(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 Amendment No. 1 to Form S-6 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 August 24, 1995
Corporation, the
General Partner of Carlos E. Nardo
Nike Securities L.P. 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 INDEPENDENT AUDITORS
The consent of Ernst & Young LLP to the use of its Report 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 will be filed
by amendment.
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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 123 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York, as Trustee, FT Evaluators L.P., as
Evaluator, and First Trust Advisors L.P., as Portfolio
Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
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3.1* Opinion of counsel as to legality of securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
securities being registered.
3.3* Opinion of counsel as to New York income tax status of
securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of FT Evaluators L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
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________________________
* To be filed by amendment.
