As filed with the Securities and Exchange Commission on March 4, 1996.
Registration No. 33-63229
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 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 126
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 126
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 MARCH 4, 1996
First Trust (registered trademark)
American Healthcare Growth Trust, Series 1
Media and Entertainment Growth Trust, Series 1
The Trust. The First Trust(registered trademark) Special Situations
Trust, Series 126 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 Healthcare Growth Trust is a unit investment trust
consisting of a portfolio containing common stocks issued primarily by
health care companies.
The Media and Entertainment Growth Trust is a unit investment trust
consisting of a portfolio containing common stocks issued by media and
entertainment companies.
The objective of each Trust is to provide for potential capital
appreciation by investing the Trust's portfolio in common stocks (the
"Equity Securities"). See "Schedule of Investments." Each Trust has a
mandatory termination date ("Mandatory Termination Date" or "Trust
Ending Date") as set forth under "Summary of Essential Information."
There is, of course, no guarantee that the objective of the Trusts will
be achieved. Each Unit of a Trust represents an undivided fractional
interest in all the Equity Securities deposited in a Trust.
The Equity Securities deposited in each Trust's portfolio have no fixed
maturity date and the value of these underlying Equity Securities will
fluctuate with changes in the values of stocks in general. See
"Portfolio."
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Equity Securities in the Trusts. 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 two may differ. Any such
difference may be due to the sale, redemption or liquidation of any
Equity Securities deposited in the Trusts on the Initial, or any
subsequent, Date of Deposit. See "What is the First Trust Special
Situations Trust?" and "How May Equity Securities be Removed from a
Trust?"
Public Offering Price. The Public Offering Price per Unit of each 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
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.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is , 1996
Page 1
an initial sales charge equal to the difference between the maximum
sales charge of % of the Public Offering Price and the maximum
remaining deferred sales charge, initially $0.20 per Unit. Commencing on
, 1996, and on the last business day of each month
thereafter, through , 1996, a deferred sales charge of
$0.02 will be assessed per Unit per month. Units purchased subsequent to
the initial deferred sales charge payment but still during the initial
offering period will be subject to the initial sales charge and the
remaining deferred sales charge payments not yet collected. The deferred
sales charge will be paid from funds in the Income and/or Capital
Accounts, if sufficient, or from the periodic sale of Equity Securities.
or other retirement plans). The sales charge of a Trust is reduced on a
graduated scale for sales involving at least 5,000 Units. See "How is
the Public Offering Price Determined?"
UNITS OF THE TRUSTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
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) on the Initial Date of Deposit for the
American Healthcare Growth Trust, Series 1 was $ per Unit and
for the Media and Entertainment Growth Trust, Series 1 was $
per Unit. The actual 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 net annual
dividend distributions will be realized in the future.
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trusts, net of expenses of such Trust,
will be paid on the Distribution Date to Unit holders of record on the
Record Date as set forth in the "Summary of Essential Information."
Distributions of funds in the Capital Account, if any, will be made at
least annually in December of each year. Any distribution of income
and/or capital will be net of the expenses of the Trusts. See "What is
the Federal Tax Status of Unit Holders?" Additionally, upon termination
of the Trusts, the Trustee will distribute, upon surrender of Units for
redemption, to each Unit holder his pro rata share of a 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 intends to maintain a market
for Units of the Trusts and offer to repurchase such Units at prices
which are based on the aggregate underlying value of Equity Securities
in such Trusts (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 Trusts. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the Equity
Securities in the Trusts (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 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 a Trust. A Unit holder tendering 2,500
Units or more for redemption may request a distribution of shares of
Equity Securities (reduced by customary transfer and registration
charges) in lieu of payment in cash. See "How May Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination of
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 each Trust maintained by the Trustee. At least 60 days prior to
the Mandatory Termination Date of each Trust, the Trustee will provide
Page 2
written notice thereof to all Unit holders and will include with such
notice a form to enable Unit holders to elect a distribution of shares
of Equity Securities (reduced by customary transfer and registration
charges) if such Unit holder owns at least 2,500 Units of a Trust,
rather than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee of
Equity Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business days
prior to the Mandatory Termination Date of a Trust. Unit holders not
electing a distribution of shares of Equity Securities will receive a
cash distribution within a reasonable time after a Trust is terminated.
See "Rights of Unit Holders-How are Income and Capital Distributed?"
Risk Factors. An investment in a Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, changes in interest rates and economic recession.
Volatility in the market price of the Equity Securities in a Trust also
changes the value of the Units of the Trusts. Unit holders tendering
Units for redemption during periods of market volatility may receive
redemption proceeds which are more or less than they paid for the Units.
The Trusts' portfolios are not managed and Equity Securities will not be
sold by the Trusts regardless of market fluctuations, although certain
Equity Securities may be sold under certain limited circumstances. See
"What are Equity Securities?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities- , 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
American
Healthcare
Growth Trust
Series 1
____________
General Information
<S> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Equity Securities per Unit $
Maximum Sales Charge of % of the Public Offering Price per Unit
( % of the net amount invested, exclusive of the deferred sales charge) $
Less Deferred Sales Charge per Unit $ ( )
Public Offering Price per Unit (3) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate underlying value of Equity
Securities less deferred sales charge) (4) $
</TABLE>
CUSIP Number
First Settlement Date , 1996
Mandatory Termination Date , 2001
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 $ per Unit outstanding, payable
to an affiliate of the Sponsor.
Evaluations for purposes of
sale, purchase or redemption of
Units are made as of the close
of trading (generally
4:00 p.m. Eastern time) on the
New York Stock Exchange on each
day on which it is open.
Supervisory Fee (5) Maximum of $ per Unit outstanding
annually payable to an affiliate
of the Sponsor.
Estimated Annual Organizational
and Offering Costs (6) $ per Unit.
Income Distribution Record Date Fifteenth day of each June and
December commencing , 1996.
Income Distribution Date (7) Last day of each June and December
commencing , 1996.
[FN]
______________________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) 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.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for the Trust of % of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $0.20 per
Unit). Subsequent to the initial date of deposit, the amount of the
initial sales charge will vary with changes in the aggregate underlying
value of the Equity Securities underlying the Trust. In addition to the
initial sales charge, Unit holders will pay a deferred sales charge of
$0.02 per Unit per month commencing , 1996 and on the
last business day of each month thereafter through ,
1996. During the initial offering period, Units purchased subsequent to
the initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments not yet
collected. These deferred sales charge payments will be paid from funds
in the Income and/or Capital Accounts, if sufficient, or from the
periodic sale of Equity Securities. See "Fee Table" and "Public
Offering" for additional information. Commencing on , 1997,
the secondary market sales charge will not include the deferred sales
charge payments but will instead include only a one-time initial sales
charge of 4.5% of the Public Offering Price and will decrease by 1/2 of
1% on each subsequent February 1, commencing , 1997 to a
minimum sales charge of 3.0% as described under "Public Offering." On
the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay a pro
rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Equity
Securities at the opening of business on the Initial Date of Deposit and
establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(4) See "How May Units be Redeemed?"
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit.
(6) The Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees 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 and offering expenses will be charged
off over a period not to exceed five years from the Initial Date of
Deposit. See "What are the Expenses and Charges?" and "Statement of Net
Assets." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
(7) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities- , 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Media and
Entertainment
Growth Trust
Series 1
_____________
General Information
<S> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Equity Securities per Unit $
Maximum Sales Charge of % of the Public Offering Price per Unit
( % of the net amount invested, exclusive of the deferred sales charge) $
Less Deferred Sales Charge per Unit $ ( )
Public Offering Price per Unit (3) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate underlying value of Equity
Securities less deferred sales charge) (4) $
</TABLE>
CUSIP Number
First Settlement Date , 1996
Mandatory Termination Date , 2001
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 $ per Unit outstanding, payable
to an affiliate of the Sponsor.
Evaluations for purposes of
sale, purchase or redemption of
Units are made as of the close
of trading (generally
4:00 p.m. Eastern time) on the
New York Stock Exchange on each
day on which it is open.
Supervisory Fee (5) Maximum of $ per Unit outstanding
annually payable to an affiliate
of the Sponsor.
Estimated Annual Organizational
and Offering Costs (6) $ per Unit.
Income Distribution Record Date Fifteenth day of each June and De-
cember commencing , 1996.
Income Distribution Date (7) Last day of each June and December
commencing , 1996.
[FN]
______________________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) 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.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for the Trust of % of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $0.20 per
Unit). Subsequent to the initial date of deposit, the amount of the
initial sales charge will vary with changes in the aggregate underlying
value of the Equity Securities underlying the Trust. In addition to the
initial sales charge, Unit holders will pay a deferred sales charge of
$0.02 per Unit per month commencing , 1996 and on the
last business day of each month thereafter through ,
1996. During the initial offering period, Units purchased subsequent to
the initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments not yet
collected. These deferred sales charge payments will be paid from funds
in the Income and/or Capital Accounts, if sufficient, or from the
periodic sale of Equity Securities. See "Fee Table" and "Public
Offering" for additional information. Commencing on , 1997,
the secondary market sales charge will not include the deferred sales
charge payments but will instead include only a one-time initial sales
charge of 4.5% of the Public Offering Price and will decrease by 1/2 of
1% on each subsequent February 1, commencing , 1997 to a
minimum sales charge of 3.0% as described under "Public Offering." On
the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay a pro
rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Equity
Securities at the opening of business on the Initial Date of Deposit and
establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(4) See "How May Units be Redeemed?"
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit.
(6) The Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees 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 and offering expenses will be charged
off over a period not to exceed five years from the Initial Date of
Deposit. See "What are the Expenses and Charges?" and "Statement of Net
Assets." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
(7) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 5
FEE TABLE - American Healthcare Growth Trust, Series 1
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" Although the Trust
has a term of five years and is a unit investment trust rather than a
mutual fund, this information is presented to permit a comparison of fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) %(a) $
Deferred sales charge
(as a percentage of original purchase price) %(b)
_______ _______
%
======= =======
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee % $
Portfolio supervision, bookkeeping, administrative
and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses
on a $1,000 investment, assuming the Healthcare
Growth Trust, Series 1 has an estimated operating
expense ratio of % and a 5% annual return on
the investment throughout the periods $ $ $ $
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
_____________________
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of % and the maximum remaining deferred
sales charge (initially $0.20 per Unit) and would exceed 2.5% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $0.02 per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing , 1996
through , 1996. If a Unit holder sells or redeems Units
before all of these deductions have been made, the balance of the
deferred sales charge payments remaining will be deducted from the sales
or redemption proceeds. If the Unit price exceeds $10.00 per Unit, the
deferred sales charge will be less than 2.0%. Units purchased subsequent
to the initial deferred sales charge payment will also be subject to the
remaining deferred sales charge payments.
Page 6
FEE TABLE - Media and Entertainment Growth Trust, Series 1
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" Although the Trust
has a term of five years and is a unit investment trust rather than a
mutual fund, this information is presented to permit a comparison of fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) % (a) $
Deferred sales charge
(as a percentage of original purchase price) % (b)
________ _______
%
======== =======
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee % $
Portfolio supervision, bookkeeping, administrative
and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment, assuming the Media and
Entertainment Growth Trust, Series 1 has an
estimated operating expense ratio of % and a
5% annual return on the investment throughout the
periods $ $ $ $
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
_____________________
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of % and the maximum remaining deferred
sales charge (initially $0.20 per Unit) and would exceed 2.5% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $0.02 per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing , 1996
through , 1996. If a Unit holder sells or redeems Units
before all of these deductions have been made, the balance of the
deferred sales charge payments remaining will be deducted from the sales
or redemption proceeds. If the Unit price exceeds $10.00 per Unit, the
deferred sales charge will be less than 2.0%. Units purchased subsequent
to the initial deferred sales charge payment will also be subject to the
remaining deferred sales charge payments.
Page 7
AMERICAN HEALTHCARE GROWTH TRUST, SERIES 1
MEDIA AND ENTERTAINMENT GROWTH TRUST, SERIES 1
The First Trust Special Situations Trust, Series 126
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 126 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 an underlying separate unit investment
trusts, designated as: American Healthcare Growth Trust, Series 1 and
Media and Entertainment Growth Trust, Series 1 (collectively, the
"Trusts," and each individually, a "Trust." The Trusts were 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, The Chase Manhattan Bank (National
Association) as Trustee, and First Trust Advisors L.P. as Portfolio
Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks together
with an irrevocable letter or letters of credit of a financial
institution in an amount at least equal to the purchase price of such
securities. In exchange for the deposit of securities or contracts to
purchase securities in the Trusts, the Trustee delivered to the Sponsor
documents evidencing the entire ownership of the Trusts.
The objective of the American Healthcare Growth Trust is to provide for
capital appreciation potential by investing in common stocks issued
primarily by health care companies, which in the Sponsor's opinion,
represent rapidly growing companies at value prices. See "Schedule of
Investments" for Healthcare Growth Trust, Series 1. The huge and ever-
growing healthcare field is undergoing major changes toward managing
patient care, medical information systems and technology applications.
New pressures to deliver higher quality care to larger numbers of people
at lower competitive costs in contributing to strong market expansion,
as well as spawning emerging new growth markets. The Trust will invest
in both market leaders and emerging growth sectors that, in the
Sponsor's opinion, are well-positioned to benefit from major changes
that business and society are undergoing. United States expenditures
for health care exceeded $1 trillion last year, and an even greater
amount was expended overseas. The Sponsor believes strong continued
growth is fostered by a combination of three factors: the increasing
number of aged people requiring ever-greater medical resource support;
improving access to physicians and patient services through broader
benefit coverage; and accelerating pace of scientific discoveries that
lead to new markets.
The objective of the Media and Entertainment Growth Trust is to provide
for capital appreciation potential by investing in common stocks issued
by media and entertainment companies. See "Schedule of Investments" for
Media and Entertainment Growth Trust, Series 1. The Sponsor believes the
companies chosen for the Trust are those best positioned to take
advantage of the rapidly expanding global demand for media and
entertainment programming and delivery systems. A rising standard of
living worldwide, with the accompanying increase in disposable income,
should serve to increase consumer demand for entertainment products such
as movies, television programs, radio, magazines and newspapers. In
addition, population increases, world trade liberalization, and an
improved political climate in many countries are also favorable factors
for the global growth of media and entertainment companies.
In the opinion of the Sponsor, the passage of the Telecommunications
Acts of 1996 will greatly benefit media and entertainment companies.
Demand for quality media and entertainment content will only intensify
as broadcasters, cable television companies and telephone companies
compete for access to the best content to fill out their programming
schedules as the removal of several regulatory barriers will allow cable
and telephone companies to pursue attractive business opportunities
formerly closed to them. In addition relaxed restrictions on radio and
television station ownership will further encourage consolidation as
broadcast companies look to lower costs and increase profits through
increased economies of scale.
An investment in this trust should be made with an understanding of the
risks involved, including the cyclicality of revenues and earnings, the
availability of discretionary income of individuals, changing consumer
tastes and interest, fierce competition and changing regulation. As with
all similar investments, there can be no assurance Trust objectives will
be met.
Page 8
Each Trust has a mandatory termination date ("Mandatory Termination
Date" or "Trust Ending Date") as set forth under "Summary of Essential
Information." There is, of course, no guarantee that the objective of
either Trust will be achieved. Each Unit of a Trust represents an
undivided fractional interest in all the Equity Securities deposited in
such Trust.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in a Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Equity Securities in a Trust and Units
may be continuously offered for sale to the public by means of this
Prospectus, resulting in a potential increase in the outstanding number
of Units of a Trust. Any deposit by the Sponsor of additional Equity
Securities will duplicate, as nearly as is practicable, the original
proportionate relationship and not the actual proportionate relationship
on the subsequent date of deposit, since the actual proportionate
relationship may be different than the original proportionate
relationship. Any such difference may be due to the sale, redemption or
liquidation of any of the Equity Securities deposited in a Trust on the
Initial, or any subsequent, Date of Deposit. See "How May Equity
Securities be Removed from a Trust?" The original percentage
relationship of each Equity Security to a Trust is set forth herein
under "Schedule of Investments" for each Trust. Since the prices of the
underlying Equity Securities will fluctuate daily, the ratio, on a
market value basis, will also change daily. The portion of Equity
Securities represented by each Unit will not change as a result of the
deposit of additional Equity Securities in a Trust.
On the Initial Date of Deposit, each Unit of a Trust represented the
undivided fractional interest in the Equity Securities deposited in a
Trust set forth under "Summary of Essential Information." To the extent
that Units of a Trust are redeemed, the aggregate value of the Equity
Securities in a Trust will be reduced and the undivided fractional
interest represented by each outstanding Unit of a Trust will increase.
However, if additional Units are issued by a Trust in connection with
the deposit of additional Equity Securities by the Sponsor, the
aggregate value of the Equity Securities in a Trust will be increased by
amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit of a Trust will be decreased
proportionately. See "How May Units be Redeemed?"
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 a 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 all unit investment trusts of which Nike Securities L.P. is the
Sponsor in any calendar year exceed the aggregate cost to the Sponsor of
supplying such services in such year. First Trust Advisors L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee, which
is not to exceed the amount set forth under "Summary of Essential
Information," for providing portfolio supervisory services for 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. The
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 all 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. In providing such supervisory services, the
portfolio Supervisor may purchase research services from a variety of
sources which may include underwriters or dealers of the Trusts.
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 each Trust, but at no time will the total
amount received for evaluation services rendered to all unit investment
Page 9
trusts of which Nike Securities L.P. is the Sponsor in any calendar year
exceed the aggregate cost to First Trust Advisors L.P. of supplying such
services in such year. The Trustee pays certain expenses of 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 a Trust outstanding based upon the
largest aggregate number of Units of each 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 such Trust. Since the Trustee has the use of the funds being
held in the Capital and Income Accounts for payment of expenses and
redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to each 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's portfolio and
the initial fees and expenses of the Trustee and any other out-of-pocket
expenses, will be paid by such Trust and charged off over a period not
to exceed five years from the Initial Date of Deposit. The 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 the Trust and the rights
and interests of the Unit holders; fees of the Trustee for any
extraordinary services performed under the Indenture; indemnification of
the Trustee for any loss, liability or expense incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with its acceptance or administration of a 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 a 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 Equity Securities in a
Trust in order to make funds available to pay all these amounts if funds
are not otherwise available in the Income and Capital Accounts of such
Trust. Since the Equity Securities are all common stocks and the income
stream produced by dividend payments is unpredictable, the Sponsor
cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of a Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities will
have to be sold to meet such Trust expenses. These sales may result in
capital gains or losses to Unit holders. See "What is the Federal Tax
Status of Unit Holders?"
The Indenture requires 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, the Sponsor is required to bear the cost of such annual audits to
the extent such cost exceeds $0.0050 per Unit. Unit holders of 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:
Page 10
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 each 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 the income derived from each Equity
Security when such income is considered to be 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, liquidation, redemption,
or otherwise) or upon the sale or redemption of Units by such Unit
holder. The price a Unit holder pays for his Units is allocated among
his pro rata portion of each Equity Security held by a Trust (in
proportion to the fair market values thereof on the date the Unit holder
purchases his Units) in order to determine his tax basis for his pro
rata portion of each Equity Security held by such Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by a Trust is taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceed such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, any such capital gain will be short-term unless a Unit
holder has held his Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by a
Trust will generally be considered a capital gain except in the case of
a dealer or a financial institution and will be long-term if the Unit
holder has held his Units for more than one year (the date on which the
Units are acquired (i.e., the trade date) is excluded for purposes of
determining whether the Units have been held for more than one year). A
Unit holder's portion of loss, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by a Trust will
generally be considered a capital loss (except in the case of a dealer
or a financial institution) and, in general, will be long-term if the
Unit holder has held his Units for more than one year. Unit holders
should consult their tax advisers regarding the recognition of such
capital gains and losses for Federal income tax purposes.
Dividends Received Deduction. A Unit holder will be considered to have
received all of the dividends paid on his pro rata portion of each
Equity Security when such dividends are received by a Trust.
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unit holder's pro rata
portion of dividends received by the Trust (to the extent such dividends
are taxable as ordinary income, as discussed above) in the same manner
as if such corporation directly owned the Equity Securities paying such
dividends (other than corporate Unit holders, such as "S" corporations,
which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax).
However, a corporation owning Units should be aware that Sections 246
and 246A of the Code impose additional limitations on the eligibility of
dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally be
held at least 46 days (as determined under Section 246(c) of the Code).
Final regulations have been recently issued which address special rules
that must be considered in determining whether the 46-day holding
requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unit holder owns certain stock
(or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of a Trust's Expenses by Unit holders. Each
Unit holder's pro rata share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by such Unit holder. It should be noted that as a
Page 11
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of a
Trust as miscellaneous itemized deductions subject to this limitation.
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 stated
marginal tax rate of 28%. However, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and
could affect relative differences at which ordinary income and capital
gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum
stated rate for taxpayers other than corporations. Because some or all
capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after
April 30, 1993. Unit holders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision
on their investment in Units.
If the Unit holder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all assets of a Trust
involved including his pro rata portion of all the Equity Securities
represented by the Unit.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units 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 may request an In-Kind
Distribution upon the redemption of Units or the termination of a Trust.
The Unit holder requesting an In-Kind Distribution will be liable for
expenses related thereto (the "Distribution Expenses") and the amount of
such In-Kind Distribution will be reduced by the amount of the
Distribution Expenses. See "Rights of Unit Holders-How are Income and
Capital Distributed?" As previously discussed, prior to the redemption
of Units or the termination of a Trust, a Unit holder is considered as
owning a pro rata portion of each of a Trust's assets for Federal income
tax purposes. The receipt of an In-Kind Distribution will result in a
Unit holder receiving an undivided interest in whole shares of stock
plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this purpose
is a particular class of stock issued by a particular corporation. A
Unit holder will not recognize gain or loss if a Unit holder only
receives Equity Securities in exchange for his or her pro rata portion
in the Equity Securities held by a Trust. However, if a Unit holder also
receives cash in exchange for a fractional share of an Equity Security
held by a Trust, such Unit holder will generally recognize gain or loss
based upon the difference between the amount of cash received by the
Unit holder and his tax basis in such fractional share of an Equity
Security held by a Trust.
Because a Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by a Trust. The
amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by a Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among the
Equity Securities held in a Trust in accordance with the proportion of
the fair market values of such Equity Securities as of the valuation
date nearest the date the Units are purchased in order to determine such
Unit holder's tax basis for his pro rata portion of each Equity Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by a Trust will be reduced to the extent dividends
Page 12
paid with respect to such Equity Security are received by a Trust which
are not taxable as ordinary income as described above.
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 by the Internal Revenue Service that
payments to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification are
not provided when requested, distributions by a Trust to such Unit
holder (including amounts received upon the redemption of Units) will be
subject to back-up withholding. Distributions by a Trust will generally
be subject to United States income taxation and withholding in the case
of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax
advisers.
Unit holders will be notified annually of the amounts of income
dividends includable in the Unit holder's gross income and amounts of
Trust expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trust Suitable for
Retirement Plans?"
The foregoing discussion relates only to United States Federal income
taxation of Unit holders; Unit holders may be subject to state and local
taxation in other jurisdictions. Unit holders should consult their tax
advisers regarding potential state or local taxation with respect to the
Units, and foreign investors should consult their tax advisers with
respect to United States tax consequences of ownership of Units.
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.
PORTFOLIO
What are Equity Securities?
The Trusts consist of different issues of Equity Securities which are
listed on a national securities exchange or the NASDAQ National Market
System or traded in the over-the-counter market. See "What are the
Equity Securities Selected for American Healthcare Growth Trust, Series
1?" and "What are the Equity Securities Selected for Media and
Entertainment Growth Trust, Series 1?" for a general description of the
companies.
Risk Factors. An investment in Units of the Trusts should be made with
an understanding of the problems and risks such an investment may entail.
Media and Entertainment. The Media and Entertainment Growth Trust, Series
1 invests its Equity Securities in companies involved in the media and
entertainment industry, including advertising, broadcasting, cable
television, entertainment and publishing companies. An investment in
companies in the media and entertainment industry should be made with an
understanding of the many factors which may have an adverse impact on
the particular company or the industry. Certain of these include the
cyclicality of revenues and earnings, the availability of discretionary
income of individuals, changing consumer tastes and interests, fierce
competition and increasing regulation. Certain of these companies may
derive a significant portion of their revenues from the discretionary
Page 13
income of individuals, which may be adversely affected by economic
downturns which reduce the amount of personal income available for non-
essential items. Many of the products offered by the companies in the
entertainment industry are subject to risks of rapid obsolescence and
changing consumer tastes and interests. In addition, certain types of
companies are subject to various government regulations. For example,
cable and telecommunications companies are subject to state and federal
regulation affecting the price of their services and the kinds of
service which may be offered. Certain media communications companies are
subject to Federal Communications Commission regulation. As a result of
the foregoing, the Equity Securities in the Trust may be subject to
rapid price volatility. The Sponsor is unable to predict what impact the
foregoing factors will have on the Equity Securities during the life of
the Trust.
Certain of the Equity Securities in the Trust are of foreign issuers,
and therefore, an investment in the Trust involves some investment risks
that are different in some respects from an investment in a trust that
invests entirely in securities of domestic issuers. Those investment
risks include future political and governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Equity Securities, currency exchange rate fluctuations,
exchange control policies, and the limited liquidity and small market
capitalization of such foreign countries' securities markets. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. However, due to the
nature of the issuers of the Equity Securities included in the Trust,
the Sponsor believes that adequate information will be available to
allow the Portfolio Supervisor to provide portfolio surveillance.
The securities of the foreign issuers in the Trust are in ADR form. ADRs
evidence American Depositary Receipts which represent common stock
deposited with a custodian in a depositary. American Depositary Shares,
and receipts therefor (ADRs), are issued by an American bank or trust
company to evidence ownership of underlying securities issued by a
foreign corporation. These instruments may not necessarily be
denominated in the same currency as the securities into which they may
be converted. For purposes of the discussion herein, the term ADR
generally includes American Depositary Shares.
ADRs may be sponsored or unsponsored. In an unsponsored facility, the
depositary initiates and arranges the facility at the request of market
makers and acts as agent for the ADR holder, while the company itself is
not involved in the transaction. In a sponsored facility, the issuing
company initiates the facility and agrees to pay certain administrative
and shareholder-related expenses. Sponsored facilities use a single
depositary and entail a contractual relationship between the issuer, the
shareholder and the depositary; unsponsored facilities involve several
depositaries with no contractual relationship to the company. The
depositary bank that issues an ADR generally charges a fee, based on the
price of the ADR, upon issuance and cancellation of the ADR. This fee
would be in addition to the brokerage commissions paid upon the
acquisition or surrender of the security. In addition, the depositary
bank incurs expenses in connection with the conversion of dividends or
other cash distributions paid in local currency into U.S. dollars and
such expenses are deducted from the amount of the dividend or
distribution paid to holders, resulting in a lower payout per underlying
shares represented by the ADR than would be the case if the underlying
share were held directly. Certain tax considerations, including tax rate
differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain
practices in the ADR market may also exist with respect to certain ADRs.
In varying degrees, any or all of these factors may affect the value of
the ADR compared with the value of the underlying shares in the local
market. In addition, the rights of holders of ADRs may be different than
those of holders of the underlying shares, and the market for ADRs may
be less liquid than that for the underlying shares. ADRs are registered
securities pursuant to the Securities Act of 1933 and may be subject to
the reporting requirements of the Securities Exchange Act of 1934.
For the Equity Securities that are ADRs, currency fluctuations will
affect the U.S. dollar equivalent of the local currency price of the
underlying domestic share and, as a result, are likely to affect the
value of the ADRs and consequently the value of the Equity Securities.
The foreign issuers of securities that are ADRs may pay dividends in
foreign currencies which must be converted into dollars. Most foreign
currencies have fluctuated widely in value against the United States
Page 14
dollar for many reasons, including supply and demand of the respective
currency, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and
other countries. Therefore, for any securities of issuers (whether or
not they are in ADR form) whose earnings are stated in foreign
currencies, or which pay dividends in foreign currencies or which are
traded in foreign currencies, there is a risk that their United States
dollar value will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies.
Healthcare. An investment in Units of American Healthcare Growth Trust,
Series 1 should be made with an understanding of the problems and risks
inherent in the health care industry in general. Health care companies
are companies involved in drug development, production services or the
maintenance of health care facilities. Such companies have potential
risks unique to their sector of the health care field. These companies
are subject to governmental regulation of their products and services, a
factor which could have a significant and possibly unfavorable effect on
the price and availability of such products or services. Furthermore,
such companies face the risk of increasing competition from generic drug
sales, the termination of their patent protection for drug products and
the risk that technological advances will render their products
obsolete. The research and development costs of bringing a drug to
market are substantial and include lengthy governmental review
processes, with no guarantee that the product will ever come to market.
Many of these companies may have losses and not offer certain products
until the late 1990s. Such companies may also have persistent losses
during a new product's transition from development to production, and
revenue patterns may be erratic. In addition, health care facility
operators may be affected by events and conditions including among other
things, demand for services, the ability of the facility to provide the
services required, physicians' confidence in the facility, management
capabilities, competition with other hospitals, efforts by insurers and
governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, government regulation, the cost and
possible unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that
associated with Medicare, Medicaid and other similar third party payor
programs.
The medical sector has historically provided investors with significant
growth opportunities. Many of these companies develop, manufacture and
sell prescription and over-the-counter drugs. In addition, they are well
known for the vast amounts of money they spend on world-class research
and development. In short, such companies work to improve the quality of
life for millions of people and are vital to the nation's health and
well-being.
As the population of the United States ages, the companies involved in
the health care field will continue to search for and develop new drugs
through advanced technologies and diagnostics. On a worldwide basis,
such companies are involved in the development and distributions of
drugs and vaccines. These activities may make the health care and
medical services sector very attractive for investors seeking the
potential for growth in their investment portfolio. However, there are
no assurances that the Trust's objectives will be met.
Legislative proposals concerning health care are under consideration by
the Clinton Administration. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs), national health insurance, incentives for
competition in the provision of health care services, tax incentives and
penalties related to health care insurance premiums and promotion of pre-
paid health care plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Equity Securities
in the Trust.
Each Trust consists of such Equity Securities listed under "Schedule of
Investments" as may continue to be held from time to time in the Trust
and any additional Equity Securities acquired and held by the Trusts
pursuant to the provisions of the Trust Agreement together with cash
held in the Income and Capital Accounts. Neither the Sponsor nor the
Trustee shall be liable in any way for any failure in any of the Equity
Securities. However, should any contract for the purchase of any of the
Equity Securities initially deposited hereunder fail, the Sponsor will,
unless substantially all of the moneys held in a Trust to cover such
purchase are reinvested in substitute Equity Securities in accordance
with the Trust Agreement, refund the cash and sales charge attributable
to such failed contract to all Unit holders on the next distribution
date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
Page 15
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that a Trust will retain for any
length of time its present size and composition. Although the 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 the
Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities be
Removed from the Trust?" Equity Securities, however, will not be sold by
a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, a Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of a Trust,
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the
general condition of the common stock market may worsen and the value of
the Equity Securities and therefore the value of the Units may decline.
The past market and earnings performance of the other Equity Securities
included in the Trusts is not predictive of their future performance.
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 a Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of a Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
Page 16
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 a Trust and will vote
such stocks in accordance with the instructions of the Sponsor.
What are the Equity Securities Selected for American Healthcare Growth
Trust, Series 1?
Advanced Medical Devices and Instruments
Biomet, Inc. and its subsidiaries design, manufacture and market
products used primarily by orthopedic medical specialists in both
surgical and non-surgical therapy, including reconstructive and trauma
devices, electrical bone growth stimulators, orthopedic support devices,
operating room supplies, powered surgical instruments, general surgical
instruments, arthroscopy products and oral-maxillofacial implants and
instruments. Headquartered in Warsaw, Indiana, the company currently
distributes products in approximately 100 countries.
Boston Scientific Corporation, headquartered in Natick, Massachusetts,
develops, produces and markets medical devices worldwide. The company's
product lines are used for cardiology, gastroenterology, radiology,
urology, pulmonary medicine, vascular surgery and cardiovascular imaging
systems. The products are used by physicians to perform less invasive
surgery, reduce costs and decrease trauma to the patient.
Medtronic, Inc., headquartered in Minneapolis, Minnesota, along with its
subsidiaries, manufactures pacemakers, heart valves (both tissue and
mechanical), neurological stimulation devices, therapeutic catheters and
blood oxygenators. The company markets its products through hospitals,
physicians and other medical institutions in the United States and
abroad.
Nellcor Puritan-Bennett is headquartered in Pleasanton, California. The
company designs, manufactures and markets patient monitoring, diagnostic
and therapeutic products used in hospital critical care units, operating
rooms and anesthesia care units. The company also produces a variety of
disposables and reusable sensors and airway adaptors used in conjunction
with the monitors. The instruments measure blood oxygen saturation,
arterial pulses and respiratory gas.
St. Jude Medical, Inc., headquartered in St. Paul, Minnesota,
manufactures and markets biomedical devices for cardiovascular and
vascular applications. The company is the world's leading supplier of
mechanical heart valves, having implanted over 570,000 since 1977. Other
products include bioimplant tissue heart valves, bradycardio pacemakers,
intra-aortic balloon pump systems and centrifugal pump systems.
Stryker Corporation, headquartered in Kalamazoo, Michigan, develops,
manufactures and markets specialty surgical and medical products,
including orthopedic implants, powered surgical instruments, endoscopic
systems, patient care and handling equipment for the global market and
provides outpatient physical therapy services in the United States.
Drugs/Biotech
Amgen, Inc., headquartered in Thousand Oaks, California, is a global
biotechnology company that discovers, develops, manufactures and markets
human therapeutics based on advanced cellular and molecular biology.
Its two principal drugs are "Neupogen," an agent that stimulates the
production of certain white blood cells and "Epogen," which promotes the
production of red blood cells.
Biogen, Inc. develops biotechnology based products through the use of
genetic engineering. The company's primary focus is on the development
and testing of products used for the treatment of respiratory disease,
inflammatory disease, AIDS and selected cancers. The company is
headquartered in Cambridge, Massachusetts and through its licensees and
affiliates, distributes products in the United States and abroad.
Merck & Company, Inc., a large, worldwide firm based in Whitehouse
Station, New Jersey, is a leading researcher, developer, marketer and
manufacturer of human and animal health care products, primarily
prescription drugs. The company's product lines include anti-
hypertensive, cardiovascular, anti-inflammatory and glaucoma treatments.
Merck & Company, Inc. recently entered the prescription benefit
management (PBM) business with its acquisition of Medco Containment.
Mylan Laboratories, Inc., headquartered in Pittsburgh, Pennsylvania,
manufactures a broad line of generic pharmaceutical products. Products
Page 17
are made in tablet, capsule and powder dosage forms and include anti-
anxiety, antidepressant, antihistamine and anti-inflammatory drugs.
Mylan Laboratories, Inc. jointly owns Somerset Pharmaceuticals (with
Circa Pharmaceuticals) which markets Eldepryl, a treatment for
Parkinson's disease. Mylan Laboratories, Inc. currently has alliances
with Eli Lilly & Co. and Roche Holdings Ltd. to manufacture and market
generic drugs.
Pfizer, Inc., headquartered in New York, New York, develops,
manufactures and sells technology-intensive products in 4 segments:
Health Care (accounting for most of revenues) including pharmaceuticals,
medical devices and surgical equipment; Animal Health; Food Science and
Consumer Products. The company's products include "Zoloft"
antidepressant, "Zithromax" antibiotic, "Norvasc" and "Procardia"
cardiovascular drugs and "Diflucan" antifungal infection drug.
Schering-Plough, headquartered in Madison, New Jersey, discovers,
develops, manufactures and markets pharmaceuticals and consumer
products. The company's pharmaceutical products include prescription
drugs, over-the-counter medicines, vision care products and animal
health care products. Schering-Plough's consumer products group consists
of cosmetics, proprietary medicines, toiletries and foot care products.
Important brand names include "Claritin," "Proventil," "Vancenase,"
"Afrin," "Eulexin," "Intron A," "Scholl's" and "Coppertone."
Health Care Information Services
HBO & Company, headquartered in Atlanta, Georgia, delivers enterprise-
wide patient care, clinical, financial and strategic management software
solutions, as well as networking technologies, outsourcing and other
services to healthcare organizations in the United States, the United
Kingdom, Canada, Australia and New Zealand.
Medaphis Corporation, headquartered in Atlanta, Georgia, is a leading
provider of business management services to physicians and hospitals.
The company currently serves approximately 16,850 physicians and 1,600
hospitals in 50 states.
HealthCare Compare Corporation, headquartered in Downers Grove,
Illinois, provides healthcare utilization review and cost management
services designed to control client's health care costs. HealthCare
Compare also established and manages networks of physicians who agree to
provide healthcare at set rates for groups of users.
Humana, Inc., headquartered in Louisville, Kentucky, provides managed
health care services to 3.8 million medical members. As one of the
nation's largest managed care companies, Humana offers a full array of
managed care products including health maintenance organizations and
preferred provider organizations to employer groups, government-
sponsored plans and individuals.
Oxford Health Plans, Inc., headquartered in Norwalk, Connecticut, is a
managed care company which provides health benefit plans in the greater
New York, New Jersey and Connecticut metropolitan areas. The company's
product line includes traditional health maintenance organizations, a
point-of-service plan, third-party administration of employer funded
benefit plans and dental plans.
United Healthcare Corporation, headquartered in Minnetonka, Minnesota,
is a national leader providing both comprehensive managed care services,
such as HMO and carrier replacement products, and unbundled health care
management and cost containment products and services. Services provided
include claims processing and marketing, financial and accounting
services, prescription drug benefit programs and mental health/substance
abuse programs.
U.S. Healthcare, Inc., headquartered in Blue Bell, Pennsylvania,
provides health care services through its HMOs located primarily in the
eastern region of the United States. The company also provides a
variety of other managed health care services to self-insured and other
employers, including workers compensation managed care, coordination and
administration of multiple health plans for multi-state employers, and
quality measurement and improvement programs and data analysis systems
for providers and purchasers of health care.
Hospital Management/Health Services
Columbia/HCA Healthcare Corporation, headquartered in Nashville,
Tennessee, is the nation's largest provider of healthcare services with
more than 340 hospitals, more than 160 outpatient surgery centers, and
Page 18
200 home health agencies in 36 states, England and Switzerland. The
company is building comprehensive networks of healthcare services,
including home health, rehabilitation and skilled nursing units in local
markets around the United States.
Genesis Health Ventures, Inc., headquartered in Kennett Square,
Pennsylvania, provides geriatric healthcare services. The company,
founded in 1985, develops and manages healthcare networks designed to
provide cost effective, outcome oriented services in select regional
markets in the eastern United States.
HEALTHSOUTH Corporation, headquartered in Birmingham, Alabama, is the
nation's largest provider of outpatient surgery and rehabilitative
healthcare services. Upon completion of the previously announced
acquisition of Advantage Health Corporation, the company will have more
than 850 locations in 45 states.
Living Centers of America, Inc., headquartered in Houston, Texas,
provides through its operating subsidiaries a diverse range of health
care services including long-term health care, rehabilitation services
and pharmaceutical services.
Manor Care, Inc. headquartered in Silver Spring, Maryland, operates 193
health care facilities containing over 25,000 beds in 28 states through
its health care segment. The company also owns 82% of Vitalink Pharmacy
Services, Inc., which provides institutional pharmacy services to
nursing facilities and other institutions in 19 markets. Manor Care's
lodging segment owns, manages or franchises over 3,500 hotels, open or
under development, containing over 305,000 guest rooms.
Vencor, Inc., headquartered in Louisville, Kentucky, is one of the
largest diversified healthcare providers in the United States. The
company's operations encompass 36 long-term acute-care hospitals and 311
nursing centers with more than 42,000 beds, 55 retail and institutional
pharmacy outlets and 23 retirement housing communities with
approximately 3,100 apartments. Vencor is also the nation's largest
provider of ancillary services to nursing homes and subacute providers,
with other 2,000 contracts to provide respiratory, physical,
occupational and speech therapies.
Medical Supplies
Abbott Laboratories, headquartered in Abbott Park, Illinois, discovers,
develops, manufactures and markets a broad and diversified line of human
health care products and services. The line includes pharmaceutical and
nutritional products and various hospital and laboratory products,
including intravenous and irrigating fluids and related equipment.
Abbott Laboratories also markets diagnostic tests, including tests for
AIDS and drug abuse.
Becton, Dickinson & Company, headquartered in Franklin Lakes, New
Jersey, manufactures and sells a broad line of medical, surgical and
diagnostic products used by hospitals, laboratories, pharmaceutical
companies and medical schools. Becton, Dickinson & Company sells its
products through distributors and directly through its own sales force
to customers in the United States and abroad.
Cardinal Distribution, Inc., based in Dublin, Ohio, is one of the
country's largest pharmaceutical distributors. The company provides an
array of innovative, value-added services to a broad base of customers
nationwide including hospitals, independent and chain pharmacies,
managed care facilities, alternate care centers, and the pharmacy
departments of supermarkets and mass merchandisers. Cardinal Health is
also a franchiser of retail pharmacies through its wholly-owned
subsidiary, Medicine Shoppe International, Inc.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, is the
world's largest and most comprehensive manufacturer of health care
products serving the consumer, pharmaceutical, diagnostics and
professional markets. The company has 164 operating companies in 50
countries around the world, selling products in more than 175 countries.
Patterson Dental Company, headquartered in Mendota Heights, Minnesota,
is the largest distributor of dental products in North America. The
company supplies more than 50,000 products including x-ray film and
solutions, impression and restorative materials, hand instruments, and
sterilization and protective products and equipment to dentists, dental
laboratories and institutions.
Page 19
What are the Equity Securities Selected for Media and Entertainment
Growth Trust, Series 1?
Advertising
Interpublic Group of Companies, Inc., headquartered in New York, New
York, owns and operates three worldwide advertising agency systems.
McCann-Erickson Worldwide, Ammirati & Puris/Lintas and the Lowe Group
agencies plan and create advertising programs for clients and place
advertising in radio, television, magazines and newspapers.
Omnicom Group, Inc., headquartered in New York, New York, is the third
largest advertising group in the world, and generates more than half of
its revenues from non-U.S. operations. Through its subsidiaries,
Omnicom operates three separate advertising agency networks: DDB
Needham Worldwide, BBDO Worldwide and TBWA International. In addition,
certain marketing service and specialty advertising companies are
operated through the Diversified Agency Services division.
Broadcasting
Belo (A.H.) Corp., based in Dallas, Texas, and its subsidiaries own and
operate network affiliated television stations and publish newspapers.
The company seven network affiliated television stations are located in
the following markets: Dallas-Fort Worth,Texas; Houston, Texas; Seattle-
Tacoma, Washington; Sacramento, California; Hampton-Norfolk, Virginia;
New Orleans, Louisiana; and Tulsa, Oklahoma. Belo publishes The Dallas
Morning News and nine community newspapers in the suburban Dallas-Fort
Worth area.
Clear Channel Communications, Inc., headquartered in San Antonio, Texas,
is a diversified broadcasting company which owns and operates 36 radio
stations and 10 television stations in 21 markets in the United States
and 8 radio stations in 5 markets in Australia.
Emmis Broadcasting Corporation, headquartered in Indianapolis, Indiana,
owns and operates seven FM and one AM radio station. The stations serve
markets in Chicago, Indianapolis, Los Angeles, New York and St. Louis.
Emmis Broadcasting Corporation also publishes "Indianapolis Monthly"
magazine, "Atlanta" magazine and other statistical publications for the
radio industry.
Evergreen Media, headquartered in Irving Texas, is the nation's third
largest radio broadcasting company. The company currently owns and
operates 34 radio stations in 13 markets including Los Angeles, New
York, Chicago, San Francisco, Washington, D.C., Dallas, Philadelphia,
Houston, Boston, Detroit, Miami, Charlotte and Buffalo.
Infinity Broadcasting Corporation (Class A) (Class A), headquartered in
New York, New York, is one of the nation's largest radio broadcasting
companies. The company owns 34 major market radio stations, of which 28
are in top 10 markets. Infinity also has an investment in and manages
Westwood One, Inc., the nation's largest producer and distributor of
radio programs in the U.S.
Jacor Communications, headquartered in Cincinnati, Ohio, owns and
operates 23 radio stations in 8 U.S. markets and recently announced
plans to acquire Noble Broadcasting, owner and operator of 12 radio
stations. Upon completion of the Citicasters and Noble transactions,
Jacor will own and operate the largest number of radio stations of any
American broadcast group.
Westinghouse Electric Corporation broadcasting operations, which consist
of CBS and Group W broadcasting, will provide the company with half of
its sales and approximately two-thirds of operating cash flow. The
company other operations include power generation, energy systems,
transport refrigeration equipment, government and environmental services
and its commercial electronics business which serves residential
security and telecommunications markets. Westinghouse is headquartered
in Pittsburgh, Pennsylvania.
Cable Television
Comcast Corporation, headquartered in Philadelphia, Pennsylvania, is
a communications company with domestic and international interests in
cable television, television programming and wireless and wireline
telecommunications. The company provides cable service to numerous
states. In addition, Comcast Corporation also has a majority interest in
QVC, Inc., a retailer who sells through electronic media.
Liberty Media, headquartered in Englewood, Colorado, was spun off from
Tele-Communications, Inc. in August, 1995. The company invests in,
produces, acquires and distributes through all media formats globally
Page 20
branded entertainment, educational and international programming and
software. Liberty also engages in electronic retailing, direct
marketing, advertising sales and transaction processing.
Tele-Communications, Inc. (Class A), headquartered in Englewood,
Colorado, consists of the domestic cable television/telecommunications,
international and technology ventures subsidiaries of Tele-
Communications, Inc. TCI is the nation's largest provider of
cable television services with about 11.7 million basic subscribers.
U.S. West Media Group, headquartered in Englewood, Colorado, tracks the
performance of U.S. West's cellular, cable, and telephone directory
businesses. The company owns 25% of the partnership controlling Time
Warner's cable systems, the HBO cable network and Warner Brothers films.
U.S. West recently agreed to buy Continental Cablevison. The purchase
would make U.S. West the nation's third largest cable operator with 4.7
million subscribers.
Entertainment
Disney (Walt) Company, headquartered in Burbank, California, is a
diversified international family entertainment company. Disney's theme
parks include "Disneyland" and "Walt Disney World" which contains "Magic
Kingdom," "Epcot Center" and "Disney MGM Studios." The company earns
royalties from "Tokyo Disneyland" and owns 39% of "Euro Disney." Disney
supplies filmed entertainment to theatres, TV and video, publishes books
and records music. The company sells merchandise through catalogs and
Disney Stores and owns the Disney Channel. Disney recently acquired
Capital Cities/ABC, adding the ABC Television Network, the ABC Radio
Network, several TV and radio stations, newspapers and magazines, and a
interest in four cable networks to its operations.
Grupo Televisa S.A. (ADR), headquartered in Mexico City, Mexico,
operates a media company through its subsidiaries. The company produces,
broadcasts, and distributes television programs in Spanish
internationally. The company also produces, publishes and broadcasts
radio and cable television programs, records music, promotes sports and
special events, and conducts outdoor advertising.
King World Productions, Inc., headquartered in New York, New York, is
the leading worldwide distributor of first-run programming, including
"Wheel of Fortune," "Jeopardy!" and "The Oprah Winfrey Show" the three
highest-rated strips in syndication. The company produces and
distributes "Inside Edition," "American Journal" and "Rolanda." King
World distributes its own library of feature films and television
programs and the Mr. Food television insert. A subsidiary of the
company sells national advertising time in King World and other
television programming.
News Corporation, Ltd. (ADR) is an international media company
headquartered in Sydney, Australia. The company's operations include the
production and distribution of motion pictures and television
programming, television and satellite broadcasting, the publication of
newspapers, magazines, books and promotional inserts. In addition, News
Corporation provides computer on-line services.
Polygram NV (ADR) headquartered in the Netherlands, is a major recorded
music and entertainment company. The company produces recorded music
under the labels A&M, Decca, Island, London, Mercury, Deutsche
Grammophon, Philips Classic, Motown, Polydor and Verve. Polygram
markets and distributes its music on compact discs, albums, videotapes,
music cassettes and video discs through subsidiaries and licensees
worldwide. The company is also a producer of film, television and video
programming.
Time Warner Inc., headquartered in New York, New York, is a diversified
media company which publishes magazines and books, produces and
distributes motion pictures and television programming, sells recorded
music, and owns and operates cable television systems, pay-TV networks
and theme parks.
Viacom Inc. headquartered in New York, New York, is one of the world's
largest entertainment and publishing companies and a leading force in
nearly every segment of the international media marketplace. The
operations of Viacom include Blockbuster Video, Blockbuster Music, MTV
Networks, Paramount Parks, Paramount Pictures, Paramount Television,
Showtime Networks, Simon & Schuster and Viacom Interactive Media, as
well as cable systems serving 1.2 million customers, radio and
television stations, and movie screens in 11 countries. The company
also has a substantial interest in Discovery Zone and a majority
interest in Spelling Entertainment Group.
Publishing-Information
Equifax, Inc. provides a broad range of information-based solutions
and decision support services that help businesses grant credit, insure
lives and property, authorize checks at the point of sale, process
credit card transactions, market products, control health care costs and
Page 21
complete other transactions. The company is headquartered in Atlanta,
Georgia.
Reuters Holdings PLC (ADR) is an international news and information
organization headquartered in London, England. The company provides
economic and financial information to the business community, and
supplies news services to the media.
Publishing-Newspapers
Gannett Company, Inc., headquartered in Arlington, Virginia, is a
nationwide news and information company that publishes 92 daily
newspapers including "USA Today" and "USA Weekend", a newspaper
magazine. Gannett also has entertainment programming, operates 15
television stations, 13 radio stations, cable television systems in five
states, alarm security services and the largest outdoor advertising
company in North America.
Pulitzer Publishing, headquartered in St. Louis, Missouri, is engaged in
newspaper publishing and television and radio broadcasting. The
company's newspaper operations include two major metropolitan dailies,
the St. Louis Post-Dispatch and the Arizona Daily Star in Tucson,
Arizona. Broadcasting operations consist of 9 network affiliated
television stations and two radio stations.
Tribune Company is a leading information, entertainment and education
company. Tribune publishes four daily newspapers, owns and operates
nine independent television stations and five radio stations, produces
and syndicates programming and information and provides educationally
oriented products and services for the school and consumer markets. The
company is headquartered in Chicago, Illinois and also owns the Chicago
Cubs.
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 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.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Equity Security will not be delivered ("Failed Contract
Obligations") to a Trust, the Sponsor is authorized under the Indenture
to direct the Trustee to acquire other Equity Securities ("Replacement
Securities"). Any Replacement Security will be identical to those which
were the subject of the failed contract. The Replacement Securities must
be purchased within 20 days after delivery of the notice of a failed
contract and the purchase price may not exceed the amount of funds
reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
a Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in a Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size of a
Trust and the number of Units thereof by the deposit of additional
Equity Securities in such Trust and the issuance of a corresponding
number of additional Units.
Each Trust consists of the Equity Securities listed under "Schedule of
Investments" 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 Equity Securities acquired and held by such Trust pursuant to
the provisions of the Indenture (including provisions with respect to
deposits into such Trust of Equity Securities in connection with the
issuance of additional Units).
Once all of the Equity Securities in each Trust are acquired, the
Trustee will have no power to vary the investments of such Trust, i.e.,
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the Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, and may dispose of
Equity Securities only under limited circumstances. See "How May Equity
Securities be Removed from a Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
which might reasonably be expected to have a material adverse effect on
a Trust. At any time after the Initial Date of Deposit, litigation may
be instituted on a variety of grounds with respect to the Equity
Securities. The Sponsor is unable to predict whether any such litigation
will be instituted, or if instituted, whether such litigation might have
a material adverse effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in 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 Income and Capital Accounts of a Trust, plus
an initial sales charge equal to the difference between the maximum
sales charge of % of the Public Offering Price and the maximum
remaining deferred sales charge, initially $0.20 per Unit. Commencing on
, 1996, and on the last business day of each month
thereafter, through , 1996, a deferred sales charge of
$0.02 will be assessed per Unit per month. Units purchased subsequent to
the initial deferred sales charge payment but still during the initial
offering period will be subject to the initial sales charge and the
remaining deferred sales charge payments not yet collected. The deferred
sales charge will be paid from funds in the Income and/or Capital
Accounts, if sufficient, or from the periodic sale of Equity Securities.
The total maximum sales charge assessed to Unit holders on a per Unit
basis will be % of the Public Offering Price (equivalent to % of
the net amount invested, exclusive of the deferred sales charge) subject
to a reduction beginning , 1997.
During the initial offering period, the Sponsor's Repurchase Price is
based on 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 Income and Capital
Accounts of a Trust divided by the number of Units of a Trust
outstanding. For secondary market sales after the completion of the
deferred sales charge period, the Public Offering Price is also based on
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 cash, if any, in the Income and Capital
Accounts of a Trust, plus a one-time initial sales charge of % of the
Public Offering Price (equivalent to % of the net amount invested)
divided by the number of outstanding Units of a Trust and will be
reduced by 1/2 of 1% on each subsequent , commencing
, 1997 to a minimum sales charge of 3.0%.
The minimum amount which an investor may purchase of a Trust is $1,000
($250 for an Individual Retirement Account or other retirement plans).
The applicable sales charge for both primary and secondary market sales
is reduced by a discount as indicated below for volume purchases (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%
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. The reduced sales charge
Page 23
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, siblings, mothers-in-law, fathers-in-law, sons-in-law and
daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of the Sponsor and broker/dealers, banks or
other selling agents and their subsidiaries, Units may be purchased at
the Public Offering Price less the concession the Sponsor typically
allows to dealers and other selling agents.
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 a Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Equity Securities. During the initial offering period,
the aggregate value of the Units of a Trust shall be determined on the
basis of the aggregate underlying value of the Equity Securities therein
plus or minus cash, if any, in the Income and Capital Accounts of a
Trust. The aggregate underlying value of the Equity Securities during
the initial offering period will be determined in the following manner:
if the Equity Securities are listed on a national securities exchange or
the NASDAQ National Market System, this evaluation is generally based on
the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current ask prices on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of a Trust plus the applicable sales
charge. The aggregate underlying value of the Equity Securities for
secondary market sales is calculated in the same manner as described
above for sales made during the initial offering period with the
exception that bid prices are used instead of ask prices.
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
Page 24
additional Equity Securities are deposited by the Sponsor, Units will be
distributed to the public at the then current Public Offering Price. The
initial offering period may be up to approximately 360 days. During such
period, the Sponsor may deposit additional Equity Securities in a Trust
and create additional Units. Units reacquired by the Sponsor during the
initial offering period (at prices based upon the aggregate underlying
value of the Equity Securities in a Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of the Trust) may be
resold at the then current Public Offering Price. Upon the termination
of the initial offering period, unsold Units created or reacquired
during the initial offering period will be sold or resold at the then
current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trusts for
sale in a number of states. Sales initially will be made to dealers and
other selling agents at prices which represent a concession or agency
commission of 3.0% of the Public Offering Price, and, for secondary
market sales, 3.0% of the Public Offering Price (or 65% of the then
current maximum sales charge after , 1997). Volume
concessions or agency commissions of an additional 0.10% of the Public
Offering Price will be given to any broker/dealer or bank, who purchases
from the Sponsor at least $100,000 on the Initial Date of Deposit or
$250,000 on any day thereafter. Volume concessions or agency commissions
of an additional 0.25% of the Public Offering Price will be given to any
broker/dealer or bank who purchases from the Sponsor at least $500,000
of a Trust on the Initial Date of Deposit or any day thereafter.
Effective on each , commencing ,
1997, such sales charge will be reduced by 1/2 of 1% to a minimum sales
charge of 3.0%. However, resales of Units of a Trust by such dealers 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 above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are not
permitted under such Act. In Texas and in certain other states, any
banks making Units available must be registered as broker/dealers under
state law.
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 dealer that sponsors sales contests or recognition programs
conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the
total applicable sales charges on the sales generated by such person at
the public offering price during such programs. Also, the Sponsor in its
discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying dealers for certain
services or activities which are primarily intended to result in sales
of Units of 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
the Trusts will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trusts 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 Trusts. U.S. Government bonds, for example,
are backed by the full faith and credit of the U.S. Government and bank
CDs and money market accounts are insured by an agency of the federal
government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics
of the Trust are described more fully elsewhere in this Prospectus.
Each Trust's performance may be compared to performance on a total
return basis with the Dow Jones Industrial Average, the S&P 500
Page 25
Composite Stock Price Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications
such as Money, The New York Times, U.S. News and World Report, Business
Week, Forbes or Fortune. As with other performance data, performance
comparisons should not be considered representative of the Trust's
relative performance for any future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal to
% of the Public Offering Price of the Units (equivalent to % of
the net amount invested, exclusive of the deferred sales charge), 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 dealers 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 Equity Securities
to the Trusts (which is based on the Evaluator's determination of the
aggregate offering price of the underlying Equity Securities of such
Trust on the Initial Date of Deposit as well as subsequent deposits) and
the cost of such Equity Securities to the Sponsor. See Note (2) of
"Schedule of Investments." During the initial offering period, the
dealers 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 the dealers and other selling
agents upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a sales charge of % subject to reduction
beginning , 1997) 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 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. Units subject to a deferred sales
charge which are sold or tendered for redemption prior to such time as
the entire deferred sales charge on such Units has been collected will
be assessed the amount of the remaining deferred sales charge at the
time of sale or redemption.
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.
Page 26
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 each Trust; the number of Units issued or transferred;
the name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in a Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See
"Summary of Essential Information." Persons who purchase Units will
commence receiving distributions only after such person becomes a record
owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer. The pro rata share
of cash in the Capital Account of a Trust will be computed as of the
fifteenth day of each month. Proceeds received on the sale of any Equity
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 such month
if the amount available for distribution equals at least $1.00 per 100
Units. The Trustee is not required to pay interest on funds held in the
Capital Account of a Trust (but may itself earn interest thereon and
therefore benefit from the use of such funds). Notwithstanding,
distributions of funds in the Capital Account, if any, will be made on
the last day of each December to Unit holders of record as of December
15. See "What is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
a Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after each Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive: (i)
the pro rata share of the amounts realized upon the disposition of
Equity Securities, unless he elects an In-Kind Distribution as described
below and (ii) a pro rata share of any other assets of a Trust, less
expenses of such Trust. Not less than 60 days prior to the Mandatory
Termination Date of the Trust, the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of whole shares of Equity
Securities (an "In-Kind Distribution"), if such Unit holder owns at
least 2,500 Units of such Trust, rather than to receive payment in cash
for such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Equity Securities. An In-Kind Distribution
will be reduced by customary transfer and registration charges. To be
effective, the election form, together with surrendered certificates and
other documentation required by the Trustee, must be returned to the
Trustee at least five business days prior to the Mandatory Termination
Page 27
Date of a Trust. A Unit holder may, of course, at any time after the
Equity Securities are distributed, sell all or a portion of the shares.
The Trustee will credit to the Income Account of each Trust any
dividends received on the Equity Securities therein. All other receipts
(e.g. return of capital, etc.) are credited to the Capital Account of
each Trust.
The Trustee may establish reserves (the "Reserve Account") within each
Trust for state and local taxes, if any, and any governmental charges
payable out of a 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 Equity Securities
sold during the year and the Equity Securities held at the end of such
year by such Trust; (3) the redemption price per Unit based upon a
computation thereof on the 31st day of December of such year (or the
last business day prior thereto); and (4) amounts of income and capital
distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its corporate trust office in the City of New York of the
certificates representing the Units to be redeemed, or in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after 4:00 p.m. Eastern 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.
Any Unit holder tendering 2,500 Units or more for redemption may request
by written notice submitted at the time of tender from the Trustee in
lieu of a cash redemption a distribution of shares of Equity Securities
in an amount and value of Equity Securities per Unit equal to the
Redemption Price Per Unit as determined as of the evaluation next
following tender. To the extent possible, in-kind distributions ("In-
Kind Distributions") shall be made by the Trustee through the
distribution of each of the Equity Securities in book-entry form to the
account of the Unit holder's bank or broker-dealer at the Depository
Trust Company. An In-Kind Distribution will be reduced by customary
transfer and registration charges. The tendering Unit holder will
receive his pro rata number of whole shares of each of the Equity
Securities comprising the portfolio and cash from the Capital Account
equal to the fractional shares to which the tendering Unit holder is
entitled. The Trustee may adjust the number of shares of any issue of
Equity Securities included in a Unit holder's In-Kind Distribution to
facilitate the distribution of whole shares, such adjustment to be made
on the basis of the value of Equity Securities on the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering Unit holder, the Trustee may sell Equity
Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. Any amount so withheld is transmitted to the Internal
Revenue Service and may be recovered by the Unit holder only when filing
a tax return. Under normal circumstances the Trustee obtains the Unit
Page 28
holder's tax identification number from the selling broker. However, any
time a Unit holder elects to tender Units for redemption, such Unit
holder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of each Trust.
The Trustee is empowered to sell Equity 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.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate
underlying value of the Equity Securities in the Trust plus or minus
cash, if any, in the Income and Capital Accounts of such Trust. The
Redemption Price per Unit is the pro rata share of each Unit determined
by the Trustee by adding: (1) the cash on hand in a Trust other than
cash deposited in a Trust to purchase Equity Securities not applied to
the purchase of such Equity Securities; (2) the aggregate value of the
Equity Securities held in a Trust, as determined by the Evaluator on the
basis of the aggregate underlying value of the Equity Securities in such
Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation; and
deducting therefrom: (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust; (2) any amounts owing to
the Trustee for its advances; (3) an amount representing estimated
accrued expenses of a Trust, including but not limited to fees and
expenses of the Trustee (including legal and auditing fees), the
Evaluator and supervisory fees, if any; (4) cash held for distribution
to Unit holders of record of a Trust as of the business day prior to the
evaluation being made; and (5) other liabilities incurred by a Trust;
and finally dividing the results of such computation by the number of
Units of the Trust outstanding as of the date thereof.
The aggregate value of the Equity Securities used to calculate the
Redemption Price per Unit will be determined in the following manner: if
the Equity Securities are listed on a national securities exchange or
the NASDAQ National Market System, this evaluation is generally based on
the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing bid prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current bid prices on the
over-the-counter market (unless these prices are inappropriate as a
basis for evaluation). If current bid prices are unavailable, the
evaluation is generally determined (a) on the basis of current bid
prices for comparable securities, (b) by appraising the value of the
Equity Securities on the bid side of the market or (c) by any
combination of the above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
Page 29
purchase Units, the Trustee may sell Units tendered for redemption in
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Equity Securities be Removed from a Trust?
The Portfolios of the Trusts are not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to a Trust.
Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by a Trust of any securities or other property other than the Equity
Securities is prohibited. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by a Trust, they may be accepted for deposit in a Trust and
either sold by the Trustee or held in a Trust pursuant to the direction
of the Sponsor (who may rely on the advice of the Portfolio Supervisor).
Proceeds from the sale of Equity Securities (or any securities or other
property received by a Trust in exchange for Equity Securities) by the
Trustee are credited to the Capital Account of a Trust for distribution
to Unit holders or to meet redemptions.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of
expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for a Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds and
The First Trust GNMA. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141. As of
December 31, 1995, the total partners' capital of Nike Securities L.P.
was $9,033,760 (audited). (This paragraph relates only to the Sponsor
and not to the Trust or to any series thereof or to any other
Underwriter. The information is included herein only for the purpose of
informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
Page 30
Who is the Trustee?
The Trustee is The Chase Manhattan Bank (National Association), a
national banking association with its principal executive office located
at 1 Chase Manhattan Plaza, New York, New York 10081 and its unit
investment trust office 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 subject to
supervision by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve
System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Equity Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Equity Securities. In the event of the failure of
the Sponsor to act under the Indenture, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under
the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor or the Trustee, in
which event the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
Page 31
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the 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 a Trust or by the Trustee when the value of the
Equity Securities owned by a Trust as shown by any evaluation, is less
than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in such Trust during the primary offering period,
or in the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by a
broker/dealer, including the Sponsor. If a Trust is liquidated because
of the redemption of unsold Units of such Trust by a broker/dealer, the
Sponsor will refund to each purchaser of Units of such Trust the entire
sales charge and the transaction fees paid by such purchaser. In the
event of termination, written notice thereof will be sent by the Trustee
to all Unit holders of such Trust. Within a reasonable period after
termination, the Trustee will follow the procedures set forth under "How
are Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of a Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of a Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his address appearing on the registration books of the Trust
maintained by the Trustee. At least 60 days prior to the Mandatory
Termination Date of a Trust the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of such Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business days
prior to the Mandatory Termination Date of the Trust. Unit holders not
electing a distribution of shares of Equity Securities will receive a
cash distribution from the sale of the remaining Equity Securities
within a reasonable time after a Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the funds of such
Trust any accrued costs, expenses, advances or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to provide
for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in a Trust upon termination may result in a
lower amount than might otherwise be realized if such sale were not
required at such time. The Trustee will then distribute to each Unit
holder his pro rata share of the balance of the Income and Capital
Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trust.
Page 32
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 is included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Page 33
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 126
We have audited the accompanying statementsof net assets, including the
schedules of investments, of The First Trust Special Situations Trust,
Series 126, comprised of American Healthcare Growth Trust, Series 1 and
Media and Entertainment Growth Trust, Series 1, at the opening of
business on , 1996. 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
, 1996. 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 statement 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 126, comprised of American
Healthcare Growth Trust, Series 1 and Media and Entertainment Growth
Trust, Series 1, at the opening of business on , 1996 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1996
Page 34
Statement of Net Assets
American Healthcare Growth Trust, Series 1
The First Trust Special Situations Trust, Series 126
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $
Organizational and offering costs (3)
________
Less accrued organizational and offering costs (3) ( )
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (5) $
Less sales charge (5) ( )
________
Net Assets $
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $ issued by
Bankers Trust Company has been deposited with the Trustee as collateral,
which is sufficient to cover the monies necessary for the purchase of
the Equity Securities pursuant to contracts for the purchase of such
Equity Securities.
(3) The Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed five years from the Initial Date of Deposit. The estimated
organizational and offering 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) Represents the amount of mandatory distributions from the Trust
($ per Unit), payable to the Sponsor in ten equal monthly installments
beginning on , 1997, and on the last business day of each
month thereafter through , 1997. If Units are redeemed
prior to , 1997, the remaining amount of the deferred
sales charge applicable to such Units will be payable at the time of
redemption.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of % of the Public Offering Price (equivalent to % of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
Page 35
Statement of Net Assets
Media and Entertainment Growth Trust, Series 1
The First Trust Special Situations Trust, Series 126
At the Opening of Business oon the Initial Date of Deposi
, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $
Organizational and offering costs (3)
________
Less accrued organizational and offering costs (3) ( )
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (5) $
Less sales charge (5) ( )
________
Net Assets $
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $ issued by
Bankers Trust Company has been deposited with the Trustee as collateral,
which is sufficient to cover the monies necessary for the purchase of
the Equity Securities pursuant to contracts for the purchase of such
Equity Securities.
(3) The Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed five years from the Initial Date of Deposit. The estimated
organizational and offering 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) Represents the amount of mandatory distributions from the Trust
($ per Unit), payable to the Sponsor in ten equal monthly installments
beginning on , 1996, and on the last business day of
each month thereafter through , 1996. If Units are
redeemed prior to , 1996, the remaining amount of the
deferred sales charge applicable to such Units will be payable at the
time of redemption.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of % of the Public Offering Price (equivalent to % of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
Page 36
Schedule of Investments
American Healthcare Growth Trust, Series 1
The First Trust Special Situations Trust, Series 126
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ ______________________________________ ________ ________ ____________
<S> <C> <C> <C> <C>
ADVANCED MEDICAL DEVICES AND INSTRUMENTS
BMET Biomet, Inc. 3-5% $ $
BSX Boston Scientific Corporation 3-5%
MDT Medtronic, Inc. 3-5%
NELL Nellcor Puritan-Bennett 3-5%
STJM St. Jude Medical, Inc. 3-5%
STRY Stryker Corporation 3-5%
DRUGS/BIOTECH
AMGN Amgen, Inc. 3-5%
BGEN Biogen, Inc. 3-5%
MRK Merck & Company, Inc. 3-5%
MYL Mylan Laboratories, Inc. 3-5%
PFE Pfizer, Inc. 3-5%
SGP Schering-Plough 3-5%
HEALTH CARE INFORMATION SERVICES
HBOC HBO & Company 3-5%
MEDA Medaphis Corporation 3-5%
HEALTH CARE/MANAGED CARE
HCCC HealthCare Compare Corporation 3-5%
HUM Humana, Inc. 3-5%
OXHP Oxford Health Plans, Inc. 3-5%
UNH United Healthcare Corporation 3-5%
USHC U.S. Healthcare, Inc. 3-5%
HOSPITAL MANAGEMENT/HEALTH SERVICES
COL Columbia/HCA Healthcare
Corporation 3-5%
GHV Genesis Health Ventures, Inc. 3-5%
HRC HEALTHSOUTH Corporation 3-5%
LCA Living Centers of America, Inc. 3-5%
MNR Manor Care, Inc. 3-5%
VC Vencor, Inc. 3-5%
MEDICAL SUPPLIES
ABT Abbott Laboratories 3-5%
BDX Becton, Dickinson & Company 3-5%
CAH Cardinal Distribution, Inc. 3-5%
JNJ Johnson & Johnson
PDCO Patterson Dental Company 3-5%
______ _____________
Total Investments 100% $
====== =============
</TABLE>
[FN]
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on , 1996.
Page 37
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the last sale prices of the listed
Equity Securities and the ask prices of the over-the-counter traded
Equity Securities on the business day 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 % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
Page 38
Schedule of Investments
Media and Entertainment Growth Trust, Series 1
The First Trust Special Situations Trust, Series 126
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ ______________________________________ ________ ________ ____________
<S> <C> <C> <C> <C>
ADVERTISING
IPG Interpublic Group of Companies, Inc. 3-5% $ $
OMC Omnicom Group, Inc. 3-5%
BROADCASTING
BLC Belo (A.H.) Corp. 3-5%
CCU Clear Channel Communications, Inc. 3-5%
EMMS Emmis Broadcasting Corporation 3-5%
EVGM Evergreen Media 3-5%
INF Infinity Broadcasting Corporation (Class A) 3-5%
JCOR Jacor Communications 3-5%
WX Westinghouse Electric Corporation 3-5%
CABLE TELEVISION
CMCSK Comcast Corporation 3-5%
LBTYA Liberty Media 3-5%
TCOMA Tele-Communications, Inc.
TCI Group (Class A) 3-5%
UMG U.S. West Media Group 3-5%
ENTERTAINMENT
DIS Disney (Walt) Company 3-5%
TV Grupo Televisa S.A. (ADR) 3-5%
KWP King World Productions, Inc. 3-5%
NWS News Corporation, Ltd. (ADR) 3-5%
PLG Polygram NV (ADR) 3-5%
TWX Time Warner Inc. 3-5%
VIA Viacom Inc. 3-5%
PUBLISHING-INFORMATION
EFX Equifax, Inc 3-5%
RTRSY Reuters Holdings PLC (ADR) 3-5%
PUBLISHING-NEWSPAPERS
GLC Gannett Company, Inc. 3-5%
PTZ Pulitzer Publishing 3-5%
TRB Tribune Company 3-5%
______ _____________
Total Investments 100% $
====== =============
</TABLE>
[FN]
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on , 1996.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the last sale prices of the listed
Equity Securities and the ask prices of the over-the-counter traded
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.
Page 39
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
Page 40
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Pae 42
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Pae 43
CONTENTS:
Summary of Essential Information
American Healthcare Growth Trust, Series 1 4
Media and Entertainment Growth Trust, Series 1 5
The First Trust Special Situations Trust, Series 126:
What is The First Trust Special Situations Trust? 8
What are the Expenses and Charges? 8
What is the Federal Tax Status of Unit Holders? 9
Why are Investments in the Trusts Suitable for
Retirement Plans? 13
Portfolio:
What are Equity Securities? 13
Risk Factors 13
What are the Equity Securities Selected for
American Healthcare Growth Trust, Series 1? 17
What are the Equity Securities Selected for
Media and Entertainment Growth Trust, Series 1? 20
What are Some Additional Considerations
for Investors? 22
Public Offering:
How is the Public Offering Price Determined? 23
How are Units Distributed? 24
What are the Sponsor's Profits? 26
Will There be a Secondary Market? 26
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 26
How are Income and Capital Distributed? 27
What Reports will Unit Holders Receive? 28
How May Units be Redeemed? 28
How May Units be Purchased by the Sponsor? 29
How May Equity Securities be Removed
from the Trust? 30
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 30
Who is the Trustee? 31
Limitations on Liabilities of Sponsor
and Trustee 31
Who is the Evaluator? 31
Other Information:
How May the Indenture be Amended
or Terminated? 32
Legal Opinions 33
Experts 33
Report of Independent Auditors 34
Statement of Net Assets:
American Healthcare Growth Trust, Series 1? 35
Media and Entertainment Growth Trust, Series 1? 36
Schedule of Investments:
American Healthcare Growth Trust, Series 1? 37
Media and Entertainment Growth Trust, Series 1? 39
______________
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 Healthcare Growth Trust
Series 1
Media and Entertainment Growth Trust
Series 1
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
, 1996
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
126 has duly caused this Amendment No. 1 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 March 4, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 126
(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 March 4, 1996
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 Combined
Series 258 (File No. 33-63483) 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 FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its name
in the Prospectus included in the Registration Statement will be
filed by amendment.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 126 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank
(National Association), as Trustee, First Trust Advisors
L.P., as Evaluator, and First Trust Advisors L.P., as
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
S-4
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 First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-5
________________________
* To be filed by amendment.
