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: FT 224
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title 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. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
FT 224
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 FT Series
of trust
6. Execution and termination The FT Series; Other
of trust agreement 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 FT Series
(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 FT Series
11. Types of securities comprising The FT Series
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The FT Series
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The FT
Series; 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 FT Series
by depositor, principal
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 FT Series; Rights of
Unit Holders
17. Withdrawal or redemption The FT Series; 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 FT Series;
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 FT
Series; 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 FT Series
50. Trustee's lien The FT Series
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 FT Series; Rights
agreement with respect of Unit Holders
to selection or elimination
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The FT Series; Rights
substitution or elimination of Unit Holders
of underlying securities
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The FT Series
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 NOVEMBER 14, 1997
Baird Economic Outlook Growth Trust, Series 1998
The Trust. FT 224 is a unit investment trust consisting of a fixed,
diversified portfolio containing common stocks issued by companies which
are considered to have the potential for capital appreciation (the
"Equity Securities").
The objective of the Trust is to provide for capital appreciation by
investing the Trust's portfolio in selected common stocks. See "Schedule
of Investments." The Trust has a mandatory termination date (the
"Mandatory Termination Date" or "Trust Ending Date") of approximately
two years from the date of this Prospectus as set forth under "Summary
of Essential Information." There is, of course, no guarantee that the
objective of the Trust will be achieved.
Each Unit of the Trust represents an undivided fractional interest in
all the Equity Securities deposited therein. The Equity Securities
deposited in the Trust's portfolio have no fixed maturity date and the
value of these underlying Equity Securities will fluctuate with changes
in the values of stocks in general. See "Portfolio."
The Sponsor may, from time to time after the Initial Date of Deposit,
deposit additional Equity Securities in the Trust or cash (including a
letter of credit) with instructions to purchase additional Equity
Securities in the Trust. Such deposits of additional Equity Securities
or cash will be done in such a manner that the original proportionate
relationship among the individual issues of the Equity Securities shall
be maintained. Any deposit by the Sponsor of additional Equity
Securities, or the purchase of additional Equity Securities pursuant to
a cash deposit, 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 Trust on the Initial, or any subsequent, Date of
Deposit. See "What is the FT Series?" and "How May Equity Securities be
Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
during the initial offering period is equal to the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
the over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust,
plus an initial sales charge equal to the difference between the maximum
total sales charge for the Trust 4.25% of the Public Offering Price) and
the maximum remaining deferred sales charge of (initially $.325 per
Unit). Subsequent to the Initial Date of Deposit, the amount of the
initial sales charge will vary with changes in the aggregate value of
the Equity Securities. Commencing on March 31, 1998, and on the last
business day of each month thereafter through December 31, 1998 (the
"First Year Deferred Period"), a deferred sales charge of $0.0185 per
Unit will also be assessed. In addition, Unit holders of record on
February 26, 1999 will also be assessed a deferred sales charge of $0.02
per Unit per month commencing _________, 1999, and on the last business
day of each month thereafter through _______, 1999 (the "Second Year
Deferred 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. Unit holders who elect to roll
the proceeds of their Units into a new Series of the Trust during the
Interim Special Redemption Period (as described under "Special
Redemption, Liquidation and Investment in a New Trust") or Unit holders
who sell or redeem their Units on or before February 26, 1999 will not
be assessed
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE 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.
Robert W. Baird & Co. Incorporated
The date of this Prospectus is ____________, 1997
Page 1
the deferred sales charge for the Second Year Deferred Period; however,
Units sold or tendered for redemption prior to such time as the entire
deferred sales charge assessed during the First Year Deferred Period has
been collected will be assessed the amount of such remaining deferred
sales charge at the time of sale or redemption. In addition, Units held
subsequent to February 26, 1999 which are sold or tendered for
redemption prior to such time as the entire deferred sales charge
assessed during the Second Year Deferred Period has been collected will
be assessed the amount of such remaining deferred sales charge at the
time of sale or redemption. The deferred sales charge assessed during
both the First Year Deferred Period and the Second Year Deferred Period
will be paid from funds in the Capital Account, if sufficient, or from
the periodic sale of Equity Securities. The total maximum sales charge
assessed to Unit holders on a per Unit basis will be 4.25% of the Public
Offering Price (equivalent to 4.293% of the net amount invested,
exclusive of the deferred sales charge). A pro rata share of accumulated
dividends, if any, in the Income Account of the Trust is included in the
Public Offering Price. The minimum amount which an investor may purchase
in the Trust is $1,000. Unit holders of the Baird Economic Outlook
Growth Trust, Series 1997 who elected to become Rollover Unit holders
into Baird Economic Outlook Growth Trust, Series 1998 are entitled to
purchase Units of such Trust subject to the maximum remaining deferred
sales charge, deferred as set forth above. Only whole Units may be
purchased. The sales charge imposed on Trust Units is reduced on a
graduated scale for sales involving at least 10,000 Units. See "How is
the Public Offering Price Determined?"
Dividend and Capital Distributions. Cash dividends received by the Trust
will be paid on each December 31 to Unit holders of record on each
December 15 and again as part of the interim liquidation distribution in
the case of "Interim Rollover Unit holders" or the final liquidation
distribution in the case of "Final Rollover Unit holders" and others.
Distributions of funds in the Capital Account will be made to "Interim
Rollover Unit holders" as part of the interim liquidation distribution
and to "Final Rollover Unit holders" and others as part of the final
liquidation distribution, and in certain circumstances, may be made
earlier. Any distribution of income and/or capital will be net of the
expenses of the Trust. See "What is the Federal Tax Status of Unit
Holders?" Additionally, upon termination of the Trust, the Trustee will
distribute, upon surrender of Units for redemption, to each remaining
Unit holder his pro rata share of the Trust's assets, less expenses, in
the manner set forth under "Rights of Unit Holders-How are Income and
Capital Distributed?" Unit holders who elect to become Rollover Unit
holders will not receive the interim or final liquidation distribution,
but will receive units in a new series of the Baird Economic Outlook
Growth Trust, if one is being offered. See "Special Redemption,
Liquidation and Investment in a New Trust." Any Unit holder may elect to
have each distribution of income or capital on his Units, other than the
final liquidating distribution, automatically reinvested in additional
Units of the Trust subject only to remaining deferred sales charge
payments. See "Rights of Unit Holders-How are Income and Capital
Distributed?"
Secondary Market for Units. While under no obligation to do so, the
Sponsor intends to, and the Underwriter may, maintain a market for Units
of the Trust and offer to repurchase such Units at prices which are
based on the aggregate underlying value of Equity Securities in the
Trust (generally determined by the closing sale prices of listed Equity
Securities and the bid prices of the over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of the Trust. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any in the Capital and
Income Accounts of the Trust. If a secondary market is not maintained, a
Unit holder may redeem Units through the Trustee at prices based upon
the aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
the over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust.
A Unit holder tendering 2,500 Units or more of the Trust for redemption
may request a distribution of shares of Equity Securities (reduced by
Page 2
customary transfer and registration charges) (an "In-Kind Distribution")
in lieu of payment in cash. See "How May Units be Redeemed?" Unit
holders who elect to roll the proceeds of their Units into a new Series
of the Trust during the Interim Special Redemption Period (as described
under "Special Redemption, Liquidation and Investment in a New Trust")
or Unit holders who sell or redeem their Units on or before February 26,
1999 will not be assessed the deferred sales charge for the Second Year
Deferred Period; however, Units sold or tendered for redemption prior to
such time as the entire deferred sales charge assessed during the First
Year Deferred Period has been collected will be assessed the amount of
such remaining deferred sales charge at the time of sale or redemption.
In addition, Units held subsequent to February 26, 1999 which are sold
or tendered for redemption prior to such time as the entire deferred
sales charge assessed during the Second Year Deferred Period has been
collected will be assessed the amount of such remaining deferred sales
charge at the time of sale or redemption. See "How May Units be Redeemed?"
Special Redemption, Liquidation and Investment in a New Trust. The
Sponsor currently intends to create a new Series of the Baird Economic
Outlook Growth Trust approximately 13 months after the Initial Date of
Deposit of the Trust (the "1999 Trust") and also in conjunction with the
termination of the Trust (approximately two years after the Initial Date
of Deposit) (the "2000 Trust") (collectively, the "New Trusts"). Unit
holders will have the option to roll the proceeds of their Units into a
New Trust after either 13 months (the "Interim Rollover") or after two
years (the "Final Rollover"). To elect a Rollover option, Unit holders
must specify by the appropriate Rollover Notification Date stated in
"Summary of Essential Information" to have all of their Units redeemed
and the distributed Securities sold by the Trustee, in its capacity as
distribution agent ("Distribution Agent"), during the corresponding
Special Redemption and Liquidation Period. Unit holders electing to
participate in either the Interim Rollover ("Interim Rollover Unit
Holders") or the Final Rollover ("Final Rollover Unit Holders") are
collectively referred to herein as "Rollover Unit Holders." The
Distribution Agent will appoint the Sponsor as its agent to determine
the manner, timing and execution of sales of underlying Securities. The
proceeds of the redemption will then be invested in Units of a New
Trust, if offered, at a reduced sales charge (anticipated to be
identical to the deferred sales charge component of the Trust). The
Sponsor may, however, stop offering units of the New Trust at any time
in its sole discretion without regard to whether all the proceeds to be
invested have been invested. Cash which has not been invested on behalf
of the Rollover Unit holders in a New Trust will be distributed shortly
after the applicable Special Redemption and Liquidation Period. However,
the Sponsor anticipates that sufficient Units will be available,
although monies in the Trust may not be fully invested until the next
business day. Rollover Unit holders may purchase Units of a New Trust at
a reduced sales charge. The portfolio of the New Trust will contain
common stocks of companies satisfying the criteria established above for
the Trust. Rollover Unit holders will receive pro rata amount of
dividends in the Income Account of the Trust which will be included in
the reinvestment into Units of a New Trust. On August 5, 1997, the
Taxpayer Relief Act of 1997 (the "1997 Tax Act") was enacted which
reduces the maximum stated marginal tax rate for certain capital gains
for investments held for more than 18 months to 20% (10% in the case of
certain taxpayers in the lowest tax bracket). Rollover Unit holders
participating in the Final Rollover would qualify for such treatment,
whereas Rollover Unit holders participating in the Interim Rollover
would be subject to a maximum stated marginal tax rate of 28%. See "What
is the Federal Tax Status of Unit Holders?" The exchange option
described above is subject to modification, termination or suspension.
Termination. Commencing no later than the Mandatory Termination Date,
Equity Securities will begin to be sold as prescribed by the Sponsor.
The Trustee shall provide written notice of any termination of the Trust
to Unit holders which will specify when Unit holders may surrender their
certificates for cancellation and will include a form to enable Unit
holders to elect an In-Kind Distribution if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment in cash
for such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Equity Securities. 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 ten business days prior to the Mandatory Termination Date of
the Trust. Unit holders not electing the "Rollover Option" or a
distribution of shares of the Equity Securities will receive a cash
distribution within a reasonable time after the Trust is terminated. See
"Rights of Unit Holders-How are Income and Capital Distributed?" and
"Other Information-How May the Indenture be Amended or Terminated?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, volatile interest rates or an economic recession. The
Trust is not actively managed and Equity Securities will not be sold by
the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. See "What are Equity Securities?-Risk
Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-____________, 1997
Underwriter: Robert W. Baird & Co. Incorporated
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
General Information
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 4.25% of the Public Offering Price per Unit
(4.293% of the net amount invested, exclusive of the deferred sales charge) (3) $
Less Deferred Sales Charge per Unit $
Public Offering Price per Unit (3) $10.000
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate underlying value of Equity
Securities less the deferred sales charge) (4) $
Cash CUSIP Number ____________
Reinvestment CUSIP Number ____________
First Settlement Date ____________, 1997
Interim Rollover Notification Date ____________
Interim Special Redemption and
Liquidation Period Beginning on _______, until no later than ________.
Final Rollover Notification Date ____________
Final Special Redemption and Liquidation Period Beginning on , until no later than .
Mandatory Termination Date ____________
Discretionary Liquidation Amount The Trust may be terminated if the value of the Equity Securities is less
than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in 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 Amortization of
Organizational and Offering Costs (6) $ per Unit.
Income Distribution Record Date Fifteenth day of June and December, commencing , 1998.
Income Distribution Date (7) Last day of June and December, commencing , 1998.
______________
<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 Stock Market is valued at the last closing sale price, or if no
such price exists or if the Equity Securities are 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. See "Fee Table" and "Public Offering" for
additional information regarding these charges. 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 may be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $0.0010
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 two 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) During the Interim Special Redemption and Liquidation Period (for
Interim Rollover Unit holders) or the Final Special Redemption and
Liquidation Period (for Final Rollover Unit Holders) or upon termination
of the Trust for other Unit holders, amounts in the Income Account
(which consist of dividends on the Securities) will be included in
amounts distributed to or on behalf of Unit holders. Distributions from
the Capital Account will be made monthly payable on the last day of the
month to Unit holders of record on the fifteenth day of such month if
the amount available for distribution equals at least $1.00 per 100
Units. Notwithstanding, distributions of funds in the Capital Account,
if any will be made as part of the final liquidation distribution.
</FN>
Page 4
FEE TABLE
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 approximately two years and is a unit investment trust
rather than a mutual fund, this information is presented to permit a
comparison of fees, assuming the principal amount and distributions are
rolled over at the Trust's termination into a New Trust subject only to
the deferred sales charge.
Amount
per Unit
________
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of the Public Offering Price) 1.00%(a) $.100
Deferred Sales Charge during the First Year Deferred Period 1.85%(b) .185
(as a percentage of the Public Offering Price)
Deferred Sales Charge during the Second Year Deferred Period 1.40%(c) .140
(as a percentage of the Public Offering Price)
_______ _______
4.25% $.425
======= =======
Maximum Sales Charge Imposed on Reinvested Dividends 1.85%(d) .185
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee % $
Portfolio supervision, bookkeeping, administrative, amortization
of organizational and offering costs and evaluation fees %
Other operating expenses %
_______ _______
Total % $
======= =======
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
_______ ________ ________ ________
An investor would pay the following expenses on a $1,000 investment,
assuming the Baird Economic Outlook Growth Trust, Series 1998, estimated
operating expense ratio of % and a 5% annual return on the
investment throughout the periods $ $ $ $
_______________
<FN>
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 3.95% and the maximum remaining deferred
sales charge (initially $.295 per Unit) and would exceed 1.00% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee during the First Year Deferred Period is $.0195 per
month per Unit, irrespective of purchase or redemption price deducted in
each of the ten months from _________ to _______, 1998. If a Unit holder
sells or redeems Units before all of these First Year Deferred Period
deductions have been made, the balance of such deferred sales charge
payments remaining will be deducted from the sales or redemption
proceeds. If the Unit price is less than $10.00 per Unit, the deferred
sales charge assessed during the First Year Deferred Period will exceed
1.95%. 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.
(c) The actual fee during the Second Year Deferred Period is $.100 per
Unit deducted on _____ 31, 1999. Unit holders who elect to roll their
Units into a new Series of the Trust during the Interim Special
Redemption Period or Unit holders who sell or redeem their Units on or
before _______31, 1999 will not be assessed the deferred sales charge
for the Second Year Deferred Period.
(d) Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "How are Income and
Capital Distributed?"
</FN>
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. In addition,
while the Trust only has a term of approximately two years, this
information is presented to permit comparison of fees, assuming the
principal amount and distributions are rolled over at the Trust's
termination into a new series subject only to the deferred sales charge
and annual trust operation expenses. For purposes of the example, the
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. Over time, investors who elect to
participate as Interim Rollover Unit holders over consecutive years will
pay higher expenses than those electing to participate as Final Rollover
Unit holders due to the fact that the deferred sales charge assessed
during the First Year Deferred Period exceeds the deferred sales charge
assessed during the Second Year Deferred Period.
Page 5
BAIRD ECONOMIC OUTLOOK GROWTH TRUST, SERIES 1998
FT 224
What is the FT Series?
FT 224 is one of a series of investment companies created by the Sponsor
under the name of the FT Series, all of which are generally similar but
each of which is separate and is designated by a different series
number. The FT Series was previously known as The First Trust Special
Situations Trust Series. This Series consists of an underlying separate
unit investment trust designated as: Baird Economic Outlook Growth
Trust, Series 1998. The Trust was created under the laws of the State of
New York pursuant to a Trust Agreement (the "Indenture"), dated the
Initial Date of Deposit, with Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank, 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 issued by
companies which are considered by the Underwriter to have the potential
for capital appreciation (the "Equity Securities"), together with an
irrevocable letter or letters of credit of a financial institution in an
amount at least equal to the purchase price of such Equity Securities.
In exchange for the deposit of securities or contracts to purchase
securities in the Trust, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of the Trust.
The objective of the Trust is to provide for capital appreciation by
investing in Equity Securities of companies having, in the Underwriter's
opinion on the Initial Date of Deposit, an above-average potential for
capital appreciation. Based upon the Underwriter's assessment that the
current environment of low relative unemployment and low inflation will
continue, and their assumption that the current bull market will
continue, the Underwriter's analysts have chosen sectors and stocks
which they believe should do well in this environment. The sectors
chosen include business services, capital goods distribution, financial
institutions, health care, oil and oil services and telecommunications
equipment. The Underwriter believes that the above-mentioned factors
point toward continued growth in these sectors over the next two years.
There is, of course, no guarantee that the objective of the Trust will
be achieved.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in the Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Equity Securities in the Trust, or
cash (including a letter of credit) with instructions to purchase
additional Equity Securities, and Units may be continuously offered for
sale to the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any deposit by
the Sponsor of additional Equity Securities, or the purchase of
additional Equity Securities pursuant to a cash deposit, 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 two may differ. Any such difference may be due to the
sale, redemption or liquidation of any of the Equity Securities
deposited in the Trust on the Initial, or any subsequent, Date of
Deposit. See "How May Equity Securities be Removed from the Trust?" The
original percentage relationship of each Equity Security to the Trust is
set forth herein under "Schedule of Investments." Since the prices of
the underlying Equity Securities will fluctuate daily, the ratio, on a
market value basis, will also change daily. The portion of Equity
Securities represented by each Unit will not change as a result of the
deposit of additional Equity Securities in the Trust. If the Sponsor
deposits cash, however, existing and new investors may experience a
dilution of their investment and a reduction in their anticipated income
because of fluctuations in the prices of the Equity Securities between
the time of the cash deposit and the purchase of the Equity Securities
and because the Trust will pay the associated brokerage fees. To
minimize this effect, the Trust will try to purchase the Equity
Securities as close to the evaluation time or as close to the evaluation
price as possible. The Trustee may from time to time retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for the Trust with respect to acquiring Equity Securities for the
Trust. In acting in such capacity, the Sponsor or its affiliate will be
held subject to the restrictions under the Investment Company Act of
1940, as amended.
Page 6
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Equity Securities deposited in such
Trust as set forth under "Summary of Essential Information." To the
extent that Units of the Trust are redeemed, the aggregate value of the
Equity Securities in the Trust will be reduced and the undivided
fractional interest represented by each outstanding Unit of the Trust
will increase. However, if additional Units are issued by the Trust in
connection with the deposit of additional Equity Securities or cash by
the Sponsor, the aggregate value of the Equity Securities in the Trust
will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit of the Trust will
be decreased proportionately. See "How May Units be Redeemed?" The Trust
has a Mandatory Termination Date as set forth herein under "Summary of
Essential Information."
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trust, for which the Sponsor may be reimbursed in
amounts as set forth under "Summary of Essential Information," the
Sponsor will not receive any fees in connection with its activities
relating to the Trust. Certain of the expenses incurred in establishing
the Trust, including the cost of the initial preparation of documents
relating to the Trust, federal and state registration fees, the initial
fees and expenses of the Trustee, legal expenses and any other out-of-
pocket expenses may be paid by the Sponsor, and may, in part, be paid by
the Trustee.
First Trust Advisors L.P., an affiliate of the Sponsor, will receive an
annual supervisory fee, which is not to exceed the amount set forth
under "Summary of Essential Information," for providing portfolio
supervisory services for the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month.
Subsequent to the initial offering period, First Trust Advisors L.P.,
the Evaluator and an affiliate of the Sponsor, will receive a fee as
indicated in the "Summary of Essential Information."
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust an annual fee as indicated in "Summary
of Essential Information." Such fee will be based upon the largest
aggregate number of Units of the Trust outstanding at any time during
the calendar year. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Indenture, reference is
made to the material set forth under "Rights of Unit Holders."
The Trustee's and the above described fees are payable from the Income
Account of the Trust to the extent funds are available and then from the
Capital Account of the Trust. Since the Trustee has the use of the funds
being held in the Capital and Income Accounts for payment of expenses
and redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to the Trust is expected to result from
the use of these funds.
Each of the above mentioned 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. In addition,
with respect to the fees payable to the Sponsor or an affiliate of the
Sponsor for providing bookkeeping and other administrative services,
supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for the Trust, 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 actual cost to the Sponsor or its affiliate
of supplying such services in such year.
Expenses incurred in establishing the 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 the Trust's portfolio and
the initial fees and expenses of the Trustee and any other out-of-pocket
expenses, will be paid by the Trust and charged off over a period not to
exceed the life of the Trust, approximately two years. The following
additional charges are or may be incurred by the Trust: all legal
expenses of the Trustee incurred by or in connection with its
responsibilities under the Indenture; the expenses and costs of any
Page 7
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 the Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee, when
paid or owing to the Trustee, are secured by a lien on the Trust. In
addition, the Trustee is empowered to sell Equity Securities in the
Trust in order to make funds available to pay all these amounts if funds
are not otherwise available in the Income and Capital Accounts of the
Trust. Since the Equity Securities are all common stocks and the income
stream produced by dividend payments is unpredictable, the Sponsor
cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities will
have to be sold to meet Trust expenses. These sales may result in
capital gains or losses to Unit holders. See "What is the Federal Tax
Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. So
long as the Sponsor is making a secondary market for the Units, the
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.0050 per Unit. Unit holders of the Trust covered by
an audit may obtain a copy of the audited financial statements upon
request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code"). Unit holders should consult their tax advisers in
determining the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units in the Trust. For
purposes of the following discussion and opinion, it is assumed that
each Equity Security is equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of the Trust under the
Code; and the income of the Trust will be treated as income of the Unit
holders thereof under the Code. Each Unit holder will be considered to
have received his or her pro rata share of the income derived from each
Equity Security when such income is received by the Trust.
2. Each Unit holder will be considered to have received all of the
dividends paid on his or her pro rata portion of each Equity Security
when such dividends are received by the Trust regardless of whether such
dividends are used to pay a portion of the deferred sales charge. Unit
holders will be taxed in this manner regardless of whether distributions
from the Trust are actually received by the Unit holder or are
automatically reinvested.
3. Each Unit holder will have a taxable event when the Trust disposes
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder (except to the extent an in-kind distribution of stocks
is received by such Unit holder as described below). The price a Unit
holder pays for his or her Units is allocated among his or her pro rata
portion of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases his of
her Units) in order to determine his or her tax basis for his or her pro
rata portion of each Equity Security held by the Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by the Trust is taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceeds such current and accumulated earnings and
Page 8
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, the holding period of such capital gain will be
determined by the period of time a Unit holder has held his or her Units.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital gain except in the case of
a dealer or financial institution. A Unit holder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the Trust will generally be considered a capital loss
(except in the case of a dealer or financial institution). Unit holders
should consult their tax advisers regarding the recognition of gains and
losses for Federal income tax purposes. In particular, a Rollover Unit
holder should be aware that a Rollover Unit holder's loss, if any,
incurred in connection with the exchange of Units for Units in the next
new series of the Baird Economic Outlook Growth Trust either at the
Interim Rollover or the Final Rollover (collectively, the "New Trusts"),
will generally be disallowed with respect to the disposition of any
Equity Securities pursuant to such exchange to the extent that such Unit
holder is considered the owner of substantially identical securities
under the wash sale provisions of the Code taking into account such Unit
holder's deemed ownership of the securities underlying the Units in a
New Trust in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and
ending 30 days after such disposition. However, any gains incurred in
connection with such an exchange by a Rollover Unit holder would be
recognized.
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge for the Trust is deferred. It is possible that for
federal income tax purposes, a portion of the deferred sales charge may
be treated as interest which would be deductible by a Unit holder
subject to limitations on the deduction of investment interest. In such
case, the non-interest portion of the deferred sales charge should be
added to the Unit holder's tax basis in his or her Units. The deferred
sales charge could cause the Unit holder's Units to be considered to be
debt-financed under Section 264A of the Code which would result in a
small reduction of the dividends-received deduction. In any case, the
income (or proceeds from redemption) a Unit holder must take into
account for federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge. Unit holders should consult
their own tax advisers as to the income tax consequences of the deferred
sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by 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
recently been issued which address special rules that must be considered
in determining whether the 46-day holding period requirement is met.
Moreover, the allowable percentage of the deduction will be reduced from
70% if a corporate Unit holder owns certain stock (or Units) the
financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals
that would affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received
deduction.
Limitations on Deductibility of Trust 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
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.
Page 9
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by the Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). For taxpayers other than corporations, net capital
gains (which is defined as net long-term capital gain over net short-
term capital loss for a taxable year) are subject to a maximum stated
marginal tax rate of 28% or 20%, depending upon the holding period of
the capital asset. In particular, net capital gain, excluding net gain
from property held more than one year but not more than 18 months and
gain on certain other assets, is subject to a maximum stated rate of 20%
(10% in the case of certain taxpayers in the lowest tax bracket). Net
capital gain that is not taxed at the marginal stated tax rate of 20%
(or 10%) as described in the preceding sentence, is generally subject to
a maximum marginal stated rate of 28%. The date on which a Unit is
acquired (i.e., the "trade date") is excluded for purposes of
determining the holding period of a Unit. Generally, capital gain or
loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year
or less. Net short-term capital is taxed at the same rate as ordinary
income. Generally, Unit holders who elect to become Interim Rollover
Unit holders will not be entitled to the 20% (10%) reduced rate of tax
because they will have held their Unit or only approximately 13 months
whereas Final Rollover Unit holders will be entitled to the reduced tax
rate. However, Unit holders should consult their own tax advisors
regarding the holding period and the tax rate of capital gains. 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.
In addition, please note that capital gains may be recharacterized 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 or her entire pro rata interest in all assets of the
Trust involved including his or her pro rata portion of all the Equity
Securities represented by the Unit.
The Taxpayer Relief Act of 1997 (the "1997 Act") includes provisions
that treat certain transactions designed to reduce or eliminate risk of
loss and opportunities for gain (e.g., short sales, offsetting notional
principal contracts, futures or forward contracts or similar
transactions) as constructive sales for purposes of recognition of gain
(but not loss) and for purposes of determining the holding period. Unit
holders should consult their own tax advisors with regard to any such
constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units, Termination of the Trust and Investment in the New Trust. As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?," under certain circumstances a Unit holder who owns at
least 2,500 Units of the Trust may request an In-Kind Distribution upon
the redemption of Units or the termination of the Trust. The Unit holder
requesting an In-Kind Distribution will be liable for expenses related
thereto (the "Distribution Expenses") and the amount of such In-Kind
Distribution will be reduced by the amount of the Distribution Expenses.
See "Rights of Unit Holders-How are Income and Capital Distributed?" As
previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unit holder is considered as owning a pro
rata portion of each of 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 the Trust. However, if a Unit holder
also receives cash in exchange for a fractional share of an Equity
Security held by the 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 the Trust.
Because the Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
Page 10
consequences with respect to each Equity Security owned by the 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 the Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
As discussed in "Rights of Unit Holders-Special Redemption, Liquidation
and Investment in a New Trust," a Unit holder may elect to become a
Rollover Unit holder. To the extent a Rollover Unit holder exchanges his
Units for Units of a New Trust in a taxable transaction, such Unit
holder will recognize gains, if any, but generally will not be entitled
to a deduction for any losses recognized upon the disposition of any
Equity Securities pursuant to such exchange to the extent that such Unit
holder is considered the owner of substantially identical securities
under the wash sale provisions of the Code taking into account such Unit
holder's deemed ownership of the securities underlying the Units in a
1999 Trust in the manner described above, if such substantially
identical securities were acquired within a period beginning 30 days
before and ending 30 days after such disposition under the wash sale
provisions contained in Section 1091 of the Code. In the event a loss is
disallowed under the wash sale provisions, special rules contained in
Section 1091(d) of the Code apply to determine the Unit holder's tax
basis in the securities acquired. Rollover Unit holders are advised to
consult their tax advisers.
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 the 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 the Trust will be reduced to the extent
dividends paid with respect to such Equity Security are received by the
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 the Trust to such Unit
holder (including amounts received upon the redemption of Units) will be
subject to back-up withholding. Distributions by the Trust will
generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign
corporations or other non-United States persons. Such persons should
consult their tax advisers.
Unit holders will be notified annually of the amounts of 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
Trust for New York tax matters, under the existing income tax laws of
the State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
Page 11
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
The Trust consists of different issues of Equity Securities which are
listed on a national securities exchange or The Nasdaq Stock Market or
are traded in the over-the-counter market. See "What are the Equity
Securities Selected for the Baird Economic Outlook Growth Trust, Series
1998?" for a general description of the companies.
Risk Factors. An investment in Units of the Trust should be made with an
understanding of the problems and risks such an investment may entail.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time to time
in the Trust and any additional Equity Securities acquired and held by
the Trust pursuant to the provisions of the Trust Agreement together
with cash held in the Income and Capital accounts. Neither the Sponsor,
the Trustee nor the Underwriter shall be liable in any way for any
failure in any of the Equity Securities. However, should any contract
for the purchase of any of the Equity Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of the moneys
held in the Trust to cover such purchase are reinvested in substitute
Equity Securities in accordance with the Trust Agreement, refund the
cash and sales charge attributable to such failed contract to all Unit
holders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Due to the short
duration of the Trust there is no assurance that the Trust's objective
will be achieved or that the Trust will provide for capital appreciation
in excess of the Trust's expenses. Although the portfolio is not
managed, the Sponsor may instruct the Trustee to sell Equity Securities
under certain limited circumstances. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell any securities or other
property acquired in exchange for Equity Securities such as those
acquired in connection with a merger or other transaction. If offered
such new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by the Trust, they may be accepted for deposit in
the Trust and either sold by the Trustee or held in the Trust pursuant
to the direction of the Sponsor (who may rely on the advice of the
Portfolio Supervisor). See "How May Equity Securities be Removed from
the Trust?" Equity Securities, however, will not be sold by the Trust to
take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, the Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of the Trust,
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the
general condition of the common stock market may worsen and the value of
the Equity Securities and therefore the value of the Units may decline.
Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding
government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or
Page 12
regional political, economic or banking crises. Shareholders of common
stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or
holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the portfolio may be expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in the Trust and will
vote such stocks in accordance with the instructions of the Sponsor.
Investors should note that because the Underwriter uses the list of
Equity Securities which comprises the portfolio in its independent
capacity as an investment advisor to individuals, mutual funds, employee
benefit plans and other institutions and persons and distributes this
information to various individuals and entities, the Underwriter may
recommend or effect from time to time the purchase or sale of one or
more of the Equity Securities. This may have an effect on the prices of
the Equity Securities which is adverse to the interests of the
purchasers of Units of the Trust. Additionally, this may have an impact
on the price paid by the Trust for the Equity Securities as well as the
price received upon redemption of the Units or upon the termination of
the Trust. Investors should also note that Equity Securities will not be
removed from the Trust and additional Units of the Trust may be created
even if the Underwriter no longer believes certain or all of the Equity
Securities have the potential to provide capital appreciation and
increasing dividend income over the life of the Trust or issues a sell
recommendation regarding any of the Equity Securities included in the
Trust.
The Underwriter has acquired or may acquire the Equity Securities for
the Sponsor and thereby may benefit. The Underwriter in its general
securities business acts as agent or principal in connection with the
purchase and sale of equity securities, including the Equity Securities
in the Trust, and may act as a market maker in certain of the Equity
Securities. The Underwriter also from time to time may issue reports on
and make recommendations relating to equity securities, which may
include the Equity Securities.
What are the Equity Securities Selected for Baird Economic Outlook
Growth Trust, Series 1998?
Page 13
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life of the
Trust and may be more or less than the price at which they were
deposited in the Trust. The Equity Securities may appreciate or
depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the primary offering period of Units of the Trust and
during either the Interim or Final Special Redemption and Liquidation
Period) and other factors.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Equity Security. In the event of a
notice that any Equity Security will not be delivered ("Failed Contract
Obligations") to the Trust, the Sponsor is authorized under the
Indenture to direct the Trustee to acquire other Equity Securities
("Replacement Securities"). Any Replacement Security will be identical
to those which were the subject of the failed contract. The Replacement
Securities must be purchased within 20 days after delivery of the notice
of a failed contract and the purchase price may not exceed the amount of
funds reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
the Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in the Trust and
the issuance of a corresponding number of additional Units. If the
Sponsor deposits cash, existing and new investors could experience a
dilution of their investments and a reduction in anticipated income
because of fluctuations in the prices of the Equity Securities between
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trust will pay the brokerage fees associated
therewith.
The Trust consists of the Equity Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) as may continue
to be held from time to time in the Trust and any additional Equity
Securities acquired and held by the Trust pursuant to the provisions of
the Indenture (including provisions with respect to deposits into the
Trust of Equity Securities or cash in connection with the issuance of
additional Units).
Investors should also consider the fact that as a unit investment trust,
the Trust differs from a mutual fund in that in most cases a mutual fund
has a portfolio manager whose responsibility it is to decide on asset
allocations (as between cash, equity securities and debt securities),
whether to purchase, sell or hold existing securities in the portfolio,
as well as how to resolve other investment questions. By contrast, once
all of the Equity Securities in the Trust are acquired, the Trustee will
have no power to vary the investments of the Trust, i.e., the Trustee
will have no managerial power to take advantage of market variations to
improve a Unit holder's investment, and may dispose of Equity Securities
only under limited circumstances. See "How May Equity Securities be
Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
Page 14
which might reasonably be expected to have a material adverse effect on
the Trust. At any time after the Initial Date of Deposit, litigation may
be instituted on a variety of grounds with respect to the Equity
Securities. The Sponsor is unable to predict whether any such litigation
will be instituted, or if instituted, whether such litigation might have
a material adverse effect on the Trust.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisers. Further, at any time after the
Initial Date of Deposit, legislation may be enacted, with respect to the
Equity Securities in the Trust or the issuers of the Equity Securities.
Changing approaches to regulation, particularly with respect to the
environment, may have a negative impact on certain companies represented
in the Trust. There can be no assurance that future legislation,
regulation or deregulation will not have a material adverse effect on
the Trust or will not impair the ability of the issuers of the Equity
Securities to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale price of listed Equity Securities and the
ask price of over-the-counter traded Equity Securities), plus or minus
cash, if any, in the Income and Capital Accounts of the Trust, plus an
initial sales charge equal to the difference between the maximum sales
charge of 4.25% of the Public Offering Price and the maximum remaining
deferred sales charge, initially $.325 per Unit. Commencing on March 31,
1998, and on the last business day of each month thereafter through
December 31, 1998 (the "First Year Deferred Period"), a deferred sales
charge of $0.185 per Unit will also be assessed. In addition, Unit
holders of record on February 26, 1999 will also be assessed a deferred
sales charge of $0.02 per Unit per month commencing , 1999,
and on the last business day of each month thereafter through
, 1999 (the "Second Year Deferred 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.
Unit holders who elect to roll the proceeds of their Units into a new
Series of the Trust during the Interim Special Redemption Period (as
described under "Special Redemption, Liquidation and Investment in a New
Trust") or Unit holders who sell or redeem their Units on or before
February 26, 1997 will not be assessed the deferred sales charge for the
Second Year Deferred Period; however, Units sold or tendered for
redemption prior to such time as the entire deferred sales charge
assessed during the First Year Deferred Period has been collected will
be assessed the amount of such remaining deferred sales charge at the
time of sale or redemption. In addition, Units held subsequent to
February 26, 1999 which are sold or tendered for redemption prior to
such time as the entire deferred sales charge assessed during the Second
Year Deferred Period has been collected will be assessed the amount of
such remaining deferred sales charge at the time of sale or redemption.
The deferred sales charge assessed during both the First Year Deferred
Period and the Second Year Deferred Period will be paid from funds in
the Income and/or Capital Accounts of the Trust, if sufficient, or from
the periodic sale of Equity Securities. The total maximum sales charge
which may be assessed to Unit holders of the Trust on a per Unit basis
is 4.25% of the Public Offering Price (equivalent to a maximum of 4.293%
of the net amount invested, exclusive of the deferred sales charge).
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in the
Trust, (generally determined by the closing sale price of listed Equity
Securities and the ask price of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Page 15
Accounts of the Trust divided by the number of Units of the Trust
outstanding, reduced by the deferred sales charge not yet paid. For
secondary market sales of the Trust after completion of the Second Year
Deferred Period, the Public Offering Price is also based upon the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the bid prices of the over-the-counter traded Equity
Securities) plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust plus an initial sales charge
equal to the difference between the maximum total sales charge (4.25% of
the Public Offering Price) and the maximum remaining deferred sales
charge, divided by the number of outstanding Units of the Trust. Unit
holders will also be subject to the remaining deferred sales charge
payments.
The minimum amount which an investor may purchase of the Trust is
$1,000. Only whole Units may be purchased. The applicable sales charge
for both primary and secondary market sales is reduced by a discount as
indicated below for volume purchases as a percentage of Public Offering
Price (except for sales made pursuant to a "wrap fee account" or similar
arrangements as set forth below):
Maximum Net Dealers
Number of Units Discount Sales Charge Concession
_______________ ________ ____________ ___________
5,000 but less than 10,000 0.25% 4.00% 2.75%
10,000 but less than 25,000 0.50% 3.75% 2.50%
25,000 but less than 50,000 0.75% 3.50% 2.25%
50,000 but less than 100,000 1.00% 3.25% 2.00%
100,000 or more 1.65% 2.60% 1.50%
</FN>
Any such reduced sales charge shall be the responsibility of the selling
Underwriter, broker/dealer, bank or other selling agent. The reduced
sales charge structure will apply on all purchases of Units in the Trust
by the same person on any one day from the Underwriter or any dealer,
bank or other selling agent. Additionally, Units of the Trust purchased
in the name of the spouse of a purchaser or in the name of a child of
such purchaser under 21 years of age will be deemed, for the purposes of
calculating the applicable sales charge, to be additional purchases by
the purchaser. The reduced sales charges will also be applicable to a
trustee or other fiduciary purchasing securities for a single trust
estate or single fiduciary account. The purchaser must inform the
Underwriter, broker/dealer, bank or other selling agent of any such
combined purchase prior to the sale in order to obtain the indicated
discount. Unit holders of Baird Economic Outlook Growth Trust, Series
1997 who elected to become Rollover Unit holders into Baird Economic
Outlook Growth Trust, Series 1998 are entitled to purchase Units of the
Trust subject to the maximum deferred sales charge on such Units, as set
forth above. 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, Underwriter,
broker/dealers, banks or other selling agents and their subsidiaries and
vendors providing services to the Sponsor will be able to purchase Units
of the Trust at the Public Offering Price, less the applicable
broker/dealer concession during the initial offering period.
Investors who purchase Units through registered broker/dealers who
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 may purchase Units in the primary or
secondary market at the Public Offering Price, less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Equity Securities. During the initial offering period,
the aggregate value of the Units of the Trust shall be determined on the
basis of the aggregate underlying value of the Equity Securities therein
plus or minus cash, if any, in the Income and Capital Accounts of the
Trust. The aggregate underlying value of the Equity Securities will be
Page 16
determined in the following manner: if the Equity Securities are listed
on a national securities exchange or The Nasdaq Stock Market, this
evaluation is generally based on the closing sale prices on that
exchange or that market (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 market, at the closing ask prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefore is other than on the exchange or market, the evaluation
shall generally be based on the current ask prices on the over-the-
counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of the Trust plus the applicable sales
charge. 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 an owner of Units on the date of
settlement provided payment has been received. Cash, if any, made
available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934. Delivery of Certificates representing
Units so ordered will be made 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, Units issued on the Initial Date of
Deposit, additional Units created on subsequent Date(s) of Deposit, and
Units reacquired by the Sponsor and resold during the initial offering
period, will be sold at the current Public Offering Price. Upon the
termination of the initial offering period, unsold Units created or
Units reacquired during the initial offering period and Units reacquired
in the secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market Public Offering Price.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales will be made to dealers and others at
prices which represent a concession or agency commission of 1.9% of the
Public Offering Price for primary and secondary market sales. Brokers,
dealers and other selling agents will receive a concession or agency
commission of 1.00% of the Public Offering Price per Unit on purchases
by Rollover Unit holders and will receive an additional concession or
agency commission of $.09 per Unit on Units held in the Trust on
February 26, 1999. However, resales of Units of the Trust by such
dealers and others to the public will be made at the Public Offering
Price described in the prospectus. The Sponsor reserves the right to
change the amount of the concession or agency commission from time to
time. Certain commercial banks may be making Units of the Trust
available to their customers on an agency basis. A portion of the sales
charge paid by these customers is retained by or remitted to the banks
in the amounts indicated 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.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission equal
to 4.25% of the Public Offering Price of the Units (equivalent to 4.293%
of the net amount invested), less any reduced sales charge for quantity
purchases as described under "Public Offering-How is the Public Offering
Price Determined?" and less any reduced sales charge for Rollover Unit
holders of the 1997 Trust. See "Underwriting" for information regarding
the receipt of the excess gross sales commissions by the Sponsor from
the Underwriter. In addition, the Sponsor may be considered to have
realized a profit or to have sustained a loss, as the case may be, in
the amount of any difference between the cost of the Equity Securities
to the Trust (which is based on the Evaluator's determination of the
aggregate offering price of the underlying Equity Securities of such
Trust on the Initial Date of Deposit as well as on subsequent deposits)
and the cost of such Equity Securities to the Sponsor. See
Page 17
"Underwriting" and Note (2) of "Schedule of Investments" for the Trust.
During the initial offering period, the Underwriter also may realize
profits or sustain losses as a result of fluctuations after the Date of
Deposit in the Public Offering Price received by the Underwriter upon
the sale of Units.
In maintaining a market for the Units, the Sponsor and Underwriter will
also realize profits or sustain losses in the amount of any difference
between the price at which Units are purchased and the price at which
Units are resold (which price includes the applicable sales charge) or
redeemed. The secondary market public offering price of Units may be
greater or less than the cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to, and the Underwriter may, maintain a market
for the Units and continuously offer to purchase Units at prices,
subject to change at any time, based upon the aggregate underlying value
of the Equity Securities in the Trust plus or minus cash and receivables
(including dividends declared but not paid), if any, in the Income and
Capital Accounts of the Trust. All expenses incurred in maintaining a
secondary market, other than the fees of the Evaluator and the costs of
the Trustee in transferring and recording the ownership of Units, will
be borne by the Sponsor. If the supply of Units exceeds demand, or for
some other business reason, the Sponsor may discontinue purchases of
Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS,
HE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Subject to the
limitations set forth under "How May Units be Redeemed?," 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. See "How May Units be
Redeemed?"
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Record ownership
may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Page 18
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 Equity Securities in the Trust on or about the Income
Distribution Dates to Unit holders of record on the preceding Income
Record Date. See "Summary of Essential Information." Persons who
purchase Units will commence receiving distributions only after such
person becomes a Record Owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling broker-
dealer. Proceeds received on the sale of any Equity Securities in the
Trust, to the extent not used to meet redemptions of Units or pay
expenses, will, however, be distributed on the last day of each month to
Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $0.01 per Unit. The Trustee
is not required to pay interest on funds held in the Capital Account of
the Trust (but may itself earn interest thereon and therefore benefit
from the use of such funds). Notwithstanding, distributions of funds in
the Capital Account, if any, will be made as part of the final
liquidation distribution, and in certain circumstances, earlier. See
"What is the Federal Tax Status of Unit Holders?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. However, to
the extent that amounts in the Capital Account are insufficient to
satisfy the then current deferred sales charge obligation, Equity
Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made
to an account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
the Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable only
when filing a tax return. Under normal circumstances the Trustee obtains
the Unit holder's tax identification number from the selling broker.
However, a Unit holder should examine his or her statements from the
Trustee to make sure that the Trustee has been provided a certified tax
identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one should be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
who is not a Rollover Unit holder will, upon surrender of his Units for
redemption, receive (i) the pro rata share of the amounts realized upon
the disposition of Equity Securities, unless he or she elects an In-Kind
Distribution as described below and (ii) a pro rata share of any other
assets of the Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.
return of capital, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within a
Trust for state and local taxes, if any, and any governmental charges
payable out of such Trust.
Distribution Reinvestment Option. Any Unit holder may elect to have each
distribution of income or capital on his Units, other than the final
liquidating distribution in connection with the termination of the
Trust, automatically reinvested in additional Units of the Trust. Each
person who purchases Units of the Trust may elect to become a
participant in the Distribution Reinvestment Option by notifying the
Trustee of their election. The Distribution Reinvestment Option may not
be available in all states. In order to enable a Unit holder to
participate in the Distribution Reinvestment Option with respect to a
particular distribution on his Units, the card must be received by the
Trustee within 10 days prior to the Record Date for such distribution.
Page 19
Each subsequent distribution of income or capital on the participant's
Units will be automatically applied by the Trustee to purchase
additional Units of the Trust. The remaining deferred sales charge
payments will be assessed on Units acquired pursuant to the
Distributions Reinvestment Option. IT SHOULD BE REMEMBERED THAT EVEN IF
DISTRIBUTIONS ARE REINVESTED, THEY ARE STILL TREATED AS DISTRIBUTIONS
FOR INCOME TAX PURPOSES.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Equity
Securities sold during the year and the Equity Securities held at the
end of such year by the Trust; (3) the redemption price per Unit based
upon a computation thereof on the 31st day of December of such year (or
the last business day prior thereto); and (4) amounts of income and
capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its unit investment 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 (if such day is a
day on which the New York Stock Exchange is open for trading), except
that as regards Units received after 4:00 p.m. Eastern time (or as of
any earlier closing time on a day on which the New York Stock Exchange
is scheduled in advance to close at such earlier time), the date of
tender is the next day on which the New York Stock Exchange is open for
trading and such Units will be deemed to have been tendered to the
Trustee on such day for redemption at the redemption price computed on
that day. Units so redeemed shall be cancelled. Units tendered for
redemption prior to such time as the entire deferred sales charge on
such Units assessed during the First Year Deferred Period has been
collected will be assessed the amount of such remaining deferred sales
charge at the time of redemption. In addition, Units held subsequent to
February 26, 1999 which are sold or tendered for redemption prior to
such time as the entire deferred sales charge assessed during the Second
Year Deferred Period has been collected will be assessed the amount of
such remaining deferred sales charge at the time of sale or redemption.
However, Unit holders either electing to become Interim Rollover Unit
Holders or who sell or redeem their Units on or before February 26, 1999
will not be assessed the deferred sales charge for the Second Year
Deferred Period.
Any Unit holder tendering 2,500 Units or more of the Trust for
redemption may request by written notice submitted at the time of tender
from the Trustee in lieu of a cash redemption a distribution of shares
of Equity Securities in an amount and value of Equity Securities per
Unit equal to the Redemption Price Per Unit as determined as of the
evaluation next following tender. However, no In-Kind Distribution
requests submitted during the nine business days prior to the Mandatory
Termination Date will be honored. 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
Page 20
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. For further information regarding this withholding, see
"How are Income and Capital Distributed?" 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 the Trust.
The Trustee is empowered to sell Equity Securities of the Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of the Trust will be
reduced. Such sales may be required at a time when Equity Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized.
The Redemption Price per Unit will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of the listed Equity
Securities and either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
the over-the-counter traded Equity Securities) plus or minus cash, if
any, in the Income and Capital Accounts of the Trust. The Redemption
Price per Unit is the pro rata share of each Unit determined by the
Trustee by adding: (1) the cash on hand in the Trust other than cash
deposited in the Trust to purchase Equity Securities not applied to the
purchase of such Equity Securities; (2) the aggregate value of the
Equity Securities (including "when issued" contracts, if any) held in
the Trust, as determined by the Evaluator on the basis of the aggregate
underlying value of the Equity Securities in the Trust next computed;
and (3) dividends receivable on the Equity Securities trading ex-
dividend as of the date of computation; and deducting therefrom: (1)
amounts representing any applicable taxes or governmental charges
payable out of the Trust; (2) any amounts owing to the Trustee for its
advances; (3) an amount representing estimated accrued expenses of the
Trust, including but not limited to fees and expenses of the Trustee
(including legal and auditing fees), the Evaluator and supervisory fees,
if any; (4) cash held for distribution to Unit holders of record of the
Trust as of the business day prior to the evaluation being made; and (5)
other liabilities incurred by the Trust; and finally dividing the
results of such computation by the number of Units of the Trust
outstanding as of the date thereof. The redemption price per Unit will
be assessed the amount, if any, of the remaining deferred sales charge
at the time of redemption, subject to the limitations set forth above.
The aggregate value of the Equity Securities will be determined in the
following manner: if the Equity Securities are listed on a national
securities exchange or The Nasdaq Stock Market, this evaluation is
generally based on the closing sale prices on that exchange or market
(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 (during the initial offering period)
or at the closing bid prices (subsequent to the initial offering
period). If the Equity Securities are not so listed or, if so listed and
the principal market therefore is other than on the exchange, the
evaluation shall generally be based on the current ask or bid prices (as
appropriate) on the over-the-counter market (unless these prices are
inappropriate as a basis for evaluation). If current ask or bid prices
(as appropriate) are unavailable, the evaluation is generally determined
(a) on the basis of current ask or bid prices (as appropriate) for
comparable securities, (b) by appraising the value of the Equity
Securities on the ask or bid side (as appropriate) 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
Page 21
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will be made of
all Units of the Trust held by any Unit holder (a "Rollover Unit
holder") who affirmatively notifies the Trustee in writing that he or
she desires to take advantage of such special redemption and liquidation
by either of the Rollover Notification Dates specified in the "Summary
of Essential Information." The Sponsor intends to create a new Series of
the Trust (the "New Trust") approximately 13 months after the Initial
Date of Deposit of the Trust and also in conjunction with the
termination of the Trust (approximately two years after the Initial Date
of Deposit). Unit holders will have the option to roll the proceeds of
their Units into a New Trust after either 13 months (the "Interim
Rollover") or two years (the "Final Rollover"). Unit holders electing to
roll their proceeds into a New Trust during the Interim Rollover shall
be referred to as "Interim Rollover Unit Holders" while Unit holders
electing to roll their proceeds into a New Trust at termination shall be
referred to as "Final Rollover Unit Holders." Collectively both the
Interim and Final Rollover Unit holders shall be referred to as
"Rollover Unit Holders." To elect a Rollover Option, Unit holders must
affirmatively notify the Trustee in writing that he or she desires to
roll over his or her Units by the applicable Rollover Notification Date
specified in the "Summary of Essential Information."
All Units of Rollover Unit holders will be redeemed In-Kind during
either the Interim Special Redemption and Liquidation Period or the
Final Special Redemption and Liquidation Period, depending on the
election of the Rollover Unit holder, and the underlying Equity
Securities will be distributed to the Distribution Agent on behalf of
the Rollover Unit holders. During the applicable Special Redemption and
Liquidation Period (as set forth in "Summary of Essential Information"),
the Distribution Agent will be required to sell all of the underlying
Equity Securities on behalf of Rollover Unit holders. The sales proceeds
will be net of brokerage fees, governmental charges or any expenses
involved in the sales.
The Distribution Agent will engage the Sponsor as its agent to sell the
distributed Equity Securities. The Sponsor will attempt to sell the
Equity Securities as quickly as is practicable during the applicable
Special Redemption and Liquidation Period. The Sponsor does not
anticipate that the period will be longer than ten business days, and it
could be as short as one day, given that the Equity Securities are
usually highly liquid. The liquidity of any Equity Security depends on
the daily trading volume of the Equity Security and the amount that the
Sponsor has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Equity Securities: for highly
liquid Equity Securities, the Sponsor will generally sell Equity
Securities on the first day of the applicable Special Redemption and
Liquidation Period; for less liquid Equity Securities, on each of the
first two days of the applicable Special Redemption and Liquidation
Period, the Sponsor will generally sell any amount of any underlying
Equity Securities at a price no less than 1/2 of one point under the
closing sale price of those Equity Securities on the preceding day.
Thereafter, the Sponsor intends to sell without any price restrictions
at least a portion of the remaining underlying Equity Securities, the
numerator of which is one and the denominator of which is the total
number of days remaining (including that day) in the applicable Special
Redemption and Liquidation Period.
The Rollover Unit holders' proceeds will be invested in a new series of
the Trust (the "1999 Trust" or the "2000 Trust"), if then registered in
the Unit holder's state and being offered, the portfolio of which will
contain the new Equity Securities selected by the Underwriter as of the
day prior to the Date of Deposit of the New Trust. The proceeds of
redemption available on each day will be used to buy New Trust Units as
the proceeds become available at the Public Offering Price of the New
Trust, including the applicable sales charge per Unit (which for
Rollover Unit Holders is currently expected to be 3.25% of the Public
Offering Price per Unit of a New Trust).
The Sponsor intends to create the New Trust Units as quickly as possible
after the commencement of the applicable Special Redemption and
Page 22
Liquidation Period, dependent upon the availability and reasonably
favorable prices of the Equity Securities included in the New Trust
portfolio, and it is intended that Rollover Unit holders will be given
first priority to purchase the New Trust Units. There can be no
assurance, however, as to the exact timing of the creation of the New
Trust Units or the aggregate number of the New Trust Units which the
Sponsor will create. The Sponsor may, in its sole discretion, stop
creating new Units (whether permanently or temporarily) at any time it
chooses, regardless of whether all proceeds of the applicable Special
Redemption and Liquidation have been invested on behalf of Rollover Unit
holders. Cash which has not been invested on behalf of the Rollover Unit
holders in New Trust Units will be distributed at the end of the
applicable Special Redemption and Liquidation Period. However, since the
Sponsor can create Units, the Sponsor anticipates that sufficient Units
can be created, although moneys in a New Trust may not be fully invested
on the next business day.
Any Rollover Unit holder may thus be redeemed out of the Trust and
become a holder of an entirely different trust with a different
portfolio of equity securities. The Rollover Unit holders' Units will be
redeemed In-Kind and the distributed Equity Securities shall be sold
during the applicable Special Redemption and Liquidation Period. In
accordance with the Rollover Unit holders' offer to purchase the New
Trust Units, the proceeds of the sales (and any other cash distributed
upon redemption) will be invested in the New Trust, at the public
offering price, including the applicable sales charge per Unit (which is
currently expected to be 3.25% of the Public Offering Price per Unit for
each New Trust).
This process of redemption, liquidation, and investment in a New Trust
is intended to allow for the fact that the portfolio selected by the
Underwriter is chosen on the basis of potential for capital appreciation
only for a limited time, at which point a new portfolio is chosen. It is
contemplated that a similar process of redemption, liquidation and
investment in a New Trust will be available for each New Trust and each
subsequent series of the Trust, approximately thirteen months and two
years after that Series' creation.
The Sponsor believes that the gradual redemption, liquidation and
investment in the Trust will help mitigate any negative market price
consequences stemming from the trading of large volumes of securities
and of the underlying Equity Securities in the Trust in a short,
publicized period of time. The above procedures may, however, be
insufficient or unsuccessful in avoiding such price consequences. In
fact, market price trends may make it advantageous to sell or buy more
quickly or more slowly than permitted by these procedures. Rollover Unit
holders could then receive a less favorable average Unit price than if
they bought all their Units of a New Trust on any given day of the
applicable Special Redemption Period.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in the
subsequent New Trusts, no cash would be distributed at that time to pay
any taxes. Included in the cash for the Special Redemption and
Liquidation will be an amount of cash attributable to the distribution
of dividend income; accordingly, Rollover Unit holders also will not
have cash distributed to pay any taxes. The 1997 Tax Act reduces the
maximum stated marginal tax rate for certain capital gains for
investments held for more than 18 months to 20% (10% in the case of
certain taxpayers in the lowest tax bracket). Rollover Unit holders
participating in the Final Rollover would qualify for such treatment
whereas Rollover Unit holders participating in the Interim Rollover
would be subject to a maximum stated marginal tax rate of 28%. See "What
is the Federal Tax Status of Unit Holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a time period as it can
without materially adversely affecting the price of the Equity
Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated by either the Interim or
Final Rollover Notification Date ("Remaining Unit holders") will
continue to hold Units of the Trust as described in this Prospectus
until the Trust is terminated or until the Mandatory Termination Date
listed in the "Summary of Essential Information," whichever occurs
first. These Remaining Unit holders will not realize capital gains or
losses due to a Special Redemption and Liquidation, and will not be
charged any additional sales charge except as provided under "Public
Offering." If a large percentage of Unit holders become Rollover Unit
Page 23
holders, the aggregate size of the Trust will be sharply reduced. As a
consequence, expenses, if any, in excess of the amount to be borne by
the Trustee would constitute a higher percentage amount per Unit than
prior to the Special Redemption, Liquidation and Investment. The Trust
might also be reduced to the Discretionary Liquidation Amount listed in
the "Summary of Essential Information" because of the lesser number of
Units in the Trust, and possibly also due to a value reduction, however
temporary, in Units caused by the Sponsor's sales of Equity Securities;
if so, the Sponsor could then choose to liquidate the Trust without the
consent of the remaining Unit holders. See "How May the Indenture be
Amended or Terminated?" The Equity Securities remaining in the Trust
after the Final Special Redemption and Liquidation Period will be sold
by the Sponsor as quickly as possible without, in its judgment,
materially adversely affecting the market price of the Equity Securities.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the New Trusts or any subsequent series of the Trust, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before the Special
Redemption and Liquidation Period would have commenced. All Unit holders
will then be Remaining Unit holders, with rights to ordinary redemption
as stated above. See "How May Units be Redeemed?" The Sponsor may modify
the terms of the New Trusts or any subsequent series of the Trust. The
Sponsor may also modify, suspend or terminate the Rollover Option upon
notice to the Unit holders of such amendment at least 60 days prior to
the applicable Rollover Notification Date specified in the related
"Summary of Essential Information."
How May Units be Purchased by the Sponsor or Underwriter?
The Trustee shall notify the Sponsor and Underwriter of any tender of
Units for redemption. If the Sponsor's or the Underwriter's bid in the
secondary market at that time equals or exceeds the Redemption Price per
Unit, the Sponsor or the Underwriter 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 or the Underwriter may be tendered to
the Trustee for redemption as any other Units. In the event the Sponsor
or the Underwriter does not purchase Units, the Trustee may sell Units
tendered for redemption in the over-the-counter market, if any, as long
as the amount to be received by the Unit holder is equal to the amount
he would have received on redemption of the Units.
The offering price of any Units acquired by the Sponsor or the
Underwriter will be in accord with the Public Offering Price described
in the then effective prospectus describing such Units. Any profit or
loss resulting from the resale or redemption of such Units will belong
to the Sponsor or the Underwriter.
How May Equity Securities be Removed from the Trust?
The portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to the
Trust. Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by the Trust of any securities or other property other than the Equity
Securities is prohibited. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by the Trust, they may be accepted for deposit in the Trust and
either sold by the Trustee or held in the Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). Proceeds from the sale of Equity Securities (or any
Page 24
securities or other property received by the Trust in exchange for
Equity Securities) by the Trustee are credited to the Capital Account of
the Trust for distribution to Unit holders or to meet redemptions. The
Trustee may from time to time retain and pay compensation to the Sponsor
(or an affiliate of the Sponsor) to act as agent for the Trust with
respect to selling Equity Securities from the Trust. In acting in such
capacity the Sponsor or its affiliate will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
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 the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold. The Sponsor
may consider sales of units of unit investment trusts which it sponsors
in making recommendations to the Trustee as to the selection of broker-
dealers to execute the Trust's portfolio transactions.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
Robert W. Baird & Co. Incorporated, headquartered in Milwaukee,
Wisconsin, is one of the oldest and largest regional investment banking
firms in the United States. Baird serves the investment community as
broker, asset manager, equity research specialist, investment banker and
public finance specialist. The firm has 57 offices in 10 states.
Baird is part of the Northwestern Mutual Life Insurance Company family
of companies. It is a member of the New York Stock Exchange and other
principal exchanges, the National Association of Securities Dealers,
Inc. and Securities Investors Protection Corporation.
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, FT Series (formerly known as 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 (630)
241-4141. As of December 31, 1996, the total partners' capital of Nike
Securities L.P. was $9,005,203 (audited). (This paragraph relates only
to the Sponsor and not to the Trust or to any series thereof or to any
other Underwriter. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor
upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trust may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
subject to supervision by the Superintendent of Banks of the State of
New York, 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
Page 25
participated in the selection of the Equity Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Equity Securities. In the event of the failure of
the Sponsor to act under the Indenture, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under
the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of 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 and the Trustee,
in which event the Sponsor and the Trustee are to use their best efforts
to appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
Page 26
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 the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
Equity Securities owned by the Trust as shown by any evaluation, is less
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, or
in the event that Units of the Trust not yet sold aggregating more than
60% of the Units of the Trust are tendered for redemption by the
Underwriter, including the Sponsor. If the Trust is liquidated because
of the redemption of unsold Units by the Underwriter, the Sponsor will
refund to each purchaser of Units of the Trust the entire sales charge
paid by such purchaser. In the event of termination, written notice
thereof will be sent by the Trustee to all Unit holders of the Trust.
Within a reasonable period after termination, the Trustee will follow
the procedures set forth under "How are Income and Capital Distributed?"
The Special Redemption and Liquidation of the Trust could cause the
Trust to be reduced below the Discretionary Liquidation Amount and the
Trust could therefore be terminated at that time before the Mandatory
Termination Date.
Commencing during the period beginning nine business days prior to and
no later than the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of the Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his address appearing on the registration books of the Trust
maintained by the Trustee. At least 60 days prior to the Mandatory
Termination Date of the Trust the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of the Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least ten business days
prior to the Mandatory Termination Date of the Trust. Unit holders not
electing a distribution of shares of Equity Securities and who do not
elect the Rollover Option will receive a cash distribution from the sale
of the remaining Equity Securities within a reasonable time after the
Trust is terminated. Regardless of the distribution involved, the
Trustee will deduct from the funds of the Trust any accrued costs,
expenses, advances or indemnities provided by the Trust Agreement,
including estimated compensation of the Trustee and costs of liquidation
and any amounts required as a reserve to provide for payment of any
applicable taxes or other governmental charges. Any sale of Equity
Securities in the Trust upon termination may result in a lower amount
than might otherwise be realized if such sale were not required at such
time. In addition, to the extent that Equity Securities are sold prior
to the Mandatory Termination Date, Unit holders will not benefit from
any stock appreciation they would have received had the Equity
Securities not been sold 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 27
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
UNDERWRITING
The Underwriter below has purchased Units in the following amount:
Number
Name Address of Units
______ _________ ________
Underwriter
Robert W. Baird & Co. Incorporated Firstar Center, 777 East Wisconsin Avenue,
Milwaukee, WI 53202
======
On the Initial Date of Deposit, the Underwriter of the Trust became the
owner of the Units of the Trust and entitled to the benefits thereof, as
well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the Units
of the Trust will be made at the Public Offering Price described in the
prospectus. Units may also be sold to or through dealers and others
during the initial offering period and in the secondary market at prices
representing a concession or agency commission as described in "Public
Offering-How are Units Distributed?" The Sponsor will receive from the
Underwriter a sales concession of $.075 per Unit and an additional $.003
per Unit for Units remaining in the Trust on February 26, 1999.
From time to time the Sponsor may implement programs under which the
Underwriter and dealers of the Trust may receive nominal awards from the
Sponsor for each of their registered representatives who have sold a
minimum number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under which
the sales force of an Underwriter or dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such Underwriter or dealer that sponsors sales
contests or recognition programs conforming to criteria established by
the Sponsor, or participates in sales programs sponsored by 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
the Underwriter or qualifying dealers for certain services or activities
which are primarily intended to result in sales of Units of the Trust.
Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trust. These programs will not change the price
Unit holders pay for their Units or the amount that the Trust will
receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the returns on the Trust and returns over specified periods on
other similar trust sponsored by Nike Securities L.P. with returns on
investments such as corporate or U.S. Government bonds, bank CDs and
money market accounts or money market funds, each of which has
investment characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the full faith and credit
of the U.S. Government and bank CDs and money market accounts are
insured by an agency of the federal government. Money market accounts
and money market funds provide stability of principal, but pay interest
at rates that vary with the condition of the short-term debt market. The
investment characteristics of the Trust are described more fully
elsewhere in this Prospectus.
Information on percentage changes in the dollar value of Units, on the
basis of changes in Unit price may be included from time to time in
advertisements, sales literature, reports and other information
furnished to current or prospective Unit holders. Total return figures
are not averaged, and may not reflect deduction of the sales charge,
which would decrease the return. Average annualized return figures
reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance may not be indicative of future results. The Trust is
Page 28
not actively managed. Unit price and return fluctuate with the value of
the common stocks in the portfolio, so there may be a gain or loss when
Units are sold.
The Trust's performance may be compared to performance on a total return
basis with the Dow Jones Industrial Average, the S&P 500 Composite Price
Stock Index, or performance data from Lipper Analytical Services, Inc.
and Morningstar Publications, Inc. or from publications such as Money,
The New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
Page 29
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 224
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 224, comprised of Baird Economic Outlook
Growth Trust, Series 1998, as of the opening of business on
____________, 1997. This statement of net assets is the responsibility
of the Trust's Sponsor. Our responsibility is to express an opinion on
the statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on ____________,
1997. An audit also includes assessing the accounting principles used
and significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 224,
comprised of Baird Economic Outlook Growth Trust, Series 1998, at the
opening of business on ____________, 1997 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
____________, 1997
Page 30
Statement of Net Assets
BAIRD ECONOMIC OUTLOOK GROWTH TRUST, SERIES 1998
FT 224
At the Opening of Business on the
Initial Date of Deposit-____________, 1997
NET ASSETS
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
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less sales charge 5) ( )
_________
Net assets $
=========
<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 The Chase Manhattan Bank has been deposited with the Trustee covering
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 two 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
($.325 per Unit), payable to the Sponsor in ten equal monthly
installments of $.0185 per Unit beginning on March 31, 1998, and on the
last business day of each month thereafter through December 31, 1998
(the "First Year Deferred Period") and equal monthly
installments of $ per Unit beginning on , 1999 and on the
last business day of each month thereafter through , 1999
(the "Second Year Deferred Period"). If Units are redeemed prior to
December 31, 1998, the remaining amount of the deferred sales charge
applicable to such Units for the First Year Deferred Period will be
payable at the time of redemption. Units that are redeemed on or before
February 26, 1999 will not be assessed the deferred sales charge for the
Second Year Deferred Period.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of 4.25% of the Public Offering Price (equivalent to 4.293% of
the net amount invested, exclusive of the deferred sales charge).
</FN>
Page 31
Schedule of Investments
BAIRD ECONOMIC OUTLOOK GROWTH TRUST, SERIES 1998
FT 224
At the Opening of Business on the
Initial Date of Deposit-____________, 1997
Approximate Market Cost of
Number Percentage of Value Equity
of Ticker Symbol and Aggregate per Securities to
Shares Name of Issuer of Equity Securities (1) Offering Price (3) Share the Trust (2)
______ _______________________________________ __________________ _______ _____________
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
________ ________
Total Investments 100% $
======== ========
______________
<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 ____________, 1997. The Trust has a mandatory termination date
of ______________.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of listed
Equity Securities and the ask prices of over-the-counter traded Equity
Securities on the business day preceding the Initial Date of Deposit).
The 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 purchase of the Equity Securities
sold to the Trust were $ and $ , respectively.
(3) The portfolio on the Initial Date of Deposit will contain Equity
Securities selected by the Underwriter utilizing the previously
described criteria, each of which will not exceed approximately ____% of
the Aggregate Offering Price for Equity Securities. The percentages of
the Aggregate Offering Price for the Equity Securities are approximate
amounts and may vary in the final portfolio.
</FN>
Page 32
This page is intentionally left blank.
Page 33
This page is intentionally left blank.
Page 34
This page is intentionally left blank.
Page 35
CONTENTS:
Summary of Essential Information:
Baird Economic Outlook Growth Trust, Series 1998 4
FT 224:
What is the FT Series? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 8
Why are Investments in the Trust Suitable for
Retirement Plans? 11
Portfolio:
What are Equity Securities? 12
Risk Factors 12
What are the Equity Securities Selected for
Baird Economic Outlook Growth Trust, Series
1998? 13
What are Some Additional Considerations for
Investors? 14
Public Offering:
How is the Public Offering Price Determined? 15
How are Units Distributed? 17
What are the Sponsor's and Underwriter's Profits? 17
Will There be a Secondary Market? 18
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 18
How are Income and Capital Distributed? 19
What Reports will Unit Holders Receive? 20
How May Units be Redeemed? 20
Special Redemption, Liquidation and
Investment in a New Trust 22
How May Units be Purchased by the
Sponsor or Underwriter? 24
How May Equity Securities be Removed from the Trust? 24
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 25
Who is the Sponsor? 25
Who is the Trustee? 25
Limitations on Liabilities of Sponsor and Trustee 26
Who is the Evaluator? 26
Other Information:
How May the Indenture be Amended or Terminated? 27
Legal Opinions 27
Experts 28
Underwriting 28
Report of Independent Auditors 30
Statement of Net Assets 31
Notes to Statement of Net Assets 31
Schedule of Investments 32
______________
When Units of the Trust are no longer available, or for investors who
will reinvest into subsequent series of the Trust, this Prospectus may
be used as a preliminary prospectus for a future series; in which case
investors should note the following:
INFORMATION CONTAINED HEREIN IS SUBJECT TO AMENDMENT. A REGISTRATION
STATEMENT RELATING TO SECURITIES OF A FUTURE SERIES 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 DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS
NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
BAIRD/
Baird Economic Outlook
Growth Trust, Series 1998
Robert W. Baird & Co.
Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
____________, 1997
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
MEMORANDUM
Re: FT 224
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 176, which is the
current fund, and FT 224, the filing of which this memorandum
accompanies, is the change in the series number. The list of
securities comprising the Fund, the evaluation, record and
distribution dates and other changes pertaining specifically to
the new series, such as size and number of Units in the Fund and
the statement of condition of the new Fund, will be filed by
amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 176 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 224 has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on November 14, 1997.
FT 224
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 1 to the Registration Statement has been signed
below by the following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities November 14, 1997
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of Nike
Securities Corporation,
the General Partner of
Nike Securities L.P.
___________________________
* 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 ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF 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 is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 224 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee and First Trust Advisors L.P., as Evaluator
and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership Agreement
of Nike Securities L.P. (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of 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).
___________________________________
* To be filed by amendment.
S-5