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 303
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
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60606
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.
SUBJECT TO COMPLETION, DATED DECEMBER 10, 1998
Illinois Big Ten Equity Trust, Series 15
Minnesota Big Ten Equity Trust, Series 16
Missouri Big Ten Equity Trust, Series 15
Pacific Ten Equity Trust, Series 11
Further detail regarding certain information provided in the Prospectus
in the form of an "Information Supplement" may be obtained by calling
the Trustee at 1-800-682-7520.
The Trusts. FT 303 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts" and each as a "Trust." Each Trust
consists of a portfolio containing common stocks issued by companies
which provide income and are considered to have the potential for
capital appreciation (the "Equity Securities"). See "Schedule of
Investments" for each Trust.
Illinois Big Ten Equity Trust, Series 15 (the "Illinois Trust") consists
of a portfolio of common stocks of the ten companies with the highest
dividend yield as of , 1998 (the "Stock Selection Date") which have
their principal operation located in the State of Illinois and have a
market capitalization in excess of $250 million.
Minnesota Big Ten Equity Trust, Series 16 (the "Minnesota Trust")
consists of a portfolio of common stocks of the ten companies with the
highest dividend yield as of the Stock Selection Date which have their
principal operation located in the State of Minnesota and have a market
capitalization in excess of $250 million.
The Missouri Big Ten Equity Trust, Series 15 (the "Missouri Trust")
consists of a portfolio of common stocks of the ten companies with the
highest dividend yield as of the Stock Selection Date which have their
principal operation located in the State of Missouri and have a market
capitalization in excess of $250 million.
The Pacific Ten Equity Trust, Series 11 (the "Pacific Trust") consists
of a portfolio of common stocks of the ten largest companies based on
market capitalization as of the Stock Selection Date which have their
principal operations located in the States of California, Oregon or
Washington.
The objective of each Trust is to provide an above-average total return.
With the exception of the Pacific Trust, each Trust seeks to achieve its
stated objective through a combination of capital appreciation and
dividend income. The Pacific Trust seeks to achieve its stated objective
through capital appreciation. Units of the Trusts have not been designed
so that their prices will parallel or correlate with movements in a
particular index or indices against which the Trusts are measured, and
it is expected that their prices will not do so. Each Trust has a
mandatory termination date ("Mandatory Termination Date") of
approximately 13 months from the date of this Prospectus as set forth
under "Summary of Essential Information." There is, of course, no
guarantee that a Trust's objective will be achieved.
Each Unit of a Trust represents an undivided interest in all Equity
Securities deposited therein. The Sponsor may deposit additional Equity
Securities or cash to create new Units after the Initial Date of Deposit
in the manner described in "What is the FT Series?"
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.
First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is ____, 1998
Page 1
Public Offering Price. The Public Offering Price per Unit of each Trust
is equal to the aggregate underlying value of the Equity Securities in
such Trust (generally determined by the closing sale prices of the
listed Equity Securities and the ask prices of over-the-counter traded
Equity Securities) plus or minus a pro rata share of cash, if any, in
the Capital and Income Accounts of such Trust, plus an initial sales
charge equal to the difference between the maximum sales charge for each
Trust (___% of the Public Offering Price) and the maximum remaining
deferred sales charge (initially $ per Unit), divided by the number
of Units of such Trust outstanding. 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 ____, 1999,
and on the twentieth day of each month thereafter (or if such day is not
a business day, on the preceding business day) through ____, 1999, a
deferred sales charge of $___ will also be assessed per Unit per month.
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. The deferred sales charge will be paid from funds
in the Capital Account, if sufficient, or from the periodic sale of
Equity Securities. The total maximum sales charge assessed to Unit
holders on a per Unit basis will be ___% of the Public Offering Price
(equivalent to ___% of the net amount invested, exclusive of the
deferred sales charge). A pro rata share of accumulated dividends, if
any, in the Income Account is included in the Public Offering Price. In
addition, a portion of the Public Offering Price during the initial
offering period also consists of Equity Securities in an amount
sufficient to pay for all or a portion of the costs incurred in
establishing a Trust. The organizational and offering costs will be
deducted from the assets of a Trust as of the close of the initial
offering period. The minimum purchase for each Trust is $1,000 ($500 for
Individual Retirement Accounts or other retirement plans), except for
Rollover Unit holders who are not subject to a minimum purchase amount.
The sales charge for each Trust is reduced on a graduated scale for
sales involving at least $50,000. See "Public Offering-How is the Public
Offering Price Determined?"
Estimated Net Annual Distributions. The estimated net annual dividend
distributions per Unit to Unit holders (based on the most recent
quarterly or semi-annual ordinary dividend declared with respect to the
Equity Securities) at the opening of business on the Initial Date of
Deposit were $___, $____ and $____ for the Illinois Trust, Minnesota
Trust and Missouri Trust, respectively. This estimate will vary with
changes in a Trust's fees and expenses, in dividends received, and with
the sale of Equity Securities. There is no assurance that the estimated
net annual dividend distributions will be realized in the future. It
should be noted that dividend yield is not a criterion for selection for
the Pacific Trust.
Dividend and Capital Distributions. Cash dividends received by a Trust
will be paid on each December 31 and June 30 to Unit holders of record
on December 15 and June 15, respectively, and again as part of the final
liquidation distribution in the case of "Rollover Unit holders" and
others. Distributions of funds in the Capital Account, if any, will be
made to Rollover Unit holders and others as part of the final
liquidation distribution, and in certain circumstances, earlier. Any
distribution of income and/or capital will be net of expenses of a
Trust. See "What is the Federal Tax Status of Unit Holders?"
Additionally, upon termination of a Trust, the Trustee will distribute,
upon surrender of Units, to each remaining Unit holder (other than a
Rollover Unit holder as defined below) his or her pro rata share of such
Trust's assets, less expenses, in the manner set forth under "Rights of
Unit Holders-How are Income and Capital Distributed?" For distributions
to Rollover Unit holders, 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 such Trust subject only to remaining deferred sales charge payments.
See "Rights of Unit Holders-How are Income and Capital Distributed?"
Secondary Market for Units. Although not obligated to do so, the Sponsor
may maintain a market for Units and offer to repurchase the Units at
prices based on the aggregate underlying value of the Equity Securities,
plus or minus cash, if any, in the Capital and Income Accounts of such
Trust. If a secondary market is not maintained, a Unit holder may still
redeem his Units through the Trustee. A Unit holder tendering 1,000
Units or more of a Trust may request a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges) in
lieu of payment in cash (an "In-Kind Distribution"). See "Public
Offering-Will There be a Secondary Market?" and "Rights of Unit Holders-
How May Units be Redeemed?" Any deferred sales charge remaining on Units
at the time of their sale or redemption will be collected at that time.
Special Redemption, Liquidation and Investment in a New Trust. The
Sponsor intends to create a separate series of trusts (the "New Trusts")
Page 2
in conjunction with the termination of each Trust (approximately 13
months after the Initial Date of Deposit). The portfolio of the New
Trusts will contain equity securities of the companies which satisfy
each New Trust's investment strategy at the time such New Trust is
established. Unit holders may elect to have their proceeds reinvested
into a New Trust by notifying the Trustee of this election by the
Rollover Notification Date. Such a Unit holder's Units will be redeemed
In-Kind, the distributed Equity Securities sold, and the proceeds
reinvested into a New Trust at a reduced sales charge, provided such New
Trust is offered and Units are available. Cash not invested in a New
Trust will be distributed. Such Unit holders are "Rollover Unit
holders." Rollover Unit holders therefore will not receive a final
liquidation distribution, but will receive Units in a New Trust. See
"Summary of Essential Information" for each Trust. This exchange option
may be modified, terminated or suspended. See "Rights of Unit Holders-
Special Redemption, Liquidation and Investment in a New Trust."
Termination. Commencing no later than the Mandatory Termination Date,
the Equity Securities will begin to be sold as prescribed by the
Sponsor. The Trustee will provide written notice of the termination to
Unit holders which will specify when certificates may be surrendered and
include a form to enable a Unit holder to elect an In-Kind Distribution,
if such Unit holder owns at least 1,000 Units of a Trust. Unit holders
not electing the "Rollover Option" or those not electing or eligible for
an In-Kind Distribution will receive a cash distribution within a
reasonable time after their respective Trust's termination. 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 a Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers or the general condition of the stock market (which have
recently experienced substantial volatility and significant declines),
volatile interest rates or economic recession. Each Trust is not
actively managed and Equity Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation. Finally, each strategy has underperformed its comparative
index or indices in certain years and (except for the Pacific Trust) may
be considered contrarian in nature. The Trusts may not be appropriate
investments for those who are unable or unwilling to assume the risks
involved generally with an equity investment. Because of the contrarian
nature of the Trusts and the attributes of the common stocks which
caused inclusion in the portfolios, the Trusts may not be appropriate
for investors seeking either preservation of capital or high current
income. The Trusts are not designed to be a complete investment program
for an investor. See "What are Some Additional Considerations for
Investors?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-____, 1998
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
Illinois Big Ten Minnesota Big Ten
Equity Trust Trust Equity Trust
Series 15 Series 16
________________ ________________
General Information
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 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 the Public Offering Price per Unit (___%
of the net amount invested, exclusive of the deferred sales charge) (3) $ $
Less Deferred Sales Charge per Unit $( ) $( )
Public Offering Price per Unit (3) $ $
Sponsor's Initial Repurchase Price per Unit (4) $ $
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
Trustee's Annual Fee and out-of-pocket expenses per Unit outstanding $ $
Evaluator's Annual Fee per Unit outstanding (5) $ $
Portfolio Supervisor's Annual Fee per Unit outstanding (6) $ $
Estimated Organizational and Offering Costs per Unit (7) $ $
First Settlement Date December __, 1998
Rollover Notification Date ____, 1999
Special Redemption and Liquidation Period ____, 1999 to ____, 1999
Mandatory Termination Date ____, 1999
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is
less than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in a Trust during the initial offering period.
Income Distribution Record Date Fifteenth day of June and December, commencing ____, 1999.
Income Distribution Date (8) Last day of June and December, commencing ____, 1999.
______________
<FN>
(1) As of the close of business on December __, 1999, the number of
Units of a 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 listed Equity Security is valued at the last closing sale
price, or if no such price exists or if the Equity Security is not so
listed, at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering" for
additional information regarding these charges. On the business day
prior to 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 Evaluation Time on the business day prior to
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 may be
deposited during the day of the Initial Date of Deposit which will be
valued generally as of 4:00 p.m. Eastern time and sold to investors at a
Public Offering Price per Unit based on this valuation.
(4) The Sponsor's Initial Repurchase Price per Unit and the Redemption
Price per Unit set forth above and during the initial offering period
include estimated organizational and offering costs per Unit. After the
initial offering period, the Sponsor's Repurchase Price and Redemption
Price per Unit will not include such estimated organizational and
offering costs. See "Rights of Unit Holders-How May Units be Redeemed?"
(5) 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.
(6) The Portfolio Supervisor's Annual Fee is payable to an affiliate of
the Sponsor. In addition, the Sponsor may be reimbursed by the Trustee
for bookkeeping and other administrative expenses currently at a maximum
annual rate of $___ per Unit.
(7) Investors will bear all or a portion of the costs incurred in
organizing their respective Trust (including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of each Trust portfolio, 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). Estimated
organizational and offering costs are included in the Public Offering
Price per Unit and will be deducted from the assets of the Trusts at the
end of the initial offering period (approximately one month). See
"Public Offering" and "Statements of Net Assets."
(8) At the Rollover Notification Date for Rollover Unit holders or upon
termination of a Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
Distributions from the Capital Account will be made monthly payable on
the last day of the month to Unit holders of record on the fifteenth day
of such month if the amount available for distribution equals at least
$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
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-____, 1998
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
Missouri Big Ten Pacific Ten
Equity Trust Equity Trust
Series 15 Series 11
_______________ ____________
General Information
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 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 the Public Offering Price per Unit (___%
of the net amount invested, exclusive of the deferred sales charge) (3) $ $
Less Deferred Sales Charge per Unit $( ) $( )
Public Offering Price per Unit (3) $ $
Sponsor's Initial Repurchase Price per Unit (4) $ $
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
Trustee's Annual Fee and out-of-pocket expenses per Unit outstanding $ $
Evaluator's Annual Fee per Unit outstanding (5) $ $
Portfolio Supervisor's Annual Fee per Unit outstanding (6) $ $
Estimated Organizational and Offering Costs per Unit (7) $ $
First Settlement Date December __, 1998
Rollover Notification Date ____, 1999
Special Redemption and Liquidation Period ____, 1999 to ____, 1999
Mandatory Termination Date ____, 1999
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 initial offering period.
Income Distribution Record Date Fifteenth day of June and December, commencing ____, 1999.
Income Distribution Date (8) Last day of June and December, commencing ____, 1999.
______________
<FN>
(1) As of the close of business on December __, 1999, 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 listed Equity Security is valued at the last closing sale
price, or if no such price exists or if the Equity Security is not so
listed, at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering" for
additional information regarding these charges. On the business day
prior to 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 Evaluation Time on the business day prior to
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 may be
deposited during the day of the Initial Date of Deposit which will be
valued generally as of 4:00 p.m. Eastern time and sold to investors at a
Public Offering Price per Unit based on this valuation.
(4) The Sponsor's Initial Repurchase Price per Unit and the Redemption
Price per Unit set forth above and during the initial offering period
include estimated organizational and offering costs per Unit. After the
initial offering period, the Sponsor's Repurchase Price and Redemption
Price per Unit will not include such estimated organizational and
offering costs. See "Rights of Unit Holders-How May Units be Redeemed?"
(5) 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.
(6) The Portfolio Supervisor's Annual Fee is payable to an affiliate of
the Sponsor. In addition, the Sponsor may be reimbursed by the Trustee
for bookkeeping and other administrative expenses currently at a maximum
annual rate of $___ per Unit.
(7) Investors will bear all or a portion of the costs incurred in
organizing their respective 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 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). Estimated
organizational and offering costs are included in the Public Offering
Price per Unit and will be deducted from the assets of the Trusts at the
end of the initial offering period (approximately one month). See
"Public Offering" and "Statements of Net Assets."
(8) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
Distributions from the Capital Account will be made monthly payable on
the last day of the month to Unit holders of record on the fifteenth day
of such month if the amount available for distribution equals at least
$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 5
FEE TABLES
These Fee Tables are intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "The FT Series-What are the Expenses and Charges?"
Although the Trusts have a term of approximately 13 months and are unit
investment trusts rather than mutual funds, this information is
presented to permit a comparison of fees, assuming, upon the termination
of each Trust, the principal amount and distributions are rolled over
into a New Trust subject only to the deferred sales charge.
ILLINOIS BIG TEN MINNESOTA BIG TEN
EQUITY TRUST EQUITY TRUST
SERIES 15 SERIES 16
_________________ ________________
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 1.75%(b) .175 1.75%(b) .175
______ ______ ______ ______
2.75% $ .275 2.75% $ .275
====== ====== ====== ======
Maximum Sales Charge imposed on Reinvested Dividends 1.75%(c) $ .175 1.75%(c) $ .175
Organizational and Offering Costs
Estimated Organizational and Offering Costs
(as a percentage of public offering price) %(d) $ %(d) $
======= ======= ======= =======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Trustee's fee, portfolio supervision, bookkeeping, % $ % $
administrative and evaluation fees
Other operating expenses % %
________ ________ ________ ________
Total % $ % $
======== ======== ======== ========
MISSOURI BIG TEN PACIFIC TEN
EQUITY TRUST EQUITY TRUST
SERIES 15 SERIES 11
_________________ ________________
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 1.75%(b) .175 1.75%(b) .175
______ ______ ______ ______
2.75% $ .275 2.75% $ .275
====== ====== ====== ======
Maximum Sales Charge imposed on Reinvested Dividends 1.75%(c) $ .175 1.75%(c) $ .175
Organizational and Offering Costs
Estimated Organizational and Offering Costs
(as a percentage of public offering price) %(d) $ %(d) $
======= ======= ======= =======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Trustee's fee, portfolio supervision, bookkeeping,
administrative and evaluation fees
% $ % $
Other operating expenses % %
_______ _______ _______ _______
Total % $ % $
======= ======= ======= =======
Page 6
An investor would pay the following expenses on a $1,000 investment,
assuming the estimated operating expense ratio and a 5% annual return on
the investment throughout the periods.
Illinois Big Ten Minnesota Big Ten Missouri Big Ten Pacific Ten
Equity Trust, Series 15 Equity Trust, Series 16 Equity Trust, Series 15 Equity Trust, Series 11
_______________________ _______________________ _______________________ _______________________
1 Year $ 30 $ 30 $ 31 $ 31
3 Years $ 72 $ 72 $ 75 $ 75
5 Years $117 $117 $121 $121
10 Years $240 $241 $248 $248
The above examples assume reinvestment of all dividends and
distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations applicable to mutual
funds. For purposes of the examples, the deferred sales charge imposed
on reinvestment of dividends is not reflected until the year following
payment of the dividend; the cumulative expenses would be higher if
sales charges on reinvested dividends were reflected in the year of
reinvestment. The examples should not be considered a representation of
past or future expenses or annual rate of return; the actual expenses
and annual rate of return may be more or less than those assumed for
purposes of the example.
________________
<FN>
(a) The initial sales charge would exceed 1.00% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $___ per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period for each Trust. If
the Unit price exceeds $10.00 per Unit, the deferred sales charge will
be less than 1.75%. If the Unit price is less than $10.00 per Unit, the
deferred sales charge will exceed 1.75%. Units purchased subsequent to
the initial deferred sales charge payment will be subject to the initial
sales charge and to the remaining deferred sales charge payments.
(c) Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "Rights of Unit
Holders-How are Income and Capital Distributed?"
(d) Investors will bear all or a portion of the costs incurred in
organizing their respective Trust (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of each Trust portfolio, legal fees and the
initial fees and expenses of the Trustee). Estimated organizational and
offering costs are included in the Public Offering Price per Unit and
will be deducted from the assets of the Trust at the end of the initial
offering period.
</FN>
Page 7
Illinois Big Ten Equity Trust, Series 15
Minnesota Big Ten Equity Trust, Series 16
Missouri Big Ten Equity Trust, Series 15
Pacific Ten Equity Trust, Series 11
FT 303
What is the FT Series?
FT 303 is one of a series of investment companies created by the
Sponsor, all of which are generally similar, but each of which is
separate and is designated by a different series number. The FT Series
was formerly known as The First Trust Special Situations Trust Series.
This Series consists of the underlying separate unit investment trusts
set forth above. Each Trust was created under the laws of the State of
New York pursuant to a Trust Agreement (the "Indenture"), dated the
Initial Date of Deposit, with Nike Securities L.P., as Sponsor, 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 provide income and are considered to have the potential
for capital appreciation (the "Equity Securities"), together with an
irrevocable letter or letters of credit of a financial institution in an
amount at least equal to the purchase price of such Equity Securities.
In exchange for the deposit of securities or contracts to purchase
securities in a Trust, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of such Trust.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in a Trust's portfolio, as set forth under
"Schedule of Investments" for each Trust. Following the Initial Date of
Deposit, the Sponsor, pursuant to the Indenture, may deposit additional
Equity Securities in a Trust or cash (including a letter of credit) with
instructions to purchase additional Equity Securities in a Trust. Units
may be continuously offered for sale to the public by means of this
Prospectus, resulting in a potential increase in the outstanding number
of Units of such Trust. Any deposit by the Sponsor of additional Equity
Securities 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 due to the
sale, redemption or liquidation of any of the Equity Securities
deposited in a Trust on the Initial, or any subsequent, Date of Deposit.
See "Rights of Unit Holders-How May Equity Securities be Removed from a
Trust?" Since the prices of the underlying Equity Securities will
fluctuate daily, the ratio, on a market value basis, will also change
daily. The portion of Equity Securities represented by each Unit will
not change as a result of the deposit of additional Equity Securities in
a Trust. 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 such Trust will pay the associated
brokerage fees. To minimize this effect, the Trusts will try to purchase
the Equity Securities as close to the evaluation time as possible. An
affiliate of the Trustee may receive these brokerage fees or 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 a Trust with respect to
acquiring Equity Securities for a Trust. In acting in such capacity, the
Sponsor or its affiliate will be subject to the restrictions under the
Investment Company Act of 1940, as amended.
To the extent that Units of a Trust are redeemed, the aggregate value of
the Equity Securities in such Trust will be reduced, and the undivided
fractional interest represented by each outstanding Unit of such Trust
will increase. However, if additional Units are issued by a Trust in
connection with the deposit of additional Equity Securities or cash by
the Sponsor, the aggregate value of the Equity Securities in such Trust
will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit of such Trust
will be decreased proportionately. See "Rights of Unit Holders-How May
Units be Redeemed?"
Page 8
What are the Expenses and Charges?
With the exception of brokerage fees discussed above and bookkeeping and
other administrative services provided to the Trusts, 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 Trusts.
First Trust Advisors L.P., an affiliate of the Sponsor, will receive an
annual supervisory fee as set forth under "Summary of Essential
Information" for providing portfolio supervisory services for the
Trusts. Such fee is based on the number of Units outstanding in a Trust
on January 1 of each year, except for the year or years in which an
initial offering period occurs in which case the fee for a month is
based on the number of Units outstanding at the end of such month. In
providing such supervisory services, the Portfolio Supervisor may
purchase research services from a variety of sources which may include
dealers of the Trusts.
First Trust Advisors L.P., in its capacity as the Evaluator for the
Trusts, will receive an annual evaluation fee as set forth under
"Summary of Essential Information" for providing evaluation services for
the Trusts. Such fee is based on the number of Units outstanding in a
Trust on January 1 of each year, except for the year or years in which
an initial offering period occurs in which case the fee for a month is
based on the largest number of Units in a Trust outstanding during the
period for which the compensation is paid.
The Trustee pays certain expenses of a Trust for which it is reimbursed
by such Trust. The Trustee will receive for its ordinary recurring
services to a Trust an annual fee as indicated in the "Summary of
Essential Information." Such fee will be based upon the largest number
of Units of such Trust outstanding during the calendar year, except
during the initial offering period, in which case the fee is calculated
based on the largest number of Units in a Trust outstanding during the
period for which the compensation is paid. For a discussion of the
services performed by the Trustee pursuant to its obligations under the
Indenture, see "Rights of Unit Holders."
The fees described above are payable from the Income Account of a Trust
to the extent funds are available, and then from the Capital Account of
such Trust. Since funds being held in the Capital and Income Accounts
are for payment of expenses and redemptions and since such Accounts are
noninterest-bearing to Unit holders, the Trustee benefits thereby. Part
of the Trustee's compensation for its services to a Trust is expected to
result from the use of these funds. Because the above fees are generally
calculated based on the largest aggregate number of Units of the Trusts
outstanding during a calendar year, the per Unit amounts set forth under
"Summary of Essential Information" will be higher during any year in
which redemptions of Units occur.
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 a 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.
The following additional charges are or may be incurred by a Trust: all
legal expenses of the Trustee incurred by or in connection with its
responsibilities under the Indenture; the expenses and costs of any
action undertaken by the Trustee to protect a Trust and the rights and
interests of the Unit holders; fees of the Trustee for any extraordinary
services performed under the Indenture; indemnification of the Trustee
for any loss, liability or expense incurred by it without negligence,
bad faith or willful misconduct on its part, arising out of or in
connection with its acceptance or administration of a Trust; any
offering costs incurred after the end of the initial offering period;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of a Trust; all taxes and other government charges
imposed upon the Equity Securities or any part of a Trust (no such taxes
or charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee, when
paid or owing to the Trustee, are secured by a lien on a Trust. In
addition, the Trustee is empowered to sell Equity Securities in a Trust
in order to make funds available to pay all these amounts if funds are
not otherwise available in the Income and Capital Accounts of a Trust.
Page 9
Since the Equity Securities are all common stocks and the income stream
produced by dividend payments is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or
all expenses of a Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities will
have to be sold to meet Trust expenses. These sales may result in
capital gains or losses to Unit holders. See "What is the Federal Tax
Status of Unit Holders?"
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code"). Unit holders should consult their tax advisors in
determining the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units in a Trust. It is
assumed for the discussion and opinions given below, 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. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of the assets of a Trust under the Code; and
the income of such Trust will be treated as income of the Unit holders
thereof under the Code. Each Unit holder will be considered to have
received his or her pro rata share of the income derived from each
Equity Security when such income is considered to be received by a Trust.
2. Each Unit holder will 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 considered to be received by a Trust regardless
of whether such dividends are used to pay a portion of the deferred
sales charge. Unit holders will be taxed in this manner regardless of
whether distributions from a Trust are actually received by the Unit
holder or are automatically reinvested. See "How are Income and Capital
Distributed?-Distribution Reinvestment Option."
3. Each Unit holder will have a taxable event when a Trust disposes
of an Equity Security (whether by sale, 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 stock
is received by such Unit holder as described below). The price a Unit
holder pays for his or her Units, generally including sales charges, is
allocated among his or her pro rata portion of each Equity Security held
by a Trust (in proportion to the fair market values thereof on the
valuation date nearest the date the Unit holder purchases his or her
Units) in order to determine his or her tax basis for his or her pro
rata portion of each Equity Security held by such Trust. Unit holders
should consult their own tax advisors with regard to the calculation of
basis. For Federal income tax purposes, a Unit holder's pro rata portion
of dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to an Equity Security held by a Trust is
taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits." A Unit holder's pro rata portion
of dividends paid on such Equity Security which exceeds such current and
accumulated earnings and profits will first reduce a Unit holder's tax
basis in such Equity Security, and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall generally
be treated as capital gain. In general, the holding period for 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 a
Trust will generally be considered a capital gain (except in the case of
a dealer or a 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 a Trust will generally be considered a capital
loss (except in the case of a dealer or a financial institution). Unit
holders should consult their tax advisors 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,
Page 10
if any, incurred in connection with the exchange of Units for Units in
the next new series of a Trust (the "New Trusts"), (the Sponsor intends
to create a separate New Trust in conjunction with the termination of
each of the 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 are acquired within a period
beginning 30 days before and ending 30 days after such disposition.
However, any gains incurred in connection with such an exchange by a
Rollover Unit holder would be recognized. Unit holders should consult
their tax advisors regarding the recognition of gains and losses for
Federal income tax purposes.
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 each 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 should 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 246A 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 advisors 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 a Trust
(to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been 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.
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 him or her. 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 the
Trust as miscellaneous itemized deductions subject to this limitation.
Unit holders should consult their tax advisors regarding the limitations
on the deductibility of Trust expenses.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by a Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). The Internal Revenue Service Restructuring and Reform
Act of 1998 (the "1998 Tax Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as net long-term
capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is subject to a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in
the lowest tax bracket). Capital gain or loss is long-term if the
Page 11
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. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes for
determining the holding period of the Unit. Capital gains realized from
assets held for one year or less are taxed at the same rates as ordinary
income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisors regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she 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 a Trust and Investment in a New Trust. As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns at
least 1,000 Units of a Trust may request an In-Kind Distribution upon
the redemption of Units or the termination of such Trust. The Unit
holder requesting an In-Kind Distribution will be liable for expenses
related thereto (the "Distribution Expenses") and the amount of such In-
Kind Distribution will be reduced by the amount of the Distribution
Expenses. See "Rights of Unit Holders-How are Income and Capital
Distributed?" As previously discussed, prior to the redemption of Units
or the termination of a Trust, a Unit holder is considered as owning a
pro rata portion of each of such Trust's assets for Federal income tax
purposes. The receipt of an In-Kind Distribution 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 with respect to each Equity Security owned by a Trust will
depend on whether or not a Unit holder receives cash in addition to
Equity Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unit holder will
not recognize gain or loss if a Unit holder only receives Equity
Securities in exchange for his or her pro rata portion in the Equity
Securities held by a Trust. However, if a Unit holder also receives cash
in exchange for a fractional share of an Equity Security held by a
Trust, such Unit holder will generally recognize gain or loss based upon
the difference between the amount of cash received by the Unit holder
and his or her tax basis in such fractional share of an Equity Security
held by such Trust.
Because a Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by such 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 such Trust. Unit holders who request an In-Kind Distribution
are advised to consult their tax advisors 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
or her 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 such 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 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 advisors.
Page 12
Computation of the Unit Holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in a Trust in accordance with
the proportion of the fair market values of such Equity Securities on
the valuation date nearest to the date the Units are purchased in order
to determine such Unit holder's tax basis for his or her pro rata
portion of each Equity Security.
A Unit holder's tax basis in his or her Units and his or her pro rata
portion of an Equity Security held by a Trust will be reduced to the
extent dividends paid with respect to such Equity Security are received
by a Trust which are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by a Trust to such Unit holder (including amounts received
upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust (other than those that are not treated as
United States source income, if any) 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 advisors.
At the termination of the Trust, the Trustee will furnish to each Unit
holder a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds
received by the Trust from the disposition of any Equity Security
(resulting from redemption or the sale of any Equity Security) and the
fees and expenses paid by the Trust. The Trustee will also furnish
annual information returns to Unit holders and to the Internal Revenue
Service.
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 "Are Investments in the Trusts Eligible for
Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trusts for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of each Trust will be treated as the income
of the Unit holders thereof.
The foregoing discussion relates only to the tax treatment of U.S. Unit
holders ("U.S. Unit holders") with regard to United States federal and
certain aspects of New York State and City income taxes. Unit holders
may be subject to taxation in New York or in other jurisdictions and
should consult their own tax advisors in this regard. As used herein,
the term "U.S. Unit holder" means an owner of a Unit in the Trusts that
(a) is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the
income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unit holder
in paragraph (a) but whose income from a Unit is effectively connected
with such Unit holder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States
whose income and gain on the Units will be taxable. Unit holders should
consult their tax advisors regarding potential foreign, state or local
taxation with respect to the Units.
Are Investments in the Trusts Eligible for Retirement Plans?
Units of the Trusts are eligible for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans. Generally, the Federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisors
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.
Page 13
PORTFOLIO
What are the Equity Securities?
The objective of each of the Trusts is to provide an above-average total
return. With the exception of the Pacific Trust, each Trust seeks to
achieve its stated objective through a combination of capital
appreciation and dividend income. The Pacific Trust seeks to achieve its
stated objective through capital appreciation. While the objectives of
the Trusts are the same, each Trust follows a different investment
strategy (set forth below) in order to achieve its stated objective.
Illinois Trust. The Illinois Trust consists of a portfolio of common
stocks of the ten companies with the highest dividend yield as of the
Stock Selection Date which have their principal operation located in the
State of Illinois and have a market capitalization in excess of $250
million.
Minnesota Trust. The Minnesota Trust consists of a portfolio of common
stocks of the ten companies with the highest dividend yield as of the
Stock Selection Date which have their principal operation located in the
State of Minnesota and have a market capitalization in excess of $250
million.
Missouri Trust. The Missouri Trust consists of a portfolio of common
stocks of the ten companies with the highest dividend yield as of the
Stock Selection Date which have their principal operation located in the
State of Missouri and have a market capitalization in excess of $250
million.
Pacific Trust. The Pacific Trust consists of a portfolio of common
stocks of the ten largest companies based on market capitalization as of
the Stock Selection Date which have their principal operations located
in the States of California, Oregon or Washington.
The Trusts may be an appropriate medium for investors who desire to
participate in a portfolio of common stocks with greater diversification
than they might be able to acquire individually. As a policy matter, any
company that is the subject of an announced business combination which
is expected to be concluded within six months of the Initial Date of
Deposit has been excluded from the Trusts. The Illinois, Minnesota and
Missouri Trusts will not invest in the common stocks of electric utility
issuers, limited partnerships, real estate investment trusts ("REITs")
or companies which have recently suspended, or announced that they
intend to suspend, their dividends. The Pacific Trust will not invest in
common stocks of limited partnerships. The Sponsor's determination that
a company has its principal operations located in a state is based on
the fact that such company is headquartered in that state. No Trust will
invest more than 5% of its portfolio in common stocks of companies which
derive more than 15% of their revenues from securities-related
activities. In formulating each Trust's objective, the Sponsor
considered, among other things, the ability of the Equity Securities to
outpace inflation. While inflation is currently relatively low, the
United States has historically experienced periods of double-digit
inflation. While the prices of equity securities will fluctuate, over
time equity securities have outperformed the rate of inflation, and
other less risky investments, such as government bonds and U.S. Treasury
bills. Past performance is, however, no guarantee of future results.
Investors should be aware that there is no guarantee that the objective
of the Trusts will be achieved because each Trust is subject to the
continuing ability of the respective issuers to declare and pay
dividends and because the market value of the Equity Securities can be
affected by a variety of factors.
The yield for each Equity Security contained in a Trust (with the
exception of the Pacific Trust, for which dividend yield is not a
criterion for stock selection) was calculated by annualizing the last
quarterly or semi-annual ordinary dividend declared and dividing the
result by the market value of such Equity Security as of the close of
business on the Stock Selection Date. An investment in a Trust involves
the purchase of a quality portfolio of attractive equities in one
convenient purchase. Investing in stocks with high dividend yields may
be effective in achieving certain of the Trust's investment objectives,
because regular dividends are common for established companies, and
dividends have accounted for a substantial portion of the total return
on stocks of each comparative index as a group. Due to the short
duration of the Trusts, there is no guarantee that either a Trust's
objective will be achieved or that a Trust will provide for capital
appreciation in excess of such Trust's expenses.
The publisher of the Standard & Poor's 500 Composite Stock Price Index
("S&P 500 Index") is not affiliated with the Sponsor and has not
participated in the creation of the Trusts or the selection of the
Equity Securities included therein. There is, of course, no guarantee
that the objective of the Trusts will be achieved.
Page 14
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust Portfolios as of the
Stock Selection Date. Since the Sponsor may deposit additional Equity
Securities which were originally selected through this process, the
Sponsor may continue to sell Units of the Trusts even though the yields
on these Equity Securities may have changed subsequent to the Initial
Date of Deposit. These Equity Securities may not currently meet a
Trust's selection criteria, and therefore, such Equity Securities would
no longer be chosen for deposit into the Trusts if the selection process
was to be performed again at a later time.
The publisher of the S&P 500 Index has not granted the Trusts or the
Sponsor a license to use the S&P 500 Index. Units of the Trusts are not
designed so that prices will parallel or correlate with movements in any
particular index and it is expected that their prices will not parallel
or correlate with such movements. The publisher of the S&P 500 Index has
not participated in any way in the creation of the Trusts or in the
selection of stocks in the Trusts and has not approved any information
related thereto.
Hypothetical Performance Information
The following table shows hypothetical performance and information for
the strategies employed by each Trust and the actual performance of the
S&P 500 Index. It should be noted that in calculating hypothetical
performance information for each Strategy, companies which, based on
publicly available information at the time the respective strategy is
applied, were the subject of an announced business combination expected
to be completed within six months of the calculation were excluded from
the respective Strategy Stocks. Hypothetical performance information for
the strategies employed by the Trusts includes financial information of
entities which at the time of initial calculations were organized as
corporations but which were previously organized as limited
partnerships. The initial calculations of the various strategies were as
follows: Illinois and Missouri Trusts, April 1996; Minnesota Trust,
December, 1995 and Pacific Trust, April, 1997. In addition, such
comparative calculations exclude financial information of corporations
which did not exist at the time of initial calculations but which may
have been in existence (and therefore potentially includable in the
universe of potential corporations) in prior years. Corporations which
cease to exist will remain in the historical return comparisons through
the date of initial calculations; however, the portion of the
comparative calculations subsequent to the date of such a corporation's
ceasing to exist will include only the financial information of
corporations which meet the criteria established by the Sponsor at the
time such comparisons are calculated. Finally, such calculations include
historical information about companies that are not eligible to be
included in a Trust but would have been selected by applying the
appropriate strategy. Modifications to these assumptions would alter the
results of the comparative calculations. The returns shown in the
following tables and graphs are not guarantees of future performance and
should not be used as a predictor of returns to be expected in
connection with a Trust Portfolio. Both stock prices (which may
appreciate or depreciate) and dividends (which may be increased, reduced
or eliminated) will affect the returns. Each strategy underperformed its
respective index in certain years. Accordingly, there can be no
assurance that a Trust's Portfolio will outperform its comparative index
over the life of a Trust or over consecutive rollover periods, if
available.
A holder of Units in a Trust would not necessarily realize as high a
Total Return on an investment in the stocks upon which the hypothetical
returns are based for the following reasons, among others: the Total
Return figures shown do not reflect sales charges, commissions, Trust
expenses or taxes; the Trusts are established at different times of the
year; the Trusts' maturities vary slightly from those presented in
compiling the Total Returns; the Trusts may not be fully invested at all
times or equally weighted in all stocks comprising a strategy; and
Equity Securities are often purchased or sold at prices different from
the closing prices used in buying and selling Units.
Annualized Performance Information
The following table compares the hypothetical performance of the
Illinois, Minnesota, Missouri and Pacific Strategy Stocks in each of the
years listed below, as of December 31 in each of those years (and as of
the most recent quarter).
Page 15
COMPARISON OF TOTAL RETURN(2)
Hypothetical One-Year Strategy Total Returns Index Total Returns
_____________________________________________________________ ___________________
Year Ended
12/31 Illinois Minnesota Missouri Pacific S&P 500(2)
_________ ________ _________ ________ _______ __________
1983 33.13% 23.52% 30.19% 20.53% 22.27%
1984 19.49% 1.87% -0.36% 3.71% 5.95%
1985 38.26% 47.37% 30.23% 20.59% 31.44%
1986 22.80% 17.98% 10.53% 17.94% 18.35%
1987 4.34% 4.02% 2.78% 6.31% 5.67%
1988 26.35% 17.52% 40.09% 14.98% 16.57%
1989 26.94% 33.04% 34.99% 31.40% 31.11%
1990 -19.51% 2.26% -11.88% -4.01% -3.20%
1991 55.62% 42.21% 51.13% 29.55% 30.13%
1992 18.46% 20.15% 18.66% 17.27% 7.49%
1993 24.73% 8.48% 23.93% 15.74% 9.88%
1994 2.24% 0.37% -3.39% 6.61% 1.28%
1995 55.78% 27.32% 24.42% 43.34% 37.01%
1996 15.12% 17.23% 24.32% 51.70% 22.68%
1997 17.86% 34.18% 51.10% 23.23% 33.35%
1998 thru 9/30 -1.86% -7.33% -2.85% 8.50% 4.80%
<FN>
(1) Total Return represents the sum of the percentage change in market
value of each group of stocks between the first and last trading days of
a period and the total dividends paid on each group of stocks during the
period divided by the opening market value of each group of stocks as of
the first trading day of a period. The S&P 500 Index is an unmanaged
index and does not incur sales charges, commissions, expenses or taxes
and is not available for direct investment. Total returns of the
Illinois, Minnesota, Missouri and Pacific Strategy Stocks, respectively,
do not take into consideration any applicable sales charges,
commissions, expenses or taxes. Returns would be lower as a result of
such charges and expenses.
(2) The S&P 500 Index is a total return index consisting of 500 widely
held common stocks calculated by Standard & Poor's. Sources: FactSet
Data Systems, Inc.
</FN>
There can be no assurance that the Portfolios of the Trusts will
outperform the S&P 500 Index over a 13-month period or over consecutive
rollover periods, if available. Past performance is no guarantee of
future results.
What are Some Additional Considerations for Investors?
The Trusts consist of different issues of Equity Securities, all of
which are listed on a securities exchange. In addition, each of the
companies whose Equity Securities are included in a portfolio are
actively-traded, well-established corporations.
A Trust consists of such of the Equity Securities listed under "Schedule
of Investments" as may continue to be held from time to time in such
Trust and any additional Equity Securities acquired and held by such
Trust pursuant to the provisions of the Indenture, together with cash
held in the Income and Capital Accounts. Neither the Sponsor nor the
Trustee shall be liable in any way for any failure in any of the Equity
Securities. However, should any contract for the purchase of any of the
Equity Securities initially deposited hereunder fail, the Sponsor will,
unless substantially all of the moneys held in a Trust to cover such
purchase are reinvested in substitute Equity Securities in accordance
with the Indenture, refund the cash and sales charge attributable to
such failed contract to all Unit holders on the next distribution date.
Risk Factors. The Equity Securities selected for certain Trusts (with
the exception of the Pacific Trust) generally share attributes that have
caused them to have lower prices or higher yields relative to other
stocks in their respective index. The Equity Securities may, for
example, be experiencing financial difficulty, or be out of favor in the
market because of weak performance, poor earnings forecasts or negative
publicity; or they may be reacting to general market cycles. There can
be no assurance that the market factors that caused the relatively low
prices and high dividend yields of the Equity Securities will change,
Page 16
that any negative conditions adversely affecting the stock prices will
not deteriorate, that the dividend rates on the Equity Securities will
be maintained or that share prices will not decline further during the
life of the Trusts, or that the Equity Securities will continue to be
included in the respective indices.
Certain or all of the Equity Securities in the Trusts (except the
Pacific Trust) may be small-cap company stocks. While historically small-
cap company stocks have outperformed the stocks of large companies, the
former have customarily involved more investment risk as well. Small-cap
companies may have limited product lines, markets or financial
resources; may lack management depth or experience; and may be more
vulnerable to adverse general market or economic developments than large
companies. Some of these companies may distribute, sell or produce
products which have recently been brought to market and may be dependent
on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small-cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Trusts
which contain these Equity Securities to buy and sell significant
amounts of such shares without an unfavorable impact on prevailing
market prices.
Certain of the issuers of Equity Securities in certain Trusts may be
involved in the manufacture, distribution and sale of tobacco products.
Pending litigation proceedings against such issuers in the United States
and abroad cover a wide range of matters including product liability and
consumer protection. Damages claimed in such litigation alleging
personal injury (both individual and class actions), and in health cost
recovery cases brought by governments, labor unions and similar entities
seeking reimbursement for health care expenditures, aggregate many
billions of dollars.
In November 1998, certain companies in the U.S. tobacco industry entered
into a negotiated settlement with several states which would result in
the resolution of significant litigation and regulatory issues affecting
the tobacco industry generally. The proposed settlement, while extremely
costly to the tobacco industry, would significantly reduce uncertainties
facing the industry and increase stability in business and capital
markets. Future litigation and/or legislation could adversely affect the
value, operating revenues and financial position of tobacco companies.
The Sponsor is unable to predict the outcome of litigation pending
against tobacco companies or how the current uncertainty concerning
regulatory and legislative measures will ultimately be resolved. These
and other possible developments may have a significant impact upon both
the price of such Equity Securities and the value of Units of Trusts
containing such Equity Securities.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that a Trust will retain for any
length of time its present size and composition. Although the Portfolios
are not managed, the Sponsor may instruct the Trustee to sell Equity
Securities under certain limited circumstances. Pursuant to the
Indenture and with limited exceptions, the Trustee may elect to keep or
sell any securities or other property acquired in exchange for Equity
Securities, such as those acquired in connection with a merger or other
transaction. See "Rights of Unit Holders-How May Equity Securities be
Removed from a Trust?" Equity Securities, however, will not be sold by a
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation or if the Equity Securities no
longer meet the criteria by which they were selected for a Trust.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, a Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions and the value of a Trust will
be adversely affected if trading markets for the Equity Securities are
limited or absent.
An investment in Units in a Trust should be made with an understanding
of the risks which an investment in common stocks entails. In general,
the value of your investment will decline if the financial condition of
Page 17
the issuers of the common stocks becomes impaired or if the general
condition of the relevant stock market worsens. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases of value, as market confidence in and
perceptions of the issuers change. These perceptions are based on
unpredictable factors including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, and global or regional political,
economic or banking crises. Both U.S. and foreign markets have
experienced substantial volatility and significant declines recently as
a result of certain or all of these factors. From September 30, 1997
through October 30, 1997, amid record trading volume, the S&P 500 Index,
DJIA, FT Index and Hang Seng Index declined 4.60%, 7.09%, 6.19% and
31.14%, respectively. In addition, against a backdrop of continued
uncertainty regarding the current global currency crisis and falling
commodity prices, during the period between July 31, 1998 and September
30, 1998, the S&P 500, DJIA and FT Index declined by 8.97%, 11.32% and
17.80%, respectively, while the Hang Seng Index increased .20%. The
Sponsor cannot predict the direction or scope of any of these factors.
Common stocks 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. Moreover,
common stocks do not represent an obligation of the issuer and therefore
do not offer any assurance of income or provide the degree of protection
of capital provided by debt securities.
Unit holders will be unable to dispose of any of the Equity Securities
in a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in a Trust and will vote
such stocks in accordance with the instructions of the Sponsor.
Investors should be aware of certain other considerations before making
a decision to invest in a Trust. The value of common stocks is subject
to market fluctuations for as long as the common stocks remain
outstanding, and thus, the value of the Equity Securities will fluctuate
over the life of a Trust and may be more or less than the price at which
they were deposited in such Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the initial offering period of Units of a Trust and
during the Special Redemption and Liquidation Period) and other factors.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Equity Security. In the event of a
notice that any Equity Security will not be delivered ("Failed Contract
Obligations") to a Trust, the Sponsor is authorized under the Indenture
to direct the Trustee to acquire other Equity Securities ("Replacement
Securities"). Any Replacement Security will be identical to those which
were the subject of the failed contract. The Replacement Securities must
be purchased within 20 days after delivery of the notice of a failed
contract, and the purchase price may not exceed the amount of funds
reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraph is not utilized to acquire Replacement Securities in the event
of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
a Trust, and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in such Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size of a
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in such 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.
Once all of the Equity Securities in a Trust are acquired, the Trustee
will have no power to vary the investments of such Trust, i.e., the
Page 18
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, but may dispose of
Equity Securities only under limited circumstances. See "Rights of Unit
Holders-How May Equity Securities be Removed from a Trust?"
Like other investment companies, financial and business organizations
and individuals around the world, the Trust could be adversely affected
if the computer systems used by the Sponsor, Evaluator, Portfolio
Supervisor or Trustee or other service providers to the Trust do not
properly process and calculate date-related information and data
involving dates of January 1, 2000 and thereafter. This is commonly
known as the "Year 2000 Problem." The Sponsor, Evaluator, Portfolio
Supervisor and Trustee are taking steps that they believe are reasonably
designed to address the Year 2000 Problem with respect to computer
systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Trust's other service providers.
At this time, however, there can be no assurance that these steps will
be sufficient to avoid any adverse impact to the Trust.
The Year 2000 Problem is expected to impact corporations, which may
include issuers of the Equity Securities contained in the Trust, to
varying degrees based upon various factors, including, but not limited
to, their industry sector and degree of technological sophistication.
The Sponsor is unable to predict what impact, if any, the Year 2000
Problem will have on issuers of the Equity Securities contained in the
Trust.
To the best of the Sponsor's knowledge, other than tobacco litigation
discussed under "What are Some Additional Considerations for Investors?-
Risk Factors," there is no litigation pending as of the Initial Date of
Deposit with respect to any Equity Security which might reasonably be
expected to have a material adverse effect on the Trusts. At any time
after the Initial Date of Deposit, litigation may be instituted on a
variety of grounds with respect to the Equity Securities. The Sponsor is
unable to predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse effect
on the Trusts.
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 advisors. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Equity Securities in the Trusts or the issuers of
the Equity Securities. Changing approaches to regulation, particularly
with respect to the tobacco industry, the environment or the petroleum
industry, may have a negative impact on certain companies represented in
the Trusts. There can be no assurance that future legislation,
regulation or deregulation will not have a material adverse effect on
the Trusts or will not impair the ability of the issuers of the Equity
Securities to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based on the
aggregate underlying value of the Equity Securities in a Trust, plus or
minus cash, if any, in the Income and Capital Accounts of such Trust,
plus an initial sales charge with respect to each Trust equal to the
difference between the maximum sales charge for each Trust (2.75% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.175 per Unit), divided by the number of Units of such Trust
outstanding. Commencing _________, 1999, and on the twentieth day of
each month thereafter (or if such date is not a business day, on the
preceding business day) through _________, 1999, a deferred sales charge
of $.0175 will be assessed per Unit per month. 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. For each Trust, the deferred sales charge will be paid from
funds in the Capital Account, if sufficient, or from the periodic sale
of Equity Securities. In addition, a portion of the Public Offering
Price during the initial offering period also consists of Equity
Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing a Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of each Trust portfolio, legal fees and the
initial fees and expenses of the Trustee. The organizational and
offering costs will be deducted from the assets of a Trust as of the
close of the initial offering period.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in a
Page 19
Trust, plus or minus cash, if any, in the Income and Capital Accounts of
such Trust, plus estimated organizational and offering costs, divided by
the number of Units of such Trust outstanding and reduced by the
deferred sales charge not yet paid.
The minimum purchase of each Trust is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans), except for Rollover Unit
holders who are not subject to a minimum purchase amount. The applicable
sales charge for primary market sales is reduced by a discount as
indicated below for volume purchases as a percentage of the Public
Offering Price (except for sales made pursuant to a "wrap fee account"
or similar arrangements as set forth below):
Maximum
Dollar Amount of Transaction at Sales Net Dealer
Public Offering Price* Discount Charge Concession
_____________________ ________ _______ __________
$ 50,000 but less than $100,000 0.25% 2.50% 2.00%
$ 100,000 but less than $150,000 0.50% 2.25% 1.75%
$ 150,000 but less than $500,000 0.85% 1.90% 1.40%
$ 500,000 but less than $1,000,000 1.00% 1.75% 1.25%
$1,000,000 or more 1.75% 1.00% 0.50%
<FN>
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
</FN>
Any such reduced sales charge shall be the responsibility of the selling
dealer. An investor may aggregate same day purchases of Units of the
Trusts contained in this Prospectus and units of other unit investment
trusts containing equity securities of which the Sponsor acted as
Principal Underwriter which are currently in the initial offering period
for purposes of qualifying for volume purchase discounts listed above.
The sales charge reduction for quantity purchases will not apply to
Rollover Unit holders. Unit holders of Delaware Investments Unit
Investment Trust, Series 14 may use their redemption proceeds to
purchase Units of the Trusts subject to the maximum deferred sales
charge on such Units (for such purchases of $1,000,000 or more, such
charge shall be limited to 1.00%), deferred as set forth above.
Investors who have executed a letter of intent indicating their
intention to purchase a specified dollar amount of Units of any unit
investment trust containing equity securities of which the Sponsor acts
as Principal Underwriter from any broker/dealer during the initial
offering period are eligible to receive a volume discount as set forth
in the above table based on the amount of intended aggregate purchases.
The letter of intent will specify the amount of intended aggregate
purchases which must be purchased over a 13-month period. The initial
purchase made pursuant to a letter of intent must equal at least 5% of
the amount of intended aggregate purchases. Units purchased with
rollover proceeds, reinvested dividends, redemption or termination
proceeds from other unit investment trusts or other similar transactions
will not be counted to reach the amount of intended aggregate purchases.
In the event that total purchases by an investor pursuant to a letter of
intent over the 13-month period are less than the amount specified in
the letter of intent, the selling broker/dealer shall take such action
as is necessary to receive from the investor the difference between the
amounts the investor paid for units pursuant to the letter of intent and
the amounts which the investor would have paid if the higher sales
charge had been applied. It is the responsibility of the selling
broker/dealer to notify the Sponsor of each sale made pursuant to a
letter of intent. All Units of the Trusts will be subject to the
applicable deferred sales charge per Unit regardless of volume purchase
discounts. Investors who, as a result of volume purchase discounts, are
eligible to purchase Units subject to a Maximum Sales Charge of less
than the applicable maximum deferred sales charge amount will be
credited the difference between this Maximum Sales Charge and the
deferred sales charge at the time of purchase. The reduced sales charge
structure will apply on all purchases of Units in a Trust by the same
person on any one day from any one dealer. Additionally, Units purchased
in the name of the spouse of a purchaser or in the name of a child of
such purchaser under 21 years of age will be deemed, for the purposes of
calculating the applicable sales charge, to be additional purchases by
the purchaser. The reduced sales charges will also be applicable to a
Page 20
trustee or other fiduciary purchasing securities for a single trust
estate or single fiduciary account. The purchaser must inform the dealer
of any such combined purchase prior to the sale in order to obtain the
indicated discount. In addition, unit holders may utilize their
redemption or termination proceeds received from trusts sponsored by the
Sponsor, or their termination proceeds from other unit investment trusts
having a similar strategy as the Trusts, to purchase Units of the
Trusts, subject to a deferred sales charge of $.0175 per Unit per month
to be collected on each of the remaining deferred sales charge payment
dates as provided herein. Unit holders who redeem units of trusts
sponsored by the Sponsor should note that they will be assessed the
amount of any remaining deferred sales charge on such units at the time
of redemption. Except as described below, 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, related companies of the Sponsor, dealers and their affiliates
and vendors providing services to the Sponsor may purchase Units at the
Public Offering Price, less the applicable dealer concession. The
Sponsor and certain dealers may establish a schedule by which employees,
officers and directors of such dealers (as described above) are able to
purchase Units of a Trust at the Public Offering Price less the
established schedule amount, which is designed to compensate such dealer
for activities relating to the sale of such Units (the "Employee Dealer
Concession").
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 Trusts been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information" appearing
in Part I of this Prospectus. The Public Offering Price of Units on the
date of the prospectus or during the initial offering period may vary
from the amount stated under "Summary of Essential Information" in
accordance with fluctuations in the prices of the underlying Equity
Securities. During the initial offering period, the aggregate value of
the Units of a Trust shall be determined on the basis of the aggregate
underlying value of the Equity Securities therein plus or minus cash, if
any, in the Income and Capital Accounts of such Trust. The aggregate
underlying value of the Equity Securities will be determined in the
following manner: if the Equity Securities are listed on a securities
exchange or The Nasdaq Stock Market, this evaluation is generally based
on the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current ask prices on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
The Evaluator on each business day will appraise or cause to be
appraised the value of the underlying Equity Securities in a Trust as of
the Evaluation Time and will adjust the Public Offering Price of the
Units commensurate with such valuation. Such Public Offering Price will
be effective for all orders received prior to the Evaluation Time on
each such day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day which is not a
business day, will be held until the next determination of price. The
term "business day," as used herein and under "Rights of Unit Holders-
How May Units be Redeemed?", shall exclude Saturdays, Sundays and the
following holidays as observed by the New York Stock Exchange, Inc.: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas Day.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of a Trust plus the applicable sales
charge. The calculation of the aggregate underlying value of the Equity
Securities for secondary market sales is calculated in the same manner
Page 21
as described above for sales made during the initial offering period
with the exception that bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of 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, if requested, 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, Units reacquired in the
secondary market (see "Public Offering-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 Trusts 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 2.25% of the
Public Offering Price for primary and secondary market sales. Dealers
and others will receive a concession or agency commission of $0.13 per
Unit on purchases by Rollover Unit holders or on the sale of Units
subject only to the remaining deferred sales charge. In addition,
dealers and others will receive a maximum concession of up to $0.10 per
Unit on purchases of Units resulting from the automatic reinvestment of
income or capital distributions into additional Units. Such concession
will vary based upon the month of a Trust's Initial Date of Deposit.
Notwithstanding the foregoing, dealers and other selling agents who sell
Units of a Trust during the initial offering period in the dollar
amounts set forth below will be entitled to the following additional
sales concessions as a percentage of the Public Offering Price:
Total Sales per Trust Additional Concession
______________________ ______________________
$ 40,000,000 but less than $50,000,000 0.050%
$ 50,000,000 but less than $75,000,000 0.125%
$ 75,000,000 but less than $100,000,000 0.150%
$100,000,000 or more 0.200%
No dealer concessions will be made for sales to "wrap fee accounts" or
similar arrangements, or for sales made to employees, officers and
directors of the Sponsor, dealers or vendors providing services to the
Sponsor, except for amounts paid to certain dealers pursuant to the
Employee Dealer Concession. The Sponsor reserves the right to change the
amount of the concession or agency commission from time to time. In the
event the Sponsor reacquires, or the Trustee redeems, Units from
brokers, dealers and others while a market is being maintained for such
Units, such entities agree to repay immediately to the Sponsor any such
concession or agency commission relating to such reacquired Units.
Certain commercial banks may be making Units of the Trusts available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is retained by or remitted to the banks in the
amounts indicated above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are not
permitted under such Act. In Texas and in certain other states, any
banks making Units available must be registered as broker/dealers under
state law. The Sponsor expects to recoup the foregoing payments from the
deferred sales charge payments related to such Trusts.
From time to time the Sponsor may implement programs under which dealers
of a Trust may receive nominal awards from the Sponsor for each of their
registered representatives who have sold a minimum number of UIT Units
during a specified time period. In addition, at various times the
Sponsor may implement other programs under which the sales force of a
dealer may be eligible to win other nominal awards for certain sales
efforts, or under which the Sponsor will reallow to any such dealer that
sponsors sales contests or recognition programs conforming to criteria
established by the Sponsor, or participates in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales
charges on the sales generated by such person at the public offering
Page 21
price during such programs. Also, the Sponsor in its discretion may from
time to time, pursuant to objective criteria established by the Sponsor,
pay fees to qualifying dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trusts. Such
payments are made by the Sponsor out of its own assets, and not out of
the assets of a Trust. These programs will not change the price Unit
holders pay for their Units or the amount that a Trust will receive from
the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns of a Trust and returns over
specified periods of other similar trusts sponsored by Nike Securities
L.P. or investment strategies utilized by a Trust (which may show
performance net of expenses and charges which such Trust would have
charged) with returns on other taxable investments such as the common
stocks comprising the DJIA, S&P 500 Index, the S&P Industrial Index,
Ibbotson Small-Cap Index, other investment indices, corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trusts. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of each Trust are
described more fully elsewhere in this Prospectus.
Advertisements and other sales material for the Trusts may also show the
total returns (price changes plus dividends received, divided by the
maximum public offering price) of each completed prior series and the
total and average annualized return of all series in the same quarterly
cycle, assuming the holder rolled over at the termination of each prior
series. These returns will reflect all applicable sales charges and
expenses.
Trust performance may be compared to performance on a total return basis
of the DJIA, the S&P 500 Composite Stock Price Index, or performance
data from Lipper Analytical Services, Inc. and Morningstar Publications,
Inc. or from publications such as Money, The New York Times, U.S. News
and World Report, Business Week, Forbes or Fortune. As with other
performance data, performance comparisons should not be considered
representative of a Trust's relative performance for any future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal to
2.75% of the Public Offering Price of the Units (equivalent to 2.778% of
the net amount invested, exclusive of the deferred sales charge), less
any reduced sales charge as described under "Public Offering-How is the
Public Offering Price Determined?" In addition, the Sponsor may be
considered to have realized a profit or to have sustained a loss, as the
case may be, in the amount of any difference between the cost of the
Equity Securities to a Trust (which is based on the Evaluator's
determination of the aggregate offering price of the underlying Equity
Securities of such Trust on the Initial Date of Deposit as well as on
subsequent deposits) and the cost of such Equity Securities to the
Sponsor. See Note (2) of "Schedule of Investments." During the initial
offering period, the dealers and others also may realize profits or
sustain losses as a result of fluctuations after the Date of Deposit in
the Public Offering Price received by such dealers and others upon the
sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a maximum sales charge of 2.75% for each
Trust) or redeemed. The secondary market Public Offering Price of Units
may be greater or less than the cost of such Units to the Sponsor. The
Sponsor may also realize profits or sustain losses in connection with
the creation of additional Units for the Distribution Reinvestment Option.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to maintain a market for the Units and
continuously offer to purchase Units at prices, subject to change at any
time, based upon the aggregate underlying value of the Equity Securities
in a Trust plus or minus cash, if any, in the Income and Capital
Accounts of such Trust. The aggregate underlying value of the Equity
Securities is computed on the basis of the bid side value of the
Page 23
relevant currency exchange rate (offer side during the initial offering
period) expressed in U.S. dollars. 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 OR HER
UNITS, HE OR SHE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET
PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Units
subject to a deferred sales charge which are sold or tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of sale or redemption.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable or may be redeemed by presentation and surrender to the
Trustee properly endorsed or accompanied by a written instrument or
instruments of transfer. A Unit holder must sign exactly as his or her
name appears on the face of the certificate with signature guaranteed by
a participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority.
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 their respective Trust; the number of Units issued or
transferred; the name, address and taxpayer identification number, if
any, of the new registered owner; a notation of any liens and
restrictions of the issuer and any adverse claims to which such Units
are or may be subject or a statement that there are no such liens,
restrictions or adverse claims; and the date the transfer was
registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee and
no certificate will be issued upon the transfer unless requested by the
Unit holder. A Unit holder may at any time request the Trustee to issue
certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the Equity Securities in a Trust on or about the Income Distribution
Dates to Unit holders of record on the preceding Income Distribution
Record Date. See "Summary of Essential Information." Persons who
purchase Units will commence receiving distributions only after such
person becomes a Record Owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling
broker/dealer. Proceeds received on the sale of any Equity Securities in
a Trust, to the extent not used to meet redemptions of Units, pay the
deferred sales charge or pay expenses, will, however, be distributed on
Page 24
the last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals at
least $1.00 per 100 Units. The Trustee is not required to pay interest
on funds held in the Capital Account of a Trust (but may itself earn
interest thereon and therefore benefit from the use of such funds).
Notwithstanding, distributions of funds in the Capital Account, if any,
will be made 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 of a Trust and that amounts in the Capital Account
will be sufficient to cover the cost of the deferred sales charge. To
the extent that amounts in the Capital Account are insufficient to
satisfy the then current deferred sales charge obligation, Equity
Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made
to an account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
a Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable only
when filing a tax return. Under normal circumstances the Trustee obtains
the Unit holder's tax identification number from the selling broker.
However, a Unit holder should examine his or her statements from the
Trustee to make sure that the Trustee has been provided a certified tax
identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one should be provided as soon as possible.
Within a reasonable time after a Trust is terminated, each Unit holder
who is not a Rollover Unit holder will, upon surrender of his or her
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 under "Other Information-How
May the Indenture be Amended or Terminated?" and (ii) a pro rata share
of any other assets of such Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.,
return of capital, etc.) are credited to the Capital Account of a Trust.
The Trustee may establish reserves (the "Reserve Account") within a
Trust for state and local taxes, if any, and any governmental charges
payable out of such Trust.
Distribution Reinvestment Option. Any Unit holder may elect to have each
distribution of income or capital on his or her Units, other than the
final liquidating distribution in connection with the termination of a
Trust, automatically reinvested in additional Units of such Trust. Each
person who purchases Units of a Trust may elect to become a participant
in the Distribution Reinvestment Option by notifying the Trustee of
their election. The Distribution Reinvestment Option may not be
available in all states. In order to enable a Unit holder to participate
in the Distribution Reinvestment Option with respect to a particular
distribution on his or her Units, the card must be received by the
Trustee within 10 days prior to the Record Date for such distribution.
Each subsequent distribution of income or capital on the participant's
Units will be automatically applied by the Trustee to purchase
additional Units of a Trust. The remaining deferred sales charge
payments will be assessed on Units acquired pursuant to the
Distributions Reinvestment Option. IT SHOULD BE REMEMBERED THAT EVEN IF
DISTRIBUTIONS ARE REINVESTED, THEY ARE STILL TREATED AS DISTRIBUTIONS
FOR INCOME TAX PURPOSES.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of a Trust the following information in reasonable detail: (1) a summary
of transactions in such Trust for such year; (2) any Equity Securities
sold during the year and the Equity Securities held at the end of such
year by such Trust; (3) the redemption price per Unit based upon a
computation thereof on the 31st day of December of such year (or the
last business day prior thereto); and (4) amounts of income and capital
distributed during such year.
Page 25
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Equity Securities in a Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his or her 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 has been collected will be assessed the amount of
the remaining deferred sales charge at the time of redemption.
Any Unit holder tendering 1,000 Units or more of a Trust for redemption
may request by written notice submitted at the time of tender from the
Trustee, in lieu of a cash redemption, a distribution of shares of
Equity Securities in an amount and value of Equity Securities per Unit
equal to the Redemption Price Per Unit, as determined as of the
evaluation next following tender. However, no In-Kind Distribution
requests submitted during the nine business days prior to a Trust's
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 or her pro rata number of whole
shares of each of the Equity Securities comprising a portfolio and cash
from the Capital Account equal to the fractional shares to which the
tendering Unit holder is entitled. The Trustee may adjust the number of
shares of any issue of Equity Securities included in a Unit holder's In-
Kind Distribution to facilitate the distribution of whole shares, such
adjustment to be made on the basis of the value of Equity Securities on
the date of tender. If funds in the Capital Account are insufficient to
cover the required cash distribution to the tendering Unit holder, the
Trustee may sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. For further information regarding this withholding, see
"Rights of Unit Holders-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 a 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 a Trust.
The Trustee is empowered to sell Equity Securities of a Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of a Trust will be reduced.
Such sales may be required at a time when Equity Securities would not
otherwise be sold and might result in lower prices than might otherwise
be realized.
The Redemption Price per Unit during the secondary market will be
determined on the basis of the aggregate underlying value of the Equity
Securities in a Trust plus or minus cash, if any, in the Income and
Capital Accounts of such Trust. The Redemption Price per Unit is the pro
rata share of each Unit determined by the Trustee by adding: (1) the
Page 26
cash on hand in a Trust other than cash deposited in the Trust to
purchase Equity Securities not applied to the purchase of such Equity
Securities; (2) the aggregate value of the Equity Securities held in
such Trust, as determined by the Evaluator on the basis of the aggregate
underlying value of the Equity Securities in such Trust next computed;
and (3) dividends receivable on the Equity Securities trading ex-
dividend as of the date of computation; and deducting therefrom: (1)
amounts representing any applicable taxes or governmental charges
payable out of such Trust; (2) any amounts owing to the Trustee for its
advances; (3) an amount representing estimated accrued expenses of such
Trust, including but not limited to fees and expenses of the Trustee
(including legal fees), the Evaluator and supervisory fees, if any; (4)
cash held for distribution to Unit holders of record of such Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by such Trust; and finally dividing the results of
such computation by the number of Units of such Trust outstanding as of
the date thereof. The redemption price per Unit will be assessed the
amount, if any, of the remaining deferred sales charge at the time of
redemption. During the initial offering period, the Redemption Price per
Unit will include estimated organizational and offering costs as set
forth under "Summary of Essential Information" for each Trust.
The aggregate value of the Equity Securities for purposes of the
Redemption Price during the secondary market and the secondary market
Public Offering Price will be determined in the following manner: if the
Equity Securities are listed on a securities exchange or The Nasdaq
Stock Market, this evaluation is generally based on the closing sale
prices on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is
no closing sale price on that exchange or system, at the closing bid
prices. If the Equity Securities are not so listed or, if so listed and
the principal market therefore is other than on a securities exchange,
the evaluation shall generally be based on the current bid prices on the
over-the-counter market (unless these prices are inappropriate as a
basis for evaluation). If current bid prices are unavailable, the
evaluation is generally determined (a) on the basis of current bid
prices for comparable securities, (b) by appraising the value of the
Equity Securities on the bid side of the market or (c) by any
combination of the above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will be made of
all Units of the Trusts held by any Unit holder (a "Rollover Unit
holder") who affirmatively notifies the Trustee in writing that he or
she desires to participate as a Rollover Unit holder by the Rollover
Notification Date specified in the "Summary of Essential Information."
The Sponsor intends to create a separate series of trusts (the "New
Trusts") in conjunction with the termination of the Trusts.
All Units of Rollover Unit holders will be redeemed In-Kind during the
Special Redemption and Liquidation Period, or such latter date as
permitted by the Trustee, and the underlying Equity Securities will be
distributed to the Distribution Agent on behalf of the Rollover Unit
holders. During the Special Redemption and Liquidation Period (as set
forth in "Summary of Essential Information" in Part I of this
Prospectus), 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 may engage the Sponsor, as its agent, or other
brokers to sell the distributed Equity Securities. The Equity Securities
will be sold as quickly as is practicable during the Special Redemption
and Liquidation Period, subject to the Sponsor's sensitivity that
certain Equity Securities have different settlement dates and that the
Page 27
concentrated sale of large volumes of Equity Securities may affect
market prices in a manner adverse to the interests of investors. The
Sponsor does not anticipate that the period will be longer than five
days, 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.
The Rollover Unit holders' proceeds will be invested in a New Trust or a
trust with a similar investment strategy (as selected by the Unit
holder), if then registered and being offered. The proceeds of
redemption will be used to buy New Trust units once all the proceeds
become available; accordingly, proceeds may be uninvested for up to
several days. Any Rollover Unit holder may thus be redeemed out of a
Trust and become a holder of an entirely different trust, a New Trust,
with a different portfolio of Equity Securities. 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 a New Trust, at the public offering price, including
the applicable maximum sales charge per Unit (which for Rollover Unit
holders is currently expected to be $.175 per unit for the New Series of
a Trust, all of which will be deferred as provided herein).
The Sponsor intends to create New Trust units as quickly as possible,
depending upon the availability and reasonably favorable prices of the
Equity Securities included in a New Trust portfolio, and it is intended
that Rollover Unit holders will be given first priority to purchase the
New Trust units. Rollover Unit holders may also elect to have their
proceeds invested in a trust with a similar investment strategy, if such
trust is then registered in the Unit holder's state of residence and
being offered. There can be no assurance, however, as to the exact
timing of the creation of the New Trust units or the aggregate number of
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 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 within
a reasonable time after such occurrence. 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.
The process of redemption, liquidation, and investment in a New Trust is
intended to allow for the fact that the portfolios selected by the
Sponsor are chosen on the basis of growth and income potential only for
a limited time period, 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 as each Trust terminates.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in a New Trust,
no cash would be distributed at that time to pay any taxes. Included in
the cash for the Special Redemption and Liquidation will be an amount of
cash attributable to a semi-annual distribution of dividend income;
accordingly, Rollover Unit holders also will not have cash from this
source distributed to pay any taxes. See "What is the Federal Tax Status
of Unit Holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a period as they can without
materially adversely affecting the price of the Equity Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated ("Remaining Unit holders")
will not realize capital gains or losses due to a Special Redemption and
Liquidation, and will not be charged any additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the New Trusts or any subsequent series of the Trusts, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before a Special
Redemption and Liquidation. All Unit holders will then be remaining Unit
holders, with rights to ordinary redemption as before. See "Rights of
Unit Holders-How May Units be Redeemed?" The Sponsor may modify the
terms of the New Trusts or any subsequent series of the Trusts. The
Sponsor may also modify, suspend or terminate the Rollover Option upon
notice to the Unit holders of such amendment at least 60 days prior to
the effective date of such amendment.
Page 28
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
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 or she would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Equity Securities be Removed from a Trust?
The portfolios of the Trusts are not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to a Trust.
Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Contract Obligations, the
acquisition by a Trust of any securities or other property other than
the Equity Securities is prohibited. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell any securities or other
property acquired in exchange for Equity Securities such as those
acquired in connection with a merger or other transaction. If offered
such new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by a Trust, they may be accepted for deposit in a
Trust and either sold by the Trustee or held in a Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). Proceeds from the sale of Equity Securities by the Trustee
are credited to the Capital Account of a Trust for distribution to Unit
holders or to meet redemptions. The Trustee may, from time to time,
retain and pay compensation to the Sponsor (or an affiliate of the
Sponsor) to act as agent for the Trusts with respect to selling Equity
Securities from the Trusts. 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 a Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold. 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 Trusts' portfolio transactions, or when
acting as agent for the Trusts in acquiring or selling Equity Securities
on behalf of the Trusts.
Page 29
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, FT Series (formerly known as The First Trust Special Situations
Trust), The First Trust Insured Corporate Trust, The First Trust of
Insured Municipal Bonds, The First Trust GNMA, Templeton Growth and
Treasury Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and The Advantage Growth and Treasury Securities Trust. First Trust
introduced the first insured unit investment trust in 1974 and to date
more than $20 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, 1997, the total
partners' capital of Nike Securities L.P. was $11,724,071 (audited).
This paragraph relates only to the Sponsor and not to the Trusts or to
any series thereof or to any other dealer. 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 Trusts
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
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.
Page 30
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is 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.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." Each Trust may be liquidated at any time by consent of
100% of the Unit holders of a Trust or by the Trustee when the value of
the Equity Securities owned by such Trust as shown by any evaluation, is
less than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in such Trust during the initial offering period,
or in the event that Units of such Trust not yet sold aggregating more
than 60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor. If a Trust is liquidated because of
the redemption of unsold Units of such Trust by underwriters, the
Sponsor will refund to each purchaser of Units of such Trust the entire
sales charge paid by such purchaser; however, liquidation of a Trust in
other circumstances will result in all remaining unpaid deferred sales
charges being deducted from termination proceeds paid to Unit holders.
In the event of termination, written notice thereof will be sent by the
Trustee to all Unit holders of a Trust. Within a reasonable period after
termination, the Trustee will follow the procedures set forth under
"Rights of Unit Holders-How are Income and Capital Distributed?" Also,
because of the Special Redemption and Liquidation in a New Trust, there
is a possibility that a Trust may be reduced below the Discretionary
Liquidation Amount and that a Trust could therefore be terminated at
that time before the Mandatory Termination Date of the Fund.
Commencing 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 a Trust. The
Sponsor will determine the manner, timing and execution of the sale of
Page 31
the Equity Securities. Written notice of any termination of a Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his or her address appearing on the registration books of such
Trust maintained by the Trustee. Not less than 30 days prior to the
Mandatory Termination Date of the Trusts 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 1,000 Units of a Trust,
rather than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee of
Equity Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least ten business days
prior to the Mandatory Termination Date of a Trust. A Unit holder may,
of course, at any time after the Equity Securities are distributed, sell
all or a portion of the shares. Unit holders not electing a distribution
of shares of Equity Securities and who do not elect the Rollover Option
will receive a cash distribution from the sale of the remaining Equity
Securities within a reasonable time after a Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from
the funds of a Trust any accrued costs, expenses, advances or
indemnities provided by the Indenture, including estimated compensation
of the Trustee and costs of liquidation and any amounts required as a
reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Equity Securities in a Trust upon
termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. 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 or her pro rata share of the balance of the Income and Capital
Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trusts.
Experts
The statements of net assets, including the schedules of investments, of
the Trusts at the opening of business on the Initial Date of Deposit
appearing in Part I of this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing in Part I of this Prospectus and in the
Registration Statement, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and
auditing.
Supplemental Information
Upon written or telephonic request to the Trustee, investors will
receive at no cost to the investor supplemental information about this
Series, which has been filed with the Securities and Exchange Commission
and is hereby incorporated by reference. The supplemental information
includes more specific risk information concerning the Trusts.
Page 32
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 303
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 303, comprised of Illinois Big Ten
Equity Trust, Series 15; Minnesota Big Ten Equity Trust, Series 16;
Missouri Big Ten Equity Trust, Series 15 and Pacific Ten Equity Trust,
Series 11 as of the opening of business on ____, 1998. These statements
of net assets are the responsibility of the Trusts' Sponsor. Our
responsibility is to express an opinion on these statements of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letter of credit allocated among the Trusts on ____, 1998. An audit also
includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall
presentation of the statements of net assets. We believe that our audit
of the statements of net assets provides a reasonable basis for our
opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 303,
comprised of Illinois Big Ten Equity Trust, Series 15; Minnesota Big Ten
Equity Trust, Series 16; Missouri Big Ten Equity Trust, Series 15 and
Pacific Ten Equity Trust, Series 11 at the opening of business on ____,
1998 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
____, 1998
Page 33
Statements of Net Assets
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Illinois Big Ten Minnesota Big Ten
Equity Trust Equity Trust
Series 15 Series 16
________________ __________________
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ $
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) ( ) ( )
Less estimated organizational and offering costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $________ issued by The
Chase Manhattan Bank, which will be allocated among each of the four
Trusts in FT 303, has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) A portion of the Public Offering Price consists of Equity Securities
in an amount sufficient to pay for all or a portion of the costs
incurred in establishing the Trusts. These costs have been estimated at
$ and $ per Unit for the Illinois Trust and Minnesota Trust,
respectively, based upon the expected number of Units to be created of
each respective Trust. A distribution will be made at the end of the
initial offering period to an account maintained by the Trustee from
which the organizational and offering cost obligation of the investors
to the Sponsor will be satisfied. To the extent the number of Units
issued is larger or smaller than the estimate, the actual distribution
per Unit at the end of the initial offering period may differ from that
set forth above.
(4) Represents the amount of mandatory distributions from a Trust ($
per Unit), payable to the Sponsor in ten equal monthly installments
beginning on ____, 1999 and on the twentieth day of each month
thereafter (or if such date is not a business day, on the preceding
business day) through ____, 1999. If Units are redeemed prior to ____,
1999 the remaining amount of the deferred sales charge applicable to
such Units will be payable at the time of redemption.
(5) The aggregate cost to investors in a Trust includes a maximum total
sales charge computed at the rate of ___% of the Public Offering Price
(equivalent to ___% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering-How is the Public Offering Price Determined?"
</FN>
Page 34
Statements of Net Assets
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Missouri Big Ten Pacific Ten
Equity Trust Equity Trust
Series 15 Series 11
________________ ____________
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ $
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) ( ) ( )
Less estimated organizational and offering costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $________ issued by The
Chase Manhattan Bank, which will be allocated among each of the four
Trusts in FT 303, has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) A portion of the Public Offering Price consists of Equity Securities
in an amount sufficient to pay for all or a portion of the costs
incurred in establishing the Trusts. These costs have been estimated at
$ and $ per Unit for the Missouri Trust and Pacific Trust,
respectively, based upon the expected number of Units to be created for
each respective Trust. A distribution will be made at the end of the
initial offering period to an account maintained by the Trustee from
which the organizational and offering cost obligation of the investors
to the Sponsor will be satisfied. To the extent the number of Units
issued is larger or smaller than the estimate, the actual distribution
per Unit at the end of the initial offering period may differ from that
set forth above.
(4) Represents the amount of mandatory distributions from a Trust ($
per Unit), payable to the Sponsor in ten equal monthly installments
beginning on ____, 1999 and on the twentieth day of each month
thereafter (or if such date is not a business day, on the preceding
business day) through ____, 1999. If Units are redeemed prior to ____,
1999 the remaining amount of the deferred sales charge applicable to
such Units will be payable at the time of redemption.
(5) The aggregate cost to investors in a Trust includes a maximum total
sales charge computed at the rate of ___% of the Public Offering Price
(equivalent to ___% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering-How is the Public Offering Price Determined?"
</FN>
Page 35
Schedule of Investments
ILLINOIS BIG TEN EQUITY TRUST, SERIES 15
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Approximate
Percentage
Number of Aggregate Market Cost of Equity Current
of Ticker Symbol and Name of Offering Value per Securities to Dividend
Shares Issuer of Equity Securities (1) Price (4) Share the Trust (2) Yield (3)
______ _______________________________ ____________ _________ _____________ _________
BC Brunswick Corporation % $ $ %
FSS Federal Signal Corporation % %
AJG Arthur J. Gallagher & Company % %
HLR Hollinger International, Inc. (Class A) % %
NLC Nalco Chemical Company % %
GAS Nicor, Inc. % %
PGL People's Energy Corporation % %
UNIT Unitrin, Inc. % %
WCS Wallace Computer Services, Inc. % %
WGOV Woodward Governor Company % %
_____ _________
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
purchase contracts for the Equity Securities were entered into by the
Sponsor on ____, 1998. The Trust has a mandatory termination date of
____, 1999.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the listed
Equity Securities and the ask prices of over-the-counter traded Equity
Securities on ____, 1999, the business day prior to the Initial Date of
Deposit). The valuation of the Equity Securities has been determined by
the Evaluator, an affiliate of the Sponsor. The aggregate underlying
value of the Equity Securities on the Initial Date of Deposit was $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend declared
on that Equity Security and dividing the result by that Equity
Security's closing sale price on the business day prior to the Initial
Date of Deposit.
(4) The portfolio may contain additional Equity Securities each of which
will not exceed approximately __% of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
page 36
Schedule of Investments
MINNESOTA BIG TEN EQUITY TRUST, SERIES 16
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Approximate
Percentage
Number of Aggregate Market Cost of Equity Current
of Ticker Symbol and Name of Offering Value per Securities to Dividend
Shares Issuer of Equity Securities (1) Price (4) Share the Trust (2) Yield (3)
______ _______________________________ ____________ _________ ___________ _________
ACAT Artic Cat, Inc. % $ $ %
BMS Bemis Company, Inc. % %
DRC Dain Rauscher Corporation % %
DLX Deluxe Corporation % %
GIS General Mills, Inc. % %
IMC International Multifoods Corporation % %
JOS Jostens, Inc. % %
MMM Minnesota Mining & Manufacturing
Company % %
SPC St. Paul Companies, Inc. % %
TCB TCF Financial Corporation % %
______ ________
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
purchase contracts for the Equity Securities were entered into by the
Sponsor on ____, 1998. The Trust has a mandatory termination date of
____, 1999.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the listed
Equity Securities and the ask prices of over-the-counter traded Equity
Securities on ____, 1999, the business day prior to the Initial Date of
Deposit). The valuation of the Equity Securities has been determined by
the Evaluator, an affiliate of the Sponsor. The aggregate underlying
value of the Equity Securities on the Initial Date of Deposit was $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend declared
on that Equity Security and dividing the result by that Equity
Security's closing sale price on the business day prior to the Initial
Date of Deposit.
(4) The portfolio may contain additional Equity Securities each of which
will not exceed approximately ___% of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
Page 37
Schedule of Investments
MISSOURI BIG TEN EQUITY TRUST, SERIES 15
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Approximate Cost of
Number Percentage Market Equity Current
of Ticker Symbol and of Aggregate Value per Securities Dividend
Shares Name of Issuer of Equity Securities (1) Offering Price (4) Share to Trust (2) Yield (3)
______ _______________________________________ _______________ _______ ____________ _________
BUD Anheuser-Busch Companies, Inc. % $ $ %
ACI Arch Coal, Inc. %
BG Brown Group Incorporated %
HRB H&R Block Incorporated %
KCLI Kansas City Life Insurance Company %
KWD Kellwood Company %
LG Laclede Gas Company %
MKG Mallinckrodt Incorporated %
MAY May Department Stores Company %
MTL Mercantile Bancorporation %
______ ________
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
purchase contracts for the Equity Securities were entered into by the
Sponsor on ____, 1999. The Trust has a mandatory termination date of
____, 1999.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the listed
Equity Securities and the ask prices of over-the-counter traded Equity
Securities on ____, 1999, the business day preceding the Initial Date of
Deposit). The valuation of the Equity Securities has been determined by
the Evaluator, an affiliate of the Sponsor. The aggregate underlying
value of the Equity Securities on the Initial Date of Deposit was $ .
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend declared
on that Equity Security and dividing the result by that Equity
Security's closing sale price on the business day prior to the Initial
Date of Deposit.
(4) The portfolio may contain additional Equity Securities each of which
will not exceed approximately ___% of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
Page 38
Schedule of Investments
PACIFIC TEN EQUITY TRUST, SERIES 11
FT 303
At the Opening of Business on the
Initial Date of Deposit-____, 1998
Approximate Cost of
Number Percentage Market Equity Market
of Ticker Symbol and of Aggregate Value per Securities Capital-
Shares Name of Issuer of Equity Securities (1) Offering Price(3) Share to Trust (2) ization (4)
______ _______________________________________ ______________ ________ ____________ ___________
ATI AirTouch Communications, Inc. % $ $
BA Boeing Company %
CHV Chevron Corporation %
Page 1
CSCO Cisco Systems, Inc. %
DIS Walt Disney Company %
HWP Hewlett-Packard Company %
INTC Intel Corporation %
MSFT Microsoft Corporation %
ORCL Oracle Corporation %
WFC Wells Fargo & Company %
______ ________
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
purchase contracts for the Equity Securities were entered into by the
Sponsor on ____, 1999. The Trust has a mandatory termination date of
____, 1999.
(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 ____, 1999, the business day preceding the Initial Date of
Deposit). The valuation of the Equity Securities has been determined by
the Evaluator, an affiliate of the Sponsor. The aggregate underlying
value of the Equity Securities on the Initial Date of Deposit was $ .
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately ___% of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
(4) Market Capitalization is in millions of dollars and is based on the
market value as of the close of trading on ________, 1998.
</FN>
Page 39
CONTENTS:
Summary of Essential Information:
Illinois Big Ten Equity Trust, Series 15 4
Minnesota Big Ten Equity Trust, Series 16 4
Missouri Big Ten Equity Trust, Series 15 5
Pacific Ten Equity Trust, Series 11 5
FT 303:
What is the FT Series? 8
What are the Expenses and Charges? 9
What is the Federal Tax Status of Unit Holders? 10
Are Investments in the Trusts Eligible for
Retirement Plans? 13
Portfolio:
What are the Equity Securities? 14
Hypothetical Performance Information 15
Annualized Performance Information 15
What are Some Additional Considerations for
Investors? 16
Risk Factors 16
Public Offering:
How is the Public Offering Price Determined? 19
How are Units Distributed? 22
What are the Sponsor's Profits? 23
Will There be a Secondary Market? 23
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 24
How are Income and Capital Distributed? 24
What Reports will Unit Holders Receive? 25
How May Units be Redeemed? 26
Special Redemption, Liquidation and
Investment in a New Trust 27
How May Units be Purchased by the Sponsor? 29
How May Equity Securities be Removed from a Trust? 29
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 30
Who is the Trustee? 30
Limitations on Liabilities of Sponsor and Trustee 30
Who is the Evaluator? 31
Other Information:
How May the Indenture be Amended or Terminated? 31
Legal Opinions 32
Experts 32
Supplemental Information 32
Report of Independent Auditors 33
Statements of Net Assets:
Illinois Big Ten Equity Trust, Series 15 34
Minnesota Big Ten Equity Trust, Series 16 34
Missouri Big Ten Equity Trust, Series 15 35
Pacific Ten Equity Trust, Series 11 35
Schedules of Investments:
Illinois Big Ten Equity Trust, Series 15 36
Minnesota Big Ten Equity Trust, Series 16 37
Missouri Big Ten Equity Trust, Series 15 38
Pacific Ten Equity Trust, Series 11 39
When Units of the Trusts are no longer available, or for investors who
will reinvest into subsequent series of the Trusts, 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 JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
ILLINOIS BIG TEN EQUITY TRUST, SERIES 15
MINNESOTA BIG TEN EQUITY TRUST, SERIES 16
MISSOURI BIG TEN EQUITY TRUST, SERIES 15
PACIFIC TEN EQUITY TRUST, SERIES 11
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
____, 1998
Page 40
First Trust (registered trademark)
ILLINOIS TRUST SERIES
MINNESOTA TRUST SERIES
MISSOURI TRUST SERIES
PACIFIC TRUST SERIES
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in The FT Series not found in the prospectuses for the Trusts.
This Information Supplement is not a prospectus and does not include all
of the information that a prospective investor should consider before
investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("Prospectus"). Copies of the Prospectus can be
obtained by calling or writing the Trustee at the telephone number and
address indicated in Part II of the Prospectus. The Information
Supplement has been created to supplement information contained in the
Prospectus.
This Information Supplement is dated ____, 1998. Capitalized terms have
been defined in the Prospectus.
Table of Contents
Risk Factors
Equity Securities 1
Concentrations
Banks and Thrifts 2
Petroleum Refining Companies 3
Real Estate Companies 4
Small-Cap Companies 6
Portfolios
Equity Securities Selected for the Illinois Trust 6
Equity Securities Selected for the Minnesota Trust 7
Equity Securities Selected for the Missouri Trust 8
Equity Securities Selected for the Pacific Trust 8
Risk Factors
Equity Securities. 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 relevant stock market
may worsen, and the value of the Equity Securities and therefore the
value of the Units may decline. Common stocks are especially susceptible
to general stock market movements and to volatile increases and
decreases of value, as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors,
including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking
crises. Both U.S. and foreign markets have experienced substantial
volatility and significant declines recently as a result of certain or
all of these factors. From September 30, 1997 through October 30, 1997,
amid record trading volume, the S&P 500 Index, DJIA, FT Index and Hang
Seng Index declined 4.60%, 7.09%, 6.19% and 31.14%, respectively. In
addition, against a backdrop of continued uncertainty regarding the
current global currency crisis and falling commodity prices, during the
period between July 31, 1998 and September 30, 1998, the S&P 500, DJIA
Page 1
and FT Index declined by 8.97%, 11.32% and 17.80%, respectively, while
the Hang Seng Index increased .20%. Shareholders of common stocks have
rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trusts have a right to receive dividends
only when and if, and in the amounts, declared by the issuer's board of
directors and have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer
have been paid or provided 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. 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.
Concentrations
Banks and Thrifts. Certain Trusts may be considered to be concentrated
in common stocks of financial institutions. Banks, thrifts and their
holding companies are especially subject to the adverse effects of
economic recession, volatile interest rates, portfolio concentrations in
geographic markets and in commercial and residential real estate loans,
and competition from new entrants in their fields of business. Banks and
thrifts are highly dependent on net interest margin. Recently, bank
profits have come under pressure as net interest margins have
contracted, but volume gains have been strong in both commercial and
consumer products. There is no certainty that such conditions will
continue. Bank and thrift institutions had received significant consumer
mortgage fee income as a result of activity in mortgage and refinance
markets. As initial home purchasing and refinancing activity subsided,
this income diminished. Economic conditions in the real estate markets,
which have been weak in the past, can have a substantial effect upon
banks and thrifts because they generally have a portion of their assets
invested in loans secured by real estate. Banks, thrifts and their
holding companies are subject to extensive federal regulation and, when
such institutions are state-chartered, to state regulation as well. Such
regulations impose strict capital requirements and limitations on the
nature and extent of business activities that banks and thrifts may
pursue. Furthermore, bank regulators have a wide range of discretion in
connection with their supervisory and enforcement authority and may
substantially restrict the permissible activities of a particular
institution if deemed to pose significant risks to the soundness of such
institution or the safety of the federal deposit insurance fund.
Regulatory actions, such as increases in the minimum capital
requirements applicable to banks and thrifts and increases in deposit
insurance premiums required to be paid by banks and thrifts to the
Federal Deposit Insurance Corporation ("FDIC"), can negatively impact
earnings and the ability of a company to pay dividends. Neither federal
insurance of deposits nor governmental regulations, however, insures the
solvency or profitability of banks or their holding companies, or
insures against any risk of investment in the securities issued by such
institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Equity Securities in the Trust's portfolio cannot be
predicted with certainty. Periodic efforts by recent Administrations to
introduce legislation broadening the ability of banks to compete with
new products have not been successful, but if enacted could lead to more
failures as a result of increased competition and added risks. Failure
to enact such legislation, on the other hand, may lead to declining
earnings and an inability to compete with unregulated financial
institutions. Efforts to expand the ability of federal thrifts to branch
on an interstate basis have been initially successful through
promulgation of regulations, and legislation to liberalize interstate
banking has recently been signed into law. Under the legislation, banks
will be able to purchase or establish subsidiary banks in any state, one
year after the legislation's enactment. Starting in mid-1997, banks were
allowed to turn existing banks into branches. Consolidation is likely to
continue. The Securities and Exchange Commission and the Financial
Accounting Standards Board require the expanded use of market value
accounting by banks and have imposed rules requiring market accounting
for investment securities held in trading accounts or available for
sale. Adoption of additional such rules may result in increased
volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. In late 1993 the
United States Treasury Department proposed a restructuring of the banks
regulatory agencies which, if implemented, may adversely affect certain
of the Equity Securities in the Trust's portfolio. Additional
legislative and regulatory changes may be forthcoming. For example, the
bank regulatory authorities have proposed substantial changes to the
Page 2
Community Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such
changes would have on the Equity Securities in the Trust's portfolio. In
addition, from time to time the deposit insurance system is reviewed by
Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability as investment opportunities available to bank institutions
become more limited and as consumers look for savings vehicles other
than bank deposits. Banks and thrifts face significant competition from
other financial institutions such as mutual funds, credit unions,
mortgage banking companies and insurance companies, and increased
competition may result from legislative broadening of regional and
national interstate banking powers as has been recently enacted. Among
other benefits, the legislation allows banks and bank holding companies
to acquire across previously prohibited state lines and to consolidate
their various bank subsidiaries into one unit. The Sponsor makes no
prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such actions
might have on the Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Equity Securities or whether such approvals, if necessary,
will be obtained.
Petroleum Refining Companies. Certain Trusts may be considered to be
concentrated in common stocks of companies engaged in refining and
marketing oil and related products. According to the U.S. Department of
Commerce, the factors which will most likely shape the industry include
the price and availability of oil from the Middle East, changes in
United States environmental policies and the continued decline in U.S.
production of crude oil. Possible effects of these factors may be
increased U.S. and world dependence on oil from the Organization of
Petroleum Exporting Countries ("OPEC") and highly uncertain and
potentially more volatile oil prices. Factors which the Sponsor believes
may increase the profitability of oil and petroleum operations include
increasing demand for oil and petroleum products as a result of the
Page 3
continued increases in annual miles driven and the improvement in
refinery operating margins caused by increases in average domestic
refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are
the two principal requirements for stable crude oil markets. Without
excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
contributes to market uncertainty. The likely restoration of a large
portion of Kuwait and Iraq's production and export capacity over the
next few years could lead to such a development in the absence of
substantial growth in world oil demand. Formerly, OPEC members attempted
to exercise control over production levels in each country through a
system of mandatory production quotas. Because of the crisis in the
Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be
curtailed on at least one occasion as a result of weak prices, even in
the absence of supplies from Kuwait and Iraq. The pressure to deviate
from mandatory quotas, if they are reimposed, is likely to be
substantial and could lead to a weakening of prices. In the longer term,
additional capacity and production will be required to accommodate the
expected large increases in world oil demand and to compensate for
expected sharp drops in U.S. crude oil production and exports from the
Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have
the petroleum reserves that will allow the required increase in
production capacity to be attained. Given the large-scale financing that
is required, the prospect that such expansion will occur soon enough to
meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers significantly to affect production, the concomitant volatility
of crude oil prices and increasing public and governmental concern over
air emissions, waste product disposal, fuel quality and the
environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Trusts.
Real Estate Companies. Certain Portfolios are considered to be
concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sales and other related
activities. Investment in securities issued by these real estate
companies should be made with an understanding of the many factors which
Page 4
may have an adverse impact on the credit quality of the particular
company or industry. Generally, these include economic recession, the
cyclical nature of real estate markets, competitive overbuilding,
unusually adverse weather conditions, changing demographics, changes in
governmental regulations (including tax laws and environmental,
building, zoning and sales regulations), increases in real estate taxes
or costs of material and labor, the inability to secure performance
guarantees or insurance as required, the unavailability of investment
capital and the inability to obtain construction financing or mortgage
loans at rates acceptable to builders and purchasers of real estate.
Additional risks include an inability to reduce expenditures associated
with a property (such as mortgage payments and property taxes) when
rental revenue declines, and possible loss upon foreclosure of mortgaged
properties if mortgage payments are not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
REITs are differentiated by the types of real estate properties held and
the actual geographic location of properties and fall into two major
categories: equity REITs emphasize direct property investment, holding
their invested assets primarily in the ownership of real estate or other
equity interests, while mortgage REITs concentrate on real estate
financing, holding their assets primarily in mortgages secured by real
estate. As of the Initial Date of Deposit, the Trust contains only
equity REITs. REITs obtain capital funds for investment in underlying
real estate assets by selling debt or equity securities in the public or
institutional capital markets or by bank borrowing. Thus, the returns on
common equities of the REITs in which the Trust invests will be
significantly affected by changes in costs of capital and, particularly
in the case of highly "leveraged" REITs (i.e., those with large amounts
of borrowings outstanding), by changes in the level of interest rates.
The objective of an equity REIT is to purchase income-producing real
estate properties in order to generate high levels of cash flow from
rental income and a gradual asset appreciation, and they typically
invest in properties such as office, retail, industrial, hotel and
apartment buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
The underlying value of the Securities and the Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in the Trust.
The value of the REITs may at times be particularly sensitive to
devaluation in the event of rising interest rates. Equity REITs are less
likely to be affected by interest rate fluctuations than mortgage REITs
and the nature of the underlying assets of an equity REIT may be
considered more tangible than that of a mortgage REIT. Equity REITs are
more likely to be adversely affected by changes in the value of the
underlying property it owns than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
Page 5
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in the Trust may
be adversely affected by increases or decreases in property tax rates
and assessments or reassessments of the properties underlying the REITs
by taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary. In an effort to reduce the impact of the
risks discussed above, the Underwriter has selected REITs that are
diversified among various real estate sectors and geographic locations.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in the Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in the Trust.
Small-Cap Companies. While historically small-cap company stocks have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap companies may have
limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
these companies may distribute, sell or produce products which have
recently been brought to market and may be dependent on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Trusts
which contain these Equity Securities to buy and sell significant
amounts of such shares without an unfavorable impact on prevailing
market prices.
Portfolios
Equity Securities Selected for the Illinois Big Ten Equity Trust, Series 15
Brunswick Corporation, headquartered in Lake Forest, Illinois, makes
outboard motors, sterndrives and inboard engines and replacement parts;
marine accessories; and boats and boat trailers. The company also makes
and sells products for the bowling, fishing, biking and camping
industries, and operates bowling recreation centers.
Federal Signal Corporation, headquartered in Oak Brook, Illinois, makes
and supplies safety, signaling and communications equipment, fire rescue
products, street sweeping and vacuum loader vehicles, parking control
equipment, custom on-premise signage, carbide cutting tools, precision
punches and related die components.
Page 6
Arthur J. Gallagher & Company, headquartered in Itasca, Illinois,
provides insurance brokerage, risk management and related services to a
wide variety of commercial, industrial, institutional and governmental
organizations.
Hollinger International, Inc. (Class A), headquartered in Chicago,
Illinois, publishes English language newspapers in the United States,
the United Kingdom, Canada and Israel, including daily newspapers, paid
non-daily newspapers and various magazines and other publications. Major
publications include the Chicago Sun-Times and the Daily Telegraph.
Nalco Chemical Company, headquartered in Naperville, Illinois, produces
and sells chemicals, technology, services and systems used in water
treatment, pollution control, energy conservation, electricity
generation, steelmaking, papermaking, commercial building utility
systems, mining and mineral processing and other industrial processes.
Nicor, Inc., headquartered in Naperville, Illinois, supplies natural gas
at retail to commercial and industrial customers in northern Illinois,
and operates a fleet of ocean vessels which provide containerized
shipping services to ports in the Caribbean, Central America and Mexico.
People's Energy Corporation, headquartered in Chicago, Illinois, through
subsidiaries, distributes natural gas in Chicago and other communities
in Illinois. Other operations include management related services; and,
through a partnership, on-site fueling services for natural gas-powered
fleet vehicles.
Unitrin, Inc., headquartered in Chicago, Illinois, provides property and
casualty insurance, life and health insurance and consumer finance
services. Through its subsidiaries, the company conducts operations in
three segments: Property and Casualty Insurance, Life and Health
Insurance and Consumer Finance.
Wallace Computer Services, Inc., headquartered in Lisle, Illinois, sells
a broad line of products and services including business forms,
commercial and promotional graphics printing, office products, computer
and consumer product labels, machine ribbons, computer hardware and
software, computer accessories and electronic forms.
Woodward Governor Company, headquartered in Rockford, Illinois, makes
hydromechanical and electronic controls, fuel-delivery systems,
actuators, valves and related components.
Equity Securities Selected for the Minnesota Big Ten Equity Trust, Series 16
Artic Cat, Inc., headquartered in Thief River Falls, Minnesota, designs,
engineers, makes and sells a full line of snowmobiles and all-terrain
vehicles under the "Arctic Cat" brand name; personal watercraft under
the "Tigershark" brand name; and related parts, garments and accessories.
Bemis Company, Inc., headquartered in Minneapolis, Minnesota, makes
flexible packaging products and pressure-sensitive materials. The
primary market for the company's products is the food industry. Other
markets include companies in the chemical, agribusiness, pharmaceutical,
medical, printing and graphic industries.
Dain Rauscher Corporation, headquartered in Minneapolis, Minnesota,
provides investment banking, securities brokerage and money management
services.
Deluxe Corporation, headquartered in St. Paul, Minnesota, provides check
printing, electronic funds transfer and related services to the
financial industry; payment protection services; electronic benefit
transfer services to state governments; direct mail checks; and tax
forms and electronic tax filing services.
General Mills, Inc., headquartered in Minneapolis, Minnesota, makes and
markets a variety of consumer food products, including ready-to-eat
cereals, desserts, flour and baking mixes, dinner and side dish
products, snack products, beverages and yogurt products.
International Multifoods Corporation, headquartered in Wayzata,
Minnesota, processes and distributes specialty foods. The company
produces appetizers, ethnic foods, specialty meats and bakery products
to commercial customers, convenience stores, warehouse clubs, vending
operators, and pizza, Mexican and Italian restaurants in the United
States. The company produces flour and pickles in Canada and spices in
Venezuela.
Jostens, Inc., headquartered in Minneapolis, Minnesota, makes and sells
class rings, graduation products, yearbooks, student photography
packages, sports awards, customized business performance and service
awards and customized affinity products.
Page 7
Minnesota Mining & Manufacturing Company, headquartered in St. Paul,
Minnesota, makes and sells consumer, industrial and life sciences
products for the automotive, chemicals, industrial, electronics,
communications, office, consumer, medical products, pharmaceuticals,
dental, personal care, and traffic and personal safety products markets.
St. Paul Companies, Inc., headquartered in St. Paul, Minnesota, with
subsidiaries, provides a broad range of commercial and consumer-related
insurance products and services, including property-liability insurance
underwriting and reinsurance. The company also provides risk advisory
services and investment banking-asset management services.
TCF Financial Corporation, headquartered in Minneapolis, Minnesota,
operates a national banking business through offices in five states. The
company also originates, sells and services residential mortgage loans;
sells annuities and mutual fund products; provides insurance, mainly
credit-related; and makes consumer finance loans.
Equity Securities Selected for the
Missouri Big Ten Equity Trust, Series 15
Anheuser-Busch Companies, Inc., headquartered in St. Louis, Missouri,
brews beer, makes metal beverage containers, and recycles metal and
glass beverage containers. The company also operates theme parks.
Arch Coal, Inc., headquartered in St. Louis, Missouri, produces steam
and metallurgical coal from surface and deep mines in Illinois,
Kentucky, Virginia, West Virginia and Wyoming for sale to utility,
industrial and export markets.
Brown Group Incorporated, headquartered in St. Louis, Missouri, operates
retail shoe stores; imports, makes, and conducts foreign sourcing; and
sells women's, children's and men's footwear. The company operates
footwear stores in the United States and Canada.
H&R Block Incorporated, headquartered in Kansas City, Missouri, through
subsidiaries, provides income tax preparation, electronic filing of
income tax returns and other tax-related services through offices in the
United States, Australia, Canada and Europe. The company also provides
financial services, online and Internet access services, and network
access, management and applications.
Kansas City Life Insurance Company, headquartered in Kansas City,
Missouri, through subsidiaries, writes individual life insurance and
annuity policies and individual disability income policies. The company
also accepts reinsurance under individual life policies and group life
and health policies. The company sells its products in 48 states and
Washington, D.C.
Kellwood Company, headquartered in St. Louis, Missouri, makes and sells
apparel for men, women and children. The company also makes and sells
tents and sleeping bags, as well as other soft goods products. Products
are primarily sold to retailers under either the company's own brand
names and labels or customer's private labels.
Laclede Gas Company, headquartered in St. Louis, Missouri, supplies
natural gas in St. Louis, St. Louis County and eight other counties in
Missouri. The company operates underground natural gas storage fields
and transports and stores liquid propane.
Mallinckrodt Incorporated, headquartered in St. Louis, Missouri,
produces respiratory products, diagnostic imaging agents and
pharmaceutical products. Principal products include oxygen monitoring,
critical care ventilation, airway management, contrast media,
radiopharmaceuticals, pharmaceuticals for pain relief and certain
chemicals.
May Department Stores Company, headquartered in St. Louis, Missouri,
operates department stores under the trade names "Lord & Taylor,"
"Hecht's," "Strawbridge's," "Foley's," "Robinsons-May," "Kaufmann's,"
"Filene's," "Famous-Barr," "L.S. Ayres" and "Meier & Frank" in 30 states
and Washington, D.C.
Mercantile Bancorporation, headquartered in St. Louis, Missouri, through
subsidiaries, conducts a general banking and trust business in Arkansas,
Illinois, Iowa, Kansas, Kentucky and Missouri.
Equity Securities Selected for the Pacific Ten Equity Trust, Series 11
AirTouch Communications, Inc., headquartered in San Francisco,
California, provides wireless telecommunications services to subscribers
in the United States, Europe and Asia; and paging services in the United
States.
Boeing Company, headquartered in Seattle, Washington, develops, produces
and markets commercial jet transports and provides related support
Page 8
services, principally to commercial customers. The company also
researches, develops, produces, modifies and supports military aircraft
and helicopters and related systems, and electronic, space and missile
systems.
Chevron Corporation, headquartered in San Francisco, California,
explores for, develops and produces crude oil and natural gas; refines
crude oil into finished petroleum products; transports and markets crude
oil, natural gas and petroleum products; and makes chemicals for
industrial uses.
Cisco Systems, Inc., headquartered in San Jose, California, develops,
makes, sells and supports high performance internetworking systems that
link geographically dispersed local-area and wide-area networks to form
a single, seamless information infrastructure.
Walt Disney Company, headquartered in Burbank, California, operates as a
diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. The company also has broadcasting (including Capital
Cities/ABC, Inc.) and publishing operations.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications, including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, solid state components and instrumentation for
chemical analysis.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
makes, licenses and supports a wide range of software products,
including operating systems, server applications, business and consumer
productivity applications, software development tools and Internet
software and technologies. Windows is the company's flagship PC
operating system.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management, application development
and business intelligence and business applications.
Wells Fargo & Company, headquartered in Minneapolis, Minnesota, operates
a general banking and mortgage banking business and provides consumer
finance services through offices in 48 states, Guam, Canada, the
Caribbean and Central America. The company also provides various other
financial services.
The Sponsor has obtained the foregoing company descriptions from sources
it deems reliable. The Sponsor has not independently verified the
provided information either in terms of accuracy or completeness.
Page 9
MEMORANDUM
Re: FT 303
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 FT
273, which is the current fund, and FT 303, 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 273 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 303 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 December 10, 1998.
FT 303
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities December 10, 1998
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 303 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 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).
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