<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 12, 1995
REGISTRATION NO. 33-62815
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------
AMENDMENT NO.2
TO
FORM S-6
----------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
----------------
A. EXACT NAME OF TRUST:
SMITH BARNEY UNIT TRUSTS
EQUITY FOCUS TRUSTS
THE BANK & THRIFT SERIES
B. NAME OF DEPOSITOR:
SMITH BARNEY INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICE:
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
D. NAMES AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY TO:
LAURIE A. HESSLEIN
SMITH BARNEY INC. PIERRE DE ST. PHALLE, ESQ.
388 GREENWICH STREET DAVIS POLK & WARDWELL
NEW YORK, NEW YORK 10013 450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE SECURITIES
BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
$500 (as required by Rule 24f-2)
H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EQUITY FOCUS TRUSTS
-----------------------------------------
THE BANK & THRIFT SERIES
A SMITH BARNEY UNIT INVESTMENT TRUST
SMITH BARNEY Equity Focus Trust--The Bank & Thrift Series
------------ is a unit investment trust that offers
investors the opportunity to purchase Units
representing proportionate interests in a
portfolio of Common Stocks of banks and
thrifts selected primarily for capital
appreciation. Smith Barney's equity research
department has selected those bank and thrift
stocks that it considers have good potential
for capital appreciation over the short term
taking into account risks and opportunities,
particularly the possibility of mergers
between these financial institutions. A
secondary objective of the Trust is current
income. The value of the Units will fluctuate
with the value of the underlying securities.
The minimum purchase is $1,000 for individual
purchases, and $250 for purchases by
Individual Retirement Accounts, Keogh Plans,
pension funds and other tax-deferred
retirement plans.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Inquiries should be directed to the Sponsor at (800) 223-
2532.
Prospectus dated October 12, 1995
Read and retain this Prospectus for future reference
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF OCTOBER 11, 1995+
<TABLE>
<S> <C>
SPONSOR
Smith Barney Inc.
INITIAL NUMBER OF UNITS++.......................................... 1,000,000
FRACTIONAL UNDIVIDED INTEREST IN TRUST REPRESENTED BY EACH UNIT.... 1/1,000,000
PUBLIC OFFERING PRICE (per 1,000 Units)
Aggregate value of Securities in Trust............................ $ 960,825
===========
Divided by 1,000,000 Units
(times 1,000).................................................... $ 960.83
Plus sales charge of 4.00% of Public Offering Price (4.167% of the
net amount invested in Securities)*.............................. $ 40.04
-----------
Public Offering Price per 1,000 Units............................. $ 1,000.87
Plus the amount per 1,000 Units in the Income and Capital Accounts
(see Description of the Trust--Income)........................... $ -0-
-----------
Total (per 1,000 Units)........................................... $ 1,000.87
===========
SPONSOR'S REPURCHASE PRICE AND REDEMPTION PRICE** PER 1,000 UNITS
(based on value of underlying securities)........................ $ 960.83
</TABLE>
QUARTERLY INCOME DISTRIBUTIONS
Distributions of income, if any, will be made quarterly the 26th of December
and the 25th of March, June and September, commencing December 26, 1995, to
Holders of record on the 10th of the month. In order to meet certain tax
requirements, a special distribution of income including capital gains, may
be paid to holders of record as of a date in December. Any capital gain net
income will generally be distributed after the end of the year.
<TABLE>
<S> <C>
SPONSOR'S PROFIT ON DEPOSIT............................................. $2,563
TRUSTEE'S ANNUAL FEE
$.86 per 1,000 Units
(see Expenses and Charges)
SPONSOR'S ANNUAL FEE
Maximum of $.25 per 1,000 Units
(see Expenses and Charges)
RECORD DAYS
The 10th of December, March, June and September
DISTRIBUTION DAYS
</TABLE>
The 26th of December and the 25th of March, June and September, and upon
termination and liquidation of the Trust.
EVALUATION TIME
4:00 P.M New York time.
TRUSTEE AND DISTRIBUTION AGENT
The Chase Manhattan Bank, N.A.
MINIMUM VALUE OF TRUST
The trust indenture between the Sponsor and the Trustee (the "Indenture") may
be terminated if the net asset value of the Trust is less than $5,000,000.
See Risk Factors, page 3.
MANDATORY TERMINATION OF TRUST
October 31, 1998 (the "Mandatory Termination Date"), or at any earlier time
by the Sponsor with the consent of Holders of 51% of the Units then outstand-
ing.
- -----------
+ The Initial Date of Deposit on which the Trust Indenture was signed and the
initial deposit was made. Valuation of Securities is based on the market value
per share as of October 11, 1995, as more fully explained in the Notes to
Portfolio. After the Initial Date of Deposit, Securities quoted on a national
securities exchange or the Nasdaq National Market, or a foreign securities
exchange, are valued at the closing sale price or, if, no price exists, at the
mean between the closing bid and offer prices. Securities not so quoted are
valued at the mean between bid and offer prices.
++ The Sponsor may create additional Units during the offering period of the
Trust.
* The sales charge will be reduced to 3.00% after the first year of the Trust
and to 2.00% after the second year of the Trust. The sales charge will also be
reduced on a graduated scale in the case of quantity purchases. See Public Sale
of Units--Public Offering Price.
** All redemptions of 100,000 Units or more may, upon request by a redeeming
Holder, be made in kind to the Distribution Agent, who will either forward the
distributed securities to the Holder or sell the securities on behalf of the
redeeming Holder and distribute the proceeds (net of any brokerage commission
or other expenses incurred in the sale) to the Holder. See Redemption.
2
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF OCTOBER 11, 1995 (CONTINUED)
OBJECTIVE OF THE TRUST -- The objective of the Trust is to provide investors
with the possibility of capital appreciation through a convenient and cost-
effective investment in a fixed portfolio consisting of shares of common stocks
(the "Securities") issued by banks and thrifts and considered to have potential
for capital appreciation over a period of three years relative to risks and
opportunities. The payment of dividends is a secondary objective of the Trust.
Achievement of the Trust's objective is dependent upon several factors
including the financial condition of the issuers of the Securities and any
appreciation of the Securities. Furthermore, Trust sales charges and expenses,
unequal weightings of stocks, brokerage costs and possible delays in purchasing
securities with cash deposited and other factors will affect the return that
investors receive.
PORTFOLIO -- The Portfolio contains 26 common stocks issued by banks and
thrifts. Based on current market values, approximately 75% of the Portfolio is
invested in bank issues and 25% in thrift issues. While there are certain risks
of price volatility associated with investment in common stocks (particularly
with an investment in one or two common stocks), your risk is reduced because
your capital is divided among 26 stocks, although the Trust is concentrated in
a single industry group. (See Risk Factors.)
The initial purchase of Securities will not necessarily represent equal
dollar amounts of each of the 26 Securities; however, with the initial deposit
of Securities, the Sponsor established a proportionate relationship among the
number of shares of each stock deposited in the Portfolio. Following the
Initial Date of Deposit, the Sponsor may create additional Units by depositing
cash (or a bank letter of credit in lieu of cash) with instructions to purchase
Securities, additional Securities or contracts to purchase additional
Securities maintaining to the extent practicable the original proportionate
relationship among the number of shares of each stock in the Portfolio.
Replacement Securities may be acquired under specified conditions. It may not
be possible to maintain the original proportionate relationship among the
Securities deposited on the Initial Date of Deposit because of, among other
reasons, purchase requirements, changes in price or the unavailability of
Securities. The Sponsor may cease creating Units (temporarily or permanently)
at any time. (See Administration of the Trust -- Trust Supervision.)
RISK FACTORS -- Investment in the Trust should be made with an understanding
that the value of the underlying Securities, and therefore the value of the
Units, will fluctuate, depending on the full range of economic and market
influences which may affect the market value of the Securities, including the
profitability and financial condition of issuers, conditions in the banking
industry, market conditions and values of common stocks generally, the impact
of the Sponsor's buying and selling Securities, especially during the initial
offering of Units of the Trust or to satisfy redemptions of Units, and other
factors.
If cash (or a letter of credit in lieu of cash) is deposited with
instructions to purchase Securities in connection with the issuance of
additional Units during the Public Offering Period, there is the risk that the
price of a Security will increase between the time of the deposit and the time
the Security is purchased resulting in a reduction in the number of shares
purchased for the Portfolio. Price fluctuations during the period from the time
of deposit of cash to the time the Securities are purchased, and payment of
brokerage fees, will affect the value of every Holder's Units, the number of
shares of each Security represented by each Unit and the income per Unit
received by the Trust. Some of the Securities may have limited trading volume,
and, while the Sponsor will endeavor to purchase Securities with deposited cash
as soon as practicable, it reserves the right to purchase those Securities over
the 20 following business days in an effort to reduce the effect of these
purchases on the market price of those stocks. This could, however, result in
the Trust's failure to participate in any appreciation of those stocks before
the cash is invested. If any cash remains at the end of this period and cannot
be invested in one or more stocks at what the Sponsor considers reasonable
prices, it intends to use that cash to purchase each of the other securities in
the original proportionate relationship among those securities. Similarly, at
termination of the Trust, the Sponsor reserves the right to sell Securities
over a period of up to 20 business days to lessen the impact
3
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF OCTOBER 11, 1995 (CONTINUED)
of its sales on the market price of the Securities. The proceeds received by
Holders following termination of the Trust will reflect the actual sales
proceeds received on the Securities, which will likely differ from the closing
sale price on the Mandatory Termination Date. (See Description of the Trust --
Risk Factors.)
Common stocks may be especially susceptible to general stock market movements
and to increases and decreases in value as market confidence in and perceptions
of the issuers change. In addition, there are certain risks involved in
investing in the Trust due to its concentration in stocks of one industry. The
Trust's concentration in securities of a single industry sector means that the
Trust's performance is closely related to the specific industry conditions as
well as general market conditions experienced in all sectors of the economy as
a whole. As a result, changes in the economic conditions affecting the selected
sector will tend to have a greater impact on the value of Units of this Trust
than on units of trusts which invest in a broader based portfolio of stocks.
These factors may tend to make the value of Trust Units more volatile than
other investments. (See Description of the Trust--Risk Factors.) Investors
should be aware that there can be no assurance that the value of the underlying
Securities will increase or that the issuers of the Securities will pay
dividends on outstanding shares. Any distributions of income to Holders will
generally depend upon the declaration of dividends by the issuers of the
Securities and the declaration of any dividends depends upon several factors
including the financial condition of the issuers and general economic
conditions.
Unlike a mutual fund, the Portfolio is not actively managed and the Sponsor
receives no management fee. Therefore, the adverse financial condition of an
issuer will not necessarily require the sale of Securities from the Portfolio
or mean that the Sponsor will not continue to purchase the Security in order to
create additional Units. Investors should note in particular that the
Securities were selected on the basis of the criteria set forth above under
Objective of the Trust and that the Trust may continue to purchase or hold
Securities originally selected through this process even though the evaluation
of the attractiveness of the Securities may have changed. In the event a public
tender offer is made for a Security or a merger or acquisition is announced
affecting a Security, the Sponsor may instruct the Trustee to tender or sell
the Security on the open market when, in its opinion, it is in the best
interest of the holders of the Units to do so. Although the Portfolio is
regularly reviewed and evaluated and the Sponsor may instruct the Trustee to
sell Securities under certain limited circumstances, Securities will not be
sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. The prices of single shares of each of the
Securities in the Trust vary widely, and the effect of a dollar of fluctuation,
either higher or lower, in stock prices will be much greater as a percentage of
the lower-price stocks' purchase price than as a percentage of the higher-price
stocks' purchase price.
Investors should note that should the size of the Trust be reduced below the
Minimum Value of Trust stated on page 2 the Trust may be terminated at that
time by the Sponsor, well before the Mandatory Termination Date of the Trust.
Any difference between the aggregate prices the Sponsor paid to acquire the
Securities and the aggregate prices at which Securities were initially
deposited in the Trust is noted on page 2 under Sponsor's Profit or Loss on
Deposit. The Sponsor's profit or loss on the deposit of Securities largely
depends on whether the Securities' prices rise in response to the Sponsor's
purchases of possibly large volumes of the Securities for initial and
subsequent deposits in the Trust. The effect of the Sponsor's purchases of
Securities on the prices of the Securities is unpredictable.
PRIVATE PLACEMENTS; UNDERWRITING -- None of the Securities in the Trust are
privately-placed common stocks. Except as indicated under Portfolio, the
Sponsor has not participated as sole underwriter, managing underwriter or
member of an underwriting syndicate from which any of the Securities in the
Trust were acquired.
4
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF OCTOBER 11, 1995 (CONTINUED)
PUBLIC OFFERING PRICE -- The Public Offering Price per 1,000 Units is equal
to the aggregate value of the underlying Securities and any cash held to
purchase Securities, divided by the number of Units outstanding times 1,000,
plus a sales charge of 4.00%* of the Public Offering Price; this results in a
sales charge of 4.167%* of the net amount invested in underlying Securities.
Units are offered at the Public Offering Price plus the net amount per Unit in
the Income Account (see Public Sale of Units). The minimum purchase is $1,000
(or $250 in the case of purchases by Individual Retirement Accounts, Keogh
plans, pension funds and other tax-deferred retirement plans). Investors should
note that the Public Offering Price of Units varies each business day with the
value of the underlying Securities. There is no "par value" for Units.
REINVESTMENT PLAN -- Distributions of dividends (net of expenses) and any
principal received by the Trust may be reinvested in additional Units of the
Trust at no extra charge. Holders who reinvest their distributions will receive
additional Units and will therefore own a greater percentage of the Trust than
Holders who receive cash distributions (see Reinvestment Plan).
TAXES -- Distributions which are taxable as ordinary income to Holders will
constitute dividends for Federal income tax purposes and may, subject to
certain limitations, be eligible for the dividends-received deduction for
certain corporations (see Taxes). Foreign holders should be aware that
distributions from the Trust will generally be subject to information reporting
and withholding taxes.
MARKET FOR UNITS -- The Sponsor, though not obligated to do so, intends from
the commencement of the Trust to maintain a market for Units and continually to
offer to purchase Units from Holders desiring to sell them at a price based on
the aggregate value of the underlying Securities (see Market for Units).
Whenever a market is not maintained, a Holder may be able to dispose of his
Units only through redemption (see Redemption).
- -----------
* This sales charge will be reduced on a graduated scale in the case of
quantity purchases. See Public Sale of Units -- Public Offering Price.
5
<PAGE>
INVESTOR GUIDE
The Equity Focus Trusts are a series of unit investment trusts, based on a
research investing theme or industry trend identified by Smith Barney's
research analysts. The process to select these portfolios draws from our
extensive resources in equity research, through an analysis of each company
and its industry group. Also considered is the potential for the holdings to
perform, given our outlook for the economic and market environment. At this
time, Smith Barney's Equity Research Division considers certain opportunities
in the Bank and Thrift industry to be particularly attractive. And now, you
can take a "portfolio approach" to participating in this sector, through the
Equity Focus Trusts: The Bank & Thrift Series.
With the Equity Focus Trusts, Smith Barney's investment analysts seek to
capitalize on "investment themes" in the stock market that could provide
strong capital appreciation potential. Some of these themes focus on a
particular industry group with characteristics of strong market leadership or
growth potential in the current economic and market environment. This Series
will concentrate on financial institutions -- specifically banks and thrifts.
Smith Barney's analysts who specialize in this industry have identified four
"investment themes" that make investing in this industry sector attractive:
HIGHER DIVIDEND YIELDS:
Many banks and thrifts pay attractive dividend yields relative to the
overall market.
ATTRACTIVE MARKET VALUATIONS:
The shares of bank stocks, when compared to stocks in other industry
sectors, are often priced attractively relative to their earnings per share
and book value per share.
STRONG CAPITAL CAPACITY:
Our analysts consider a bank with strong capital capacity to be one that
uses its capital base effectively -- often for the benefit of shareholders.
For example, some banks with strong balance sheets are regular and disciplined
buyers of their own common stock. Not only can these repurchase programs lead
to greater consistency of earnings -- in a strong or weak operating
environment -- they can offer support for share prices as well.
POTENTIAL CANDIDATES FOR CONSOLIDATION:
In the view of our research analysts, the most compelling reason to invest
in the banking industry is the high level of merger and acquisition activity
- -- a consolidation trend that could extend into the late 1990's. Six of the 10
largest bank mergers in U.S. history, as listed below, were announced in 1995.
<TABLE>
<CAPTION>
ANNOUNCEMENT VALUE OF
INSTITUTIONS DATE TRANSACTION
- ------------ ------------- ------------
<S> <C> <C>
Chemical Bank, Chase Manhattan August 1995 $9.9 Billion
First Chicago, NBD Bancorp July 1995 $5.3 Billion
First Fidelity, First Union June 1995 $5.1 Billion
C&S/Sovran, NCNB June 1991 $4.3 Billion
Security Pacific, BankAmerica August 1991 $4.2 Billion
KeyCorp, Society October 1993 $3.9 Billion
Shawmut National, Fleet Financial February 1995 $3.8 Billion
Midlantic, PNC Bank July 1995 $2.9 Billion
Continental Bank, BankAmerica January 1994 $2.2 Billion
Integra Financial, National City August 1995 $2.1 Billion
</TABLE>
A number of factors have fueled this consolidation trend. For one, more
institutions are in a position to make acquisitions because of the significant
recent rise in bank share prices. And, with the rising costs of remaining
competitive, an increasing number of banks have become more receptive to
mergers. They may be reacting to the expense and time-consuming process of
replacing inefficient or obsolete technology. Or, they could be among the
banks whose management focus on severe asset quality problems of the 1980's
kept them from developing a future business direction for the 1990's.
THE BANK & THRIFT SERIES: HOW THE PORTFOLIO WAS IDENTIFIED
To identify attractive investment opportunities, Smith Barney's research
analysts focused on the four investment themes, described above, to screen a
large universe of banks and thrifts. Many of the selections that emerged
through this process were institutions with these characteristics:
<PAGE>
INVESTOR GUIDE
STRONG OPERATING LEVERAGE: Banks with strong operating leverage tend to
derive a significant amount of their revenues from core banking activities
where they are well-positioned competitively. Typically, they can generate
strong growth in earnings per share on modest revenue growth. And many have
balance sheet capacity -- the ability to repurchase shares or make
acquisitions.
TURNAROUND SITUATIONS: These banks and thrifts may have recognized operating
problems and have taken steps to resolve them. Many are likely to enhance
their position with the existing customer base, while generating relationships
with new customers. And they may use their capital to the shareholders'
benefit, including share repurchases. Over time, our analysts believe that
investors in these banks and thrifts are likely to be rewarded by stronger-
than-expected earnings per share growth and higher market valuations.
TAKEOVER CANDIDATES: To identify these selections, our analysts expanded
beyond Smith Barney's research coverage to survey a universe of more than 300
domestic banks and thrifts with assets over $500 million. The data, obtained
from both internal and external sources, evaluated factors such as earnings
per share, book value, common stock shares outstanding and operating expenses
over the past 12 months. The screening process was designed to identify the
best takeover candidates, by ranking each bank according to:
. Asset size
. Attractiveness of its franchise
. Markets served
. Potential impact of a merger on earnings per share, book value and
shareholder control
. Potential expense savings through consolidation
THE BANK & THRIFT SERIES: INVESTING MADE EASY
Through The Bank & Thrift Series, investors can take a "portfolio approach,"
and invest in the stocks of 26 bank and thrifts with one easy purchase. This
fixed portfolio, as summarized on page 8 of this prospectus, will be held in a
unit investment trust with a three-year life. The primary investment objective
of the Trust is capital appreciation; however, many of the companies also pay
attractive dividends. Three key features of the Trust are:
PROFESSIONAL SELECTION: The holdings of the portfolio were identified by
Smith Barney's three investment analysts who specialize in the Bank &
Thrift industry.
A CONVENIENT AND COST EFFECTIVE PACKAGE: A portfolio of companies our
research believes to be attractive can be purchased for as little as $1,000
($250 in Individual Retirement Accounts). Dividends can be automatically
reinvested, or they can be distributed in a convenient quarterly check.
LIQUIDITY: Units can be sold at any time, with no sales charge or penalty.
The price will reflect the net asset value on the date of sale, which may
be more or less than the original cost.
RISK FACTORS
The Trust is designed for investors who can assume the risks associated with
equity investments, and is not appropriate for investors requiring
conservation of capital or high current income. Unit prices will fluctuate
with the value of the underlying stocks, and there is no assurance that the
price will appreciate, or not depreciate, over the term of the Trust. Because
of the Trust's sales charges and expenses, unequal weightings of stocks,
brokerage costs and other factors. Trust investors may not achieve the
aggregate price performance of equal amounts of underlying stocks. Moreover,
even though there may be attractive investment opportunities in the Bank &
Thrift industry, there are certain risks involved when concentrating within
one industry or market sector, as well as risks associated with investing in
the banking industry. See the "Risk Factor" in the Prospectus for more
information.
This material is not authorized for distribution unless accompanied or
preceded by the Trust prospectus.
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF OCTOBER 11, 1995 (CONTINUED)
FEE TABLE
- --------------------------------------------------------------------------------
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES
THAT YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC SALE OF UNITS AND
EXPENSES AND CHARGES. ALTHOUGH THE TRUST IS A UNIT INVESTMENT TRUST RATHER THAN
A MUTUAL FUND, THIS INFORMATION IS PRESENTED TO PERMIT A COMPARISON OF FEES.
- --------------------------------------------------------------------------------
UNITHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchase (as a percentage of offering
price)................................................................. 4.00%
====
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Trustee's Fee........................................................... .090%
Maximum Portfolio Supervision, Bookkeeping and Administrative Fees...... .026%
Organizational Expenses................................................. .106%
Other Operating Expenses................................................ .033%
----
Total................................................................ .255%
====
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE
EXPENSES PAID
FOR PERIOD:
----------------
1 2 3
YEAR YEARS YEARS
---- ----- -----
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Trust's estimated operating expense
ratio of .255% in the first year and .255% in succeeding
years and a 5% annual return on the investment throughout
the periods................................................. $43 $45 $48
</TABLE>
The Example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Example should not be
considered a representation of past or future expenses or annual rate of
return; the actual expenses and annual rate of return may be more or less than
those assumed for purposes of the Example.
The Trust (and therefore the Holders) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the indenture and other closing documents, registering units with the SEC and
the states and the initial audit of the Portfolio--as is common for mutual
funds. Historically, the sponsors of unit investment trusts have paid all the
costs of establishing those trusts. Advertising and selling expenses will be
paid by the Underwriters at no cost to the Trust.
6
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Sponsor, Trustee and Unit Holders of Equity Focus Trusts--The Bank &
Thrift Series (the "Trust"):
We have audited the accompanying statement of financial condition, including
the portfolio of the Trust, as of October 11, 1995. This financial statement
is the responsibility of the Trustee (see note 5 to Statement of Financial
Condition). Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of financial condition
is free of material misstatement. An audit of a statement of financial
condition includes examining, on a test basis, evidence supporting the amounts
and disclosures in that financial statement. Our procedures included
confirmation with the Trustee of an irrevocable letter of credit deposited on
October 11, 1995, for the purchase of securities, as shown in the statement of
financial condition and portfolio of securities. An audit of a statement of
financial condition also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall
statement of financial condition presentation. We believe that our audit of
the statement of financial condition provides a reasonable basis for our
opinion.
In our opinion, the statement of financial condition referred to above
presents fairly, in all material respects, the financial position of the Trust
as of October 11, 1995, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
New York, New York
October 11, 1995
EQUITY FOCUS TRUSTS
THE BANK & THRIFT SERIES
STATEMENT OF FINANCIAL CONDITION AS OF INITIAL DATE OF DEPOSIT, OCTOBER 11,
1995
<TABLE>
<S> <C>
TRUST PROPERTY
Investment in Securities:
Contracts to purchase Securities(1)............................... $ 960,825
Organizational costs(2)............................................ 91,525
----------
Total........................................................... $1,052,350
==========
LIABILITIES
Accrued Expenses(2)............................................... $ 91,525
----------
INTEREST OF UNITHOLDERS
1,000,000 Units of fractional undivided interest outstanding:
Cost to investors(3).............................................. 1,000,863
Less: Gross underwriting commissions(4)........................... 40,038
----------
Net amount applicable to investors................................ 960,825
----------
Total........................................................... $1,052,350
==========
</TABLE>
- -----------
(1) Aggregate cost to the Trust of the Securities listed under Portfolio on
the Initial Date of Deposit is determined by the Trustee on the basis set
forth in Footnote 3 to the Portfolio. See also the columns headed Cost of
Securities to Trust. An irrevocable letter of credit in the amount of
$1,000,000 has been deposited with the Trustee for the purchase of
Securities. The letter of credit was issued by Chemical Bank.
(2) Organizational costs to be paid by the Trust have been deferred and will
be amortized over three years of the Trust. Organizational costs have been
estimated based on projected total assets of $28.8 million. To the extent
the Trust is larger or smaller, the amount paid may vary.
(3) Aggregate public offering price computed on the basis set forth under
Public Sale of Units--Public Offering Price.
(4) Assumes a maximum sales charge of 4.00% of Public Offering Price computed
on the basis set forth under Public Sale of Units--Public Offering Price.
(5) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the
Trust. The Trustee is responsible for establishing and maintaining a
system of internal controls directly related to, and designed to provide
reasonable assurance as to the integrity and reliability of, financial
reporting of the Trust. The Trustee is also responsible for all estimates
and accruals reflected in the Trust's financial statements other than
estimates of organizational costs, for which the Sponsor is responsible.
7
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES PORTFOLIO ON THE INITIAL DATE
OF DEPOSIT, OCTOBER 11, 1995
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COST OF
STOCK NUMBER PERCENT OF SECURITIES
SECURITIES(1) SYMBOL OF SHARES(2) NET ASSETS TO TRUST(3)
------------- ------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Ahmanson (HF) & Co. # AHM 1,000 2.68% $25,750.00
Banc One Corp. ONE 1,100 4.32 41,525.00
Bank of Boston BKB 900 4.45 42,750.00
BankAmerica Corp. # BAC 700 4.58 44,012.50
Boatmen's Bancshares BOAT 1,100 4.41 42,350.00
California Federal Bank "A' # CAL 1,700 2.70 25,925.00
Charter One Financial * COFI 900 2.77 26,662.50
Chemical Banking Corp. # CHL 700 4.65 44,537.50
Citicorp # CCI 600 4.50 43,275.00
Coast Savings Financial CSA 1,000 2.72 26,125.00
Comerica Inc. CMA 1,200 4.57 43,950.00
Dime Bancorp DME 2,300 2.72 26,162.50
First Bank System FBS 800 4.17 40,100.00
First Chicago # FNB 600 4.46 42,825.00
Firstar Corp. FSR 1,100 4.31 41,387.50
Golden West Financial GDW 500 2.81 27,000.00
Greater NY Savings * # GRTR 2,200 2.80 26,950.00
Mellon Bank Corp. # MEL 900 4.59 44,100.00
National City Corp. # NCC 1,300 4.31 41,437.50
Norwest Corp. # NOB 1,300 4.33 41,600.00
Republic New York RNB 700 4.51 43,312.50
Southern National SNB 1,600 4.35 41,800.00
Standard Federal Bancorp SFB 700 2.83 27,212.50
U.S. Bancorp USBC 1,500 4.55 43,687.50
Wachovia Corp. WB 900 4.20 40,387.50
Washington Mutual * WAMU 1,000 2.71 26,000.00
------ -----------
100.00% $960,825.00
====== ===========
</TABLE>
- -----------
(1) All Securities are represented entirely by contracts to purchase
Securities, which were entered into by the Sponsor on October 11, 1995. All
contracts for Securities are expected to be settled by the initial
settlement date for the purchase of Units.
(2) Per 1,000,000 Units.
(3) Valuation of Securities by the Trustee was made using the market value per
share as of the Evaluation Time on October 11, 1995. Subsequent to the
Initial Date of Deposit, valuation of Securities is based, for Securities
quoted on a national securities exchange or the Nasdaq National Market, or
a foreign securities exchange, on the closing sale prices, or if no price
exists, at the mean between the closing bid and offer prices, or for
Securities not so quoted, at the mean between bid and offer prices on the
over-the-counter market. See Redemption--Computation of Redemption Price
Per Unit.
---------------
*Smith Barney usually maintains a market in the securities of this company.
# Within the last three years, Smith Barney or one of its affiliates was the
manager (co-manager) of a public offering of the securities of this company
or an affiliate.
8
<PAGE>
DESCRIPTION OF THE TRUST
STRUCTURE AND OFFERING
This Series of Equity Focus Trusts (the "Trust") is a "unit investment
trust" created under New York law by a Trust Indenture (the "Indenture")*
between the Sponsor and the Trustee. On the date of this Prospectus, each unit
of the Trust (a "Unit") represented a fractional undivided interest in the
securities listed under Portfolio (the "Securities") set forth under
Investment Summary. Additional Units of the Trust will be issued in the amount
required to satisfy purchase orders by depositing in the Trust cash (or a bank
letter of credit in lieu of cash) with instructions to purchase Securities,
contracts to purchase Securities together with irrevocable letters of credit,
or additional Securities. On each settlement date (estimated to be three
business days after the applicable date on which Securities were deposited in
the Trust), the Units will be released for delivery to investors and the
deposited Securities will be delivered to the Trustee. As additional Units are
issued by the Trust as a result of the deposit of cash (or a letter of credit
in lieu of cash) with instructions to purchase additional Securities, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. There is no limit on the time period during which the Sponsor may
continue to make additional deposits of Securities into the Trust.
Additional deposits of cash or Securities in connection with the issuance
and sale of additional Units will maintain to the extent practicable the
original proportionate relationship among the number of shares of each
Security. The proportionate relationship among the Securities in the Trust
will be adjusted to reflect the occurrence of a stock dividend, a stock split
or a similar event which affects the capital structure of the issuer of a
Security in the Trust but which does not affect the Trust's percentage
ownership of the common stock equity of such issuer at the time of such event.
It may not be possible to maintain the exact original proportionate
relationship among the Securities deposited on the Initial Date of Deposit
because of, among other reasons, purchase requirements, changes in prices,
brokerage commissions or unavailability of Securities. Replacement Securities
may be acquired under specified conditions when Securities originally
deposited are unavailable (see Administration of the Trust -- Trust
Supervision). Units may be continuously offered to the public by means of this
Prospectus (see Public Sale of Units -- Public Distribution) resulting in a
potential increase in the number of Units outstanding.
The Public Offering Price of Units prior to the Evaluation Time specified on
page 2 on any day will be based on the aggregate value of the Securities in
the Trust on that day at the Evaluation Time, plus a sales charge. The Public
Offering Price will thus vary in the future from that specified on page 2 of
this Prospectus. See Public Sale of Units -- Public Offering Price for a
complete description of the pricing of Units.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units. The Sponsor reserves
the right to accept or reject any purchase order in whole or in part.
The Sponsor will execute orders to purchase in the order it determines, in
good faith, that they are received, except it is expected that indications of
interest received prior to the effectiveness of the registration of the Trust
which become orders upon effectiveness will be accepted according to the order
in which the indications of interest were received. The Sponsor may accept or
reject any purchase order in whole or in part.
The holders ("Holders") of Units will have the right to have their Units
redeemed for the Securities underlying the Units (see Redemption). If any
Units are redeemed, the aggregate value of Securities in the Trust will be
reduced and the fractional undivided interest in the Trust represented by each
remaining Unit will be increased. Units will remain outstanding until redeemed
upon request to the Trustee by any Holder (which may include the Sponsor), or
termination of the Indenture (see Administration of the Trust -- Amendment and
Termination).
- -----------
* To the extent references in this Prospectus are to articles and sections of
the Indenture, which is incorporated by reference into this Prospectus, the
statements made herein are qualified in their entirety by such reference.
9
<PAGE>
THE PORTFOLIO
Smith Barney's Equity Focus Trusts are each based on a specific research
investing theme or industry trend identified by Smith Barney Equity Research
analysts, based on an analysis of each company and the industry group as a
whole. The Research Division believes bank and thrift stocks to be attractive
investments for potential capital appreciation, as well as dividends, over the
next three years based on industry trends including above-average dividend
yields, low price-earnings and price-book ratios, strong capital capacity
(availability of internally generated funds for purposes including
acquisitions and share repurchase programs) and a high level of bank mergers
and acquisitions. However, there can be no assurance that any of these trends
will develop or continue or that the prices of the stocks in the Trust will
appreciate, or will not depreciate, over its three-year life. The Research
Division's three analysts reviewed more than 300 American banks and thrifts
with assets over $500 million, including not only stocks regularly followed
but information on other companies from independent research reports,
considering earnings per share, book value, market capitalization and
operating expenses. Possible takeover candidates were identified by
considering asset size; attractiveness of franchise; markets served; potential
impact on earnings per share, book value, shareholder control and expense
savings. Also considered were turnaround situations believed to be currently
undervalued. Sales literature may include information on recent proposed and
consummated bank mergers. Sales material may also include the state in which
the company currently operates, current price, trailing 12-month earnings per
share and price-earnings and price-to-book ratios.
The results of ownership of Units will differ from the results of ownership
of the underlying Securities of the Trust for various reasons, including sales
charges and expenses of the Trust, because the Portfolio may not be fully
invested at all times, the stocks are normally purchased or sold at prices
different from the closing price used to determine the Trust's net asset
value, and not all stocks may be weighted in the initial proportions at all
times. Additionally, results of ownership to different Holders will vary
depending on the net asset value of the underlying Securities on the days
Holders bought and sold their Units. Of course, any purchaser of securities,
including Units, will have to pay sales charges or commissions, which will
reduce his total return.
Advertising and sales literature for the Trust may include excerpts from the
Sponsor's research reports on one or more of the stocks in the Trust,
including a brief description of its businesses and market sector, and the
basis on which the stock was selected. In selecting Securities for the Trust,
the Sponsor has not expressed any belief as to the potential of these
Securities for capital appreciation over a period longer than three years.
There is, of course, no assurance that any of the Securities in the Trust will
appreciate in value, and indeed any or all of the Securities may depreciate in
value at any time in the future. See Description of the Trust -- Risk Factors.
The Trust consists of such Securities as may continue to be held from time
to time in the Trust and any additional and replacement Securities and any
money market instruments acquired and held by the Trust pursuant to the
provisions of the Indenture (including the provisions with respect to the
deposit into the Trust of Securities in connection with the sale of additional
Units to the public) together with undistributed income therefrom and
undistributed and uninvested cash realized from the disposition of Securities
(see Administration of the Trust -- Accounts and Distributions; -- Trust
Supervision). The Indenture authorizes, but does not require, the Trustee to
reinvest the net proceeds of the sale of any Securities in Additional
Securities to the extent that the proceeds are not required for the redemption
of Units. If sufficient Securities are not available at what the Sponsor
considers a reasonable price, excess cash received on the creation of Units
may be held in an interest-bearing account with the Trustee until that cash
can be invested in Securities. Neither the Sponsor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Securities.
However, should any contract deposited hereunder (or to be deposited in
connection with the sale of additional Units) fail, the Sponsor shall, on or
before the next following Distribution Day, cause to be refunded the
attributable sales charge, plus the attributable Cost of Securities to Trust
listed under Portfolio, unless substantially all of the monies held in the
Trust to cover the purchase are reinvested in replacement Securities in
accordance with the Indenture (see Administration of the Trust -- Portfolio
Supervision).
Because certain of the Securities from time to time may be sold, or their
percentage may be reduced under certain extraordinary circumstances described
below, or because Securities may be distributed in redemption of Units, no
assurance can be given that the Trust will retain for any length of time its
present size (see Redemption; Administration
10
<PAGE>
of the Trust -- Amendment and Termination). For Holders who do not redeem
their Units, investments in Units of the Trust will be liquidated on the fixed
date specified under Investment Summary -- Mandatory Termination of Trust, and
may be liquidated sooner if the net asset value of the Trust falls below that
specified under Investment Summary -- Minimum Value of Trust (see Risk
Factors).
RISK FACTORS
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 Securities or the general condition
of the common stock market may worsen and the value of the 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 in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the
issuers of those common stocks that are generally subordinate to those of
creditors or holders of debt obligations or preferred stocks of such issuers.
Shareholders of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and have a right to participate in amounts
available for distribution by the issuer only after all other claims on the
issuer have been paid or provided for. By contrast, holders of preference
stocks have the right to receive dividends at a fixed rate when and as
declared by the issuer's board of directors, normally on a cumulative basis,
but generally do not participate in other amounts available for distribution
by the issuing corporation. 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 stocks are also entitled to rights on liquidation
which are senior to those of common stocks. Moreover, common stocks do not
represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks are subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Securities in the Portfolio may be expected to fluctuate over the life of the
Trust to values higher or lower than those prevailing on the Initial Date of
Deposit.
CERTAIN RISKS AFFECTING SECURITIES OF BANKS AND THRIFTS. The Trust is
concentrated in Securities of issuers in the banking and thrift industry and,
as a result, the value of the Units of the Trust will be susceptible to the
risk of such concentration and to factors affecting the banking and thrift
industry. While the factors affecting the U.S. banks, bank holding companies
and thrifts and the market values of the Securities in the Portfolio are
varied and complex, the risks of Investment in such Securities outlined below
should be noted.
The activities of U.S. banks, bank holding companies and thrifts are subject
to comprehensive federal and state regulation which regulation is expected to
continue to change over the life of the Trust. The enactment of any new
legislation or regulations, or any change in interpretation or enforcement of
existing laws or regulations, may affect the profitability of participants in
the banking industry. Significant developments in the banking and thrift
industry have included deregulation of interest rates; additional conversions
of thrifts from mutual to stock form; regional expansion; increases in capital
requirements; the deregulation and subsequent reregulation of thrifts'
business operations; and the enactment of significant legislation to finance
the Savings Association Insurance Fund (formerly, the Federal Savings and Loan
Insurance Corporation) and the Bank Insurance Fund and generally to
restructure the thrift and banking industries. Congress is currently
considering removing restrictions to interstate banking. No assurance can be
given as to what form such legislation, or any other legislation or
regulation, would take, if enacted, or what affects any new legislation or
regulation would have on the banking and thrift industry.
The banking and thrift industry is particularly susceptible to certain
economic factors, such as interest rate changes, adverse developments in the
market for real estate, economic conditions both nationally and in particular
11
<PAGE>
regions or industries serviced by these institutions, and volatility in
political conditions as well as fiscal or monetary policies of governmental
units. Banks may be at particular risk in a protracted recession, given that
the levels of corporate debt, corporate defaults on debts, the number of bank
failures and problem banks are substantially higher than is typical during a
non-recessionary period as was demonstrated by the number of failures and
federally assisted takeovers of banks in the late 1980's. Certain banks and
thrifts whose securities are included in the Portfolio may have loan
portfolios concentrated in highly leveraged transactions, real estate loans or
loans to less developed countries, which transactions and loans bank
regulators classify as risky. The operations of banks and thrifts are highly
interest rate sensitive. An inflationary economy or tight credit policies
imposed by the Federal Reserve could adversely affect the banking and thrift
industry. Investors should note that monetary policies of the Federal Reserve
are subject to significant fluctuations. A deflationary economy, when asset
values decline, poses risks to banks and thrifts by reducing the value of
direct investments held for the banks' or thrifts' own portfolios and
contributing to loan defaults if the value of secured property or other
collateral for loans declines. Banks and thrifts are particularly susceptible
to the real estate markets since a significant amount of their loans are
secured by real estate, the value of which is subject to significant
fluctuations. The banks and thrifts in which the Trust may invest may also be
exposed to risk from marketing or holding derivative instruments.
Federal regulators require banks and thrifts to maintain minimum capital
requirements. To the extent additional equity is issued to meet the
requirements, outstanding equity holdings will be diluted. The capital
standards are expected to continue to lead a major consolidation of the bank
and thrift systems. Certain Money Center Banks have experienced problems in
obtaining access to equity and debt markets. No assurance can be given that
any bank or thrift will maintain access to the public credit markets on
affordable terms to meet their capital or short term cash needs. The Sponsor
is unable to predict the impact or the likelihood of any consolidation
resulting from the capital standards or any change in the interstate banking
laws and regulations, with respect to the particular Securities in the
Portfolio. The Trust may invest in banks and thrifts that are not members of
the Federal Reserve System or whose deposits are not insured by the FDIC.
Units of the Trust are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution and are not
insured by the FDIC, the Federal Reserve Board or any other governmental
agency.
Banks and thrifts are subject to substantial competition from other banking
and thrift institutions and from other financial service institutions for
deposits, as well as corporate and retail customers. These competitors, which
are subject to less government regulation than banks provide a broad range of
financial products, and include foreign banks, insurance companies, brokerage
and securities firms, mutual funds, investment banks and diversified financial
service companies. As a result of such competition worldwide, depository flows
have become highly liquid, and subject to dramatic shifts among different
forms of financial instruments.
To the extent banks and thrifts are unable to pass deposit insurance
premiums on to customers because of competitive pressures (e.g., from money
market mutual funds), such premiums must be absorbed. Any premium increase may
lead to insolvency by some problem banks and thrifts. No assurance can be
given that statutory provisions for insuring all deposits up to $100,000
(which currently applies to multiple accounts held by the same depositor and
to pass-through accounts, such as for pension plans) will not be restricted.
Such restrictions could adversely affect large investor confidence, which
could lead to deposit runs. In addition, no assurance can be given that
foreign branch deposits of domestic banks will remain exempt from assessments
for deposit insurance premiums or retain their de facto insurance coverage.
Either policy change could have a substantial adverse impact on affected banks
and thrifts, particularly Money Center Banks. Investors should note that
deposit insurance does not cover equity issued by banks and thrifts and
therefore is no guarantee of the market value of the Securities in the
Portfolio.
To the extent a bank's or thrift's portfolio is concentrated in assets
related to a particular industry or geographic region, the bank's or thrifts'
operating results will be subject to additional risks associated with such
industry or region. A significant downgrading of a credit rating could
jeopardize the affected bank's or thrift's access to public credit markets.
Deposits from foreign corporations, individuals and governments constitute a
substantial share (frequently a majority) of total deposits of Money Center
Banks, including their foreign branches. The level of such deposits is
12
<PAGE>
generally subject to the risks of foreign currency exchange rates (a falling
U.S. dollar reducing the value of their investments), comparative interest
rate changes and capital flight restrictions.
There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet redemptions
and the value of the Trust will be adversely affected if trading markets for
the Securities are limited or absent.
Since the Securities are all common stocks, and the income stream produced
by dividend payments thereon is unpredictable, the Sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all expenses of the
Trust. If dividends are insufficient to cover expenses, it is likely that
Securities will have to be sold to meet Trust expenses. See Expenses and
Charges -- Payment of Expenses. Any such sales may result in capital gains or
losses to Holders. See Description of the Trust -- Taxes.
Holders will be unable to dispose of any of the Securities in the Portfolio,
as such, and will not be able to vote the Securities. As the holder of the
Securities, the Trustee will have the right to vote all of the voting stocks
in the Trust and will vote in accordance with the instructions of the Sponsor.
Holders will, however, be able upon request to receive an "in kind"
distribution of the Securities evidenced by their Units if they tender a
minimum of 100,000 Units (see Redemption).
Investors should be aware that the Trust is not a "managed" trust and, as a
result, the adverse financial condition of a company will not result in the
elimination of its securities from the portfolio of the Trust (the
"Portfolio") except under extraordinary circumstances (see Administration of
the Trust -- Trust Supervision).
Investors should note that in connection with the issuance of additional
Units during the Public Offering Period set forth in the Investment Summary,
the Sponsor may deposit cash (or a letter of credit in lieu of cash) with
instructions to purchase Securities, additional Securities or contracts to
purchase Securities, in each instance maintaining the original percentage
relationship, subject to adjustment under certain circumstances, among the
number of shares of each Security in the Trust. To the extent the price of a
Security increases or decreases between the time cash is deposited with
instructions to purchase the Security at the time the cash is used to purchase
the Security, Units may represent less or more of that Security and more or
less of the other Securities in the Trust. In addition, brokerage fees (if
any) incurred in purchasing Securities with cash deposited with instructions
to purchase the Securities will be an expense of the Trust. Price fluctuations
between the time of deposit and the time the Securities are purchased, and
payment of brokerage fees, will affect the value of every Holder's Units and
the Income per Unit received by the Trust.
The Trust may be terminated at any time and all outstanding Units liquidated
if the net asset value of the Trust falls below $5,000,000. Investors should
note that if the net asset value of the Trust should fall below the applicable
minimum value, the Sponsor may then in its sole discretion terminate the Trust
before the Mandatory Termination Date specified under Investment Summary.
INCOME
Dividend income on the Securities received by the Trust, net of expenses,
and the distributable balance in the Capital Account other than capital gains
as of any particular Record Day will be distributed on or shortly after the
related Distribution Day to Holders of record on that Record Day.
There is no assurance that any dividends will be declared or paid in the
future on the Securities.
Record Days and Distribution Days are set forth under Investment Summary.
Distributions, if any, may be reinvested in additional Units of the Trust at
no extra charge (see Reinvestment Plan). Because dividends on the Securities
are not received by the Trust at a constant rate throughout the year and
because the issuers of the Securities may change the schedules or amounts of
dividend payments, any distributions, whether reinvested or paid in cash, may
be more or less than the amount of dividend income actually received by the
Trust and credited to the income account established under the Indenture (the
"Income Account") as of the Record Day.
13
<PAGE>
TAXES
TAXATION OF THE TRUST
The Trust intends to qualify for and elect the special tax treatment
applicable to "regulated investment companies" under Section 851-855 of the
Internal Revenue Code of 1986, as amended (the "Code"). Qualification and
election as a "regulated investment company" involve no supervision of
investment policy or management by any government agency. If the Trust
qualifies as a "regulated investment company" and distributes to Holders 90%
or more of its taxable income without regard to its net capital gain (i.e.,
the excess of its net long-term capital gain over its net short-term capital
loss), it will not be subject to Federal income tax on any portion of its
taxable income (including any net capital gain) distributed to Holders in a
timely manner. In addition, the Trust will not be subject to the 4% excise tax
on certain undistributed income of "regulated investment companies" to the
extent it distributes to Holders in a timely manner at least 98% of its
taxable income (including any net capital gain). It is anticipated that the
Trust will not be subject to Federal income tax or the excise tax because the
Indenture requires the distribution of the Trust's taxable income (including
any net capital gain) in a timely manner. Although all or a portion of the
Trust's taxable income (including any net capital gain) for a taxable year may
be distributed shortly after the end of the calendar year, such a distribution
will be treated for Federal income tax purposes as having been received by
Holders during the calendar year.
DISTRIBUTIONS
Distribution to Holders of the Trust's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to Holders to the
extent of the Trust's taxable income (without regard to its net capital gain)
for that year. Any excess will be treated as a return of capital and will
reduce the Holder's basis in his Units and, to the extent that such
distributions exceed his basis, will be treated as a gain from the sale of his
Units as discussed below. It is anticipated that substantially all of the
distributions of the Trust's dividend income and net short-term capital gain
will be taxable as ordinary income to Holders.
Distribution of the Trust's net capital gain (designated as capital gain
dividends by the Trust) will be taxable to Holders as long-term capital gain,
regardless of the length of time the Units have been held by a Holder. A
Holder will recognize a taxable gain or loss if the Holder sells or redeems
his Units. Any gain or loss arising from (or treated as arising from) the sale
or redemption of Units will be a capital gain or loss, except in the case of a
dealer in securities. Capital gains are currently taxed at the same rate as
ordinary income, however, the excess of net long-term capital gains over net
short-term capital losses may be taxed at a lower rate than ordinary income
for certain noncorporate taxpayers. A capital gain or loss is long-term if the
asset is held for more than one year and short-term if held for one year or
less. However, any capital loss on the sale or redemption of a Unit that a
Holder has held for six months or less will be a long-term capital loss to the
extent of any capital gain dividends previously distributed to the Holder by
the Trust. The deduction of capital losses is subject to limitations.
A distribution of Securities to a Holder upon redemption of his Units will
be a taxable event to such Holder, and that Holder will recognize taxable gain
or loss (equal to the difference between such Holder's tax basis in his Units
and the fair market value of Securities received in redemption), which will be
capital gain or loss upon such distribution, except in the case of a dealer in
securities. Holders should consult their own tax advisers in this regard.
Distributions that are taxable as ordinary income to Holders will constitute
dividends for Federal income tax purposes. To the extent that distributions
are appropriately designated by the Trust and are attributable to dividends
received by the Trust from domestic issuers with respect to whose Securities
the Trust satisfies the requirements for the dividends-received deduction,
such distributions will be eligible for the dividends-received deduction for
corporations (other than corporations such as "S" corporations which are not
eligible for such deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding company tax). The dividends-received deduction generally
is currently 70%. However, Congress from time to time considers proposals to
reduce the rate, and enactment of such a proposal would adversely affect the
after-tax return to investors who can take advantage of the deduction. Holders
are urged to consult their own tax advisers.
14
<PAGE>
Sections 246 and 246A of the Code contain additional limitations on the
eligibility of dividends for the corporate dividends-received deduction.
Depending upon the corporate Holder's circumstances (including whether it has
a 45-day holding period for its Units and whether its Units are debt
financed), these limitations may be applicable to dividends received by a
Holder from the Trust which would otherwise qualify for the dividends-received
deduction under the principles discussed above. Accordingly, Holders should
consult their own tax advisers in this regard. A corporate Holder should be
aware that the receipt of dividend income for which the dividends-received
deduction is available may give rise to an alternative minimum tax liability
(or increase an existing liability) because the dividend income will be
included in the corporation's "adjusted current earnings" for purposes of the
adjustment to alternative minimum taxable income required by Section 56(g) of
the Code.
Holders will be taxed in the manner described above regardless of whether
distributions from the Trust are actually received by the Holder or are
reinvested pursuant to the Reinvestment Plan.
The Federal tax status of each year's distributions will be reported to
Holders and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Trust and to the tax treatment of
distributions by the Trust to U.S. Holders. Holders that are not United States
citizens or residents should be aware that distributions from the Trust will
generally be subject to a withholding tax of 30%, or a lower treaty rate, and
should consult their own tax advisers to determine whether investment in the
Trust is appropriate. Distributions may also be subject to state and local
taxation and Holders should consult their own tax advisers in this regard.
RETIREMENT PLANS
This Trust may be well suited for purchase by Individual Retirement Accounts
("IRAs"), Keogh plans, pension funds and other qualified retirement plans,
certain of which are briefly described below. Generally, capital gains and
income received in each of the foregoing plans are exempt from Federal
taxation. All distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special 5 or 10 year averaging
or tax-deferred rollover treatment. Holders of Units in IRAs, Keogh plans and
other tax-deferred retirement plans should consult their plan custodian as to
the appropriate disposition of distributions. Investors considering
participation in any such plan should review specific tax laws related thereto
and should consult their attorneys or tax advisers with respect to the
establishment and maintenance of any such plan. Such plans are offered by
brokerage firms, including the Sponsor of this Trust, and other financial
institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed -- Keogh Plans. Units of the Trust
may be purchased by retirement plans established pursuant to the Self-Employed
Individuals Tax Retirement Act of 1962 ("Keogh plans") for self-employed
individuals, partnerships or unincorporated companies. Qualified individuals
may generally make annual tax-deductible contributions up to the lesser of 20%
of annual compensation or $30,000 in a Keogh plan. The assets of the plan must
be held in a qualified trust or other arrangement which meets the requirements
of the Code. Generally there are penalties for premature distributions from a
plan before attainment of age 59 1/2, except in the case of a participant's
death or disability and certain other limited circumstances. Keogh plan
participants may also establish separate IRAs (see below) to which they may
contribute up to an additional $2,000 per year ($2,250 if a spousal account is
also established).
Individual Retirement Account -- IRA.
Any individual (including one covered by a qualified private or government
retirement plan) can establish an IRA or make use of a qualified IRA
arrangement set up by an employer or union for the purchase of Units of the
Fund. Any individual can make a contribution to an IRA equal to the lesser of
$2,000 ($2,250 in a spousal account) or 100% of earned income; such investment
must be made in cash. However, the deductible amount an individual may
contribute will be reduced if the individual's adjusted gross income exceeds
$25,000 (in the case of a single individual), $40,000 (in the case of married
individuals filing a joint return) or $200 (in the case of a married
individual filing a separate return). A married individual filing a separate
return will not be entitled to any deduction if the individual is covered by
an employer-maintained retirement plan without regard to whether the
individual's spouse is an active participant in an employer retirement plan.
Unless nondeductible contributions were made in 1987 or a later
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year, all distributions from an IRA will be treated as ordinary income but
generally are eligible for tax-deferred rollover treatment. It should be noted
that certain transactions which are prohibited under Section 408 of the Code
will cause all or a position of the amount in an IRA to be deemed to be
distributed and subject to tax at that time. A participant's entire interest
in an IRA must be, or commence to be, distributed to the participant not later
than the April 1 following the taxable year during which the participant
attains age 70 1/2. Taxable distributions made before attainment of age 59
1/2, except in the case of a participant's death or disability, or where the
amount distributed is part of a series of substantially equal periodic (at
least annual) payments that are to be made over the life expectancies of the
participant and his or her beneficiary, are generally subject to a surtax in
an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing plan
established for employees of a corporation may purchase Units of the Trusts.
PUBLIC SALE OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is computed by adding to the
aggregate value of the Securities in the Trust (as determined by the Trustee)
and any cash held to purchase Securities, divided by the number of Units
outstanding, a sales charge of 4.167% thereof. This sales charge is equal to a
gross underwriting profit of 4.0% of the Public Offering Price and is subject
to change by the Sponsor at any time. This sales charge will be reduced to
3.00% after the first year of the Trust and to 2.00% after the second year of
the Trust. For most investors the commissions to purchase and sell the stocks
directly would exceed the Trust's 4% sales charge and expenses. Purchasers on
October 12, 1995 (the first day Units will be available to the public) will be
able to purchase Units at $1.00 each (including the sales charge). To allow
Units to be priced at $1.00, the Units outstanding as of the Evaluation Time
on October 12, 1995 (all of which are held by the Sponsor) will be split (or
split in reverse). The Public Offering Price on any subsequent date will vary
from the Public Offering Price on the date of the initial Prospectus (set
forth under Investment Summary) in accordance with fluctuations in the
aggregate value of the underlying Securities. Units will be sold to investors
at the Public Offering Price next determined after receipt of the investor's
purchase order. A proportionate share of the amount in the Income Account
(described under Administration of the Trust -- Accounts and Distributions) on
the date of delivery of the Units to the purchaser is added to the Public
Offering Price.
The sales charge applicable to quantity purchases is reduced on a graduated
scale for sales to any purchaser of at least 50,000 Units. Sales charges are
as follows:
<TABLE>
<CAPTION>
DEALER
PERCENT OF PERCENT OF CONCESSION
OFFERING NET AMOUNT AS PERCENT OF
NUMBER OF UNITS PRICE INVESTED OFFERING PRICE
- --------------- ---------- ---------- --------------
<S> <C> <C> <C>
Fewer than 50,000.......................... 4.00% 4.167% 3.00%
50,000 but less than 100,000............... 3.50 3.627 2.63
100,000 but less than 250,000.............. 3.00 3.093 2.25
250,000 but less than 500,000.............. 2.50 2.564 1.88
500,000 but less than 1,000,000............ 2.00 2.041 1.50
1,000,000 or more.......................... 1.50 1.523 1.13
</TABLE>
The above graduated sales charges will apply to all purchases on any one day
by the same purchaser of Units in the amounts stated. Purchases of Units will
not be aggregated with purchases of units of any other series of Smith Barney
Unit Trusts. Units held in the name of the spouse of the purchaser or in the
name of a child of the purchaser under 21 years of age are deemed to be
registered in the name of the purchaser for purposes of calculating the
applicable sales charge. The graduated sales charges are also applicable to a
trustee or other fiduciary purchasing securities for a single trust estate or
single fiduciary account.
Valuation of Securities by the Trustee is made as of the close of business
on the New York Stock Exchange on each business day. Securities quoted on a
national stock exchange or the Nasdaq National Market are valued at the
closing sales price, or, if no closing sales price exists, at the mean between
the closing bid and offer prices. Securities not so quoted are valued at the
mean between bid and offer prices.
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Employees of the Sponsor and its subsidiaries, affiliates and employee-
related accounts may purchase Units pursuant to employee benefit plans, at a
price equal to the aggregate value of the Securities in the Trust divided by
the number of Units outstanding plus a reduced sales charge of .5%. Sales to
these plans involve less selling effort and expense than sales to employee
groups of other companies.
PUBLIC DISTRIBUTION
Units will be distributed to the public at the Public Offering Price through
the Sponsor, as sole underwriter of the Trust, and may also be distributed
through dealers.
The Sponsor intends to qualify Units for sale in all states of the United
States where qualification is deemed necessary through the Sponsor and dealers
who are members of the National Association of Securities Dealers, Inc. Sales
to dealers, if any, will initially be made at prices which represent a
concession from the Public Offering Price per Unit.
UNDERWRITER'S AND SPONSOR'S PROFITS
The Sponsor, as sole underwriter, receives a gross underwriting commission
equal to the sales charge of 4.00% of the Public Offering Price (subject to
reduction on a graduated scale basis in the case of volume purchases, and
subject to reduction for purchasers in each succeeding quarter during the
first year of the Trust, as referred to above).
On the Initial Date of Deposit, the Sponsor also realized a profit or loss
on deposit of the Securities into the Trust in the amount set forth under
Investment Summary, which equals the difference between the cost of the
Securities to the Trust (which is based on the aggregate value of the
Securities on the Date of Deposit) and the purchase price of such Securities
to the Sponsor. On each subsequent deposit of Securities with respect to the
sale of additional Units to the public, the Sponsor similarly may realize a
profit or loss. The Sponsor also may realize profits or sustain losses as a
result of fluctuations after the Initial Date of Deposit in the aggregate
value of the Securities and hence of the Public Offering Price received by the
Sponsor for Units. Cash, if any, made available by buyers of Units to the
Sponsor prior to the settlement dates for purchase of Units may be used in the
Sponsor's business and may be of benefit to the Sponsor.
The Sponsor also receives an annual fee at the maximum rate of $.25 per
1,000 Units for the administrative and other services which it provides during
the life of the Trust (see Expenses and Charges -- Fees). The Sponsor has not
participated as sole underwriter or manager or member of any underwriting
syndicate from which any of the Securities in the Portfolio on the Initial
Date of Deposit were acquired, except as indicated under Portfolio.
In maintaining a market for the Units (see Market for Units), the Sponsor
will also realize profits or sustain losses in the amount of any difference
between the prices at which it buys Units (based on the aggregate value of the
Securities) and the prices at which it resells such Units (which include the
sales charge) or the prices at which the Securities are sold after it redeems
such Units, as the case may be.
MARKET FOR UNITS
While the Sponsor is not obligated to do so, its intention is to maintain a
market for Units and offer continuously to purchase Units from the Initial
Date of Deposit at prices, subject to change at any time, which will be
computed by adding (1) the aggregate value of Securities in the Trust, (2)
amounts in the Trust including dividends receivable on stocks trading ex-
dividend and (3) all other assets in the Trust; deducting therefrom the sum of
(a) taxes or other governmental charges against the Trust not previously
deducted, (b) accrued fees and expenses of the Trustee (including legal and
auditing expenses), the Sponsor and counsel to the Trust and certain other
expenses and (c) amounts for distribution to Holders of record as of a date
prior to the evaluation; and dividing the result of such computation by the
number of Units outstanding as of the date of computation. The Sponsor may
discontinue purchases of Units if the supply of Units exceeds demand or for
any other business reason. The Sponsor, of course, does not in any way
guarantee the enforceability, marketability or price of any Securities in the
Portfolio or of the Units. On any given day, however, the price offered by the
Sponsor for the purchase of Units shall be an amount not less than the
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<PAGE>
Redemption Price per Unit, based on the aggregate value of Securities in the
Trust on the date on which the Units are tendered for redemption (see
Redemption).
The Sponsor may, of course, redeem any Units it has purchased in the
secondary market to the extent that it determines that it is undesirable to
continue to hold such Units in its inventory. Factors which the Sponsor will
consider in making such a determination will include the number of units of
all series of unit trusts which it has in its inventory, the salability of
such units and its estimate of the time required to sell such units and
general market conditions. For a description of certain consequences of such
redemption for the remaining Holders, see Redemption.
REDEMPTION
Units may be redeemed by the Trustee at its corporate trust office upon
payment of any relevant tax without any other fee, accompanied by a written
instrument or instruments of transfer with the signature guaranteed by a
national bank or trust company, a member firm of any of the New York, Midwest
or Pacific Stock Exchanges, or in such other manner as may be acceptable to
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.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions (see Administration of the Trust --Accounts and
Distribution). The Securities to be sold will be selected by the Trustee from
those designated on the current list provided by the Sponsor for this purpose.
Provision is made in the Indenture under which the Sponsor may, but need not,
specify minimum amounts in which blocks of Securities are to be sold in order
to obtain the best price for the Trust. While these minimum amounts may vary
from time to time in accordance with market conditions, the Sponsor believes
that the minimum amounts which would be specified would be a sufficient number
of shares to obtain institutional rates of brokerage commissions (generally
between 1,000 and 5,000 shares).
The Trustee will redeem Units "in kind" upon request of a redeeming Holder
if the Holder tenders at least 100,000 Units. Thus, a Holder will be able
(except during a period described in the last paragraph under this heading),
not later than the seventh calendar day following such tender (or if the
seventh calendar day is not a business day on the first business day prior
thereto), to receive in kind an amount per Unit equal to the Redemption Price
per Unit (computed as described in Redemption -- Computation of Redemption
Price per Unit) as determined as of the day of tender. The Redemption Price
per Unit for in kind distributions (the "In Kind Distribution") will take the
form of the distribution of whole shares of each of the Securities in the
amounts and the appropriate proportions represented by the fractional
undivided interest in the Trust of the Units tendered for redemption (based
upon the Redemption Price per Unit), except that with respect to any foreign
Security not held in ADR form, the value of that Security will be distributed
in cash, and cash will be distributed in lieu of fractional shares.
In Kind Distributions on redemption of a minimum of 100,000 Units will be
held by The Chase Manhattan Bank, N.A., as Distribution Agent, for the
account, and for disposition in accordance with the instructions of, the
tendering Holder as follows:
(a) If the tendering Holder requests cash payment, the Distribution Agent
shall sell the In Kind Distribution as of the close of business on the date of
tender and remit to the Holder not later than seven calendar days thereafter
the net proceeds of sale, after deducting brokerage commissions and transfer
taxes, if any, on the sale. The Distribution Agent may sell the Securities
through the Sponsor, and the Sponsor may charge brokerage commissions on those
sales. Since these proceeds will be net of brokerage commissions, Holders who
wish to receive cash for their Units should always offer them for sale to the
Sponsor in the secondary market before seeking redemption by the Trustee. The
Trustee may offer Units tendered for redemption and cash liquidation to it to
the Sponsor on behalf of any Holder to obtain this more favorable price for
the Holder.
(b) If the tendering Holder requests distribution in kind, the Distribution
Agent (or the Sponsor acting on behalf of the Distribution Agent) shall sell
any portion of the In Kind Distribution represented by fractional interests in
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<PAGE>
accordance with the foregoing and distribute net cash proceeds to the
tendering Holder together with certificates representing whole shares of each
of the Securities that comprise the In Kind Distribution. (The Trustee may,
however, offer the Sponsor the opportunity to purchase the tendered Units in
exchange for the numbers of shares of each Security and cash, if any, which
the Holder is entitled to receive. The tax consequences to the Holder would be
identical in either case.)
Any amounts paid on redemption representing income received will be
withdrawn from the Income Account to the extent funds are available (an
explanation of such Account is set forth under Administration of the Trust --
Accounts and Distributions). In addition, in implementing the redemption
procedures described above, the Trustee and the Distribution Agent shall make
any adjustments necessary to reflect differences between the Redemption Price
of the Units and the value of the In Kind Distribution as of the date of
tender. To the extent that Securities are distributed in kind, the size of the
Trust will be reduced.
A Holder may tender Units for redemption on any weekday (a "Tender Day")
which is not one of the following: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving or
Christmas. The right of redemption may be suspended and payment postponed for
any period, determined by the Securities and Exchange Commission ("SEC"), (1)
during which the New York Stock Exchange, Inc. is closed other than for
customary weekend and holiday closings, (2) during which the trading on that
Exchange is restricted or an emergency exists as a result of which disposal or
evaluation of the Securities is not reasonably practicable or (3) for such
periods as the SEC may by order permit.
COMPUTATION OF REDEMPTION PRICE PER UNIT
Redemption Price per Unit is computed by the Trustee as of the Evaluation
Time on each June 30 and December 31 (or the last business day prior thereto),
as of the Evaluation Time next following the tender of any Unit for redemption
on any Tender Day, and on any other business day desired by the Trustee or the
Sponsor, by adding (1) the aggregate value of the Securities determined by the
Trustee, (2) amounts in the Trust including dividends receivable on stocks
trading ex-dividend (with appropriate adjustments to reflect monthly
distributions made to Holders) and (3) all other assets in the Trust;
deducting therefrom the sum of (a) taxes or other governmental charges against
the Trust not previously deducted, (b) accrued fees and expenses of the
Trustee (including legal and auditing expenses), the Sponsor and counsel to
the Trust and certain other expenses and (c) amounts for distribution to
Holders of record as of a date prior to the evaluation; and dividing the
result of such computation by the number of Units outstanding as of the date
thereof.
The aggregate value of the Securities shall be determined by the Trustee in
good faith in the following manner: if the Securities are listed on a national
securities exchange or the Nasdaq National Market, or a foreign securities
exchange, such evaluation shall generally be based on the closing sale price
on such exchange (unless the Trustee deems such price inappropriate as a basis
for evaluation) or, if there is no closing sale price on such exchange, at the
mean between the closing offering and bid side evaluation. If the Securities
are not so listed or, if so listed and the principal market therefor is other
than on such exchange, such evaluation shall generally be made by the Trustee
in good faith based at the mean between current bid and offer prices on the
over-the-counter market (unless the Trustee deems such mean inappropriate as a
basis for evaluation) or, if bid and offer prices are not available, (1) on
the basis of the mean between current bid and offer prices for comparable
securities, (2) by the Trustee's appraising the value of the Securities in
good faith at the mean between the bid side and the offer side of the market
or (3) by any combination thereof.
EXPENSES AND CHARGES
Initial Expenses -- All or some portion of the expenses incurred in
establishing the Trust, including the cost of the initial preparation,
printing and execution of the registration statement and the indenture,
Federal and State registration fees, the initial fees and expenses of the
Trustee, legal expenses and any other out-of-pocket expenses, will be paid by
the Trust and amortized over two years. Any balance of the expenses incurred
in establishing the Trust, as well as advertising and selling expenses, will
be paid by the Underwriters at no cost to the trust.
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<PAGE>
Fees -- The Trustee's and Sponsor's fees are set forth under Investment
Summary. The Trustee receives for its services as Trustee and Distribution
Agent payable in monthly installments, the amount set forth under Investment
Summary. The Trustee's fee (in respect of services as Trustee), payable
monthly, is based on the largest number of Units outstanding during the
preceding month. Certain regular and recurring expenses of the Trust,
including certain mailing and printing expenses, are borne by the Trust. The
Trustee receives benefits to the extent that it holds funds on deposit in the
various non-interest bearing accounts created under the Indenture. The
Sponsor's fee, which is earned for trust supervisory services, is based on the
largest number of Units outstanding during the year. The Sponsor's fee, which
is not to exceed the maximum amount set forth under Investment Summary, may
exceed the actual costs of providing supervisory services for this Trust, but
at no time will the total amount the Sponsor receives for trust supervisory
services rendered to all series of Smith Barney Unit Trusts in any calendar
year exceed the aggregate cost to it of supplying these services in that year.
In addition, the Sponsor may also be reimbursed for bookkeeping or other
administrative services provided to the Trust in amounts not exceeding its
cost of providing those services. The fees of the Trustee and Sponsor may be
increased without approval of Holders in proportion to increases under the
classification "All Services Less Rent" in the Consumer Price Index published
by the United States Department of Labor.
Other Charges -- These include: (1) fees of the Trustee for extraordinary
services (for example, making distributions due to failure of contracts for
Securities), (2) expenses of the Trustee incurred for the benefit of the Trust
(including legal and auditing expenses) and expenses of counsel designated by
the Sponsor, (3) various governmental charges and fees and expenses for
maintaining the Trust's registration statement current with Federal and State
authorities, (4) expenses and costs of action taken by the Sponsor, in its
discretion, or the Trustee, in its discretion, to protect the Trust and the
rights and interests of Holders (for example, expenses in exercising the
Trust's rights under the underlying Securities), (5) indemnification of the
Trustee for any losses, liabilities and expenses incurred without gross
negligence, bad faith or wilful misconduct on its part, (6) indemnification of
the Sponsor for any losses, liabilities and expenses incurred without gross
negligence, bad faith, wilful misconduct or reckless disregard of their duties
and (7) expenditures incurred in contacting Holders upon termination of the
Trust. The amounts of these charges and fees are secured by a lien on the
Trust.
Payment of Expenses -- Funds necessary for the payment of the above fees
will be obtained in the following manner: (1) first, by deductions from the
Income Account (see below) (which will reduce income distributions from the
Account); (2) to the extent the Income Account funds are insufficient, by
distribution from the Capital Account (see below); (3) to the extent the
Income and Capital Accounts are insufficient, by selling Securities from the
Portfolio and using the proceeds to pay the expenses (thereby reducing the net
asset value of the Units).
Since the Securities are all common stocks, and the income stream produced
by dividend payments thereon is unpredictable (see Description of the Trust --
Risk Factors), the Sponsor cannot provide any assurance that dividends will
be sufficient to meet any or all expenses of the Trust. If dividends are
insufficient to cover expenses, it is likely that Securities will have to be
sold to meet Trust expenses. Any such sales may result in capital gains or
losses to Holders. See Description of the Trust -- Taxes.
ADMINISTRATION OF THE TRUST
RECORDS
The Trustee keeps records of the transactions of the Trust at its corporate
trust office including names, addresses and holdings of all Holders, a current
list of the Securities and a copy of the Indenture. Such records are available
to Holders for inspection at reasonable times during business hours.
ACCOUNTS AND DISTRIBUTIONS
Dividends payable to the Trust are credited by the Trustee to an Income
Account, as of the date on which the Trust is entitled to receive such
dividends as a holder of record of the Securities. All other receipts (i.e.,
return of capital, stock dividends, if any, and gains) will be credited by the
Trustee to a Capital Account. Unless a Holder elects
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<PAGE>
to participate in the Reinvestment Plan, any income distribution for the
Holder as of each Record Day will be made on the following Distribution Day or
shortly thereafter and shall consist of an amount equal to the Holder's pro
rata share of the distributable balance in the Income Account as of such
Record Day, after deducting estimated expenses. The first distribution for
persons who purchase Units between a Record Day and a Distribution Day will be
made on the second Distribution Day following their purchase of Units. In
addition, amounts from the Capital Account may be distributed from time to
time to Holders of record. The Trustee may withdraw from the Income Account,
from time to time, such amounts as it deems requisite to establish a reserve
for any taxes or other governmental charges that may be payable out of the
Trust. Funds held by the Trustee in the various accounts created under the
Indenture do not bear interest.
Purchases at Market Discount -- Certain of the shareholder dividend
reinvestment, stock purchase or similar plans maintained by issuers of the
Securities offer shares pursuant to such plans at a discount from market
value. Subject to any applicable regulations and plan restrictions, the
Sponsor intends to direct the Trustee to participate in any such plans to the
greatest extent possible taking into account the Securities held by the Trust
in the issuers offering such plans.
The Trustee will follow a policy that it will place securities transactions
with a broker or dealer only if it expects to obtain the most favorable prices
and executions of orders. Transactions in securities held in the Trust are
generally made in brokerage transactions (as distinguished from principal
transactions) and the Sponsor or any of its affiliates may act as brokers
therein if the Trustee expects thereby to obtain the most favorable prices and
execution. The furnishing of statistical and research information to the
Trustee by any of the securities dealers through which transactions are
executed will not be considered in placing securities transactions.
TRUST SUPERVISION
The Trust is a unit investment trust which normally follows a buy and hold
investment strategy and is not actively managed. However, the Portfolio is
regularly reviewed. Traditional methods of investment management for a managed
fund (such as a mutual fund) typically involve frequent changes in a portfolio
of securities on the basis of economic, financial and market analyses. The
Portfolio of the Trust, however, will not be actively managed and therefore
the adverse financial condition of an issuer will not necessarily require the
sale of its Securities from the Portfolio. However, while it is the intention
of the Sponsor to continue the Trust's investment in the Securities in the
original proportions, it has the power but not the obligation to direct the
disposition of the Securities upon institution of certain legal proceedings,
default under certain documents adversely affecting future declaration or
payment of anticipated dividends, or a substantial decline in price or the
occurrence of other materially adverse market or credit factors that, in the
opinion of the Sponsor, would make the retention of the Securities detrimental
to the interests of the Holders. The Sponsor is authorized under the Indenture
to direct the Trustee to reinvest the proceeds of any sale of Securities not
required for redemption of Units in additional Securities.
In the event a public tender offer is made for a Security or a merger or
acquisition is announced affecting a Security, the Sponsor may instruct the
Trustee to tender or sell the Security on the open market when in its opinion
it is in the best interest of the Holders of the Units to do so. In addition,
the Sponsor may instruct the Trustee to accept or reject any offer made by an
issuer of any of the Securities to issue new Securities in exchange or
substitution for any Securities. Any Securities so received in exchange or
substitution will be held by the Trustee subject to the terms and conditions
of the Indenture to the same extent as Securities originally deposited
thereunder. If a Security is eliminated from the Portfolio the Sponsor is
authorized to reinvest the proceeds in Additional Securities.
The Sponsor is authorized to direct the Trustee to acquire replacement
Securities ("Replacement Securities") to replace any Securities, for which
purchase contracts have failed ("Failed Securities"), or, in connection with
the deposit of Additional Securities, when Securities of an issue originally
deposited are unavailable at the time of subsequent deposit, as described more
fully below. The Replacement Securities shall satisfy certain conditions
specified in the Indenture including, among other conditions, requirements
that the Replacement Securities shall be publicly-traded common stocks of
banks and thrifts selected according to the same criteria as the stocks
initially selected and of the same quality; shall be issued by an issuer
subject to or exempt from the reporting requirements
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under Section 13 or 15(d) of the Securities Exchange Act of 1934 (or similar
provisions of law); shall not result in more than 10% of the Trust consisting
of securities of a single issuer (or of two or more issuers which are
Affiliated Persons as this term is defined in the Investment Company Act of
1940) which are not registered and are not being registered under the
Securities Act of 1933 or result in the Trust owning more than 50% of any
single issue which has been registered under the Securities Act of 1933; and
shall have, in the opinion of the Sponsor, characteristics sufficiently
similar to the characteristics of the other Securities in the Trust as to be
acceptable for acquisition by the Trust.
The Indenture also authorizes the Sponsor to increase the size and number of
Units of the Trust by the deposit of cash (or a letter of credit) with
instructions to purchase Additional Securities, contracts to purchase
Additional Securities or, Additional Securities in exchange for the
corresponding number of additional Units, provided that the original
proportionate relationship among the number of shares of each Security
established on the Initial Date of Deposit (the "Original Proportionate
Relationship") is maintained to the extent practicable.
With respect to deposits of cash (or a letter of credit) with instructions
to purchase Additional Securities), Additional Securities or contracts to
purchase Additional Securities, in connection with creating additional Units
of the Trust during the 90-day period following the Initial Date of Deposit,
the Sponsor may specify minimum amounts of additional Securities to be
deposited or purchased. If a deposit is not sufficient to acquire minimum
amounts of each Security, Additional Securities may be acquired in the order
of the Security most under-represented immediately before the deposit when
compared to the Original Proportionate Relationship. If Securities of an issue
originally deposited are unavailable at the time of subsequent deposit or
cannot be purchased at reasonable prices or their purchase is prohibited or
restricted by law, regulation or policies applicable to the Trust or the
Sponsor, the Sponsor may (1) deposit cash or a letter of credit with
instructions to purchase the Security when practicable or (2) deposit (or
instruct the Trustee to purchase) Securities of one or more other issues
originally deposited or (3) deposit (or instruct the Trustee to purchase) a
Replacement Security that will meet the conditions described above.
REPORTS TO HOLDERS
The Trustee will furnish Holders with each distribution a statement of the
amount of income and the amount of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit. The Trustee
will also furnish to each person who at any time during the preceding year was
a Holder of record an annual statement (1) as to the Income Account: income
received; deductions for applicable taxes and for fees and expenses of the
Trustee and counsel, and certain other expenses; amounts paid in connection
with redemptions of Units and the balance remaining after such distributions
and deductions, expressed in each case both as a total dollar amount and as a
dollar amount per Unit outstanding on the last business day of such year; (2)
as to the Capital Account: the disposition of any Securities (other than
pursuant to In Kind Distributions) and the net proceeds received therefrom;
the results of In Kind Distributions in connection with redemption of Units;
deductions for payment of applicable taxes and for fees and expenses of the
Trustee and counsel and certain other expenses, to the extent that the Income
Account is insufficient, and the balance remaining after such distribution and
deductions, expressed both as a total dollar amount and as a dollar amount per
Unit outstanding on the last business day of such year; (3) a list of the
Securities held and the number of Units outstanding on the last business day
of such year; (4) the Redemption Price per Unit based upon the computation
thereof made on the last business day of such year; and (5) amounts actually
distributed during such year from the Income Account expressed both as total
dollar amounts and as dollar amounts per Unit outstanding on the record dates
for such distributions.
In order to enable them to comply with federal and state tax reporting
requirements, Holders will be furnished with evaluations of Securities upon
request to the Trustee.
EVIDENCE OF OWNERSHIP
If a purchaser of Units holds his Units through an account for his benefit
at the Sponsor, that purchaser will be the beneficial owner of the Units but
the Sponsor will be the record Holder. Units held in such an account with the
Sponsor are transferable by the beneficial owner to another account with the
Sponsor by notice to the Sponsor, payment of any sums required for taxes or
other governmental charges and compliance with any formalities required by the
Sponsor.
22
<PAGE>
All record Holders of Units (including the Sponsor for any Units held by it
in accounts for the benefit of others) are required to hold their Units in
uncertificated form. The Trustee will credit a record Holder's account with
the number of Units held by the Holder. If any Units are not held in an
account with the Sponsor, or if Units so held are to be transferred outside
such an account, such Units are transferable by the Trustee, with a payment of
any sums payable for taxes or other governmental charges imposed upon these
transactions and compliance with the formalities necessary to redeem Units.
AMENDMENT AND TERMINATION
The Sponsor may amend the Indenture, with the consent of the Trustee but
without the consent of any of the Holders, (1) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent, (2) to change any provision thereof as may be required by the
SEC or any successor governmental agency and (3) to make such other provisions
as shall not materially adversely affect the interest of the Holders (as
determined in good faith by the Sponsor). The Indenture may also be amended in
any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the Holders of 51% of the Units, provided
that no such amendment or waiver will reduce the interest in the Trust of any
Holder without the consent of such Holder or reduce the percentage of Units
required to consent to any such amendment or waiver without the consent of all
Holders. The Indenture will terminate upon the earlier of the disposition of
the last Security held thereunder or the Mandatory Termination Date specified
under Investment Summary. The Indenture may also be terminated by the Sponsor
if the value of the Trust is less than the minimum value set forth under
Investment Summary (as described under Description of the Trust -- Risk
Factors) and may be terminated at any time by written instrument executed by
the Sponsor and consented to by Holders of 51% of the Units. The Trustee shall
deliver written notice of any termination to each Holder within a reasonable
period of time prior to the termination. Within a reasonable period of time
after such termination, the Trustee must sell all of the Securities then held
and distribute to each Holder, after deductions of accrued and unpaid fees,
taxes and governmental and other charges, such Holder's interest in the Income
and Capital Accounts. Such distribution will normally be made by mailing a
check in the amount of each Holder's interest in such accounts to the address
of such Holder appearing on the record books of the Trustee.
REINVESTMENT PLAN
Distributions of income and/or principal, if any, on Units held in street
name through Smith Barney Inc. or directly in the name of the Holder may be
reinvested in additional Units of the Trust at no extra charge pursuant to the
Trust's "Reinvestment Plan". In order to participate in the Reinvestment Plan,
the Holder must notify his financial consultant at Smith Barney Inc. or the
Trustee at least ten business days prior to the Distribution Day to which that
election is to apply. The election may be modified or terminated by similar
notice.
Distributions being reinvested will be paid in cash to the Sponsor, who will
use them to purchase Units of the Trust at the Sponsor's Repurchase Price (the
net asset value per Unit without any sales charge) in effect at the close of
business on the Distribution Day. These may be either previously issued Units
repurchased by the Sponsor or newly issued Units created upon the deposit of
additional Securities in the Trust (see Description of the Trust -- Structure
and Offering). Each participant will receive an account statement reflecting
any purchase or sale of Units under the Reinvestment Plan.
The costs of the Reinvestment Plan will be borne by the Sponsor, at no cost
to the Trust. The Sponsor reserves the right to amend, modify or terminate the
Reinvestment Plan at any time without prior notice.
RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY
TRUSTEE
The Trustee or any successor may resign upon notice to the Sponsor. The
Trustee may be removed upon the direction of the Holders of 51% of the Units
at any time, or by the Sponsor without the consent of any of the Holders if
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor. In case of
23
<PAGE>
such resignation or removal the Sponsor is to use its best efforts to appoint
a successor promptly and if upon resignation of the Trustee no successor has
accepted appointment within thirty days after notification, the Trustee may
apply to a court of competent jurisdiction for the appointment of a successor.
The Trustee shall be under no liability for any action taken in good faith in
reliance on prima facie properly executed documents or for the disposition of
monies or Securities, nor shall it be liable or responsible in any way for
depreciation or loss incurred by reason of the sale of any Security. This
provision, however, shall not protect the Trustee in cases of wilful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. In the event of the failure of the Sponsor to act, the
Trustee may act under the Indenture and shall not be liable for any of these
actions taken in good faith. The Trustee shall not be personally liable for
any taxes or other governmental charges imposed upon or in respect of the
Securities or upon the interest thereon. In addition, the Indenture contains
other customary provisions limiting the liability of the Trustee.
SPONSOR
The Sponsor may resign at any time if a successor Sponsor is appointed by
the Trustee in accordance with the Indenture. Any new Sponsor must have a
minimum net worth of $2,000,000 and must serve at rates of compensation deemed
by the Trustee to be reasonable and as may not exceed amounts prescribed by
the SEC. If the Sponsor fails to perform its duties or becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public
authorities, then the Trustee may (1) appoint a successor Sponsor at rates of
compensation deemed by the Trustee to be reasonable and as may not exceed
amounts prescribed by the SEC, (2) terminate the Indenture and liquidate the
Trust or (3) continue to act as Trustee without terminating the Indenture.
The Sponsor shall be under no liability to the Trust or to the Holders for
taking any action or for refraining from taking any action in good faith or
for errors in judgment and shall not be liable or responsible in any way for
depreciation of any Security or Units or loss incurred in the sale of any
Security or Units. This provision, however, shall not protect the Sponsor in
cases of wilful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties. The Sponsor may transfer all or substantially
all of its assets to a corporation or partnership which carries on its
business and duly assumes all of its obligations under the Indenture and in
such event it shall be relieved of all further liability under the Indenture.
24
<PAGE>
MISCELLANEOUS
TRUSTEE
The name and address of the Trustee are shown on the back cover of this
prospectus. The Trustee is subject to supervision and examination by the
Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and the Comptroller of the Currency.
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsor.
AUDITORS
The Statement of Financial Condition and the Portfolio included in this
Prospectus have been audited by KPMG Peat Marwick LLP, independent auditors,
as indicated in their report with respect thereto, and is so included herein
in reliance upon the authority of said firm as experts in accounting and
auditing.
SPONSOR
Smith Barney Inc. ("Smith Barney"), was incorporated in Delaware in 1960 and
traces its history through predecessor partnerships to 1873. Smith Barney, an
investment banking and securities broker-dealer firm, is a member of the New
York Stock Exchange, Inc. and other major securities and commodities
exchanges, the National Association of Securities Dealers, Inc. and the
Securities Industry Association. Smith Barney is an indirect wholly-owned
subsidiary of The Travelers Inc. The Sponsor or an affiliate is investment
adviser, principal underwriter or distributor of more than 60 open-end
investment companies and investment manager of 12 closed-end investment
companies. Smith Barney also sponsors all Series of Corporate Securities
Trust, Government Securities Trust, Harris, Upham Tax-Exempt Fund and Tax
Exempt Securities Trust, and acts as co-sponsor of most Series of Defined
Asset Funds.
25
<PAGE>
EQUITY FOCUS TRUSTS
-------------------------------------------
A SMITH BARNEY UNIT TRUST
THE BANK & THRIFT SERIES
PROSPECTUS
This Prospectus does not contain all of the information with respect to the
investment company set forth in its registration statements and exhibits
relating thereto which have been 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.
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<S> <C>
Investment Summary 2
Independent Auditors' Report 7
Statement of Financial Condition 7
Portfolio 8
Description of the Trust 9
Risk Factors 11
Taxes 14
Public Sale of Units 16
Market for Units 17
Redemption 18
Expenses and Charges 19
Administration of the Trust 20
Reinvestment Plan 23
Resignation, Removal and Limitations on Liability 23
Miscellaneous 25
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SPONSOR: TRUSTEE: INDEPENDENT AUDITORS:
<S> <C> <C>
Smith Barney Inc. The Chase Manhattan Bank, N.A. KPMG Peat Marwick LLP
388 Greenwich Street (A National Banking Association) 345 Park Avenue
23rd Floor Unit Investment Trust New York, New York 10154
New York, New York 10013 Box 2051
(800) 223-2532 New York, NY 10081
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY
------------
- --------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
WITH RESPECT TO THIS INVESTMENT COMPANY NOT CONTAINED IN THIS PROSPECTUS; AND
ANY INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
- --------------------------------------------------------------------------------
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositor is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
<TABLE>
<CAPTION>
SEC FILE OR
IDENTIFICATION NUMBER
---------------------
<C> <S> <C>
I. Bonding Arrangements and Date of Organization of
the Depositor filed pursuant to Items A and B of
Part II of the Registration Statement on Form S-6
under the Securities Act of 1933: 2-67446
II. Information as to Officers and Directors of the
Depositor filed pursuant to Schedules A and D of
Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934: 8-12324
III. Charter documents of the Depositor filed as
Exhibits to the Registration Statement on Form S-
6 under the Securities Act of 1933 (Charter, By-
Laws): 2-52898
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsor and Trustee are as follows:
Smith Barney Inc. 13-2518466
The Chase Manhattan Bank, N.A. 13-2633612
</TABLE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities and
Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
THE REGISTRATION STATEMENT ON FORM S-6 IS COMPRISED OF THE FOLLOWING PAPERS
AND DOCUMENTS:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference to the Cross-
Reference Sheet to the Registration Statement of The Uncommon Values
Unit Trust, 1985 Series, 1933 Act File No. 2-97046).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The signatures.
Written Consents of the following persons:
KPMG Peat Marwick LLP (included in Exhibit 5.1)
Davis Polk & Wardwell (included in Exhibit 3.1)
The following exhibits:
<TABLE>
<C> <S>
1.1 -- Form of Reference Trust Indenture.
2.1 -- Form of Standard Terms and Conditions of Trust (incorporated by
reference to Exhibit 1.1.1 to the Registration Statement of Shearson
Lehman Brothers Unit Trusts, Utility Value Trust 1, 1933 Act File
No. 33-17053).
3.1 -- Opinion of counsel as to the legality of securities being issued
including their consent to the use of their name under the heading
"Miscellaneous --Legal Opinion" in the Prospectus.
5.1 -- Consent of KPMG Peat Marwick LLP to the use of their name under the
heading "Miscellaneous --Auditors" in the Prospectus.
</TABLE>
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment thereto to be signed
on its behalf by the undersigned thereunto duly authorized in the City of New
York and State of New York on the 12th day of October 1995.
SIGNATURES APPEAR ON PAGE II-4
A majority of the members of the Board of Directors of Smith Barney Inc. has
signed this Registration Statement or Amendment thereto pursuant to Powers of
Attorney authorizing the person signing this Registration Statement or
Amendment to the Registration Statement to do so on behalf of such members.
II-3
<PAGE>
SMITH BARNEY UNIT TRUSTS (REGISTRANT)
SMITH BARNEY INC.
(DEPOSITOR)
By the following persons* who constitute a majority of the Board of Directors
of Smith Barney Inc.:
Steven D. Black
James S. Boshart III
Robert A. Case
James Dimon
Robert Druskin
Robert F. Greenhill
Jeffrey B. Lane
Robert H. Lessin
Jack L. Rivkin
/s/ Kevin Kopczynski
By___________________________________
Kevin Kopczynski (As authorized
signatory for Smith Barney Inc.
and Attorney-in-fact for the
persons listed above)
- --------
* Pursuant to Powers of Attorney filed under the 1933 Act file Numbers 33-56722
and 33-51999.
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER PAGE
------- ----
<C> <S> <C>
1.1 --Form of Trust Indenture.
3.1 --Opinion of counsel as to legality of securities being issued
including their consent to the use of their name under the
heading "Miscellaneous--Legal Opinion" in the Prospectus.
5.1 --Consent of KPMG Peat Marwick to the use of their name under
the heading "Auditors" in the Prospectus.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Statements
of Financial Conditions and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-10-1995
<PERIOD-END> OCT-10-1995
<INVESTMENTS-AT-COST> 960,825
<INVESTMENTS-AT-VALUE> 960,825
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 91,525
<TOTAL-ASSETS> 1,052,350
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 91,525
<TOTAL-LIABILITIES> 40,038
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,000,863
<SHARES-COMMON-STOCK> 1,000,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 960,825
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 960,825
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 1.1
SMITH BARNEY UNIT TRUSTS EQUITY FOCUS TRUSTS
BANK & THRIFT SERIES
REFERENCE TRUST INDENTURE
Dated as of October 12, 1995
This Trust Indenture between Smith Barney Inc., as
Sponsor, and Chase Manhattan Bank, N.A., as Trustee, (the "Inden-
ture") sets forth certain provisions in full and incorporates
other provisions by reference to the document entitled Smith
Barney Unit Trusts, Standard Terms and Conditions of Trust for
Utility Value Trust 1 and Similar and Subsequent Series formed on
or subsequent to October 20, 1987, as amended March 3, 1988 (the
"Standard Terms and Conditions of Trust") and such provisions as
are set forth in full and such provisions as are incorporated by
reference constitute a single instrument. All references herein
to Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Sponsor and the Trustee Agree as
follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the
provisions contained in the Standard Terms and Conditions of Trust
are herein incorporated by reference in their entirety and shall
be deemed to be a part of this instrument as fully and to the same
extent as though said provisions had been set forth in full in
this instrument, except that all references to "Shearson Lehman
Hutton Inc." shall be deleted and replaced by "Smith Barney Inc.",
and all references to Boston Safe Deposit and Trust Company shall
be deleted and replaced by The Chase Manhattan Bank, N.A.; and
further, that The Chase Manhattan Bank, N.A., shall, by executing
this Trust Indenture, be deemed to be the Trustee and a party to
said Standard Terms and Conditions of Trust for all purposes of
this Trust.
<PAGE>
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
(a) The Securities (or contracts for the purchase
of such Securities) listed under Portfolio in the Prospectus
have been deposited with (or assigned to) the Trustee under
this Indenture.
(b) The fractional undivided interest in the Trust
represented by each Unit is set forth under "Investment
Summary-- Fractional Undivided Interest in Trust Represented
by Each Unit" in the Prospectus.
(c) The definition of "Prospectus" in Article I
shall be amended to read in its entirety "The prospectus
relating to the Trust Fund dated the date of the Reference
Trust Indenture, the form of which is incorporated by
reference in the Registration Statement filed with the
Securities and Exchange Commission on such date."
(d) The definitions of Capital Gain Subaccount,
Capital Subaccount and Ordinary Gain Subaccount and all
references thereto shall be deleted.
(e) The definition of Capital Account is amended
to read: "The account created pursuant to Section 3.02."
(f) A definition of "Reinvestment Program" is
added as follows:
"Any program administered by the Trustee pursuant
to the Indenture providing for the reinvestment of Income or
Capital Account proceeds in Units."
(g) Section 2.02 is hereby amended by adding the
following sentence as the second sentence of Section 2.02:
"Effective as of the Evaluation Time on October 12, 1995, in
the event that the aggregate value of Securities in the Trust
has increased since the evaluation on October 11, 1995, the
Trustee shall issue such number of additional Units to the
Holder of outstanding Units as of the close of business on
October 11, 1995, that the price per Unit computed as of the
Evaluation Time on October 12, 1995, plus the maximum
applicable sales charge shall equal $1 per Unit (based on the
number of Units outstanding as of said Evaluation Time,
-2-
<PAGE>
including the additional Units pursuant to this sentence); in
the event that the aggregate value of Securities in the Fund
has decreased since the evaluation on October 11, 1995, there
will be a reverse split of the outstanding Units, and said
Holder will surrender to the Trustee for cancellation such
number of Units, that the price per Unit computed as of the
Evaluation Time on October 12, 1995 plus the maximum
applicable sales charge shall equal $1 per Unit (based on the
number of Units outstanding as of said Evaluation Time,
reflecting cancellation of Units pursuant to this sentence)."
(h) Section 3.02 is amended by deleting "(a)"
preceding the final paragraph and by deleting paragraph (b)
in its entirety.
(i) Section 3.05(e) shall be amended to read as
follows:
"(e) in order to meet the requirements of the Code,
distributions shall be made as follows or in any other manner
that will meet such current requirements:
"(i) Distribution of Capital Gain Net Income for
-------------------------------------------
Purposes of Section 4982 of the Code. In December of each
- ------------------------------------
calendar year, the Trustee shall determine whether there was
any capital gain net income for the 1-year period ending
October 31 of such calendar year, and if there was such
capital gain net income the Trustee shall declare a distribu-
tion of such capital gain net income (reduced by any amount
therof previously distributed on account of such period)
during December of such calendar year to holders of record on
a specified date in December of such calendar year and shall
make such distribution to such holders of record in January
of the next calendar year.
"(ii) Distribution of Capital Gain Net Income for
-------------------------------------------
Purposes of Section 852 of the Code. If each of the Trust's
- -----------------------------------
taxable years the Trustee determines after the tax return for
the year is prepared that there was capital gain net income
for the year, the Trustee shall declare distribution of such
capital gain net income (reduced by any amount thereof pre-
viously distributed on account of such year) prior to the
time the tax return for the year is required to be filed
(including extensions) and shall make such distribution with
the next regular Income Distribution but in no event later
than 12 months after the close of the taxable year.
"(iii) Distribution of Taxable Income of the Trust
-------------------------------------------
other than Capital Gain Net Income for Purposes of Section
- ----------------------------------------------------------
-3-
<PAGE>
4982 of the Code. In December of each calendar year, the
- ----------------
Trustee shall estimate the Trust's taxable income (without
regard to its capital gain net income), for the calendar
year; the Trustee shall declare a distribution of such
estimated taxable income (reduced by any amount thereof
previously distributed on account of such period) during
December of such calendar year to holders of record on a
specified date in December of such calendar year and shall
make such distribution in January of the next calendar year.
If after the Trustee has estimated the Trust's taxable income
(without regard to its capital gain net income) for the
calendar year as aforesaid, the Fund recognizes additional
taxable income (other than capital gain) that was not
included in such estimate of the Trust's taxable income
(e.g., gain from the disposition of a Security treated as
ordinary income under the market discount rules of Sections
1276-78 of the Code), the Trustee shall reestimate the
Trust's taxable income for the calendar year and, if neces-
sary, declare and make any additional distribution in the
same manner as set forth in the immediately preceding sen-
tence.
"(iv) Distribution of Taxable Income of the Fund
------------------------------------------
other than the Capital Gain Net Income for purposes of Sec-
- -----------------------------------------------------------
tion 852 of the Code. At the end of each of the Trust's
- --------------------
taxable years after the tax return for the year is prepared,
the Trustee shall determine the Trust's taxable income
(without regard to its capital gain net income) for the year;
the Trustee shall declare a distribution of such taxable
income (reduced by any amount thereof previously distributed
on account of such year) prior to the time the tax return for
the year is required to be filed (including extensions) and
shall make such distribution with the next Income Distribu-
tion but in no event later than 12 months after the close of
the taxable year."
(j) A new section 3.07A is added to read as fol-
lows:
"Section 3.07A. Reinvestment Programs. If a
---------------------
Holder has elected to participate in a Reinvestment Program,
amounts distributed to the Holder shall be applied to the
purchase of Units at the Unit Value on the applicable Dis-
tribution Day. The Trustee shall credit to the Holder's
account the number of Units purchased. Units purchased for
any Reinvestment Program shall be purchased from the Spon-
sor."
(k) Section 3.08 is amended to read as follows:
-4-
<PAGE>
"Section 3.08. Expenses Borne By the Trust Fund.
--------------------------------
The following regular and recurring expenses of the Trust
Fund will be borne by the Trust Fund: (a) auditing fees, (b)
postage, stationery, printing and reproduction charges
incurred in preparing and mailing the statements and reports
furnished pursuant to Sections 3.09 and 8.03 and distribu-
tions made pursuant to Section 3.05; (c) any expenses of the
Distribution Agent and (d) any brokerage fees incurred by the
Trustee in purchasing additional Securities pursuant to
instructions received from the Sponsor pursuant to Section
3.06."
(l) The second and third sentences of Section 4.01
are amended to read as follows:
"If the Securities are listed on a national securities
exchange; The Nasdaq National Market ('NASDAQ') or foreign
securities exchange, the evaluation shall be determined on
the basis of the closing sales price on that exchange or
NASDEQ (unless the Trustee deems such price inappropriate as
a basis for valuation) or, if there is no closing sale price
on that exchange or NASDAQ, or the mean between the closing
bid and asked prices, If the Securities are not so listed or,
if so listed and the principal market therefor is other than
on that exchange or NASDAQ, the evaluation shall be based on
the mean between the closing bid and asked prices of such
Securities on the over-the-counter market (unless the Trustee
deems such prices inappropriate as a basis for valuation),
or, if no such closing sale prices are available (i) on the
basis of the mean between the current bid and asked prices,
(ii) if bid and asked prices are not available for any
Securities, on the basis of the mean between the current bid
and asked prices for comparable securities, (iii) by deter-
mining the value of the Securities at the mean between the
bid and asking side of the market by appraisal or (iv) by any
combination of the above."
(m) Section 5.01 shall be amended to read as
follows:
As of the Evaluation Time (x) on each
December 31 and June 30 (or the last Business Day prior
thereto) commencing with the first such day which is more
than six months after the date of the Reference Trust Inden-
ture, (y) on any other business day as of the Evaluation Time
next following the tender of any Unit for redemption, and (z)
on any other business day desired by it, the Trustee shall:
(1) Add
-5-
<PAGE>
(A) cash on hand in the Trust Fund,
other than cash held specially for the purchase of Contract
Securities,
(B) the aggregate value of each issue of
Securities other than Contract Securities, and
(C) any interest and dividends receiv-
able on stocks trading ex dividend, and
(D) amounts representing organizational
expenses paid from the Trust less amounts representing
accrued organizational expenses of the Trust, plus
(E) all other assets of the Trust; and
(2) Deduct
(A) amounts representing any applicable
taxes or governmental charges payable out of the Trust Fund
and for which no deductions shall have previously been made
for the purpose of addition to the Reserve Account,
(B) amounts representing estimated
accrued fees and expenses of the Trust Fund including but not
limited to unpaid fees and expenses of the Trustee (including
legal and auditing expenses), the Sponsor and of counsel
pursuant to Section 3.14, and
(C) cash allocation for distribution to
Holders of record, or redemption of Units, as of a date prior
to the evaluation then being made.
The resulting figure is herein called a "Trust Fund
Evaluation". Until the Depositor has informed the Trustee
that there will be no further deposits of Additional
Securites pursuant to section 3.06, the Depositor shall
provide the Trustee estimaters of (i) the total organiza-
tional expenses to be borne by the Trust pursuant to Section
10.02 and (ii) the total number of Units to be issued in
connection with the initial deposit and all anticipated
deposits of Additional Securites. For purposes of calculat-
ing the Trust Fund Evaluation and Unit Value, the Trustee
shall treat all duch anticipated expenses and Units as having
been paid and issued, respectively on the date of the
Reference Trust Agreement, and, in connection with each such
calculation, shall take into account a pro rata portion of
--- ----
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<PAGE>
such expencses (and of any liability for advances made by the
Trustee for the payment thereof) based on the actural number
of Units issued as of the date of such calculation. In the
event the Trustee is informed by the Depositor of a revision
in its estimate of total expenses or total Units and upon the
conclusion of the deposit of Additional Securities, the
Trustee shall base calculations made thereafter on such
revised estimates or actual expenses, respectively, but such
adjustment shall not affect calculations made prior thereto
and no adjustment shall be made in respect thereof.
(n) Section 10.02, shall be amended to read as
follows:
"Section 10.02 Initial Cost. To the Extent
---------------------------
not borne by the Depositor, the expenses incurred in estab-
lishing the Trust, including the cost of the initial prepara-
tion and typesetting of the registration statement, prospec-
tuses (including preliminary prospectuses), the indenture,
and other documents relating to the Trust, SEC and state blue
sky registration fees, the costs of the inital valuation of
the portfolio and audit of the Trust, the out-of-pocket
expenses related thereto, but not including the expenses
incurred in the printing of preliminary prospectuses and
prospectuses, expenses incurred in the preparation and print-
ing of brochures and other advertising materials and any
other selling expenses, shall be borne by the Trust,
provided, however, that the liability of the Depositor for
- -------- -------
any such initial costs, fees and expenses shall not, except
with respect to deposits of Additional Securities, include
any fees, costs or other expenses incurred in connection
herewith after the execution of this Indenture. Such expen-
ses shall be paid from the Capital Account. To the extent
the funds in the Capital Account of the Trust shall be insuf-
ficient to pay the expenses borne by the Trust specified in
this Section 10.02, the Trustee shall advance out of its own
funds and cause to be deposited and credited to the Capital
Account such amount as may be required to permit payment of
such expenses. The Trustee shall be reimbursed for such
advance on each Record Date from funds on hand in the Capital
Account in the amount deemed to have accrued as of such
Record Date as provided in the following sentence (less prior
payments on account of such advances, if any), and the provi-
sions of Section 8.05 with respect to the reimbursement of
dispursements for Trust expenses, including, without limita-
tion. the lien in favor of the Trustee therefor and the
authority to sell Securities as needed to fund such reimbur-
sement, shall apply to expenses paid and amounts advanced
pursuant to this Section. For the purposes of the preceding
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<PAGE>
sentence and the addition provided in clause (1)(D) of Sec-
tion 5.01, the expenses borne by the Trust pursuant to this
Section shall be deemed to have been paid on the date of the
Reference Trust Agreement and to accrue at a daily rate over
the first two years of the Fund, provided, however, that
--------
nothing herein shall be deemed to prevent, and the Trustee
shall be entitled to, full reimbursement for any advances
made pursuant to this Section no later than the termination
of the Trust.
This Indenture shall be deemed effective when
executed and delivered by the Sponsor and the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused
this Trust Indenture to be duly executed.
SMITH BARNEY INC.
Sponsor
By ____________________________
Title: Vice President
THE CHASE MANHATTAN BANK, N.A.
Trustee
By ____________________________
Title:
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<PAGE>
EXHIBIT 3.1
October 11, 1995
Smith Barney Unit Trusts
Equity Focus Trusts--
The Bank & Thrift Series
Smith Barney Inc.
Unit Trust Department
388 Greenwich Street, 23rd Floor
New York, NY 10013
Dear Sirs:
We have acted as special counsel for you, as sponsor (the "Sponsor") of
Smith Barney Unit Trusts Equity Focus Trusts--The Bank & Thrift Series (the
"Trust"), in connection with the issuance of units of fractional undivided
interest in the Trust (the "Units") in accordance with the Trust Indenture
relating to the Trust (the "Indenture").
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsor and (ii) the Units, when duly issued and delivered
by the Sponsor and the Trustee in accordance with the Indenture, will be
legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 3.1 to the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the heading "Miscellaneous--Legal Opinion."
Very truly yours,
Davis Polk & Wardwell
<PAGE>
EXHIBIT 5.1
CONSENT OF INDEPENDENT AUDITORS
To the Sponsor, Trustee and Unit Holders of
Smith Barney Unit Trusts Equity Focus Trusts--The Bank & Thrift Series:
We consent to the use of our report dated October 11, 1995 included herein
and to the reference to our firm under the heading "Auditors" in the
Prospectus.
KPMG PEAT MARWICK LLP
New York, New York
October 11, 1995
