<PAGE>
Registration No. 33-62815
S E C U R I T I E S A N D E X C H A N G E C O M M I S
S I O
N
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
to
F O R M 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 BANK & THRIFT SERIES
(A UNIT INVESTMENT TRUST)
B.
Names of Depositors:
SMITH BARNEY INC.
<TABLE>
<S> <C>
C. Complete address of depositor's principal executive
office:
388 Greenwich St.
New York, New York 10013
D. Names and complete address of agent for service:
LAURIE A. HESSLEIN
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
It is proposed that this filing will become effective February 11,
1997
<PAGE>
</TABLE>
EQUITY FOCUS TRUSTS
BANK & THRIFT SERIES
CROSS-REFERENCE SHEET
Pursuant to Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction
as to the Prospectus in Form S-6)
<TABLE>
Form N-89B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
<C> <S> <C>
1. . . . . . . . . (a) Name of trust Prospectus front cover
(b) Title of securities issued . .
2.Name and address of each depositor Sponsors: Prospectus
back
cover
3. . . . Name and address of trustee Trustee
4.Name and address of each principal underwriterSponsors:
Prospectus back cover
5. . .State of organization of trust Tax Exempt Securities
Trust
6.Execution and termination of trust agreementTax Exempt
Securities Trust - The
Trust:
Amendment and Termination
of the Trust Agreement 7. .
. . . . . . . . Changes of name *
8. . . . . . . . . . . . Fiscal year *
9. . . . . . . . . . . . .Litigation *
II. General Description of the Trust and
Securities of the Trust
10.(a) Registered or bearer securities Rights of Unit Holders
(b) Cumulative or distributive securities
(c) Redemption . . . . . . . . . .
(d) Conversion, transfer, etc. . .
(e) Periodic payment plan. . . . . *
(f) Voting rights. . . . . . . . .
(g) Notice to certificate holders Rights of Unit Holders -
Reports and Records:
Sponsors -
Responsibility: Trustee -
Resignation: Amendment
and Termination of the
Trust Agreement -
Amendment
(h) Consents required. . . . . . . Sponsors - Responsibility:
Amendment and Termination
of the Trust Agreement (i) Other
provisions . . . . . . . Tax Exempt Securities Trust - Tax Status
11.Type of securities comprising units Prospectus front cover:
Tax Exempt Securities
Trust - Portfolio
12.Certain information regarding periodic
payment certificates. . . . . . . *
13.. .(a) Load, fees, expenses, etc. Prospectus front cover:
Summary of Essential
Information; Public
Offering - Offering
Price; Public Offering -
Sponsors' and
Underwriters' Profits:
Tax Exempt Securities
Trust - Expenses and
Charges
<PAGE>
Form N-89B-2 Form S-6
Item Number Heading in Prospectus
II. General Description of the Trust and
Securities of the Trust
<C> <S> <C>
(b) Certain information regarding periodic
payment certificates . . . . *
(c) Certain percentages. . . . . . Public Offering - Offering
Price
(d) Certain other fees, etc, payable by holders
Rights of Unit Holders - Certificates
(e) Certain profits receivable by depositors,
principal underwriters, trustee or
affiliated persons . . . . . . Public Offering - Sponsors'
and Underwriters' Profits:
Rights of Unit Holders -
Redemption of Units -
Purchase by the Sponsors of
Units Tendered for
Redemption
(f) Ratio of annual charges to income*
14.. .Issuance of trust's securities Tax Exempt Securities
Trust - The Trust: Rights
of Unit Holders -
Certificates
15.Receipt and handling of payments from purchasers*
16.Acquisition and disposition of underlying
securities . . . . . . . . . . . . Tax Exempt Securities Trust
- Portfolio: Sponsors -
Responsibility
17.. . . . .Withdrawal or redemption Rights of Unit Holders -
Redemption of Units
18.(a) Receipt, custody and disposition of incomeRights of Units
Holders - Distribution of
Interest and Principal:
Rights of Unit Holders -
Reports and Records
(b) Reinvestment of distributions *
(c) Reserves or special funds. . . Rights of Unit Holders -
Distribution of Interest
and Principal: Tax Exempt
Securities Trust - Expenses
and Charges - Other Charges (d) Schedule of
distributions. . . *
19.. . Records, accounts and reports Rights of Unit Holders -
Reports and Records:
Rights of Unit Holders -
Distribution of Interest
and Principal
20.Certain miscellaneous provisions of trust
agreementAmendment
and Termination of the Trust
(a) Amendment. . . . . . . . . . . Agreement: Trustee -
Resignation: Trustee -
(b) Termination . . . . . . . . . Resignation: Trustee -
Limitations on Liability:
(c) and (d) Trustee, removal and successorSponsors -
Responsibility: Sponsors - Resignation
(e) and (f) Depositors, removal and successor
21.. . . . Loans to security holders *
22.. . . . .Limitations on liability Sponsors - Limitations on
Liability: Trustee -
Limitations on Liability:
Tax Exempt Securities
Trust - Portfolio
23.. . . . . . .Bonding arrangements *
24.Other material provisions of trust agreement*
______
* Inapplicable, answer negative or not required.
<PAGE>
<PAGE> Form N-89B-2 Form S-6
Item Number Heading in Prospectus
III. Organization, Personnel and
Affiliated Persons of Depositor
<C> <S> <C>
25.. . . .Organization of depositors Sponsors
26.. . . Fees received by depositors *
27.. . . . . .Business of depositors Sponsors
28.Certain information as to officials and
affiliated persons of depositors [Contents of Registration
Statement]
29.. Voting securities of depositors *
30.. .Persons controlling depositors *
31.Payments by depositor for certain services
rendered to trust . . . . . . . . *
32.Payments by depositors for certain other services
rendered to trust . . . . . . . . *
33.Remuneration of employees of depositors for
certain services rendered to trust *
34.Remuneration of other persons for certain services
rendered to trust . . . . . . . . *
IV. General Description of the Trust and
Securities of the Trust
35.Distribution of trust's securities by statesPublic Offering -
Distribution of Units
36.Suspension of sales of trust's securities*
37.Revocation of authority to distribute*
38.. . . .(a) Method of distribution Public Offering -
Distribution of Units
(b) Underwriting agreements. . . .
(c) Selling agreements . . . . . .
39.(a) Organization of principal underwritersSponsors
(b) N.A.S.D. membership of principal underwriters
40.Certain fees received by principal underwriters*
41.(a) Business of principal underwritersSponsors
(b) Branch offices of principal underwriters*
(c) Salesmen of principal underwriters*
42.Ownership of trust's securities by certain persons*
43.Certain brokerage commissions received by principal
underwriters. . . . . . . . . . . *
44.. . . . . (a) Method of valuation Prospectus front cover:
Public Offering -
Offering Price: Public
Offering - Distribution
of Units
(b) Schedule as to offering price *
(c) Variation in offering price to certain personsPublic
Offering - Distribution of Units
45.. Suspension of redemption rights *
46.. . . . .(a) Redemption Valuation Rights of Unit Holders -
Redemption of Units -
Computation of Redemption
Price per Unit
(b) Schedule as to redemption price *
47.Maintenance of position in underlying securities
Public Offering - Market for Units: Rights of Unit Holders -
Redemption of Units - Purchase by the Sponsors of Units
tendered for Redemption; Rights of Unit Holders - Redemption
of Units - Computation of Redemption Price per Unit
______
* Inapplicable, answer negative or not required.<PAGE>
<PAGE> Form N-89B-2 Form S-6
Item Number Heading in Prospectus
V. Information Concerning the Trustee
or Custodian
<C> <S> <C>
48.Organization and regulation of trusteeTrustee
49.. . .Fees and expenses of trustee Tax Exempt Securities
Trust - Expenses and
Charges
50.. . . . . . . . . .Trustee's lien Tax Exempt Securities
Trust - Expenses and
Charges - Other Charges
VI. Information Concerning Insurance of
Holders of Securities
51.Insurance of holders of trust's securities*
VI. Policy of Registrant
52. (a) Provisions of trust agreement with respect to
selection or elimination of underlying securitiesProspectus
front cover: Sponsors-Responsibility
(b)Transactions involving elimination of
underlying securities . . . . . *
(c)Policy regarding substitution or elimination
of underlying securities. . . . Sponsors - Responsibility
(d)Fundamental policy not otherwise covered*
53. Tax status of trust . . . . . . Prospectus front cover: Tax
Exempt Securities Trust -
Tax Status
VIII. Financial and Statistical Information
54. Trust's securities during last ten years*
55. . . . . . . . . . . . . . . . . *
56. Certain information regarding periodic payment
securities . . . . . . . . . . . . *
57. . . . . . . . . . . . . . . . . *
58. . . . . . . . . . . . . . . . . *
59. Financial statements (Instruction 1(c) to form S-6)
Statement of Financial Condition of The Tax Exempt Securities
Trust
______
* Inapplicable, answer negative or not required.
<PAGE>
</TABLE>
EQUITY FOCUS
TRUSTS
__________________
T h e B a n k & T h r i f t S e r i e s
A Smith Barney Unit Investment Trust
SMITH BARNEY
Equity Focus Trusts--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 (212) 816-4000.
Prospectus dated February 11, 1997
Read and retain this Prospectus for future reference
<PAGE>
<TABLE>
SMITH BARNEY INC. UNIT TRUSTS,
EQUITY FOCUS TRUSTS--THE BANK & THRIFT
SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 15,
1996+ (the Evaluation Date)
<S><C> <C>
SPONSOR
Smith Barney Inc.
NUMBER OF UNITS -19,842,000
FRACTIONAL UNDIVIDED
INTEREST IN TRUST
REPRESENTED BY EACH UNIT -1/19,842,000nd
PUBLIC OFFERING PRICE
(per 1,000 Units)
Aggregate value of Securities in
Trust$26,049,882
Divided by 19,842,000 Units
(times 1,000)$1,312.87
Plus sales charge of 3.00% of
Public Offering Price
(3.093% of the net amount
invested in Securities)* 40.60
Public Offering Price per
1,000 Units$1,353.47
Plus the amount per 1,000 Units
in the Income and Capital
Accounts (see Description of
the Trust - Income) 2.92
Total (per 1,000 Units)$1,356.39
SPONSOR'S REPURCHASE PRICE
and REDEMPTION PRICE per 1,000
UNITS** (based on underlying
Securities)$1,312.87
MONTHLY INCOME DISTRIBUTIONS
Distributions of Income, if any, will
be made quarterly the 26th of December
and the 25th of March, June and September
to Holders of record on the 10th day of
the month. In order to meet certain tax
requirements, a special distribution of
income including capital gains, may be
paid to Holders or record as of a date
in December. Any capital gain net
income will generally be distributed
after the end of the year.
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
The 26th of December and the 25th of March,
June and September, and upon termination and
liquidation of the Trust.
EVALUATION TIME
The close of trading on the New York Stock Exchange (currently 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
outstanding.
+Valuation of Securities is based on the market value per share as
of November 15, 1996, 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 sales charge will be reduced on a graduated scale in the case
of quantity purchases. See Public Sale of Units--Public Offering
Price.
**All redemptions of at least 100,000 Units 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
</TABLE>
<PAGE>
EQUITY FOCUS TRUSTS--THE BANK & THRIFT SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 15, 1996
(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 or 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
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
trust 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.
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 3.00%* of the
Public Offering Price; this results in a sales charge of 3.093%* 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 Sales of Units). The minimum
purchase if $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.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Unit Holders, Sponsor and Trustee of
Smith Barney Unit Trusts, Equity Focus Trusts
Bank & Thrift Series:
We have audited the accompanying balance sheet of Smith Barney
Unit Trusts, Equity Focus Trusts Bank & Thrift Series: including
the portfolio of securities, as of September 30, 1996, and the
related statements of operations and changes in net assets and the
supplemental per-unit data for the period October 11, 1995 (date of
deposit) to September 30, 1996. These financial statements and
per-unit data are the responsibility of the Trustee (see Note 6). Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of September 30, 1996
by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates
made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Smith
Barney Unit Trusts, Equity Focus Trusts Bank & Thrift Series: as
of September 30, 1996, and the results of its operations and changes
in its net assets and the supplemental per-unit data for the period
October 11, 1995 (date of deposit) to September 30, 1996, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New York, New York
February 5, 1997
<PAGE>
<TABLE>
SMITH BARNEY UNIT TRUSTS,
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Statement of Assets and Liabilities
September 30, 1996
<S><C><C>
Assets:
Investments in securities, at value (cost $17,639,384)
(see accopanying schedule of portfolio investments)$23,879,968
Dividends receivable45,831
Organizational costs 61,017
Total assets23,986,816
Liabilities:
Accrued fees and expenses6,657
Cash overdraft 108,189
Total liabilities 114,846
Net assets at September 30, 1996 equivalent
to $1,115.04 per 1,000 units on 21,409,000
units of fractional undivided interest
outstanding$23,871,970
Net assets consist of:
Cost of 25,607,700 units at date of deposit25,236,468
Sales charge 40,038
25,196,430
Accumulated cost of equity securities sold(7,533,589)
Net unrealized appreciation6,240,584
Distributions in excess of net investment income(40,283)
Undistributed proceeds for equity securities sold 8,828
Net assets$23,871,970
See accompanying notes to financial statements.
7<PAGE>
<PAGE>
SMITH BARNEY UNIT TRUSTS,
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Statement of Operations
Period from October 11, 1995 (Date of Deposit)
to September 30, 1996
Income:
Dividend income$ 659,771
Total income659,771
Total expenses (note 3) 92,067
Investment income - net 567,704
Realized and unrealized gain on investments:
Net realized gain492,559
Increase (decrease) in unrealized appreciation
of investments - net6,240,584
Net gain on investments6,733,143
Net increase in net assets resulting
from operations$7,300,847
See accompanying notes to financial statements.
8<PAGE>
<PAGE>
SMITH BARNEY UNIT TRUSTS,
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Statement of Changes in Net Assets
Period from October 11, 1995 (Date of Deposit)
to September 30, 1996
Operations:
Investment income - net$567,704
Net realized gain492,559
Increase in unrealized appreciation of
investments - net 6,240,584
Net increase in net assets resulting
from operations 7,300,847
Initial deposits:
Principal25,196,430
Income 3,086
25,199,516
Distributions to Unitholders (note 2):
Investment income - net (589,541)
Total distributions (589,541)
Redemptions of units (note 2):
Principal (8,017,320)
Investment income - net (21,532)
Total redemptions (8,038,852)
Increase in net assets 23,871,970
Net assets:
Beginning of period -
End of period$23,871,970
Other information:
Distribution in excess of net investment
income, end of period$40,283
Units redeemed4,198,700 units
See accompanying notes to financial statements.
9<PAGE>
</TABLE>SMITH BARNEY UNIT TRUSTS,
<PAGE>
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Notes to Financial Statements
September 30, 1996
(1)Summary of Significant Accounting Policies
Smith Barney Inc. Unit Trusts, Equity Focus Trusts, the Bank &
Thrift Series (the "Trust"), is registered under the Investment
Company Act of 1940 as a unit investment trust. The following is
a summary of significant accounting policies consistently followed
by the Trust:
(a)The valuation of securities by the Trustee was made using the
market value per share as of the evaluation time at date of deposit.
Subsequent to the initial date of deposit, valuation of securities is
based, for securities quoted on a national securities exchange or on
the Nasdaq National Market, on closing sale prices, or if no price
exists, at the mean between bid and offer prices, or for securities
not so quoted, at the mean between bid and offer prices on the
over-the-counter market.
(b)The Trust is not an association taxable as a corporation for
Federal income tax purposes; accordingly, no provision for taxes on
income is required (see "Taxes" in this Prospectus).
(c)Investment transactions are recorded as of the trade date.
Realized gains or loses on sales of investments are determined on
the identified cost basis for financial reporting and tax purposes.
Dividend income is recorded on the ex-dividend date.
(d)The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period actual results may differ from these estimates.
(e)Organizational costs were paid by the Trust and will be
amortized over three years.
(f)Record days are the 10th of December, March, June and
September.
(2)Distributions and Redemptions
Quarterly distributions of net investment income to Unitholders are
made in cash on the 26th of December and the 25th of March, June
and September, to holders of record as of the 10th day of that
month. Receipts other than dividends, net of expenses, are
distributed as explained in "Administration of the Trust - Accounts
and Distributions" in this Prospectus. Units may be redeemed upon
delivery of a request for redemption to the Trustee.
10<PAGE>
SMITH BARNEY UNIT TRUSTS,
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Notes to Financial Statements, Continued
September 30, 1996
(3)Fees and Transactions with Affiliates
Sponsor
The Sponsor, Smith Barney Inc. receives an annual fee (maximum
of $.25 per $1,000 face amount of securities in the Trust) for
service it renders with respect to monitoring, and when necessary,
providing advice to the Trustee with respect to any adverse market
or credit factors concerning the security investments of the trust and
any actions taken by the issuers of such securities that may affect
the issuer's capital structure, as provided by the Indenture.
The Sponsor receives a sales charge applicable to purchases of units
at a rate of 3% of the Offering Price.
Trustee
The Chase Manhattan Bank, N.A. acts as Trustee and Distribution
Agent for an annual fee ($.86 per 1,000 units) paid in monthly
installments, based on the largest number of units outstanding the
previous month.
(4)Concentration of Risk
The Securities in the Trust are concentrated in common stocks
issued by Banks and thrifts (see "Risk Factors" in this Prospectus).
(5)Selected Supplemental Per-Unit Data
Selected data per 1,000 units of the Trust outstanding for the period
from October 11, 1995 (Date of Deposit) to September 30, 1996 is
as follows:
<TABLE>
<S><C><C> <C>
YearUnitsNet assetIncomePrincipal
endedoutstandingvaluedistributionsdistributions
September 30, 199621,409,000$1,115.04$27.54-
</TABLE>
11<PAGE>
<PAGE>
SMITH BARNEY UNIT TRUSTS,
EQUITY FOCUS TRUST
THE BANK & THRIFT SERIES
Notes to Financial Statements, Continued
September 30, 1996
(6)Notes to Portfolio
(a)At September 30, 1996, the aggregate cost of investments for
Federal income tax purposes was the same as the cost for financial
reporting purposes, which was $17,639,384.
At September 30, 1996, the net unrealized appreciation of stocks
consisted of:
<TABLE>
<S><C>
Gross unrealized appreciation$6,240,584
Net unrealized appreciation$6,240,584
12<PAGE>
<PAGE>
PORTFOLIO OF SMITH BARNEY INC. UNIT TRUSTS,
EQUITY FOCUS TRUSTS - THE BANK & THRIFT SERIES
AS OF SEPTEMBER 30, 1996
<S><C><C><C><C><C>
StockNumberClosingMarket
SecuritiesSymbolof SharesPriceValue(1)
1.Ahmanson (HF) & Co.#AHM19,750$28.0000$ 553,000.00
2.Banc One Corp.ONE23,89741.0000979,777.00
3.Bank of BostonBKB17,77557.87501,028,728.13
4.BankAmerica Corp.#BAC13,82582.12501,135,378.13
5.Boatmen's BancsharesBOAT21,72555.87501,213,884.38
6.California Federal Bank Corp."A"#CAL33,57523.2500780,618.75
7.Charter One Financial*COFI18,66440.0000746,560.00
8.Chase Manhattan Corp.#CMB13,82580.12501,107,728.13
9.Citicorp#CCI11,85090.62501,073,906.25
10.Coast Savings FinancialCSA19,75032.0000632,000.00
11.Comerica Inc.CMA23,70051.50001,220,550.00
12.Dime BancorpDME45,42513.3750607,559.38
13.First Bank SystemFBS15,80066.87501,056,625.00
14.First Chicago NBD Corp.#FCN21,44845.2500970,522.00
15.Firstar Corp.FSR21,72548.25001,048,231.25
16.Golden West FinancialGDW9,87558.3750576,453.13
17.Greater NY Savings*#GRTR43,45012.6250548,556.25
18.Mellon Bank Corp.#MEL17,77559.25001,053,168.75
19.National City Corp.#NCC25,67542.12501,081,559.38
20.Norwest Corp.#NOB25,67540.87501,049,465.63
21.Republic New YorkRNB13,82569.1250955,653.13
22.Southern NationalSNB31,60033.25001,050,700.00
23.Standard Federal BancorpSFB13,82545.7500632,493.75
24.U.S. BancorpUSBC29,40039.50001,161,300.00
25.Wachovia Corp.WB17,77549.5000879,862.50
26.Washington Mutual*WAMU 19,750 37.2500 735,687.50
571,359$1,243.750$23,879,968.38
_____
(1)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.
13
<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 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--Trust Supervision). Units may be
continuously offered to the public by means of this Prospectus (see
Public Sale of Units--Public Distribution) resulting in 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 order 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.
___________
*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.
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 bereduced 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).
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 no 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 book
value, annual dividend, dividend yield, 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 any additional and replacement Securities and
any money market instruments acquired and held by the Trust pursuant
to the provisions of the Indenture (including 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 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
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 regions or industries serviced by these institutions, and
volatility in political conditions as well as fiscal or monetary policies
or 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
thrift's 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 thirft'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 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 of 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 Distributions 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.
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
distributed 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 distributed 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 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.
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 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 years 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
$2,00 ($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 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 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>
<TABLE>
<S> <C><C>
Dealer
75% ofPercent ofConcession as
OfferingNet AmountPercent of
Number of UnitsPriceInvestedOffering Price
Fewer than 50,0003.00%3.093%2.25%
50,000 but less than 100,0002.6252.6961.97
100,000 but less than 250,0002.252.3021.69
250,000 but less than 500,0001.8751.9111.41
500,000 but less than 1,000,0001.501.5231.13
1,000,000 or more1.251.266.94
</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 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.
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 state 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 chargee) 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 Redemption Price per Units, 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 accordance with the foregoing the 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 closing, (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 three 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.
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-- Fund 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
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 rate 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 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 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 or 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.
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
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 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
Distribution 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 anytime 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 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 (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 of 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.
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 Battle Fowler LLP,
75 East 55th Street, New York, New York 10022, 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.
<PAGE>
EQUITY FOCUS
TRUSTS
_______________
A Smith Barney Unit Trust
The Bank & Thrift Series
PROSPECTUS
This Prospectus does not contain all of the information set forth
in the 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
Investment Summary2
Report of Independent Accountants6
Financial Statements7
Portfolio13
Description of the Trust14
Taxes19
Public Sale of Units22
Market for Units23
Redemption24
Expenses and Charges26
Administration of the Trust27
Reinvestment Plan30
Resignation, Removal and Limitations on Liability30
Miscellaneous31
Sponsors:Trustee:Independent Accountants:
Smith Barney Inc.The Chase Manhattan Bank, N.A.KPMG Peat
Marwick LLP
388 Greenwich St., 23rd Fl.(A National Banking Assoc.)345 Park
Avenue
New York, New York 10013Unit Investment TrustNew York, New
York 10154
(212) 816-4000Box 2051
New York, New York 10081
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
representations 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.
