XYZ STRYPES TRUST, N-2, 1996-03-18

XYZ STRYPES TRUST
N-2, 1996-03-18

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 18, 1996
SECURITIES ACT FILE NO. 33-_____
INVESTMENT COMPANY ACT FILE NO. 811-____

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-2

/x/ Registration Statement Under The Securities Act of 1933
/ / Pre-Effective Amendment No.
/ / Post-Effective Amendment No.
and/or
/x/ Registration Statement Under The Investment Company Act of 1940

/ / Amendment No.
(check appropriate box or boxes)

STRYPES TRUST
(Exact Name of Registrant as Specified in Charter)

C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WORLD FINANCIAL CENTER
NORTH TOWER
NEW YORK, NEW YORK 10281
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (212) 449-1000

ROBERT E. AHERNE
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WORLD FINANCIAL CENTER
NORTH TOWER
NEW YORK, NEW YORK 10281
(Name and Address of Agent for Service)

COPIES TO:

NORMAN D. SLONAKER, ESQ.
BROWN & WOOD
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable
after the effective date of this Registration Statement.

If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act
of 1933, as amended, other than securities offered in connection with a
dividend reinvestment plan, check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /

<TABLE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<CAPTION>
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities Being Offering Price Aggregate Offering Registration
Being Registered Registered Per Share(1) Price(1) Fee
<S> <C> <C> <C> <C>
STRYPES
representing shares of
beneficial interest . 1,000,000 Shares $10.00 $10,000,000 $3,448.28

</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee.

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

<PAGE>
EXPLANATORY NOTE

This Registration Statement relates to the offering of 1,000,000 STRYPES
representing shares of beneficial interest of the XYZ STRYPES Trust (without
giving effect to the Underwriters' over-allotment options), of which STRYPES
will be offered in the United States and Canada and STRYPES will be offered
internationally outside the United States and Canada. The Registration
Statement includes the U.S. Prospectus followed by an alternate front cover
page and back cover page for the International Prospectus as indicated on
each page.

<PAGE>
<TABLE>
CROSS-REFERENCE SHEET*
PURSUANT TO RULE 404(C)

<CAPTION>
Item Number in Form N-2 Caption in Prospectus
- - ----------------------- ---------------------
<S> <C>
PART A - INFORMATION REQUIRED IN A PROSPECTUS

1. Outside Front Cover . . . . . . . . . . . . Front Cover Page

2. Inside Front and Outside Back
Cover Page . . . . . . . . . . . . . . . . . Front Cover Page; Inside
Front Cover Page

3. Fee Table and Synopsis . . . . . . . . . . . Prospectus Summary; Fee Table

4. Financial Highlights . . . . . . . . . . . . Not Applicable

5. Plan of Distribution . . . . . . . . . . . . Front Cover Page; Prospectus
Summary; Underwriting

6. Selling Shareholders . . . . . . . . . . . . Not Applicable

7. Use of Proceeds . . . . . . . . . . . . . . Use of Proceeds; Investment
Objective and Policies

8. General Description of the Registrant . . . Front Cover Page; Prospectus
Summary; The Trust;
Investment Restrictions;
Investment Objective and
Policies; Risk Factors

9. Management . . . . . . . . . . . . . . . . . Trustees and Officers;
Management Arrangements

10. Capital Stock, Long-Term Debt and Other
Securities; Federal Income Tax
Considerations . . . . . . . . . . . . . . . Description of STRYPES

11. Defaults and Arrears on Senior Securities . Not Applicable

12. Legal Proceedings . . . . . . . . . . . . . Not Applicable

13. Table of Contents of the Statement of
Additional Information . . . . . . . . . . . Not Applicable

PART B - INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION

14. Cover Page . . . . . . . . . . . . . . . . . Not Applicable

15. Table of Contents . . . . . . . . . . . . . Not Applicable

16. General Information and History . . . . . . The Trust

17. Investment Objective and Policies . . . . . Investment Objective and
Policies; Investment
Restrictions

18. Management . . . . . . . . . . . . . . . . . Trustees and Officers;
Management Arrangements

19. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . Management Arrangements

20. Investment Advisory and Other Services . . . Management Arrangements

21. Brokerage Allocation and Other Practices . . Investment Objective and
Policies

- - -------------------------
*Pursuant to the General Instructions to Form N-2, all information
required to be set forth in Part B: Statement of Additional Information has
been included in Part A: The Prospectus.

i
<PAGE>
22. Tax Status . . . . . . . . . . . . . . . . . Certain United States Federal Income Tax
Considerations
23. Financial Statements . . . . . . . . . . . . Financial Statements
</TABLE>

PART C - OTHER INFORMATION

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
ii
<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

SUBJECT TO COMPLETION
Preliminary Prospectus Dated March 18, 1996

1,000,000 STRYPES(SERVICE MARK)
XYZ STRYPES TRUST

(Subject to Exchange for Shares of Common Stock of (XYZ Company), (par value
$. per share))

XYZ STRYPES Trust (the "Trust") is a newly organized Delaware business
trust established to purchase and hold (i) a series of zero-coupon U.S.
Government securities with face amounts and maturities corresponding to the
distributions payable with respect to the STRYPES offered hereby (the
"STRYPES") and the payment dates thereof ("U.S. Treasury Securities"), and
(ii) one or more forward purchase contracts (the "Contracts") with a certain
stockholder (the "Contracting Stockholder") of XYZ Company (the "Company")
relating to shares of common stock of the Company (par value $. per
share) (the "XYZ Common Stock"). Each of the STRYPES will receive quarterly
distributions at an anticipated annual distribution rate of $ per
STRYPES, and will be exchanged for between 0.8333 and 1.0 shares of the XYZ
Common Stock, upon the conclusion of the term of the Trust on ,
1998 (the "Maturity Date"). Distributions with respect to the STRYPES will
be made quarterly on each , , and , commencing
, 1996. The STRYPES are not subject to redemption.

The Trust's investment objective is to distribute to holders on a
quarterly basis $ per STRYPES, and upon the Maturity Date, in exchange
for each STRYPES, a number of shares of XYZ Common Stock (or, under certain
circumstances, an equivalent cash amount or a combination of cash and XYZ
Common Stock) determined in accordance with the following Payment Rate
Formula, subject to certain adjustments: (a) if the Maturity Price is
greater than or equal to 120% of the Initial Price (the "Threshold
Appreciation Price"), 0.8333 shares of XYZ Common Stock per STRYPES, (b) if
the Maturity Price is less than the Threshold Appreciation Price but is
greater than the Initial Price, a number of shares of XYZ Common Stock per
STRYPES so that the value thereof (determined based on the Maturity Price)
equals the Initial Price and (c) if the Maturity Price is less than or equal
to the Initial Price, 1.0 shares of XYZ Common Stock per STRYPES. The
"Maturity Price" means the average Closing Price per share of XYZ Common
Stock on the 20 Trading Days immediately prior to the second Trading Day
preceding the Maturity Date. The "Initial Price" is the last reported sale
price of the XYZ Common Stock on the New York Stock Exchange Composite Tape
on , 1996, which was $ per share. Pursuant to the terms of
the Contracts, in lieu of delivery of XYZ Common Stock, the Contracting
Stockholder may elect to pay cash on the Maturity Date in an amount equal to
the then current market value of the number of shares of XYZ Common Stock
determined under the above formula (the "Cash Settlement Alternative"). To
the extent the Contracting Stockholder elects the Cash Settlement
Alternative, holders of the STRYPES will receive cash instead of XYZ Common
Stock on the Maturity Date. Holders otherwise entitled to receive fractional
shares in respect of their aggregate holdings of STRYPES will receive cash in
lieu thereof.

The STRYPES are designed to provide investors with a higher current
dividend yield than the XYZ Common Stock, while also providing the
opportunity for investors to share in the appreciation, if any, of the XYZ
Common Stock above the Threshold Appreciation Price. However, the
opportunity for equity appreciation afforded by an investment in the STRYPES
is less than that afforded by an investment in the XYZ Common Stock because
the value of the XYZ Common Stock receivable by holders of the STRYPES upon
exchange at the Maturity Date will only exceed the Initial Price if the
Maturity Price exceeds the Threshold Appreciation Price, which represents an
appreciation of 20% over the Initial Price. In addition, because a holder of
each STRYPES will only receive 0.8333 shares of XYZ Common Stock if the
Maturity Price exceeds the Threshold Appreciation Price, holders of the
STRYPES will only be entitled to receive upon exchange 83.33% of any
appreciation of the value of the Common Stock in excess of the Threshold
Appreciation Price. There can be no assurance that the yield on the STRYPES
will be higher than the dividend yield on the XYZ Common Stock over the term
of the Trust. MOREOVER, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE
BY HOLDERS OF THE STRYPES ON THE MATURITY DATE WILL BE EQUAL TO OR GREATER
THAN THE INITIAL PRICE OF THE STRYPES. IF THE MATURITY PRICE OF THE XYZ
COMMON STOCK IS LESS THAN THE INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE
MATURITY DATE WILL BE LESS THAN THE INITIAL PRICE PAID FOR THE STRYPES, IN
WHICH CASE AN INVESTMENT IN STRYPES WILL RESULT IN A LOSS. See "Risk
Factors."

The STRYPES may be a suitable investment for investors who are able to
understand the unique nature of the Trust and the economic characteristics of
the Contracts and the U.S. Treasury Securities.

Of the 1,000,000 STRYPES offered hereby, are being offered
initially in the United States and Canada by Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "U.S. Underwriter") and are being offered
initially internationally outside the United States and Canada by Merrill
Lynch International Limited (the "International Manager"). See
"Underwriting."

The Trust has adopted a fundamental policy that the Contracts may not be
disposed of during the term of the Trust and that, except under limited
circumstances, the U.S. Treasury Securities may not be disposed of prior to
their respective maturities. The Trust will continue to hold the Contracts
despite any significant decline in the market price of the XYZ Common Stock
or adverse changes in the financial condition of the Company. The Trust will
be treated as a grantor trust for federal income tax purposes and each holder
of STRYPES will be treated as the owner of its pro rata portion of the
Contracts and the U.S. Treasury Securities. The U.S. Treasury Securities
held by the Trust will be treated for federal income tax purposes as having
original issue discount and holders of STRYPES will be required to recognize
currently as income their pro rata portion of such original issue discount as
it accrues over the term of the Trust. The quarterly cash distributions paid
to the holders of STRYPES, which distributions are anticipated to exceed the
currently includable original issue discount, will be treated as tax-free
return of the holders' costs of the U.S. Treasury Securities and any
previously included original issue discount, and therefore will not be
considered current income to holders upon receipt thereof for federal income
tax purposes. Although under current law holders of STRYPES should not
recognize income, gain or loss with respect to the Contracts over their term,
holders will recognize taxable gain or loss upon receipt of cash, if any,
upon termination of the Trust. For a discussion of certain United States
Federal income tax consequences for holders of the STRYPES, see "Certain
United States Federal Income Tax Considerations."

Prior to the offering there has been no public market for the STRYPES.
Shares of closed-end investment companies have in the past frequently traded
at a discount from their net asset values and initial public offering prices.
The risks associated with this characteristic of closed-end investment
companies may be greater for investors expecting to sell shares of a closed-
end investment company soon after the completion of an initial public
offering of the company's shares. SEE "RISK FACTORS" ON PAGE 17 OF THIS
PROSPECTUS FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE
STRYPES.

"STRYPES" is a service mark of Merrill Lynch & Co., Inc. Application
will be made to list the STRYPES on the New York Stock Exchange under the
symbol " ". Prior to this offering there has been no public market
for the STRYPES.

This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing and should be read and
retained for future reference.

-------------------------------
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Price to Sales Proceeds to
Public Load(1) the Trust(2)
<S> <C> <C> <C>
Per STRYPES . . . . . . . . . . . . . . . $ $ $
Total(3) . . . . . . . . . . . . . . . . $ $ $

</TABLE>
__________________
(1) The Trust, the Company and the Contracting Stockholder have agreed to
indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $ payable by the Trust.
(3) The Trust has granted to the U.S. Underwriter and the International
Manager options, exercisable for 30 days from the date hereof, to
purchase up to an additional STRYPES to cover over-allotments, if
any. If all such STRYPES are purchased, the total Price to Public,
Sales Load and Proceeds to the Trust will be $ , $ and $
, respectively. See "Underwriting."

The STRYPES are offered by the U.S. Underwriter, subject to prior sale,
when, as and if issued by the Trust and accepted by the U.S. Underwriter,
subject to approval of certain legal matters by counsel for the U.S.
Underwriter and certain other conditions. The U.S. Underwriter reserves the
right to withdraw, cancel or modify such offer and to reject orders in whole
or in part. It is expected that delivery of the STRYPES will be made in New
York, New York on or about , 1996.

/(Service Mark)/ Service mark of Merrill Lynch & Co., Inc.

___________________________

MERRILL LYNCH & CO.
___________________________

The date of this Prospectus is , 1996.

2
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE STRYPES OR
THE XYZ COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.

3
<PAGE>
PROSPECTUS SUMMARY

The following summary should be read in conjunction with the more
detailed information appearing elsewhere in this Prospectus.

THE TRUST

XYZ STRYPES Trust (the "Trust") is a newly organized Delaware business
trust that will be registered as a non-diversified closed-end management
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust will have a term of three years that
will expire on or shortly after , 1999 (the "Maturity Date"),
except that the Trust may be terminated prior to such date under certain
limited circumstances. The Trust will be treated as a grantor trust for
Federal income tax purposes.

PURPOSE OF THE TRUST

The STRYPES are designed to provide investors (the "Holders") with a
higher current dividend yield than the XYZ Common Stock, while also providing
the opportunity for Holders to share in the appreciation, if any, of the XYZ
Common Stock above the Threshold Appreciation Price. The anticipated annual
distribution on the STRYPES is $ per STRYPES. Based on the current
annual dividend rate of $ per share of XYZ Common Stock, the annual per
share distribution per STRYPES is $ (or %) greater than the current
annual per share dividend rate on the XYZ Common Stock.

Although the yield on the STRYPES is higher than the current dividend
yield on the XYZ Common Stock, the opportunity for equity appreciation
afforded by an investment in the STRYPES is less than that afforded by an
investment in the XYZ Common Stock. The value of the XYZ Common Stock
receivable by Holders upon exchange at the Maturity Date will only exceed the
Initial Price (as defined below) if the Maturity Price (as defined below)
exceeds the Threshold Appreciation Price (as defined below), which represents
an appreciation of 20% over the Initial Price. Moreover, because the Holder
of each STRYPES will only receive 0.8333 shares of Common Stock if the
Maturity Price exceeds the Threshold Appreciation Price, Holders will only be
entitled to receive upon exchange 83.33% of any appreciation of the value of
the XYZ Common Stock in excess of the Threshold Appreciation Price.

INVESTMENT OBJECTIVE AND POLICIES

The Trust's investment objective is to distribute to Holders on a
quarterly basis $ per STRYPES, and upon the Maturity Date, in
exchange for each STRYPES, a number of shares of XYZ Common Stock (or, under
certain circumstances, an equivalent cash amount or a combination of cash and
XYZ Common Stock) determined in accordance with the Payment Rate Formula as
set forth below under "--Trust Assets", subject to certain adjustments.
Holders otherwise entitled to receive fractional shares in respect of their
aggregate holdings of STRYPES will receive cash in lieu thereof. Pursuant to
the terms of the Contracts (as defined below), in lieu of delivery of XYZ
Common Stock, the Contracting Stockholder may elect to pay cash on the
Maturity Date in an amount equal to the then current market value of the
number of shares of XYZ Common Stock determined under the above formula (the
"Cash Settlement Amount"). To the extent the Contracting Stockholder elects
the Cash Settlement Alternative, Holders will receive cash instead of XYZ
Common Stock on the Maturity Date. See "Investment Objective and Policies--
The Contracts" and "--Trust Termination; No Fractional Shares of XYZ Common
Stock."

It is anticipated that the Holders will receive distributions at the
rate per STRYPES of $ per annum or $ per quarter, payable
quarterly on each , , and or, if any such date is
not a business day, on the next succeeding business day, to Holders of record
as of each , , and , respectively. The first
distribution will be payable on , 1996 to Holders of record as of

4
<PAGE>
, 199 . There can be no assurance that the Trust will
achieve its investment objective. In this regard, in determining the amount
of its anticipated distributions, the Trust has estimated amounts necessary
to pay expenses over the term of the Trust. To the extent that the Trust
incurs unanticipated expenses, distributions to Holders will be reduced in
order to pay such expenses. See "Investment Objective and Policies--Trust
Assets."

On the Maturity Date, each outstanding STRYPES will be exchanged for
between 0.8333 and 1.0 shares of XYZ Common Stock (or, under certain
circumstances, an equivalent cash amount or a combination of cash and/or XYZ
Common Stock), subject to adjustment in the event of certain dividends or
distributions, subdivisions, splits, combinations, issuances of certain
rights or warrants or distributions of certain assets with respect to the XYZ
Common Stock. In the event of a merger of the Company into another entity,
or the liquidation of the Company, or in certain related events, the term of
the Trust would expire and Holders would receive consideration in the form of
cash rather than shares of XYZ Common Stock. Additionally, the occurrence of
certain defaults by the Contracting Stockholder under the Contracts or the
collateral arrangements would cause the acceleration of the Contracts and the
exchange of each STRYPES for an amount of cash in respect of the shares of
XYZ Common Stock and the termination of the Trust. See "Investment Objective
and Policies--The Contracts."

TRUST ASSETS

The Trust's assets will consist of: (i) a series of zero-coupon U.S.
Government securities with face amounts and maturities corresponding to the
distributions payable with respect to the STRYPES and the payment dates
thereof ("U.S. Treasury Securities") comprising approximately (17%) of the
initial net assets of the Trust and (ii) one or more forward purchase
contracts (the "Contracts") with a certain existing stockholder (the
"Contracting Stockholder") of XYZ Company (the "Company") relating to the XYZ
Common Stock comprising approximately (83)% of the initial net assets of the
Trust.

The Trust will enter into Contracts with the Contracting Stockholder
obligating the Contracting Stockholder to deliver to the Trust on the
Maturity Date shares of XYZ Common Stock in accordance with the following
Payment Rate Formula: (i) if the Maturity Price per share of XYZ Common
Stock is greater than or equal to 120% of the Initial Price (the "Threshold
Appreciation Price"), the Contracting Stockholder will be obligated to
deliver under its Contracts 0.8333 shares of XYZ Common Stock for each share
of XYZ Common Stock subject to such Contracts, (ii) if the Maturity Price per
share of XYZ Common Stock is less than the Threshold Appreciation Price but
greater than the initial price, the Contracting Stockholder will be obligated
to deliver under its Contracts a number of shares of XYZ Common Stock with an
aggregate value equal to the product of the initial price times the initial
number of shares of XYZ Common Stock subject to such Contracts and (iii) if
the Maturity Price per share of XYZ Common Stock is less than or equal to the
Initial Price, the Contracting Stockholder will be obligated to deliver under
its Contracts a number of shares of XYZ Common Stock equal to the initial
number of shares of XYZ Common Stock subject to such Contracts. This
provides the Trust with the opportunity to share in the appreciation, if any,
of the XYZ Common Stock above the Threshold Appreciation Price. The
"Maturity Price" means the average Closing Price per share of XYZ Common
Stock on the 20 Trading Days immediately prior to the second Trading Day
preceding the Maturity Date. The purchase price under the Contracts is equal
to $ per share of XYZ Common Stock and $ in the aggregate and
is payable to the Contracting Stockholder by the Trust on or about
, 1996. No other consideration is payable by the Trust to the Contracting
Stockholder in connection with its acquisition of the Contracts or the
performance of the Contracts by the Contracting Stockholder.

The obligations of the Contracting Stockholder under each Contract will
be secured by a pledge of 1.0 share of XYZ Common Stock for each share
subject to the Contract or, at the election of the Contracting Stockholder,
by substitute collateral consisting of U.S. Government securities. See
"Investment Objective and Policies--The Contracts."

5
<PAGE>
TERM OF THE TRUST

The Trust will terminate on or shortly after the Maturity Date, except
if terminated earlier under certain limited circumstances. Promptly after
the Maturity Date the shares of XYZ Common Stock and/or cash to be exchanged
for the STRYPES and any other remaining Trust assets, net of any remaining
Trust expenses, if any, will be distributed pro rata to Holders. In the
event the Company is the subject of a Reorganization Event (as defined below)
or there is a default under the Contracts, the Contracts will accelerate, the
rest of the Trust's assets will be liquidated and the net assets of the Trust
will be distributed to Holders and the term of the Trust will expire. See
"Investment Objective and Policies--The Contracts" and "--Trust Termination;
No Fractional Shares of XYZ Common Stock," and "Risk Factors--Limited Term."

THE COMPANY

The Company is (description).

The Holders will not have voting rights with respect to the XYZ Common
Stock prior to receipt of the XYZ Common Stock by the Holders of STRYPES on
the Maturity Date.

Reference is made to the accompanying prospectus of the Company with
respect to the shares of XYZ Common Stock which may be received by a holder
of STRYPES on the Maturity Date. The Company is not affiliated with the
Trust, will not receive any of the proceeds from the sale of the STRYPES and
will have no obligations with respect to the STRYPES. THE PROSPECTUS OF THE
COMPANY IS BEING ATTACHED HERETO AND DELIVERED TO PROSPECTIVE PURCHASERS OF
STRYPES TOGETHER WITH THIS PROSPECTUS FOR CONVENIENCE OF REFERENCE ONLY. THE
PROSPECTUS OF THE COMPANY DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR
IS IT INCORPORATED BY REFERENCE HEREIN.

THE OFFERING

The Trust is offering 1,000,000 STRYPES representing shares of
beneficial interest at an initial public offering price of $ per STRYPES
(which is equal to the last reported sale price of the XYZ Common Stock on
the New York Stock Exchange Composite Tape on , 1996, the date
of the offering, and is referred to herein as the "Initial Price") (the
"Offering"). Of the 1,000,000 STRYPES, STRYPES are being offered
in the United States and Canada by Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "U.S. Underwriter") and STRYPES are being offered
outside the United States and Canada by Merrill Lynch International Limited
(the "International Manager" and, together with the U.S. Underwriter, the
"Underwriters"). In addition, the U.S. Underwriter and the International
Manager have been granted options, exercisable for 30 days from the date of
this Prospectus, to purchase up to an aggregate of additional
STRYPES to cover over-allotments, if any. See "Underwriting."

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The Trust will be taxable as a grantor trust for United States Federal
income tax purposes. Accordingly, each Holder of the Trust will be treated
for United States Federal income tax purposes as the owner of its pro rata
portion of the U.S. Treasury Securities and the Contracts, and income
received (including original issue discount treated as received) by the Trust
will generally be treated as income of the Holders. See "Certain United
States Federal Income Tax Considerations."

The U.S. Treasury Securities held by the Trust will be treated for
United States Federal income tax purposes as having "original issue discount"
which will accrue over the term of the U.S. Treasury Securities. It is
currently anticipated that each quarterly cash distribution to the Holders of
the Trust will be treated as a tax-free return of the Holders' costs of the
U.S. Treasury Securities and any previously included original issue discount,
and therefore will not be considered current income to Holders upon receipt
thereof for United

6
<PAGE>
States Federal income tax purposes. However, a Holder (whether on the cash
or accrual method of tax accounting) must recognize currently as income
original issue discount on the U.S. Treasury Securities as it accrues. See
"Certain United States Federal Income Tax Considerations."

Under existing law, a Holder will not recognize income, gain or loss
upon the Trust's entry into the Contracts or over the term of the Contracts.
The delivery of XYZ Common Stock pursuant to the Contracts will not be
taxable to the Holders. A Holder will have taxable gain or loss upon receipt
of cash, if any, upon termination of the Trust and to the extent that the
Contracting Stockholder satisfies its obligations under the Contracts
entirely with cash. Each Holder's initial tax basis in any XYZ Common Stock
received thereby will be equal to its basis in its pro rata portion of the
Contracts less the portion of such basis allocable to any fractional shares
of XYZ Common Stock for which cash is received. See "Certain United States
Federal Income Tax Considerations."

MANAGEMENT ARRANGEMENTS

The Trust will be internally managed and will not have an investment
adviser. The Trust's portfolio will not be actively managed. The
administration of the Trust will be overseen by the Trustees. The day-to-day
administration of the Trust will be carried out by (or its
successor) as trust administrator (the "Administrator"). (or
its successor) will also act as custodian for the Trust's assets (the
"Custodian") and as paying agent, registrar and transfer agent (the "Paying
Agent") with respect to the STRYPES. Except as aforesaid, and except for its
role as Collateral Agent under the Trust's Collateral Agreements (see
"Investment Objective and Policies--The Contracts--Collateral Requirements of
the Contract"), has no other affiliation with, and is not engaged in any
other transaction with, the Trust. For their services, the Trust will pay
each of the Custodian (as defined herein) and the Payment Agent (as defined
herein) a one-time, up-front amount in respect of its fee. See "Management
Arrangements."

RISK FACTORS

The Trust has adopted a fundamental policy that the Contracts may not be
disposed of during the term of the Trust and that, except to the extent
necessary to pay expenses of the Trust or if the Trust terminates prior to
the Maturity Date due to certain "Reorganization Events" with respect to the
Company or in the event of a "Default" by the Contracting Stockholder, the
U.S. Treasury Securities may not be disposed of prior to their respective
maturities. The Trust will continue to hold the Contracts despite any
significant decline in the market price of the XYZ Common Stock or adverse
changes in the financial condition of the Company.

Although, the yield on the STRYPES is higher than the current dividend
yield on the XYZ Common Stock, the opportunity for equity appreciation
afforded by an investment in the STRYPES is less than that afforded by an
investment in the XYZ Common Stock. The value of the XYZ Common Stock
receivable by Holders of the STRYPES upon exchange at the Maturity Date will
only exceed the Initial Price if the Maturity Price exceeds the Threshold
Appreciation Price, which represents an appreciation of 20% over the Initial
Price. Moreover, because a holder of each STRYPES will only receive 0.8333
shares of XYZ Common Stock if the Maturity Price exceeds the Threshold
Appreciation Price, Holders of the STRYPES will only be entitled to receive
upon exchange 83.33% of any appreciation of the value of the XYZ Common Stock
in excess of the Threshold Appreciation Price. In addition, there can be no
assurance that the dividend yield on the STRYPES will be higher than the
dividend yield on the XYZ Common Stock over the term of the Trust. THERE CAN
BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY HOLDERS OF THE STRYPES ON THE
MATURITY DATE WILL BE EQUAL TO OR GREATER THAN THE INITIAL PRICE OF THE
STRYPES. IF THE MATURITY PRICE OF THE XYZ COMMON STOCK IS LESS THAN THE
INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE MATURITY DATE WILL BE LESS THAN
THE INITIAL PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT IN
STRYPES WILL RESULT IN A LOSS.

7
<PAGE>
The Trust is classified as a "non-diversified" investment company under
the Investment Company Act. Consequently, the Trust is not limited by the
Investment Company Act in the proportion of its assets that may be invested
in the securities of a single issuer. Since the only securities held by the
Trust will be the U.S. Treasury Securities and the Contracts, the Trust may
be subject to greater risk than would be the case for an investment company
with more diversified investments.

The trading prices of the STRYPES in the secondary market will be
directly affected by the trading prices of the XYZ Common Stock in the
secondary market. Trading prices of XYZ Common Stock will be influenced by
the Company's operating results and prospects and by economic, financial and
other factors and market conditions.

Holders of the STRYPES will not be entitled to any rights with respect
to the XYZ Common Stock (including, without limitation, voting rights and
rights to receive any dividends or other distributions in respect thereof)
unless and until such time, if any, as the Contracting Stockholder shall have
delivered shares of XYZ Common Stock for STRYPES on the Maturity Date.

Holders will experience a taxable event upon the exchange of the STRYPES
to the extent the Contracting Stockholder elects the Cash Settlement
Alternative. Because of an absence of authority as to the proper character
of any gain or loss resulting from such a taxable event, the ultimate tax
consequences to Holders as a result of the Contracting Stockholder electing
the Cash Settlement Alternative is uncertain. See "Risk Factors."

LISTING

Application will be made to list the STRYPES on the New York Stock
Exchange (the "NYSE") under the symbol " ".

<TABLE>
FEE TABLE
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of offering price) . . . . . . . . . . % (a)
Automatic Dividend Reinvestment Plan Fees . . . . . . . . . . . . . . . . Not Applicable
ANNUAL EXPENSES (as a percentage of net assets)
Management Fees(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
%
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
------------------
TOTAL ANNUAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
------------------
------------------

</TABLE>

<TABLE>
<CAPTION>
Example 1 year 3 years
------ -------
<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, including the maximum sales load of $ and
assuming (1) total annual expenses of % and (2) a 5%
annual return throughout the periods: $ $

</TABLE>
_____________
(a) See the cover page of this Prospectus and "Underwriting."
(b) See "Management Arrangements." The Trust will be internally managed;
consequently there is no separate investment advisory fee paid by the
Trust. will act as the administrator of the Trust.

The foregoing Fee Table is intended to assist investors in understanding
the costs and expenses that a shareholder in the Trust will bear directly or
indirectly. The expenses set forth under "Management Fees" and "Other
Expenses" in the Fee Table above are based on estimated amounts through the
end of the Trust's first fiscal year on an annualized basis and prorated on a
straight-line basis over the term of the Trust, including the one-time up-
front fee payable to the Administrator, the Custodian and the Paying Agent.
The Example set forth above assumes reinvestment of all dividends and
distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR ANNUAL RATES OF RETURN, AND
ACTUAL EXPENSES OR ANNUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE
ASSUMED FOR PURPOSES OF THE EXAMPLE.

9
<PAGE>
THE TRUST

XYZ STRYPES Trust (the "Trust") is a newly organized Delaware business
trust and will be registered as a closed-end management investment company
under the Investment Company Act. The Trust was formed on March 14,
1996 pursuant to a Trust Agreement dated as of March 14, 1996 (the
"Declaration of Trust"). The Trust will have a term of three years that will
expire on or shortly after , 1999, except that the Trust may
be terminated prior to such date under certain limited circumstances. The
Trust will be treated as a grantor trust for Federal income tax purposes.
The Trust's principal office is located at and its telephone
number is ( ) - .

USE OF PROCEEDS

The net proceeds of the Offering will be approximately $
(or approximately $ , if the Underwriters' over-allotment options
are exercised in full), after payment of the sales load and organizational
and offering costs. At the time of the closing of the Offering, or shortly
thereafter, the net proceeds of the Offering will be used to purchase a fixed
portfolio comprised of a series of zero-coupon U.S. Government securities
with face amounts and maturities corresponding to the distributions payable
with respect to the STRYPES and the payment dates thereof (the "U.S. Treasury
Securities") and to pay the purchase price under the Contracts.

INVESTMENT OBJECTIVE AND POLICIES

GENERAL

The Trust's investment objective is to distribute to Holders on a
quarterly basis $ per STRYPES, and upon the Maturity Date, in
exchange for each STRYPES, a number of shares of XYZ Common Stock (or, under
certain circumstances, an equivalent cash amount or a combination of cash and
XYZ Common Stock) determined in accordance with the Payment Rate Formula as
set forth below under "--The Contracts," subject to certain adjustments.
There can be no assurance that the amount receivable by Holders of the
STRYPES on the Maturity Date will be equal to or greater than the Initial
Price of the STRYPES. If the Maturity Price of the XYZ Common Stock is less
than the Initial Price, such amount receivable on the Maturity Date will be
less than the Initial Price paid for the STRYPES, in which case an investment
in STRYPES will result in a loss. The numbers of shares of XYZ Common Stock
per STRYPES specified in clauses (a) and (c) of the Payment Rate Formula are
hereinafter referred to as the "Share Components." Holders otherwise
entitled to receive fractional shares in respect of their aggregate holdings
of STRYPES will receive cash in lieu thereof. See "-- Trust Termination; No
Fractional Shares of XYZ Common Stock."

Pursuant to the terms of the Contracts, in lieu of delivery of XYZ
Common Stock, the Contracting Stockholder may elect to pay cash on the
Maturity Date in an amount equal to the then current market value of the
number of shares of XYZ Common Stock determined under the above Payment Rate
Formula (the "Cash Settlement Amount"). To the extent the Contracting
Stockholder elects the Cash Settlement Alternative, Holders will receive cash
instead of XYZ Common Stock at the Maturity Date.

The Trust has adopted a fundamental policy as required by the
Declaration of Trust to invest at least 65% of its portfolio in the
Contracts. The Contracts will comprise (83)% of the Trust's initial assets.
The Trust has also adopted a fundamental policy that the Contracts may not be
disposed of during the term of the Trust and that, except to the extent
necessary to pay expenses of the Trust or if the Trust terminates prior to
the Maturity Date due to the occurrence of a "Reorganization Event" with
respect to the Company, the U.S. Treasury Securities may not be disposed of
prior to their respective maturities. The foregoing fundamental policies of
the Trust may not be changed without the vote of 100% in interest of the
Holders.

10
<PAGE>
TRUST ASSETS

The Trust's assets primarily will consist of: (i) U.S. Treasury
Securities, and (ii) the Contracts. The Trust may also make certain
temporary investments. See "--Temporary Investments." For illustrative
purposes only, the following chart shows the number of shares of XYZ Common
that a Holder would receive for each STRYPES at various Maturity Prices. The
chart assumes that there would be no adjustments to the number of shares of
XYZ Common Stock deliverable under the Contracts by reason of the occurrence
of any of the events described under "--The Contracts -- Dilution
Adjustments; Reorganization Events Causing a Termination of the Trust."
There can be no assurance that the Maturity Price will be within the range
set forth below. Given the Initial Price of $ per STRYPES and a
-------
Threshold Appreciation Price of $ , a Holder would receive on the
Maturity Date the following number of shares of XYZ Common Stock or amount of
cash (in the event of the Cash Settlement Alternative) per STRYPES:

<TABLE>
<CAPTION>
Maturity Price of Number of Shares of
XYZ Common Stock XYZ Common Stock Amount of Cash
----------------- ------------------- --------------
<S> <C> <C> <C>

</TABLE>

The following table sets forth information regarding the distributions
to be received on the U.S. Treasury Securities, the portion of each year's
distributions that will constitute a return of capital for United States
Federal income tax purposes and the amount of original issue discount
accruing on the U.S. Treasury Securities with respect to a Holder who
acquires its STRYPES at the issue price from an Underwriter pursuant to the
original offering. See "Certain United States Federal Income Tax
Considerations."

<TABLE>
<CAPTION> Annual
Annual Gross Annual Gross Inclusion of
Distributions Distributions Original Issue
from U.S. from U.S. Annual Return Discount in
Treasury Treasury Securities per of Capital per Income per
Year Securities STRYPES STRYPES STRYPES
---- ------------- ----------------------- -------------- --------------
<S> <C> <C> <C> <C>
1996 $ $ $ $

1997

1998

</TABLE>

The anticipated annual distribution of $ per STRYPES is
payable quarterly on each , , and ,
commencing , 1996. Quarterly distributions on the STRYPES will
consist solely of the cash received from the U.S. Treasury Securities. The
Trust will not be entitled to any dividends that may be declared on the XYZ
Common Stock. See "Dividends and Distributions."

There can be no assurance that the Trust will achieve its investment
objective. In this regard, in determining the amount of its anticipated
distributions, the Trust has estimated amounts necessary to pay expenses over
the term of the Trust. A portion of the initial assets of the Trust will be
used to purchase U.S. Treasury Securities with face amounts and maturities
corresponding to the expenses anticipated to be incurred over the term of the
Trust. To the extent that the Trust incurs unanticipated expenses,
distributions to Holders will be reduced in order to pay such expenses.

11
<PAGE>
ENHANCED YIELD; LESS POTENTIAL FOR EQUITY APPRECIATION THAN XYZ COMMON STOCK

Although the yield on the STRYPES is higher than the current dividend
yield on the XYZ Common Stock, the opportunity for equity appreciation
afforded by an investment in the STRYPES is less than that afforded by an
investment in the XYZ Common Stock. The value of the XYZ Common Stock
receivable by Holders of the STRYPES at the Maturity Date will only exceed
the Initial Price if the Maturity Price exceeds the Threshold Appreciation
Price, which represents an appreciation of 20% of the Initial Price.
Moreover, because a holder of each STRYPES will only receive 0.8333 shares of
XYZ Common Stock if the Maturity Price exceeds the Threshold Appreciation
Price, Holders of the STRYPES will only be entitled to receive upon exchange
83.33% (the percentage equal to the Initial Price divided by the Threshold
Appreciation Price) of any appreciation of the value of the XYZ Common Stock
in excess of the Threshold Appreciation Price.

THE COMPANY

(description of the Company)

The shares of XYZ Common Stock are traded on the NYSE. The following
table sets forth, for the indicated periods, the reported high and low sales
prices of the shares of XYZ Common Stock on the NYSE Composite Tape and the
cash dividends per share of XYZ Common Stock. As of , 1996,
there were record holders of the XYZ Common Stock, including The
Depository Trust Company (the "Depositary") which holds shares of XYZ Common
Stock on behalf of an indeterminate number of beneficial owners.

<TABLE>
<CAPTION>
Dividend
High Low Per Share
---- --- ---------
<S> <C> <C> <C>
1994
2nd Quarter $ $ $
3rd Quarter
4th Quarter
1995
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
1996
1st Quarter (through ,
1996)

</TABLE>

Holders will not be entitled to rights with respect to the XYZ Common
Stock (including, without limitation, voting rights and rights to receive
dividends or other distributions in respect thereof) until receipt of the XYZ
Common Stock by the Holders of STRYPES on the Maturity Date.

The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, the
Company files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Copies of
such material can be inspected and copied at the public reference facilities
maintained by the Commission at the addresses specified under "Available
Information." Reports, proxy and information statements and other information
concerning the Company may also be inspected at the offices of the NYSE.

THE COMPANY IS NOT AFFILIATED WITH THE TRUST, THE COMPANY WILL NOT
RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF THE STRYPES AND THE COMPANY HAS
NO OBLIGATIONS WITH RESPECT TO THE STRYPES. THIS PROSPECTUS RELATES ONLY TO
THE STRYPES OFFERED HEREBY AND DOES NOT RELATE TO THE COMPANY OR THE XYZ
COMMON STOCK. THE COMPANY HAS FILED A REGISTRATION STATEMENT ON FORM S-3
WITH THE COMMISSION WITH RESPECT TO THE SHARES OF XYZ COMMON STOCK THAT MAY
BE RECEIVED BY A HOLDER OF STRYPES ON THE MATURITY DATE. THE PROSPECTUS OF
THE COMPANY (THE

12
<PAGE>
"XYZ PROSPECTUS") CONSTITUTING A PART OF SUCH REGISTRATION
STATEMENT INCLUDES INFORMATION RELATING TO THE COMPANY AND THE XYZ COMMON
STOCK, INCLUDING CERTAIN RISK FACTORS RELEVANT TO AN INVESTMENT IN XYZ COMMON
STOCK. THE XYZ PROSPECTUS IS BEING ATTACHED HERETO AND DELIVERED TO
PROSPECTIVE PURCHASERS OF STRYPES TOGETHER WITH THIS PROSPECTUS FOR
CONVENIENCE OF REFERENCE ONLY. THE XYZ PROSPECTUS DOES NOT CONSTITUTE A PART
OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN.

THE CONTRACTS

General. The Trust will enter into one or more Contracts with the
Contracting Stockholder obligating the Contracting Stockholder to deliver to
the Trust on the Maturity Date shares of XYZ Common Stock in accordance with
the following Payment Rate Formula: (i) if the Maturity Price per share of
XYZ Common Stock is greater than or equal to the Threshold Appreciation
Price, the Contracting Stockholder will be obligated to deliver under its
Contracts 0.8333 shares of XYZ Common Stock for each share of XYZ Common
Stock subject to such Contracts, (ii) if the Maturity Price per share of XYZ
Common Stock is less than the Threshold Appreciation Price but greater than
the Initial Price, the Contracting Stockholder will be obligated to deliver
under its Contracts a number of shares of XYZ Common Stock with an aggregate
value equal to the product of the Initial Price times the initial number of
shares of XYZ Common Stock subject to such Contracts and (iii) if the
Maturity Price per share of XYZ Common Stock is less than or equal to the
Initial Price, the Contracting Stockholder will be obligated to deliver under
its Contracts a number of shares of XYZ Common Stock equal to the initial
number of shares of XYZ Common Stock subject to such Contracts. Each
Contract also provides that the Contracting may deliver, at the Contracting
Stockholder's option, to the Trust on the Maturity Date an amount of cash
equivalent to the value of the XYZ Common Stock deliverable pursuant to such
Contract (the "Cash Settlement Alternative"). Each Contract will require a
Contracting Stockholder, if it elects to deliver cash in lieu of shares of
XYZ Common Stock to deliver cash in respect of all shares deliverable
pursuant to such Contract.

The "Maturity Price" means the average Closing Price per share of XYZ
Common Stock on the 20 Trading Days immediately prior to, but not including,
the second Trading Day preceding the Maturity Date. The "Closing Price" of
any security on any date of determination means the closing sale price (or,
if no closing price is reported, the last reported sale price) of such
security on the NYSE on such date or, if such security is not listed for
trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which
such security is so listed, or if such security is not so listed on a United
States national or regional securities exchange, as reported by The NASDAQ
Stock Market, or, if such security is not so reported, the last quoted bid
price for such security in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is
not available, the market value of such security on such date as determined
by a nationally recognized independent investment banking firm retained for
this purpose by the Company. In the event that the Payment Rate Formula is
adjusted as described under "--The Contracts--Dilution Adjustments" below,
the Maturity Price is subject to adjustment to reflect the average Closing
Price per share of XYZ Common Stock on a preadjusted basis. A "Trading Day"
is defined as a day on which the security the Closing Price of which is being
determined (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of such security.

The purchase price under the Contracts is equal to $ per share of
XYZ Common Stock and $ in the aggregate and is payable to the
Contracting Stockholder by the Trust on or about , 1996. No
other consideration is payable by the Trust to the Contracting Stockholder in
connection with its acquisition of the Contracts or the performance of the
Contracts by the Contracting Stockholder.

The Contracts will be valued by the Trust at fair value as determined in
good faith at the direction of the Trustees (if necessary, through
consultation with accountants, bankers and other specialists). See "Net
Asset Value."

13
<PAGE>
Dilution Adjustments; Reorganization Events Causing a Termination of the
Trust. The Payment Rate Formula is subject to adjustment if the Company
shall: (i) pay a stock dividend or make a distribution with respect to XYZ
Common Stock in shares of such stock; (ii) subdivide or split the outstanding
shares of XYZ Common Stock into a greater number of shares; (iii) combine the
outstanding shares of XYZ Common Stock into a smaller number of shares; (iv)
issue by reclassification of shares of XYZ Common Stock any shares of common
stock of the Company; (v) issue rights or warrants to all holders of XYZ
Common Stock entitling them to subscribe for or purchase shares of XYZ Common
Stock at a price per share less than the then current market price of the XYZ
Common Stock (other than rights to purchase XYZ Common Stock pursuant to a
plan for the reinvestment of dividends or interest); or (vi) pay a dividend
or make a distribution to all Holders of XYZ Common Stock of evidences of its
indebtedness or other assets (excluding any stock dividends or distributions
referred to in clause (i) above or any cash dividends other than any
Extraordinary Cash Dividends (as defined below)) or issue to all holders of
XYZ Common Stock rights or warrants to subscribe for or purchase any of its
securities (other than those referred to in clause (v) above (any such event
described in clause (i), (ii), (iii), (iv), (v) or (vi), a "Dilution Event").
In the case of the events referred to in clauses (i), (ii), (iii) and (iv)
above, the Payment Rate Formula shall be adjusted the Trust will receive on
the Maturity Date, the number of shares of XYZ Common Stock which the Trust
would have owned or been entitled to receive immediately following any event
described above had such STRYPES been paid and discharged immediately prior
to such event or any record date with respect thereto. Nevertheless, the
Maturity Price shall equal the average Closing Price per share of XYZ Common
Stock on the 20 Trading Days immediately prior to, but not including, the
second Trading Day preceding the Maturity Date. In the case of the event
referred to in clause (v) above, the Payment Rate Formula shall be adjusted
by multiplying each of the Share Components in the Payment Rate Formula in
effect immediately prior to the date of issuance of the rights or warrants
referred to in clause (v) above, by a fraction, of which the numerator shall
be the number of shares of XYZ Common Stock outstanding on the date of
issuance of such rights or warrants, immediately prior to such issuance, plus
the number of additional shares of XYZ Common Stock offered for subscription
or purchase pursuant to such rights or warrants, and of which the denominator
shall be the number of shares of XYZ Common Stock outstanding on the date of
issuance of such rights or warrants, immediately prior to such issuance, plus
the number of additional shares of XYZ Common Stock which the aggregate
offering price of the total number of shares of XYZ Common Stock so offered
for subscription or purchase pursuant to such rights or warrants would
purchase at the market price (determined as the average Closing Price per
share of XYZ Common Stock on the 20 Trading Days immediately prior to the
date such rights or warrants are issued), which shall be determined by
multiplying such total number of shares by the exercise price of such rights
or warrants and dividing the product so obtained by such market price. To
the extent that shares of XYZ Common Stock are not delivered after the
expiration of such rights or warrants, the Payment Rate Formula shall be
readjusted to the Payment Rate Formula which would then be in effect had such
adjustments for the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of XYZ Common Stock actually
delivered. In the case of the event referred to in clause (vi) above, the
Payment Rate Formula shall be adjusted by multiplying each of the Share
Components in the Payment Rate Formula in effect on the record date, by a
fraction of which the numerator shall be the market price per share of XYZ
Common Stock on the record date for the determination of stockholders
entitled to receive the dividend or distribution referred to in clause (vi)
above (such market price being determined as the average Closing Price per
share of XYZ Common Stock on the 20 Trading Days immediately prior to such
record date), and of which the denominator shall be such market price per
share of XYZ Common Stock less the fair market value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive,
and described in a resolution adopted with respect thereto) as of such record
date of the portion of the assets or evidences of indebtedness to be
distributed or of such subscription rights or warrants applicable to one
share of XYZ Common Stock. An "Extraordinary Cash Dividend" means, with
respect to any consecutive 12-month period, all cash dividends on the XYZ
Common Stock during such period to the extent such dividends exceed on a per
share basis 10% of the average Closing Price of the XYZ Common Stock over
such period (less any such dividends for which a prior adjustment to the
Payment Rate Formula was previously made). All adjustments to the Payment
Rate Formula will be calculated to the nearest 1/10,000th of a share of XYZ
Common Stock (or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Payment Rate Formula
shall be required unless such adjustment would require an increase or
decrease of at least one percent therein; provided, however, that any
adjustments which by reason of the foregoing are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
If an adjustment is made to the Payment Rate Formula as described above, an
adjustment will also be made to the Maturity Price solely to determine which
of clauses (a),

14
<PAGE>
(b) or (c) of the Payment Rate Formula will apply on the
Maturity Date. The required adjustment to the Maturity Price will be made by
multiplying each of the Closing Prices used in determining the Maturity Price
by a fraction of which the numerator shall be the Share Component in clause
(c) of the Payment Rate Formula immediately after such adjustment described
above and of which the denominator shall the Share Component in clause (c) of
the Payment Rate Formula immediately before such adjustment described above.
Each such adjustment to the Payment Rate Formula shall be made successively.

No adjustments will be made for certain other events, such as offerings
of XYZ Common Stock by the Company for cash or in connection with
acquisitions. Likewise, no adjustments will be made for any sales of XYZ
Common Stock by the Contracting Stockholder.

IN THE EVENT A REORGANIZATION EVENT (AS DEFINED HEREIN) OCCURS, THE
TRUST'S ASSETS WILL BE LIQUIDATED, THE NET ASSETS OF THE TRUST WILL BE
DISTRIBUTED TO HOLDERS AND THE TERM OF THE TRUST WILL EXPIRE. In the event
of (A) any consolidation or merger of the Company, or any surviving entity or
subsequent surviving entity of the Company (a "Company Successor"), with or
into another entity (other than a merger or consolidation in which the
Company is the continuing corporation and in which the XYZ Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another
corporation), (B) any sale, transfer, lease or conveyance to another
corporation of the property of the Company or any Company Successor as an
entirety or substantially as an entirety, (C) any statutory exchange of
securities of the Company or any Company Successor with another corporation
(other than in connection with a merger or acquisition) or (D) any
liquidation, dissolution or winding up of the Company or any Company
Successor (any such event described in clause (A), (B), (C) or (D), a
"Reorganization Event"), the term of the Trust will expire and the Payment
Rate Formula will be adjusted such that, within approximately days of
the Reorganization Event, the Trust will receive for each share of XYZ Common
Stock subject to such Contracts cash in an amount equal to: (i) if the
Transaction Value (as defined below) is less than the Threshold Appreciation
Price but equal to or greater than the Initial Price, the Initial Price, (ii)
if the Transaction Value is greater than or equal to the Threshold
Appreciation Price, 0.8333 multiplied by the Transaction Value and (iii) if
the Transaction Value is less than the Initial Price, the Transaction Value.
"Transaction Value" means (i) for any cash received in any such
Reorganization Event, the amount of cash received per share of XYZ Common
Stock, (ii) for any property other than cash or Marketable Securities
received in any such Reorganization Event, an amount equal to the market
value on the date the Reorganization Event is consummated of such property
received per share of XYZ Common Stock as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Contracting Stockholder and (iii) for any Marketable Securities received
in any such Reorganization Event, an amount equal to the Closing Price per
share of such securities on the date of the Reorganization Event, multiplied
by the number of such securities received for each share of XYZ Common Stock.
"Marketable Securities" means any securities listed on a U.S. national
securities exchange or reported by The NASDAQ Stock Market, but shall not
include any such securities that by their terms mature, expire or are
callable by the issuer thereof prior to the Maturity Date. Notwithstanding
the foregoing, if any Marketable Securities are received in such
Reorganization Event, then in lieu of delivering cash as provided above, the
Contracting Stockholder may at its option deliver an equivalent value of such
marketable securities received in such Reorganization Event, determined in
accordance with clause (iii) above. If the Contracting Stockholder elects to
deliver Marketable Securities, Holders will be responsible for the payment of
any and all brokerage and other transaction costs upon the sale of such
securities.

If a Reorganization Event occurs, the U.S. Treasury Securities will be
sold by the Trust, and the proceeds therefrom will be distributed along with
the cash realized upon the Reorganization Event after providing for any
expenses of the Trust.

The Trust is required, within ten Business Days following the occurrence
of a Dilution Event or a Reorganization Event (or if the Trust is not aware
of such occurrence, as soon as practicable after becoming so aware), to
provide written notice to the Holders of the occurrence of such event and a
statement in reasonable detail setting forth the adjusted Payment Rate
Formula and the method by which the adjustment to the Payment Rate Formula
was determined. In the case of a Reorganization Event, such notice will also
indicate the Payment Rate and the date upon which the Trust will terminate.
In the case of a Dilution Event, in respect of any adjustment to the Maturity
Price, such notice will only disclose the factor by which each of the Closing
Prices used in determining

15
<PAGE>
the Maturity Price is so multiplied in order to
determine the Payment Rate on the Maturity Date. In the event of a Dilution
Event, it will not be possible to determine the Payment Rate until the
Maturity Date with respect to such Dilution Event.

Collateral Requirements of the Contracts. The Contracting Stockholder's
obligations under each Contract will be secured by a security interest in 1.0
share of XYZ Common Stock for each share of XYZ Common Stock subject to such
Contract pursuant to a Security and Pledge Agreement between the Contracting
Stockholder and the Custodian, as collateral agent. Unless the Contracting
Stockholder is in default in its obligations under the Security and Pledge
Agreement, the Contracting Stockholders will be permitted to substitute for
the pledged shares of XYZ Common Stock collateral consisting of short-term,
direct obligations of the U.S. Government. Any U.S. Government obligations
pledged as substitute collateral will be required to have an aggregate market
value at the time of substitution and at daily mark-to-market valuations
thereafter of not less than % of the product of the market price of the
XYZ Common Stock at the time of each valuation times the number of shares of
XYZ Common Stock for which such obligations are being substituted.

In the event a Default (as defined herein) occurs, the Trust's assets
will be liquidated, the net assets of the Trust will be distributed to the
Holders and the term of the Trust will expire. Failure by the Contracting
Stockholder to provide additional U.S. Government obligations to cover any
collateral shortfall, or the bankruptcy or insolvency of the Contracting
Stockholder (each such event, a "Default"), will cause an automatic
acceleration of the Contracting Stockholder's obligations under the
Contracts. In any such Default, or in the event that by the Maturity Date
any substitute collateral has not been replaced by a number of shares of XYZ
Common Stock sufficient to meet the obligations under any Contract, the
Custodian will (i) liquidate any U.S. Government obligations pledged under
the Security and Pledge Agreement and (ii) distribute to the Trust for
distribution pro rata to the Holders, with respect to the Contracting
Stockholder's Contracts, any shares of XYZ Common Stock then pledged by the
Contracting Stockholder, together with the net proceeds of the liquidation of
the U.S. Government obligations then pledged by the Contracting Stockholder
in an amount equal to the market value at such time of a number of shares of
XYZ Common Stock equal to the difference between the maximum number of shares
of XYZ Common Stock subject to the Contracting Stockholder's Contracts less
the number of such shares pledged at such time. Any net proceeds from the
liquidation of such U.S. Government obligations remaining after such
distribution and after payment of any expenses or other amounts owed by the
Contracting Stockholder will be returned to the Contracting Stockholder. The
Security and Pledge Agreement will provide that, in the event of a
Reorganization Event, the Contracting Stockholder will pledge as security for
its obligations under the Contracts the consideration received by it in the
Reorganization Event in respect of the maximum number of shares of XYZ Common
Stock subject to its Contracts, except that, for consideration other than
cash or marketable securities, the Contracting Stockholder will be required
to pledge cash in the amount of the Transaction Value of such consideration.

Description of Contracting Stockholder. The Contracting Stockholder is
. (The Contracting Stockholder may be an institutional
investor, individual, a trust, foundation or other entity through which such
individual holds its shares of XYZ Common Stock. A brief description of the
Contracting Stockholder will be added by amendment. Specific information on
the holdings of the Contracting Stockholder, as required by the Securities
Act of 1933, as amended (the "1933 Act"), will be included in Appendix A to
this prospectus.)

TEMPORARY INVESTMENTS

For cash management purposes, the Trust may invest the proceeds of the
U.S. Treasury Securities and any other cash held by the Trust in short-term
obligations of the U.S. Government maturing no later than the business day
preceding the next following distribution date.

TRUST TERMINATION; NO FRACTIONAL SHARES OF XYZ COMMON STOCK

The Trust will terminate on or shortly after the Maturity Date, except
if terminated earlier under certain limited circumstances. Within
approximately business days after the Maturity Date following the
payment of any remaining expenses of the Trust, the shares of XYZ Common
Stock and/or cash to be received pursuant to the Contracts and any other
remaining assets of the Trust will be distributed pro rata to Holders. Each
Holder will

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<PAGE>
receive the greatest number of whole shares of XYZ Common Stock
allocable to its STRYPES, plus the cash value, based on the Maturity Price,
of any fractional shares so allocable. Although the Trust has adopted a
fundamental policy that it will not dispose of the Contracts prior to the
Maturity Date, under certain circumstances the Contracts may terminate prior
to such Date. In the event the Company is the subject of a Reorganization
Event, the Trust's assets will be liquidated, the net assets of the Trust
will be distributed to Holders and the term of the Trust will expire. See
"Investment Objective and Policies--The Contracts--Dilution Adjustments;
Reorganization Event Causing Termination of the Trust." The Trust will also
terminate prior to the Maturity Date in the event of a Default by the
Contracting Stockholder.

INVESTMENT RESTRICTIONS

The Trust has adopted a fundamental policy that the Trust may not
purchase any securities or instruments other than the U.S. Treasury
Securities, the Contracts and the XYZ Common Stock or other assets received
pursuant to the Contracts and, for cash management purposes, short-term
obligations of the U.S. Government; issue any securities or instruments
except for the STRYPES; make short sales or purchase securities on margin;
write put or call options; borrow money; underwrite securities; purchase or
sell real estate, commodities or commodities contracts; or make loans. The
Trust has adopted a fundamental policy to invest at least 65% of its
portfolio in the Contracts. The Trust has also adopted a fundamental policy
that the Contracts may not be disposed of during the term of the Trust and
that, except to the extent necessary to pay expenses of the Trust or if the
Trust terminates prior to the Maturity Date due to the occurrence of a
Reorganization Event, the U.S. Treasury Securities may not be disposed of
prior to their respective maturities.

RISK FACTORS

NO ACTIVE PORTFOLIO MANAGEMENT

It is a fundamental policy of the Trust that the Contracts may not be
disposed of during the term of the Trust and that, except to the extent
necessary to pay expenses of the Trust or if the Trust terminates prior to
the Maturity Date due to the occurrence of a Reorganization Event or a
Default by the Contracting Stockholder, the U.S. Treasury Securities may not
be disposed of prior to their respective maturities. As a result, the Trust
will continue to hold the Contracts despite any significant decline in the
market price of the XYZ Common Stock or adverse changes in the financial
condition of the Company. The Trust will not be managed like a typical
closed-end investment company.

ABSENCE OF TRADING HISTORY; MARKETABILITY; POSSIBILITY OF THE STRYPES TRADING
AT A DISCOUNT FROM NET ASSET VALUE

STRYPES have no trading history and it is not possible to predict how
they will trade in the secondary market. The trading price of the STRYPES
may vary considerably prior to the Maturity Date due to, among other things,
fluctuations in the price of the XYZ Common Stock (which may occur due to
changes in the Company's financial condition, results of operations or
prospects, or because of complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally,
the stock exchanges or quotation systems on which the XYZ Common Stock is
traded and the market segment of which the Company is a part) and
fluctuations in interest rates and other factors that are difficult to
predict and beyond the Trust's control.

The Underwriters currently intend, but are not obligated, to make a
market in the STRYPES. There can be no assurance that a secondary market
will develop or, if a secondary market does develop, that it will provide the
Holders of the STRYPES with liquidity of investment or that it will continue
for the life of the STRYPES. Application will be made to list the STRYPES on
the NYSE. Assuming the acceptance of such application, there can be no
assurance that the STRYPES will not later be delisted or that trading in the
STRYPES on the NYSE will not be suspended. In the event of a delisting or
suspension of trading on such exchange, the Trust will apply for listing of
the STRYPES on another national securities exchange or for quotation on
another trading market. If the

17
<PAGE>
STRYPES are not listed or traded on any
securities exchange or trading market, or if trading of the STRYPES is
suspended, pricing information for the STRYPES may be more difficult to
obtain, and the price and liquidity of the STRYPES may be adversely affected.

The Trust is a newly organized closed-end investment company with no
previous operating history. Shares of closed-end investment companies
frequently trade at a discount from their net asset value, which is a risk
separate and distinct from the risk that the Trust's net asset value will
decrease. The Trust cannot predict whether the STRYPES will trade at, below
or above their net asset value. The risk of purchasing investments that
might trade at a discount is more pronounced for investors who wish to sell
their investments in a relatively short period of time after completion of
the Trust's initial public offering because for those investors realization
of a gain or loss on their investments is likely to be more dependent upon
the existence of a premium or discount than upon portfolio performance.
STRYPES are not subject to redemption.

DILUTION ADJUSTMENTS; STOCKHOLDER RIGHTS

The number of shares of XYZ Common Stock that the Trust is entitled to
receive at the termination of the Trust is subject to adjustment for certain
events arising from stock splits and combinations, stock dividends and
certain other actions of the Company that modify its capital structure. See
"Investment Objective and Policies--The Contracts--Dilution Adjustments."
Such number of shares to be received by the Trust may not be adjusted for
other events, such as offerings of XYZ Common Stock for cash or in connection
with acquisitions, that may materially and adversely affect the price of the
XYZ Common Stock and, because of the relationship of the amount to be
received pursuant to the Contracts to the price of the XYZ Common Stock, such
other events may materially and adversely affect the trading price of the
STRYPES. There can be no assurance that the Company will not take any of the
foregoing actions, or that it will not make offerings of, or that major
shareholders will not sell any, XYZ Common Stock in the future, or as to the
amount of any such offerings or sales. Neither the Company nor the
Contracting Stockholder have any obligation to consider the interests of the
Holders of the STRYPES for any reason. In addition, until the receipt of the
XYZ Common Stock by Holders as a result of the exchange of the STRYPES for
the XYZ Common Stock, Holders will not be entitled to any rights with respect
to the XYZ Common Stock (including without limitation voting rights and the
rights to receive any dividends or other distributions in respect thereof).

LIMITED TERM

The Trust will have a limited term of three years and will terminate on
or shortly after the Maturity Date, unless the Trust is terminated earlier
under certain limited circumstances. On or shortly after the Maturity Date,
the Trust will distribute the shares of XYZ Common Stock received by the
Trust pursuant to the Contracts and other net assets held by the Trust pro
rata to Holders and terminate shortly thereafter. In the event the Company
is the subject of a Reorganization Event, the Trust's assets will be
liquidated, the net assets of the Trust will be distributed to Holders and
the term of the Trust will expire. The Trust will also expire in the event
of a Default by the Contracting Stockholder.

NON-DIVERSIFIED PORTFOLIO

The Trust's assets will consist almost entirely of the Contracts and the
U.S. Treasury Securities. As a result, investments in the Trust may be
subject to greater risk than would be the case for a company with a more
diversified portfolio of investments.

COMPARISON TO OTHER EQUITY SECURITIES; RELATIONSHIP TO XYZ COMMON STOCK

The terms of the STRYPES are similar to those of ordinary equity
securities in that the value of the XYZ Common Stock (or, pursuant to the
option of the Contracting Stockholder, the amount of cash) that a holder of a
STRYPES will receive on the Maturity Date is not fixed, but is based on the
Maturity Price of the XYZ Common Stock (see "Description of the STRYPES").
THERE CAN BE NO ASSURANCE THAT SUCH AMOUNT RECEIVABLE BY THE HOLDER ON THE
MATURITY DATE WILL BE EQUAL TO OR GREATER THAN THE ISSUE PRICE OF THE
STRYPES. IF THE MATURITY

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<PAGE>
PRICE OF THE XYZ COMMON STOCK IS LESS THAN THE
INITIAL PRICE, SUCH AMOUNT RECEIVABLE ON THE MATURITY DATE WILL BE LESS THAN
THE INITIAL PRICE, IN WHICH CASE AN INVESTMENT IN STRYPES WILL RESULT IN A
LOSS. ACCORDINGLY, A HOLDER OF STRYPES ASSUMES THE RISK THAT THE MARKET
VALUE OF THE XYZ COMMON STOCK MAY DECLINE, AND THAT SUCH DECLINE COULD BE
SUBSTANTIAL. REFERENCE IS MADE TO THE ACCOMPANYING PROSPECTUS OF THE
COMPANY, INCLUDING THE INFORMATION UNDER THE CAPTION "RISK FACTORS" THEREIN.

The trading prices of the STRYPES in the secondary market will be
affected by the trading prices of the XYZ Common Stock in the secondary
market. It is impossible to predict whether the price of XYZ Common Stock
will rise or fall. Trading prices of XYZ Common Stock will be influenced by
the Company's operating results and prospects and by economic, financial and
other factors and market conditions that can affect the capital markets
generally, including the level of, and fluctuations in, the trading prices of
stocks generally and sales of substantial amounts of XYZ Common Stock in the
market subsequent to the offering of the STRYPES or the perception that such
sales could occur.

LIMITATIONS ON OPPORTUNITY FOR EQUITY APPRECIATION; POTENTIAL LOSSES

The opportunity for equity appreciation afforded by an investment in the
STRYPES is less than the opportunity for equity appreciation afforded by a
direct investment in the XYZ Common Stock, because the amount receivable by a
Holder on the Maturity Date will only exceed the Initial Price if the
Maturity Price of the XYZ Common Stock exceeds the Threshold Appreciation
Price (which represents an appreciation of 20% over the Initial Price).
Moreover, Holders of the STRYPES will only be entitled to receive on the
Maturity Date 83.33% (the percentage equal to the Initial Price divided by
the Threshold Appreciation Price) of any appreciation of the value of XYZ
Common Stock in excess of the Threshold Appreciation Price. In addition,
there can be no assurance that the yield on the STRYPES will be higher than
the dividend yield on the XYZ Common Stock over the term of the Trust.

NO STOCKHOLDER RIGHTS

Holders of the STRYPES will not be entitled to any rights with respect
to the XYZ Common Stock (including, without limitation, voting rights and
rights to receive any dividends or other distributions in respect thereof)
until receipt of the XYZ Common Stock on the Maturity Date. For example, in
the event that amendment is proposed to the Articles of Incorporation or By-
Laws of the Company and the record date for determining the stockholders of
record entitled to vote on such amendment occurs prior to such delivery,
Holders of the STRYPES will not be entitled to vote on such amendment.

The Contracting Stockholder is not responsible for the determination or
calculation of the amount receivable by Holders of the STRYPES at maturity.
The Contracts between the Trust and the Contracting Stockholder is a
commercial transaction and does not create any rights in, or for the benefit
of, any third party, including any holder of STRYPES.

TAX MATTERS

Holders will experience a taxable event upon the exchange of STRYPES to
the extent the Contracting Stockholder elects the Cash Settlement
Alternative. Because of an absence of authority as to the proper character
of any gain or loss resulting from such a taxable event, the ultimate tax
consequences to Holders as a result of the Contracting Stockholder electing
the Cash Settlement Alternative is uncertain. Accordingly, prospective
investors in the STRYPES should consult their own tax advisers in this
regard. Investors should also consult their own tax advisers concerning the
proper treatment of their pro rata share of the Trust's fees and expenses,
and the application of the United States Federal income tax laws to their
particular situations as well as any consequences of the purchase, ownership
and disposition of the STRYPES arising under the laws of any other taxing
jurisdiction. The tax consequences of investing in the STRYPES are described
in greater detail under "Certain United States Federal Income Tax
Considerations."

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<PAGE>
DESCRIPTION OF THE STRYPES

Each STRYPES represents an equal proportional beneficial interest in the
Trust, and a total of 1,000,000 STRYPES will be issued in the Offering,
assuming no exercise of the Underwriters' over-allotment options. Upon
liquidation of the Trust, Holders are entitled to share pro rata in the net
assets of the Trust available for distribution. STRYPES have no preemptive,
redemption or conversion rights. The STRYPES, when issued and outstanding,
will be fully paid and nonassessable.

Holders are entitled to one vote for each STRYPES held on all matters to
be voted on by Holders and are not able to cumulate their votes in the
election of Trustees. The Trustees of the Trust have been selected initially
by as the initial Holder of the Trust. The
Trust intends to hold annual meetings as required by the rules of the NYSE.
The Holders have the right, upon the declaration in writing or vote of more
than two-thirds of the outstanding STRYPES, to remove a Trustee. The
Trustees will call a meeting of Holders to vote on the removal of a Trustee
upon the written request of the record Holders of 10% of the STRYPES or to
vote on other matters upon the written request of the record Holders of 51%
of the STRYPES (unless substantially the same matter was voted on during the
preceding 12 months).

BOOK-ENTRY SYSTEM

The STRYPES will be issued in the form of one or more global securities
(the "Global Securities") deposited with the Depositary and registered in the
name of a nominee of the Depositary.

The Depositary has advised the Trust and the Underwriters as follows:
The Depositary is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act.
The Depositary was created to hold securities of persons who have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of
certificates. Such participants include securities brokers and dealers,
banks, trust companies and clearing corporations. Indirect access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.

Upon the issuance of a Global Security, the Depositary or its nominee
will credit the respective STRYPES represented by such Global Security to the
accounts of participants. The accounts to be credited shall be designated by
the Underwriters. Ownership of beneficial interests in such Global
Securities will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests by participants in
such Global Securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
or its nominee for such Global Securities. Ownership of beneficial interests
in such Global Securities by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and
such laws may impair the ability to transfer beneficial interests in a Global
Security.

So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the STRYPES.
Except as set forth below, owners of beneficial interests in such Global
Securities will not be entitled to have the STRYPES registered in their names
and will not receive or be entitled to receive physical delivery of the
STRYPES in definitive form and will not be considered the owners or Holders
thereof.

Payment of shares of XYZ Common Stock or amounts payable or other
consideration deliverable on exchange of, and any quarterly distributions on,
STRYPES registered in the name of or held by the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security. None of the Trust,
any Trustee, the Paying Agent or the Custodian for the STRYPES will

20
<PAGE>
have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.

The Trust expects that the Depositary, upon receipt of any payment in
respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such Global Security as shown
on the records of the Depositary. The Trust also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such participants.

A Global Security may not be transferred except as a whole by the
Depositary to a nominee or a successor of the Depositary. If the Depositary
is at any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Trust within ninety days, the Trust will
issue STRYPES in definitive registered form in exchange for the Global
Security representing such STRYPES. In addition, the Trust may at any time
and in its sole discretion determine not to have any STRYPES represented by
one or more Global Securities and, in such extent, will issue STRYPES in
definitive form in exchange for all of the Global Securities representing the
STRYPES. Further, if the Trust so specifies with respect to the STRYPES, an
owner of a beneficial interest in a Global Security representing STRYPES may,
on terms acceptable to the Trust and the Depositary for such Global Security,
receive STRYPES in definitive form. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of STRYPES represented by such Global Security
equal in number to that represented by such beneficial interest and to have
such STRYPES registered in its name.

TRUSTEES AND OFFICERS

The Trustees of the Trust consist of individuals, of whom
are not "interested persons" of the Trust as defined in the Investment
Company Act. The Trustees of the Trust are responsible for the overall
supervision of the operations of the Trust and perform the various duties
imposed on the trustees of management investment companies by the Investment
Company Act.

The Trustees and Officers of the Trust are:

COMPENSATION OF TRUSTEES

The Trust will pay each unaffiliated Trustee a fee of $ per year
plus $ per meeting attended and pays all Trustees' actual out-of-pocket
expenses relating to attendance at meetings; the Trust also pays an annual
fee of $ to members of its audit committee and pays all Trustees' actual
out-of-pocket expenses relating to

21
<PAGE>
attendance at meetings. The Trustees will not receive any pension or
retirement benefits from the Trust. None of the Trustees receives any
compensation for serving as a trustee or director of any other affiliated
investment company.

The following table sets forth for the calendar year ended December 31,
1995 the aggregate compensation paid by all investment companies advised by (
) and its affiliates ("(__________) Advised Funds") to the non-interested
Trustees.

<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM
( ) ADVISED FUNDS
NAME OF TRUSTEE PAID TO TRUSTEES/(1)/
--------------- -------------------------
<S> <C>

</TABLE>
_______________
/(1)/ In addition to the Trust, the Trustees served on the boards of
other ( ) Advised Funds as follows:

MANAGEMENT ARRANGEMENTS

PORTFOLIO MANAGEMENT AND ADMINISTRATION

The Trust will be internally managed and will not have an investment
adviser. The Trust's portfolio will not be actively managed. The Managing
Trustee will negotiate the terms of the Contracts and select the U.S.
Treasury Securities proposed for purchase by the Fund in accordance with and
subject to the terms of the Declaration of Trust. The Trustees of the Trust
will authorize the purchase of the Contracts and the U.S. Treasury Securities
as directed by the Declaration of Trust. It is a fundamental policy of the
Trust that the Contracts may not be disposed of during the term of the Trust
and that, except to the extent necessary to pay expenses of the Trust or if
the Trust terminates prior to the Maturity Date due to the occurrence of a
Reorganization Event, the U.S. Treasury Securities may not be disposed of
prior to their respective maturities.

The Trust pays all expenses incurred in the operation of the Trust,
including, among other things, accounting services, expenses for legal and
auditing services, taxes, costs of printing proxies, listing fees, if any,
stock certificates and shareholder reports, charges of the Custodian (as
defined below) and the Paying Agent (as defined below), expenses of
registering the STRYPES under federal and state securities laws, Commission
fees, fees and expenses of Trustees, accounting and pricing costs, insurance,
interest, brokerage costs, litigation and other extraordinary or non-
recurring expenses, mailing and other expenses properly payable by the Trust.

ADMINISTRATOR

The day-to-day affairs of the Trust will be managed by ,
as Trust Administrator pursuant to an Administration Agreement. Under the
Administration Agreement, the Trustees have delegated most of their
operational duties to the Administrator, including without limitation, the
duties to: (i) receive invoices for and pay, or cause to be paid, all
expenses incurred by the Trust; (ii) with the approval of the Trustees,
engage legal and other professional advisors (other than the independent
public accountants for the Trust); (iii) instruct the Paying Agent to pay
distributions on STRYPES as described herein; (iv) prepare and mail, file or
publish all notices, proxies, reports, tax returns and other communications
and documents, and keep all books and records, for the Trust; (v) at the
direction of the Trustees, institute and prosecute legal and other
appropriate proceedings to enforce the rights and remedies of the Trust; and
(vi) make all necessary arrangements with respect to meetings of Trustees and
any meetings of holders of STRYPES. The Administrator will not, however,
select the independent public accountants for the Trust or sell or otherwise
dispose of the Trust assets (except in connection with an acceleration of the

22
<PAGE>
Contracts as described under "Investment Objective and Policies--The
Contracts--Collateral Requirements of the Contracts", or the settlement of
the Contracts at the Maturity Date, or upon a Reorganization Event).

The Administration Agreement may be terminated by either the Trust or
the Administrator upon 60 days' prior written notice, except that no
termination shall become effective until a successor Administrator has been
chosen and has accepted the duties of the Administrator.

Except for its roles as Administrator, custodian, paying agent,
registrar and transfer agent of the Trust, and except for its role as
Collateral Agent under the Collateral Agreements, has no other
affiliation with, and is not engaged in any other transactions with, the
Trust.

The address of the Administrator is .

CUSTODIAN

The Trust's custodian (the "Custodian") is
pursuant to a custodian agreement (the "Custodian Agreement"). In the event
of any termination of the Custodian Agreement by the Trust or the resignation
of the Custodian, the Trust must engage a new Custodian to carry out the
duties of the Custodian as set forth in the Custodian Agreement. Pursuant to
the Custodian Agreement, all net cash received by the Trust will be invested
by the Custodian in short-term U.S. Government securities maturing on or
shortly before the next quarterly distribution date. The Custodian will also
act as collateral agent under the Security and Pledge Agreement and will hold
a perfected security interest in the XYZ Common Stock and U.S. Treasury
Securities or other assets consistent with the terms of the Contracts pledged
thereunder.

PAYING AGENT

The transfer agent, registrar and paying agent (the "Paying Agent") for
the STRYPES is pursuant to a paying agent agreement
(the "Paying Agent Agreement"). In the event of any termination of the
Paying Agent Agreement by the Trust or the resignation of the Paying Agent,
the Trust will use its best efforts to engage a new Paying Agent to carry out
the duties of the Paying Agent.

INDEMNIFICATION

The Trust will indemnify each Trustee, the Administrator, the Paying
Agent and the Custodian, with respect to any claim, liability, loss or
expense (including the costs and expenses of the defense against any claim or
liability) which it may incur in acting as Trustee, Administrator, Paying
Agent or Custodian, as the case may be, except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of their
respective duties or where applicable law prohibits such indemnification.

ESTIMATED EXPENSES

The Trust will pay at its inception to each of the Administrator, the
Custodian and the Paying Agent, a one-time, up-front amount in respect of its
fee. The anticipated Trust expenses include, among other things, expenses
for legal and independent accountants' services, costs of printing proxies,
STRYPES certificates and Holder reports, expenses of the Trustees, fidelity
bond coverage, stock exchange listing fees and expenses of qualifying the
STRYPES for sale in the various states. Organization costs of the Trust in
the amount of $ , offering costs estimated to be $ , and the
aggregate of the one-time, up-front payments described above in the amount of
$ , will be paid from the proceeds of the offering of the STRYPES. A
portion of the initial assets of the Trust will be used to purchase U.S.
Treasury Securities with face amounts and maturities corresponding to the
anticipated expenses over the term of the Trust. To the extent that the
Trust incurs unanticipated expenses, distributions to Holders will be reduced
in order to pay such expenses.

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<PAGE>
DIVIDENDS AND DISTRIBUTIONS

The Trust intends to distribute to Holders on a quarterly basis the
proceeds of the U.S. Treasury Securities held by the Trust, net of any Trust
expenses. The first distribution, reflecting the Trust's operations from the
date of the Offering, will be made on , 1996 to Holders of
record as of , 1996. Thereafter, distributions will be made on
, , and of each year to Holders of
record as of each , , and ,
respectively. In determining the amount of its anticipated distributions the
Trust has estimated amounts necessary to pay expenses over the term of the
Trust. To the extent that the Trust incurs unanticipated expenses,
distributions to Holders will be reduced in order to pay such expenses. Upon
termination of the Trust as described in "Investment Objective and Policies--
Trust Termination; No Fractional Shares of XYZ Common Stock," each Holder
will share pro rata in any remaining net assets of the Trust.

NET ASSET VALUE

The net asset value of the STRYPES will be calculated by the Trust no
less frequently than quarterly by dividing the value of the net assets of the
Trust (the value of its assets less its liabilities) by the total number of
STRYPES outstanding. The Trust's net asset value will be published
semi-annually as part of the Trust's semi-annual report to Holders and at
such other times as the Trustees may determine. The U.S. Treasury Securities
held by the Trust will be valued at the mean between the last current bid and
asked prices or, if quotations are not available, as determined in good faith
by the Trust under the direction of the Trustees. Short-term investments
having a maturity of 60 days or less are valued at cost with accrued interest
or discount earned included in interest receivable. The Contracts will be
valued at the mean of the bid prices received by the Trust from at least
three independent broker-dealer firms unaffiliated with the Trust who are in
the business of making bids on financial instruments similar to the Contracts
and with terms comparable thereto.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

Set forth in full below is the opinion of Brown & Wood, counsel to the
Trust, as to certain United States Federal income tax consequences of the
purchase, ownership and disposition of the STRYPES. Such opinion is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including retroactive changes in effective dates) or
possible differing interpretations. The discussion below deals only with
STRYPES held as capital assets and does not purport to deal with persons in
special tax situations, such as financial institutions, insurance companies,
regulated investment companies, dealers in securities or currencies, tax-
exempt entities, or persons holding STRYPES as a hedge against currency risks
or as a position in a "straddle" for tax purposes. It also does not deal
with Holders of STRYPES other than original purchasers thereof (except where
otherwise specifically noted herein). Moreover, the discussion below does
not address the tax consequences of ownership of the XYZ Common Stock or
Marketable Securities. The following discussion also does not address the
tax consequences of investing in the STRYPES arising under the laws of any
state, local or foreign jurisdiction. Persons considering the purchase of
the STRYPES should consult their own tax advisors concerning the application
of the United States Federal income tax laws to their particular situations
as well as any consequences of the purchase, ownership and disposition of the
STRYPES arising under the laws of any other taxing jurisdiction.

As used herein, the term "U.S. Holder" means a beneficial owner of
STRYPES that is for United States Federal income tax purposes (i) a citizen
or resident of the United States, (ii) a corporation, a partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States Federal income taxation regardless of its
source. As used herein, the term "non-U.S. Holder" means a beneficial owner
of STRYPES that is not a U.S. Holder.

24
<PAGE>
CLASSIFICATION OF THE TRUST

The Trust will be classified as a grantor trust under subpart E, Part I
of subchapter J of the Internal Revenue Code of 1986, as amended (the
"Code"). As such, Holders of the STRYPES will be treated for United States
Federal income tax purposes as owners of a pro rata undivided interest in the
Trust's assets which will consist of the U.S. Treasury Securities and the
Contracts. Accordingly, each Holder will be required to report on its United
States Federal income tax return its pro rata share of the entire income on
the Trust's assets in accordance with such Holder's regular method of tax
accounting.

U.S. HOLDERS

As previously discussed, each U.S. Holder will be considered the owner
of its pro rata portion of the U.S. Treasury Securities and the Contracts
held by the Trust. The cost to a U.S. Holder of its STRYPES (net of its pro
rata portion of the one-time fees payable to the Custodian and the Paying
Agent) will be allocated among such U.S. Holder's pro rata portion of the
U.S. Treasury Securities and the Contracts (in proportion to the relative
fair market values thereof on the date on which the U.S. Holder acquires its
STRYPES) in order to determine the U.S. Holder's initial tax basis in the
U.S. Holder's pro rata portion of the U.S. Treasury Securities and the
Contracts. It is currently anticipated that (17%) and (83%) of the net
proceeds of the offering will be used by the Trust to purchase the U.S.
Treasury Securities and as payments under the Contracts, respectively.

The U.S. Treasury Securities held by the Trust will be treated for
United States Federal income tax purposes as having original issue discount
which will accrue over the term of the U.S. Treasury Securities. In general,
a U.S. Holder will be treated as having purchased each U.S. Treasury Security
held by the Trust with original issue discount in an amount equal to the
excess of the U.S. Holder's pro rata portion of the amount payable on such
U.S. Treasury Security over the Holder's initial tax basis therefor as
discussed above. A U.S. Holder (whether on the cash or accrual method of tax
accounting) will be required to include such original issue discount in
income for United States Federal income tax purposes as it accrues in
accordance with a constant yield method. Because it is expected that 20% or
more of the holders of STRYPES will be accrual basis taxpayers, original
issue discount on any short-term U.S. Treasury Securities (i.e., any U.S.
Treasury Security with a maturity of one year or less from the date it is
purchased by the Trust) held by the Trust will also be currently includable
in income by U.S. Holders as it accrues on a straight-line basis (unless a
U.S. Holder elects to accrue such original issue discount on a constant yield
basis). A U.S. Holder's tax basis in its pro rata portion of a U.S. Treasury
Security will be increased by the amount of any original issue discount
included in income by the U.S. Holder with respect to such U.S. Treasury
Security (as described above).

Each U.S. Holder will also be treated as having entered into a pro rata
portion of the Contracts. Under current law, a U.S. Holder will not be
required to recognize any income, gain or loss with respect to the Contracts
until the Maturity Date. On the Maturity Date, if the Contracting
Stockholder delivers XYZ Common Stock pursuant to the Contracts, a U.S.
Holder will generally not realize any taxable gain or loss upon the receipt
of such XYZ Common Stock. However, a U.S. Holder will generally be required
to recognize taxable gain or loss with respect to any cash received in lieu
of fractional shares. The amount of such gain or loss recognized by a U.S.
Holder will be equal to the difference, if any, between the amount of cash
received by the U.S. Holder and the portion of the U.S. Holder's tax basis in
the Contracts that is allocable to the fractional shares. Any such taxable
gain or loss will be treated as short-term capital gain or loss. A U.S.
Holder will have an initial tax basis in any XYZ Common Stock received
thereby on the Maturity Date in an amount equal to the U.S. Holder's tax
basis in the Contracts less the portion of such tax basis that is allocable
to any fractional shares (as described above) and will realize taxable gain
or loss with respect to any such XYZ Common Stock received thereby on the
Maturity Date only upon the subsequent sale or disposition by the U.S. Holder
of such XYZ Common Stock. In addition, a U.S. Holder's holding period for
any XYZ Common Stock received by such U.S. Holder on the Maturity Date will
begin on the day immediately following the Maturity Date and will not include
the period during which the U.S. Holder held the related STRYPES.

Alternatively, if the Contracting Stockholder satisfies the Contracts in
cash on the Maturity Date, a U.S. Holder will recognize taxable gain or loss
on the Maturity Date with respect to the Contracts in an amount equal

25
<PAGE>
to the difference, if any, between the total amount of cash received by such
U.S. Holder on the Maturity Date and an amount equal to the U.S. Holder's
tax basis in the Contracts. It is uncertain whether such gain or loss would be
treated as capital or ordinary. If such gain or loss is properly treated as
capital, then such gain or loss will be treated as long-term capital gain or
loss if the STRYPES has been held by the U.S. Holder for more than one year
as of the Maturity Date. If such gain or loss is properly treated as
ordinary gain or loss, it is possible that the deductibility of any loss
recognized on the Maturity Date with respect to the Contracts by a U.S.
Holder who is an individual could be subject to the limitations applicable to
miscellaneous itemized deductions provided for under Section 67(a) of the
Code. In general, Section 67(a) of the Code provides that an individual may
only deduct miscellaneous itemized deductions for a particular taxable year
to the extent that the aggregate amount of the individuals's miscellaneous
itemized deductions for such taxable year exceed two percent of the
individual's adjusted gross income for such taxable year (the miscellaneous
itemized deductions and other itemized deductions allowable to high-income
individuals, however, are generally subject to further limitations under
Section 68 of the Code). Prospective investors in the STRYPES who are
individuals should also be aware that miscellaneous itemized deductions are
not allowable in computing the United States Federal alternative minimum tax
imposed by Section 55 of the Code. Prospective investors in the STRYPES are
urged to consult their own tax advisors concerning the character of any gain
or loss realized on the Maturity Date with respect to the Contracts in the
event that the Contracting Stockholder elects to satisfy its obligations
under the Contracts in cash on the Maturity Date as well as the deductibility
of any such loss.

In the event that some of the Contracting Stockholder satisfies its
obligations under the Contracts with XYZ Common Stock and others satisfy
their obligations under the Contracts with cash, a U.S. Holder would be
required to apply the foregoing rules to the STRYPES held thereby on a pro
rata basis in proportion to the amount of XYZ Common Stock and cash received
thereby.

Upon the sale or other disposition of a STRYPES prior to the Maturity
Date, a U.S. Holder generally will be required to allocate the total amount
realized by such U.S. Holder upon such sale or other disposition between the
U.S. Holder's pro rata portion of the U.S. Treasury Securities and the
Contracts based upon their relative fair market values (as determined on the
date of disposition). A U.S. Holder will generally be required to recognize
taxable gain or loss with respect to each such component (i.e., the U.S.
Holder's pro rata portion of the U.S. Treasury Securities and the Contracts)
in an amount equal to the difference, if any, between the amount realized
with respect to each such component upon the sale or disposition of the
STRYPES (as determined in the manner described above) and the U.S. Holder's
adjusted tax basis in each such component. Any such gain or loss will
generally be treated as long-term capital gain or loss if the U.S. Holder has
held the STRYPES for more than one year at the time of disposition.

An individual U.S. Holder who itemizes deductions may amortize and
deduct over the term of the Trust (subject to any applicable limitations such
as Section 67(a) of the Code) its pro rata portion of the one-time, up-front
fees paid by the Trust to the Custodian and the Paying Agent, and may deduct
(subject to any applicable limitations such as those in Section 67(a) of the
Code) its pro rata portion of the other expenses described under "Management
Arrangements--Estimated Expenses" incurred by the Trust resulting from its
ongoing operations (including the fees payable to the Trustees) as such
expenses are incurred by the Trust. Counsel believes that a U.S. Holder's
pro rata portion of the expenses incurred in connection with the organization
of the Trust, underwriting discounts and commissions and other offering
expenses should be includable in the cost to the U.S. Holder of the STRYPES.
However, there can be no assurance that the Internal Revenue Service (the
"IRS") will not take a contrary view. If the IRS were to prevail in
treating such expenses as excludible from a U.S. Holder's cost of the
STRYPES, such expenses would not be includable in the basis of the assets of
the Trust and should instead, subject to the limitations provided for under
Section 67(a) of the Code, be amortizable and deductible over the term of the
Trust.

MISCELLANEOUS TAX MATTERS

Special tax rules may apply to persons holding STRYPES as part of a
"synthetic security" or other integrated investment, or as part of a
straddle, hedging transaction or other combination of offsetting positions.
For instance, Section 1258 of the Code may possibly require certain U.S.
Holders of the STRYPES who enter into hedging transactions or offsetting
positions with respect to the STRYPES to treat all or a portion of any gain
realized

26
<PAGE>
on the STRYPES as ordinary income in instances where such gain may
have otherwise been treated as capital gain. U.S. Holders hedging their
positions with respect to the STRYPES or otherwise holding their STRYPES in a
manner described above should consult their own tax advisors regarding the
applicability of Section 1258 of the Code, or any other provision of the
Code, to their investment in the STRYPES.

If as a result of a Reorganization Event, cash, Marketable Securities,
or a combination of cash and Marketable Securities is delivered pursuant to
the Contracts, U.S. Holders generally will be required to recognize taxable
gain or loss in respect of any cash received, including cash received in lieu
of fractional shares of Marketable Securities and, in some instances, in
respect of any Marketable Securities received upon receipt thereof.
Moreover, in some instances, U.S. Holders may be required to recognize at the
time of a Reorganization Event taxable gain or loss in respect of the amount
of cash (and, in some cases, Marketable Securities) which is fixed at the
time of such Reorganization Event and is to be delivered pursuant to the
Contracts. It is uncertain whether any taxable gain or loss recognized by a
U.S. Holder as a result of a Reorganization Event would be capital or
ordinary. U.S. Holders are urged to consult their own tax advisors
concerning the specific tax consequences of a Reorganization Event on their
investment in a STRYPES.

NON-U.S. HOLDERS

Subject to the discussion below concerning income that is effectively
connected with a trade or business conducted by a non-U.S. Holder in the
United States, payments of interest (including original issue discount) made
with respect to the U.S. Treasury Securities will not be subject to United
States withholding tax, provided that such non-U.S. Holder complies with
applicable certification requirements. In general, for a non-U.S. Holder to
qualify for this exemption from taxation, the last United States payor in the
chain of payment prior to payment to a non-U.S. Holder (the "Withholding
Agent") must have received in the year in which a payment of interest or
principal occurs, or in either of the two receding calendar years, a
statement that (i) is signed by the beneficial owner of the U.S. Treasury
Securities under penalties of perjury, (ii) certifies that such owner is not
a U.S. Holder and (iii) provides the name and address of the beneficial
owner. The statement may be made on an IRS Form W-8 or a substantially
similar form, and the beneficial owner must inform the Withholding Agent of
any change in the information on the statement within 30 days of such change.
If STRYPES is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide a
signed statement to the Withholding Agent. However, in such case, the signed
statement must be accompanied by a copy of the IRS Form W-8 or the substitute
form provided by the beneficial owner to the organization or institution.

Any capital gain realized in respect of STRYPES by a non-U.S. Holder
will generally not be subject to United States Federal income tax if (i) such
gain in not effectively connected with a United States trade or business of
such non-U.S. Holder and (ii) in the case of an individual non-U.S. Holder,
such individual is not present in the United States for 183 days or more in
the taxable year of the sale or other disposition, or the gain is not
attributable to a fixed place of business maintained by such individual in
the United States and such individual does not have a "tax home" (as defined
for United States Federal income tax purposes) in the United States.

If any interest or gain realized by a non-U.S. Holder is effectively
connected with the non-U.S. Holder's conduct of a trade or business in the
United States, such interest or gain will be subject to regular United States
Federal income tax in the same manner as if the non-U.S. Holder were a U.S.
Holder. In addition, in such event, if such non-U.S. Holder is a foreign
corporation, such interest or gain may be included in the earnings and
profits of such non-U.S. Holder in determining such non-U.S. Holder's United
States branch profits tax liability.

BACKUP WITHHOLDING AND INFORMATION REPORTING

A beneficial owner of STRYPES may be subject to information reporting
and to backup withholding at a rate of 31 percent of certain amounts paid to
the beneficial owner unless such beneficial owner provides proof of an
applicable exemption or a correct taxpayer identification number, and
otherwise complies with applicable requirements of the backup withholding
rules.

27
<PAGE>
Any amounts withheld under the backup withholding rules from a payment
to a beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.

PROSPECTIVE INVESTORS IN THE STRYPES SHOULD BE AWARE THAT THERE IS NO
AUTHORITY DIRECTLY ADDRESSING THE PROPER UNITED STATES FEDERAL INCOME TAX
TREATMENT OF THE STRYPES OR SECURITIES WITH TERMS SUBSTANTIALLY THE SAME AS
THE STRYPES, AND THAT NO RULING HAS BEEN REQUESTED FROM THE IRS WITH RESPECT
TO THE STRYPES. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE IRS WILL
AGREE WITH THE FOREGOING DISCUSSION AND THAT THE IRS WILL NOT ASSERT A
CONTRARY POSITION AS TO THE PROPER UNITED STATES FEDERAL INCOME TAX TREATMENT
OF THE STRYPES WHICH MIGHT CAUSE THE CHARACTER AND TIMING OF INCOME, GAIN OR
LOSS RECOGNIZED WITH RESPECT TO A STRYPES TO DIFFER SIGNIFICANTLY FROM SUCH
CHARACTER AND TIMING DISCUSSED ABOVE. PROSPECTIVE INVESTORS IN THE STRYPES
ARE THEREFORE URGED TO CONSULT WITH THEIR OWN TAX ADVISERS PRIOR TO MAKING AN
INVESTMENT IN THE STRYPES.

UNDERWRITING

The U.S. Underwriter has agreed, subject to the terms and conditions of
the U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the Trust,
to purchase STRYPES from the Trust. The International Manager has
agreed, subject to the terms and conditions of the International Purchase
Agreement (the "International Purchase Agreement") with the Trust, to
purchase STRYPES from the Trust.

In the U.S. Purchase Agreement and the International Purchase Agreement,
the U.S. Underwriter and International Manager have agreed, subject to the
terms and conditions set forth therein, to purchase all of the STRYPES being
sold pursuant to each such Agreement if any of the STRYPES being sold
pursuant to each such Agreement are sold to investors. Sales of STRYPES to
be purchased by the U.S. Underwriter in the U.S. Offering and the
International Manager in the International Offering are conditioned upon one
another and if either such offering fails to close, the U.S. Underwriter and
International Manager, as the case may be, will have a right to elect whether
or not to proceed with their respective offering. In the event of a failure
to close, any funds debited from any investor's account maintained with such
underwriter will be credited to such account and any funds received by such
underwriter by check or money order from any investor will be returned to
such investor by check.

The Underwriters have each advised the Trust that they propose initially
to offer the STRYPES to the public at the public offering price set forth on
the cover page of this Prospectus. The Underwriters have also advised the
Trust that they propose to offer STRYPES to certain dealers at the initial
public offering price less a concession not in excess of $ per STRYPES.
Such Underwriters may allow, and such dealers may reallow, a discount not in
excess of $ per STRYPES to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.

The Trust has granted to the Underwriters options, exercisable for 30
days after the date hereof, to purchase up to an aggregate of
additional STRYPES to cover over-allotments, if any, at the initial public
offering price less the sales load. To the extent the Underwriters exercise
such option, the U.S. Underwriter or International Manager, as the case may
be, will have a firm commitment, subject to certain conditions, to purchase a
number of option STRYPES.

Prior to the Offering, there has been no public market for the STRYPES.
Application will be made to list the STRYPES on the NYSE under the symbol "
".

The International Underwriter represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of
the STRYPES will not offer or sell any STRYPES to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of

28
<PAGE>
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied with and will
comply with all applicable provisions of the Financial Services Act 1986
with respect to anything done by it in relation to the STRYPES in, from
or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the STRYPES to a person who
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
such document may otherwise lawfully be issued or passed on. The International
Underwriter has also agreed that (i) it has not offered or sold and will not
offer or sell in Hong Kong, by means of any documents, any other to persons
whose ordinary business it is to buy or sell shares or debentures, whether as
a principal or agent, or in circumstances which do not constitute an offer to
the public within the meaning of the Companies Ordinance (Cap. 32) of Hong
Kong and (ii) it has not issued and will not issue any invitation or
advertisement relating to the STRYPES in Hong Kong (except if permitted to do
so under the securities laws of Hong Kong) other than with respect to STRYPES
intended to be disposed of to persons outside Hong Kong or to be disposed of
in Hong Kong only to persons whose business involves the acquisition,
disposal, or holding of securities, whether as principal or agent. The
International Manager has further agreed that the STRYPES may not be offered
or sold, nor may any document or other material in connection with the
STRYPES be distributed, either directly or indirectly, (i) to persons in
Singapore other than in circumstances in which such offer or sale does not
constitute an offer or sale of the STRYPES to the public in Singapore or (ii)
to the public or any member of the public in Singapore other than pursuant
to, and in accordance with the conditions of, an explanation invoked under
Division 5A of Part IV of the Companies Act, Chapter 50 of Singapore and to
persons to whom the STRYPES may be offered or sold under such exemption.

Purchasers of the STRYPES in the International Offering may be required
to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase, in addition to the offering price set
forth on the cover page hereof.

The Company and the Contracting Stockholder have agreed not to offer,
sell or otherwise dispose of shares of XYZ Common Stock or any securities
convertible into or exchangeable or exercisable for shares of XYZ Common
Stock (other than pursuant to employee stock option plans) for a period of 90
days from the date of this Prospectus without the prior written consent of
the Underwriters.

The Trust has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "1933 Act").

LEGAL MATTERS

Certain legal matters will be passed upon for the Trust and the
Underwriters by Brown & Wood.

EXPERTS

The statement of assets, liabilities and capital included in this
Prospectus has been audited by , independent
auditors, as stated in their opinion appearing herein, and has been included
in reliance upon such opinion given on the authority of said firm as experts
in auditing and accounting.

ADDITIONAL INFORMATION

The Trust has filed with the Commission, Washington D.C. 20549, a
Registration Statement under the 1933 Act with respect to the STRYPES offered
hereby. Further information concerning the STRYPES and the Trust may be
found in the Registration Statement, of which this Prospectus constitutes a
part. The Registration Statement may

29
<PAGE>
be inspected without charge at the Commission's office in Washington, D.C.
and copies of all or any part thereof may be obtained from such office after
payment of the fees prescribed by the Commission.

30
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Trustees and Shareholders of XYZ STRYPES Trust:

We have audited the accompanying statement of assets, liabilities and capital
of XYZ STRYPES Trust as of , 1996. This financial
statement is the responsibility of the Trust's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of assets,
liabilities and capital is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statement. An audit also includes assessing the accounting
principles used and significant estimates made by the Trust's management, as
well as evaluating the overall financial statement presentation. We believe
that our audit of the financial statement provides a reasonable basis for our
opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of XYZ STRYPES Trust, as of
, 1996 in conformity with generally accepted accounting
principles.

New York, New York
, 1996

31
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
, 1996

<S> <C>
ASSETS

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
Deferred organization and offering costs (Note 1) . . . . . . . . . ________

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $

LIABILITIES

Deferred organization and offering costs payable (Note 1) . . . . . $

NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

CAPITAL

STRYPES, par value $.10 per share;
shares authorized;
shares issued and outstanding (Note 1) . . . . . . . . . . . . . $

Paid-in Capital in excess of par . . . . . . . . . . . . . . . . .
--------

Total Capital-Equivalent of $
net asset value per share of
STRYPES (Note 1) . . . . . . . . . . . . . . . . . . . . . . $
--------
--------

</TABLE>

(1) The Trust was established as a Delaware business trust on _____________,
1996 and is registered as a non-diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended.
Costs incurred by the Trust in connection with its organization,
estimated at $ , will be amortized on a straight-line basis
over a three-year period beginning at the commencement of operations of
the Trust.

(2) Offering expenses, estimated at $ , will be payable upon
completion of the offering and will be charged to capital upon the
commencement of operations of the Trust.

32
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED 1,000,000 STRYPES(SERVICE MARK)
UPON AS HAVING BEEN AUTHORIZED BY
THE FUND OR THE U.S. UNDERWRITER.
THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING OF ANY
SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON
IN ANY STATE OR JURISDICTION OF XYZ STRYPES TRUST
THE UNITED STATES OR ANY COUNTRY
WHERE SUCH OFFER WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO ____________________
CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS
OF SINCE THE DATE HEREOF OR PROSPECTUS
SINCE THE DATES AS OF WHICH
INFORMATION IS SET FORTH HEREIN. ____________________

______________

TABLE OF CONTENTS

Page
---- MERRILL LYNCH & CO.

Prospectus Summary . . . . .
Fee Table . . . . . . . . . .
The Trust . . . . . . . . . .
Use of Proceeds . . . . . . .
Investment Objective and
Policies . . . . . . . . .
Investment Restrictions . . .
Risk Factors . . . . . . . .
Description of the STRYPES .
Trustees and Officers . . . .
Management Arrangements . . .
Dividends and Distributions . , 1996
Net Asset Value . . . . . . .
Certain United States Federal
Income Tax Considerations . (Service Mark) Service mark of
Underwriting . . . . . . . . Merrill Lynch & Co., Inc.
Legal Matters . . . . . . . .
Experts . . . . . . . . . . .
Additional Information . . .
Independent Auditors' Report
Statement of Assets,
Liabilities and Capital . .
Appendix A . . . . . . . . .

-----------------------

UNTIL , 1996 (25
DAYS AFTER THE COMMENCEMENT OF THE
OFFERING), ALL DEALERS EFFECTING
TRANSACTIONS IN THE STRYPES,
WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS
DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

<PAGE>
THE FOLLOWING PROSPECTUS OF XYZ COMPANY IS ATTACHED AND DELIVERED FOR
CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS OF XYZ COMPANY DOES NOT
CONSTITUTE A PART OF THE FOREGOING PROSPECTUS OF XYZ STRYPES TRUST, NOR IS IT
INCORPORATED BY REFERENCE THEREIN.
<PAGE>
APPENDIX A

(XYZ Prospectus)

A-1
<PAGE>

SUBJECT TO COMPLETION ALTERNATE PAGE
Preliminary Prospectus Dated March 18, 1996

1,000,000 STRYPES(SERVICE MARK)
XYZ STRYPES TRUST

(Subject to Exchange for Shares of Common Stock of (XYZ Company), (par value
$. per share))

XYZ STRYPES Trust (the "Trust") is a newly organized Delaware business
trust established to purchase and hold (i) a series of zero-coupon U.S.
Government securities with face amounts and maturities corresponding to the
distributions payable with respect to the STRYPES offered hereby (the
"STRYPES") and the payment dates thereof ("U.S. Treasury Securities"), and
(ii) one or more forward purchase contracts (the "Contracts") with a certain
stockholder (the "Contracting Stockholder") of XYZ Company (the "Company")
relating to shares of common stock of the Company (par value $. per
share) (the "XYZ Common Stock"). Each of the STRYPES will receive quarterly
distributions at an anticipated annual distribution rate of $ per
STRYPES, and will be exchanged for between 0.8333 and 1.0 shares of the XYZ
Common Stock, upon the conclusion of the term of the Trust on ,
1998 (the "Maturity Date"). Distributions with respect to the STRYPES will
be made quarterly on each , , and , commencing ,
1996. The STRYPES are not subject to redemption.

The Trust's investment objective is to distribute to holders on a
quarterly basis $ per STRYPES, and upon the Maturity Date, in exchange
for each STRYPES, a number of shares of XYZ Common Stock (or, under certain
circumstances, an equivalent cash amount or a combination of cash and XYZ
Common Stock) determined in accordance with the following Payment Rate
Formula, subject to certain adjustments: (a) if the Maturity Price is
greater than or equal to 120% of the Initial Price (the "Threshold
Appreciation Price"), 0.8333 shares of XYZ Common Stock per STRYPES, (b) if
the Maturity Price is less than the Threshold Appreciation Price but is
greater than the Initial Price, a number of shares of XYZ Common Stock per
STRYPES so that the value thereof (determined based on the Maturity Price)
equals the Initial Price and (c) if the Maturity Price is less than or equal
to the Initial Price, 1.0 shares of XYZ Common Stock per STRYPES. The
"Maturity Price" means the average Closing Price per share of XYZ Common
Stock on the 20 Trading Days immediately prior to the second Trading Day
preceding the Maturity Date. The "Initial Price" is the last reported sale
price of the XYZ Common Stock on the New York Stock Exchange Composite Tape
on , 1996, which was $ per share. Pursuant to the terms
of the Contracts, in lieu of delivery of XYZ Common Stock, the Contracting
Stockholder may elect to pay cash on the Maturity Date in an amount equal to
the then current market value of the number of shares of XYZ Common Stock
determined under the above formula (the "Cash Settlement Alternative"). To
the extent the Contracting Stockholder elects the Cash Settlement
Alternative, holders of the STRYPES will receive cash instead of XYZ Common
Stock on the Maturity Date. Holders otherwise entitled to receive fractional
shares in respect of their aggregate holdings of STRYPES will receive cash in
lieu thereof.

The STRYPES may be a suitable investment for investors who are able to
understand the unique nature of the Trust and the economic characteristics of
the Contracts and the U.S. Treasury Securities.

The Trust has adopted a fundamental policy that the Contracts may not be
disposed of during the term of the Trust and that, except under certain
limited circumstances, the U.S. Treasury Securities may not be disposed of
prior to their respective maturities. The Trust will continue to hold the
Contracts despite any significant decline in the market price of the XYZ
Common Stock or adverse changes in the financial condition of the Company.
The Trust will be treated as a grantor trust for federal income tax purposes
and each holder of STRYPES will be treated as the owner of its pro rata
portion of the Contracts and the U.S. Treasury Securities. The U.S. Treasury
Securities held by the Trust will be treated for federal income tax purposes
as having original issue discount and holders of STRYPES will be required to
recognize currently as income their pro rata portion of such original issue
discount as it accrues over the term of the Trust. The quarterly cash
distributions paid to the holders of STRYPES, which distributions are
anticipated to exceed the currently includable original issue discount, will
be treated as tax-free return of the holders' costs of the U.S. Treasury
Securities and any previously included original issue discount, and therefore
will not be considered current income to holders upon receipt thereof for
federal income tax purposes. Although under current law holders of STRYPES
should not recognize income, gain or loss with respect to the Contracts over
their term, holders will recognize taxable gain or loss upon receipt of cash,
if any, upon termination of the Trust. For a discussion of certain United
States Federal income tax consequences for holders of the STRYPES, see
"Certain United States Federal Income Tax Considerations."

This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing and should be read and
retained for future reference.

<TABLE>
<CAPTION>
Price to Sales Proceeds to
Public Load(1) the Trust(2)
<S> <C> <C> <C>
Per STRYPES . . . . . . . . . . . . . . . $ $ $
Total(3) . . . . . . . . . . . . . . . . $ $ $

</TABLE>

__________________
(1) The Trust, the Company and the Contracting Stockholder have agreed to
indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $ payable by the
Trust.
(3) The Trust has granted to the U.S. Underwriter and the International
Manager options, exercisable for 30 days from the date hereof, to
purchase up to an additional STRYPES to cover over-allotments,
if any. If all such STRYPES are purchased, the total Price to Public,
Sales Load and Proceeds to the Trust will be $ , $ and
$ , respectively. See "Underwriting."

The STRYPES are offered by the International Manager, subject to prior
sale, when, as and if issued by the Trust and accepted by the International
Manager, subject to approval of certain legal matters by counsel for the
International Manager and certain other conditions. The International
Manager reserves the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the
STRYPES will be made in New York, New York on or about ,
1996.

/(Service Mark)/ Service mark of Merrill Lynch & Co., Inc.

___________________________

MERRILL LYNCH INTERNATIONAL LIMITED
___________________________

The date of this Prospectus is , 1996.

A-2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED 1,000,000 STRYPES(SERVICE MARK)
UPON AS HAVING BEEN AUTHORIZED BY
THE FUND OR THE U.S. UNDERWRITER.
THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING OF ANY
SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON
IN ANY STATE OR JURISDICTION OF XYZ STRYPES TRUST
THE UNITED STATES OR ANY COUNTRY
WHERE SUCH OFFER WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO ____________________
CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS
OF SINCE THE DATE HEREOF OR PROSPECTUS
SINCE THE DATES AS OF WHICH
INFORMATION IS SET FORTH HEREIN. ____________________

______________

TABLE OF CONTENTS

Page MERRILL LYNCH INTERNATIONAL
---- LIMITED

Prospectus Summary . . . . .
Fee Table . . . . . . . . . .
The Trust . . . . . . . . . .
Use of Proceeds . . . . . . .
Investment Objective and
Policies . . . . . . . . .
Investment Restrictions . . .
Risk Factors . . . . . . . .
Description of the STRYPES .
Trustees and Officers . . . .
Management Arrangements . . .
Dividends and Distributions .
Net Asset Value . . . . . . . , 1996
Certain United States
Federal Income Tax
Considerations . . . . . . (Service Mark) Service mark of
Underwriting . . . . . . . . Merrill Lynch & Co., Inc.
Legal Matters . . . . . . . .
Experts . . . . . . . . . . .
Additional Information . . .
Independent Auditors' Report.
Statement of Assets,
Liabilities and Capital . .
Appendix A . . . . . . . . .

-----------------------

<PAGE>
PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

1. FINANCIAL STATEMENTS

Independent Auditors' Report
Statement of Assets, Liabilities and Capital as of ,
1996

2. EXHIBITS

(a)(1) Trust Agreement//
(2) Certificate of Trust//
(b) Not applicable
(c) Not applicable
(d)(1) Specimen certificate for STRYPES/*/
(2) Portions of the Declaration of Trust of the Registrant
defining the rights of Holders of STRYPES/*/
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h)(1) Form of U.S. Purchase Agreement/*/
(2) Form of International Purchase Agreement/*/
(3) Merrill Lynch Standard Dealer Agreement/*/
(i) Not applicable
(j) Custodian Agreement/*/
(k)(1) Paying Agent, Registrar and Transfer Agent Agreement/*/
(2) Form of Forward Purchase Contract/*/
(l) Opinion and Consent of Brown & Wood, counsel to the Trust/*/
(m) Not applicable
(n) Consent of , independent auditors for the
Trust/**/
(o) Not applicable
(p) Certificate of /*/
(q) Not applicable
(r) Financial Data Schedule/*/

___________________

/*/ To be filed by amendment.

ITEM 25. MARKETING ARRANGEMENTS

See Exhibits (h)(1), (h)(2) and (h)(3) to this Registration Statement.

C-1
<PAGE>
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:
<TABLE>
<S> <C>
SEC Registration fees . . . . . . . . . . . . . . . . . . . .$ *
New York Stock Exchange listing fee . . . . . . . . . . . . . *
Printing (other than certificates). . . . . . . . . . . . . . *
Engraving and printing certificates . . . . . . . . . . . . . *
Fees and expenses of qualification under state securities
laws (including fees of counsel) . . . . . . . . . . . . . *
Accounting fees and expenses . . . . . . . . . . . . . . . . *
Legal fees and expenses . . . . . . . . . . . . . . . . . . . *
NASD fees . . . . . . . . . . . . . . . . . . . . . . . . . . *
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . *
------
Total . . . . . . . . . . . . . . . . . . . . . . . . .$ *
------
------
</TABLE>
_______________

* To be furnished by amendment.

ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

The Trust will be internally managed and will not have an investment
adviser. The information in the Prospectus under the caption "Management
Arrangements" is incorporated herein by reference.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES

There will be one record holder of the STRYPES as of the effective date
of this Registration Statement.

ITEM 29. INDEMNIFICATION

Article of the Declaration of Trust and the U.S. and International
-----
Purchase Agreements provide for indemnification.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to trustees,
officers and controlling persons of the Registrant, pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The Trust is internally managed and does not have an investment adviser.

C-2
<PAGE>
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the
rules promulgated thereunder are maintained at the offices of the Registrant
( ), its custodian (
) and its paying agent (
).

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. UNDERTAKINGS

(a) The Registrant hereby undertakes to suspend the offering of the
shares covered hereby until it amends its prospectuses contained herein if
(1) subsequent to the effective date of this Registration Statement, its net
asset value per share declines more than 10 percent from its net asset value
per share as of the effective date of the Registration Statement or (2) the
net asset value per share increases to an amount greater than its net
proceeds as stated in the prospectuses contained herein.

(b) The Registrant hereby undertakes that (i) for purpose of
determining any liability under the 1933 Act, the information omitted from
the form of prospectuses filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant under Rule 497(h) under the 1933 Act shall be deemed to be part of
this registration statement as of the time it was declared effective; (ii)
for the purpose of determining any liability under the 1933 Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be
a new Registration Statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.

C-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
the 18th day of March, 1996.

XYZ STRYPES TRUST

By: /s/ Douglas R. Robinson
-----------------------------
Douglas R. Robinson
Trustee

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person,
in the capacities and on the date indicated.

<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>

/s/ Douglas R. Robinson Principal Executive Officer, March 18, 1996
- - -----------------------------
Douglas R. Robinson Principal Financial Officer,
Principal Accounting Officer
and Trustee
</TABLE>
C-4
<PAGE>

Exhibit (a)(1)

TRUST AGREEMENT OF XYZ STRYPES TRUST

TRUST AGREEMENT, dated as of March 14, 1996 among Paul A.
Pepe, as Depositor, and Douglas R. Robinson, as Trustee. The Depositor and
the Trustee hereby agree as follows:

1. The trust created hereby shall be known as "XYZ STRYPES
Trust", in which name the Trustee may conduct the business of the Trust, make
and execute contracts, and sue and be sued.

2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $1. The Trustee hereby acknowledges receipt of
such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustee hereby declares that it will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, et seq.
-------
and that this document constitute the governing instrument of the Trust. The
Trustee is hereby authorized and directed to execute and file a certificate
of trust with the Delaware Secretary of State in the form attached hereto.

3. The Depositor and the Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party, to provide for the
contemplated operation of the Trust created hereby. Prior to the execution
and delivery of such amended and restated Trust Agreement, the Trustee shall
not have any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law or as may be necessary
to obtain prior to such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise.

<PAGE>
4. This Trust Agreement may be executed in one or more
counterparts.

5. The Trustee may resign upon thirty days prior notice to the
Depositor.

IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.

DEPOSITOR

/s/ Paul A. Pepe
---------------------------------------
Paul A. Pepe,
as Depositor

TRUSTEE

/s/ Douglas R. Robinson
---------------------------------------
Douglas R. Robinson,
as Trustee

2
<PAGE>

Exhibit (a)(2)

CERTIFICATE OF TRUST OF XYZ STRYPES TRUST

This Certificate of Trust of XYZ STRYPES Trust (the "Trust"), dated
March 14, 1996, is being duly executed and filed by Douglas R.
Robinson, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.)
------- ------
1. Name. The name of the business trust formed hereby is XYZ
----
STRYPES Trust.

2. Registered Office; Registered Agent. The business address of
-----------------------------------
the registered office of the Trust in the State of Delaware is One Rodney
Square, 10th Floor, Tenth and King Streets in the City of Wilmington, County
of New Castle, 19801. The name of the Trust's registered agent at such
address is RL&F Service Corp.

3. Effective Date. This Certificate of Trust shall be effective
--------------
upon the date and time of filing.

4. Other Matters. The Trust will be a registered investment
-------------
company under the Investment Company Act of 1940, as amended.

IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above-
written.

/s/ Douglas R. Robinson
----------------------------------------
Sole Trustee
<PAGE>