- -------------------------------------------------------------------------------
Pursuant to Rule 497(b)
Registration No. 333-11767
GLICKENHAUS VALUE PORTFOLIOS
THE 1996 EQUITY COLLECTION, SERIES III
The Trust is a unit investment trust designated Glickenhaus Value Portfolios,
The 1996 Equity Collection, Series III (the "1996 Series III" or "Trust"). The
Sponsor is Glickenhaus & Co. The objective of the Trust is to seek growth of
capital by investing in securities which are undervalued as determined by the
Sponsor. Current income will be secondary to the objective of capital growth.
The Sponsor cannot give assurance that the Trust's objectives can be achieved.
The Trust contains an underlying portfolio of equity securities consisting of
common stocks and American Depository Receipts ("ADRs") (collectively, the
"Securities"), which have been purchased by the Trust based upon the selections
of the Sponsor. The Trust will terminate approximately two years after the
initial Date of Deposit. Minimum Purchase: 100 Units
This Prospectus, which sets forth information that an investor should know,
consists of two parts. Part A contains the Summary of Essential Information
including descriptive material relating to the Trust and the Statement of
Condition of the Trust. Part B contains general information about the Trust.
Part A may not be distributed unless accompanied by Part B.
Please read and retain both parts of this Prospectus for future reference.
===============================================================================
===============================================================================
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED OCTOBER 10, 1996
402192.1
<PAGE>
GLICKENHAUS VALUE PORTFOLIOS
THE 1996 EQUITY COLLECTION, SERIES III
SUMMARY OF ESSENTIAL INFORMATION AS OF OCTOBER 9, 1996*
<TABLE>
<S> <C>
Date of Deposit: October 10, 1996 Liquidation Period: Beginning 30 days prior to the
Mandatory Termination Date.
Aggregate Value of Securities...........................$126,825
Minimum Value of Trust: The Trust may be
Aggregate Value of Securities terminated if the value of the Trust is less than 40% of
per 100 Units..........................................$965.03 the aggregate value of the Securities at the completion of
the Deposit Period.
Number of Units...........................................13,142
Mandatory Termination Date: The earlier of
Fractional Undivided Interest in November 10, 1998 or the disposition of the last
Trust.................................................1/13,142 Security in the Trust.
Public Offering Price (per 100 units) Trustee: The Bank of New York.
Aggregate Value of Securities in Trust................$126,825 Trustee's Annual Fee: $.85 per 100 Units outstanding.
Divided By 13,142 Units (times 100)....................$965.03 Other Annual Fees and Expenses: $.25 per 100 Units
outstanding.
Plus Sales Charge of 3.5% (3.627% of the net amount
invested) of Public Offering Price per 100 Units........$35.00 Organizational Expenses:(4) $1.45 per 100 Units.
Public Offering Price per Sponsor: Glickenhaus & Co.
100 Units(2).......................................$1,000.03
Sponsor's Annual Supervisory Fee: Maximum of $.25
Sponsor's Repurchase Price and per 100 Units outstanding (see "Trust Expenses and
Redemption Price per 100 Units(3)......................$965.03 Charges" in Part B).
Excess of Public Offering Price Over Estimated Total Annual Fees and Expenses:(5) $2.80
Redemption Price per 100 Units..........................$35.00 per 100 Units outstanding.
Evaluation Time: 4:00 p.m. New York time. Record date:(1) Semi-annually on the fifteenth day of
June and December
Minimum Principal Distribution:
$1.00 per 100 Units Dividend distribution date: (1) Semi-annually on the
first business day of July and January
</TABLE>
- -----------------------------------------
*The business day prior to the initial Date of Deposit. The initial Date of
Deposit is the date on which the Trust Agreement was signed and the deposit of
Securities with the Trustee made.
(1) The first dividend distribution will be made on January 2, 1997 (the "First
Distribution Date") to all Unit holders of record on December 15, 1996 (the
"First Record Date").
(2) On the initial Date of Deposit there will be no cash in the Income or
Capital Accounts. Anyone purchasing Units after such date will have included in
the Public Offering Price a pro rata share of any cash in such Accounts.
A-2
402192.1
<PAGE>
(3) Any redemptions of over 2,500 Units may, upon request by a redeeming Unit
holder, be made "in kind" by the Trustee, who will either forward the
distributed securities to the Unit holder or sell the securities on behalf of
the redeeming Unit holder and distribute the proceeds (net of any brokerage
commissions or other expenses incurred in the sale) to the Unit holder. See
"Liquidity--Trustee Redemption" in Part B.
(4) Although historically the sponsors of unit investment trusts ("UITs") have
paid all the costs of establishing such UITs, this Trust (and therefore the
Unit holders) will bear all or a portion of its organizational costs. Such
organizational costs include: the cost of preparing and printing the
registration statement, the trust indenture and other closing documents; and
the initial audit of the Trust. Total organizational expenses will be amortized
over the life of the Trust. See "Rights of Unit Holders--Expenses and
Charges--Initial Expenses" in Part B.
(5) Assumes the Trust will reach a size of 1,000,000 Units as estimated by the
Sponsor; expenses per 100 Units will vary with the actual size of the Trust. If
the Trust does not reach this Unit level, the Estimated Total Annual Fees and
Expenses will be adversely affected.
Description of Portfolio
<TABLE>
<S> <C>
Number of Issues: 13 (13 issuers) Number and Percentage of Issues by Industry:
Domestic Issuers: 12 (91.72% of the initial Auto & Trucks, 1 (9.86%); Building -
aggregate value of securities) Residential/Commercial, 1 (7.10%); Chemicals, 1
Foreign Issuers: 1 (8.28% of the initial (7.00%); Containers, 1 (8.35%); Electronic
aggregate value of securities) Companies - Semiconductors, 2 (15.02%); Equity
REIT, 1 (8.00%); Oil/Gas - Domestic, 4 (28.23%)*;
American Stock Exchange, 1 (6.92%); NASDAQ Publishing, 1 (8.16%); Telecommunications, 1
National Market, 1 (7.36%); New York Stock (8.28%)
Exchange, 11 (85.72%)
Common Stocks: 12 (91.72%)
ADRs: 1 (8.28%)
Percentage of Portfolio by Country of Organization
or Principal Place of Business of Issuers:
Israel 8.28%
United States 91.72%
</TABLE>
- ------------------
* A Trust is considered to be "concentrated" in a particular category or issuer
when the Securities in that category or of that issuer constitute 25% or more
of the aggregate face amount of the portfolio.
A-3
402192.1
<PAGE>
THE TRUST
The Trust is a unit investment trust designated Glickenhaus Value Portfolios,
The 1996 Equity Collection, Series III (the "1996 Series III" or "Trust"). The
Sponsor is Glickenhaus & Co. The objective of the Trust is to seek growth of
capital by investing in securities which are undervalued as determined by the
Sponsor. Current income will be secondary to the objective of capital growth.
The Sponsor cannot give assurance that the Trust's objectives can be achieved.
The Trust contains an underlying portfolio of equity securities consisting of
common stocks and American Depository Receipts ("ADRs") (collectively, the
"Securities"), which have been purchased by the Trust based upon the selections
of the Sponsor. In selecting the Securities for the Trust, the Sponsor normally
will consider the following factors, among others: (1) values of individual
securities relative to their earnings, dividends, historical prices, book
assets or other measures of fundamental value; and (2) trends in the
determinants of corporate profits, corporate cash flow, balance sheet changes,
management capability and practices. See "The Trust--The Securities" in Part B.
The Trust will terminate two years and 30 days after the initial Date of
Deposit. Upon termination, Unit holders may elect to receive their terminating
distributions in cash, in the form of in-kind distributions of the Trust's
Securities, if they own at least 2,500 units, or may utilize their terminating
distributions to purchase units of a future series of the Trust at a reduced
sales charge. There can be no assurance that the Securities and Exchange
Commission will grant such exemptive order. See "Termination" in this Part A
and "Trust Administration--Trust Termination" in Part B. Thirteen issues have
been deposited in the Trust and all of such issues are represented by the
Sponsor's contracts to purchase, which are expected to settle on or about
October 16, 1996.
With the deposit of the Securities in the Trust on the initial Date of Deposit,
the Sponsor established a proportionate relationship among the aggregate value
of the specified Securities in the Trust. During the 90 days subsequent to the
initial Date of Deposit, the Sponsor may, but is not obligated to, deposit from
time to time additional Securities in the Trust ("Additional Securities"),
contracts to purchase Additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase Additional Securities,
maintaining to the extent practicable the original proportionate relationship
of the number of shares of each Security in the Trust portfolio immediately
prior to such deposit, thereby creating additional Units which will be offered
to the public by means of this Prospectus. These additional Units will each
represent, to the extent practicable, an undivided interest in the same number
and type of securities of identical issuers as are represented by Units issued
on the initial Date of Deposit. It may not be possible to maintain the exact
original proportionate relationship among the number of shares of Securities in
the Trust portfolio on the initial Date of Deposit with the deposit of
Additional Securities because of, among other reasons, purchase requirements,
changes in prices, or the unavailability of Securities. Deposits of Additional
Securities in the Trust subsequent to the 90-day period following the initial
Date of Deposit must replicate exactly the proportionate relationship among the
shares of each Security in the Trust portfolio at the end of the initial 90-day
period. The number and identity of Securities in the Trust will be adjusted to
reflect the disposition of Securities and/or the receipt of a stock dividend, a
stock split or other distribution with respect to such Securities. The
portfolio of the Trust may change slightly based on such disposition.
Securities received in exchange for shares will be similarly treated.
Substitute Securities may be acquired under specified conditions when
Securities originally deposited in the Trust are unavailable (see "The
Trust--Substitution of Securities" in Part B). As additional Units are issued
by the Trust as a result of the deposit of Additional Securities, the aggregate
value of the Securities in the Trust will be increased and the fractional
undivided interest in the Trust represented by each unit will be decreased. As
of the Date of Deposit, Units in the Trust represent an undivided interest in
the principal and net income of the Trust in the ratio of one hundred Units for
the indicated initial aggregate value of Securities in the
Trust on the initial Date of Deposit as is set forth in the Summary of
Essential Information (see "The Trust--
A-4
<PAGE>
Organization" in Part B) (For the specific number of Units in the Trust as of
the initial Date of Deposit, see "Summary of Essential Information" in this
Part A).
The Sponsor does not make a primary over-the-counter market in shares of any of
the companies included in the Portfolio of the Trust. The Sponsor does not act
as an underwriter, manager or co-manager of a public offering of the securities
of any of the issuers in the Trust portfolio.
RISK CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of the
risks inherent in any investment in the Securities including: (i) for common
stocks, the risk that the financial condition of the issuers of the Securities
may become impaired or that the general condition of the stock market may
worsen (both of which may contribute directly to a decrease in the value of the
Securities and thus in the value of the Units); (ii) for ADRs, the risks
associated with government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or regional
political, economic or banking crises; and (iii) for common stocks issued by
domestic real estate investment trusts ("REITs"), the risks associated with the
ownership of real property (in addition to securities market risks). In
addition, the Trust may be considered to be concentrated in common stocks of
companies deriving a substantial portion of their income from the oil industry.
Investment in this industry may pose additional risks including the volatility
of oil prices, the impact of oil cartels, political uncertainty in the Middle
East and increasing costs associated with environmental damage caused by oil
companies and compliance with environmental regulations and legislation.
The portfolio of the Trust is fixed and not "managed" by the Sponsor. All the
Securities in the Trust are liquidated during a 30 day period at the
termination of the two year life of the Trust. Since the Trust will not sell
Securities in response to ordinary market fluctuation, but only at the Trust's
termination or to meet redemptions, the amount realized upon the sale of the
Securities may not be the highest price attained by an individual Security
during the life of the Trust.
In connection with the deposit of Additional Securities subsequent to the
initial Date of Deposit, if cash (or a letter of credit in lieu of cash) is
deposited with instructions to purchase Securities, to the extent the price of
a Security increases or decreases between the deposit of such cash and the time
the Security is purchased, Units may represent less or more of that Security
and more or less of the other Securities in the Trust. In addition, brokerage
fees incurred in purchasing Securities with cash deposited with instructions to
purchase the Securities will be an expense of the Trust. Price fluctuations
during the period from the time of deposit to the time the Securities are
purchased, and payment of brokerage fees, will affect the value of every Unit
holders's Units and the income per Unit received by the Trust. (See "The
Trust--Risk Considerations" in Part B of this Prospectus.)
PUBLIC OFFERING PRICE
The Public Offering Price per 100 Units of the Trust is equal to the aggregate
value of the underlying Securities in the Trust divided by the number of Units
outstanding times 100 plus a sales charge of 3.5% of the Public Offering Price
per 100 Units (or 3.627% of the net amount invested in Securities per 100 Units
) on sales of fewer than 10,000 Units. Any cash held by the Trust will be added
to the Public Offering Price. For additional
A-5
402192.1
<PAGE>
information regarding the Public Offering Price, the descriptions of dividend
and principal distributions, repurchase and redemption of Units and other
essential information regarding the Trust, see the Summary of Essential
Information for the Trust. During the life of the Trust orders involving at
least 10,000 Units will be entitled to a volume discount from the Public
Offering Price. The Public Offering Price per Unit may vary on a daily basis in
accordance with fluctuations in the aggregate value of the underlying
Securities. (See "Public Offering" in Part B.) The figures above assume a
purchase of 100 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Public Offering Price per 100 Units by 100 and
multiplying by the number of Units. (See "Tax Status" in Part B.) If the Units
of the Trust had been available for sale on October 9, 1996, the Public
Offering Price per 100 Units would have been $1,000.03.
DISTRIBUTIONS
Distributions of net income (other than amortized discount) received in respect
to any of the Securities by the Trust will be made by the Trust semi-annually.
Long-term capital gains distributions received in respect to any of the
Securities by the Trust, however, will be made by the Trust no more frequently
than annually. The first dividend distributions will be made on the First
Distribution Date to all Unit holders of record on the First Record Date and
thereafter distributions will be made semi-annually on the first business day
of December and June (the "Distribution Date"). (See "Rights of Unit
Holders--Distributions" in Part B. For the specific dates representing the
First Distribution Date and the First Record Date, see "Summary of Essential
Information.")
MARKET FOR UNITS
The Sponsor, although not obligated to do so, currently intends to maintain a
secondary market for the Units of the Trust after the initial public offering
has been completed. The secondary market repurchase price will be based on the
market value of the Securities in the Trust portfolio. (See "Liquidity--Sponsor
Repurchase" for a description on how the secondary market repurchase price will
be determined.) If a market is not maintained a Unit holder will be able to
redeem his Units with the Trustee at the then current Redemption Price per
Unit. (See "Liquidity--Trustee Redemption" in Part B.) The principal trading
market for certain Securities may be in the over-the-counter market. As a
result, the existence of a liquid trading market for these Securities may
depend on whether dealers will make a market in these Securities. There can be
no assurance of the making or the maintaining of a market for any of the
Securities contained in the Trust portfolio or of the liquidity of the
Securities in any markets made. In addition, the Trust may be restricted under
the Investment Company Act of 1940, as amended, from selling Securities to the
Sponsor. The price at which the Securities may be sold to meet redemptions and
the value of the Units will be adversely affected if trading markets for the
Securities are limited or absent.
TERMINATION
During the 30 day period prior to the Mandatory Termination Date (the
"Liquidation Period"), Securities will begin to be sold in connection with the
termination of the Trust and all Securities will be sold by the Mandatory
Termination Date. The Trustee may utilize the services of the Sponsor for the
sale of all or a portion of the Securities in the Trust. The Sponsor will
receive brokerage commissions from the Trust in connection with such sales in
accordance with applicable law. The Sponsor will determine the manner, timing
and execution of the sales
A-6
402192.1
<PAGE>
of the underlying Securities. Unit holders may elect one of the three options
in receiving their terminating distributions. Unit holders may elect: (1) to
receive their pro rata share of the underlying Securities in kind, if they own
at least 2,500 units, (2) to receive cash upon the liquidation of their pro
rata share of the underlying Securities or (3) to invest the amount of cash
they would have received upon the liquidation of their pro rata share of the
underlying Securities in units of a future series of the Trust (if one is
offered) at a reduced sales charge. See "Trust Administration--Trust
Termination" in Part B for a description of how to select a termination
distribution option.
The Sponsor will attempt to sell the Securities as quickly as they can during
the Liquidation Period without, in their judgment, materially adversely
affecting the market price of the Securities, but all of the Securities will in
any event be disposed of by the end of the Liquidation Period. The Sponsor does
not anticipate that the period will be longer than 30 days, and it could be as
short as one day, depending on the liquidity of the Securities being sold. The
liquidity of any Security depends on the daily trading volume of the Security
and the amount that the Sponsor has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsor will generally sell Securities on the first day of the Liquidation
Period; for less liquid Securities, on each of the first two days of the
Liquidation Period, the Sponsor will generally sell any amount of any
underlying Securities at a price no less than 1/2 of one point under the last
closing sale price of those Securities. On each of the following two days, the
price limit will increase to one point under the last closing sale price. After
four days, the Sponsor intends to sell at least a fraction of the remaining
underlying Securities, the numerator of which is one and the denominator of
which is the total number of days remaining (including that day) in the
Liquidation Period, without any price restrictions.
During the Liquidation Period, Unit holders who have not chosen to receive
distributions-in-kind will be at risk to the extent that Securities are not
sold; for this reason the Sponsor will be inclined to sell the Securities in as
short a period as they can without materially adversely affecting the price of
the Securities. (See "Tax Status" in Part B.)
Unit holders should consult their own tax advisers in this regard.
A-7
402192.1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Sponsor, Trustee, and Unit holders, Glickenhaus Value Portfolios, The 1996
Equity Collection, Series III
We have audited the accompanying Statement of Condition and Portfolio (the
"financial statements") of the Glickenhaus Value Portfolios, The 1996 Equity
Collection, Series III as of October 10, 1996. These financial statements are
the responsibility of the Sponsor. Our responsibility is to express an opinion
on the financial statements 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 financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion. The irrevocable letters of credit deposited in connection with the
securities owned as of October 10, 1996, pursuant to contracts to purchase, as
shown in the Statement of Condition, were confirmed to us by The Bank of New
York, the Trustee.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Glickenhaus Value Portfolios, The 1996
Equity Collection, Series III, at October 10, 1996, in conformity with
generally accepted accounting principles.
BDO SEIDMAN, LLP
New York, New York
October 10, 1996
A-8
402192.1
<PAGE>
GLICKENHAUS VALUE PORTFOLIOS
THE 1996 EQUITY COLLECTION
STATEMENT OF CONDITION
AS OF DATE OF DEPOSIT, OCTOBER 10, 1996
TRUST PROPERTY
<TABLE>
<S> <C>
Series III
----------
Investment in Securities:
Contracts to purchase underlying Securities (1)..........................................................$126,825
Organizational costs (2).................................................................................... 28,850
-------
Total.................................................................................$155,675
=======
LIABILITIES AND INTEREST OF UNIT HOLDERS
Liabilities:
Accrued liability (2)....................................................................................$ 28,850
-------
Interest of Unit holders:
Units of fractional undivided interest outstanding (13,142):
Cost to investors (3)....................................................................................$131,425
Less--gross underwriting commission (4)................................................................... 4,600
-------
Net interest of Unit holders................................................................................126,825
-------
Total.................................................................................$155,675
=======
</TABLE>
(1) Aggregate cost to the Trust of the Securities listed in the Portfolio is
determined by the Trustee on the basis set forth under "Public
Offering--Offering Price" as of 4:00 p.m. on October 9, 1996. Irrevocable
letters of credit issued by The Bank of New York in an amount in excess of
$126,825 have been deposited with the Trustee to cover the purchase of
Securities pursuant to contracts to purchase such Securities.
(2) Organizational costs incurred by the Trust have been deferred and will be
amortized over the life of the Trust. The Trust will reimburse the Sponsor for
actual organizational costs incurred.
(3) Aggregate public offering price computed on 13,142 Units of the 1996
Series III on the basis set forth under "Public Offering--Offering Price" in
Part B.
(4) Sales charge of 3.5% computed on 13,142 Units of the 1996 Series III on
the basis set forth under "Public Offering Price" in Part B.
A-9
402192.1
<PAGE>
GLICKENHAUS VALUE PORTFOLIOS
THE 1996 EQUITY COLLECTION, SERIES III
PORTFOLIO
AS OF OCTOBER 10, 1996
<TABLE>
<CAPTION>
Percentage Cost of
Portfolio Number of Name of Issuer of Market Value Securities
No. Shares and Ticker Symbol(2) Fund (1) Per Share to Trust (3)
----- -------- -------------------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK: 91.72%
UNITED STATES: (91.72%)
Automobiles/Trucks: 9.86% 1 400 Shs. Chrysler Corp. - C (4) 9.86% $31.250 $12,500
Building: 7.10% 2 400 Shs. Lennar Corp. - LEN 7.10% 22.500 9,000
Containers: 8.35% 3 700 Shs. Stone Container
Corp. - STO 8.35% 15.125 10,588
Chemicals: 7.00% 4 200 Shs. Union Carbide Corp. -
UK 7.00% 44.375 8,875
Electronic Companies: 15.02% 5 600 Shs. Cyrix Corp. - CYRX 7.36% 15.563 9,338
6 300 Shs. Micron Technology,
Inc. - MU 7.66% 32.375 9,712
-------
19,050
Equity REITs: 8.00% 7 400 Shs. First Industrial Realty
Tr. - FR 8.00% 25.375 10,150
Oil/Gas - Domestic: 28.23% 8 300 Shs. ENSCO International
Inc. - ESV 7.95% 33.625 10,087
9 200 Shs. Imperial Oil Ltd. -
IMO 6.92% 43.875 8,775
10 200 Shs. Tidewater, Inc. - TDW 6.17% 39.125 7,825
11 200 Shs. Triton Energy Ltd. -
OIL 7.19% 45.625 9,125
------
35,812
Publishing: 8.16% 12 900 Shs. Hollinger International
Inc. - HLR 8.16% 11.500 10,350
ADRs: 8.28%
ISRAEL: (8.28%)
Telecommunications: 8.28% 13 600 Shs. Koor Industries Ltd. -
KOR 8.28% 17.500 10,500
------ ------
100.00% $126,825
====== =======
</TABLE>
A-10
402192.1
<PAGE>
FOOTNOTES TO PORTFOLIO
(1) Based on the cost of the Securities to the Trust.
(2) Forward contracts to purchase the Securities were entered into on
October 9, 1996. All such contracts are expected to be settled on or
about the First Settlement Date of the Trust which is expected to be
October 16, 1996.
(3) Evaluation of Securities by the Trustee was made on the basis of
closing sale prices at the Evaluation Time on the day prior to the
Initial Date of Deposit.
(4) Chrysler Corp. is an investment advisory client of the Sponsor.
Additional information regarding the Trust is as follows:
Sponsor's
Purchase Price Sponsor's Profit/Loss
$127,375 $(550)
UNDERWRITING
Glickenhaus & Co., 6 East 43rd Street, New York, New York 10017, will act as
Underwriter for all of the Units of Glickenhaus Value Portfolios, The 1996
Equity Collection, Series III. The Underwriter will distribute the Units
through various broker-dealers, banks and/or other eligible participants (see
"Public Offering - Distribution of Units" in Part B).
A-11
402192.1
<PAGE>
SETH M. GLICKENHAUS
on selecting value equities.
I find that the conventional wisdom of a "stock market" is wrong and
often misleading. To say that "stocks should have a banner year", or that
"stocks are headed for a correction" is to ignore the reality of thousands of
individual situations waiting to unfold on the New York, American and NASDAQ
exchanges. It's not a "stock market", it's a "market of stocks" and the
difference among stocks today is the greatest I've ever seen.
As value investors, our philosophy, in a broad sense, is to look for
stocks with low price-earnings multiples plus the usual characteristics of a
good balance sheet. But standard ratios can be distorted by a variety of
circumstances. So in most of the cases, we interview company executives.
Among other things, we like to see aggressive management that has a
real interest in seeing their stock price go up substantially. We've
interviewed many that haven't, and it is critical information that you can't
learn from a stock report or a balance sheet. Our ideal situation is
identifying a down-and-out company which has implemented an ambitious program
to cut costs, gain market share, or both. Major investors often ignore the
early signs of a turn around situation until it's too late.
We've specialized in the management of value equities since 1961, when
Glickenhaus & Co. first opened its doors. Back then, I was a relative newcomer
with only 20 or so years of investment experience. Now that I have over 60
years of value securities experience, and success with our first GVP Series,
I'm confident enough to offer you the 1996 Equity Collection Series.
THE 1996 EQUITY COLLECTION, SERIES III
SELECTED PORTFOLIO
CHRYSLER CORPORATION \C\ Auto & Trucks Third largest US automobile
(Chrysler, Dodge, Plymouth, Jeep and Eagle) and truck manufacturer, and the
leader in minivans and sport utility vehicles. A portion of Chrysler's revenues
are derived from defense-related parts and supplies, vehicle financing and
insurance, and worldwide electronic systems and services.
Chrysler is now the world's lowest cost automaker with the highest
profit margins, which is one of many reasons why the company was selected for
the Collection. Management has attempted to create an optimal mix of cars,
sport utility vehicles and trucks with strong demand in more than 100
countries. The consensus estimates point to strong earnings ahead, with
additional price support coming from a planned $1 billion buyback of its common
stock in 1996. But the company remains conservative, with a reported $7 billion
in reserves tucked away as a precaution for future industry downturns.
C/M: 10726.0080 408125.1
<PAGE>
KOOR INDUSTRIES LIMITED - ADR \KOR\ Telecommunications Based in Tel Aviv,
KOR's diversified interests include construction, agrochemicals, food,
telecommunications, steel, electronics and international trade. (5 ADRs = 1
share of common stock)
KOR enjoys good relations with most of its Middle East neighbors, and
recently created Salam-2000 to boost its middle east investment into the West
Bank and Gaza Strip.
IMPERIAL OIL LIMITED \IMO\ Oil/Gas Domestic The Toronto-based Imperial Oil
is 69.6% owned by Exxon and is Canada's largest oil company, largest producer
of natural gas, largest refiner of petroleum products and major supplier of
petrochemicals. Reserves total 1.6 billion barrels of crude and 2.1 trillion
cubic feet of natural gas.
Imperial's Chairman, Robert Peterson, is trying to revive the
long-neglected, unappreciated stock. Armed with a $1.6 billion war chest in
cash reserves, the company may boost the price of its common stock via a major
buyback or by some alternative program as yet to be announced. The Glickenhaus
team also expects improved refining and marketing operations, and the
implementation of cost cutting measures in the near future.
ENSCO INTERNATIONAL, INC. \ESV\ Oil & Gas Drilling ENSCO provides the
international petroleum industry with onshore and offshore oil and gas drilling
(both domestic and international), oil field supply, tubular distribution and
marine transportation to and from offshore exploration sites.
Offshore rig utilization is at its highest level since 1982, pushing
day rates (daily rental rates) up approximately 30% from year-ago levels. Yet
the rental rates are not high enough to warrant the construction of new rigs,
so companies like ENSCO may still have room to hike rates. ENSCO has the
largest fleet of premium 300' cantilevered jack up rigs in the Gulf of Mexico,
and the rising demand for their rigs, both in the Gulf of Mexico and in West
Africa, has resulted in day rates rising from $30,000 to over $40,000.
HOLLINGER INTERNATIONAL, INC. \HLR\ Publishing - Newspapers A global
newspaper company that owns and operates 410 newspapers, including 105 daily
papers, 141 non-daily newspapers and 164 free publications. The Chicago Sun
Times, The Daily Telegraph and the Sydney Morning Herald are among the larger
holdings.
Hollinger is revolutionizing the community newspaper. The company
creates economies of scale by clustering several papers around one production
facility, and in towns with relatively stable economies. Classified
advertising, which is the most cyclical source of
C/M: 10726.0080 408125.1
<PAGE>
newspaper revenues, represents a relatively small portion of the community
newspapers' profits. As a result, the newspapers have remained profitable
through the business cycles.
UNION CARBIDE CORPORATION \UK\ Chemicals-Diversified The world's largest
producer of ethylene oxide (polyester fibers), glycol (antifreeze), and
polyethylene (plastics). Also manufactures specialty polymers, industrial
chemicals, solvents, coatings, latex, resins and emulsions.
Union Carbide continues to expand its global chemical operations with
new plants and joint partnerships. In particular, their new $1.5 billion
petrochemical plant in Kuwait will produce the world's cheapest plastic for the
growing Asian markets. They continue to cut costs, modernize and improve
productivity, and have developed specialty chemicals with high profit margins.
In addition to operations, UK has repurchased 40.8 million shares since 1993
(11.35 million shares this year alone) and is authorized to repurchase 50
million shares.
LENNAR CORPORATION \LEN\ Building Residential/Commercial One of the
country's leading real estate companies and homebuilders. Their diversified
interests include the construction of moderately priced single family homes and
condominiums, the construction, ownership and management of multi-family
housing and commercial property, and a financial services division engaged in
mortgage banking.
Lennar announced a backlog of orders in excess of $400 million, which
is 27% higher than it was a year ago. The company's three divisions,
Homebuilding, Investment and Financial Services, are thriving and expect to
post record profits in the fourth quarter of 1996.
STONE CONTAINER CORPORATION \STO\ Containers Paper/Plastic The international
pulp and paper company, with operations in North America,
Europe, Australia, Asia and South America, is the leading producer of market
pulp (newsprint), containerboard, corrugated containers, kraft paper, bags,
sacks, newsprint and uncoated groundwood paper. Also a major supplier of
lumber, plywood and veneers to the construction and furniture industries and of
boxboard and folding cartons to Europe.
Stone Container's price-earnings multiple is at 6.7%, compared to
18.7% for the Dow Jones Industrials. The P/E multiple makes this a truly
undervalued stock as the industry's oversupply is abating and wholesale prices
are firming.
FIRST INDUSTRIAL REALTY TRUST, INC. \FR\ Equity REIT Real estate
investment trust that owns, develops and operates bulk warehouse and light
industrial properties principally in the Midwest. FR owns and operates 322
in-service
C/M: 10726.0080 408125.1
<PAGE>
properties, located primarily in the central US, many of which are in business
industrial parks strategically located near highways.
Unlike many of the speculative REITs of the '80s, FR usually buys
property with a "lease in hand", which is why the very capable management has
achieved an occupancy rate of nearly 96% - and at rates which exceed their
borrowing costs by wide margins. First Industrial's steady growth and high
dividend yield (57% of which is tax deferred) should also prove defensive in
adverse market conditions.
CYRIX CORPORATION \CYRX\ Electronic Components / Semiconductors Designs
and markets microprocessors and co-processors for IBM compatible personal
computers in direct competition with Intel. The company will also be entering
the PC computer business as a means of increasing its brand name recognition.
The Cyrix computer chips are regarded by many as superior. They
compete on the basis of price and performance with an emphasis on a fast design
cycle and extensive simulations. They now market a 5x86 chip which bridges the
gap between Intel's 486 and Pentium chips in addition to the new powerful MI
chip with IBM.
MICRON TECHNOLOGY, INC. \MU\ Electronic Components / Semiconductors
Holding company whose subsidiaries include Micron Technology (3rd largest maker
of dynamic random access memory chips (DRAMs)), Micron Display (develops flat
panel displays), Micron Communications (radio frequency ID products) and Micron
Electronics (high performance PCs).
The computer chip industry's book-to-bill ratio rose to its highest
level since December 1995. Computer makers, anticipating strong demand for
their machines, have increased their orders by 9.0%. As the low cost producer
of 4 and 8 megabyte chips, the strong demand should prove profitable for Micron
Technology in particular.
TIDEWATER, INC. \TDW\ Oil / Field Services With 600 vessels, TDW is the
largest provider of transport, towing and barge services to the international
offshore drilling industry. In addition, the company owns the largest rental
fleet of natural gas compressors, and builds and installs natural gas
processing plants and compression stations.
Tidewater should benefit from the growth of the oil service industry,
which is the top performer among the S&P 500 industry groups.
C/M: 10726.0080 408125.1
<PAGE>
TRITON ENERGY LTD \OIL\ Oil Comp / Exploration & Production Dallas-based
oil and gas exploration and production company with operations in Columbia,
Thailand, Argentina, Australia, Canada, China, Ecuador, France, Guatemala,
Indonesia and Italy.
Triton has tightened its belt and sold its nonstrategic businesses.
Profits could be favorably impacted by two developments: the expected
completion of a Columbian pipeline which would enable them to export 500,000
barrels of oil per day, and several promising natural gas wells in the
Malaysia-Thailand region.
C/M: 10726.0080 408125.1
<PAGE>
<PAGE>
GLICKENHAUS VALUE PORTFOLIOS
THE 1996 EQUITY COLLECTION, SERIES III
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUST
Organization
"Glickenhaus Value Portfolios, The 1996 Equity Collection, Series III"
consists of a "unit investment trust" designated as set forth in Part A. The
Trust was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement (the "Trust Agreement"), dated the initial Date of
Deposit, between Glickenhaus & Co., as Sponsor, and The Bank of New York, as
Trustee.
On the initial Date of Deposit, the Sponsor deposited with the Trustee common
stock and ADRs, including funds and delivery statements relating to contracts
for the purchase of certain such securities (collectively, the "Securities")
with an aggregate value as set forth in Part A and cash or an irrevocable
letter of credit issued by a major commercial bank in the amount required for
such purchases. Thereafter the Trustee, in exchange for the Securities so
deposited, delivered to the Sponsor the Certificates evidencing the ownership
of all Units of the Trust. The Sponsor has a limited right to substitute other
securities in the Trust portfolio in the event of a failed contract. See "The
Trust--Substitution of Securities". The Sponsor may also, in certain
circumstances, direct the Trustee to dispose of certain Securities if the
Sponsor believes that, because of market or credit conditions, or for certain
other reasons, retention of the Security would be detrimental to Unit holders.
(See "Trust Administration--Portfolio Supervision.")
As of the day prior to the initial Date of Deposit, a "Unit" represents an
undivided interest or pro rata share in the Securities of the Trust in the
ratio of one hundred Units for the indicated amount of the aggregate market
value of the Securities initially deposited in the Trust as is set forth in the
"Summary of Essential Information". To the extent that any Units are redeemed
by the Trustee, the fractional undivided interest or pro rata share in such
Trust represented by each unredeemed Unit will increase, although the actual
interest in such Trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the Trustee by Unit
holders, which may include the Sponsor or the Underwriters, or until the
termination of the Trust Agreement.
With the deposit of the Securities in the Trust on the initial Date of
Deposit, the Sponsor established a proportionate relationship among the initial
aggregate value of specified Securities in the Trust. During the 90 days
subsequent to the initial Date of Deposit, the Sponsor may deposit additional
Securities in the Trust that are substantially similar to the Securities
already deposited in the Trust ("Additional Securities"), contracts to purchase
Additional Securities or cash (or a bank letter of credit in lieu of cash) with
instructions to purchase Additional Securities, in order to create
402192.1
<PAGE>
additional Units, maintaining to the extent practicable the original
proportionate relationship of the number of shares of each Security in the
Trust portfolio on the initial Date of Deposit. These additional Units will
each represent, to the extent practicable, an undivided interest in the same
number and type of securities of identical issuers as are represented by Units
issued on the initial Date of the Deposit. It may not be possible to maintain
the exact original proportionate relationship among the Securities deposited on
the initial Date of Deposit because of, among other reasons, purchase
requirements, changes in prices, or unavailability of Securities. Deposit of
Additional Securities in the Trust subsequent to the 90-day period following
the initial Date of Deposit must replicate exactly the proportionate
relationship among the shares of each Security in the Trust portfolio at the
end of the initial 90-day period. The number and identity of Securities in the
Trust will be adjusted to reflect the disposition of Securities and/or the
receipt of a stock dividend, a stock split or other distribution with respect
to shares. The portfolio of the Trust may change slightly based on such
disposition and reinvestment. Securities received in exchange for shares will
be similarly treated. Substitute Securities may be acquired under specified
conditions when Securities originally deposited in the Trust are unavailable
(see "The Trust--Substitution of Securities" below). Units may be continuously
offered to the public by means of this Prospectus (see "Public
Offering--Distribution of Units") resulting in a potential increase in the
number of Units outstanding. As additional Units are issued by the Trust as a
result of the deposit of Additional Securities, the aggregate value of the
Securities in the Trust will be increased and the fractional undivided interest
in the Trust represented by each Unit will be decreased.
Objectives
The objective of the Trust is to seek growth of capital by investing in
securities which are undervalued as determined by the Sponsor. Current income
will be secondary to the objective of capital growth. The Trust will invest in
a portfolio of equity securities consisting of common stocks of domestic
issuers and ADRs which are selected by the Trust's Sponsor and which the
Sponsor believes will enable the Trust to achieve these objectives. All of the
Securities in the Trust, with the possible exception of Securities that are in
the form of ADRs, are listed on the New York Stock Exchange, the American Stock
Exchange or the National Association of Securities Dealers Automated Quotations
("NASDAQ") National Market System and are generally followed by independent
investment research firms. There is no minimum capitalization or market trading
activity requirement for the selection of Securities for the Trust's portfolio.
There can be no assurance that the Trust's investment objectives can be
achieved.
The Securities
In selecting Securities for the Trust, the Sponsor normally will consider the
following factors, among others: (1) values of individual securities relative
to their earnings, dividends, historical prices, book assets or other measures
of fundamental value; and (2) trends in the determinants of corporate profits,
corporate cash flow, balance sheet changes, management capability and
practices. The Sponsor's investment philosophy hinges on analyzing and
understanding individual businesses in order to assess their long-term
potential. The Sponsor seeks to discover well-positioned, evolving companies
with substantial growth prospects which are typically unnoticed in the
marketplace. This enables the Sponsor to commit its funds and build up its
stake at relatively low prices.
Some of the Securities in the Trust may be in the form of ADRs. ADRs evidence
American Depositary Receipts which, in turn, represent common stock of non-U.S.
issuers deposited with a custodian in a depository. In selecting ADRs for
deposit into the Trust portfolio, in addition to the factors associated with
the selection of Securities of any issuer, the Sponsor considers the following
factors, among others: (1) the location of the issuer of the Securities
B-2
402192.1
<PAGE>
underlying the ADRs; (2) the likelihood of favorable market and political
conditions in the country in which such issuer is located; and (3) the amount
of publicly available information available from such issuer. The Trustee may
act as depository for certain of the ADRs included in the Portfolio of the
Trust.
Portfolio
The Trust consists of the Securities (or contracts to purchase such
Securities together with an irrevocable letter or letters of credit for the
purchase of such contracts) and Additional Securities deposited upon the
creation of additional Units as set forth above and Substitute Securities
acquired by the Trust as long as such Securities may continue to be held from
time to time in the Trust together with uninvested cash realized from the
disposition of Securities. Because certain of the Securities from time to time
may be sold under certain circumstances, as described herein, no assurance can
be given that the Trust will retain for any length of time its present size and
composition. The Trustee has not participated and will not participate in the
selection of Securities for the Trust, and neither the Sponsor nor the Trustee
will be liable in any way for any default, failure or defect in any Securities.
All of the Securities are publicly traded either on a stock exchange or in
the over-the-counter market. The contracts to purchase Securities deposited
initially in the Trust are expected to settle in three business days, in the
ordinary manner for such Securities. Settlement of the contracts for Securities
is thus expected to take place prior to the settlement of purchase of Units on
the initial Date of Deposit.
Substitution of Securities
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities. In the event of a failure
to deliver any Security that has been purchased for the Trust under a contract
("Failed Securities"), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other securities ("Substitute Securities") to
make up the original corpus of the Trust.
The Substitute Securities must be purchased within 20 days after the sale of
the portfolio Security or delivery of the notice of the failed contract. Where
the Sponsor purchases Substitute Securities in order to replace Failed
Securities, (i) the purchase price may not exceed the purchase price of the
Failed Securities and (ii) the Substitute Securities must be substantially
similar to the Securities originally contracted for and not delivered.
Whenever a Substitute Security has been acquired for the Trust, the Trustee
shall, within five days thereafter, notify all Unit holders of the Trust of the
acquisition of the Substitute Security and the Trustee shall, on the next
Distribution Date which is more than 30 days thereafter, make a pro rata
distribution of the amount, if any, by which the cost to the Trust of the
Failed Security exceeded the cost of the Substitute Security.
The proceeds of the sale of Securities will be distributed to Unit holders as
set forth under "Rights of Unit Holders-Distributions." In addition, if the
right of substitution shall not be utilized to acquire Substitute Securities in
the event of a failed contract, the Sponsor will cause to be refunded the sales
charge attributable to such Failed Securities to all Unit holders of the Trust,
and distribute the principal attributable to such Failed Securities on the next
Distribution Date.
B-3
402192.1
<PAGE>
Because certain of the Securities from time to time may be substituted (see
"Trust Administration--Portfolio Supervision") or may be sold under certain
circumstances, no assurance can be given that the Trust will retain its present
size and composition for any length of time. The proceeds from the sale of a
Security or the exercise of any redemption or call provision will be
distributed to Unit holders except to the extent such proceeds are applied to
meet redemptions of Units. (See "Liquidity--Trustee Redemption.")
RISK CONSIDERATIONS
Fixed Portfolio
The value of the units will fluctuate depending on all the factors that have
an impact on the economy and the equity markets. These factors similarly impact
on the ability of an issuer to distribute dividends. The Trust is not a
"managed registered investment company" and Securities will not be sold by the
Trustee as a result of ordinary market fluctuations. Unlike a managed
investment company in which there may be frequent changes in the portfolio of
securities based upon economic, financial and market analyses, securities of a
unit investment trust, such as the Trust, are not subject to such frequent
changes based upon continuous analysis. However, the Sponsor may direct the
disposition by the Trustee of Securities upon the occurrence of certain events.
(See "Trust Administration--Portfolio Supervision" below.) Potential investors
also should be aware that the Sponsor may change its views as to the investment
merits of any of the Securities during the life of the Trust and therefore
should consult their own financial advisers with regard to a purchase of Units.
In addition, investors should be aware that the Sponsor, and its affiliates,
currently act and will continue to act as investment adviser for managed
investment companies and managed private accounts that may have similar or
different investment objectives from the Trust. Some of the Securities in the
Trust may also be owned by these other clients of the Sponsor and its
affiliates. However, because these clients have "managed" portfolios and may
have differing investment objectives, the Sponsor may sell certain Securities
from those accounts in instances where a sale by the Trust would be
impermissible, such as to maximize return by taking advantage of market
fluctuation. Investors should consult with their own financial advisers prior
to investing in the Trust to determine its suitability. (See "Trust
Administration--Portfolio Supervision.") All the Securities in the Trust are
liquidated or distributed (to Unit holders who elect to receive in-kind
distributions) during a 30 day period at the termination of the two year life
of the Trust. Since the Trust will not sell Securities in response to ordinary
market fluctuation, but only at the Trust's termination and to meet
redemptions, the amount realized upon the sale of the Securities may not be the
highest price attained by an individual Security during the life of the Trust.
Additional Securities
Investors should be aware that in connection with the creation of additional
Units subsequent to the initial Date of Deposit, the Sponsor may deposit
Additional Securities, contracts to purchase Additional Securities or cash (or
letter of credit in lieu of cash) with instructions to purchase Additional
Securities, in each instance maintaining the original proportionate
relationship, subject to adjustment under certain circumstances, of the numbers
of shares of each Security in the Trust. To the extent the price of a Security
increases or decreases between the time cash is deposited with instructions to
purchase the Security and the time the cash is used to purchase the Security,
Units may represent less or more of that Security and more or less of the other
Securities in the Trust. In addition, brokerage fees (if any) incurred in
purchasing Securities with cash deposited with instructions to purchase the
Securities will be an expense of the Trust. Price fluctuations between the time
of deposit and the time the Securities are purchased, and payment of brokerage
fees, will affect the value of every Unit holder's Units and the Income per
Unit received by the Trust.
B-4
402192.1
<PAGE>
In particular, Unit holders who purchase Units during the initial offering
period would experience a dilution of their investment as a result of any
brokerage fees paid by the Trust during subsequent deposits of Additional
Securities purchased with cash deposited. In order to minimize these effects,
the Trust will try to purchase Securities as near as possible to the Evaluation
Time or at prices as close as possible to the prices used to evaluate Trust
Units at the Evaluation Time.
Common Stock
Since the Trust may contain common stocks of both foreign and domestic
issuers, an investment in Units of the Trust should be made with an
understanding of the risks inherent in any investment in common stocks
including the risk that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the stock
market may worsen (both of which may contribute directly to a decrease in the
value of the Securities and thus in the value of the Units). Additional risks
include risks associated with the right to receive payments from the issuer
which is generally inferior to the rights of creditors of, or holders of debt
obligations or preferred stock issued by, the issuer. Holders of common stocks
have a right to receive dividends only when, if, and in the amounts declared by
the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stocks usually have the
right to receive dividends at a fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative basis. Dividends on cumulative
preferred stock must be paid before any dividends are paid on common stock and
any cumulative preferred stock dividend which has been omitted is added to
future dividends payable to the holders of such cumulative preferred stocks.
Preferred stocks are also usually entitled to rights on liquidation which are
senior to those of common stocks. For these reasons, preferred stocks generally
entail less risk than common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even
preferred stock by an issuer will create prior claims for payment of principal,
interest and dividends which could adversely affect the ability and inclination
of the issuer to declare or pay dividends on its common stock or the economic
interest of holders of common stock with respect to assets of the issuer upon
liquidation or bankruptcy. Further, unlike debt securities which typically have
a stated principal amount payable at maturity (which value will be subject to
market fluctuations prior thereto), common stocks have neither fixed principal
amount nor a maturity and have values which are subject to market fluctuations
for as long as the common stocks remain outstanding. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the initial Date of Deposit.
Foreign Securities
The Trust may invest in certain foreign securities. Investment in obligations
of foreign issuers and in direct obligations of foreign nations involves
somewhat different investment risks from those affecting obligations of United
States domestic issuers. There may be limited publicly available information
with respect to foreign issuers and foreign issuers are not generally subject
to uniform accounting, auditing and financial standards and requirements
comparable to those applicable to domestic companies. Dividends and interest
paid by foreign issuers may be subject to withholding and other foreign taxes,
which may decrease the net return on foreign investments as compared to
B-5
402192.1
<PAGE>
dividends and interest paid to the Trust by domestic companies. Additional
risks include future political and economic developments, the possibility that
a foreign jurisdiction might impose or change withholding taxes on income
payable with respect to foreign securities, the possible seizure,
nationalization or expropriation of the foreign issuer or foreign deposits and
the possible adoption of foreign governmental restrictions such as exchange
controls.
ADRs
An investment in Units of the Trust should be made with an understanding of
the risks inherent in an investment in foreign equity securities in the form of
American Depositary Receipts, including risks associated with government,
economic, monetary and fiscal policies, possible foreign withholding taxes,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. ADRs evidence American
Depositary Receipts which, in turn, represent common stock of non-U.S. issuers
deposited with a custodian in a depository.
The characteristics and rights and privileges of equity securities vary from
country to country, and governments may impose restrictions on foreign
ownership of certain classes of equity securities unless a non-national
purchaser acquires a license or unless the particular issuer receives
permission for ownership by non-nationals. The Trust has not obtained any of
these licenses nor does the Sponsor anticipate the need to obtain them. In
general, foreign ownership restrictions are more likely to be imposed on voting
shares than non-voting shares. Equity securities, in general, trade on the
market at a multiple of their issuers' earnings, which multiple varies from
country to country, industry to industry and company to company and may
fluctuate over time based on general perceptions of the marketplace whether or
not related to specific actions or performance results of a particular issuer.
This multiple for any particular issuer may not be uniform for all classes of
the issuer's equity securities. Moreover, because the market for restricted
stocks traded by non-nationals generally has less volume than the market for
unrestricted stocks, the market for these restricted stocks may be more
volatile and less liquid than the market for shares that may be owned only by
nationals of the particular country. Investors should carefully review the
objectives of the Trust and consider their ability to assume the risks involved
before making an investment in the Trust.
In addition, for the foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less publicly
available information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. However, the Sponsor anticipates that adequate
information will be available to allow the Sponsor to supervise and/or monitor
the Trust portfolio.
The ADRs in the Portfolio have been issued by non-U.S. issuers whose earnings
are stated in foreign currencies. Further, ADRs in the Trust portfolio may pay
dividends in foreign currencies, and the securities underlying the ADRs are
principally traded in foreign currencies. Most foreign currencies have
fluctuated widely in value against the United States dollar for many reasons,
including supply and demand of the respective currency, the soundness of the
world economy and the strength of the respective economy as compared to the
economies of the United States and other countries. Therefore, for those
Securities of issuers whose earnings are stated in foreign currencies, or which
pay dividends in foreign currencies, or which are traded in foreign currencies,
there is a likelihood that their United States dollar value will vary to some
degree with fluctuations in the United States dollar foreign exchange rates for
the relevant currencies. Moreover, ADR currency fluctuations will affect the
U.S. dollar equivalent of the local currency price of the underlying domestic
share and, as a result, are likely to affect the value of the ADRs and
consequently
B-6
402192.1
<PAGE>
the value of the Securities. In addition, the rights of holders of ADRs may be
different than those of holders of the underlying shares, and the market for
ADRs may be less liquid than that for the underlying shares.
The following table sets forth end-of-month United States dollar exchange
rates for the past three years for the currency of the securities underlying
the ADR included in the portfolio. Fluctuations of the rates that have occurred
in the past are not necessarily indicative of fluctuations that may occur over
the term of the Trust. This table shows the unit of foreign currency received
for a U.S. dollar:
<TABLE>
<CAPTION>
Israeli Israeli Israeli
Shekel Shekel Shekel
<S> <C> <C> <C> <C> <C>
Sept. 1996 31.200 Sept. 1995 33.350 Sept. 1994 33.180
Aug. 1996 31.850 Aug. 1995 32.780 Aug. 1994 33.000
July 1996 31.690 July 1995 33.360 July 1994 32.730
June 1996 31.060 June 1995 33.860 June 1994 32.950
May 1996 30.310 May 1995 33.120 May 1994 32.930
Apr. 1996 31.300 Apr. 1995 33.690 Apr. 1994 33.320
Mar. 1996 32.040 Mar. 1995 33.940 Mar. 1994 33.710
Feb. 1996 32.250 Feb. 1995 33.450 Feb. 1994 33.600
Jan. 1996 31.870 Jan. 1995 33.300 Jan. 1994 33.470
Dec. 1995 31.880 Dec. 1994 33.140 Dec. 1993 33.530
Nov. 1995 32.500 Nov. 1994 32.980 Nov. 1993 34.130
Oct. 1995 33.010 Oct. 1994 33.280 Oct. 1993 34.420
</TABLE>
ADRs may be sponsored or unsponsored. In an unsponsored facility, the
depositary initiates and arranges the facility at the request of market makers
and acts as agent for the ADR holder, while the company itself is not involved
in the transaction. With respect to unsponsored ADRs, material information
about the underlying company may not be available. In a sponsored facility, the
issuing company initiates the facility and agrees to pay certain administrative
and shareholder-related expenses. Sponsored facilities use a single depositary
and entail a contractual relationship among the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. ADRs designed for use in United States
securities markets may be registered securities pursuant to the Securities Act
of 1933 and/or subject to the reporting requirements of the Securities Exchange
Act of 1934.
REITs
Since the Trust may include shares issued by real estate investment trusts
("REITs"), a domestic corporation or business trust which invests primarily in
income producing real estate or real estate related loans or mortgages, an
investment in the Trust should be made with an understanding of risks similar
to those associated with the direct
B-7
402192.1
<PAGE>
ownership of real estate (in addition to securities markets risks). These
include declines in the value of real estate, illiquidity of real property
investments, risks related to general and local economic conditions, dependency
on management skill, heavy cash flow dependency, possible lack of availability
of mortgage funds, overbuilding, extended vacancies of properties, increased
competition, increases in property taxes and operating expenses, changes in
zoning laws. losses due to costs resulting from the clean-up of environmental
problems, liability to third parties for damages resulting from environmental
problems, casualty or condemnation losses, economic or regulatory impediments
to raising rents, changes in neighborhood values and the appeal of properties
to tenants and changes in interest rates. In addition to these risks, Equity
REITs may be more likely to be affected by changes in the value of the
underlying property owned by the trusts, while Mortgage REITs may be more
likely to be affected by the quality of any credit extended. Further, REITs are
dependent upon the management skills of the issuers and generally may not be
diversified. REITs are also subject to heavy cash flow dependency, defaults by
borrowers and self-liquidation. In addition, REITs could possibly fail to
qualify for tax free pass-through of income under the Internal Revenue Code of
1986, as amended (the "Code"), or to maintain their exemptions from
registration under the Investment Company Act of 1940 (the "1940 Act"). The
above factors may also adversely affect a borrower's or a lessee's ability to
meet its obligations to the REIT. In the event of a default by a borrower or
lessee, the REIT may experience delays in enforcing its rights as a mortgagee
or lessor and may incur substantial costs associated with protecting its
investments.
Oil Companies
The Trust may be considered to be concentrated in common stocks of companies
engaged in refining and marketing oil and related products. According to the
U.S. Department of Commerce, the factors which will most likely shape the
industry to 1996 and beyond include the price and availability of oil from the
Middle East, changes in United States environmental policies and the continued
decline in U.S. production of crude oil. Possible effects of these factors may
be increased U.S. and world dependence on oil from the Organization of
Petroleum Exporting Countries ("OPEC") and highly uncertain and potentially
more volatile oil prices and a higher rate of growth for natural gas production
than for other fuels. Factors which the Sponsor believes may increase the
profitability of oil and petroleum operations include increasing demand for oil
and petroleum products as a result of the continued increases in annual miles
driven and the improvement in refinery operating margins caused by increases in
average domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the two
principal requirements for stable crude oil markets. Without excess capacity,
supply disruptions in some countries cannot be compensated for by others.
Surplus capacity in Saudi Arabia and a few other countries and the utilization
of that capacity during the Persian Gulf crisis prevented severe market
disruption. Although unused capacity can contribute to market stability, it
ordinarily creates pressure to overproduce and contributes to market
uncertainty. The likely restoration of a large portion of Kuwait and Iraq's
production and export capacity over the next few years could lead to such a
development in the absence of substantial growth in world oil demand. Formerly,
OPEC members attempted to exercise control over production levels in each
country through a system of mandatory production quotas. As a result of the
crisis in the Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be curtailed on at
least one occasions as a result of weak prices, even in the absence of supplies
from Iraq. The pressure to deviate from mandatory quotas, if they are
reimposed, is likely to be substantial and could lead to a weakening of prices.
In the longer term, additional capacity and production will be required to
accommodate the expected increases in world oil demand and to compensate for
expected sharp drops in U.S. crude oil production and exports from the former
Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have the
petroleum reserves that will allow the required increase in production capacity
to be attained. Given the large-scale financing that is required, the prospect
that such expansion will occur soon enough to meet the increased demand is
uncertain.
B-8
402192.1
<PAGE>
Declining U.S. crude oil production will likely lead to increased dependence
on OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments in order to comply with increasingly stringent environmental
legislation, such as the 1990 amendments to the Clean Air Act. If the cost of
these changes is substantial enough to cut deeply into profit, smaller refiners
may be forced out of the industry entirely. Moreover, lower consumer demand due
to increases in energy efficiency and conservation, due to gasoline
reformulations that call for less crude oil, due to warmer winters or due to a
general slowdown in economic growth in this country and abroad, could
negatively affect the price of oil and the profitability of oil companies.
Cheaper oil could also decrease demand for natural gas. However, no assurance
can be given that the demand for or the price of oil will increase or that if
either anticipated increase does take place, it will not be marked by great
volatility.
In addition, any future scientific advances concerning new sources of energy
and fuels or legislative changes relating to the energy industry or the
environment could have a negative impact on the petroleum product or natural
gas industry. While legislation has been enacted to deregulate certain aspects
of the oil industry, no assurances can be given that new or additional
regulations will not be adopted. Each of the problems referred to could
adversely affect the financial stability of the issuers of any petroleum
industry stocks in the Trust.
Liquidity
The existence of a liquid trading market for Securities in the Trust
portfolio, may depend on whether dealers will make a market in these
Securities. There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust is
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet redemptions
and the value of the Units will be adversely affected if trading markets for
the Securities are limited or absent.
There is no assurance that any dividends will be declared or paid in the
future on the Securities. Current income is a secondary objective to the
Trust's primary objective of capital growth. Investors should be aware that
there is no assurance that the Trust's objectives will be achieved.
PUBLIC OFFERING
Offering Price
The Public Offering Price per 100 Units of the Trust is equal to the
aggregate value of the underlying Securities in the Trust divided by the number
of Units outstanding times 100 plus a sales charge of 3.5% of the Public
Offering Price per 100 Units (or 3.627% of the net amount invested in
Securities per 100 Units). During the life of the Trust, sales of at least
10,000 Units will be entitled to a volume discount from the Public Offering
Price as described below. (See "Summary of Essential Information.") In
addition, the net amount invested in Securities will involve a proportionate
share of amounts in the Income Account and Principal Account, if any. The
Public Offering Price can vary on a daily basis from the amount stated on the
cover of this Prospectus in accordance with fluctuations in the market value of
the Securities and the price to be paid by each investor will be computed as of
the day the Units are purchased.
B-9
402192.1
<PAGE>
The aggregate value of the Securities is determined in good faith by the
Trustee on each "Business Day" as defined in the Indenture in the following
manner: if the Securities are listed on a national securities exchange or on
the NASDAQ National Market System, this evaluation is generally based on the
closing sale prices on that exchange as of the Evaluation Time (unless the
Trustee deems these prices inappropriate as a basis for valuation). If the
Securities are not so listed or, if so listed and the principal market therefor
is other than on the exchange, the evaluation generally shall be based on the
closing purchase price in the over-the-counter market (unless the Trustee deems
these prices inappropriate as a basis for evaluation) or if there is no such
closing purchase price, then the Trustee may utilize, at the Trust's expense,
an independent evaluation service or services to ascertain the values of the
Securities. The independent evaluation service shall use any of the following
methods, or a combination thereof, which it deems appropriate: (a) on the basis
of current bid prices for comparable securities, (b) by appraising the value of
the Securities on the bid side of the market or by such other appraisal deemed
appropriate by the Trustee or (c) by any combination of the above, each as of
the Evaluation Time.
Volume and Other Discounts
Units of the Trust are available at a volume discount from the Public
Offering Price during the life of the Trust. This volume discount will result
in a reduction of the sales charge applicable to such purchases. The amount of
the approximate reduced sales charge on the Public Offering Price applicable to
such purchases is as follows:
<TABLE>
<CAPTION>
Percent of Public Percent of Net Amount
Number of Units Offering Price Invested
<S> <C> <C>
Fewer than 10,000 3.50% 3.627%
10,000 but less than 25,000 3.00% 3.093%
25,000 but less than 50,000 2.50% 2.564%
50,000 but less than 100,000 2.00% 2.041%
100,000 or more 1.50% 1.523%
</TABLE>
These discounts will apply to all purchases of Units by the same purchaser
during the initial public offering period. Units purchased by the same
purchasers in separate transactions during the initial public offering period
will be aggregated for purposes of determining if such purchaser is entitled to
a discount provided that such purchaser must own at least the required number
of Units at the time such determination is made. Units held in the name of the
spouse of the purchaser or in the name of a child of the purchaser under 21
years of age are deemed for the purposes hereof to be registered in the name of
the purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Employees (and their immediate families) of Glickenhaus & Co. may, pursuant
to employee benefit arrangements, purchase Units of the Trust at a price equal
to the then market value of the underlying securities in the Trust, divided by
the number of Units outstanding at no sales charge. Employees (and their
immediate families) of any member firm of the National Association of
Securities Dealers, Inc. ("NASD") may purchase Units of the Trust at a price
equal to the then market value of the underlying securities in the Trust,
divided by the number of Units outstanding plus a reduced sales charge of 1.0%
per Unit. Such arrangements result in less selling effort and selling expenses
than sales
B-10
402192.1
<PAGE>
to employee groups of other companies. Resales or transfers of Units purchased
under the employee benefit arrangements may only be made through the Sponsor's
secondary market, so long as it is being maintained.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a volume discount) less
the concession the Sponsor typically allows to brokers and dealers for
purchases (see "Public Offering--Distribution of Units") by (1) investors who
purchase Units through registered investment advisers, certified financial
planners and registered broker-dealers who in each case either charge periodic
fees for financial planning, investment advisory or asset management service,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who, for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their immediate family members (as described above) and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive the volume discount.
Distribution of Units
The Underwriter of the Units of the Trust is Glickenhaus & Co. (see
"Underwriting" in Part A). It is the Underwriter's intention to qualify Units
of the Trust for sale in certain of the states and to effect a public
distribution of the Units through its own organization. In addition, Units will
be sold to dealers who are members of the NASD at prices which represent a
concession equal to 2.5% of the Public Offering Price per 100 Units (or 2.564%
of the net amount invested in Securities per 100 Units), subject to change from
time to time by the Sponsor. Individual sales by dealers that are subject to
volume discounts (see "Volume and Other Discounts" above), and therefore
receive less than the full sales charge, are subject to a dealer concession of
70% of the applicable sales charge.
Sales will be made only with respect to whole Units, and the Sponsor reserves
the right to reject, in whole or in part, any order for the purchase of Units.
The Sponsor may also from time to time pay in addition to the amounts
referenced above, an additional concession, in the form of cash or other
compensation, any dealer who sells, during a specific period, minimum dollar
amounts of the Units of the Trust. In no event will such additional concession
paid by the Sponsor to the dealer exceed the difference between the sales
charge and the selling dealer's allowance in respect of Units sold by the
dealer. Such Units then may be distributed to the public by the dealers at the
Public Offering Price then in effect.
The Underwriter, broker-dealers, banks and/or others are eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their registered representatives who have sold a minimum
number of units of unit investment trusts created by the Sponsor during a
specified time period. In addition, at various times the Sponsor may implement
other programs under which the sales forces of the Underwriter, brokers,
dealers, banks and/or others may be eligible to win other nominal awards for
certain sales efforts, or under which the Sponsor will reallow to any such
Underwriter, brokers, dealers, banks and/or others that sponsor sales contests
or recognition programs conforming to criteria established by the Sponsor, or
participate in sales programs sponsored by the Sponsor, an amount not exceeding
the total applicable sales charges on the sales generated by such person at the
public offering price during such programs. Also, the Sponsor in its discretion
may from time to time pursuant to objective criteria established by the Sponsor
pay fees to qualify the Underwriter, brokers, dealers, banks and/or others for
certain
B-11
402192.1
<PAGE>
services or activities which are primarily intended to result in sales of Units
of the Trust. Such payments are made by the Sponsor out of its own assets and
not out of the assets of the Trust. These programs will not change the price
Unit holders pay for their units or the amount that the Trust will receive from
the Units sold.
Sponsor's and Underwriter's Profits
As set forth under "Public Offering--Offering Price" in Part B, the
Underwriter will receive gross commissions equal to the specified percentages
of the Public Offering Price of the Units of the Trust. Additionally, the
Sponsor may realize a profit on the deposit of the Securities in the Trust
representing the difference between the cost of the Securities to the Sponsor
and the cost of the Securities to the Trust. (See "Portfolio.") The Sponsor or
any selling dealer may realize profits or sustain losses with respect to
Securities deposited in the Trust which were acquired from selling syndicates
of which they were a member.
The Sponsor may have participated as an underwriter or manager, co-manager or
member of underwriting syndicates from which some of the aggregate amount of
the Securities were acquired for the Trust in the amounts set forth in "The
Trust" in Part A.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsor, the Underwriter and the
selling dealers for the Units. Cash, if any, made available to the Sponsor
prior to settlement date for the purchase of Units may be used in the Sponsor's
business subject to the limitations of 17 CFR 240.15c3-3 under the Securities
Exchange Act of 1934 and may be of benefit to the Sponsor.
Both upon acquisition of Securities and termination of the Trust, the Trustee
may utilize the services of the Sponsor for the sale of all or a portion of the
Securities in the Trust. The Sponsor will receive brokerage commissions from
the Trust in connection with such purchases and sales in accordance with
applicable law.
In maintaining a market for the Units (see "Sponsor Repurchase") the Sponsor
and the Underwriter will realize profits or sustain losses in the amount of any
difference between the price at which they buy Units and the price at which
they resell or redeem such Units and to the extent they earn sales charges on
resales.
RIGHTS OF UNIT HOLDERS
Certificates
Ownership of Units of the Trust is evidenced by registered Certificates
executed by the Trustee and the Sponsor. Certificates may be issued in
denominations of one hundred or more Units. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed and/or accompanied
by a written instrument or instruments of transfer. Although no such charge is
presently made or contemplated, the Trustee may require a Unit holder to pay
$2.00 for each Certificate reissued or transferred and any governmental charge
that may be imposed in connection with each such transfer or interchange.
Mutilated, destroyed, stolen or lost Certificates will be replaced upon
delivery of satisfactory indemnity and payment of expenses incurred.
B-12
402192.1
<PAGE>
Distributions
Dividends received by the Trust are credited by the Trustee to an Income
Account for the Trust. Other receipts, including the proceeds of Securities
disposed of, are credited to a Principal Account for the Trust.
Distributions to each Unit holder from the Income Account are computed as of
the close of business on each Record Date for the following Distribution Date.
Distributions from the Principal Account of the Trust (other than amounts
representing failed contracts, as previously discussed) will be computed as of
each Record Date, and will be made to the Unit holders of the Trust on or
shortly after the Distribution Date. Proceeds representing principal received
from the disposition of any of the Securities between a Record Date and a
Distribution Date which are not used for redemptions of Units will be held in
the Principal Account and not distributed until the next Distribution Date.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the Distribution Date following the first
Record Date on which they are a Unit Holder of record.
As of each month the Trustee will deduct from the Income Account of the
Trust, and, to the event funds are not sufficient therein, from the Principal
Account of the Trust, amounts necessary to pay the expenses of the Trust (as
determined on the basis set forth under "Trust Expenses and Charges"). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any applicable taxes or other governmental
charges that may be payable out of the Trust. Amounts so withdrawn shall not be
considered a part of such Trust's assets until such time as the Trustee shall
return all or any part of such amounts to the appropriate accounts. In
addition, the Trustee may withdraw from the Income and Principal Accounts such
amounts as may be necessary to cover redemptions of Units by the Trustee.
The dividend distribution per 100 Units cannot be estimated and will change
and may be reduced as Securities are redeemed, exchanged or sold, or as
expenses of the Trust fluctuate. No distribution need be made from the
Principal Account until the balance therein is an amount sufficient to
distribute $1.00 per 100 Units.
Records
The Trustee shall furnish Unit holders in connection with each distribution a
statement of the amount of dividends, if any, and the amount of other receipts,
if any, which are being distributed, expressed in each case as a dollar amount
per 100 Units. Within a reasonable time after the end of each calendar year the
Trustee will furnish to each person who at any time during the calendar year
was a Unit holder of record, a statement showing (a) as to the Income Account:
dividends, interest and other cash amounts received, amounts paid for purchases
of Substitute Securities and redemptions of Units, if any, deductions for
applicable taxes and fees and expenses of the Trust, and the balance remaining
after such distributions and deductions, expressed both as a total dollar
amount and as a dollar amount representing the pro rata share of each 100 Units
outstanding on the last business day of such calendar year; (b) as to the
Principal Account: the dates of disposition of any Securities and the net
proceeds received therefrom, deductions for payments of applicable taxes and
fees and expenses of the Trust, amounts paid for purchases of Substitute
Securities and redemptions of Units, if any, and the balance remaining after
such distributions and deductions, expressed both as a total dollar amount and
as a dollar amount representing the pro rata share of each 100 Units
outstanding on the last business day of such calendar year; (c) a list of the
Securities held, a list of Securities purchased, sold or otherwise disposed of
during the calendar year and the number of Units outstanding on the last
business day of such calendar year; (d) the Redemption Price per 100 Units
based upon the last computation thereof made during such calendar year; and (e)
amounts actually distributed to Unit holders during such calendar year from the
Income and Principal Accounts,
B-13
402192.1
<PAGE>
separately stated, of the Trust, expressed both as total dollar amounts and as
dollar amounts representing the pro rata share of each 100 Units outstanding on
the last business day of such calendar year.
The Trustee shall keep available for inspection by Unit holders at all
reasonable times during usual business hours, books of record and account of
its transactions as Trustee, including records of the names and addresses of
Unit holders, Certificates issued or held, a current list of Securities in the
portfolio and a copy of the Trust Agreement.
Expenses and Charges
Initial Expenses
All or a portion of the expenses incurred in creating and establishing the
Trust, including the cost of the initial preparation and execution of the Trust
Agreement, the initial fees and expenses of the Trustee, legal expenses and
other actual out-of-pocket expenses, will be paid by the Trust and amortized
over the life of the Trust. All advertising and selling expenses, as well as
any organizational expenses not paid by the Trust, will be borne by the
Sponsors at no cost to the Trust.
Fees
The Sponsor will not charge the Trust a fee for their services as such. (See
"Sponsor's and Underwriters' Profits.")
The Sponsor will receive for portfolio supervisory services to the Trust an
Annual Fee in the amount set forth under "Summary of Essential Information" in
Part A. The Sponsor's fee may exceed the actual cost of providing portfolio
supervisory services for the Trust, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the
Glickenhaus Value Portfolios in any calendar year exceed the aggregate cost to
the Sponsor of supplying such services in such year. (See "Portfolio
Supervision.")
The Trustee will receive, for its ordinary recurring services to the Trust,
an annual fee in the amount set forth under "Summary of Essential Information"
in Part A. For a discussion of the services performed by the Trustee pursuant
to its obligations under the Trust Agreement, see "Trust Administration" and
"Rights of Unit holders". The Trustee also receives benefits to the extent that
it holds funds on deposit in the various non-interest bearing accounts created
under the Indenture.
The Trustee's fees applicable to a Trust are payable monthly from the Income
Account of the Trust to the extent funds are available and then from the
Principal Account. Both fees may be increased without approval of the Unit
holders by amounts not exceeding proportionate increases in consumer prices for
services as measured by the United States Department of Labor's Consumer Price
Index entitled "All Services Less Rent." If the balances of the Principal and
Income Accounts are insufficient to provide for amounts payable by the Trust,
or amounts payable to the Trustee which are secured by its prior lien on the
Trust, the Trustee is permitted to sell Securities to pay such amounts.
Other Charges
The following additional charges are or may be incurred by the Trust: all
expenses (including audit and counsel fees) of the Trustee incurred and
advances made in connection with its activities under the Trust Agreement,
including annual audit expenses of independent public accountants selected by
the Sponsor (so long as the Sponsor maintains a secondary market, the Sponsor
will bear any audit expense which exceeds 50 cents per 100 Units), the expenses
and costs of any
B-14
402192.1
<PAGE>
action undertaken by the Trustee to protect the Trust and the rights and
interests of the Unit holders; fees of the Trustee for any extraordinary
services performed under the Trust Agreement; indemnification of the Trustee
for any loss or liability accruing to it without gross negligence, bad faith or
willful misconduct on its part, arising out of or in connection with its
acceptance or administration of the Trust; indemnification of the Sponsor for
any losses, liabilities and expenses incurred in acting as sponsors of the
Trust without gross negligence, bad faith or willful misconduct on its part;
and all taxes and other governmental charges imposed upon the Securities or any
part of the Trust (no such taxes or charges are being levied, made or, to the
knowledge of the Sponsor, contemplated). The above expenses, including the
Trustee's fees, when paid by or owing to the Trustee are secured by a first
lien on the Trust to which such expenses are charged. In addition, the Trustee
is empowered to sell the Securities in order to make funds available to pay all
expenses.
TAX STATUS
The following is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Unit holders should
consult their tax advisers in determining the Federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units.
In rendering the opinion set forth below, Battle Fowler LLP has examined the
Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein.
In the opinion of Battle Fowler LLP, special counsel for the Sponsor, under
existing law:
1. The Trust will be classified as a grantor trust for
Federal income tax purposes and not as a partnership or association taxable
as a corporation. Classification of the Trust as a grantor trust will cause
the Trust not to be subject to Federal income tax, and will cause the Unit
holders of the Trust to be treated for Federal income tax purposes as the
owners of a pro rata portion of the assets of the Trust. All income received
by the Trust will be treated as income of the Unit holders in the manner set
forth below.
2. The Trust is not subject to the New York Franchise Tax
on Business Corporations or the New York City General Corporation Tax. For a
Unit holder who is a New York resident, however, a pro rata portion of all or
part of the income of the Trust will be treated as the income of the Unit
holder under the income tax laws of the State and City of New York. Similar
treatment may apply in other states.
3. During the 90-day period subsequent to the initial
issuance date, the Sponsor reserves the right to deposit additional
Securities that are substantially similar to those establishing the Trust.
This retained right falls within the guidelines promulgated by the Internal
Revenue Service ("IRS") and should not affect the taxable status of the
Trust.
A taxable event will generally occur with respect to each Unit holder when
the Trust disposes of a Security (whether by sale, exchange or redemption) or
upon the sale, exchange or redemption of Units by such Unit holder. The price a
Unit holder pays for his Units, including sales charges, is allocated among his
pro rata portion of each Security held
B-15
402192.1
<PAGE>
by the Trust (in proportion to the fair market values thereof on the date the
Unit holder purchases his Units) in order to determine his initial cost for his
pro rata portion of each Security held by the Trust.
For Federal income tax purposes, a Unit holder's pro rata portion of
dividends paid with respect to a Security held by a Trust are taxable as
ordinary income to the extent of such corporation's current and accumulated
"earnings and profits" as defined by Section 316 of the Code. A Unit holder's
pro rata portion of dividends paid on such Security that exceed such current
and accumulated earnings and profits will first reduce a Unit holder's tax
basis in such Security, and to the extent that such dividends exceed a Unit
holder's tax basis in such Security will generally be treated as capital gain.
A Unit holder's portion of gain, if any, upon the sale, exchange or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain and will be long-term if the Unit holder
has held his Units for more than one year. Long-term capital gains are
generally taxed at the same rates applicable to ordinary income, although
individuals who realize long-term capital gains may be subject to a reduced tax
rate on such gains, rather than the "regular" maximum tax rate of 39.6%. Tax
rates may increase prior to the time when Unit holders may realize gains from
the sale, exchange or redemption of Units or Securities.
A Unit holder's portion of loss, if any, upon the sale or redemption of Units
or the disposition of Securities held by the Trust will generally be considered
a capital loss and will be long-term if the Unit holder has held his Units for
more than one year. Capital losses are deductible to the extent of capital
gains; in addition, up to $3,000 of capital losses of non-corporate Unit
holders may be deducted against ordinary income.
Under Section 67 of the Code and the accompanying Regulations, a Unit holder
who itemizes his deductions may also deduct his pro rata share of the fees and
expenses of the Trust, but only to the extent that such amounts, together with
the Unit holder's other miscellaneous deductions, exceed 2% of his adjusted
gross income. The deduction of fees and expenses may also be limited by Section
68 of the Code, which reduces the amount of itemized deductions that are
allowed for individuals with incomes in excess of certain thresholds.
After the end of each calendar year, the Trustee will furnish to each Unit
holder an annual statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security, and the fees and expenses paid by
the Trust. The Trustee will also furnish annual information returns to each
Unit holder and to the Internal Revenue Service.
A corporation that owns Units will generally be entitled to a 70% dividends
received deduction with respect to such Unit holder's pro rata portion of
dividends received by the Trust from a domestic corporation under Section 243
of the Code or from a qualifying foreign corporation under Section 245 of the
Code (to the extent the dividends are taxable as ordinary income, as discussed
above) in the same manner as if such corporation directly owned the Securities
paying such dividends. However, a corporation owning Units should be aware that
Sections 246 and 246A of the Code impose additional limitations on the
eligibility of dividends for the 70% dividends received deduction. These
limitations include a requirement that stock (and therefore Units) must
generally be held at least 46 days (as determined under Section 246(c) of the
Code). Moreover, the allowable percentage of the deduction will be reduced from
70% if a corporate Unit holder owns certain stock (or Units) the financing of
which is directly attributable to indebtedness incurred by such corporation.
Accordingly, Unit holders should consult their tax adviser in this regard.
As discussed in the section "Termination", each Unit holder may have three
options in receiving their termination distributions, which are (i) to receive
their pro rata share of the underlying Securities in kind, (ii) to receive cash
upon
B-16
402192.1
<PAGE>
liquidation of their pro rata share of the underlying Securities, or (iii) to
invest the amount of cash they would receive upon the liquidation of their pro
rata share of the underlying Securities in units of a future series of the
Trust (if one is offered).
There are special tax consequences should a Unit holder choose option (i),
the exchange of the Unit holder's Units for a pro rata portion of each of the
Securities held by the Trust plus cash. Treasury Regulations provide that gain
or loss is recognized when there is a conversion of property into property that
is materially different in kind or extent. In this instance, the Unit holder
may be considered the owner of an undivided interest in all of the Trust's
assets. By accepting the proportionate number of Securities of the Trust, in
partial exchange for his Unit, the Unit holder should be treated as merely
exchanging his undivided pro rata ownership of Securities held by the Trust
into sole ownership of a proportionate share of Securities. As such, there
should be no material difference in the Unit holder's ownership, and therefore
the transaction should be tax free to the extent the Securities are received.
Alternatively, the transaction may be treated as an exchange that would qualify
for nonrecognition treatment to the extent the Unit holder is exchanging his
undivided interest in all of the Trust's Securities for his proportionate
number of shares of the underlying Securities. In either instance, the
transaction should result in a non-taxable event for the Unit holder to the
extent Securities are received. However, there is no specific authority
addressing the income tax consequences of an in kind distribution from a
grantor trust, and investors are urged to consult their tax advisers in this
regard.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trusts, are nevertheless taxed under Section 511 of the
Code on "unrelated business taxable income." Unrelated business taxable income
is income from a trade or business regularly carried on by the tax-exempt
entity that is unrelated to the entity's exempt purpose. Unrelated business
taxable income generally does not include dividend or interest income or gain
from the sale of investment property, unless such income is derived from
property that is debt-financed or is dealer property. A tax-exempt entity's
dividend income from the Trust and gain from the sale of Units in the Trust or
the Trust's sale of Securities is not expected to constitute unrelated business
taxable income to such tax-exempt entity unless the acquisition of the Unit
itself is debt-financed or constitutes dealer property in the hands of the
tax-exempt entity.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit sharing retirement plan)
should consider among other things (a) whether the investment is prudent under
the Employee Retirement Income Security Act of 1974 ("ERISA"), taking into
account the needs of the plan and all of the facts and circumstances of the
investment in the Trust; (b) whether the investment satisfies the
diversification requirement of Section 404(a)(1)(C) of ERISA; and (c) whether
the assets of the Trust are deemed "plan assets" under ERISA and the Department
of Labor regulations regarding the definition of "plan assets."
Prospective tax-exempt investors are urged to consult their own tax advisers
prior to investing in the Trust.
Retirement Plans
This Trust may be well suited for purchase by Individual Retirement Accounts
("IRAs"), Keogh plans, pension funds and other qualified retirement plans,
certain of which are briefly described below. Generally, capital gains and
income received in each of the foregoing plans are exempt from current Federal
taxation. All distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special 5 or 10 year averaging
or tax-deferred rollover treatment. Unit holders in IRAs, Keogh plans and other
tax-deferred retirement plans should consult their plan custodian as to the
appropriate disposition of distributions. Investors considering participation
in any of these plans should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
B-17
402192.1
<PAGE>
the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of the Trust, and other
financial institutions. Fees and charges with respect to such plans may vary.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit sharing retirement plan)
should consider among other things (a) whether the investment is prudent under
the Employee Retirement Income Security Act of 1974 ("ERISA"), taking into
account the needs of the plan and all of the facts and circumstances of the
investment in the Trust; (b) whether the investment satisfies the
diversification requirement of Section 404(a)(1)(C) of ERISA; and (c) whether
the assets of the Trust are deemed "plan assets" under ERISA and the Department
of Labor regulations regarding the definition of "plan assets."
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Trust may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ("Keogh plans"). Qualified individuals
may generally make annual tax-deductible contributions up to the lesser of 25%
of annual compensation or $30,000 to Keogh plans. The assets of the plan must
be held in a qualified trust or other arrangement which meets the requirements
of the Code. Generally, there are penalties for premature distributions from a
plan before attainment of age 59 1/2, except in the case of a participant's
death or disability and certain other circumstances. Keogh plan participants
may also establish separate IRAs (see below) to which they may contribute up to
an additional $2,000 per year ($2,250 in a spousal account).
Individual Retirement Account--IRA. Any individual (including one covered by
an employer retirement plan) can establish an IRA or make use of a qualified
IRA arrangement set up by an employer or union for the purchase of Units of the
Trust. Any individual can make a contribution in an IRA equal to the lesser of
$2,000 ($2,250 in a spousal account) or 100% of earned income; such investment
must be made in cash. However, the deductible amount an individual may
contribute will be reduced if the individual or the individual's spouse (in the
case of a married individual) participates in a qualified retirement plan and
the individual's adjusted gross income exceeds $25,000 (in the case of a single
individual or a married individual filing a separate return not residing with
such person's spouse) or $40,000 (in the case of married individuals filing a
joint return). Special rules apply in the case of married individuals living
together who file separate returns. Generally, there are penalties for
premature distributions from an IRA before the attainment of age 59 1/2, except
in the case of the participant's death or disability and certain other
circumstances.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing plan
for employees of a corporation may purchase Units of the Trust.
Recent Legislation. As a result of the enactment of the Small Business,
Health Insurance and Welfare Reform Acts of 1996 (the "'96 Act"), certain of
the foregoing provisions have been amended. Pertinent provisions of the '96 Act
are described below:
Generally. Five year averaging will not apply to distributions after
December 31, 1999. Ten year averaging has been preserved in very limited
circumstances.
IRAs. Beginning January 1, 1997, a non-working spouse may be eligible to
establish an IRA and contribute up to $2,000, provided the combined income of
both spouses is at least equal to the amount contributed by both spouses to
IRAs.
B-18
402192.1
<PAGE>
SIMPLE Plans. The '96 Act provides for a new type of retirement plan, a
savings incentive match plan for employees (a "SIMPLE Plan"), which may be
adopted by certain employers that employ no more than 100 employees.
Participants in a SIMPLE Plan are permitted to contribute up to $6,000 to the
Plan on a pre-tax basis and the employer makes either matching contributions
not in excess of 3 percent of compensation or non-elective contributions equal
to 2 percent of compensation. SIMPLE Plans are subject to distribution rules
similar to IRAs, except there is a 25 percent early withdrawal penalty for
withdrawals made during the first 2 years of participation. Units of the Trust
may be purchased by SIMPLE Plans.
LIQUIDITY
Sponsor Repurchase
The Sponsor, although not obligated to do so, intends to maintain a secondary
market for the Units and continuously to offer to repurchase the Units. The
Sponsor's secondary market repurchase price will be based on the aggregate
value of the Securities in the Trust portfolio and will be the same as the
redemption price. The aggregate value of the Securities will be determined by
the Trustee on a daily basis and computed on the basis set forth under "Trustee
Redemption." The Sponsor does not guarantee the enforceability, marketability
or price of any Securities in the Portfolio or of the Units. Unit holders who
wish to dispose of their Units should inquire of the Sponsor as to current
market prices prior to making a tender for redemption. The Sponsor may
discontinue repurchase of Units if the supply of Units exceeds demand, or for
other business reasons. The date of repurchase is deemed to be the date on
which Certificates representing Units are physically received in proper form,
i.e., properly endorsed, by Glickenhaus & Co., 6 East 43rd Street, New York,
New York 10017. Units received after 4 P.M., New York Time, will be deemed to
have been repurchased on the next business day. In the event a market is not
maintained for the Units, a Unit holder may be able to dispose of Units only by
tendering them to the Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be reoffered for
sale by the Sponsor at a price based on the aggregate value of the Securities
in the Trust plus a maximum sales charge of 3.5% (or 3.627% of the net amount
invested) plus a pro rata portion of amounts, if any, in the Income Account.
Any Units that are purchased by the Sponsor in the secondary market also may be
redeemed by the Sponsor if it determines such redemption to be in its best
interest.
The Sponsor may, under certain circumstances, as a service to Unit holders,
elect to purchase any Units tendered to the Trustee for redemption (see
"Trustee Redemption"). Factors which the Sponsor will consider in making a
determination will include the number of Units of all Trusts which it has in
inventory, its estimate of the salability and the time required to sell such
Units and general market conditions. For example, if in order to meet
redemptions of Units the Trustee must dispose of Securities, and if such
disposition cannot be made by the redemption date (seven calendar days after
tender), the Sponsor may elect to purchase such Units. Such purchase shall be
made by payment to the Unit holder not later than the close of business on the
redemption date of an amount equal to the Redemption Price on the date of
tender.
Trustee Redemption
Units may also be tendered to the Trustee for redemption at its corporate
trust office at 101 Barclay Street, New York, New York 10286, upon proper
delivery of Certificates representing such Units and payment of any relevant
tax.
B-19
402192.1
<PAGE>
At the present time there are no specific taxes related to the redemption of
Units. No redemption fee will be charged by the Sponsor or the Trustee. Units
redeemed by the Trustee will be cancelled.
Certificates representing Units to be redeemed must be delivered to the
Trustee and must be properly endorsed or accompanied by proper instruments of
transfer with signature guaranteed (or by providing satisfactory indemnity, as
in the case of lost, stolen or mutilated Certificates). Thus, redemptions of
Units cannot be effected until Certificates representing such Units have been
delivered by the person seeking redemption. (See "Certificates.") Unit holders
must sign exactly as their names appear on the faces of their Certificates. In
certain instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority.
Within seven calendar days following a tender for redemption, or, if such
seventh day is not a business day, on the first business day prior thereto, the
Unit holder will be entitled to receive an amount for each Unit tendered equal
to the Redemption Price per Unit computed as of the Evaluation Time set forth
under "Summary of Essential Information" in Part A on the date of tender. The
"date of tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the close of trading
on the New York Stock Exchange (4:00 p.m. Eastern Time), the date of tender is
the next day on which such Exchange is open for trading, and such Units will be
deemed to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.
A Unit holder will receive his redemption proceeds in cash and amounts paid
on redemption shall be withdrawn from the Income Account, or, if the balance
therein is insufficient, from the Principal Account. All other amounts paid on
redemption shall be withdrawn from the Principal Account. The Trustee is
empowered to sell Securities in order to make funds available for redemptions.
Such sales, if required, could result in a sale of Securities by the Trustee at
a loss. To the extent Securities are sold, the size and diversity of the Trust
will be reduced. The Securities to be sold will be selected by the Trustee in
order to maintain, to the extent practicable, the proportionate relationship
among the number of shares of each Stock. Provision is made in the Indenture
under which the Sponsor may, but need not, specify minimum amounts in which
blocks of Securities are to be sold in order to obtain the best price for the
Fund. While these minimum amounts may vary from time to time in accordance with
market conditions, the Sponsor believes that the minimum amounts which would be
specified would be approximately 100 shares for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in the Trust
determined by the Trustee on the basis of (i) the cash on hand in the Trust or
moneys in the process of being collected, (ii) the value of the Securities in
the Trust as determined by the Trustee, less (a) amounts representing taxes or
other governmental charges payable out of the Trust, (b) the accrued expenses
of the Trust and (c) cash allocated for the distribution to Unit holders of
record as of the business day prior to the evaluation being made. The Trustee
may determine the value of the Securities in the Trust in the following manner:
if the Securities are listed on a national securities exchange or the NASDAQ
national market system, this evaluation is generally based on the closing sale
prices on that exchange or that system (unless the Trustee deems these prices
inappropriate as a basis for valuation). If the Securities are not so listed
or, if so listed and the principal market therefor is other than on the
exchange, the evaluation shall generally be based on the closing purchase price
in the over-the-counter market (unless the Trustee deems these prices
inappropriate as a basis for evaluation) or if there is no such closing
purchase price, then the Trustee may utilize, at the Trust's expense, an
independent evaluation service or services to ascertain the values of the
Securities. The independent evaluation service shall use any of the following
methods, or a combination thereof, which it deems appropriate: (a) on the basis
of
B-20
402192.1
<PAGE>
current bid prices for comparable securities, (b) by appraising the value of
the Securities on the bid side of the market or (c) by any combination of the
above.
Units will be redeemed by the Trustee solely in cash for any Unit holder
tendering less than 2,500 Units. With respect to redemption requests of at
least 2,500 Units, the Sponsor may determine, in its discretion, to direct the
Trustee to redeem Units "in kind" even if the Sponsor is then maintaining a
secondary market in Units of the Trust. Unit holders redeeming "in kind" will
receive an amount and value of Securities per Unit equal to the Redemption
Price per Unit determined as of the Evaluation Time next following the date of
tender. The distribution "in kind" for redemption of Units will be made by the
Trustee for the account of, and for disposition in accordance with the
instructions of, the tendering Unit holder. The tendering Unit holder will be
entitled to receive whole shares of each of the underlying Securities, plus
cash equal to the Unit holder's pro rata share of the cash balance of the
Income and Principal Accounts and cash from the Principal Account equal to the
fractional shares to which such tendering Unit holder is entitled. The Trustee
in connection with implementing the redemption "in kind" procedures described
above, may make any adjustments necessary to reflect differences between the
Redemption Price of Units and the value of the Securities distributed "in kind"
as of the date of tender. If the Principal Account does not contain amounts
sufficient to cover the required cash distribution to the tendering Unit
holder, the Trustee is empowered to sell Securities in the manner discussed
below. A Unit holder receiving redemption distributions of Securities "in kind"
generally will incur brokerage costs and odd-lot charges in converting
Securities so received into cash. The Trustee will assess transfer charges to
Unit holders taking Securities "in kind" according to its usual practice.
Any amounts paid on redemption representing income received will be withdrawn
from the Income Account to the extent funds are available. In addition, in
implementing the redemption procedures described above, the Trustee shall make
any adjustments necessary to reflect differences between the Redemption Price
of the Units and the value of the "in kind" distribution as of the date of
tender. To the extent that Securities are distributed in kind, the size of the
Trust will be reduced.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on that Exchange is restricted or
during which (as determined by the Securities and Exchange Commission) an
emergency exists as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the Securities and
Exchange Commission may by order permit. The Trustee and the Sponsor are not
liable to any person or in any way for any loss or damage which may result from
any such suspension or postponement.
A Unit holder who wishes to dispose of his Units should inquire of his bank
or broker in order to determine if there is a current secondary market price in
excess of the Redemption Price. There can be no assurance, however, that such a
market will exist.
EXCHANGE OPTION
Commencing October 10, 1997, Unit holders of the Trust may exchange their
Units for units of certain available series of Glickenhaus Value Portfolios,
The Equity Collection (the "Exchange Trusts") subject only to a reduced sales
charge of 2.5%.
B-21
402192.1
<PAGE>
To make an exchange, prospective participants should contact their financial
professional to find out what suitable Exchange Trusts are available and to
obtain a prospectus. Unit holders may acquire units of only those Exchange
Trusts in which the Sponsor is maintaining a market and which are lawfully for
sale in the state where they reside. Except for the reduced sales charge, an
exchange is a taxable event normally requiring recognition of any gain or loss
on the units exchanged. The IRS, however, may seek to disallow a loss if the
portfolio of the units acquired is not materially different from the portfolio
of the units exchanged; prospective participants in the exchange option should
consult their tax advisor. If the proceeds of units exchanged are insufficient
to acquire a whole number of Exchange Trust units, participants may pay the
difference in cash (not exceeding the price of a single unit acquired).
As the Sponsor is not obligated to maintain a secondary market in any series,
there can be no assurance that units of a desired series will be available for
exchange. This exchange option may be amended or terminated at any time without
notice.
TRUST ADMINISTRATION
Portfolio Supervision
The Trust is a unit investment trust and is not a managed fund. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. The Portfolio of the Trust, however, will not be managed and
therefore the adverse financial condition of an issuer will not necessarily
require the sale of its Securities from the Portfolio. The Sponsor, however,
may direct the disposition of Securities upon the occurrence of certain events,
including:
1. default in payment of amounts due on any of the Securities;
2. institution of certain legal proceedings;
3. default under certain documents materially and adversely affecting future
declaration or payment of amounts due or expected; or
4. decline in price as a direct result of serious adverse
credit factors affecting the issuer of a Security which,
in the opinion of the Sponsor, would make the retention of
the Security detrimental to the Trust or the Unit holders.
Upon receipt of such direction from the Sponsor, the Trustee shall proceed to
sell the specified Security in accordance with such direction. Such proceeds
shall be distributed to Unit holders in accordance with the provisions set
forth under "Rights of Unit Holders - Distributions."
If a default in the payment of amounts due on any Security occurs and if the
Sponsor fails to give immediate instructions to sell or hold that Security, the
Trust Agreement provides that the Trustee, within 30 days of that failure by
the Sponsor, may sell the Security.
The Trust Agreement provides that it is the responsibility of the Sponsor to
instruct the Trustee to reject any offer made by an issuer of any of the
Securities to issue new securities in exchange and substitution for any
Security pursuant
B-22
402192.1
<PAGE>
to a recapitalization or reorganization, except that the Sponsor may instruct
the Trustee to accept such an offer or to take any other action with respect
thereto as the Sponsor may deem proper if the issuer failed to declare or pay,
amounts owed with respect thereto.
The Trust Agreement also authorizes the Sponsor to increase the size and
number of Units of the Trust by the deposit of Additional Securities, contracts
to purchase Additional Securities or cash or a letter of credit with
instructions to purchase Additional Securities in exchange for the
corresponding number of additional Units within 90 days subsequent to the
initial Date of Deposit, provided that the original proportionate relationship
among the number of shares of each Security established on the Initial Date of
Deposit is maintained to the extent practicable. Deposits of Additional
Securities in the Trust subsequent to the 90-day period following the initial
Date of Deposit must replicate exactly the proportionate relationship among the
shares of each Security in the Trust portfolio at the end of the initial 90-day
period.
With respect to deposits of Additional Securities (or cash or a letter of
credit with instructions to purchase Additional Securities), in connection with
creating additional Units of the Trust, the Sponsor may specify the minimum
numbers in which Additional Securities will be deposited or purchased. If a
deposit is not sufficient to acquire minimum amounts of each Security,
Additional Securities may be acquired in the order of the Security most
under-represented immediately before the deposit when compared to the original
proportionate relationship. If Securities of an issue originally deposited are
unavailable at the time of the subsequent deposit, the Sponsor may (1) deposit
cash or a letter of credit with instructions to purchase the Security when it
becomes available, or (2) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a Substitute
Security.
Trust Agreement and Amendment
The Trust Agreement may be amended by the Trustee and the Sponsor without the
consent of any of the Unit holders: (1) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent; (2) to change
any provision thereof as may be required by the Securities and Exchange
Commission or any successor governmental agency; or (3) to make such other
provisions in regard to matters arising thereunder as shall not adversely
affect the interests of the Unit holders.
The Trust Agreement may also be amended in any respect, or performance of any
of the provisions thereof may be waived, with the consent of the holders of
Certificates evidencing 662/3% of the Units then outstanding for the purpose of
modifying the rights of Unit holders; provided that no such amendment or waiver
shall reduce any Unit holder's interest in the Trust without his consent or
reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of the holders of all Certificates. The Trust
Agreement may not be amended, without the consent of the holders of all
Certificates in the Trust then outstanding, to increase the number of Units
issuable or to permit the acquisition of any Securities in addition to or in
substitution for those initially deposited in such Trust, except in accordance
with the provisions of the Trust Agreement. The Trustee shall promptly notify
Unit holders, in writing, of the substance of any such amendment.
Trust Termination
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last of
the Securities held in such Trust but in no event is it to continue beyond the
Mandatory Termination Date. If the value of the Trust shall be less than the
minimum amount set forth under "Summary of Essential Information" in Part A,
the Trustee may, in its discretion, and shall, when so directed by the Sponsor,
B-23
402192.1
<PAGE>
terminate the Trust. The Trust may also be terminated at any time with the
consent of the holders of 100% of the Units then outstanding. The Trustee may
utilize the services of the Sponsor for the sale of all or a portion of the
Securities in the Trust. The Sponsor will receive brokerage commissions from
the Trust in connection with such sales in accordance with applicable law. In
the event of termination, written notice thereof will be sent by the Trustee to
all Unit holders. Such notice will provide Unit holders with three options by
which to receive their pro rata share of the net asset value of the Trust.
1. A Unit holder who owns at least 2,500 Units and who so
elects by notifying the Trustee prior to the commencement of the Liquidation
Period by returning a properly completed election request (to be supplied to
Unit holders at least 20 days prior to such date) (see "Summary of Essential
Information" in Part A for the date of the commencement of the Liquidation
Period) and whose interest in the Trust entitles him to receive at least one
share of each underlying Security will have his Units redeemed on
commencement of the Liquidation Period by distribution of the Unit holder's
pro rata share of the net asset value of the Trust on such date distributed
in kind to the extent represented by whole shares of underlying Securities
and the balance in cash within three business days next following the
commencement of the Liquidation Period. Unit holders subsequently selling
such distributed Securities will incur brokerage costs when disposing of such
Securities.
A Unit holder may also elect prior to the Mandatory Termination Date by so
specifying in a properly completed election request, the following two options
with regard to the termination distribution of such Unit holder's interest in
the Trust as set forth below:
2. to receive in cash such Unit holder's pro rata share of
the net asset value of the Trust derived from the sale by the Sponsor as the
agent of the Trustee of the underlying Securities over a period not to exceed
30 days immediately following the commencement of the Liquidation Period. The
Unit holder's Redemption Price per Unit on the settlement date of the last
trade of a Security in the Trust will be distributed to such Unit holder
within three business days of the settlement of the trade of the last
Security to be sold; and/or
3. to invest such Unit holder's pro rata share of the net
asset value of the Trust derived from the sale by the Sponsor as agent of the
Trustee of the underlying Securities over a period not to exceed 30 days
immediately following the commencement of the Liquidation Period, in units of
any available series of Glickenhaus Value Portfolios, The Equity Collection
(the "New Series"). The Units of a New Series will be purchased by the Unit
holder within three business days of the settlement of the trade for the last
Security to be sold. Such purchaser may be entitled to a reduced sales load
of 2.5% upon the purchase of units of the New Series. It is expected that the
terms of the New Series will be substantially the same as the terms of the
Trust described in this Prospectus, and that similar options with respect to
the termination of such New Series will be available. The availability of
this option will be dependent on the Units of the New Series being qualified
for sale in the state in which the Unit holder resides. The availability of
this option does not constitute a solicitation of an offer to purchase Units
of a New Series or any other security. A Unit holder's election to
participate in this option will be treated as an indication of interest only.
At any time prior to the purchase by the Unit holder of units of a New Series
such Unit holder may change his investment strategy and receive, in cash, the
proceeds of the sale of the Securities.
The Sponsor has agreed to effect the sales of underlying securities for the
Trustee in the case of the second and third options over a period not to exceed
30 days immediately following the commencement of the Liquidation Period. The
Sponsor, on behalf of the Trustee, will sell, unless prevented by unusual and
unforeseen circumstances, such as, among other reasons, a suspension in trading
of a Security, the close of a stock exchange, outbreak of hostilities and
collapse of the economy, on each business day during the 30 day period at least
a number of shares of each Security which then
B-24
402192.1
<PAGE>
remains in the portfolio (based on the number of shares of each issue in the
portfolio) multiplied by a fraction the numerator of which is one and the
denominator of which is the number of days remaining in the 30 day sales
period. The Redemption Price Per Unit upon the settlement of the last sale of
Securities during the 30 day period will be distributed to Unit holders in
redemption of such Unit holders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New Series
and the amount of other orders for Units in the New Series, the Sponsor may
purchase a large amount of securities for the New Series in a short period of
time. The Sponsor's buying of securities may tend to raise the market prices of
these securities. The actual market impact of the Sponsor's purchases, however,
is currently unpredictable because the actual amount of securities to be
purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the 30 day
period immediately following the commencement of the Liquidation Period;
depending on the number of sales required, the prices of and demand for
Securities, such sales may tend to depress the market prices and thus reduce
the proceeds of such sales. The Sponsor believes that the sale of underlying
Securities over a 30 day period as described above is in the best interest of a
Unit holder and may mitigate the negative market price consequences stemming
from the trading of large amounts of Securities. The Securities may be sold in
fewer than 30 days if, in the Sponsor's judgment, such sales are in the best
interest of Unit holders. The Sponsor, in implementing such sales of securities
on behalf of the Trustee, will seek to maximize the sales proceeds and will act
in the best interests of the Unit holders. There can be no assurance, however,
that any adverse price consequences of heavy trading will be mitigated.
Unit holders who do not make any election will be deemed to have elected to
receive the Redemption Price per Unit in cash (option number 2).
It should also be noted that Unit holders will realize taxable capital gains
or losses on the liquidation of the Securities representing their Units for
cash or a New Series, but, due to the procedures for investing in the New
Series, no cash would be distributed at that time to pay any taxes.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
any subsequent series of the Trust, without penalty or incurring liability to
any Unit holder. If the Sponsor so decides, the Sponsor will notify the Trustee
of that decision, and the Trustee will notify the Unit holders before the
Termination Date. All Unit holders will then elect either option 1 or option 2.
By electing to reinvest in the New Series, the Unit holder indicates his
interest in having his terminating distribution from the Trust invested only in
the New Series created following termination of the Trust; the Sponsor expects,
however, that a similar reinvestment program will be offered with respect to
all subsequent series of the Trust, thus giving Unit holders an opportunity to
elect to "rollover" their terminating distributions into a New Series. The
availability of the reinvestment privilege does not constitute a solicitation
of offers to purchase units of a New Series or any other security. A Unit
holder's election to participate in the reinvestment program will be treated as
an indication of interest only. The Sponsor intends to coordinate the date of
deposit of a future series so that the terminating trust will terminate
contemporaneously with the creating of a New Series.
The Sponsor reserves the right to modify, suspend or terminate the
reinvestment privilege at any time.
B-25
402192.1
<PAGE>
The Sponsor
The Sponsor, Glickenhaus & Co., a New York limited partnership, is engaged in
the underwriting and securities brokerage business, and in the investment
advisory business. It is a member of the New York Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. and is an associate member of
the American Stock Exchange. Glickenhaus & Co. acts as a sponsor for successive
Series of both the Municipal Insured National Trusts and the Empire State
Municipal Exempt Trusts and as investment advisor for the Empire Builder Tax
Free Bond Fund. Glickenhaus & Co., in addition to participating as a member of
various selling groups of other investment companies, executes orders on behalf
of investment companies for the purchase and sale of securities of such
companies and sells securities to such companies in its capacity as a broker or
dealer in securities.
Limitations on Liability
The Sponsor will be under no liability to Unit holders for taking any action,
or refraining from taking any action, in good faith pursuant to the Trust
Agreement, or for errors in judgment except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties.
Resignation
The Sponsor may resign at any time by delivering to the Trustee an instrument
of resignation executed by the Sponsor.
If at any time the Sponsor shall resign or fail to perform any of its duties
under the Trust Agreement or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee may either
(a) appoint a successor Sponsor; (b) terminate the Trust Agreement and
liquidate the Trust; or (c) continue to act as Trustee without terminating the
Trust Agreement. Any successor Sponsor appointed by the Trustee shall be
satisfactory to the Trustee and, at the time of appointment, shall have a net
worth of at least $1,000,000.
Financial Information
At September 30, 1995, the total partners' capital of the Sponsor was
$146,106,000 (audited).
The foregoing information with regard to the Sponsor relates to the Sponsor
only, and not to any series of Glickenhaus Value Portfolios, Equity Collection.
Such information is included in this Prospectus only for the purpose of
informing investors as to the financial responsibility of the Sponsor and their
ability to carry out their contractual obligations shown herein. More
comprehensive financial information can be obtained upon request from the
Sponsor.
The Trustee
The Trustee is The Bank of New York, a trust company organized under the laws
of New York, having its offices at 101 Barclay Street, New York, New York 10286
(800) 431-8001. The Bank of New York is subject to supervision and examination
by the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law. The
duties of the Trustee are primarily ministerial in nature. The Trustee did not
participate in the selection of Securities for the Trust.
B-26
402192.1
<PAGE>
Limitations on Liability
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment; or for any disposition of any
moneys, Securities or Certificates in accordance with the Trust Agreement,
except in cases of its own willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties; provided, however, that the
Trustee shall not in any event be liable or responsible for any evaluation made
by any independent evaluation service employed by it. In addition, the Trustee
shall not be liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or the Trust which it may be required to pay under
current or future law of the United States or any other taxing authority having
jurisdiction. The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities pursuant to the
Trust Agreement.
Responsibility
For further information relating to the responsibilities of the Trustee under
the Trust Agreement, reference is made to the material set forth under "Rights
of Unit Holders."
Resignation
The Trustee may resign by executing an instrument in writing and filing the
same with the Sponsor, and mailing a copy of a notice of resignation to all
Unit holders. In such an event the Sponsor is obligated to appoint a successor
Trustee as soon as possible. In addition, if the Trustee becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public authorities,
or if the Sponsor deems it to be in the best interest of the Unit holders, the
Sponsor may remove the Trustee and appoint a successor as provided in the Trust
Agreement. Notice of such removal and appointment shall be mailed to each Unit
holder by the Sponsor. If upon resignation of the Trustee no successor has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
the Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. Upon execution of a written acceptance of such appointment
by such successor Trustee, all the rights, powers, duties and obligations of
the original Trustee shall vest in the successor.
Any corporation into which the Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Trustee shall be a party, shall be the successor Trustee. The Trustee
must always be a banking corporation organized under the laws of the United
States or any State and have at all times an aggregate capital, surplus and
undivided profits of not less than $5,000,000.
Evaluation of the Trust
The value of the Securities in the Trust portfolio is determined in good
faith by the Trustee on the basis set forth under "Public Offering-Offering
Price." The Sponsor and the Unit holders may rely on any evaluation furnished
by the Trustee and shall have no responsibility for the accuracy thereof.
Determinations by the Trustee under the Trust Agreement shall be made in good
faith upon the basis of the best information available to it, provided,
however, that the Trustee shall be under no liability to the Sponsor or Unit
holders for errors in judgment, except in cases of its own willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and
duties. The Trustee, the Sponsor and the Unit holders may rely on any
evaluation furnished to the Trustee by an independent evaluation service and
shall have no responsibility for the accuracy thereof.
B-27
402192.1
<PAGE>
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
federal tax law have been passed upon by Battle Fowler LLP, 75 East 55th
Street, New York, New York 10022 as counsel for the Sponsor. Kroll & Tract LLP,
520 Madison Avenue, New York, New York 10022 have acted as counsel for the
Trustee.
AUDITORS
The Statement of Condition and Portfolio are included herein in reliance upon
the report of BDO Seidman, LLP, independent certified public auditors, and upon
the authority of said firm as experts in accounting and auditing.
B-28
402192.1
<PAGE>
<TABLE>
<S> <C>
No person is authorized to give any information or to make any representations
not contained in Parts A and B of this Prospectus; and any information or
representation not contained herein must not be relied upon as having been
authorized by the Trust, the Trustee or the Sponsors. The Trust is registered
as a unit investment trust under the Investment Company Act of 1940. Such
registration does not imply that the Trust or any of its Units have been guaranteed, GLICKENHAUS VALUE PORTFOLIOS
sponsored, recommended or approved by the United States or any THE 1996 EQUITY COLLECTION,
state or any agency or officer thereof. SERIES III
This Prospectus does not constitute an offer to sell, (Unit Investment Trust)
or a solicitation of an offer to buy, securities in any state to any person to
whom it is not lawful to Prospectus make such offer in such state.
Dated October 10, 1996
Table of Contents
Title Page
Sponsor:
PART A
Summary of Essential Information..................A-2 Glickenhaus & Co.
Independent Auditors' Report......................A-8 6 East 43rd Street
Statement of Condition............................A-9 New York, New York 10017
Portfolio........................................A-10 (212) 953-7532
Underwriting.....................................A-11
PART B
The Trust.........................................B-1 Trustee:
Risk Considerations...............................B-4
Public Offering...................................B-9 The Bank of New York
Rights of Unit Holders............................B-12 101 Barclay Street
Tax Status........................................B-15 New York, New York 10286
Liquidity.........................................B-19 (800) 431 - 8001
Exchange Option...................................B-21
Trust Administration..............................B-22
Legal Opinions....................................B-28
Auditors..........................................B-28
Parts A and B of this Prospectus do not contain all of the information set
forth in the registration statement and exhibits relating thereto, filed with
the Securities and Exchange Commission, Washington, D.C., under the Securities
Act of 1933, and the Investment Company Act of 1940, and to which reference is
made.
</TABLE>
402192.1
