AUTOMATIC COMMON EXCHANGE SECURITY TRUST II, 497, 1997-05-30

AUTOMATIC COMMON EXCHANGE SECURITY TRUST II
497, 1997-05-30

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<PAGE> 1
Filed Pursuant to Rule 497(h)(1)

8,700,000 SHARES

AUTOMATIC COMMON EXCHANGE SECURITY TRUST II
(EXCHANGEABLE INTO COMMON STOCK OF
REPUBLIC INDUSTRIES, INC.)
$1.55 TRUST AUTOMATIC COMMON EXCHANGE SECURITIES (TRACES (TM/SM))
---------------------
Each of the $1.5519 Trust Automatic Common Exchange Securities (the
"Securities") of Automatic Common Exchange Security Trust II (the "Trust")
represents the right to receive an annual distribution of $1.5519, and will be
exchanged for between 0.8333 shares and one share of common stock, par value
$0.01 per share (the "Common Stock"), of Republic Industries, Inc., a Delaware
corporation (the "Company"), on May 15, 2000 (the "Exchange Date").
The Trust is a newly organized, finite-term Trust established to acquire and
hold a portfolio of stripped U.S. Treasury securities maturing on a quarterly
basis through the Exchange Date, and forward purchase contracts (the
"Contracts") with one or more existing shareholders of the Company (the
"Sellers") relating to the Common Stock. The Trust's investment objective is to
provide each holder of Securities with a quarterly distribution of $0.3880 per
Security and, on the Exchange Date, a number of shares of Common Stock per
Security equal to the Exchange Rate. The Exchange Rate is equal to (i) if the
Current Market Price (as defined herein) on the Exchange Date is less than
$28.65 (the "Appreciation Threshold Price") but equal to or greater than $23.875
(the "Initial Price"), a number (or fractional number) of shares of Common Stock
per Security having a value (determined at such Current Market Price) equal to
the Initial Price, (ii) if such Current Market Price is equal to or greater than
the Appreciation Threshold Price, 0.8333 shares of Common Stock per Security and
(iii) if such Current Market Price is less than the Initial Price, one share of
Common Stock per Security, subject in each case to adjustment in certain events.
In lieu of delivering Common Stock, each Contract entitles the Seller thereunder
to elect to pay cash upon settlement of such Contract in an amount equal to the
then Current Market Price of the number of shares of Common Stock determined
pursuant to the above formula (the "Cash Settlement Alternative"). To the extent
the Sellers elect the Cash Settlement Alternative, holders of Securities will
receive cash instead of Common Stock upon settlement of the Contracts. Holders
otherwise entitled to receive fractional shares in respect of their aggregate
holdings of Securities will receive cash in lieu thereof.
Holders of Securities will receive quarterly distributions. The Company
currently does not pay dividends on the Common Stock. There is no assurance,
however, that the yield on the Securities will be higher than the dividend yield
on the Common Stock over the term of the Trust. In addition, the opportunity for
equity appreciation afforded by an investment in the Securities is less than
that afforded by an investment in the Common Stock because holders of Securities
will realize no equity appreciation if, on the Exchange Date, the Current Market
Price of the Common Stock is below the Appreciation Threshold Price, and less
than all of the appreciation if at that time the Current Market Price is above
the Appreciation Threshold Price. Holders of Securities will realize the entire
decline in equity value if the Current Market Price is less than the price to
public per Security shown below.
The Company is not affiliated with the Trust.
The Securities have been approved for listing, subject to notice of
issuance, on the New York Stock Exchange under the symbol "RTR". Prior to this
offering there has been no public market for the Securities. The Common Stock is
traded on The Nasdaq Market -- National Market ("Nasdaq") under the symbol
"RWIN". The last reported sale price of the Common Stock on Nasdaq on May 29,
1997, was $23.875 per share.
(continued on next page)
SEE "RISK FACTORS" ON PAGE 17 OF THIS PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE SECURITIES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------

<TABLE>
<CAPTION>
PRICE TO PUBLIC SALES LOAD(1) PROCEEDS TO THE TRUST(2)
------------------- ------------------- ----------------------------
<S> <C> <C> <C>
Per Security................................. $23.875 $--(4) $23.875
Total(3)..................................... $207,712,500 $--(4) $207,712,500
</TABLE>

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

(1) The Company and the Sellers have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933. See "Underwriting".
(2) Before deducting estimated expenses of $440,000, payable by Goldman, Sachs &
Co. and the Sellers.
(3) The Trust has granted to the Underwriters an option for 30 days to purchase
up to an additional 1,234,235 Securities at the price to the public per
Security, solely to cover over-allotments, if any. If the option is
exercised in full, the total Price to Public and Proceeds to the Trust will
be $237,179,861. See "Underwriting".
(4) In light of the fact that the proceeds of the sale of the Securities will be
used in part by the Trust to purchase the Contracts from the Sellers, the
Underwriting Agreement provides that the Sellers will pay to the
Underwriters as compensation ("Underwriters' Compensation") $0.72 per
Security. See "Underwriting".
---------------------

The Securities offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the Securities will be ready for delivery in book entry form only through
the facilities of DTC, on or about June 4, 1997, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO.
---------------------
The date of this Prospectus is May 29, 1997.
<PAGE> 2

The Trust has adopted a policy that the Contracts may not be disposed of
during the term of the Trust. The Trust will continue to hold the Contracts
despite any significant decline in the market price of the Common Stock or
adverse changes in the financial condition of the Company.

This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing. Potential investors are
advised to read this Prospectus and to retain it for future reference.

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

The Trust will be a grantor trust for federal income tax purposes and each
holder of Securities will be treated as the owner of its pro rata portions of
the stripped U.S. Treasury securities and the Contracts. For a discussion of the
principal United States federal income tax consequences of ownership of
Securities, see "Certain Federal Income Tax Considerations".

THE TRUST IS A NEWLY ORGANIZED CLOSED-END INVESTMENT COMPANY WITH NO
PREVIOUS HISTORY OF PUBLIC TRADING. TYPICAL CLOSED-END FUND SHARES FREQUENTLY
TRADE AT A DISCOUNT FROM NET ASSET VALUE. THIS CHARACTERISTIC OF INVESTMENTS IN
A CLOSED-END INVESTMENT COMPANY IS A RISK SEPARATE AND DISTINCT FROM THE RISK
THAT THE TRUST'S NET ASSET VALUE WILL DECREASE. THE TRUST CANNOT PREDICT WHETHER
ITS SHARES WILL TRADE AT, BELOW OR ABOVE NET ASSET VALUE. THE RISK OF PURCHASING
INVESTMENTS IN A CLOSED-END COMPANY THAT MIGHT TRADE AT A DISCOUNT MAY BE
GREATER FOR INVESTORS WHO WISH TO SELL THEIR INVESTMENTS SOON AFTER COMPLETION
OF AN INITIAL PUBLIC OFFERING.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OR THE
COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH SECURITIES OR THE COMMON STOCK, AND THE IMPOSITION OF A
PENALTY BID, DURING AND AFTER THE OFFERING. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING".

2
<PAGE> 3

PROSPECTUS SUMMARY

This summary of the provisions relating to the Securities does not purport
to be complete and is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus. Certain terms used in this summary are
defined elsewhere in this Prospectus.

THE TRUST

GENERAL. The Trust is a newly organized, finite-term trust. The Trust will
be registered as a non-diversified closed-end management investment company
under the Investment Company Act of 1940 (the "Investment Company Act"). Under
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable to grantor trusts, the Trustees will not have the power to vary the
investments held by the Trust.

INVESTMENT OBJECTIVE AND POLICIES. The Trust will acquire and hold a
portfolio of stripped U.S. Treasury securities maturing on a quarterly basis
through the Exchange Date, and the Contracts with the Sellers obligating each
Seller, on the Exchange Date, to deliver to the Trust a number of shares of
Common Stock equal to the product of the Exchange Rate times the initial number
of shares subject to such Seller's Contract (or an amount of cash equal to the
Current Market Price thereof). The Trust's investment objective is to provide
the holders of Securities ("Holders") with a quarterly distribution of $0.3880
per Security (which amount equals the pro rata portion of the fixed quarterly
cash distributions from the proceeds of the maturing U.S. Treasury securities
held by the Trust) and, on the Exchange Date, a number of shares of Common Stock
per Security equal to the Exchange Rate (or to the extent the Sellers select the
Cash Settlement Alternative, an amount in cash equal to the Current Market Price
thereof). The Exchange Rate is equal to (i) if the Current Market Price on the
Exchange Date is less than the Appreciation Threshold Price but equal to or
greater than the Initial Price, a number (or fractional number) of shares of
Common Stock per Security having a value (determined at such Current Market
Price) equal to the Initial Price, (ii) if such Current Market Price is equal to
or greater than the Appreciation Threshold Price, 0.8333 shares of Common Stock
per Security and (iii) if such Current Market Price is less than the Initial
Price, one share of Common Stock per Security, subject in each case to
adjustment in certain events. This provides the Trust with the potential for a
portion of any capital appreciation above the Appreciation Threshold Price on
the Common Stock, but no protection from depreciation of the Common Stock.
Holders otherwise entitled to receive fractional shares in respect of their
aggregate holdings of Securities will receive cash in lieu thereof. See
"Investment Objective and Policies -- Trust Termination".

STRUCTURE. The purchase price under the Contracts is equal to
approximately $19.7220 per share of Common Stock initially subject thereto and
$171,581,533 (8,700,004 shares of Common Stock) in the aggregate (exclusive of
the over-allotment option) and is payable to the Sellers by the Trust at the
closing of the offering of the Securities. The obligations of the Sellers under
the Contracts will be secured by a pledge of the Common Stock (or at the
election of the Sellers, by substitute collateral consisting of short-term,
direct obligations of the U.S. Government). See "Investment Objective and
Policies -- The Contracts -- Collateral Arrangements; Acceleration".

THE OFFERING

The Trust is offering 8,700,000 Securities to the public at a purchase
price of $23.875 per Security (which is equal to the last reported sale price of
the Common Stock on the date of the offering) through Goldman, Sachs & Co.
("Goldman Sachs" or the "Underwriters"). In addition, the Underwriters have been
granted options to purchase up to 1,234,235 additional Securities solely for the
purpose of covering over-allotments. See "Underwriting".

THE SECURITIES

GENERAL. The Securities are designed to provide investors with an annual
distribution of $1.5519 per Security. The Company does not currently pay
dividends on the Common Stock. Future declarations
3
<PAGE> 4

of dividends on the Common Stock by the Company and the amount of such dividends
are discretionary with its Board of Directors and subject to legal and other
factors. Such further declarations will necessarily depend on the Company's
future earnings, financial condition, capital requirements and other factors.
Quarterly distributions on the Securities will consist solely of the cash
received from the U.S. Treasury securities. The Trust will not be entitled to
any dividends that may be declared on the Common Stock.

Holders will receive quarterly distributions. The Company currently does
not pay dividends on the Common Stock. There is no assurance, however, that the
yield on the Securities will be higher than the dividend yield on the Common
Stock over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the Securities is less than that
afforded by an investment in the Common Stock because Holders will realize no
equity appreciation if, on the Exchange Date, the Current Market Price of the
Common Stock is below the Appreciation Threshold Price (which represents an
appreciation of 120.00% of the Initial Price). Moreover, because a Holder will
only receive 0.8333 shares of Common Stock per Security (or the Current Market
Price thereof) if the Current Market Price exceeds the Appreciation Threshold
Price, Holders will only be entitled to receive upon exchange 83.33% of any
appreciation of the value of the Common Stock in excess of the Appreciation
Threshold Price. Holders of Securities will realize the entire decline in equity
value if the Current Market Price on the Exchange Date is less than the price to
public per Security shown on the cover page hereof.

DISTRIBUTIONS. Holders are entitled to receive distributions at the rate
per Security of $1.5519 per annum or $0.3880 per quarter, payable quarterly on
each February 15, May 15, August 15 and November 15 or, if any such date is not
a business day, on the next succeeding business day, to Holders of record as of
each February 1, May 1, August 1 and November 1, respectively. The first
distribution will be payable on August 15, 1997 to Holders of record as of
August 1, 1997 and will equal $0.3061 per Security. See "Investment Objective
and Policies -- General".

MANDATORY EXCHANGE. On the Exchange Date, each outstanding Security will
be exchanged automatically for between 0.8333 shares and one share of Common
Stock, subject to adjustment in the event of certain dividends or distributions,
subdivisions, splits, combinations, issuances of certain rights or warrants or
distributions of certain assets with respect to the Common Stock. In lieu of
delivering Common Stock, each Contract entitles the Seller thereunder to elect
to pay cash upon settlement of such Contract in an amount equal to the then
Current Market Price of the number of shares of Common Stock determined pursuant
to the above formula (the "Cash Settlement Alternative"). To the extent the
Sellers elect the Cash Settlement Alternative, holders of Securities will
receive cash instead of Common Stock on the Exchange Date. The Trustees will
notify the Holders of any election of the Cash Settlement Alternative by the
Sellers not less than 30 days nor more than 60 days prior to the Exchange Date.
The "Current Market Price" on any date means the average Closing Price per share
of Common Stock for the 20 Trading Days immediately prior to, but not including,
such date.

In addition, in the event of a merger of the Company into another entity,
or the liquidation of the Company, or certain related events, Holders would
receive consideration in the form of cash or Marketable Securities (as defined
below under the caption "Investment Objective and Policies -- The
Contracts -- Dilution Adjustments") rather than shares of Common Stock. Further,
the occurrence of certain defaults by the Sellers under the Contracts or the
collateral arrangements would cause the acceleration of the Contracts and the
exchange of each Security for an amount of shares of Common Stock (or Marketable
Securities), cash, or a combination thereof, in respect of the shares of Common
Stock and the U.S. Treasury Securities. See "Investment Objective and
Policies -- The Contracts -- Collateral Arrangements; Acceleration"; "-- The
U.S. Treasury Securities" and "-- Trust Termination".

VOTING RIGHTS. Holders will have the right to vote on matters affecting
the Trust, as described below under the caption "Description of the Securities",
but will have no voting rights with respect to the Common Stock prior to receipt
of shares of Common Stock by the Holders as a result of the exchange of the
Securities for the Common Stock on the Exchange Date. See "Investment Objective
and Policies -- The Company" and "Description of the Securities".
4
<PAGE> 5

THE COMPANY

The Company is a diversified holding company with subsidiaries operating in
the solid waste services, electronic security services, automotive rental and
automotive retailing industries. The Company is aggressively building its
existing lines of business through internal growth and acquisitions. The Company
is actively negotiating to acquire additional companies in its existing and
complementary lines of business.

Reference is made to the accompanying prospectus of the Company (pages A-1
through A-13 hereto) and the prospectus supplement thereto (pages S-1 to S-2
hereto) which describe the Company and the shares of Common Stock of the Company
deliverable to the Holders upon mandatory exchange of the Securities on the
Exchange Date. The Company is not affiliated with the Trust and will not receive
any of the proceeds from the sale of the Securities. The Company prospectus, as
supplemented, relates to an aggregate of up to 8,700,000 shares of Common Stock
(plus up to an additional 1,234,235 shares that may be delivered upon exercise
of the Underwriters' over-allotment option).

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The Trust will be treated as a grantor trust for federal income tax
purposes. Accordingly, each Holder will be treated for federal income tax
purposes as the owner of its pro rata portion of the U.S. Treasury securities
and the Contracts, and income received (including original issue discount
treated as received) by the Trust will generally be treated as income of the
Holders. The U.S. Treasury securities will be treated for federal income tax
purposes as having "original issue discount" that will accrue over the term of
such U.S. Treasury securities. Actual receipts of cash in respect of U.S.
Treasury securities will not be included in income, however, but rather will
reduce the aggregate tax basis of the Securities. A holder will have taxable
gain or loss upon receipt of cash in lieu of Common Stock distributed upon
termination of the Trust. Holders should also be aware that there are
alternative characterizations of the assets of the Trust and the Securities
which could require Holders to include more interest in income than they would
include in income under the analysis set out above. See "Certain Federal Income
Tax Considerations".

MANAGEMENT AND ADMINISTRATION OF THE TRUST

The Trust will be internally managed and will not have an investment
adviser. The administration of the Trust will be overseen by three Trustees. The
day-to-day administration of the Trust will be carried out by The Bank of New
York (or its successor) as trust administrator (the "Administrator"). The Bank
of New York (or its successor) will also act as custodian (the "Custodian") for
the Trust's assets and as paying agent (the "Paying Agent"), registrar and
transfer agent with respect to the Securities. Except as aforesaid, The Bank of
New York has no other affiliation with, and is not engaged in any other
transaction with, the Trust. See "Management and Administration of the Trust".

LIFE OF THE TRUST

The Trust will terminate automatically on or shortly after the Exchange
Date. Promptly after the Exchange Date the shares of Common Stock or cash, as
the case may be, to be exchanged for the Securities and other remaining Trust
assets, if any, will be distributed pro rata to Holders. See "Investment
Objective and Policies -- Trust Termination".

RISK FACTORS

The Trust will not be managed in the traditional sense. The Trust has
adopted a policy that the Contracts may not be disposed of during the term of
the Trust and that the U.S. Treasury securities held by the Trust may not be
disposed of prior to the earlier of their respective maturities and the
termination of the Trust. The Trust will continue to hold the Contracts despite
any significant decline in the market price of the Common Stock or adverse
changes in the financial condition of the Company. See "Risk Factors -- Internal
Management; No Portfolio Management" and "Management and Administration of the
Trust -- Trustees".
5
<PAGE> 6

The Trust is classified as a "non-diversified" investment company under the
Investment Company Act. Consequently, the Trust is not limited by the Investment
Company Act in the proportion of its assets that may be invested in the
securities of a single issuer. Since the only assets held by the Trust will be
the U.S. Treasury securities and the Contracts, the Trust will be subject to
greater risk than would be the case for an investment company with diversified
investments. See "Investment Objective and Policies" and "Risk
Factors -- Non-Diversified Status".

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

Holders of the Securities will not be entitled to any rights with respect
to the Common Stock (including, without limitation, voting rights and rights to
receive any dividends or other distributions in respect thereof) unless and
until such time, if any, as the Sellers shall have delivered shares of Common
Stock pursuant to the Contracts.

A bankruptcy of a Seller could adversely affect the timing of exchange or,
as a result, the amount received by the Holders in respect of the Securities.
See "Risk Factors -- Risk Relating to Bankruptcy of the Sellers".

LISTING

The Securities have been approved for listing, subject to notice of
issuance, on the New York Stock Exchange (the "NYSE") under the symbol "RTR".

FEES AND EXPENSES

In light of the fact that the proceeds of the sale of the Securities will
be used in part by the Trust to purchase the Contracts from the Sellers, the
Underwriting Agreement provides that the Sellers will pay Underwriters'
Compensation to the Underwriters of $0.72 per Security. See "Underwriting".
Estimated organization costs of the Trust in the amount of $10,000 and estimated
costs of the Trust in connection with the initial registration and public
offering of the Securities in the amount of $164,301 will be paid by Goldman
Sachs. Other estimated costs of the Trust in connection with the public offering
of the Securities in the amount of $275,699 will be paid by the Sellers. Each of
the Administrator, the Custodian and the Paying Agent, and each Trustee will be
paid by Goldman Sachs at the closing of the offering of the Securities a
one-time, up-front amount in respect of its ongoing fees and, in the case of the
Administrator, anticipated expenses of the Trust (estimated to be $300,000 in
the aggregate), over the term of the Trust. Goldman Sachs has agreed to pay any
ongoing expenses of the Trust in excess of these estimated amounts and to
reimburse the Trust for any amounts it may be required to pay as indemnification
to any Trustee, the Administrator, the Custodian or the Paying Agent. See
"Management and Administration of the Trust -- Estimated Expenses".
6
<PAGE> 7

Regulations of the Securities and Exchange Commission ("SEC") applicable to
closed-end investment companies designed to assist investors in understanding
the costs and expenses that an investor will bear directly or indirectly require
the presentation of Trust expenses in the following format. Because the Trust
will not bear any fees or expenses, investors will not bear any direct expenses.
The only expenses that an investor might be considered to be bearing indirectly
are (i) the Underwriters' Compensation payable by the Sellers with respect to
such investor's Securities and (ii) the ongoing expenses of the Trust (including
fees of the Administrator, Custodian, Paying Agent and Trustees), estimated at
$100,000 per year, payable by Goldman Sachs at the closing of the offering. See
"Investment Objective and Policies -- General".

INVESTOR TRANSACTION EXPENSES

<TABLE>
<S> <C>
Sales Load (as a percentage of offering price).............. 3.0%
Dividend Reinvestment and Cash Purchase Plan Fees........... N/A
</TABLE>

ANNUAL EXPENSES

<TABLE>
<S> <C>
Management Fees............................................. 0%
Other Expenses (after reimbursement by Goldman Sachs)*...... 0.044%
-----
Total Annual Expenses (after reimbursement by
Goldman Sachs)*.................................. 0.044%
=====
</TABLE>

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

* Absent the reimbursement, the Trust's "total annual expenses" would be equal
to approximately 0.071% of the Trust's average net assets. Goldman Sachs is
paying expenses on behalf of the Trust out of its normal underwriting
compensation.

SEC regulations also require that closed-end investment companies present
an illustration of cumulative expenses (both direct and indirect) that an
investor would bear. The example is required to factor in the applicable Sales
Load and to assume, in addition to a 5% annual return, the reinvestment of all
distributions at net asset value. INVESTORS SHOULD NOTE THAT THE ASSUMPTION OF A
5% ANNUAL RETURN DOES NOT ACCURATELY REFLECT THE FINANCIAL TERMS OF THE TRUST.
SEE "INVESTMENT OBJECTIVE AND POLICIES -- GENERAL". ADDITIONALLY, THE TRUST DOES
NOT PERMIT THE REINVESTMENT OF DISTRIBUTIONS.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
EXAMPLE
You would bear the following expenses (i.e., the
applicable sales load and allocable portion of ongoing
expenses paid by Goldman Sachs and the Sellers) on a
$1,000 investment, assuming a 5% annual return......... $30.71 $32.23
</TABLE>

7
<PAGE> 8

THE TRUST

The Trust is a newly organized New York trust and is registered as a
closed-end investment company under the Investment Company Act. The Trust was
formed on February 21, 1997 pursuant to a trust agreement dated as of such date
and amended and restated as of May 29, 1997 (the "Amended and Restated Trust
Agreement"). The address of the Trust is 85 Broad Street, New York, New York
10004 (telephone no. (212) 902-1000).

USE OF PROCEEDS

The net proceeds of this offering will be used immediately upon the closing
of this offering to purchase a fixed portfolio comprised of stripped U.S.
Treasury securities with face amounts and maturities corresponding to the
quarterly distributions payable with respect to the Securities and the payment
dates thereof, and to pay the purchase price under the Contracts to the Sellers.

INVESTMENT OBJECTIVE AND POLICIES

GENERAL

The Trust will acquire and hold a portfolio of stripped U.S. Treasury
securities maturing on a quarterly basis through the Exchange Date and the
Contracts relating to the Common Stock of the Company. The Trust's investment
objective is to provide each Holder with a quarterly cash distribution of
$0.3880 per Security (which amount equals the pro rata portion of the fixed
quarterly distributions from the proceeds of the maturing U.S. Treasury
securities held by the Trust) and, on the Exchange Date, a number of shares of
Common Stock per Security equal to the Exchange Rate (or to the extent the
Sellers select the Cash Settlement Alternative, an amount in cash equal to the
Current Market Price thereof). The Exchange Rate is equal to (i) if the Current
Market Price on the Exchange Date is less than the Appreciation Threshold Price
but equal to or greater than the Initial Price, a number (or fractional number)
of shares of Common Stock per Security equal to the Initial Price divided by
such Current Market Price (i.e., the value of such shares of Common Stock
(determined at such Current Market Price) shall equal the Initial Price), (ii)
if such Current Market Price is equal to or greater than the Appreciation
Threshold Price, 0.8333 shares of Common Stock per Security and (iii) if such
Current Market Price is less than the Initial Price, one share of Common Stock
per Security, subject in each case to adjustment in certain events. See "-- The
Contracts -- Dilution Adjustments". For purposes of the preceding clause (i) the
Exchange Rate will be rounded upward or downward to the nearest 1/10,000 (or if
there is not a nearest 1/10,000, to the next lower 1/10,000). Holders otherwise
entitled to receive fractional shares in respect of their aggregate holdings of
Securities will receive cash in lieu thereof. See "-- Trust Termination". The
Current Market Price per share of Common Stock on any date means the average
Closing Price (as defined below) of a share of Common Stock on the 20 Trading
Days (as defined below) immediately prior to but not including such date. The
Closing Price of the Common Stock on any date of determination means the daily
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of the Common Stock as reported by The Nasdaq National Market on
such date of determination or, if the Common Stock is not traded on The Nasdaq
National Market on any such date, as reported in the composite transactions for
the principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, the last quoted bid price for the Common Stock in
the over-the-counter market as reported by the National Quotation Bureau or
similar organization, provided that if any event that results in an adjustment
to the number of shares of Common Stock deliverable under the Contracts as
described under "-- The Contracts -- Dilution Adjustments" occurs prior to the
Exchange Date, the Closing Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event. A "Trading Day"
means a day on which the Common Stock (A) is not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market at the close of

8
<PAGE> 9

business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of such security.

A fundamental policy of the Trust is to invest at least 70% of its total
assets in the Contracts. The Trust has also adopted a fundamental policy that
the Contracts may not be disposed of during the term of the Trust and that the
U.S. Treasury securities held by the Trust may not be disposed of prior to the
earlier of their respective maturities and the termination of the Trust. The
foregoing investment objective and policies are fundamental policies of the
Trust that may not be changed without the approval of a majority of the Trust's
outstanding Securities. A "majority of the Trust's outstanding Securities" means
the lesser of (i) 67% of the Securities represented at a meeting at which more
than 50% of the outstanding Securities are represented, and (ii) more than 50%
of the outstanding Securities.

The value of the Common Stock (or cash or Marketable Securities received in
lieu thereof) that will be received by Holders in respect of the Securities on
the Exchange Date may be more or less than the amount paid for the Securities
offered hereby.

For illustrative purposes only, the following chart shows the number of
shares of Common Stock that a Holder would receive for each Security at various
Current Market Prices. The chart assumes that there would be no adjustments to
the number of shares of Common Stock deliverable under the Contracts by reason
of the occurrence of any of the events described under "-- The
Contracts -- Dilution Adjustments". There can be no assurance that the Current
Market Price on the Exchange Date will be within the range set forth below.
Given the Initial Price of $23.875 per Security and the Appreciation Threshold
Price of $28.65, a Holder would receive in connection with the exchange of
Securities on the Exchange Date the following number of shares of Common Stock:

<TABLE>
<CAPTION>
CURRENT MARKET PRICE NUMBER OF SHARES
OF COMMON STOCK OF COMMON STOCK
- -------------------- ----------------
<C> <C>
29.000 0.8333
28.650 0.8333
27.000 0.8843
23.875 1.0000
20.000 1.0000
19.000 1.0000
</TABLE>

The following table sets forth information regarding the distributions to
be received on the U.S. Treasuries to be acquired by the Trust with a portion of
the proceeds of the Offering (assuming no exercise of the Underwriters'
over-allotment option), the portion of each year's distributions that will
constitute a return of capital for U.S. federal income tax purposes and the
amount of original issue discount accruing (assuming a yield-to-maturity accrual
election in respect of any short-term U.S. Treasury securities) on such U.S.
Treasuries with respect to a Holder who acquires its Securities at the issue
price from an Underwriter pursuant to the original offering. See "Certain
Federal Income Tax Considerations -- Recognition of Interest on the U.S.
Treasury Securities".

<TABLE>
<CAPTION>
ANNUAL GROSS
ANNUAL GROSS DISTRIBUTIONS FROM ANNUAL RETURN OF ANNUAL INCLUSION OF
DISTRIBUTIONS FROM U.S. TREASURIES CAPITAL PER ORIGINAL ISSUE DISCOUNT
YEAR U.S. TREASURIES PER SECURITY SECURITY IN INCOME PER SECURITY
- ---- ------------------ ------------------ ---------------- -----------------------
<S> <C> <C> <C> <C>
1997...................... $ 6,038,090 $0.6940 $0.5596 $0.1344
1998...................... 13,501,319 1.5519 1.3740 0.1779
1999...................... 13,501,319 1.5519 1.4566 0.0953
2000...................... 6,750,660 0.7759 0.7619 0.0140
</TABLE>

The annual distribution of $1.5519 per Security is payable quarterly on
each February 15, May 15, August 15 and November 15, commencing August 15, 1997.
Quarterly distributions on the Securities will consist solely of the cash
received from the U.S. Treasury securities. The Trust will not be entitled to
any dividends that may be declared on the Common Stock. See "Management and
Administration of the Trust -- Distributions".

9
<PAGE> 10

CURRENT YIELD; LESS EQUITY APPRECIATION THAN COMMON STOCK; NO DEPRECIATION
PROTECTION

Holders will receive quarterly distributions, while the Company currently
does not pay dividends on the Common Stock. However, there is no assurance that
the yield on the Securities will be higher than the dividend yield on the Common
Stock over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the Securities is less than that
afforded by an investment in the Common Stock because Holders will realize no
equity appreciation if, on the Exchange Date, the Current Market Price of the
Common Stock is below the Appreciation Threshold Price (which represents an
appreciation of 120.00% of the Initial Price). Moreover, because Holders will
only receive 0.8333 shares of Common Stock per Security (or the Current Market
Price thereof) if the Current Market Price exceeds the Appreciation Threshold
Price, Holders will only be entitled to receive upon exchange 83.33% (the
percentage equal to the Initial Price divided by the Appreciation Threshold
Price) of any appreciation of the value of the Common Stock in excess of the
Appreciation Threshold Price. Holders of Securities will realize the entire
decline in value if the Current Market Price on the Exchange Date is less than
the price to public per Security shown on the cover page hereof.

THE COMPANY

The Company is a diversified holding company with subsidiaries operating in
the automotive retailing, automotive rental, automotive financial services,
solid waste services, and electronic security services industries. The Company
owns the nation's largest chain of new vehicle dealerships and is building a
chain of used vehicle megastores which it operates under the AutoNation USA
brand name. The Company also owns National Car Rental System, Inc., Alamo
Rent-A-Car, Inc., and Spirit Rent-A-Car, Inc., as well as some of the country's
leading solid waste services and electronic security services companies, which
operate under their regionally known business names. The Company is aggressively
building its existing lines of business through internal growth and
acquisitions. The Company is actively negotiating to acquire additional
companies in its existing and complementary lines of business.

The shares of Common Stock are traded on Nasdaq under the symbol "RWIN".
The following table sets forth, for the calendar quarters indicated, the
reported high and low sales prices of the shares of Common Stock on Nasdaq. In
May 1996, the Company declared a two-for-one stock split in the form of a 100%
stock dividend, which was distributed in June 1996 (the "Stock Split"). All
prices presented herein have been adjusted to reflect the Stock Split. Since
December 1989, the Company has not declared or paid any cash dividends on Common
Stock. As of May 28, 1997, there were 4,906 record holders of the Common Stock,
including The Depository Trust Company, which holds shares of Common Stock on
behalf of an indeterminate number of beneficial owners.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C> <C> <C>
1995
1st Quarter............................................... $ 2 1/8 $ 1 9/16
2nd Quarter............................................... 7 3/16 1 1/2
3rd Quarter............................................... 13 3/8 6 7/16
4th Quarter............................................... 18 1/16 9 15/16
1996
1st Quarter............................................... 17 15/16 13 3/16
2nd Quarter............................................... 34 1/8 15
3rd Quarter............................................... 31 19 1/4
4th Quarter............................................... 34 5/8 27 3/8
1997
1st Quarter............................................... 42 3/4 29 15/16
2nd Quarter (through May 28, 1997)........................ 31 11/16 23 3/8
</TABLE>

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

10
<PAGE> 11

shares of Common Stock by the Holders as a result of the exchange of the
Securities for the Common Stock on the Exchange Date.

Reference is made to the accompanying prospectus of the Company, dated
March 20, 1997 (pages A-1 through A-13 hereto), and the prospectus supplement
thereto, dated May 22, 1997 (pages S-1 to S-2 hereto), which describe the
Company and the shares of Common Stock deliverable to the Holders upon mandatory
exchange of the Securities on the Exchange Date. The Company is not affiliated
with the Trust and will not receive any of the proceeds from the sale of the
Securities. The Company prospectus, as supplemented, relates to an aggregate of
up to 8,700,000 shares of Common Stock (plus up to an additional 1,234,235
shares that may be delivered upon exercise of the Underwriters' over-allotment
option).

THE CONTRACTS

GENERAL. The Trust will enter into a Contract with each Seller obligating
that Seller to deliver to the Trust on the Exchange Date a number of shares of
Common Stock equal to the product of the Exchange Rate times the initial number
of shares of Common Stock subject to such Contract. The aggregate initial number
of shares of Common Stock under the Contracts will equal the aggregate number of
Securities offered hereby (subject to increase in the event the Underwriters
exercise their over-allotment option). Each Contract also provides that the
Seller thereunder may deliver to the Trust upon settlement of such Contract, at
such Seller's option, an amount of cash equal to the value of the Common Stock
deliverable pursuant to such Contract (the "Cash Settlement Alternative"). If a
Seller elects to deliver cash in lieu of shares of Common Stock, such Seller
would be required to deliver cash in respect of all shares deliverable pursuant
to such Seller's Contract. The Trustees will notify the Holders of any election
of the Cash Settlement Alternative by the Sellers not less than 30 days nor more
than 60 days prior to the Exchange Date.

The purchase price of the Contracts was arrived at by arm's-length
negotiation between the Trust and the Sellers taking into consideration factors
including the price, expected dividend level and volatility of the Common Stock,
current interest rates, the term of the Contracts, current market volatility
generally, the collateral security pledged by the Sellers, the value of other
similar instruments and the costs and anticipated proceeds of the offering of
the Securities. All matters relating to the administration of the Contracts will
be the responsibility of either the Administrator or the Custodian.

DILUTION ADJUSTMENTS. The Exchange Rate is subject to adjustment if the
Company shall (i) pay a stock dividend or make a distribution with respect to
the Common Stock in shares of such stock, (ii) subdivide or split its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its shares of Common Stock any shares of other common stock of the Company.
In any such event, the Exchange Rate shall be multiplied by a dilution
adjustment equal to the number of shares of Common Stock (or, in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Company issued pursuant thereto), or fraction thereof, that
a shareholder who held one share of Common Stock immediately prior to such event
would be entitled solely by reason of such event to hold immediately after such
event.

In addition, if the Company shall issue rights or warrants to all holders
of Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Then-Current Market Price of the Common
Stock (as defined below) (other than rights to purchase Common Stock pursuant to
a plan for the reinvestment of dividends or interest) then the Exchange Rate
shall be multiplied by a dilution adjustment equal to a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding immediately
prior to the time (determined as described below) the adjustment is calculated
by reason of the issuance of such rights or warrants plus the number of
additional shares offered for subscription or purchase pursuant to such rights
or warrants, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to the time such adjustment is
calculated plus the number of additional shares that the aggregate offering
price

11
<PAGE> 12

of the shares so offered for subscription or purchase would purchase at the
Then-Current Market Price. To the extent that, after expiration of such rights
or warrants, the shares offered thereby shall not have been delivered, the
Exchange Rate shall be further adjusted to equal the Exchange Rate that would
have been in effect had the foregoing adjustment been made upon the basis of
delivery of only the number of shares of Common Stock actually delivered. The
"Then-Current Market Price" of the Common Stock means the average Closing Price
per share of Common Stock for a Calculation Period of five Trading Days
immediately prior to the time such adjustment is calculated (or, in the case of
an adjustment calculated at the opening of business on the business day
following a record date, as described below, immediately prior to the earlier of
the time such adjustment is calculated and the related "ex-date" on which the
shares of Common Stock first trade regular way on their principal market without
the right to receive the relevant dividend, distribution or issuance); provided
that if no Closing Price for the Common Stock is determined for one or more (but
not all) of such Trading Days, such Trading Day shall be disregarded in the
calculation of the Then-Current Market Price (but no additional Trading Days
shall be added to the Calculation Period). If no Closing Price for the Common
Stock is determined for any of such Trading Days, the most recently available
Closing Price for the Common Stock prior to such five Trading Days shall be the
Then-Current Market Price.

Further, if the Company shall pay a dividend or make a distribution to all
holders of Common Stock, in either case, of evidences of its indebtedness or
other non-cash assets (excluding any stock dividends or distributions in shares
of Common Stock) or issue to all holders of Common Stock rights or warrants to
subscribe for or purchase any of its securities (other than rights or warrants
referred to in the previous paragraph), then the Exchange Rate shall be
multiplied by a dilution adjustment equal to a fraction, of which the numerator
shall be the Then-Current Market Price per share of Common Stock, and the
denominator shall be such price less the fair market value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator) as of the time the adjustment is calculated of the
portion of such evidences of indebtedness, non-cash assets or rights or warrants
payable in respect of one share of Common Stock.

Further, if the Company distributes cash (other than any Permitted Dividend
(as defined below), any cash distributed in consideration of fractional shares
of Common Stock and any cash distributed in a Reorganization Event (as defined
below) ("Excluded Distributions")), by dividend or otherwise, to all holders of
Common Stock or makes an Excess Purchase Payment (as defined below) then the
Exchange Rate shall be multiplied by a dilution adjustment equal to a fraction,
of which the numerator shall be the Then-Current Market Price on the record date
in respect of such distribution and of which the denominator shall be such price
less the amount of such distribution applicable to one share of Common Stock
that would not be a Permitted Dividend (or in the case of an Excess Purchase
Payment, less the aggregate amount of such Excess Purchase Payment divided by
the number of outstanding shares of Common Stock on such record date). For
purposes of these adjustments, (a) the term "Permitted Dividend" means any
quarterly cash dividend in respect of the Common Stock, other than a quarterly
cash dividend that exceeds the immediately preceding quarterly cash dividend,
and then only to the extent that the per share amount of such dividend results
in an annualized dividend yield on the Common Stock in excess of 12.50% and (b)
the term "Excess Purchase Payment" means the excess, if any, of (i) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator, whose determination
shall be conclusive) of all other consideration paid by the Company with respect
to one share of Common Stock acquired in a tender offer or exchange offer by the
Company over (ii) the Then-Current Market Price per share of Common Stock.

If any adjustment in the Exchange Rate is required to be calculated as
described above, corresponding adjustments to the Initial Price and the
Appreciation Threshold Price shall be calculated.

Dilution adjustments shall be effected: (i) in the case of any dividend,
distribution or issuance described above, at the opening of business on the
business day following the record date for determination of holders of Common
Stock entitled to receive such dividend, distribution or issuance or, if the
announcement of any such dividend, distribution or issuance is after such record
date, at the time such dividend, distribution or issuance shall be announced by
the Company; (ii) in the case of any

12
<PAGE> 13

subdivision, split, combination or reclassification described above, on the
effective date of such transaction; (iii) in the case of any Excess Purchase
Payment for which the Company shall announce, at or prior to the time it
commences the relevant share repurchase, the repurchase price for such shares to
be repurchased, on the date of such announcement; and (iv) in the case of any
other Excess Purchase Payment, on the date that the holders of Common Stock
become entitled to payment with respect thereto. There will be no adjustment
under the Contracts in respect of any dividends, distributions, issuances or
repurchases that may be declared or announced after the Exchange Date. If any
announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase shall subsequently be cancelled by the
Company, or such dividend, distribution, issuance or repurchase shall fail to
receive requisite approvals or shall fail to occur for any other reason, then
the Exchange Rate shall be further adjusted to equal the Exchange Rate that
would have been in effect had the adjustment for such dividend, distribution,
issuance or repurchase not been made. All adjustments described herein shall be
rounded upward or downward to the nearest 1/10,000 (or if there is not a nearest
1/10,000, to the next lower 1/10,000). No adjustment in the Exchange Rate shall
be required unless such adjustment would require an increase or decrease of at
least one percent therein; provided, however, that any adjustments which by
reason of the foregoing are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.

In the event of (A) any consolidation or merger of the Company, or any
surviving entity or subsequent surviving entity of the Company (a "Company
Successor"), with or into another entity (other than a merger or consolidation
in which the Company is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another corporation),
(B) any sale, transfer, lease or conveyance to another corporation of the
property of the Company or any Company Successor as an entirety or substantially
as an entirety, (C) any statutory exchange of securities of the Company or any
Company Successor with another corporation (other than in connection with a
merger or acquisition) or (D) any liquidation, dissolution or winding up of the
Company or any Company Successor (any such event described in clause (A), (B),
(C) or (D), a "Reorganization Event"), the Exchange Rate will be adjusted such
that, on the Exchange Date, each Holder will receive for each Security cash in
an amount equal to (i) if the Transaction Value (as defined below) is less than
the Appreciation Threshold Price but equal to or greater than the Initial Price,
the Initial Price, (ii) if the Transaction Value is greater than or equal to the
Appreciation Threshold Price, 0.8333 multiplied by the Transaction Value and
(iii) if the Transaction Value is less than the Initial Price, the Transaction
Value. Notwithstanding the foregoing, to the extent that any Marketable
Securities (as defined below) are received by holders of Common Stock in such
Reorganization Event, then in lieu of delivering cash as provided above, the
Sellers may at their option deliver a proportional amount of such Marketable
Securities on the Exchange Date. If the Sellers elect to deliver Marketable
Securities, Holders will be responsible for the payment of any and all brokerage
and other transaction costs upon the sale of such securities.

"Transaction Value" means (i) for any cash received in any such
Reorganization Event, the amount of cash received per share of Common Stock,
(ii) for any property other than cash or Marketable Securities received in any
such Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of such property received per share of
Common Stock as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator and (iii) for any
Marketable Securities received in any such Reorganization Event, an amount equal
to the average Closing Price per share of such securities on the 20 Trading Days
immediately prior to the Exchange Date multiplied by the number of such
securities received for each share of Common Stock; provided that if no Closing
Price for such Marketable Securities is determined for one or more (but not all)
of such Trading Days, such Trading Days shall be disregarded in the calculation
of such average Closing Price (but no additional Trading Days shall be added to
the Calculation Period). If no Closing Price for the Marketable Securities is
determined for all such Trading Days, the calculation in the preceding clause
(iii) shall be based on the most recently available Closing Price for the
Marketable Securities prior to such 20 Trading Days. The number of shares of
Marketable Securities included in the calculation of Transaction Value for
purposes of the preceding clause (iii) shall be subject to adjustment

13
<PAGE> 14

if a dilution event of the type described above shall occur with respect to the
issuer of the Marketable Securities between the time of the Reorganization Event
and the Exchange Date.

"Marketable Securities" means any common equity securities listed on a U.S.
national securities exchange or reported by The Nasdaq National Market.

No dilution adjustments will be made for events, other than those described
above, such as offerings of Common Stock (other than through the issuance of
rights or warrants described above) for cash or in connection with acquisitions.

COLLATERAL ARRANGEMENTS; ACCELERATION. Each Seller's obligations under the
Contract between such Seller and the Trust initially will be secured by a
security interest in the maximum number of shares of Common Stock subject to
such Contract (subject to adjustment in accordance with the dilution adjustment
provisions of such Contract, described above), pursuant to a Collateral
Agreement between such Seller and The Bank of New York, as collateral agent (the
"Collateral Agent"). Unless a Seller is in default in its obligations under its
Collateral Agreement, such Seller will be permitted to substitute for the
pledged shares of Common Stock collateral consisting of short-term, direct
obligations of the U.S. Government. Any U.S. Government obligations pledged as
substitute collateral will be required to have an aggregate market value at the
time of substitution and at daily mark-to-market valuations thereafter of not
less than 150% (or, from and after any Insufficiency Determination that shall
not be cured by the close of business on the next business day thereafter, as
described below, 200%) of the product of the market price of the Common Stock at
the time of each valuation times the number of shares of Common Stock for which
such obligations are being substituted. The Collateral Agreements will provide
that, in the event of a Reorganization Event, each Seller will pledge as
alternative collateral any Marketable Securities received by it in respect of
the maximum number of shares of Common Stock subject to its Contract at the time
of the Reorganization Event, plus cash in an amount equal to 100% of such
Seller's Cash Delivery Obligations (or U.S. Government obligations having an
aggregate market value when pledged and at daily mark-to-market valuations
thereafter of not less than 105% thereof). The Collateral Agent will be
required, under the Collateral Agreements, to invest any such cash in U.S.
Treasury securities maturing on or before May 15, 2000. A Seller's "Cash
Delivery Obligations" shall be the Transaction Value of any consideration other
than Marketable Securities received by such Seller in respect of the maximum
number of shares subject to its Contract at the time of the Reorganization
Event. The number of shares of Marketable Securities required to be pledged
shall be subject to adjustment if any event requiring a dilution adjustment
under the Contracts shall occur. The Sellers will be permitted to substitute
U.S. Government obligations for Marketable Securities pledged at the time of or
after any Reorganization Event. Any U.S. Government obligations so substituted
will be required to have an aggregate market value at the time of substitution
and at daily mark-to-market valuations thereafter of not less than 150% (or,
from and after any Insufficiency Determination that shall not be cured by the
close of business on the next business day thereafter, as described below, 200%)
of the product of the market price per share of Marketable Securities at the
time of each valuation times the number of shares of Marketable Securities for
which such obligations are being substituted. The Collateral Agent will promptly
pay over to each Seller any dividends, interest, principal or other payments
received by the Collateral Agent in respect of any collateral pledged by such
Seller, including any substitute collateral, unless such Seller is in default of
its obligations under its Collateral Agreement, or unless the payment of such
amount to such Seller would cause the collateral to become insufficient under
its Collateral Agreement. Each Seller shall have the right to vote any pledged
shares of Marketable Securities for so long as such shares are owned by it and
pledged under its Collateral Agreement, including after an event of default
under such Seller's Contract or Collateral Agreement.

If the Collateral Agent shall determine (an "Insufficiency Determination")
that U.S. Government obligations pledged by any Seller as substitute collateral
shall fail to meet the foregoing requirements at any valuation, or that such
Seller has failed to pledge additional collateral required as a result of a
dilution adjustment increasing the maximum number of shares of Common Stock or
shares of Marketable Securities subject to such Contract, and such failure shall
not be cured by the close of business on the next business day after such
determination, then, unless a Collateral Event of Default (as defined below)

14
<PAGE> 15

under such Collateral Agreement shall have occurred and be continuing, the
Collateral Agent shall commence (i) sales of the collateral consisting of U.S.
Government obligations and (ii) purchases, using the proceeds of such sales, of
shares of Common Stock or shares of Marketable Securities, in an amount
sufficient to cause the collateral to meet the requirements under such
Collateral Agreement. The Collateral Agent shall discontinue such sales and
purchases if at any time a Collateral Event of Default under such Collateral
Agreement shall have occurred and be continuing. A "Collateral Event of Default"
under such Seller's Collateral Agreement shall mean, at any time, (A) if no U.S.
Government obligations shall be pledged as substitute collateral at such time,
failure of the collateral to consist of at least the maximum number of shares of
Common Stock subject to such Seller's Contract at such time (or, if a
Reorganization Event shall have occurred at or prior to such time, failure of
the collateral to include the maximum number of shares of any Marketable
Securities required to be pledged as described above); (B) if any U.S.
Government obligations shall be pledged as substitute collateral for shares of
Common Stock (or shares of Marketable Securities) at such time, failure of such
U.S. Government obligations to have a market value at such time of at least 105%
of the market price per share of Common Stock (or the then-current market price
per share of Marketable Securities, as the case may be) times the difference
between (x) the maximum number of shares of Common Stock (or shares of
Marketable Securities) subject to such Contract at such time and (y) the number
of shares of Common Stock (or shares of Marketable Securities) pledged as
collateral at such time; and (C) at any time after a Reorganization Event in
which consideration other than Marketable Securities shall have been delivered,
failure of any U.S. Government obligations pledged in respect of Cash Delivery
Obligations to have a market value at such time of at least 105% of such Cash
Delivery Obligations, if such failure shall not be cured within one business day
after notice thereof is delivered to such Seller.

The occurrence of a Collateral Event of Default under a Collateral
Agreement, or the bankruptcy or insolvency of a Seller, will cause an automatic
acceleration of such Seller's obligations under its Contract. In any such event,
such Seller will become obligated to deliver the initial number of shares of
Common Stock (or, after a Reorganization Event, the Marketable Securities or
cash or a combination thereof deliverable in respect thereof) subject to such
Seller's Contract, or any U.S. Government obligations then pledged in respect
thereof.

Upon any acceleration under a Collateral Agreement, (i) the Collateral
Agent will distribute to the Trust, for distribution pro rata to the Holders,
the shares of Common Stock then pledged by the defaulting Seller, or cash
generated from the liquidation of U.S. Government obligations then pledged by
the defaulting Seller, or a combination thereof (or, after a Reorganization
Event, the Marketable Securities then pledged by the defaulting Seller, cash
generated from the liquidation of U.S. Government obligations then pledged by
the defaulting Seller, or a combination thereof) and (ii) the Custodian will
liquidate a proportionate amount of the U.S. Treasury securities acquired by the
Trust at closing. Following any distributions upon acceleration and liquidation
in accordance with the foregoing sentence, the number of shares of Common Stock
or Marketable Securities, as applicable, deliverable to Holders on the Exchange
Date will be proportionately reduced. In addition, in the event that by the
Exchange Date any substitute collateral has not been replaced by Common Stock
(or, after a Reorganization Event, cash or Marketable Securities) sufficient to
meet the obligations under any Contract, the Collateral Agent will distribute to
the Trust for distribution pro rata to the Holders the market value of the
Common Stock required to be delivered thereunder, in the form of any shares of
Common Stock then pledged by the Sellers plus cash generated from the
liquidation of U.S. Government obligations then pledged by the Sellers (or,
after a Reorganization Event, the market value of the alternative consideration
required to be delivered thereunder, in the form of any Marketable Securities
then pledged, plus any cash then pledged, plus cash generated from the
liquidation of U.S. Government obligations then pledged). See "-- Trust
Termination."

DESCRIPTION OF THE SELLERS. The Sellers are (1) Brion Properties, (2)
National Car Rental, Inc., (3) Cline Tucker and Patricia Mack-Tucker, (4) Dale
Ritter, (5) Larry A. and Mary Jane Ritter, (6) National Car Rental of Oklahoma
City, Inc., (7) Elizabeth Catherine Frame Trust, (8) Elizabeth Peake Graham
Trust, (9) Margaret Nicholson Lobeck Trust, (10) William E. Lobeck, Jr., (11)
William E.

15
<PAGE> 16

Lobeck, Jr. IRA Contributing, (12) Sleepy Lagoon, Ltd., (13) Alvin E. Swanner
and (14) Kathryn L. Taylor. Reference is made to the caption "Selling
Stockholders" in the Company's prospectus, as supplemented, for information
about the Sellers.

THE U.S. TREASURY SECURITIES

The Trust will purchase and hold a series of zero-coupon ("stripped") U.S.
Treasury securities with face amounts and maturities corresponding to the
distributions payable with respect to the Securities and the payment dates
thereof. Up to 30% of the Trust's total assets may be invested in these U.S.
Treasury Securities. In the event that any Contract is accelerated, then a
proportionate amount of such U.S. Treasury securities then held in the Trust
shall be liquidated by the Administrator and the proceeds thereof distributed
pro rata to the Holders, together with the amounts distributed upon
acceleration. See "-- Collateral Arrangements; Acceleration" and "-- Trust
Termination."

TEMPORARY INVESTMENTS

For cash management purposes, the Trust may invest the proceeds of the U.S.
Treasury securities and any other cash held by the Trust in short-term
obligations of the U.S. Government maturing no later than the business day
preceding the next following distribution date. Not more than 5% of the Trust's
total assets will be invested in such short-term obligations or held in cash at
any one time.

INVESTMENT RESTRICTIONS

As a matter of fundamental policy, the Trust may not purchase any
securities or instruments other than the U.S. Treasury securities, the Contracts
and the Common Stock or other assets received pursuant to the Contracts and, for
cash management purposes, short-term obligations of the U.S. Government; issue
any securities or instruments except for the Securities; make short sales or
purchase securities on margin; write put or call options; borrow money;
underwrite securities; purchase or sell real estate, commodities or commodities
contracts including futures contracts; or make loans (other than the purchase of
stripped U.S. Treasury securities as described in this Prospectus). The Trust
also has adopted a fundamental policy that the Contracts may not be disposed of
during the term of the Trust and that the U.S. Treasury securities held by the
Trust may not be disposed of prior to the earlier of their respective maturities
and the termination of the Trust.

Because of the foregoing limitations, the Trust's investments will be
concentrated in the automotive rental industry, which, as of the date hereof, is
one of the industries in which the Company operates. The Trust is not permitted
to purchase restricted securities.

TRUST TERMINATION

The Trust will terminate automatically on or shortly after the Exchange
Date. Alternatively, in the event that all Contracts are accelerated, then any
U.S. Treasury securities then held in the Trust shall be liquidated by the
Administrator and the proceeds distributed pro rata to the Holders, together
with the amounts distributed upon acceleration, and the Trust shall be
terminated. See "-- Collateral Arrangements; Acceleration" and "-- The U.S.
Treasury Securities".

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<PAGE> 17

RISK FACTORS

INTERNAL MANAGEMENT; NO PORTFOLIO MANAGEMENT

The Trust will be internally managed by its Trustees and will not have any
separate investment adviser. It is a fundamental policy of the Trust that the
Contracts may not be disposed of during the term of the Trust and that the U.S.
Treasury securities held by the Trust may not be disposed of prior to the
earlier of their respective maturities and the termination of the Trust. As a
result, the Trust will continue to hold the Contracts despite significant
declines in the market price of the Common Stock or adverse changes in the
financial condition of the Company (or, after a Reorganization Event, comparable
developments affecting any Marketable Securities or the issuer thereof). The
Trust will not be managed like a typical closed-end investment company.

LIMITED APPRECIATION POTENTIAL; COMMON STOCK DEPRECIATION RISK

The Trust anticipates that on the Exchange Date, it will receive the Common
Stock deliverable pursuant to the Contracts, which it will then distribute to
Holders. Although the Trust will make quarterly distributions on the Securities
and the Company currently does not pay dividends on the Common Stock, there is
no assurance that the yield on the Securities will be higher than the dividend
yield on the Common Stock over the term of the Trust. In addition, because the
Contracts call for the Sellers to deliver less than the full number of shares of
Common Stock subject to the Contracts where the Current Market Price exceeds the
Initial Price (and therefore less than one full share of Common Stock for each
outstanding Security), the Securities have more limited appreciation potential
than the Common Stock. Therefore, the Securities may trade below the value of
the Common Stock if the Common Stock appreciates in value. The value of the
Common Stock to be received by Holders on the Exchange Date (and any cash
received in lieu thereof) may be less than the amount paid for the Securities.
Holders of Securities will realize the entire decline in value if the Current
Market Price is less than the price to public per Security shown on the cover
page hereof.

DILUTION ADJUSTMENTS; SHAREHOLDER RIGHTS

The number of shares of Common Stock that Holders are entitled to receive
at the termination of the Trust is subject to adjustment for certain events
arising from stock splits and combinations, stock dividends and certain other
actions of the Company that modify its capital structure. See "Investment
Objective and Policies -- The Contracts -- Dilution Adjustments". The number of
shares to be received by Holders may not be adjusted for other events, such as
offerings of Common Stock for cash or in connection with acquisitions, that may
adversely affect the price of the Common Stock and, because of the relationship
of the amount to be received pursuant to the Contracts to the price of the
Common Stock, such other events may adversely affect the trading price of the
Securities. There can be no assurance that the Company will not take any of the
foregoing actions, or that it will not make offerings of, or that major
shareholders will not sell any, Common Stock in the future, or as to the amount
of any such offerings or sales. In addition, until the receipt of the Common
Stock by Holders as a result of the exchange of the Securities for the Common
Stock, Holders will not be entitled to any rights with respect to the Common
Stock (including without limitation voting rights and the rights to receive any
dividends or other distributions in respect thereof).

TRADING VALUE; LISTING

The Trust is a newly organized closed-end investment company with no
previous operating history and the Securities are innovative securities. It is
not possible to predict how the Securities will trade in the secondary market.
The trading price of the Securities may vary considerably prior to the Exchange
Date due to, among other things, fluctuations in the price of the Common Stock
(which may occur due to changes in the Company's financial condition, results of
operations or prospects, or because of complex and interrelated political,
economic, financial and other factors that can affect the capital markets
generally, the stock exchanges or quotation systems on which the Common Stock is
traded and the

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<PAGE> 18

market segment of which the Company is a part) and fluctuations in interest
rates and other factors that are difficult to predict and beyond the Trust's
control. The Trust believes, however, that because of the yield on the
Securities and the formula for determining the number of shares of Common Stock
to be delivered on the Exchange Date, the Securities will tend to trade at a
premium to the market value of the Common Stock to the extent the Common Stock
price falls and at a discount to the market value of the Common Stock to the
extent the Common Stock price rises.

Shares of closed-end investment companies frequently trade at a discount
from net asset value. This characteristic of investments in a closed-end
investment company is a risk separate and distinct from the risk that the
Trust's net asset value will decrease. The Trust cannot predict whether its
shares will trade at, below or above net asset value. The risk of purchasing
investments in a closed-end investment company that might trade at a discount
may be greater for investors who wish to sell their investments soon after
completion of an initial public offering because for those investors,
realization of a gain or loss on their investments is likely to be more
dependent upon the existence of a premium or discount than upon portfolio
performance.

Goldman Sachs currently intends, but is not obligated, to make a market in
the Securities. There can be no assurance that a secondary market will develop
or, if a secondary market does develop, that it will provide the Holders with
liquidity of investment or that it will continue for the life of the Securities.
Goldman Sachs may cease to make a market in the Securities at any time without
notice. The Securities have been approved for listing, subject to notice of
issuance, on the NYSE, but there can be no assurance that the Securities will
not later be delisted or that trading in the Securities on the NYSE will not be
suspended. In the event of a delisting or suspension of trading on such
exchange, the Trust will apply for listing of the Securities on another national
securities exchange or for quotation on another trading market. If the
Securities are not listed or traded on any securities exchange or trading
market, or if trading of the Securities is suspended, pricing information for
the Securities may be more difficult to obtain, and the price and liquidity of
the Securities may be adversely affected.

NON-DIVERSIFIED STATUS

The Trust is considered non-diversified under the Investment Company Act,
which means that the Trust is not limited in the proportion of its assets that
may be invested in the obligations of a single issuer. Since the only assets
held or received by the Trust will be U.S. Treasury securities and the Contracts
or other assets consistent with the terms of the Contracts, the Trust will be
subject to greater risk than would be the case for an investment company with
diversified investments.

RISKS RELATING TO THE COMPANY AND THE COMPANY'S INDUSTRY

The Company is a diversified holding company with subsidiaries operating in
the automotive retailing, automotive rental, automotive financial services,
solid waste services, and electronic security services industries. Because the
trading price of the Securities may vary considerably due to, among other
things, fluctuations in the price of the Common Stock, prospective investors
should consider carefully the following factors which may adversely affect the
business, financial condition, results of operations and future prospects of the
Company and the prevailing market price and performance of the Common Stock.
Such factors include, among other things: (a) the Company's limited operations
and operating losses in the automotive retailing business; (b) the Company's
need for substantial additional capital; (c) uncertainties in integrating the
Company's operations and achieving cost savings; (d) dependence on vehicle
manufacturers; (e) the cost of vehicle rental fleet; (f) dependence on vehicle
manufacturer's credit; (g) dependence on principal rental fleet; (h) interest
rates and restrictive covenants in the Company's debt instruments; (i)
regulation of collision damage waivers; (j) environmental regulations; (k) risks
of legal proceedings; (l) seasonality and dependence on the travel industry and
fuel supply; (m) the competitive environment for the Company's businesses; (n)
the Company's aggressive acquisition strategy; (o) the possible depressing
effect of future sales of Common Stock; and (p) dependence on certain key
personnel of the Company.

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<PAGE> 19

Reference is made to the accompanying prospectus of the Company, dated
March 20, 1997 ("Risk Factors" set forth on pages A-4 through A-7 hereto), which
describes certain factors that may adversely affect the business, financial
condition, results of operations and future prospects of the Company and the
prevailing market price and performance of the Common Stock.

RISK RELATING TO BANKRUPTCY OF THE SELLERS

The Trust believes that the Contracts constitute "securities contracts" for
purposes of the Bankruptcy Code, performance of which would not be subject to
the automatic stay provisions of the Bankruptcy Code in the event of bankruptcy
of the Sellers. It is, however, possible that the Contracts will be determined
not to qualify as "securities contracts" for this purpose, in which case a
Seller's bankruptcy may cause a delay in settlement of such Seller's Contract,
or otherwise subject such Contract to the bankruptcy proceedings, which could
adversely affect the timing of exchange or, as a result, the amount received by
the Holders in respect of the Securities.

DESCRIPTION OF THE SECURITIES

Each Security represents an equal proportional interest in the Trust, and a
total of 8,700,000 Securities (excluding the over-allotment option) will be
issued. Upon liquidation of the Trust, Holders are entitled to share pro rata in
the net assets of the Trust available for distribution. The Securities have no
preemptive, redemption or conversion rights. Securities are fully paid and
nonassessable by the Trust. The only securities that the Trust is authorized to
issue are the Securities offered hereby and those sold to the initial Holder
referred to below. See "Underwriting".

Holders are entitled to a full vote for each Security held on all matters
to be voted on by Holders and are not able to cumulate their votes in the
election of Trustees. The Trustees of the Trust have been selected initially by
Goldman Sachs, as the initial Holder of Securities of the Trust. The Trust
intends to hold annual meetings as required by the rules of the NYSE. The
Trustees may call special meetings of Holders for action by Holder vote as may
be required by either the Investment Company Act or the Amended and Restated
Trust Agreement. The Holders have the right, upon the declaration in writing or
vote of more than two-thirds of the outstanding Securities, to remove a Trustee.
The Trustees will call a meeting of Holders to vote on the removal of a Trustee
upon the written request of the Holders of record of 10% of the Securities or to
vote on other matters upon the written request of the Holders of record of 51%
of the Securities (unless substantially the same matter was voted on during the
preceding 12 months). The Trustees shall establish, and notify the Holders in
writing of, the record date for each such meeting, which shall be not less than
10 nor more than 50 days before the meeting date. Holders at the close of
business on the record date will be entitled to vote at the meeting. The Trust
will also assist in communications with other Holders as required by the
Investment Company Act.

In calculating the net asset value of the Trust as required by the
Investment Company Act, the Amended and Restated Trust Agreement provides that
(i) the Treasury Securities will be valued at the mean between the last current
bid and asked prices or, if quotations are not available, as determined in good
faith by the Trustees, (ii) short-term investments having a maturity of 60 days
or less will be valued at cost with accrued interest or discount earned included
in interest receivable and (iii) the Contracts will be valued on the basis of
the bid price received by the Trust in respect of the Contracts, or any portion
thereof covering not less than 1,000 shares, from an independent broker-dealer
firm unaffiliated with the Trust to be named by the Trustees who is in the
business of making bids on financial instruments similar to the Contracts and
with terms comparable thereto.

BOOK-ENTRY-ONLY ISSUANCE

The Depository Trust Company ("DTC") will act as securities depository for
the Securities. The information in this section concerning DTC and DTC's
book-entry system is based upon information obtained from DTC. The Securities
offered hereby will be issued only as fully-registered securities registered in
the name of Cede & Co. (as nominee for DTC). One or more fully-registered global
Security certificates will be issued, representing in the aggregate the total
number of Securities, and will be deposited with DTC.

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<PAGE> 20

DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilities the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). Access to
the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants").

Purchases of Securities within the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of a Security
("Beneficial Owner") is in turn to be recorded on the Direct or Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Securities. Transfers of ownership
interests in Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Securities,
except upon a resignation of DTC.

DTC has no knowledge of the actual Beneficial Owners of the Securities;
DTC's records reflect only the identity of the Direct Participants to whose
accounts such Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

Payments on the Securities will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such Participant and not
of DTC or the Trust, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of dividends to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.

Except as provided herein, a Beneficial Owner of an interest evidenced by a
global Security will not be entitled to receive physical delivery of Securities.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Securities.

DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to the Trust.
Under such circumstances, in the event that a successor securities depository is
not obtained, certificates representing the Securities will be printed and
delivered.

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<PAGE> 21

MANAGEMENT AND ADMINISTRATION OF THE TRUST

TRUSTEES

The Trust will be internally managed by three Trustees, none of whom is an
"interested person" of the Trust as defined in the Investment Company Act. Under
the provisions of the Code applicable to grantor trusts, the Trustees will not
have the power to vary the investments held by the Trust. It is a fundamental
policy of the Trust that the Contracts may not be disposed of during the term of
the Trust and that the U.S. Treasury Securities held by the Trust may not be
disposed of prior to the earlier of their respective maturities and termination
of the Trust.

The names of the persons who have been elected by Goldman Sachs, the
initial Holder of the Trust, and who will serve as the Trustees are set forth
below. The positions and the principal occupations of the individual Trustees
during the past five years are also set forth below.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND ADDRESS TITLE DURING PAST FIVE YEARS
- --------------------- ----- ----------------------
<S> <C> <C>
Donald J. Puglisi, 50................. Managing Trustee Professor of Finance
Department of Finance University of Delaware
University of Delaware
Newark, DE 19716
William R. Latham III, 51............. Trustee Professor of Economics
Department of Economics University of Delaware
University of Delaware
Newark, DE 19716
James B. O'Neill, 57.................. Trustee Professor of Economics
Center for Education & University of Delaware
Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>

Each Trustee who is not a director, officer or employee of any Underwriter
or the Administrator, or of any affiliate thereof, will be paid by the Sellers,
on behalf of the Trust, in respect of its annual fee and anticipated
out-of-pocket expenses, a one-time, up-front fee of $10,800. The Trust's
Managing Trustee will also receive an additional up-front fee of $3,600 for
serving in that capacity. The Trustees will not receive, either directly or
indirectly, any compensation, including any pension or retirement benefits, from
the Trust. None of the Trustees receives any compensation for serving as a
trustee or director of any other affiliated investment company.

ADMINISTRATOR

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

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<PAGE> 22

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

Except for its roles as Administrator, Custodian, Paying Agent, registrar
and transfer agent for the Trust, The Bank of New York has no other affiliation
with, and is not engaged in any other transactions with, the Trust.

The address of the Administrator is 101 Barclay Street, New York, New York
10286.

CUSTODIAN

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

PAYING AGENT

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

INDEMNIFICATION

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

DISTRIBUTIONS

The Trust intends to distribute to Holders on a quarterly basis an amount
equal to $0.3880 per Security (which amount equals the pro rata portion of the
fixed quarterly cash distributions from the proceeds of the maturing U.S.
Treasury securities held by the Trust). The first distribution, reflecting the
Trust's operations from the date of this offering, will be made on August 15,
1997 to Holders of record as of August 1, 1997. Thereafter, distributions will
be made on February 15, May 15, August 15 and November 15 of each year to
Holders of record as of each February 1, May 1, August 1 and November 1,
respectively. A portion of each such distribution should be treated as a
tax-free return of the Holder's investment. See "Investment Objective and
Policies -- General" and "Certain Federal Income Tax
Considerations -- Recognition of Interest on the U.S. Treasury Securities".

Upon termination of the Trust, as described under the caption "Investment
Objective and Policies -- Trust Termination", each Holder will receive any
remaining net assets of the Trust.

The Trust does not permit the reinvestment of distributions.

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<PAGE> 23

ESTIMATED EXPENSES

At the closing of this offering Goldman Sachs will pay to each of the
Administrator, the Custodian and the Paying Agent, and to each Trustee, a
one-time, up-front amount in respect of its fee and, in the case of the
Administrator, anticipated expenses of the Trust over the term of the Trust. The
anticipated Trust expenses to be borne by the Administrator include, among other
things, expenses for legal and independent accountants' services, costs of
printing proxies, Securities certificates and Holder reports, expenses of the
Trustees, fidelity bond coverage, stock exchange listing fees and expenses of
qualifying the Securities for sale in the various states. Organization costs of
the Trust in the amount of $10,000 and estimated costs of the Trust in
connection with the initial registration and public offering of the Securities
in the amount of $164,301 will be paid by Goldman Sachs. Other estimated costs
of the Trust in connection with the public offering of the Securities in the
amount of $275,699 will be paid by the Sellers.

The amount payable to the Administrator in respect of ongoing expenses of
the Trust was determined based on estimates made in good faith on the basis of
information currently available to the Trust, including estimates furnished by
the Trust's agents. There cannot, however, be any assurance that actual
operating expenses of the Trust will not be substantially more than this amount.
Any excess expenses will be paid by Goldman Sachs or, in the event their failure
to pay such amounts, the Trust.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion of the principal United States federal income tax
consequences of ownership of Securities represents the opinion of Sullivan &
Cromwell, special tax counsel to the Trust. It deals only with Securities held
as capital assets by a Holder who acquires its Securities at the issue price
from an Underwriter pursuant to the original offering, and not with special
classes of Holders, such as dealers in securities or currencies, banks, life
insurance companies, persons who are not United States Holders (as defined
below), persons that hold Securities that are part of a hedging transaction,
straddle or conversion transaction, or persons whose functional currency is not
the U.S. dollar. The summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), its legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, all as currently in effect
and all subject to change at any time, perhaps with retroactive effect. It
should be noted that the Trust has not sought a ruling from the Internal Revenue
Service with respect to the federal income tax consequences of ownership of
Securities, and the opinion of counsel of Sullivan & Cromwell is not binding on
the Internal Revenue Service.

Prospective purchasers of Securities should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction, of ownership of Securities.

A United States Holder is a beneficial owner who or that is (i) a citizen
or resident of the United States, (ii) a domestic corporation or (iii) otherwise
subject to United States federal income taxation on a net income basis in
respect of Securities.

Holders should also be aware that there are alternative characterizations
of the assets of the Trust which could result in different federal income tax
consequences. See "Alternative Characterizations" below. While Sullivan &
Cromwell does not believe these alternative characterizations should apply for
federal income tax purposes, there can be no assurance in this regard, and
Holders should consult their tax advisors concerning the risks associated with
alternative characterizations. The following discussion assumes that no such
alternative characterizations will apply.

TAX STATUS OF THE TRUST. The Trust will be treated as a grantor trust for
federal income tax purposes, and each Holder will be considered the owner of its
pro rata portions of the stripped U.S. Treasury securities and the Contracts in
the Trust under the grantor trust rules of the Code. Income received by the
Trust will be treated as income of the Holders in the manner set forth below.

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<PAGE> 24

RECOGNITION OF ORIGINAL ISSUE DISCOUNT ON THE U.S. TREASURY
SECURITIES. The U.S. Treasury securities in the Trust will consist of stripped
U.S. Treasury securities. A Holder will be required to treat its pro rata
portion of each U.S. Treasury security in the Trust as a bond that was
originally issued on the date the Trust acquired the relevant U.S. Treasury
securities and will include original issue discount in income over the life of
the U.S. Treasury securities in an amount equal to the Holder's pro rata portion
of the excess of the amounts payable on such U.S. Treasury securities over the
value of the U.S. Treasury securities at the time the Trust acquires them. The
amount of such excess will constitute only a portion of the total amounts
payable in respect of U.S. Treasury securities held by the Trust, however.
Consequently, a substantial portion of each quarterly cash distribution to the
Holders will be treated as a tax-free return of the Holders' investment in the
U.S. Treasury securities and will not be considered current income for federal
income tax purposes. See "Investment Objective and Policies -- General".

A Holder (whether on the cash or accrual method of tax accounting) will be
required to include original issue discount (other than original issue discount
on short-term U.S. Treasury securities as defined below) in income for federal
income tax purposes as it accrues on a constant yield basis. The Trust expects
that more than 20% of the Holders will be accrual basis taxpayers, in which case
original issue discount on any short-term U.S. Treasury security (i.e., any U.S.
Treasury security with a maturity of one year or less from the date it is
purchased) held by the Trust also will be required to be included in income by
the Holders as it is accrued. Unless a Holder elects to accrue the original
issue discount on a short-term U.S. Treasury security according to a constant
yield method based on daily compounding, such original issue discount will be
accrued on a straight-line basis.

TAX BASIS OF THE U.S. TREASURY SECURITIES AND THE CONTRACTS. A Holder's
initial tax basis in the Contracts and the U.S. Treasury securities,
respectively, will equal its pro rata portion of the amounts paid for them by
the Trust. It is currently anticipated that 17.39% and 82.61% of the net
proceeds of the offering will be used by the Trust to purchase the U.S. Treasury
securities and as payments for the Contracts, respectively. A Holder's tax basis
in the U.S. Treasury securities will be increased by the amounts of original
issue discount included in income in respect of U.S. Treasury securities and
decreased by each amount of cash received in respect of U.S. Treasury
securities.

TREATMENT OF THE CONTRACTS. Each Holder will be treated as having entered
into a pro rata portion of the Contracts and, at the Exchange Date, as having
received a pro rata portion of the Common Stock or cash, Marketable Securities
or a combination thereof delivered to the Trust.

DISTRIBUTION OF THE COMMON STOCK. The delivery of Common Stock pursuant to
the Contracts will not be taxable to the Holders. Each Holder's basis in its
Common Stock will be equal to its basis in its pro rata portion of the Contracts
less the portion of such basis allocable to any fractional shares of Common
Stock for which cash is received. A Holder will recognize short-term capital
gain or loss upon receipt of cash in lieu of fractional shares of Common Stock
distributed upon termination of the Trust equal to the difference between the
amount of cash received and the basis of such fractional share. The holding
period for the Common Stock will begin on the day after it is acquired by the
Trust.

DISTRIBUTION OF CASH. If the Trust receives cash upon settlement of the
Contracts, a Holder will recognize capital gain or loss equal to the difference
between the amount of cash received and the basis of the Contracts settled
therefor. Any gain or loss will be capital gain or loss and, if the Holder has
held the Securities for more than one year, such gain or loss will be long-term
capital gain or loss.

SALE OF SECURITIES. A Holder who sells Securities will be treated as
having sold its pro rata portions of the U.S. Treasury securities and the
Contracts underlying the Securities. The Holder will therefore recognize gain or
loss equal to the difference between the amount realized and the Holder's
aggregate tax bases in its pro rata portions of the U.S. Treasury securities and
the Contracts. Any gain or loss will be long-term capital gain or loss if the
Trust has held the relevant property for more than one year.

ALTERNATIVE CHARACTERIZATIONS. Sullivan & Cromwell believes the Contracts
should be treated for federal income tax purposes as prepaid forward contracts
for the purchase of a variable number of shares of Common Stock.

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<PAGE> 25

The Internal Revenue Service could conceivably take the view that the
Contracts should be treated as loans to the Sellers in exchange for contingent
debt obligations of the Sellers. If the Internal Revenue Service were to prevail
in making such an assertion, a Holder might be required to include original
issue discount in income over the life of the Securities at a market rate of
interest for the Seller, taking account of all the relevant facts and
circumstances. In addition, a Holder would be required to include interest
(rather than capital gain) in income on the Exchange Date in an amount equal to
the excess, if any, of the value of the Common Stock received on the Exchange
Date (or the proceeds from cash settlement of the Contracts) over the aggregate
of the basis of the Contracts and any interest on the Contracts previously
included in income (or might be entitled to an ordinary deduction to the extent
of interest previously included in income and not ultimately received). The
Internal Revenue Service could also conceivably take the view that a Holder
should simply include in income the amount of cash actually received each year
in respect of the Securities.

BACKUP WITHHOLDING AND INFORMATION REPORTING. The payments of principal
and interest (including original issue discount) on, and the proceeds received
from the sale of, Securities may be subject to U.S. backup withholding tax at
the rate of 31% if the Holder thereof fails to supply an accurate taxpayer
identification number or otherwise to comply with applicable U.S. information
reporting or certification requirements. Any amounts so withheld will be allowed
as a credit against such Holder's U.S. federal income tax liability and may
entitle such Holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.

After the end of each calendar year, the Trust will furnish to each record
Holder of Securities an annual statement containing information relating to the
payments on the U.S. Treasury securities received by the Trust. The Trust will
also furnish annual information returns to each record Holder of the Securities
and to the Internal Revenue Service.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Trust has agreed to sell to each of the Underwriters named below, and each of
such Underwriters, for whom Goldman, Sachs & Co. are acting as representatives,
has severally agreed to purchase from the Trust, the respective number of
Securities set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Goldman, Sachs & Co. ....................................... 6,522,000
Bear, Stearns & Co. Inc. ................................... 202,000
Credit Suisse First Boston Corporation...................... 202,000
Deutsche Morgan Grenfell Inc. .............................. 202,000
A.G. Edwards & Sons, Inc. .................................. 202,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 202,000
Montgomery Securities....................................... 202,000
First Analysis Securities Corporation....................... 161,000
Furman Selz LLC............................................. 161,000
Edward D. Jones & Co., L.P. ................................ 161,000
Raymond James & Associates, Inc. ........................... 161,000
Stephens Inc. .............................................. 161,000
Stifel, Nicolaus & Company, Incorporated.................... 161,000
---------
Total................................................ 8,700,000
=========
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Securities offered
hereby, if any are taken.

25
<PAGE> 26

The Underwriters propose to offer the Securities in part directly to the
public at the price to the public set forth on the cover page of this Prospectus
and in part to certain securities dealers at such price less a concession of
$0.44 per Security. The Underwriters may allow, and such dealers may re-allow, a
concession not in excess of $0.10 per Security to certain brokers and dealers.
After the Securities are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters. The
sales load of $0.72 per Security is equal to 3.0% of the initial public offering
price. Investors must pay for any Securities purchased in the initial public
offering on or before June 4, 1997.

In connection with the offering, the Underwriters may purchase and sell the
Securities and the Common Stock in the open market. These transactions may
include over-allotment and stabilizing transactions, "passive" market making and
purchases to cover syndicate short positions created in connection with the
offering. Stabilizing transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price of the
Securities or the Common Stock; and short positions created by the Underwriters
involve the sale by the Underwriters of a greater number of Securities than they
are required to purchase from the Trust in the offering. The Underwriters also
may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker-dealers in respect of the Securities sold in the
offering may be reclaimed by the syndicate if such Securities are repurchased by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Securities which
may be higher than the price that might otherwise prevail in the open market;
and these activities, if commenced, may be discontinued at any time. These
transactions may be effected on the NYSE, Nasdaq in the over-the-counter market
or otherwise.

As permitted by Rule 103 under the Exchange Act, certain Underwriters (and
selling group members, if any) that are market makers ("passive market makers")
in the Common Stock may make bids for or purchases of the Common Stock in the
Nasdaq National Market until such time, if any, when a stabilizing bid for such
securities has been made. Rule 103 generally provides that (1) a passive market
maker's net daily purchases of the Common Stock may not exceed 30% of its
average daily trading volume in such securities for the two full consecutive
calendar months (or any 60 consecutive days ending within the 10 days)
immediately preceding the filing date of the registration statement of which
this Prospectus forms a part, (2) a passive market maker may not effect
transactions or display bids for the Common Stock at a price that exceeds the
highest independent bid for the Common Stock by persons who are not passive
market makers and (3) bids made by passive market makers must be identified as
such.

In light of the fact that proceeds from the sale of the Securities will be
used by the Trust to purchase the Contracts from the Sellers, the Underwriting
Agreement provides that the Sellers will pay to the Underwriters the
Underwriters' Compensation of $0.72 per Security.

The Trust has granted the Underwriters an option exercisable for 30
calendar days after the date of this Prospectus to purchase up to an aggregate
of 1,234,235 additional Securities solely to cover over-allotments, if any. If
the Underwriters exercise their over-allotment option, they will receive the
Underwriters' Compensation referred to above for each Security so purchased.

The Sellers have agreed that, during the period beginning from the date of
this Prospectus and continuing to and including the date 90 days after the date
of this Prospectus, they will not offer, sell, contract to sell or otherwise
dispose of any Common Stock or other securities of the Company (other than
pursuant to employee stock option plans existing, or on the conversion or
exchange of convertible or exchangeable securities outstanding, on the date of
this Prospectus) which are substantially similar to the Common Stock or which
are convertible or exchangeable into Common Stock or other securities which are
substantially similar to the Common Stock, without the prior written consent of
Goldman Sachs.

The Securities will be a new issue of securities with no established
trading market. The Securities have been approved for listing, subject to notice
of issuance, on the NYSE. Goldman Sachs have advised the Company that they
intend to make a market in the Securities, but they are not obligated to do so
and

26
<PAGE> 27

may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Securities.

Goldman Sachs has informed the Trust that they will not confirm sales to
any accounts over which they exercise discretionary authority without specific
written approval of such transactions by the customer.

The Company and the Sellers have agreed to indemnify the Underwriters
against certain liabilities, including certain liabilities under the Securities
Act of 1933. The Underwriters have agreed to pay certain expenses of the Trust.

One Security has been subscribed for by Goldman Sachs at an aggregate
purchase price of $100.00. No Securities will be sold to the public until the
Securities subscribed for have been purchased and the purchase price thereof
paid in full to the Trust. Prior to completion of this offering, Goldman Sachs
will control the Trust, but after completion of this offering, Goldman Sachs
will no longer control the Trust.

Certain of the Underwriters and/or their affiliated entities have performed
services for the Company for which they have received customary fees and, in
certain instances, securities of the Company.

VALIDITY OF SECURITIES

The validity of the Securities offered hereby will be passed upon for the
Trust by Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, and
certain legal matters will be passed upon for the Underwriters by Skadden, Arps,
Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022.

EXPERTS

The financial statement included in this Prospectus has been audited by
Coopers & Lybrand L.L.P., independent accountants, as stated in their opinion
appearing herein, and has been so included in reliance upon such opinion given
upon the authority of that firm as experts in accounting and auditing.

FURTHER INFORMATION

The Trust has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement under the Securities Act of
1933, as amended, with respect to the Securities offered hereby. Further
information concerning the Securities and the Trust may be found in the
Registration Statement of which this Prospectus constitutes a part. The
Registration Statement may be inspected without charge at the Commission's
office in Washington, D.C., and copies of all or any part thereof may be
obtained from such office after payment of the fees prescribed by the
Commission. Such Registration Statement is also available on the Commission's
website (http://www.sec.gov).

27
<PAGE> 28

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees and Securityholders of
Automatic Common Exchange Security Trust II:

We have audited the accompanying statement of assets and liabilities of
Automatic Common Exchange Security Trust II as of May 27, 1997. This financial
statement is the responsibility of the Trust's management. Our responsibility is
to express an opinion on this financial statement based on our audit.

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

In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Automatic Common Exchange
Security Trust II, as of May 27, 1997 in conformity with generally accepted
accounting principles.

COOPERS & LYBRAND L.L.P.

New York, New York
May 28, 1997

28
<PAGE> 29

AUTOMATIC COMMON EXCHANGE SECURITY TRUST II

STATEMENT OF ASSETS AND LIABILITIES

MAY 27, 1997

<TABLE>
<S> <C>
ASSETS
Cash........................................................ $100
----
Total assets................................................ $100
====

LIABILITIES
............................................................ $ 0
----
NET ASSETS
Balance applicable to 1 Security outstanding................ $100
----
Net asset value per Security................................ $100
====
</TABLE>

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

(1) Automatic Common Exchange Security Trust II (the "Trust") was established on
February 21, 1997 and has had no operations to date other than matters
relating to its organization and registration as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940. Costs incurred in connection with the organization of the Trust will
be paid by Goldman, Sachs & Co.

(2) The Trust proposes to sell Trust Automatic Common Exchange Securities (the
"Securities") to the public pursuant to a Registration Statement on Form N-2
under the Securities Act of 1933, as amended, and the Investment Company Act
of 1940, as amended.

The Trust is a newly organized, finite-term trust established to purchase
and hold a portfolio of stripped U.S. treasury securities and a forward
purchase contract with existing shareholders of Republic Industries, Inc.
("Republic Industries") relating to the common stock of Republic Industries.
The Trust will be internally managed and will not have an investment
adviser. The administration of the Trust, which will be overseen by the
trustees, will be carried out by The Bank of New York as trust
administrator. The Bank of New York will also serve as custodian, paying
agent, registrar and transfer agent with respect to the Securities. Ongoing
fees and anticipated expenses for the term of the trust will be paid for by
Goldman, Sachs & Co.

(3) The Trust issued one Security on May 27, 1997 to Goldman, Sachs & Co. in
consideration for the aggregate purchase price of $100.

The Amended and Restated Trust Agreement provides that prior to the
offering, the Trust will split the outstanding Security to be effected on
the date that the price and underwriting discount of the Securities being
offered to the public is determined, but prior to the sale of the Securities
to Goldman, Sachs & Co. The initial Security will be split into the smallest
whole number of Securities that would result in the per Security amount
recorded as shareholders' equity after effecting the split not exceeding the
Public Offering price per Security.

29
<PAGE> 30

=========================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................... 3
The Trust............................... 8
Use of Proceeds......................... 8
Investment Objective and Policies....... 8
Risk Factors............................ 17
Description of the Securities........... 19
Management and Administration of the
Trust................................. 21
Certain Federal Income Tax
Considerations........................ 23
Underwriting............................ 25
Validity of Securities.................. 27
Experts................................. 27
Further Information..................... 27
Report of Independent Accountants....... 28
Statement of Assets and Liabilities..... 29
</TABLE>

UNTIL JUNE 23, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL DEALERS
EFFECTING TRANSACTIONS IN THE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

=========================================================
=========================================================

8,700,000 SHARES

AUTOMATIC
COMMON EXCHANGE
SECURITY TRUST II

$1.55 TRUST AUTOMATIC
COMMON EXCHANGE
SECURITIES (TRACES (TM/SM))
------------------

PROSPECTUS

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

GOLDMAN, SACHS & CO.

REPRESENTATIVES OF THE UNDERWRITERS

=========================================================