As filed with the Securities and Exchange Commission on May 15, 1997
Registration No. 333-21481
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 3
FORM S-6
For Registration Under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
---------------------
A. EXACT NAME OF TRUST:
Equity Securities Trust, Series 13, Signature Series, Zacks
Wall Street All-Star Analysts Trust
B. NAME OF DEPOSITOR:
Reich & Tang Distributors L.P.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Reich & Tang Distributors L.P.
600 Fifth Avenue
New York, New York 10020
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY OF COMMENTS TO:
PETER J. DEMARCO MICHAEL R. ROSELLA, Esq.
Reich & Tang Distributors L.P. Battle Fowler LLP
600 Fifth Avenue 75 East 55th Street
New York, New York 10020 New York, New York 10022
(212) 856-6858
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Equity Securities Trust, Series 13,
Signature Series, Zacks Wall Street All-Star Analysts Trust is being
registered under the Securities Act of 1933 pursuant to Section 24(f)
of the Investment Company Act of 1940, as amended, and Rule 24f-2
thereunder.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE
SECURITIES BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
No filing fee required.
H. APPROPRIATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the
Registration Statement.
/ / Check if it is proposed that this filing will become
effective immediately upon filing pursuant to Rule 487.
The registrant hereby amends the registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
467238.1
<PAGE>
Equity Securities Trust, Series 13,
Signature Series, Zacks Wall Street All-Star Analysts Trust
CROSS-REFERENCE SHEET
Pursuant to Rule 404 of Regulation C
Under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction as
to the Prospectus in Form S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
<S> <C> <C>
I. Organization And General Information
1. (a) Name of trust............................................... Front cover of Prospectus
(b) Title of securities issued.................................. Front cover of Prospectus
2. Name and address of trustee...................................... The Trustee
3. Name and address of each depositor............................... The Sponsor
4. Name and address of principal underwriters....................... Distribution of Units
5. State of organization of trust................................... Organization
6. Execution and termination of trust agreement..................... Trust Agreement, Amendment and Termination
7. Changes of name.................................................. Not applicable
8. Fiscal year...................................................... Not applicable
9. Litigation....................................................... None
II. General Description of The Trust and Securities of the Trust
10. (a) Registered or bearer securities............................. Certificates
(b) Cumulative or distributive securities....................... Interest and Principal Distributions
(c) Redemption.................................................. Trustee Redemption
(d) Conversion, transfer, etc................................... Certificates, Sponsor's Repurchase, Trustee Redemption
(e) Periodic payment plan....................................... Not Applicable
(f) Voting rights............................................... Trust Agreement, Amendment and Termination
(g) Notice to certificateholders................................ Records, Portfolio, Substitution of Securities, Trust
Agreement, Amendment and Termination, The
Sponsor, The Trustee
(h) Consents required........................................... Trust Agreement, Amendment and Termination
(i) Other provisions............................................ Tax Status
11. Type of securities comprising units.............................. Objectives, Portfolio, Portfolio Summary
12. Certain information regarding periodic payment certificates...... Not Applicable
13. (a) Load, fees, expenses, etc................................... Summary of Essential Information, Public Offering
Price, Market for Units, Volume and Other Discounts,
Sponsor's Profits, Trust Expenses and Charges
(b) Certain information regarding periodic payment
certificates............................................ Not Applicable
</TABLE>
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467238.1
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
<S> <C> <C>
(c) Certain percentages......................................... Summary of Essential Information, Public Offering
Price, Market for Units, Volume and Other Discounts
(d) Price differences........................................... Volume and Other Discounts, Distribution of Units
(e) Other loads, fees, expenses................................. Certificates
(f) Certain profits receivable by depositors, principal
underwriters, trustee or affiliated persons............. Sponsor's Profits, Portfolio Summary
(g) Ratio of annual charges to income........................... Not Applicable
14. Issuance of trust's securities................................... Organization, Certificates
15. Receipt and handling of payments from purchasers Organization
16. Acquisition and disposition of underlying securities............. Organization, Objectives, Portfolio, Portfolio
Supervision
17. Withdrawal or redemption......................................... Comparison of Public Offering Price, Sponsor's
Repurchase Price and Redemption Price, Sponsor's
Repurchase, Trustee Redemption
18. (a) Receipt, custody and disposition of income.................. Distributions, Dividend and Principal Distributions,
Portfolio Supervision
(b) Reinvestment of distributions............................... Not Applicable
(c) Reserves or special funds................................... Dividend and Principal Distributions
(d) Schedule of distributions................................... Not Applicable
19. Records, accounts and reports.................................... Records
20. Certain miscellaneous provisions of trust agreement
(a) Amendment................................................... Trust Agreement, Amendment and Termination
(b) Termination................................................. Trust Agreement, Amendment and Termination
(c) and (d) Trustee, removal and successor...................... The Trustee
(e) and (f) Depositor, removal and successor.................... The Sponsor
21. Loans to security holders........................................ Not Applicable
22. Limitations on liability......................................... The Sponsor, The Trustee, The Evaluator
23. Bonding arrangements............................................. Part II - Item A
24. Other material provisions of trust agreement..................... Not Applicable
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of depositor........................................ The Sponsor
26. Fees received by depositor....................................... Not Applicable
27. Business of depositor............................................ The Sponsor
28. Certain information as to officials and affiliated persons of
depositor..................................................... Not Applicable
29. Voting securities of depositor................................... Not Applicable
30. Persons controlling depositor.................................... Not Applicable
31. Payments by depositor for certain services
rendered to trust....................................... Not Applicable
</TABLE>
-ii-
467238.1
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
<S> <C> <C>
32. Payments by depositor for certain other services
rendered to trust............................................. Not Applicable
33. Remuneration of employees of depositor for certain services
rendered to trust............................................. Not Applicable
34. Remuneration of other persons for certain services
rendered to trust............................................. Not Applicable
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities by states..................... Distribution of Units
36. Suspension of sales of trust's securities........................ Not Applicable
37. Revocation of authority to distribute............................ None
38. (a) Method of distribution...................................... Distribution of Units
(b) Underwriting agreements..................................... Distribution of Units
(c) Selling agreements.......................................... Distribution of Units
39. (a) Organization of principal underwriters...................... The Sponsor
(b) N.A.S.D. membership of principal underwriters............... The Sponsor
40. Certain fees received by principal underwriters.................. The Sponsor
41. (a) Business of principal underwriters.......................... The Sponsor
(b) Branch offices of principal underwriters.................... The Sponsor
(c) Salesmen of principal underwriters.......................... The Sponsor
42. Ownership of trust's securities by certain persons............... Not Applicable
43. Certain brokerage commissions received by
principal underwriters.................................. Not Applicable
44. (a) Method of valuation......................................... Summary of Essential Information, Market for
Units,Offering Price, Accrued Interest, Volume and
Other Discounts, Distribution of Units, Comparison of
Public Offering Price, Sponsor's Repurchase Price and
Redemption Price, Sponsor's Repurchase, Trustee
Redemption
(b) Schedule as to offering price............................... Summary of Essential Information
(c) Variation in offering price to certain persons.............. Distribution of Units, Volume and Other Discounts
45. Suspension of redemption rights.................................. Not Applicable
46. (a) Redemption valuation........................................ Comparison of Public Offering Price, Sponsor's
Repurchase Price and Redemption Price, Redemption
Price, and Trustee Redemption
(b) Schedule as to redemption price............................. Summary of Essential Information
47. Maintenance of position in underlying securities................. Comparison of Public Offering Price, Sponsor's
Repurchase Price and Redemption Price, Sponsor's
Repurchase, Trustee Redemption
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of trustee........................... The Trustee
</TABLE>
-iii-
467238.1
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
<S> <C> <C>
49. Fees and expenses of trustee..................................... Trust Expenses and Charges
50. Trustee's lien................................................... Trust Expenses and Charges
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's securities....................... None
VII. Policy of Registrant
52. (a) Provisions of trust agreement with respect to selection or
elimination of underlying securities.................... Objectives, Portfolio, Portfolio Supervision,
Substitution of Securities
(b) Transactions involving elimination of underlying
securities.............................................. Not Applicable
(c) Policy regarding substitution or elimination of underlying
securities.............................................. Submission of Securities
(d) Fundamental policy not otherwise covered.................... Not Applicable
53. Tax status of trust.............................................. Tax Status
VIII. Financial and Statistical Information
54. Trust's securities during last ten years......................... Not Applicable
55. Hypothetical account for issuers of periodic payment plans....... Not Applicable
56. Certain information regarding periodic payment certificates...... Not Applicable
57. Certain information regarding periodic payment plans............. Not Applicable
58. Certain other information regarding
periodic payment plans.................................. Not Applicable
59. Financial statements (Instruction 1(c) to Form S-6).............. Statement of Financial Condition
</TABLE>
-iv-
467238.1
<PAGE>
SUBJECT TO COMPLETION DATED MAY 15, 1997
- -------------------------------------------------------------------------------
INSERT LOGO
- -------------------------------------------------------------------------------
EQUITY SECURITIES TRUST
SERIES 13
SIGNATURE SERIES,
ZACKS WALL STREET ALL-STAR ANALYSTS TRUST
The Trust is a unit investment trust designated Equity Securities Trust, Series
13, Signature Series, Zacks Wall Street All-Star Analysts Trust (the "Trust").
The Sponsor is Reich & Tang Distributors L.P. The objective of the Trust is to
seek to achieve capital appreciation. Current income will be secondary to the
objective of capital growth. The Sponsor can not give any assurance that the
Trust's objective can be achieved. The Trust contains an underlying portfolio
consisting primarily of common stock, and contracts and funds for the purchase
of such securities (collectively, the "Securities"), which have been purchased
by the Trust based upon the recommendations of the portfolio consultant, Zacks
Investment Research Inc. ("Zacks"). The Trust will include stocks recommended as
"buy" or "strong buy" by analysts employed by United States brokerage firms, who
have had exceptional track records in selecting stocks (the "All-Star Analysts")
as identified in the annual Zacks/Wall Street Journal All-Star Analysts Survey.
These All-Star Analysts have been identified annually during each of the last 5
years and their stock recommendations are monitored by Zacks on a regular basis.
The value of the Units of the Trust will fluctuate with fluctuations in the
value of the underlying Securities in the Trust. Therefore, Certificateholders
who sell their Units prior to termination of the Trust may receive more or less
than their original purchase price upon sale. No assurance can be given that
dividends will be paid or that the Units will appreciate in value. The Trust
will terminate approximately one year after the Initial Date of Deposit. Minimum
Purchase: 100 Units.
This Prospectus consists of two parts. Part A contains the Summary of Essential
Information including descriptive material relating to the Trust and the
Statement of Financial Condition of the Trust. Part B contains general
information about the Trust. Part A may not be distributed unless accompanied by
Part B. Please read and retain both parts of this Prospectus for future
reference.
The Securities and Exchange Commission ("SEC") maintains a website that contains
reports, proxy and information statements and other information regarding the
Trust which is filed electronically with the SEC. The SEC's Internet address is
http:www.sec.gov. Offering materials for the sale of these Units available
through the Internet are not being offered directly or indirectly to residents
of a particular state nor is an offer of these Units through the Internet
specifically directed to any person in a state by, or on behalf of, the issuer.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED JUNE __, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these Securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold or may not
constitute an offer to sell or solicitation of an offer to buy nor shall there
be any sale of these Securities in any state in which said offer, solicitation
or sale would be unlawful prior to the registration or qualification under the
Securities Laws of any state.
467237.1
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE __, 1997:*
<TABLE>
<S> <C>
DATE OF DEPOSIT: June __ 1997 MINIMUM VALUE OF TRUST: The Trust may be
AGGREGATE VALUE OF SECURITIES.................. $ terminated if the value of the Trust is less than 40% of
AGGREGATE VALUE OF SECURITIES the aggregate value of the Securities at the completion
PER 100 UNITS............................... $ of the Deposit Period.
NUMBER OF UNITS................................ MANDATORY TERMINATION DATE: The earlier of
FRACTIONAL UNDIVIDED INTEREST IN ________, 1998 or the disposition of the last Security
TRUST....................................... 1/ in the Trust.
PUBLIC OFFERING PRICE+ TRUSTEE: The Chase Manhattan Bank
Aggregate Value of Securities in TRUSTEE'S FEE: $.__ per 100 Units outstanding
Trust**.................................. $ ESTIMATED ORGANIZATIONAL EXPENSES**:
Divided By ______ Units (times 100)......... $ $.__ per 100 Units
Plus Sales Charge of 2.95% of Public ESTIMATED OFFERING COSTS**: $.__ per 100
Offering Price per 100 Units............. $ Units
Public Offering Price per 100 Units++....... $1,000.00 OTHER FEES AND EXPENSES: $.__ per 100 Units
SPONSOR'S REPURCHASE PRICE AND outstanding
REDEMPTION PRICE PER SPONSOR: Reich & Tang Distributors L.P.
100 UNITS+++................................ $ SPONSOR'S SUPERVISORY FEE: Maximum of $.25
EXCESS OF PUBLIC OFFERING PRICE OVER per 100 Units outstanding (see "Trust Expenses and
REDEMPTION PRICE PER Charges" in Part B).
100 UNITS................................... $ PORTFOLIO CONSULTANT: Zacks Investment
EVALUATION TIME: 4:00 p.m. New York Time. Research Inc.
MINIMUM INCOME OR PRINCIPAL RECORD DATE:
DISTRIBUTION: $1.00 per 100 Units DISTRIBUTION DATE:
LIQUIDATION PERIOD: Beginning 60 days prior to ROLLOVER NOTIFICATION DATE***:
the Mandatory Termination Date. 199_ or another date as determined by the Sponsor.
</TABLE>
- ------------------
* The business day prior to the Initial Date of Deposit. The Initial Date
of Deposit is the date on which the Trust Agreement was signed and the deposit
of Securities with the Trustee made.
** Although historically the sponsors of unit investment trusts ("UITs")
have paid all the costs of establishing such UITs, this Trust (and therefore the
Certificateholders) will bear all or a portion of its organizational costs. Such
organizational costs include: the cost of preparing and printing the
registration statement, the trust indenture and the closing documents; and the
initial audit of the Trust. Total organizational expenses will be amortized over
the life of the Trust. Offering costs, including the costs of registering
securities with the Securities and Exchange Commission and the states, will be
amortized over the term of the initial offering period, which may be between 30
and 90 days. See "Trust Expenses" in Part B. Assumes the Trust will reach a size
of [2,500,000] Units as estimated by the Sponsor; organizational expenses and
offering costs per 100 Units will vary with the actual size of the Trust. If the
Trust does not reach this Unit level, the Estimated Organizational Expenses and
Offering Costs per 100 Units will be higher.
*** If a Certificateholder ("Rollover Certificateholder") so specifies prior
to the Rollover Notification Date, the Rollover Certificateholder's terminating
distribution will be reinvested as received in an available series of the Equity
Securities Trust, if offered (see "Trust Administration - Trust Termination").
+ Per 100 Units.
++ On the Initial Date of Deposit there will be no cash in the Income or
Principal Accounts. Anyone purchasing Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
+++ Any redemptions of over 2,500 Units may, upon request by a redeeming
Certificateholder, be made in kind. The Trustee will forward the distributed
securities to the Certificateholder's bank or broker-dealer account at The
Depository Trust Company in book-entry form. See "Liquidity--Trustee Redemption"
in Part B.
A-2
467237.1
<PAGE>
DESCRIPTION OF PORTFOLIO:
Number of Issues: __ (__ issuers)
NYSE __%; AMEX __%; Over the Counter __%
Percent of Issues represented by the Sponsor's contracts to
purchase: 100%
Expected settlement date: __________, 1997
Percent of Issues by Industry*:
(-)................................... %
(-).................................... %
(-).................................... %
(-).................................... %
(-)................................... %
(-)................................... %
(-)................................... %
(_)................................. %
------
100.00%
======
- ------------------
* A trust is considered to be "concentrated" in a particular category or
industry when the securities in that category or that industry constitute
25% or more of the aggregate face amount of the portfolio.
OBJECTIVE. The objective of the Trust is to seek to achieve capital
appreciation. Current income will be secondary to the objective of capital
growth. The Trust seeks to achieve its objective by investing in a portfolio of
__ equity securities, each of which has been recommended as a "buy" or "strong
buy" by three or more Zacks/Wall Street Journal All-Star Analysts. These top
analysts have been identified and monitored by Zacks as part of Zacks analysis
of the historical performance of brokerage analyst stock recommendations in
conjunction with the annual publication of the Zacks/Wall Street Journal
All-Star Analysts Survey (see "The Trust--The Securities" in Part B). As used
herein, the term "Securities" means the common stocks initially deposited in the
Trust and described in "Portfolio" in Part A and any additional common stocks
acquired and held by the Trust pursuant to the provisions of the Indenture.
Further, the Securities may appreciate or depreciate in value, dependent upon
the full range of economic and market influences affecting corporate
profitability, the financial condition of issuers and the price of equity
securities in general and the Securities in particular. Therefore, there is no
guarantee that the objective of the Trust will be achieved.
PUBLIC OFFERING PRICE. The Public Offering Price per 100 Units of the Trust is
equal to the aggregate value of the underlying Securities (the price at which
they could be directly purchased by the public assuming they were available) in
the Trust divided by the number of Units outstanding times 100 plus a sales
charge of 2.95% of the Public Offering Price per 100 Units or 3.04% of the net
amount invested in Securities per 100 Units. The price of a single Unit, or any
multiple thereof, is calculated by dividing the Public Offering Price per 100
Units by 100 and multiplying by the number of Units. Any cash held by the Trust
will be added to the Public Offering Price. For additional information regarding
the Public Offering Price, repurchase and redemption of Units and other
essential information regarding the Trust, see the "Summary of Essential
Information." During the initial offering period orders involving at least
10,000 Units will be entitled to a volume discount from the Public Offering
Price. The Public Offering Price per Unit may vary on a daily basis in
accordance with fluctuations in the aggregate value of the underlying Securities
and the price to be paid by each investor will be computed as of the date the
Units are purchased. (See "Public Offering" in Part B.)
A-3
467237.1
<PAGE>
DISTRIBUTIONS. Dividend distributions, if any, will be made on the Distribution
Dates to all Certificateholders of record on the Record Date. For the specific
dates representing the Distribution Dates and Record Dates, see "Summary of
Essential Information" in Part A. The final distribution will be made within a
reasonable period of time after the termination of the Trust. (See "Rights of
Certificateholders--Distributions" in Part B.) Certificateholders may elect to
automatically reinvest distributions (other than the final distribution in
connection with the termination of the Trust), into additional Units of the
Trust, which are subject to a reduced sales charge. See "Reinvestment Plan" in
Part B.
MARKET FOR UNITS. The Sponsor, although not obligated to do so, intends to
maintain a secondary market for the Units and to continuously offer to
repurchase the Units of the Trust both during and after the initial public
offering. The secondary market repurchase price will be based on the market
value of the Securities in the Trust portfolio and will be the same as the
redemption price. (See "Liquidity--Sponsor Repurchase" for a description of how
the secondary market repurchase price will be determined.) If a market is not
maintained a Certificateholder will be able to redeem his Units with the Trustee
(see "Liquidity--Trustee Redemption" in Part B). As a result, the existence of a
liquid trading market for these Securities may depend on whether dealers will
make a market in these Securities. There can be no assurance of the making or
the maintenance of a market for any of the Securities contained in the portfolio
of the Trust or of the liquidity of the Securities in any markets made. In
addition, the Trust may be restricted under the Investment Company Act of 1940
from selling Securities to the Sponsor. The price at which the Securities may be
sold to meet redemptions and the value of the Units will be adversely affected
if trading markets for the Securities are limited or absent.
TERMINATION. During the 60-day period prior to the Mandatory Termination Date
(the "Liquidation Period"), Securities will begin to be sold in connection with
the termination of the Trust and all Securities will be sold or distributed by
the Mandatory Termination Date. The Trustee may utilize the services of the
Sponsor for the sale of all or a portion of the Securities in the Trust. Any
brokerage commissions received by the Sponsor from the Trust in connection with
such sales will be in accordance with applicable law. The Sponsor will determine
the manner, timing and execution of the sales of the underlying Securities. The
Sponsor will attempt to sell the Securities as quickly as it can during the
Liquidation Period without, in its judgment, materially adversely affecting the
market price of the Securities, but all of the Securities will in any event be
disposed of by the end of the Liquidation Period. The Sponsor does not
anticipate that the period will be longer than 60 days, and it could be as short
as one day, depending on the liquidity of the Securities being sold.
Certificateholders may elect one of the three options in receiving their
terminating distributions: (1) to receive their pro rata share of the underlying
Securities in-kind, if they own at least 2,500 units, (2) to receive cash upon
the liquidation of their pro rata share of the underlying Securities or (3) to
invest the amount of cash they would have received upon the liquidation of their
pro rata share of the underlying Securities in units of a future series of
Equity Securities Trust (if one is offered) at a reduced sales charge (see
"Rollover Option"). See "Trust Administration--Trust Termination" in Part B for
a description of how to select a termination distribution option.
Certificateholders who have not chosen to receive distributions-in-kind will be
at risk to the extent that Securities are not sold; for this reason the Sponsor
will be inclined to sell the Securities in as short a period as it can without
materially adversely affecting the price of the Securities. Certificateholders
should consult their own tax advisers in this regard.
ROLLOVER OPTION. Certificateholders may elect to roll over their terminating
distributions into the next available series of Equity Securities Trust at a
reduced sales charge. Rollover Certificateholders must make this election prior
to the Rollover Notification Date. Upon making this election, a
Certificateholder's Units will be redeemed and the proceeds will be reinvested
in units of the next available series of Equity Security Trust. See "Trust
Administration--Trust Termination" in Part B for details to make this election.
RISK CONSIDERATIONS. An investment in Units of the Trust should be made with an
understanding of the risks inherent in an investment in any of the Securities
including for common stocks, the risk that the financial condition of the
issuers of the Securities may become impaired or that the general condition of
the stock market may worsen (both of which may
A-4
467237.1
<PAGE>
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units). The portfolio of the Trust is fixed and not "managed" by
the Sponsor. Since the Trust will not sell Securities in response to ordinary
market fluctuation, but only at the Trust's termination or to meet redemptions,
the amount realized upon the sale of the Securities may not be the highest price
attained by an individual Security during the life of the Trust. In connection
with the deposit of Additional Securities subsequent to the Initial Date of
Deposit, if cash (or a letter of credit in lieu of cash) is deposited with
instructions to purchase Securities, to the extent the price of a Security
increases or decreases between the deposit and the time the Security is
purchased, Units may represent less or more of that Security and more or less of
the other Securities in the Trust. In addition, brokerage fees incurred in
purchasing Securities with cash deposited with instructions to purchase the
Securities will be an expense of the Trust. Price fluctuations during the period
from the time of deposit to the time the Securities are purchased, and payment
of brokerage fees, will affect the value of every Certificateholder's Units and
the income per Unit received by the Trust.
The Sponsor cannot give any assurance that the business and investment
objectives of the issuers of the Securities will correspond with or in any way
meet the limited term objective of the Trust. (See "Risk Considerations" in Part
B of this Prospectus.)
REINVESTMENT PLAN. Certificateholders may elect to automatically reinvest their
distributions, if any (other than the final distribution in connection with the
termination of the Trust) into additional units of the Trust at a reduced sales
charge of 1.00%. See "Reinvestment Plan" in Part B for details on how to enroll
in the Reinvestment Plan.
UNDERWRITING. Reich & Tang Distributors L.P., 600 Fifth Avenue, New York, New
York 10020, will act as Underwriter for all of the Units of Equity Securities
Trust, Series 13, Signature Series, Zacks Wall Street All-Star Analysts Trust.
The Underwriter will distribute Units through various broker-dealers, banks
and/or other eligible participants (see "Public Offering--Distribution of Units"
in Part B).
A-5
467237.1
<PAGE>
EQUITY SECURITIES TRUST
SERIES 13
SIGNATURE SERIES,
ZACKS WALL STREET ALL-STAR ANALYSTS TRUST
STATEMENT OF FINANCIAL CONDITION AS OF OPENING OF BUSINESS, JUNE __, 1997
ASSETS
<TABLE>
<S> <C>
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost $_______)(Note 1).......................... $
Organizational Costs (Note 2)...........................................................................
Offering Costs (Note 3).................................................................................
-----------------------
Total................................................................................................... $
=======================
LIABILITIES AND INTEREST OF CERTIFICATEHOLDERS
Accrued Liabilities (Notes 2 and 3)..................................................................... $
Interest of Certificateholders - Units of Fractional
Undivided Interest Outstanding (Series 13: Units).........................................
-----------------------
Total................................................................................................... $
=======================
Net Asset Value per Unit................................................................................ $
=======================
</TABLE>
- -------------------------
Notes to Statement:
(1) Equity Securities Trust, Series 13, Signature Series, Zacks Wall
Street All-Star Analysts Trust (the "Trust") is a unit investment trust created
under the laws of the State of New York and registered under the Investment
Company Act of 1940. The objective of the Trust, sponsored by Reich & Tang
Distributors L.P. (the "Sponsor") is to maximize total return through capital
appreciation and current dividend income. On June __ 1997, the "Date of
Deposit", Portfolio Deposits were received by The Chase Manhattan Bank, the
Trust's Trustee, in the form of executed securities transactions, in exchange
for ______ units of the Trust. An irrevocable letter of credit issued by the
Bank of Boston in an amount of $_______ has been deposited with the Trustee for
the benefit of the Trust to cover the purchases of such Securities as well as
any outstanding purchases of previously-sponsored unit investment trusts of the
Sponsor. Aggregate cost to the Trust of the Securities listed in the Portfolio
is determined by the Trustee on the basis set forth under "Public
Offering--Offering Price" as of 4:00 p.m. on June __, 1997. The Trust will
terminate on ________, 1998 or earlier under certain circumstances as further
described in the Prospectus.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
(2) Organizational costs incurred by the Trust have been deferred and will
be amortized on a straight line basis over the life of the Trust. The Trust will
reimburse the Sponsor for actual organizational costs incurred.
(3) Offering costs incurred by the Trust will be charged to capital no
later than the close of the period during which Units of the Trust are first
sold to the public.
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EQUITY SECURITIES TRUST
SERIES 13
SIGNATURE SERIES,
ZACKS WALL STREET ALL-STAR ANALYSTS TRUST
PORTFOLIO
AS OF OPENING OF BUSINESS, JUNE __, 1997
<TABLE>
<CAPTION>
Market Cost of
Number Value of Securities
of Stocks as a Market to the
Portfolio Shares Ticker Percentage Value Per Trust
No. (1) Name of Issuer (2) Symbol of the Trust Share (3)
----- ---- ------------------- ------ ------------ ----- ----
<S> <C> <C> <C> <C> <C> <C>
------ ---------
Total Investment in Securities 100% $
====== ========
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Based on the cost of the Securities to the Trust.
(2) Contracts to purchase the Securities were entered into on June __, 1997.
All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be June __, 1997.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sales prices at the Evaluation Time on the day prior to the Initial Date
of Deposit. The Sponsor's Purchase Price is $_______. The Sponsor's Loss
on the Initial Date of Deposit is $______.
The accompanying notes form an integral part of the Financial Statements.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee and Certificateholders,
Equity Securities Trust, Series 13,
Signature Series, Zacks Wall Street All-Star Analysts Trust
In our opinion, the accompanying Statement of Financial Condition,
including the Portfolio, presents fairly, in all material respects, the
financial position of Equity Securities Trust, Series 13, Signature Series,
Zacks Wall Street All-Star Analysts Trust (the "Trust") at opening of business,
June __ 1997, in conformity with generally accepted accounting principles. 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 of this financial statement in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit, which included confirmation of the contracts for the
securities at opening of business, June __ 1997, by correspondence with the
Sponsor, provides a reasonable basis for the opinion expressed above.
160 Federal Street
Boston, MA 02110
June __, 1997
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EQUITY SECURITIES TRUST
SERIES 13
SIGNATURE SERIES,
ZACKS WALL STREET ALL-STAR ANALYSTS TRUST
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUST
ORGANIZATION. Equity Securities Trust, Series 13, Signature Series, Zacks
Wall Street All-Star Analysts Trust consists of a "unit investment trust"
designated as set forth in Part A. The Trust was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the "Trust
Agreement"), dated the Initial Date of Deposit, between Reich & Tang
Distributors L.P., as Sponsor, and The Chase Manhattan Bank, as Trustee.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
common stock, including funds and delivery statements relating to contracts for
the purchase of certain such securities (collectively, the "Securities") with an
aggregate value as set forth in Part A and cash or an irrevocable letter of
credit issued by a major commercial bank in the amount required for such
purchases. Thereafter the Trustee, in exchange for the Securities so deposited,
delivered to the Sponsor the Certificates evidencing the ownership of all Units
of the Trust. The Sponsor has a limited right to substitute other securities in
the Trust portfolio in the event of a failed contract. See "The
Trust--Substitution of Securities." The Sponsor may also, in certain
circumstances, direct the Trustee to dispose of certain Securities if the
Sponsor believes that, because of market or credit conditions, or for certain
other reasons, retention of the Security would be detrimental to
Certificateholders. See "Trust Administration Portfolio--Supervision."
As of the Initial Date of Deposit, a "Unit" represents an undivided
interest or pro rata share in the Securities of the Trust in the ratio of one
hundred Units for the indicated amount of the aggregate market value of the
Securities initially deposited in the Trust as is set forth in the "Summary of
Essential Information." As additional Units are issued by the Trust as a result
of the deposit of Additional Securities, as described below, the aggregate value
of the Securities in the Trust will be increased and the fractional undivided
interest in the Trust represented by each Unit will be decreased. To the extent
that any Units are redeemed by the Trustee, the fractional undivided interest or
pro rata share in such Trust represented by each unredeemed Unit will increase,
although the actual interest in such Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Certificateholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
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DEPOSIT OF ADDITIONAL SECURITIES. With the deposit of the Securities in
the Trust on the Initial Date of Deposit, the Sponsor established a
proportionate relationship among the initial aggregate value of specified
Securities in the Trust. During the 90 days subsequent to the Initial Date of
Deposit (the "Deposit Period"), the Sponsor may deposit additional Securities in
the Trust that are substantially similar to the Securities already deposited in
the Trust ("Additional Securities"), contracts to purchase Additional Securities
or cash (or a bank letter of credit in lieu of cash) with instructions to
purchase Additional Securities, in order to create additional Units, maintaining
to the extent practicable the original proportionate relationship of the number
of shares of each Security in the Trust portfolio on the Initial Date of
Deposit. These additional Units, which may result in a potential increase in the
number of Units outstanding, will each represent, to the extent practicable, an
undivided interest in the same number and type of securities of identical
issuers as are represented by Units issued on the Initial Date of Deposit. It
may not be possible to maintain the exact original proportionate relationship
among the Securities deposited on the Initial Date of Deposit because of, among
other reasons, purchase requirements, changes in prices, or unavailability of
Securities. The composition of the Trust portfolio may change slightly based on
certain adjustments made to reflect the disposition of Securities and/or the
receipt of a stock dividend, a stock split or other distribution with respect to
such Securities, including Securities received in exchange for shares or the
reinvestment of the proceeds distributed to Certificateholders. Deposits of
Additional Securities in the Trust subsequent to the Deposit Period must
replicate exactly the existing proportionate relationship among the number of
shares of Securities in the Trust portfolio. Substitute Securities may be
acquired under specified conditions when Securities originally deposited in the
Trust are unavailable (see "The Trust--Substitution of Securities" below).
OBJECTIVE. The objective of the Trust is to seek to achieve capital
appreciation. Current income will be secondary to the objective of capital
growth. The Trust seeks to achieve its objective by investing in a portfolio of
__ equity securities, each of which has been selected by three or more of the
top five analysts in each of 50 major industries. These top analysts have been
identified and monitored by the Portfolio Consultant (see "The Trust--The
Securities" below). As used herein, the term "Securities" means the common
stocks initially deposited in the Trust and described in "Portfolio" in Part A
and any additional common stocks acquired and held by the Trust pursuant to the
provisions of the Indenture. All of the Securities in the Trust are listed on
the New York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers Automated Quotations ("NASDAQ") National
Quotation Market System.
The Trust will terminate in approximately one year, at which time
investors may choose to either receive the distributions in kind (if they own at
least 2,500 Units), in cash or reinvest in a subsequent series of Equity
Securities Trust (if available) at a reduced sales charge. Since the Sponsor may
deposit additional Securities in connection with the sale of additional Units,
the yields on these Securities may change subsequent to the Initial Date of
Deposit. Further, the Securities may appreciate or depreciate in value,
dependent upon the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular.
Therefore, there is no guarantee that the objective of the Trust will be
achieved.
THE SECURITIES. Each of the Securities in the Portfolio of the Trust was
recommended as "buy" or "strong buy" as of the business day prior to the Initial
Date of Deposit by three or more of the "All-Star Analysts" as identified by
Zacks in the Zacks/Wall Street Journal All-Star Analysts Survey. The concept of
All-Star Analysts was first formulated in 1990, when Zacks and the Wall Street
Journal began tracking the returns of stocks recommended by brokerage firms.
This initial study, which is updated quarterly by Zacks and published in the
Wall Street Journal, measured only the performance of the "buy list" published
by the major brokers. In 1993 this analysis was expanded and Zacks began
measuring the performance of the stocks recommended by each of the individual
analysts employed by the brokerage firms. Each year Zacks and the Wall Street
Journal identify the top analysts in each of 50 major industries based on the
historical performance of the stocks they recommend. Only analysts who do not
change firms during the year, who follow at least five companies in their
industry and who follow at least 2 of the 10 largest firms in their industry are
included in the competition. Equal weighted
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portfolios are created by Zacks throughout the year that contain all stocks
recommended by each of the analysts as "buys" or "strong buys." Whenever a
recommendation is lowered, the stock is removed from the hypothetical portfolio
and whenever a new stock is recommended, it is added to the hypothetical
portfolio which is then rebalanced. In each industry the five analysts with the
best performing portfolio for the year are designated "All-Star Analysts" for
the industry and are published by the Wall Street Journal in the annual
Zacks/Wall Street Journal All-Star Analysts Survey. Each stock in the portfolio
of the Trust was recommended as "buy" or "strong buy" as of the business day
prior to the Initial Date of Deposit by three or more of the 1995 All-Star
Analysts or by analysts identified by Zacks as possible 1996 All-Star Analysts.
The number of shares of each stock in the portfolio has been set by Zacks so
that the relative market value of the stock in the portfolio is proportionate to
the weight of its industry in the S&P 500 and within each industry if there were
more than one stock those stocks have been equally weighted in the portfolio.
Depending on the number of stocks that meet these criteria as of the business
day prior to the Initial Date of Deposit, the selection of the stocks for the
portfolio will be made from among such stocks by Zacks Investment Management.
The Trustee has not participated and will not participate in the selection
of Securities for the Trust, and neither the Sponsor, Zacks nor the Trustee will
be liable in any way for any default, failure or defect in any Securities.
The contracts to purchase Securities deposited initially in the Trust are
expected to settle in three business days, in the ordinary manner for such
Securities. Settlement of the contracts for Securities is thus expected to take
place prior to the settlement of purchase of Units on the Initial Date of
Deposit.
SUBSTITUTION OF SECURITIES. In the event of a failure to deliver any
Security that has been purchased for the Trust under a contract ("Failed
Securities"), the Sponsor is authorized under the Trust Agreement to direct the
Trustee to acquire other securities ("Substitute Securities") to make up the
original corpus of the Trust. In addition, the Sponsor, at its option, is
authorized under the Trust Agreement to direct the Trustee to reinvest in
Substitute Securities the proceeds of the sale of any of the Securities only if
such sale was due to unusual circumstances as set forth under "Trust
Administration-- Portfolio Supervision."
The Substitute Securities must be purchased within 20 days after the sale
of the portfolio Security or delivery of the notice of the failed contract.
Where the Sponsor purchases Substitute Securities in order to replace Failed
Securities, (i) the purchase price may not exceed the purchase price of the
Failed Securities and (ii) the Substitute Securities must be substantially
similar to the Failed Securities. Where the Sponsor purchases Substitute
Securities in order to replace Securities it sold, the Sponsor will endeavor to
select Securities which are equity securities that possess characteristics that
are consistent with the objective of the Trust as set forth above. Such
selection may include or be limited to Securities previously included in the
portfolio of the Trust. No assurance can be given that the Trust will retain its
present size and composition for any length of time.
The Trustee shall notify all Certificateholders of the acquisition of the
Substitute Security, within five days thereafter, and the Trustee shall, on the
next Distribution Date which is more than 30 days thereafter, make a pro rata
distribution of the amount, if any, by which the cost to the Trust of the Failed
Security exceeded the cost of the Substitute Security plus accrued interest, if
any. In the event no reinvestment is made, the proceeds of the sale of
Securities will be distributed to Certificateholders as set forth under "Rights
of Certificateholders--Distributions." In addition, if the right of substitution
shall not be utilized to acquire Substitute Securities in the event of a failed
contract, the Sponsor will cause to be refunded the sales charge attributable to
such Failed Securities to all Certificateholders, and distribute the principal
and dividends, if any, attributable to such Failed Securities on the next
Distribution Date. The proceeds from the sale of a Security or the exercise of
any redemption or call provision will be distributed to Certificateholders
except to the extent such proceeds are applied to meet redemptions of Units.
(See "Liquidity--Trustee Redemption.")
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RISK CONSIDERATIONS
FIXED PORTFOLIO. The value of the Units will fluctuate depending on all of
the factors that have an impact on the economy and the equity markets. These
factors similarly impact the ability of an issuer to distribute dividends.
Unlike a managed investment company in which there may be frequent changes in
the portfolio of securities based upon economic, financial and market analyses,
securities of a unit investment trust, such as the Trust, are not subject to
such frequent changes based upon continuous analysis. All the Securities in the
Trust are liquidated or distributed during a 60-day period at the termination of
the approximately [one]-year life of the Trust. Since the Trust will not sell
Securities in response to ordinary market fluctuation, but only at the Trust's
termination or upon the occurrence of certain events, the amount realized upon
the sale of the Securities may not be the highest price attained by an
individual Security during the life of the Trust. However, the Sponsor may
direct the disposition by the Trustee of Securities upon the occurrence of
certain events. Some of the Securities in the Trust may also be owned by other
clients of the Sponsor and their affiliates. However, because these clients may
have differing investment objectives, the Sponsor may sell certain Securities
from those accounts in instances where a sale by the Trust would be
impermissible, such as to maximize return by taking advantage of market
fluctuations. Investors should consult with their own financial advisers prior
to investing in the Trust to determine its suitability. (See "Trust
Administration--Portfolio Supervision" below.)
ADDITIONAL SECURITIES. Investors should be aware that in connection with
the creation of additional Units subsequent to the Initial Date of Deposit, the
Sponsor may deposit Additional Securities, contracts to purchase Additional
Securities or cash (or letter of credit in lieu of cash) with instructions to
purchase Additional Securities, in each instance maintaining the original
proportionate relationship, subject to adjustment under certain circumstances,
of the numbers of shares of each Security in the Trust. To the extent the price
of a Security increases or decreases between the time cash is deposited with
instructions to purchase the Security and the time the cash is used to purchase
the Security, Units may represent less or more of that Security and more or less
of the other Securities in the Trust. In addition, brokerage fees (if any)
incurred in purchasing Securities with cash deposited with instructions to
purchase the Securities will be an expense of the Trust. Price fluctuations
between the time of deposit and the time the Securities are purchased, and
payment of brokerage fees, will affect the value of every Certificateholder's
Units and the Income per Unit received by the Trust. In particular,
Certificateholders who purchase Units during the initial offering period would
experience a dilution of their investment as a result of any brokerage fees paid
by the Trust during subsequent deposits of Additional Securities purchased with
cash deposited. In order to minimize these effects, the Trust will try to
purchase Securities as near as possible to the Evaluation Time or at prices as
close as possible to the prices used to evaluate Trust Units at the Evaluation
Time.
COMMON STOCK. Since the Trust contains common stocks of domestic issuers,
an investment in Units of the Trust should be made with an understanding of the
risks inherent in any investment in common stocks including the risk that the
financial condition of the issuers of the Securities may become impaired or that
the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights of
creditors of, or holders of debt obligations or preferred stock issued by, the
issuer. Holders of common stocks have a right to receive dividends only when,
if, and in the amounts declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks usually have the right to receive dividends at a fixed rate
when and as declared by the issuer's board of directors, normally on a
cumulative basis. Dividends on cumulative preferred stock must be paid before
any dividends are paid on common stock and any cumulative preferred stock
dividend which has been omitted is added to future dividends payable to the
holders of such cumulative preferred stock. Preferred stocks are also usually
entitled to rights on liquidation which are senior to those of common stocks.
For these reasons, preferred stocks generally entail less risk than common
stocks.
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Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the Initial Date of Deposit.
LEGISLATION. From time to time Congress considers proposals to reduce the
rate of the dividends-received deduction which is available to certain
corporations. Enactment into law of a proposal to reduce the rate would
adversely affect the after-tax return to investors who can take advantage of the
deduction. Investors are urged to consult their own tax advisers. Further, at
any time after the Initial Date of Deposit, legislation may be enacted, with
respect to the Securities in the Trust or the issuers of the Securities.
Changing approaches to regulation, particularly with respect to the environment
or with respect to the petroleum industry, may have a negative impact on certain
companies represented in the Trust. There can be no assurance that future
legislation, regulation or deregulation will not have a material adverse effect
on the Trust or will not impair the ability of the issuers of the Securities to
achieve their business goals.
LEGAL PROCEEDINGS AND LITIGATION. At any time after the Initial Date of
Deposit, legal proceedings may be initiated on various grounds, or legislation
may be enacted, with respect to the Securities in the Trust or to matters
involving the business of the issuer of the Securities. There can be no
assurance that future legal proceedings or legislation will not have a material
adverse impact on the Trust or will not impair the ability of the issuers of the
Securities to achieve their business and investment goals.
GENERALLY. There is no assurance that any dividends will be declared or
paid in the future on the Securities. Investors should be aware that there is
no assurance that the Trust's objective will be achieved.
PUBLIC OFFERING
OFFERING PRICE. In calculating the Public Offering Price, the aggregate
value of the Securities is determined in good faith by the Trustee on each
"Business Day" as defined in the Indenture in the following manner: because the
Securities are listed on a national securities exchange, this evaluation is
based on the closing sale prices on that exchange as of the Evaluation Time
(unless the Trustee deems these prices inappropriate as a basis for valuation).
If the Trustee deems these prices inappropriate as a basis for evaluation, then
the Trustee may utilize, at the Trust's expense, an independent evaluation
service or services to ascertain the values of the Securities. The independent
evaluation service shall use any of the following methods, or a combination
thereof, which it deems appropriate: (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Securities on the bid
side of the market or by such other appraisal deemed appropriate by the Trustee
or (c) by any combination of the above, each as of the Evaluation Time.
VOLUME AND OTHER DISCOUNTS. Units are available at a volume discount
from the Public Offering Price during the initial public offering based upon
the number of Units purchased. This volume discount will result in a reduction
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of the sales charge applicable to such purchases. The amount of the volume
discount and the approximate reduced sales charge on the Public Offering Price
applicable to such purchases are as follows:
NUMBER OF UNITS APPROXIMATE REDUCED SALES CHARGE
10,000 but less than 25,000 2.45%
25,000 but less than 50,000 2.20%
50,000 but less than 100,000 2.00%
100,000 or more 1.75%
These discounts will apply to all purchases of Units by the same purchaser
during the initial public offering period. Units purchased by the same
purchasers in separate transactions during the initial public offering period
will be aggregated for purposes of determining if such purchaser is entitled to
a discount provided that such purchaser must own at least the required number of
Units at the time such determination is made. Units held in the name of the
spouse of the purchaser or in the name of a child of the purchaser under 21
years of age are deemed for the purposes hereof to be registered in the name of
the purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Employees (and their immediate families) of Reich & Tang Distributors L.P.
(and its affiliates) and of the special counsel to the Sponsor, may, pursuant to
employee benefit arrangements, purchase Units of the Trust at a price equal to
the aggregate value of the underlying securities in the Trust during the initial
offering period, divided by the number of Units outstanding at no sales charge.
Such arrangements result in less selling effort and selling expenses than sales
to employee groups of other companies. Resales or transfers of Units purchased
under the employee benefit arrangements may only be made through the Sponsor's
secondary market, so long as it is being maintained.
Investors in any open-end management investment company or unit investment
trust that have purchased their investment within a five-year period prior to
the date of this Prospectus can purchase Units of the Trust in an amount not
greater in value than the amount of said investment made during this five-year
period at a reduced sales charge of 1.95% of the public offering price.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a volume discount) less
the concession the Sponsor typically allows to brokers and dealers for purchases
(see "Public Offering--Distribution of Units") by (1) investors who purchase
Units through registered investment advisers, certified financial planners and
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management service, or provide
such services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, (3) any person who, for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive the volume discount.
DISTRIBUTION OF UNITS. During the initial offering period and thereafter
to the extent additional Units continue to be offered by means of this
Prospectus, Units will be distributed by the Sponsor and dealers at the Public
Offering Price. The initial offering period is thirty days after each deposit of
Securities in the Trust and the Sponsor may extend the initial
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offering period for successive thirty day periods. Certain banks and thrifts
will make Units of the Trust available to their customers on an agency basis. A
portion of the sales charge paid by their customers is retained by or remitted
to the banks. Under the Glass-Steagall Act, banks are prohibited from
underwriting Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have indicated that these particular
agency transactions are permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law expressed
herein and banks and financial institutions may be required to register as
dealers pursuant to state law.
The Sponsor intends to qualify the Units for sale in substantially all
States through dealers who are members of the National Association of Securities
Dealers, Inc. Units may be sold to dealers at prices which represent a
concession of up to 2.0% per Unit, subject to the Sponsor's right to change the
dealers' concession from time to time. In addition, for transactions of at least
100,000 Units or more, the Sponsor intends to negotiate the applicable sales
charge and such charge will be disclosed to any such purchaser. Such Units may
then be distributed to the public by the dealers at the Public Offering Price
then in effect. The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units. The Sponsor reserves the right to change
the discounts from time to time.
Broker-dealers of the Trust, banks and/or others are eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their registered representatives who have sold a minimum
number of units of unit investment trusts created by the Sponsor during a
specified time period. In addition, at various times the Sponsor may implement
other programs under which the sales forces of brokers, dealers, banks and/or
others may be eligible to win other nominal awards for certain sales efforts or
under which the Sponsor will reallow to any such brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor, or participate in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales charges on
the sales generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time pursuant to
objective criteria established by the Sponsor pay fees to qualifying brokers,
dealers, banks and/or others for certain services or activities which are
primarily intended to result in sales of Units of the Trust. Such Payments are
made by the Sponsor out of their own assets and not out of the assets of the
Trust. These programs will not change the price Certificateholders pay for their
Units or the amount that the Trust will receive from the Units sold.
SPONSOR'S PROFITS. The Sponsor will receive a combined gross underwriting
commission equal to up to 2.95% of the Public Offering Price per 100 Units
(equivalent to 3.04% of the net amount invested in the Securities).
Additionally, the Sponsor may realize a profit on the deposit of the Securities
in the Trust representing the difference between the cost of the Securities to
the Sponsor and the cost of the Securities to the Trust (See "Portfolio"). The
Sponsor may realize profits or sustain losses with respect to Securities
deposited in the Trust which were acquired from underwriting syndicates of which
they were a member. All or a portion of the Securities deposited in the Trust
may have been acquired through the Sponsor.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
Initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsor for the Units. Cash, if any,
made available to the Sponsor prior to settlement date for the purchase of Units
may be used in the Sponsor's business subject to the limitations of 17 CFR
240.15c3-3 under the Securities Exchange Act of 1934 and may be of benefit to
the Sponsor.
Both upon acquisition of Securities and termination of the Trust, the
Trustee may utilize the services of the Sponsor for the purchase or sale of all
or a portion of the Securities in the Trust. The Sponsor may receive brokerage
commissions from the Trust in connection with such purchases and sales in
accordance with applicable law.
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In maintaining a market for the Units (see "Sponsor Repurchase") the
Sponsor will realize profits or sustain losses in the amount of any difference
between the price at which it buys Units and the price at which it resells such
Units.
RIGHTS OF CERTIFICATEHOLDERS
CERTIFICATES. Ownership of Units of the Trust is evidenced by registered
Certificates executed by the Trustee and the Sponsor. Certificates may be issued
in denominations of one hundred or more Units. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed and/or accompanied
by a written instrument or instruments of transfer. Although no such charge is
presently made or contemplated, the Trustee may require a Certificateholder to
pay $2.00 for each Certificate reissued or transferred and any governmental
charge that may be imposed in connection with each such transfer or interchange.
Mutilated, destroyed, stolen or lost Certificates will be replaced upon delivery
of satisfactory indemnity and payment of expenses incurred.
DISTRIBUTIONS. Dividends received by the Trust are credited by the
Trustee to an Income Account for the Trust. Other receipts, including the
proceeds of Securities disposed of, are credited to a Principal Account for the
Trust.
Distributions to each Certificateholder from the Income Account are
computed as of the close of business on each Record Date for the following
payment date and consist of an amount substantially equal to such
Certificateholder's pro rata share of the income credited to the Income Account,
less expenses. Distributions from the Principal Account of the Trust (other than
amounts representing failed contracts, as previously discussed) will be computed
as of each Record Date, and will be made to the Certificateholders of the Trust
on or shortly after the Distribution Date. Proceeds representing principal
received from the disposition of any of the Securities between a Record Date and
a Distribution Date which are not used for redemptions of Units will be held in
the Principal Account and not distributed until the next Distribution Date.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the Distribution Date after such purchase.
As of each Record Date, the Trustee will deduct from the Income Account of
the Trust, and, to the extent funds are not sufficient therein, from the
Principal Account of the Trust, amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Trust Expenses and Charges").
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges that may be payable out of the Trust. Amounts so withdrawn
shall not be considered a part of such Trust's assets until such time as the
Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Income and Principal
Accounts such amounts as may be necessary to cover redemptions of Units by the
Trustee.
The dividend distribution per 100 Units, if any, cannot be anticipated and
may be paid as Securities are redeemed, exchanged or sold, or as expenses of the
Trust fluctuate. No distribution need be made from the Income Account or the
Principal Account until the balance therein is an amount sufficient to
distribute $1.00 per 100 Units.
RECORDS. The Trustee shall furnish Certificateholders in connection with
each distribution a statement of the amount of dividends and interest, if any,
and the amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per 100 Units. Within a reasonable time after
the end of each calendar year, the Trustee will furnish to each person who at
any time during the calendar year was a Certificateholder of record, a statement
showing (a) as to the Income Account: dividends, interest and other cash amounts
received, amounts paid for purchases of Substitute Securities and redemptions of
Units, if any, deductions for applicable taxes and fees and expenses of the
Trust, and the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount representing
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the pro rata share of each 100 Units outstanding on the last business day of
such calendar year; (b) as to the Principal Account: the dates of disposition of
any Securities and the net proceeds received therefrom, deductions for payments
of applicable taxes and fees and expenses of the Trust, amounts paid for
purchases of Substitute Securities and redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed both as a
total dollar amount and as a dollar amount representing the pro rata share of
each 100 Units outstanding on the last business day of such calendar year; (c) a
list of the Securities held, a list of Securities purchased, sold or otherwise
disposed of during the calendar year and the number of Units outstanding on the
last business day of such calendar year; (d) the Redemption Price per 100 Units
based upon the last computation thereof made during such calendar year; and (e)
amounts actually distributed to Certificateholders during such calendar year
from the Income and Principal Accounts, separately stated, of the Trust,
expressed both as total dollar amounts and as dollar amounts representing the
pro rata share of each 100 Units outstanding on the last business day of such
calendar year.
The Trustee shall keep available for inspection by Certificateholders at
all reasonable times during usual business hours, books of record and account of
its transactions as Trustee, including records of the names and addresses of
Certificateholders, Certificates issued or held, a current list of Securities in
the portfolio and a copy of the Trust Agreement.
TAX STATUS
The following is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Certificateholders
should consult their tax advisers in determining the Federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units.
In rendering the opinion set forth below, Battle Fowler LLP has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein. In the Opinion of Battle Fowler LLP, special
counsel for the Sponsor, under existing law:
1. The Trust will be classified as a grantor trust for Federal income
tax purposes and not as a partnership or association taxable as a
corporation. Classification of the Trust as a grantor trust will cause the
Trust not to be subject to Federal income tax, and will cause the
Certificateholders of the Trust to be treated for Federal income tax
purposes as the owners of a pro rata portion of the assets of the Trust.
All income received by the Trust will be treated as income of the
Certificateholders in the manner set forth below.
2. The Trust is not subject to the New York Franchise Tax on Business
Corporations or the New York City General Corporation Tax. For a
Certificateholder who is a New York resident, however, a pro rata portion
of all or part of the income of the Trust will be treated as income of the
Certificateholder under the income tax laws of the State and City of New
York. Similar treatment may apply in other states.
3. During the 90-day period subsequent to the initial issuance date,
the Sponsor reserves the right to deposit Additional Securities that are
substantially similar to those establishing the Trust. This retained right
falls within the guidelines promulgated by the Internal Revenue Service
("IRS") and should not affect the taxable status of the Trust.
A taxable event will generally occur with respect to each
Certificateholder when the Trust disposes of a Security (whether by sale,
exchange or redemption) or upon the sale, exchange or redemption of Units by
such Certificateholder.
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The price a Certificateholder pays for his Units, including sales charges, is
allocated among his pro rata portion of each Security held by the Trust (in
proportion to the fair market values thereof on the date the Certificateholder
purchases his Units) in order to determine his initial cost for his pro rata
portion of each Security held by the Trust.
For Federal income tax purposes, a Certificateholder's pro rata portion of
dividends paid with respect to a Security held by a Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings and
profits" as defined by Section 316 of the Code. A Certificateholder's pro rata
portion of dividends paid on such Security that exceed such current and
accumulated earnings and profits will first reduce a Certificateholder's tax
basis in such Security, and to the extent that such dividends exceed a
Certificateholder's tax basis in such Security will generally be treated as
capital gain.
A Certificateholder's portion of gain, if any, upon the sale, exchange or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain and will be long-term if the
Certificateholder has held his Units for more than one year. Long-term capital
gains are generally taxed at the same rates applicable to ordinary income,
although individuals who realize long-term capital gains may be subject to a
reduced tax rate on such gains, rather than the "regular" maximum tax rate of
39.6%. Tax rates may increase prior to the time when Certificateholders may
realize gains from the sale, exchange or redemption of the Units or Securities.
A Certificateholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will generally be
considered a capital loss and will be long-term if the Certificateholder has
held his Units for more than one year. Capital losses are deductible to the
extent of capital gains; in addition, up to $3,000 of capital losses recognized
by non-corporate Certificateholders may be deducted against ordinary income.
Under Section 67 of the Code and the accompanying Regulations, a
Certificateholder who itemizes his deductions may also deduct his pro rata share
of the fees and expenses of the Trust, but only to the extent that such amounts,
together with the Certificateholder's other miscellaneous deductions, exceed 2%
of his adjusted gross income. The deduction of fees and expenses may also be
limited by Section 68 of the Code, which reduces the amount of itemized
deductions that are allowed for individuals with incomes in excess of certain
thresholds.
After the end of each calendar year, the Trustee will furnish to each
Certificateholder an annual statement containing information relating to the
dividends received by the Trust on the Securities, the gross proceeds received
by the Trust from the disposition of any Security, and the fees and expenses
paid by the Trust. The Trustee will also furnish annual information returns to
each Certificateholder and to the Internal Revenue Service.
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Certificateholder's pro rata
portion of dividends that are taxable as ordinary income to Certificateholders
which are received by the Trust from a domestic corporation under Section 243 of
the Code or from a qualifying foreign corporation under Section 245 of the Code
(to the extent the dividends are taxable as ordinary income, as discussed above)
in the same manner as if such corporation directly owned the Securities paying
such dividends. However, a corporation owning Units should be aware that
Sections 246 and 246A of the Code impose additional limitations on the
eligibility of dividends for the 70% dividends received deduction. These
limitations include a requirement that stock (and therefore Units) must
generally be held at least 46 days (as determined under Section 246(c) of the
Code). Moreover, the allowable percentage of the deduction will be reduced from
70% if a corporate Certificateholder owns certain stock (or Units) the financing
of which is directly attributable to indebtedness incurred by such corporation.
Accordingly, corporate Certificateholders should consult their tax adviser in
this regard.
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As discussed in the section "Termination", each Certificateholder may have
three options in receiving his termination distributions, which are (i) to
receive his pro rata share of the underlying Securities in kind, (ii) to receive
cash upon liquidation of his pro rata share of the underlying Securities, or
(iii) to invest the amount of cash he would receive upon the liquidation of his
pro rata share of the underlying Securities in units of a future series of the
Trust (if one is offered). There are special tax consequences should a
Certificateholder choose option (i), the exchange of the Certificateholder's
Units for a pro rata portion of each of the Securities held by the Trust plus
cash. Treasury Regulations provide that gain or loss is recognized when there is
a conversion of property into property that is materially different in kind or
extent. In this instance, the Certificateholder may be considered the owner of
an undivided interest in all of the Trust's assets. By accepting the
proportionate number of Securities of the Trust, in partial exchange for his
Units, the Certificateholder should be treated as merely exchanging his
undivided pro rata ownership of Securities held by the Trust into sole ownership
of a proportionate share of Securities. As such, there should be no material
difference in the Certificateholder's ownership, and therefore the transaction
should be tax free to the extent the Securities are received. Alternatively, the
transaction may be treated as an exchange that would qualify for nonrecognition
treatment to the extent the Certificateholder is exchanging his undivided
interest in all of the Trust's Securities for his proportionate number of shares
of the underlying Securities. In either instance, the transaction should result
in a non-taxable event for the Certificateholder to the extent Securities are
received. However, there is no specific authority addressing the income tax
consequences of an in-kind distribution from a grantor trust, and investors are
urged to consult their tax advisers in this regard.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trusts, are nevertheless taxed under Section 511 of the
Code on "unrelated business taxable income." Unrelated business taxable income
is income from a trade or business regularly carried on by the tax-exempt entity
that is unrelated to the entity's exempt purpose. Unrelated business taxable
income generally does not include dividend or interest income or gain from the
sale of investment property, unless such income is derived from property that is
debt-financed or is dealer property. A tax-exempt entity's dividend income from
the Trust and gain from the sale of Units in the Trust or the Trust's sale of
Securities is not expected to constitute unrelated business taxable income to
such tax-exempt entity unless the acquisition of the Unit itself is
debt-financed or constitutes dealer property in the hands of the tax-exempt
entity.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit-sharing retirement plan) should
consider among other things (a) whether the investment is prudent under the
Employee Retirement Income Security Act of 1974 ("ERISA"), taking into account
the needs of the plan and all of the facts and circumstances of the investment
in the Trust; (b) whether the investment satisfies the diversification
requirement of Section 404(a)(1)(C) of ERISA; and (c) whether the assets of the
Trust are deemed "plan assets" under ERISA and the Department of Labor
regulations regarding the definition of "plan assets."
Prospective tax-exempt investors are urged to consult their own tax
advisers prior to investing in the Trust.
LIQUIDITY
SPONSOR REPURCHASE. Certificateholders who wish to dispose of their Units
should inquire of the Sponsor as to current market prices prior to making a
tender for redemption. The aggregate value of the Securities will be determined
by the Trustee on a daily basis and computed on the basis set forth under
"Trustee Redemption." The Sponsor does not guarantee the enforceability,
marketability or price of any Securities in the Portfolio or of the Units. The
Sponsor may discontinue the repurchase of Units if the supply of Units exceeds
demand, or for other business reasons. The date of repurchase is deemed to be
the date on which Certificates representing Units are physically received in
proper form, i.e., properly endorsed, by Reich & Tang Distributors L.P., 600
Fifth Avenue, New York, New York 10020. Units received after 4 P.M., New York
Time, will be deemed to have been repurchased on the next business day. In the
event a market
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is not maintained for the Units, a Certificateholder may be able to dispose of
Units only by tendering them to the Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be reoffered
for sale by the Sponsor at a price based on the aggregate value of the
Securities in the Trust plus a 2.95% sales charge (or 3.04% of the net amount
invested) plus a pro rata portion of amounts, if any, in the Income Account. Any
Units that are purchased by the Sponsor in the secondary market also may be
redeemed by the Sponsor if it determines such redemption to be in its best
interest.
The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee for
redemption (see "Trustee Redemption"). Factors which the Sponsor will consider
in making a determination will include the number of Units of all Trusts which
it has in inventory, its estimate of the salability and the time required to
sell such Units and general market conditions. For example, if in order to meet
redemptions of Units the Trustee must dispose of Securities, and if such
disposition cannot be made by the redemption date (three calendar days after
tender), the Sponsor may elect to purchase such Units. Such purchase shall be
made by payment to the Certificateholder not later than the close of business on
the redemption date of an amount equal to the Redemption Price on the date of
tender.
TRUSTEE REDEMPTION. At any time prior to the termination of the Trust
(approximately one year from the Initial Date of Deposit), Units may also be
tendered to the Trustee for redemption at its corporate trust office at 4 New
York Plaza, New York, New York 10004, upon proper delivery of Certificates
representing such Units and payment of any relevant tax. At the present time
there are no specific taxes related to the redemption of Units. No redemption
fee will be charged by the Sponsor or the Trustee. Units redeemed by the Trustee
will be cancelled.
Certificates representing Units to be redeemed must be delivered to the
Trustee and must be properly endorsed or accompanied by proper instruments of
transfer with signature guaranteed (or by providing satisfactory indemnity, as
in the case of lost, stolen or mutilated Certificates). Thus, redemptions of
Units cannot be effected until Certificates representing such Units have been
delivered by the person seeking redemption. (See "Certificates.")
Certificateholders must sign exactly as their names appear on the faces of their
Certificates. In certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of corporate
authority.
Within three business days following a tender for redemption, the
Certificateholder will be entitled to receive an amount for each Unit tendered
equal to the Redemption Price per Unit computed as of the Evaluation Time set
forth under "Summary of Essential Information" in Part A on the date of tender.
The "date of tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the close of trading
on the New York Stock Exchange (4:00 p.m. Eastern Time), the date of tender is
the next day on which such Exchange is open for trading, and such Units will be
deemed to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.
A Certificateholder will receive his redemption proceeds in cash and
amounts paid on redemption shall be withdrawn from the Income Account, or, if
the balance therein is insufficient, from the Principal Account. All other
amounts paid on redemption shall be withdrawn from the Principal Account. The
Trustee is empowered to sell Securities in order to make funds available for
redemptions. Such sales, if required, could result in a sale of Securities by
the Trustee at a loss. To the extent Securities are sold, the size and diversity
of the Trust will be reduced. The Securities to be sold will be selected by the
Trustee in order to maintain, to the extent practicable, the proportionate
relationship among the number of shares of each Stock. Provision is made in the
Indenture under which the Sponsor may, but need not, specify minimum amounts in
which blocks of Securities are to be sold in order to obtain the best price for
the Trust. While these minimum amounts may
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vary from time to time in accordance with market conditions, the Sponsor
believes that the minimum amounts which would be specified would be
approximately 100 shares for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in the
Trust determined by the Trustee on the basis of (i) the cash on hand in the
Trust or moneys in the process of being collected, (ii) the value of the
Securities in the Trust as determined by the Trustee, less (a) amounts
representing taxes or other governmental charges payable out of the Trust, (b)
the accrued expenses of the Trust and (c) cash allocated for the distribution to
Certificateholders of record as of the business day prior to the evaluation
being made. The Trustee may determine the value of the Securities in the Trust
in the following manner: because the Securities are listed on a national
securities exchange, this evaluation is based on the closing sale prices on that
exchange. Unless the Trustee deems these prices inappropriate as a basis for
evaluation or if there is no such closing purchase price, then the Trustee may
utilize, at the Trust's expense, an independent evaluation service or services
to ascertain the values of the Securities. The independent evaluation service
shall use any of the following methods, or a combination thereof, which it deems
appropriate: (a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Securities on the bid side of the market or
(c) by any combination of the above.
Any Certificateholder tendering 2,500 Units or more of the Trust for
redemption may request by written notice submitted at the time of tender from
the Trustee in lieu of a cash redemption a distribution of shares of Securities
and cash in an amount and value equal to the Redemption Price Per Unit as
determined as of the evaluation next following tender. To the extent possible,
in kind distributions ("In Kind Distributions") shall be made by the Trustee
through the distribution of each of the Securities in book-entry form to the
account of the Certificateholder's bank or broker-dealer at The Depository Trust
Company. An In Kind Distribution will be reduced by customary transfer and
registration charges. The tendering Certificateholder will receive his pro rata
number of whole shares of each of the Securities comprising the Trust portfolio
and cash from the Principal Accounts equal to the balance of the Redemption
Price to which the tendering Certificateholder is entitled. If funds in the
Principal Account are insufficient to cover the required cash distribution to
the tendering Certificateholder, the Trustee may sell Securities in the manner
described above.
The Trustee is irrevocably authorized in its discretion, if the Sponsor
does not elect to purchase a Unit tendered for redemption or if the Sponsor
tenders a Unit for redemption, in lieu of redeeming such Unit, to sell such Unit
in the over-the-counter market for the account of the tendering
Certificateholder at prices which will return to the Certificateholder an amount
in cash, net after deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Price for such Unit. The
Trustee will pay the net proceeds of any such sale to the Certificateholder on
the day he would otherwise be entitled to receive payment of the Redemption
Price.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on that Exchange is restricted or during which
(as determined by the Securities and Exchange Commission) an emergency exists as
a result of which disposal or evaluation of the Bonds is not reasonably
practicable, or for such other periods as the Securities and Exchange Commission
may by order permit. The Trustee and the Sponsor are not liable to any person or
in any way for any loss or damage which may result from any such suspension or
postponement.
A Certificateholder who wishes to dispose of his Units should inquire of
his bank or broker in order to determine if there is a current secondary market
price in excess of the Redemption Price.
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TRUST ADMINISTRATION
PORTFOLIO SUPERVISION. The Trust is a unit investment trust and is not a
managed fund. Traditional methods of investment management for a managed fund
typically involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Portfolio of the Trust, however,
will not be managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its Securities from the portfolio. It
is unlikely that the Trust will sell any of the Securities other than to satisfy
redemptions of Units, or to cease buying Additional Securities in connection
with the issuance of additional Units. However, the Trust Agreement provides
that the Sponsor may direct the disposition of Securities upon the occurrence of
certain events including: (1) default in payment of amounts due on any of the
Securities; (2) institution of certain legal proceedings; (3) default under
certain documents materially and adversely affecting future declaration or
payment of amounts due or expected; (4) determination of the Sponsor that the
tax treatment of the Trust as a grantor trust would otherwise be jeopardized; or
(5) decline in price as a direct result of serious adverse credit factors
affecting the issuer of a Security which, in the opinion of the Sponsor, would
make the retention of the Security detrimental to the Trust or the
Certificateholders. Furthermore, the Trust will likely continue to hold a
Security and purchase additional shares notwithstanding its ceasing to be
included among the "buy" or "strong buy" recommendations of at least three of
the All-Star Analysts in that industry.
In addition, the Trust Agreement provides as follows:
(a) If a default in the payment of amounts due on any Security occurs
pursuant to provision (1) above and if the Sponsor fails to give immediate
instructions to sell or hold that Security, the Trustee, within 30 days of
that failure by the Sponsor, shall sell the Security.
(b) It is the responsibility of the Sponsor to instruct the Trustee
to reject any offer made by an issuer of any of the Securities to issue
new securities in exchange and substitution for any Security pursuant to a
recapitalization or reorganization, if any exchange or substitution is
effected notwithstanding such rejection, any securities or other property
received shall be promptly sold unless the Sponsor directs that it be
retained.
(c) Any property received by the Trustee after the Initial Date of
Deposit as a distribution on any of the Securities in a form other than
cash or additional shares of the Securities, which shall be retained, or
shall be promptly sold unless the Sponsor directs that it be retained by
the Trustee. The proceeds of any disposition shall be credited to the
Income or Principal Account of the Trust.
(d) The Sponsor is authorized to increase the size and number of
Units of the Trust by the deposit of Additional Securities, contracts to
purchase Additional Securities or cash or a letter of credit with
instructions to purchase Additional Securities in exchange for the
corresponding number of additional Units from time to time subsequent to
the Initial Date of Deposit, provided that the original proportionate
relationship among the number of shares of each Security established on
the Initial Date of Deposit is maintained to the extent practicable. The
Sponsor may specify the minimum numbers in which Additional Securities
will be deposited or purchased. If a deposit is not sufficient to acquire
minimum amounts of each Security, Additional Securities may be acquired in
the order of the Security most under-represented immediately before the
deposit when compared to the original proportionate relationship. If
Securities of an issue originally deposited are unavailable at the time of
the subsequent deposit, the Sponsor may (i) deposit cash or a letter of
credit with instructions to purchase the Security when it becomes
available, or (ii) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a
Substitute Security.
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TRUST AGREEMENT AND AMENDMENT. The Trust Agreement may be amended by the
Trustee and the Sponsor without the consent of any of the Certificateholders:
(1) to cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency; or (3) to make such other provisions in regard to matters arising
thereunder as shall not adversely affect the interests of the
Certificateholders.
The Trust Agreement may also be amended in any respect, or performance of
any of the provisions thereof may be waived, with the consent of the holders of
Certificates evidencing 66 2/3% of the Units then outstanding for the purpose of
modifying the rights of Certificateholders; provided that no such amendment or
waiver shall reduce any Certificateholder's interest in the Trust without his
consent or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of the holders of all Certificates. The
Trust Agreement may not be amended, without the consent of the holders of all
Certificates in the Trust then outstanding, to increase the number of Units
issuable or to permit the acquisition of any Securities in addition to or in
substitution for those initially deposited in such Trust, except in accordance
with the provisions of the Trust Agreement. The Trustee shall promptly notify
Certificateholders, in writing, of the substance of any such amendment.
TRUST TERMINATION. The Trust Agreement provides that the Trust shall
terminate upon the maturity, redemption or other disposition, as the case may
be, of the last of the Securities held in such Trust but in no event is it to
continue beyond the Mandatory Termination Date. If the value of the Trust shall
be less than the minimum amount set forth under "Summary of Essential
Information" in Part A, the Trustee may, in its discretion, and shall, when so
directed by the Sponsor, terminate the Trust. The Trust may also be terminated
at any time with the consent of the holders of Certificates representing 100% of
the Units then outstanding. The Trustee may utilize the services of the Sponsor
for the sale of all or a portion of the Securities in the Trust, and in so
doing, the Sponsor will determine the manner, timing and execution of the sales
of the underlying Securities. Any brokerage commissions received by the Sponsor
from the Trust in connection with such sales will be in accordance with
applicable law. In the event of termination, written notice thereof will be sent
by the Trustee to all Certificateholders. Such notice will provide
Certificateholders with the following three options by which to receive their
pro rata share of the net asset value of the Trust and requires their election
of one of the three options by notifying the Trustee prior to the commencement
of the Liquidation Period by returning a properly completed election request (to
be supplied to Certificateholders at least 20 days prior to such date) (see Part
A--"Summary of Essential Information" for the date of the commencement of the
Liquidation Period):
1. A Certificateholder who owns at least 2,500 units and whose
interest in the Trust would entitle him to receive at least one share of
each underlying Security will have his Units redeemed on commencement of
the Liquidation Period by distribution of the Certificateholder's pro rata
share of the net asset value of the Trust on such date distributed in kind
to the extent represented by whole shares of underlying Securities and the
balance in cash within three business days next following the commencement
of the Liquidation Period. Certificateholders subsequently selling such
distributed Securities will incur brokerage costs when disposing of such
Securities. Certificateholders should consult their own tax adviser in
this regard;
2. to receive in cash such Certificateholder's pro rata share of the
net asset value of the Trust derived from the sale by the Sponsor as the
agent of the Trustee of the underlying Securities over a period not to
exceed 60 days immediately following the commencement of the Liquidation
Period. The Certificateholder's pro rata share of its net assets of the
Trust will be distributed to such Certificateholder within three days of
the settlement of the trade of the last Security to be sold; and/or
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3. to invest such Certificateholder's pro rata share of the net
assets of the Trust derived from the sale by the Sponsor as agent of the
Trustee of the underlying Securities over a period not to exceed 60 days
immediately following the commencement of the Liquidation Period, in units
of a subsequent series of Equity Securities Trust (the "New Series"),
provided one is offered. It is expected that a special redemption and
liquidation will be made of all Units of this Trust held by a
Certificateholder (a "Rollover Certificateholder") who affirmatively
notifies the Trustee by the Rollover Notification Date set forth in the
"Summary of Essential Information" for the Trust in Part A. The Units of a
New Series will be purchased by the Certificateholder within three
business days of the settlement of the trade for the last Security to be
sold. Such purchaser will be entitled to a reduced sales load upon the
purchase of units of the New Series. It is expected that the terms of the
New Series will be substantially the same as the terms of the Trust
described in this Prospectus, and that similar options with respect to the
termination of such New Series will be available. The availability of this
option does not constitute a solicitation of an offer to purchase Units of
a New Series or any other security. A Certificateholder's election to
participate in this option will be treated as an indication of interest
only. At any time prior to the purchase by the Certificateholder of units
of a New Series such Certificateholder may change his investment strategy
and receive, in cash, the proceeds of the sale of the Securities. An
election of this option will not prevent the Certificateholder from
recognizing taxable gain or loss (except in the case of a loss, if and to
the extent the New Series is treated as substantially identical to the
Trust) as a result of the liquidation, even though no cash will be
distributed to pay any taxes. Certificateholders should consult their own
tax advisers in this regard.
Certificateholders who do not make any election will be deemed to have
elected to receive the termination distribution in cash (option number 2).
The Sponsor has agreed to effect the sales of underlying securities for
the Trustee in the case of the second and third options over a period not to
exceed 60 days immediately following the commencement of the Liquidation Period
free of brokerage commissions. The Sponsor, on behalf of the Trustee, will sell,
unless prevented by unusual and unforeseen circumstances, such as, among other
reasons, a suspension in trading of a Security, the close of a stock exchange,
outbreak of hostilities and collapse of the economy, on each business day during
the 60 day period at least a number of shares of each Security which then
remains in the portfolio based on the number of shares of each issue in the
portfolio) multiplied by a fraction the numerator of which is one and the
denominator of which is the number of days remaining in the 60 day sales period.
The Redemption Price Per Unit upon the settlement of the last sale of Securities
during the 60 day period will be distributed to Certificateholders in redemption
of such Certificateholders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New
Series and the amount of other orders for Units in the New Series, the Sponsor
may purchase a large amount of securities for the New Series in a short period
of time. The Sponsor's buying of securities may tend to raise the market prices
of these securities. The actual market impact of the Sponsor's purchases,
however, is currently unpredictable because the actual amount of securities to
be purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the 60 day
period immediately following the commencement of the Liquidation Period;
depending on the number of sales required, the prices of and demand for
Securities, such sales may tend to depress the market prices and thus reduce the
proceeds of such sales. The Sponsor believes that the sale of underlying
Securities over a 60 day period as described above is in the best interest of a
Certificateholder and may mitigate the negative market price consequences
stemming from the trading of large amounts of Securities. The Securities may be
sold in fewer than 60 days if, in the Sponsor's judgment, such sales are in the
best interest of Certificateholders. The Sponsor, in implementing such sales of
securities on behalf of the Trustee, will seek to maximize the sales proceeds
and will act in the best interests of the Certificateholders. There can be no
assurance, however, that any adverse price consequences of heavy trading will be
mitigated.
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It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Securities: for highly liquid
Securities, the Sponsor will generally sell Securities on the first day of the
Liquidation Period; for less liquid Securities, on each of the first two days of
the Liquidation Period, the Sponsor will generally sell any amount of any
underlying Securities at a price no less than 1/2 of one point under the last
closing sale price of those Securities. On each of the following two days, the
price limit will increase to one point under the last closing sale price. After
four days, the Sponsor intends to sell at least a fraction of the remaining
underlying Securities, the numerator of which is one and the denominator of
which is the total number of days remaining (including that day) in the
Liquidation Period, without any price restrictions.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor any subsequent series of the Trust, without penalty or incurring
liability to any Certificateholder. If the Sponsor so decides, the Sponsor will
notify the Trustee of that decision, and the Trustee will notify the
Certificateholders before the commencement of the Liquidation Period. All
Certificateholders will then elect either option 1, if eligible, or option 2.
By electing to reinvest in the New Series, the Certificateholder indicates
his interest in having his terminating distribution from the Trust invested only
in the New Series created following termination of the Trust; the Sponsor
expects, however, that a similar reinvestment program will be offered with
respect to all subsequent series of the Trust, thus giving Certificateholders a
yearly opportunity to elect to "rollover" their terminating distributions into a
New Series. The availability of the reinvestment privilege does not constitute a
solicitation of offers to purchase units of a New Series or any other security.
A Certificateholder's election to participate in the reinvestment program will
be treated as an indication of interest only. The Sponsor intends to coordinate
the date of deposit of a future series so that the terminating trust will
terminate contemporaneously with the creation of a New Series. The Sponsor
reserves the right to modify, suspend or terminate the reinvestment privilege at
any time.
THE SPONSOR. The Sponsor, Reich & Tang Distributors L.P. (successor to the
Unit Investment Trust Division of Bear, Stearns & Co. Inc.), a Delaware limited
partnership, is engaged in the brokerage business and is a member of the
National Association of Securities Dealers, Inc. Reich & Tang is also a
registered investment advisor. Reich & Tang maintains its principal business
offices at 600 Fifth Avenue, New York, New York 10020. Reich & Tang Asset
Management L.P. ("RTAM L.P."), a registered investment adviser having its
principal place of business at 399 Boylston Street, Boston, MA 02116, is the 99%
limited partner of the Sponsor. RTAM L.P. is 99.5% owned by New England
Investment Companies, L.P. ("NEIC L.P.") and Reich & Tang Asset Management, Inc.
("RTAM Inc."), a wholly owned subsidiary of NEIC L.P., owns the remaining .5%
interest of RTAM L.P. and is its general partner. NEIC L.P.'s general partner is
New England Investment Companies, Inc. ("NEIC"), a holding company offering a
broad array of investment styles across a wide range of asset categories through
eleven subsidiaries, divisions and affiliates offering a wide array of
investment styles and products to institutional clients. These affiliates in the
aggregate are investment advisors or managers to over 54 registered investment
companies. Reich & Tang is successor Sponsor to Bear Stearns for numerous series
of unit investment trusts, including New York Municipal Trust, Series 1 (and
Subsequent Series), Municipal Securities Trust, Series 1 (and Subsequent
Series), 1st Discount Series (and Subsequent Series), Multi-State Series 1 (and
Subsequent Series), Mortgage Securities Trust, Series 1 (and Subsequent Series),
Insured Municipal Securities Trust, Series 1 (and Subsequent Series) and 5th
Discount Series (and Subsequent Series) and Equity Securities Trust, Series 1,
Signature Series, Gabelli Communications Income Trust (and Subsequent Series).
On August 30, 1996, New England Mutual Life Insurance Company
("The New England") and Metropolitan Life Insurance Company ("MetLife") merged,
with MetLife being the continuing company. RTAM L.P. remains a wholly-owned
subsidiary of NEIC L.P. but RTAM Inc., its sole general partner, is now an
indirect subsidiary of MetLife. Also, MetLife New England Holdings, Inc., a
wholly-owned subsidiary of MetLife, owns 55% of the outstanding limited
partnership
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interest of NEIC L.P. MetLife is a mutual life insurance company with assets of
$142.2 billion at March 31, 1996. It is the second largest life insurance
company in the United States in terms of total assets. MetLife provides a wide
range of insurance and investment products and services to individuals and
groups and is the leader among United States life insurance companies in terms
of total life insurance in force, which exceeded $1.2 trillion at March 31, 1996
for MetLife and its insurance affiliates. MetLife and its affiliates provide
insurance or other financial services to approximately 36 million people
worldwide.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations. The Sponsor will be under no liability to
Certificateholders for taking any action, or refraining from taking any action,
in good faith pursuant to the Trust Agreement, or for errors in judgment except
in cases of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor. If at any time the Sponsor
shall resign or fail to perform any of its duties under the Trust Agreement or
becomes incapable of acting or becomes bankrupt or its affairs are taken over by
public authorities, then the Trustee may either (a) appoint a successor Sponsor;
(b) terminate the Trust Agreement and liquidate the Trust; or (c) continue to
act as Trustee without terminating the Trust Agreement. Any successor Sponsor
appointed by the Trustee shall be satisfactory to the Trustee and, at the time
of appointment, shall have a net worth of at least $1,000,000.
THE TRUSTEE. The Trustee is The Chase Manhattan Bank with its principal
executive office located at 270 Park Avenue, New York, New York 10017 (800)
428-8890 and its unit investment trust office at 4 New York Plaza, New York, New
York 10004. The Trustee is subject to supervision by the Superintendent of Banks
of the State of New York, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System.
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment; or for any disposition of any
moneys, Securities or Certificates in accordance with the Trust Agreement,
except in cases of its own willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties; provided, however, that the
Trustee shall not in any event be liable or responsible for any evaluation made
by any independent evaluation service employed by it. In addition, the Trustee
shall not be liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or the Trust which it may be required to pay under
current or future law of the United States or any other taxing authority having
jurisdiction. The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities pursuant to the
Trust Agreement.
For further information relating to the responsibilities of the Trustee
under the Trust Agreement, reference is made to the material set forth under
"Rights of Certificateholders."
The Trustee may resign by executing an instrument in writing and filing
the same with the Sponsor, and mailing a copy of a notice of resignation to all
Certificateholders. In such an event the Sponsor is obligated to appoint a
successor Trustee as soon as possible. In addition, if the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor as
provided in the Trust Agreement. Notice of such removal and appointment shall be
mailed to each Certificateholder by the Sponsor. If upon resignation of the
Trustee no successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court of
competent jurisdiction for the appointment of a successor. The resignation or
removal of the Trustee becomes effective only when the successor Trustee accepts
its appointment as such or when a court
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of competent jurisdiction appoints a successor Trustee. Upon execution of a
written acceptance of such appointment by such successor Trustee, all the
rights, powers, duties and obligations of the original Trustee shall vest in the
successor.
Any corporation into which the Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Trustee shall be a party, shall be the successor Trustee. The
Trustee must always be a banking corporation organized under the laws of the
United States or any State and have at all times an aggregate capital, surplus
and undivided profits of not less than $2,500,000.
THE PORTFOLIO CONSULTANT. The Portfolio Consultant is Zacks Investment
Research Inc., an Illinois corporation, with offices at 155 North Wacker Drive,
Chicago, Illinois 60606. Zacks is a 150 person consulting firm that summarizes,
interprets, organizes, distributes, and evaluates the research produced by the
3000 analysts employed by 230 United States brokerage firms. This price driving
flow of information has been tracked by Zacks since 1980 and is delivered, on a
daily basis, to retail brokers at the Zacks Web site, www.reswizard.com, and is
delivered, on a weekly basis, to individual investors at the Zacks Web site,
www.zacks.com.
Zacks Investment Management, a wholly owned subsidiary of Zacks, is a
registered investment advisor, with $60 million under management in hedge funds.
The Portfolio Consultant is not a Sponsor of the Trust. The Portfolio
Consultant has been retained by the Sponsor, at its expense, to utilize its
equity expertise in selecting the Securities deposited in the Trust. The
Portfolio Consultant's only responsibility with respect to the Trust, in
addition to its role in Portfolio selection, is to monitor the Securities of the
Portfolio and make recommendations to the Sponsor regarding the disposition of
the Securities held by the Trust. The responsibility of monitoring the
Securities of the Portfolio means that if the Portfolio Consultant's views
materially change regarding the appropriateness of an investment in any Security
then held in the Trust based upon the investment objectives, guidelines, terms,
parameters, policies and restrictions supplied to the Portfolio Consultant by
the Sponsor, the Portfolio Consultant will notify the Sponsor of such change to
the extent consistent with applicable legal requirements. The Sponsor is not
obligated to adhere to the recommendations of the Portfolio Consultant regarding
the disposition of Securities. The Sponsor has the sole authority to direct the
Trust to dispose of Securities under the Trust Agreement. The Portfolio
Consultant has no other responsibilities or obligations to the Trust or the
Certificateholders.
The Portfolio Consultant may resign or may be removed by the Sponsor at
any time on sixty days' prior notice. The Sponsor shall use its best efforts to
appoint a satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Portfolio
Consultant. If upon resignation of the Portfolio Consultant no successor has
accepted appointment within sixty days after notice of resignation, the Sponsor
has agreed to perform this function.
EVALUATION OF THE TRUST. The value of the Securities in the Trust
portfolio is determined in good faith by the Trustee on the basis set forth
under "Public Offering--Offering Price." The Sponsor and the Certificateholders
may rely on any evaluation furnished by the Trustee and shall have no
responsibility for the accuracy thereof. Determinations by the Trustee under the
Trust Agreement shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Trustee shall be under
no liability to the Sponsor or Certificateholders for errors in judgment, except
in cases of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties. The Trustee, the Sponsor and the
Certificateholders may rely on any evaluation furnished to the Trustee by an
independent evaluation service and shall have no responsibility for the accuracy
thereof.
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TRUST EXPENSES AND CHARGES
All or a portion of the expenses incurred in creating and establishing the
Trust, including the cost of the initial preparation and execution of the Trust
Agreement, registration of the Trust and the Units under the Investment Company
Act of 1940 and the Securities Act of 1933, the initial fees and expenses of the
Trustee, legal expenses and other actual out-of-pocket expenses, will be paid by
the Trust and charged to capital over the life of the Trust. Offering costs,
including the costs of registering securities with the Securities and Exchange
Commission and the states, will be charged to capital over the term of the
initial offering period, which may be between 30 and 90 days. All advertising
and selling expenses, as well as any organizational expenses not paid by the
Trust, will be borne by the Sponsor at no cost to the Trust.
The Sponsor will receive for portfolio supervisory services to the Trust
an Annual Fee in the amount set forth under "Summary of Essential Information"
in Part A. The Sponsor's fee may exceed the actual cost of providing portfolio
supervisory services for the Trust, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the Equity
Securities Trust in any calendar year exceed the aggregate cost to the Sponsor
of supplying such services in such year. (See "Portfolio Supervision.")
The Trustee will receive, for its ordinary recurring services to the
Trust, an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Trust Agreement, see "Trust
Administration" and "Rights of Certificateholders."
The Trustee's fees applicable to a Trust are payable as of each Record
Date from the Income Account of the Trust to the extent funds are available and
then from the Principal Account. Both fees may be increased without approval of
the Certificateholders by amounts not exceeding proportionate increases in
consumer prices for services as measured by the United States Department of
Labor's Consumer Price Index entitled "All Services Less Rent."
The following additional charges are or may be incurred by the Trust: all
expenses (including counsel fees) of the Trustee incurred and advances made in
connection with its activities under the Trust Agreement, including the expenses
and costs of any action undertaken by the Trustee to protect the Trust and the
rights and interests of the Certificateholders; fees of the Trustee for any
extraordinary services performed under the Trust Agreement; indemnification of
the Trustee for any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification of the
Sponsor for any losses, liabilities and expenses incurred in acting as sponsors
of the Trust without gross negligence, bad faith or willful misconduct on its
part; and all taxes and other governmental charges imposed upon the Securities
or any part of the Trust (no such taxes or charges are being levied, made or, to
the knowledge of the Sponsor, contemplated). The above expenses, including the
Trustee's fees, when paid by or owing to the Trustee are secured by a first lien
on the Trust to which such expenses are charged. In addition, the Trustee is
empowered to sell the Securities in order to make funds available to pay all
expenses.
Unless the Sponsor otherwise directs, the accounts of the Trust shall be
audited not less than annually by independent public accountants selected by the
Sponsor. The expenses of the audit shall be an expense of the Trust. So long as
the Sponsor maintains a secondary market, the Sponsor will bear any audit
expense which exceeds $.50 Cents per 100 Units. Certificateholders covered by
the audit during the year may receive a copy of the audited financials upon
request.
REINVESTMENT PLAN
Income and principal distributions on Units (other than the final
distribution in connection with the termination of the Trust) may be reinvested
by participating in the Trust's reinvestment plan. Under the plan, the Units
acquired for
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participants will be either Units already held in inventory by the Sponsor or
new Units created by the Sponsor's deposit of Additional Securities as described
in "The Trust-Organization" in this Part B. Units acquired by reinvestment will
be subject to a reduced sales charge of 1.00%. In order to enable a
Certificateholder to participate in the reinvestment plan with respect to a
particular distribution on their Units, written notification must be received by
the Trustee within 10 days prior to the Record Date for such distribution. Each
subsequent distribution of income or principal on the participant's Units will
be automatically applied by the Trustee to purchase additional Units of the
Trust. The Sponsor reserves the right to demand, modify or terminate the
reinvestment plan at any time without prior notice. The reinvestment plan for
the Trust may not be available in all states.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
EXCHANGE PRIVILEGE. Certificateholders will be able to elect to exchange
any or all of their Units of this Trust for Units of one or more of any
available series of Equity Securities Trust, Insured Municipal Securities Trust,
Municipal Securities Trust, New York Municipal Trust or Mortgage Securities
Trust (the "Exchange Trusts") at a reduced sales charge as set forth below.
Under the Exchange Privilege, the Sponsor's repurchase price during the initial
offering period of the Units being surrendered will be based on the market value
of the Securities in the Trust portfolio or on the aggregate offer price of the
Bonds in the other Trust Portfolios; and, after the initial offering period has
been completed, will be based on the aggregate bid price of the Bonds in the
particular Trust portfolio. Units in an Exchange Trust then will be sold to the
Certificateholder at a price based on the aggregate offer price of the Bonds in
the Exchange Trust portfolio (or for units of Equity Securities Trust, based on
the market value of the underlying securities in the Trust portfolio) during the
initial public offering period of the Exchange Trust; and after the initial
public offering period has been completed, based on the aggregate bid price of
the Bonds in the Exchange Trust Portfolio if its initial offering has been
completed plus accrued interest (or for units of Equity Securities Trust, based
on the market value of the underlying securities in the Trust portfolio) and a
reduced sales charge as set forth below.
Except for Certificateholders who wish to exercise the Exchange Privilege
within the first five months of their purchase of Units of the Trust, any
purchaser who purchases Units under the Exchange Privilege will pay a lower
sales charge than that which would be paid for the Units by a new investor. For
Certificateholders who wish to exercise the Exchange Privilege within the first
five months of their purchase of Units of the Trust, the sales charge applicable
to the purchase of units of an Exchange Trust shall be the greater of (i) the
reduced sales charge or (ii) an amount which when coupled with the sales charge
paid by the Certificateholder upon his original purchase of Units of the Trust
would equal the sales charge applicable in the direct purchase of units of an
Exchange Trust.
Exercise of the Exchange Privilege by Certificateholders is subject to the
following conditions (i) the Sponsor must be maintaining a secondary market in
the units of the available Exchange Trust, (ii) at the time of the
Certificateholder's election to participate in the Exchange Privilege, there
must be units of the Exchange Trust available for sale, either under the initial
primary distribution or in the Sponsor's secondary market, (iii) exchanges will
be effected in whole units only, (iv) Units of the Mortgage Securities Trust may
only be acquired in blocks of 1,000 Units and (v) Units of the Equity Securities
Trust may only be acquired in blocks of 100 Units. Certificateholders will not
be permitted to advance any funds in excess of their redemption in order to
complete the exchange. Any excess proceeds received from a Certificateholder for
exchange will be remitted to such Certificateholder.
The Sponsor reserves the right to suspend, modify or terminate the
Exchange Privilege. The Sponsor will provide Certificateholders of the Trust
with 60 days' prior written notice of any termination or material amendment to
the Exchange Privilege, provided that, no notice need be given if (i) the only
material effect of an amendment is to reduce or eliminate the sales charge
payable at the time of the exchange, to add one or more series of the Trust
eligible for the Exchange
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Privilege or to delete a series which has been terminated from eligibility for
the Exchange Privilege, (ii) there is a suspension of the redemption of units of
an Exchange Trust under Section 22(e) of the Investment Company Act of 1940, or
(iii) an Exchange Trust temporarily delays or ceases the sale of its units
because it is unable to invest amounts effectively in accordance with its
investment objectives, policies and restrictions. During the 60-day notice
period prior to the termination or material amendment of the Exchange Privilege
described above, the Sponsor will continue to maintain a secondary market in the
units of all Exchange Trusts that could be acquired by the affected
Certificateholders. Certificateholders may, during this 60-day period, exercise
the Exchange Privilege in accordance with its terms then in effect.
To exercise the Exchange Privilege, a Certificateholder should notify the
Sponsor of his desire to exercise his Exchange Privilege. If Units of a
designated, outstanding series of an Exchange Trust are at the time available
for sale and such Units may lawfully be sold in the state in which the
Certificateholder is a resident, the Certificateholder will be provided with a
current prospectus or prospectuses relating to each Exchange Trust in which he
indicates an interest. He may then select the Trust or Trusts into which he
desires to invest the proceeds from his sale of Units. The exchange transaction
will operate in a manner essentially identical to a secondary market transaction
except that units may be purchased at a reduced sales charge.
THE CONVERSION OFFER. Unit owners of any registered unit investment trust
for which there is no active secondary market in the units of such trust (a
"Redemption Trust") will be able to elect to redeem such units and apply the
proceeds of the redemption to the purchase of available Units of one or more
series of Municipal Securities Trust, Insured Municipal Securities Trust,
Mortgage Securities Trust, New York Municipal Trust or Equity Securities Trust
(the "Conversion Trusts") at the Public Offering Price for units of the
Conversion Trust based on a reduced sales charge as set forth below. Under the
Conversion Offer, units of the Redemption Trust must be tendered to the trustee
of such trust for redemption at the redemption price determined as set forth in
the relevant Redemption Trust's prospectus. The purchase price of the units will
be based on the aggregate offer price of the in the Conversion Trust's portfolio
securities during its initial offering period; or, at a price based on the
aggregate bid price of the underlying bonds if the initial public offering of
the Conversion Trust has been completed, plus accrued interest and a sales
charge as set forth below. If the participant elects to purchase units of the
Equity Securities Trust under the Conversion Offer, the purchase price of the
units will be based, at all times, on the market value of the underlying
securities in the Trust portfolio plus a sales charge.
Except for Certificateholders who wish to exercise the Conversion Offer
within the first five months of their purchase of units of a Redemption Trust,
any Certificateholder who purchases Units under the Conversion Offer will pay a
lower sales charge than that which would be paid for the Units by a new
investor. For Certificateholders who wish to exercise the Conversion Offer
within the first five months of their purchase of units of Redemption Trust, the
sales charge applicable to the purchase of Units of a Conversion Trust shall be
the greater of (i) the reduced sales charge or (ii) an amount which when coupled
with the sales charge paid by the Certificateholder upon his original purchase
of units of the Redemption Trust would equal the sales charge applicable in the
direct purchase of Units of a Conversion Trust.
The exercise of the Conversion Offer is subject to the following
limitations: (i) the Conversion Offer is limited only to unit owners of any
Redemption Trust, (ii) at the time of the unit owner's election to participate
in the Conversion Offer, there also must be available units of a Conversion
Trust, either under a primary distribution or in the Sponsor's secondary market,
(iii) exchanges under the Conversion Offer will be effected in whole units only,
(iv) units of the Mortgage Securities Trust may only be acquired in blocks of
1,000 units, (v) units of the Equity Securities Trust may only be acquired in
blocks of 100 Units. Unit owners will not be permitted to advance any new funds
in order to complete an exchange under the Conversion Offer. Any excess proceeds
from units being redeemed will be returned to the unit owner.
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The Sponsor reserves the right to modify, suspend or terminate the
Conversion Offer. The Sponsor will provide Certificateholders with 60 days prior
written notice of any termination or material amendment to the Conversion Offer,
provided that, no notice need be given if (i) the only material effect of an
amendment is to reduce or eliminate the sales charge payable at the time of the
exchange, to add one or more series of the Trusts eligible for the Conversion
Offer, to add any new unit investment trust sponsored by Reich & Tang or a
sponsor controlled by or under common control with Reich & Tang, or to delete a
series which has been terminated from eligibility for the Conversion Offer, (ii)
there is a suspension of the redemption of units of a Conversion Trust under
Section 22(e) of the Act, or (iii) a Conversion Trust temporarily delays or
ceases the sale of its units because it is unable to invest amounts effectively
in accordance with its investment objectives, policies and restrictions.
To exercise the Conversion Offer, a unit owner of a Redemption Trust
should notify his retail broker of his desire to redeem his Redemption Trust
Units and use the proceeds from the redemption to purchase Units of one or more
of the Conversion Trusts. If Units of a designated, outstanding series of a
Conversion Trust are at that time available for sale and if such Units may
lawfully be sold in the state in which the unit owner is a resident, the unit
owner will be provided with a current prospectus or prospectuses relating to
each Conversion Trust in which he indicates an interest. He then may select the
Trust or Trusts into which he decides to invest the proceeds from the sale of
his Units. The transaction will be handled entirely through the unit owner's
retail broker. The retail broker must tender the units to the trustee of the
Redemption Trust for redemption and then apply the proceeds to the redemption
toward the purchase of units of a Conversion Trust at a price based on the
aggregate offer or bid side evaluation per Unit of the Conversion Trust,
depending on which price is applicable, plus accrued interest and the applicable
sales charge. The certificates must be surrendered to the broker at the time the
redemption order is placed and the broker must specify to the Sponsor that the
purchase of Conversion Trust Units is being made pursuant to the Conversion
Offer. The unit owner's broker will be entitled to retain a portion of the sales
charge.
TAX CONSEQUENCES OF THE EXCHANGE PRIVILEGE AND THE CONVERSION OFFER.
A surrender of Units pursuant to the Exchange Privilege or the Conversion Offer
will constitute a "taxable event" to the Certificateholder under the Internal
Revenue Code. The Certificateholder will realize a tax gain or loss that will be
of a long- or short-term capital or ordinary income nature depending on the
length of time the units have been held and other factors. (See "Tax Status".) A
Certificateholder's tax basis in the Units acquired pursuant to the Exchange
Privilege or Conversion Offer will be equal to the purchase price of such Units.
Investors should consult their own tax advisors as to the tax consequences to
them of exchanging or redeeming units and participating in the Exchange
Privilege or Conversion Offer.
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to federal tax law have been passed upon by Battle Fowler LLP,
75 East 55th Street, New York, New York 10022 as counsel for the Sponsor.
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have acted
as counsel for the Trustee.
INDEPENDENT ACCOUNTANTS. The Statement of Financial Condition, including
the Portfolio, is included herein in reliance upon the report of Price
Waterhouse LLP, independent accountants, and upon the authority of said firm as
experts in accounting and auditing.
PERFORMANCE INFORMATION. Total returns, average annualized returns or
cumulative returns for various periods of the stocks receiving "buy" or "strong
buy" recommendations of at least three of the All-Star Analysts monitored by the
Portfolio Consultant ("All-Star Analysts Recommendations") and this Trust may be
included from time to time in advertisements, sales literature and reports to
current or prospective investors. Total return shows changes in Unit price
during the period plus reinvestment of dividends and capital gains, divided by
the maximum public offering price. Average
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annualized returns show the average return for stated periods of longer than a
year. Sales material may also include an illustration of the cumulative results
of like annual investments in the All-Star Analysts Recommendations during an
accumulation period and like annual withdrawals during a distribution period.
Figures for actual portfolios will reflect all applicable expenses and, unless
otherwise stated, the maximum sales charge. No provision is made for any income
taxes payable. Similar figures may be given for this Trust. Trust performance
may be compared to performance on a total return basis of the Dow Jones
Industrial Average, the S&P 500 Composite Price Stock Index, or performance data
from Lipper Analytical Services, Inc. and Morningstar Publications, Inc. or from
publications such as Money, The New York Times, U.S. News and World Report,
Business Week, Forbes or Fortune. As with other performance data, performance
comparisons should not be considered representative of a Trust's relative
performance for any future period.
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<S> <C>
No person is authorized to give any information or to ----------------------------------------------------
make any representations not contained in Parts A and B of EQUITY SECURITIES TRUST
this Prospectus; and any information or representation not ----------------------------------------------------
contained herein must not be relied upon as having been SIGNATURE SERIES, ZACKS WALL STREET ALL-
authorized by the Trust, the Trustee or the Sponsor. The STAR ANALYSTS TRUST
Trust is registered as a unit investment trust under the ----------------------------------------------------
Investment Company Act of 1940. Such registration does
not imply that the Trust or any of its Units have been EQUITY SECURITIES TRUST
guaranteed, sponsored, recommended or approved by the SERIES 13
United States or any state or any agency or officer thereof. SIGNATURE SERIES,
ZACKS WALL STREET ALL-STAR ANALYSTS TRUST
------------------
This Prospectus does not constitute an offer to sell, or (A UNIT
INVESTMENT TRUST) a solicitation of an offer to buy, securities in any state to
any person to whom it is not lawful to make such offer in PROSPECTUS such state.
DATED: JUNE __, 1997
Table of Contents
Title Page SPONSOR:
PART A REICH & TANG DISTRIBUTORS L.P.
Summary of Essential Information...........................A-2 600 Fifth Avenue
Statement of Financial Condition...........................A-6 New York, New York 10020
Portfolio..................................................A-7 212-830-5400
Report of Independent Accountants..........................A-8
PART B PORTFOLIO CONSULTANT:
The Trust.................................................B-1
Risk Considerations.......................................B-3 ZACKS INVESTMENT RESEARCH INC.
Public Offering...........................................B-5 155 North Wacker Drive
Rights of Certificateholders..............................B-8 Chicago, Illinois 60606
Tax Status................................................B-9
Liquidity.................................................B-11
Trust Administration......................................B-13 TRUSTEE:
Trust Expenses and Charges................................B-19
Reinvestment Plan.........................................B-20 THE CHASE MANHATTAN BANK
Exchange Privilege and Conversion Offer...................B-20 4 New York Plaza
Other Matters.............................................B-23 New York, New York 10004
</TABLE>
Parts A and B of this Prospectus do not contain all of the information set
forth in the registration statement and exhibits relating thereto, filed with
the Securities and Exchange Commission, Washington, D.C., under the Securities
Act of 1933, and the Investment Company Act of
1940, and to which reference is made.
467237.1
<PAGE>
PART II -- ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM A -- BONDING ARRANGEMENTS
The employees of Reich & Tang Distributors L.P. are covered under Brokers'
Blanket Policy, Standard Form 14, in the amount of $11,000,000 (plus
$196,000,000 excess coverage under Brokers' Blanket Policies, Standard Form 14
and Form B Consolidated).
This policy has an aggregate annual coverage of $15 million.
ITEM B -- CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons: Battle Fowler LLP (included in
Exhibit 3.1) Price Waterhouse LLP Zacks Investment Research Inc.
The following exhibits:
*99.1.1 -- Reference Trust Agreement including certain amendments to
the Trust Indenture and Agreement referred to under Exhibit
99.1.1.1 below.
99.1.1.1 -- Form of Trust Indenture and Agreement (filed as Exhibit 1.1.1
to Amendment No. 1 to Form S-6 Registration Statement No.
33-62627 of Equity Securities Trust, Series 6, Signature
Series, Gabelli Entertainment and Media Trust on November 16,
1995 and incorporate herein by reference).
99.1.3.4 -- Certificate of Formation and Agreement among Limited
Partners, as amended, of Reich & Tang Distributors L.P.
(filed as Exhibit 99.1.3.4 to Post-Effective Amendment No. 10
to Form S-6 Registration Statements Nos. 2-98914, 33-00376,
33-00856 and 33-01869 of Municipal Securities Trust, Series
28, 39th Discount Series, Series 29 & 40th Discount Series
and Series 30 & 41st Discount Series, respectively, on
October 31, 1995 and incorporated herein by reference).
99.1.4 -- Form of Agreement Among Underwriters (filed as
Exhibit 1.4 to Amendment No. 1 to Form S-6 Registration
Statement No. 33-62627 of Equity Securities Trust, Series 6,
Signature Series, Gabelli Entertainment and Media Trust on
November 16, 1995 and incorporated herein by reference).
99.2.1 -- Form of Certificate (filed as Exhibit 99.2.1 to
Amendment No. 1 to Form S-6 Registration Statement No.
33-62627 of Equity Securities Trust, Series 6, Signature
Series, Gabelli Entertainment and Media Trust on November 16,
1995 and incorporated herein by reference).
*99.3.1 -- Opinion of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and to the use of their name under the
headings "Tax Status" and "Legal Opinions" in the Prospectus,
and to the filing of their opinion regarding tax status of
the Trust.
99.6.0 -- Power of Attorney of Reich & Tang Distributors L.P., the
Depositor, by its officers and a majority of its Directors
(filed as Exhibit 6.0 to Amendment No. 1 to Form S-6
Registration Statement No. 33-62627 of Equity Securities
Trust, Series 6, Signature Series, Gabelli Entertainment and
Media Trust on November 16, 1995 and incorporated herein by
reference).
*99.27 - Financial Data Schedule (for EDGAR filing only).
- --------
* To be filed by amendment.
467238.1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Equity Securities Trust, Series 13, Signature Series, Zacks Wall
Street All-Star Analysts Trust, has duly caused this Pre-Effective Amendment No.
3 to the Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of New York and State of New York on the
15th day of May 1997.
EQUITY SECURITIES TRUST, SERIES 13
Signature Series, Zacks Wall Street
All-Star Analysts Trust
(Registrant)
REICH & TANG DISTRIBUTORS L.P.
(Depositor)
By: Reich & Tang Asset Management, Inc.
By /s/ PETER J. DEMARCO
Peter J. DeMarco
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 3 to the Registration Statement has been signed
below by the following persons, who constitute the principal officers and a
majority of the directors of Reich & Tang Asset Management, Inc., General
Partner of Reich & Tang Distributors L.P., the Depositor, in the capacities and
on the dates indicated.
Name Title Date
PETER S. VOSS President, Chief Executive Officer
and Director
G. NEAL RYLAND Executive Vice President,
Treasurer and Chief
Financial Officer
EDWARD N. WADSWORTH Clerk
RICHARD E. SMITH III Director May 15, 1997
STEVEN W. DUFF Director By /s/ PETER J. DEMARCO
Peter J. DeMarco
BERNADETTE N. FINN Vice President Attorney-In-Fact**
LORRAINE C. HYSLER Secretary
RICHARD DE SANCTIS Vice President and
Treasurer
- --------
** Executed copies of Powers of Attorney were filed as Exhibit 6.0 to
Amendment No. 1 to Registration Statement No. 33-62627 on November 16,
1995.
II-2
467238.1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
registration statement on Form S-6 (the "Registration Statement") of our report
dated June __, 1997, relating to the Statement of Financial Condition, including
the Portfolio, of Equity Securities Trust, Series 13, which appears in such
Prospectus. We also consent to the reference to us under the heading
"Independent Accountants" in such Prospectus.
PRICE WATERHOUSE LLP
160 Federal Street
Boston MA 02110
June __, 1997
II-3
467238.1
<PAGE>
CONSENT OF PORTFOLIO CONSULTANT
The Sponsor, Trustee and Certificateholders
Equity Securities Trust, Series 13, Signature Series,
Zacks Wall Street All-Star Analysts Trust
We hereby consent to the use of the name "Zacks" included herein and to the
reference to our Firm in the Prospectus.
ZACKS INVESTMENT RESEARCH INC.
New York, New York
June , 1997
II-4
467238.1
