<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 18, 1997
REGISTRATION NO. 333-36935
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------
AMENDMENT NO. 1
TO
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:
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
B. NAME OF DEPOSITORS:
SMITH BARNEY INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICE:
SMITH BARNEY INC.
388 GREENWICH ST.
NEW YORK, N.Y. 10013
D. NAMES AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY TO:
LAURIE A. HESSLEIN MICHAEL R. ROSELLA, ESQ.
SMITH BARNEY INC. BATTLE FOWLER LLP
388 GREENWICH STREET 75 EAST 55TH STREET
NEW YORK, NEW YORK 10013 NEW YORK, NEW YORK 10022
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
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. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
[X] Check box if it is proposed that this filing will become effective
immediately upon filing on November 18, 1997 pursuant to Rule 487.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
[GRAPHIC]
THE COUNTRYFUND OPPORTUNITY TRUST
1997 SERIES
A Unit Investment Trust
LOGO The CountryFund Opportunity Trust, 1997 Series
is a unit investment trust that offers
investors the opportunity to purchase Units
representing proportionate interests in a
diversified fixed portfolio of closed-end
country fund stocks.
The country funds and their weightings in the
Trust portfolio will be selected by the
Research Department of Smith Barney Inc. as
the Trust Portfolio for 1997-1998. The value
of the Units will fluctuate with the value of
the underlying securities. Investment in
country funds involves special considerations
and risks that are not normally present in
investments in securities of U.S. issuers. The
Trust may be considered speculative and
therefore may be appropriate only for those
investors willing and able to assume the
increased risks of higher price volatility and
currency fluctuations associated with
investments in international equities. Shares
of closed-end investment companies may not be
actively traded and have in the past
frequently traded at discounts from their net
asset values and initial offering prices. The
minimum purchase is $1,000 for individual
purchases and $250 for purchases by Individual
Retirement Accounts, self-employed retirement
plans (formerly Keogh Plans), pension funds
and other tax-deferred retirement plans.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated November 18, 1997
Read and retain this Prospectus for future reference
<PAGE>
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 17, 1997+
<TABLE>
<S> <C>
SPONSOR
Smith Barney Inc.
INITIAL NUMBER OF UNITS++........................................... 1,000,000
FRACTIONAL UNDIVIDED INTEREST IN TRUST REPRESENTED BY EACH UNIT..... 1/1,000,000
</TABLE>
<TABLE>
<S> <C>
PUBLIC OFFERING PRICE (per 1,000 Units)
Aggregate value of Securities in Trust.............................. $ 985,381
Divided by 1,000,000 Units
(times 1,000)...................................................... $ 985.38
Plus sales charge of 1.50% of Public Offering Price (1.523% of the
net amount invested in Securities)*................................ $ 15.01
---------
Public Offering Price per 1,000 Units............................... $1,000.39
Plus the amount per 1,000 Units in the Income and Capital Accounts
(see Description of the Trust--Income)............................. $ -0-
---------
Total (per 1,000 Units)............................................. $1,000.39
=========
SPONSOR'S REPURCHASE PRICE AND REDEMPTION PRICE PER 1,000 UNITS
(based on value of underlying securities)........................... $ 985.38
=========
</TABLE>
DISTRIBUTIONS
Net income, if any, will be distributed on the Distribution Day in any month,
along with the balance in the Capital Account (excluding amounts reserved to
purchase Securities) if that balance is more than $5 per 1,000 Units on the
Record Day in that month, to Holders on that Record Day. Otherwise, net
income will only be distributed in January and following termination of the
Trust. In addition, any taxable income of the Trust including any net capital
gain (i.e. the excess of net long-term capital gain over net short-term
capital loss) that has not been distributed as of the last business day in
December will be distributed on the January Distribution Day. These
distributions will be automatically reinvested in additional Units of the
Trust unless the Holder elects to receive the distribution in cash. A Final
Distribution will be made shortly after termination of the Trust.
RECORD DAY--The 10th day of each month.
DISTRIBUTION DAY--The 25th day of each month.
<TABLE>
<S> <C>
SPONSOR'S LOSS ON DEPOSIT............................................... $1,682
TRUSTEE'S ANNUAL FEE
$.86 per 1,000 Units
(see Expenses and Charges)
SPONSOR'S ANNUAL FEE
Maximum of $.25 per 1,000 Units
(see Expenses and Charges)
</TABLE>
EVALUATION TIME
4:00 P.M. New York time (or earlier close of the New York Stock Exchange).
TRUSTEE AND DISTRIBUTION AGENT
The Chase Manhattan Bank
MINIMUM VALUE OF TRUST
The trust indenture between the Sponsor and the Trustee (the "Indenture") may
be terminated if the net asset value of the Trust is less than $500,000, un-
less the net asset value of Trust deposits has exceeded $12,000,000. In that
case, the Indenture may be terminated if the net asset value of the Trust is
less than $5,000,000.
MANDATORY TERMINATION OF TRUST
November 30, 1999 (the "Mandatory Termination Date"), unless terminated ear-
lier by the Sponsor with the consent of Holders of 51% of the Units then out-
standing.
- -----------
+ The Initial Date of Deposit on which the Trust Indenture was signed and the
initial deposit was made. Valuation of Securities is based on the market value
per share as of November 17, 1997 as more fully explained in the Notes to the
Portfolio. Securities quoted on a national securities exchange or The Nasdaq
National Market are valued at the closing sale price or if no price exists, at
the mean between the closing bid and offer prices; Securities not so quoted
are valued at the mean between bid and offer prices.
++ The Sponsor may create additional Units during the offering period of the
Trust.
* The sales charge is reduced on purchases of $1,000,000 or more. See Public
Sale of Units.
2
<PAGE>
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 17, 1997 (CONTINUED)
OBJECTIVE OF THE TRUST -- The objective of the Trust is to provide investors
with the possibility of capital appreciation through a convenient and cost-
effective investment in a fixed portfolio consisting of publicly traded common
stock (the "Securities") of closed-end management investment companies which
invest primarily in non-U.S. securities ("country funds") selected by the
Sponsor for the 1997 Trust portfolio (the "Portfolio") as offering potential
for capital appreciation over a period of two years. The Trust is structured to
capitalize on perceived investment opportunities in the markets for publicly
traded stocks of country funds. It takes a value approach by targeting funds
selling at an attractive premium or discount, with potential for total return.
It is believed that investing in non-U.S. stocks through country funds can
achieve greater diversification, liquidity of investment and avoid barriers to
entry, while taking advantage of market discounts on closed-end fund shares and
specialization of various managers in selecting stocks in particular countries.
The payment of dividends is only of incidental importance to the Trust.
Achievement of the Trust's objective is, of course, dependent upon several
factors including the financial condition of the issuers of the Securities, and
any appreciation of the Securities.
PORTFOLIO -- The Portfolio contains stocks of closed-end country funds
representing the following regions and countries within those regions:
Asia/Pacific, Central/Eastern Europe, Latin America, Middle East/Africa and
Western Europe; in addition, 4 of the funds are global in nature. (See Risk
Factors.) Although there are certain risks of price volatility associated with
investment in country fund common stocks (particularly with an investment in
one or two country funds), your risk is reduced because your capital is divided
among 30 different country funds.
With the initial deposit of Securities, the Sponsor established a
proportionate relationship among the number of shares of each stock deposited
in the Portfolio. The Sponsor may create additional Units by depositing
additional Securities, contracts to purchase additional Securities or cash (or
a bank letter of credit in lieu of cash) with instructions to purchase
Securities, maintaining to the extent practicable the original proportionate
relationship among the number of shares of each stock in the Portfolio.
Replacement Securities may be acquired under specified conditions. It may not
be possible to maintain the exact original proportionate relationship among the
Securities deposited on the Initial Date of Deposit because of, among other
reasons, purchase requirements, changes in price, the unavailability of
Securities or the fact that the Trust is prohibited from acquiring more than 3%
of the outstanding voting stock of any country fund. The Sponsor may cease
creating Units (temporarily or permanently) at any time.
REPLACEMENT SECURITIES -- The Indenture permits the deposit of Replacement
Securities in the Fund under certain circumstances described under
Administration of the Trust--Trust Supervision. The Securities on the current
list from which Replacement Securities are to be selected are: Chile Fund and
Portugal Fund.
RISK FACTORS -- Investment in the Trust should be made with an understanding
that the value of the underlying Securities, and therefore the value of the
Units, will fluctuate, depending on the full range of economic and market
influences which may affect the market value of the Securities, including the
profitability and financial condition of issuers, conditions in a given
issuer's industry and country, market conditions and values of common stocks
generally, the impact of the Sponsor's buying and selling Securities,
especially during the initial offering of Units of the Trust and the Special
Redemption and Liquidation Period, and other factors.
Investors should carefully consider their ability to assume the following
risks before making an investment in the Trust. The Trust may not be
appropriate for investors seeking either preservation of capital or high
current income, or for investors unable or unwilling to assume the increased
risks of higher price volatility and currency fluctuations associated with
investments in international equities trading in non-U.S. currencies. An
investment in Units should not be considered a complete investment program.
However, while individual country funds may be subject to greater price
volatility than U.S. stocks in general, some exposure to foreign market trends
may help increase total return.
3
<PAGE>
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 17, 1997 (CONTINUED)
Investing in securities of non-U.S. issuers, such as those held by the
country funds, involves certain risks and considerations not typically
associated with investing in securities of U.S. issuers, including generally
(a) restrictions on foreign investment and on repatriation of invested capital
and on a fund's ability to exchange local currencies for U.S. dollars, (b)
greater price volatility, reduced liquidity and significantly smaller market
capitalization of most non-U.S. securities markets, (c) currency devaluations
and other currency exchange fluctuations, (d) more substantial government
involvement in the economy, (e) higher rates of inflation, (f) greater social,
economic and political uncertainty and (g) the risk of nationalization or
expropriation of assets and the risk of war. In addition, accounting, auditing
and financial reporting standards in foreign countries are not necessarily
equivalent to U.S. standards and therefore disclosure of certain material
information may not be made, and less information may be available to investors
(including the country fund) than with investments in U.S. issuers. There is
also generally less governmental regulation of the securities industry in
foreign countries. Moreover, it may be difficult for a fund to obtain a
judgment in a court outside the U.S. A fund may be subject to withholding taxes
including those imposed on realized capital gains that may exist or be
implemented by the governments of the countries in which that fund invests.
Furthermore, shares of closed-end country funds frequently trade at a
discount from net asset value. This characteristic is a risk separate and
distinct from the risk that the fund's net asset value will decrease. However,
a fund's articles of incorporation may contain certain anti-takeover provisions
that may have the effect of inhibiting the fund's possible conversion to open-
end status and limiting the ability of other persons to acquire control of the
fund. In certain circumstances, these provisions might also inhibit the ability
of stockholders (including the Trust) to sell their shares at a premium over
prevailing market prices. Shares of many country funds are thinly traded, and
therefore may be more volatile and subject to greater price fluctuations
because of the Sponsor's buying and selling securities than shares with greater
liquidity. Investors should be aware that there can be no assurance that the
value of the Securities in the Trust's Portfolio will increase or that the
issuers of those Securities will pay dividends on outstanding shares. Any
distributions of income to Holders will generally depend on the declaration of
dividends by the issuers of the underlying stocks, and the declaration of
dividends depends on several factors including the financial condition of the
issuers of those stocks and general economic conditions.
Certain of the country funds represented in the Trust from time to time may
issue to their shareholders (including the Trust) rights to subscribe for
additional shares at a price below the current market price of those shares. If
the rights are transferable, the Sponsor intends to sell the rights. If the
rights are not transferable and the Sponsor expects the Trust to profit
thereby, it intends to sell the number of shares of that fund which can be
obtained by exercise of the rights, and to replace the shares sold by
exercising those rights. Nevertheless, following the rights offering the Trust
will hold a smaller proportional interest in the country fund and, despite the
procedure to realize some of the value of the rights, the market price and net
asset value of shares held by the Trust can be expected to decline; this
dilution could be substantial. If the Sponsor anticipates that the rights
offering would materially adversely affect the share price, the Sponsor
reserves the right to sell all of the shares of that country fund held by the
Trust, as described under Trust Supervision.
Unlike a mutual fund, the Portfolio is not actively managed (the portfolios
of the underlying country funds are actively managed). Therefore, the adverse
financial condition of a country fund will not necessarily require the sale of
Securities from the Portfolio or mean that the Sponsor will not continue to
purchase the Security in order to create additional Units. Although the
Portfolio is regularly reviewed and evaluated and the Sponsor may instruct the
Trustee to sell Securities under certain limited circumstances, Securities will
not be sold by the Trust to take advantage of market fluctuations. The prices
of single shares of each of the Securities in the Trust vary widely, and the
effect of a dollar of fluctuation, either higher or lower, in stock prices will
be much greater as a percentage of the lower-price stocks' purchase price than
as a percentage of the higher-price stocks' purchase price.
4
<PAGE>
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 17, 1997 (CONTINUED)
Investors should note that should the size of the Trust be reduced below the
Minimum Value of Trust, the Trust may be terminated at that time by the
Sponsor, before the Mandatory Termination Date of the Trust.
Any difference between the aggregate prices the Sponsor paid to acquire
Securities and the aggregate prices at which those Securities were initially
deposited in the Trust is noted under Sponsor's Profit or (Loss) on Deposit.
The Sponsor's profit on the deposit of Securities largely depends on whether
the prices of those 30 Securities rise in response to the Sponsor's purchases
of possibly large volumes of the Securities for initial and subsequent deposits
in the Trust. The effect of the Sponsor's purchases of Securities on the prices
of the Securities is unpredictable.
Investors should note in particular that the Securities were selected on the
basis of the criteria set forth above under Objectives of the Trust and that
the Trust may continue to purchase or hold Securities originally selected
through this process even though the evaluation of the attractiveness of the
Securities may have changed. In connection with the issuance of additional
Units during the Public Offering Period, the Sponsor may deposit additional
Securities or replacement Securities, contracts to purchase additional
Securities or replacement Securities, or cash (or a letter of credit in lieu of
cash) with instructions to purchase Securities, in each instance maintaining to
the extent practicable the original percentage relationship among the number of
shares of each Security in the Trust. (See Administration of the Trust -- Trust
Supervision.) 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 Holder's Units and
the income per Unit received by the Trust. In particular, Holders who purchase
Units during the initial offering period would experience a dilution of their
investment as a result of any brokerage fees paid by the Trust during
subsequent deposits of additional Securities purchased with cash deposited. In
order to minimize these effects, the Trust will try to purchase Securities as
near as possible to the Evaluation Time or at prices as close as possible to
the prices used to evaluate Trust Units at the Evaluation Time. Some of the
Securities may have limited trading volume, and, while the Sponsor will
endeavor to purchase Securities with deposited cash as soon as practicable, it
reserves the right to purchase those Securities over the 20 following business
days after each deposit in an effort to reduce the effect of these purchases on
the market price of those stocks. This could, however, result in the Trust's
failure to participate in any appreciation of those stocks before the cash is
invested. If any cash remains at the end of this period and cannot be invested
in one or more stocks at what the Sponsor considers reasonable prices, it
intends to use that cash to purchase each of the other securities in the
original proportionate relationship among those securities. Similarly, at
termination of the Trust, the Sponsor reserves the right to sell Securities
over a period of up to 20 business days to lessen the impact of its sales on
the market price of the Securities. The proceeds received by Holders following
termination of the Trust will reflect the actual sales proceeds received on the
Securities, which will likely differ from the closing sale price on the
Mandatory Termination Date. (See Description of the Trust -- Risk Factors.)
PRIVATE PLACEMENTS; UNDERWRITING -- None of the Securities in the Trust
consists of privately-placed common stocks. Except as indicated under
Portfolio, the Sponsor has not participated as sole underwriter, managing
underwriter or member of an underwriting syndicate from which any of the
Securities in the Trust were acquired.
PUBLIC OFFERING PRICE -- The Public Offering Price per 1,000 Units is equal
to the aggregate value of the underlying Securities, divided by the number of
Units outstanding times 1,000, plus a sales charge of 1.5%* of the Public
Offering Price; this results in a sales charge of 1.523%* of the net amount
invested in underlying
- -----------
* This sales charge is reduced on purchases of $1,000,000 or more. See Public
Sale of Units--Public Offering Price.
5
<PAGE>
THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES
INVESTMENT SUMMARY AS OF NOVEMBER 17, 1997 (CONCLUDED)
Securities. Units are offered at the Public Offering Price plus the net amount
per Unit in the Income Account (see Public Sale of Units). The minimum purchase
is $1,000 (or $250 in the case of purchases by Individual Retirement Accounts,
Keogh plans, pension funds and other tax-deferred retirement plans). Investors
should note that the Public Offering Price of Units varies each business day
with the value of the underlying Securities. There is no "par value" for Units.
DISTRIBUTIONS -- Distributions of dividends and capital, if any, will be made
as described under Distributions above. Except for the Final Distribution, any
such distribution will automatically be reinvested in additional Units of the
Trust at no extra charge, and each Holder of Units will participate unless the
Holder elects to receive distributions of dividends or capital, or both, in
cash. Whether a distribution is reinvested or received in cash, the
distribution will be taxable to the Holder. Holders who reinvest their
distributions will receive additional Units and will therefore own a greater
percentage of the Trust than Holders who receive cash distributions (see
Reinvestment Plan). As soon as practicable after termination of the Trust
(generally after seven days), the Trustee will distribute to each Holder his
pro rata share of the amount realized on disposition of the Securities
remaining in the Trust plus any other assets then in the Trust, less expenses
of the Trust. The other assets of the Trust will include any dividends,
interest income and net realized capital gains. The total distribution may be
less than the amount paid for Units.
MARKET FOR UNITS -- The Sponsor, though not obligated to do so, intends from
the commencement of the Trust to maintain a market for Units and continually to
offer to purchase Units from Holders desiring to sell them at a price based on
the aggregate value of the underlying Securities (see Market for Units).
Whenever a market is not maintained, a Holder may be able to dispose of his
Units only through redemption (see Redemption).
FEE TABLE
- --------------------------------------------------------------------------------
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES
THAT YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC SALE OF UNITS AND
EXPENSES AND CHARGES. ALTHOUGH THE TRUST IS A UNIT INVESTMENT TRUST RATHER THAN
A MUTUAL FUND, THIS INFORMATION IS PRESENTED TO PERMIT A COMPARISON OF FEES.
- --------------------------------------------------------------------------------
UNITHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchase (as a percentage of offering
price)................................................................. 1.50%
====
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Trustee's Fee........................................................... .087%
Maximum Portfolio Supervision, Bookkeeping and Administrative Fees...... .025%
Organizational Expenses................................................. .294%
Other Operating Expenses................................................ .089%
----
Total................................................................ .495%
====
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE
EXPENSES
PAID FOR PERIOD:
EXAMPLE ----------------
1 2
YEAR YEARS
----------------
<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Trust's estimated operating expense
ratio of .495% in the first year and .201% in the second
year and a 5% annual return on the investment throughout the
periods..................................................... $ 20 $ 22
</TABLE>
The Example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Example should not be
considered a representation of past or future expenses or annual rate of
return; the actual expenses and annual rate of return may be more or less than
those assumed for purposes of the Example.
The Trust (and therefore the Holders) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the indenture and other closing documents, registering units with the SEC and
the states and the initial audit of the Portfolio--as is common for mutual
funds. Historically, the sponsors of unit investment trusts have paid all the
costs of establishing those trusts. Advertising and selling expenses will be
paid by the Underwriters at no cost to the Trust.
6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Sponsor, Trustee and Unit Holders of The CountryFund Opportunity Trust,
1997 Series:
We have audited the accompanying statement of financial condition, including
the portfolio, of The CountryFund Opportunity Trust, 1997 Series, as of
November 17, 1997. This financial statement is the responsibility of the
Trustee (see note 5 to statement of financial condition). Our responsibility
is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of financial condition
is free of material misstatement. An audit of a statement of financial
condition includes examining, on a test basis, evidence supporting the amounts
and disclosures in that statement of financial condition. Our procedures
included confirmation with the Trustee of an irrevocable letter of credit
deposited on November 17, 1997, for the purchase of securities, as shown in
the statement of financial condition and portfolio of securities. An audit of
a statement of financial condition also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall statement of financial condition presentation. We
believe that our audit of the statement of financial condition provides a
reasonable basis for our opinion.
In our opinion, the statement of financial condition referred to above
presents fairly, in all material respects, the financial position of The
CountryFund Opportunity Trust, 1997 Series as of November 17, 1997, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
November 17, 1997
THE COUNTRYFUND OPPORTUNITY TRUST,
1997 SERIES
STATEMENT OF FINANCIAL CONDITION AS OF NOVEMBER 17, 1997
<TABLE>
<S> <C>
TRUST PROPERTY
Investment in Securities:
Contracts to purchase Securities(1)............................... $ 985,381
Organizational Costs(2)........................................... 14,500
----------
$ 999,881
==========
LIABILITY
Accrued Expenses(2)...............................................
$ 14,500
----------
INTEREST OF HOLDERS
1,000,000 Units of fractional undivided interest outstanding:
Cost to investors(3).............................................. $1,000,387
Less: gross underwriting commissions(4)........................... 15,006
----------
Net amount applicable to investors.................................. 985,381
----------
Total........................................................... $ 999,881
==========
</TABLE>
- -----------
(1) Aggregate cost to the Trust of the Securities listed under Portfolio on
the Initial Date of Deposit is determined by the Trustee on the basis set
forth in Footnote 3 to the Portfolio. See also the columns headed Cost of
Securities to Trust thereunder. An irrevocable letter of credit in the
amount of $1,000,000 has been deposited with the Trustee for the purchase
of Securities. The letter of credit was issued by Svenska Handelsbanken.
(2) Organizational costs to be paid by the Trust have been deferred and will
be amortized over the first year of the Trust. Organizational costs have
been estimated based on projected total assets of $4.925 million. To the
extent the Trust is larger or smaller, the amount to be paid may vary.
(3) Aggregate public offering price computed on the basis set forth under
Public Sale of Units--Public Offering Price.
(4) Assumes a sales charge of 1.50% of Public Offering Price computed on the
basis set forth under Public Sale of Units--Public Offering Price.
(5) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the
Trust. The Trustee is a responsible for establishing and maintaining a
system of internal controls directly related to, and designed to provide
reasonable assurance as to the integrity and reliability of, financial
reporting of the Trust. The Trustee is also responsible for all estimates
and accruals reflected in the Trust's financial statements other than
estimates of organizational costs, for which the Sponsor is responsible.
7
<PAGE>
PORTFOLIO OF THE COUNTRYFUND OPPORTUNITY TRUST, 1997 SERIES ON THE INITIAL
DATE OF DEPOSIT, NOVEMBER 17, 1997
<TABLE>
<CAPTION>
COST OF
STOCK NUMBER PERCENT OF SECURITIES
SECURITIES(1) SYMBOL OF SHARES(2) NET ASSETS TO TRUST(3)
------------- ------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
ASIA/PACIFIC
Asia Pacific Fund+ APB 6,700 6.03% $ 59,462
Asia Tigers Fund GRR 7,400 6.01 59,200
Fidelity Advisor Emerging Asia Fund FAE 4,000 3.96 39,000
Korea Fund+ KF 2,900 2.02 19,938
Morgan Stanley India Investment
Fund IIF 2,300 1.97 19,406
R.O.C. Taiwan Fund SBI+ ROC 2,000 1.97 19,375
Scudder New Asia Fund SAF 4,500 4.99 49,219
Templeton Dragon Fund+ TDF 1,600 2.04 20,100
------
28.99%
------
CENTRAL/EASTERN EUROPE
G.T. Global Eastern European Fund+ GTF 2,100 2.93% 28,875
Morgan Stanley Russia/New Europe
Fund RNE 1,600 4.02 39,600
Templeton Russia Fund TRF 500 1.93 19,000
------
8.88%
------
LATIN AMERICA
Brazil Fund+ BZF 1,000 2.07% 20,438
Latin American Discovery Fund# LDF 1,300 2.02 19,906
Latin America Equity Fund# LAQ 4,200 5.94 58,538
Mexico Fund+ MXF 1,600 2.95 29,100
------
12.98%
------
MIDDLE EAST/AFRICA
First Israel Fund ISL 1,400 1.97% 19,425
Foreign/Colonial Emerging Middle
East Fund EME 1,200 2.09 20,550
Morgan Stanley Africa Investment
Fund+ AFF 1,300 2.01 19,825
------
6.07%
------
WESTERN EUROPE
Austria Fund# OST 2,000 2.04% 20,125
Emerging Germany Fund#+ FRG 1,900 2.05 20,187
Europe Fund EF 2,800 4.94 48,650
European Warrant Fund EWF 2,900 5.08 50,025
France Growth Fund+ FRF 2,700 3.02 29,700
Irish Investment Fund#+ IRL 1,200 1.93 19,050
Scudder New Europe Fund+ NEF 3,600 5.91 58,275
Spain Fund SNF 1,400 2.06 20,300
------
27.03%
------
GLOBAL
Emerging Markets Telecommunications
Fund+ ETF 1,900 3.01% 29,687
Morgan Stanley Emerging Markets
Fund+ MSF 3,600 5.00 49,275
Templeton Emerging Markets Appreci-
ation Fund TEA 4,000 5.05 49,750
Templeton Emerging Markets Fund EMF 1,400 2.99 29,400
------
16.05%
------ --------
100.00% $985,381
====== ========
</TABLE>
- -----------
(1) All Securities are represented entirely by contracts to purchase
Securities, which were entered into by the Sponsor on November 17, 1997.
All contracts for Securities are expected to be settled by the initial
settlement date for the purchase of Units.
(2) Per 1,000,000 Units.
(3) Valuation of Securities by the Trustee was made using the market value per
share as of the Evaluation Time on November 17, 1997. Subsequent to the
Initial Date of Deposit, Securities are valued, for Securities quoted on a
national securities exchange or The Nasdaq National Market, at the closing
sale prices, or if no price exists, at the mean between the closing bid
and offer prices, or for Securities not so quoted, at the mean between bid
and offer prices on the over-the-counter market. See Redemption--
Computation of Redemption Price Per Unit.
---------------
The following information is unaudited:
# Within the last three years, Smith Barney Inc. or one of its affiliates was
the manager (co-manager) of a public offering of the securities of this
fund.
+Smith Barney Inc. usually maintains a market in the securities of this fund.
8
<PAGE>
DESCRIPTION OF THE TRUST
STRUCTURE AND OFFERING
The Trust is a "unit investment trust" created under New York law by a Trust
Indenture (the "Indenture") between the Sponsor and the Trustee. On the date
of this Prospectus, each unit of the Trust (a "Unit") represented a fractional
undivided interest in the securities listed under Portfolio (the "Securities")
and net income of the Trust set forth under Investment Summary. Additional
Units of the Trust will be issued in the amount required to satisfy purchase
orders by depositing in the Trust additional Securities or contracts to
purchase Securities together with irrevocable letters of credit or cash (or a
bank letter of credit in lieu of cash) with instructions to purchase
Securities. On each settlement date (estimated to be five business days after
the applicable date on which Securities were deposited in the Trust), the
Units will be released for delivery to investors and the deposited Securities
will be delivered to the Trustee. As additional Units are issued by the Trust
as a result of the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. There is no limit on the time period during which the Sponsor may
continue to make additional deposits of Securities into the Trust.
Additional deposits of Securities or cash in connection with the issuance
and sale of additional Units will maintain to the extent practicable the
original proportionate relationship among the number of shares of each
Security. The proportionate relationship among the Securities in the Trust
will be adjusted to reflect the occurrence of a stock dividend, a stock split
or a similar event which affects the capital structure of the issuer of a
Security in the Trust but which does not affect the Trust's percentage
ownership of the common stock equity of such issuer at the time of such event.
It may not be possible to maintain the exact original proportionate
relationship among the Securities deposited on the Initial Date of Deposit
because of, among other reasons, purchase requirements, changes in prices,
brokerage commissions, unavailability of Securities or the fact that the Trust
is prohibited from acquiring more than 3% of the outstanding voting stock of
any country fund. Replacement Securities may be acquired under specified
conditions when Securities originally deposited are unavailable (see
Administration of the Trust -- Trust Supervision). Units may be continuously
offered to the public by means of this Prospectus (see Public Sale of Units --
Public Distribution) resulting in a potential increase in the number of Units
outstanding.
The Public Offering Price of Units prior to the Evaluation Time on any day
will be based on the aggregate value of the Securities in the Trust on that
day at the Evaluation Time, plus a sales charge. The Public Offering Price
will thus vary from that specified on page 2 of this Prospectus. See Public
Sale of Units -- Public Offering Price for a complete description of the
pricing of Units.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units. The Sponsor reserves
the right to accept or reject any purchase order in whole or in part.
The Sponsor will execute orders to purchase Units in the order it
determines, in good faith, that these orders are received, except it is
expected that indications of interest received prior to the effectiveness of
the registration of the Trust which become orders upon effectiveness will be
accepted according to the order in which they were received. The Sponsor may
accept or reject any purchase order.
RISK FACTORS
An investment in Units should be made with an understanding of the risks
which an investment in publicly traded common stocks of closed-end country
funds entails, including the risk that the financial condition of the issuers
of the Securities or the general condition of the common stock market may
worsen and the value of the Securities and therefore the value of the Units
may decline.
Investing in securities of non-U.S. issuers, such as those held by the
country funds, involves certain risks and considerations not typically
associated with investing in securities of U.S. issuers. For example,
investments may be restricted or controlled to varying degrees. These
restrictions or controls may at times limit or preclude a country fund from
investing in securities of certain non-U.S. issuers or increase its costs and
expenses of such investments. In addition, governmental approval may be
required for the repatriation of investment income, capital or the proceeds of
sales of securities of non-U.S. issuers. A fund could be adversely affected by
delays in, or a refusal to grant any
9
<PAGE>
required governmental approval for repatriation of capital, as well as by the
application to the fund of any restrictions on investments.
No established secondary markets may exist for many of the non-U.S.
securities in which country funds invest. The markets for equity securities in
lesser developed countries are often substantially smaller, less liquid and
more volatile than those in industrialized countries. This may have an adverse
effect on the market price and a fund's ability to dispose of particular
investments when necessary to meet its liquidity requirements or in response
to specific economic events such as a deterioration in the creditworthiness of
an issuer. During periods of limited liquidity and higher price volatility in
the market for equity securities, a fund's ability to acquire or dispose of
those securities at a price and time that the fund deems advantageous may be
impaired. As a result, in periods of rising market prices, a fund may be
unable to participate in price increases fully to the extent that it is unable
to acquire desired securities positions quickly. Conversely, a fund may be
unable to dispose fully and promptly of positions in declining markets,
causing its net asset value to decline as the value of unsold positions is
marked to lower prices. In addition, the markets in equity securities may in
some cases be susceptible to influence by large investors trading significant
blocks of securities or by large dispositions of securities resulting from the
failure to meet margin calls when due. Also, certain foreign markets have
longer settlement periods for securities transactions, which could expose a
country fund investing in those markets to greater risk. Furthermore, because
of the lower levels of disclosure and regulatory standards, the prices at
which a fund may acquire investments may be affected by other market
participants' anticipation of a fund's investment and trading by persons with
material, nonpublic information.
The economies of foreign countries may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross domestic product, rate of
inflation, currency depreciation, capital reinvestment, resource self-
sufficiency and balance of payments position. The economies of developing
countries generally are heavily dependent upon international trade and,
accordingly, have been and may continue to be adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values
and other protectionist measures imposed or negotiated by the countries with
which they trade. These economies also have been and may continue to be
adversely affected by economic conditions in the countries with which they
trade. Certain developing countries have historically experienced and may
continue to experience, high rates of inflation, high interest rates, exchange
rate fluctuations, large amounts of external debt, balance of payments and
balance of trade difficulties and extreme poverty and unemployment. Also,
there is a possibility of nationalization, expropriation or confiscatory
taxation, political changes, government regulation, withholding taxes, social
instability or diplomatic developments (including war) which could affect
adversely the economies of such countries or the value of a fund's investments
in those countries.
Although the investments of the country funds held by the Trust are
predominantly equity securities, a portion of the investments may be sovereign
debt obligations. If a fund invests in emerging country bonds, the issuer or
government authority that controls the country's debt may not be willing or
able to repay the principal and/or interest when due in accordance with the
terms of such debt. A debtor's willingness or ability to repay principal and
interest due in a timely manner may be affected by, among other factors, its
cash flow situation and, in the case of a government debtor, the extent of its
foreign reserves, the availability of sufficient foreign exchange on the date
a payment is due, the relative size of the debt service burden to the economy
as a whole and the political constraints to which a government debtor may be
subject. Some of these obligations may pertain to countries that are among the
world's largest debtors. In recent years, the governments of some of these
countries have encountered difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and restructuring of
certain indebtedness. Restructuring arrangements have included among other
things reducing or rescheduling interest and principal payments by negotiating
new or amended credit agreements or converting outstanding principal and
unpaid interest to Brady Bonds and obtaining new credit to finance interest
payments. Holders of certain emerging country bonds may be requested to
participate in the restructuring of such obligations and to extend further
loans to their issuers. Further, certain participants in the secondary market
for such debt may be directly involved in negotiating the terms of these
arrangements and may therefore have access to information not available to
other market participants. Certain of the securities held by country funds may
be obligations of, or their issuers may be located in, countries which
currently or previously had Communist governments. A number of these countries
have defaulted on or repudiated their debts in the past, and have yet to make
restitution. For example, following the establishment of the People's Republic
of China in 1949, the Chinese government renounced various debt obligations,
which have never been paid, and expropriated assets without compensation.
There can be no assurance that one or more governments will not take similar
action in the future, in which case a country fund holding those obligations
could lose the entire
10
<PAGE>
value of its investment; this, in turn, could adversely affect the value of
Trust Units. Government debtors may default in their debt and may also be
dependent on expected disbursements from foreign governments, multilateral
agencies and others abroad to reduce principal and interest arrearages on
their debt. The commitment on the part of these governments, agencies and
others to make such disbursements may be conditioned on a debtor's
implementation of economic reforms and/or economic performance and the timely
service of such debtor's obligations. Failure to implement such reforms,
achieve such levels of economic performance or repay principal or interest
when due may result in the cancellation of such third parties' commitments to
lend funds to the government debtor, which may further impair such debtor's
ability or willingness to timely service its debts. If a government obligor
defaults on its obligations, a fund may have limited legal recourse against
the issuer and/or guarantor. Remedies must, in some cases, be pursued in the
courts of the defaulting party itself, and the ability of the holder of
foreign government bonds to obtain recourse may be subject to the political
climate in the relevant country.
In addition, non-U.S. issuers are not generally subject to accounting,
auditing and financial reporting standards, practices and disclosure
requirements comparable to those applicable to U.S. issuers. Consequently,
there may be less publicly available information about a non-U.S. issuer than
about a U.S. issuer. Furthermore, there is generally less government
supervision and regulation of foreign securities markets, brokers and
securities issuers than in the U.S.
Since the country funds will invest in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates could affect the value of securities in their portfolios and unrealized
appreciation or depreciation of investments. Furthermore, a fund may incur
costs in connection with conversions between various currencies. Foreign
exchange dealers realize a profit based on the difference between the prices
at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency at one rate, while offering a
lesser rate of exchange should a holder wish to resell that currency. There
can be no assurance that instruments suitable for hedging currency risks will
be available at the time a fund wishes to use them.
Shares of closed-end country funds frequently trade at a discount from net
asset value in the secondary market. This characteristic of these shares is a
risk separate and distinct from the risk that a fund's net asset value will
decrease. The amount of the discount is subject to change from time to time in
response to various factors.
Shareholders of common stocks have rights to receive payments from the
issuers of those common stocks that are generally subordinate to those of
creditors or holders of debt obligations or preferred stocks of such issuers.
Shareholders of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and have a right to participate in amounts
available for distribution by the issuer only after all other claims on the
issuer have been paid or provided for. By contrast, holders of preference
stocks have the right to receive dividends at a fixed rate when and as
declared by the issuer's board of directors, normally on a cumulative basis,
but generally do not participate in other amounts available for distribution
by the issuing corporation. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stocks are also entitled to rights on liquidation
which are senior to those of common stocks. Moreover, common stocks do not
represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks are subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Securities in the Portfolio may be expected to fluctuate over the life of the
Trust to values higher or lower than those prevailing on the Initial Date of
Deposit.
Since the Securities are all country fund stocks, and the income stream
produced by dividend payments thereon is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or all
expenses of the Trust. If dividends are insufficient to cover expenses, it is
likely that Securities will have to be sold to meet Trust expenses. See
Expenses and Charges -- Payment of Expenses. Any such sales may result in
capital gains to Holders. See Description of the Trust -- Taxes.
Holders will be unable to dispose of any of the Securities in the Portfolio,
as such, and will not be able to vote the Securities. As the holder of the
Securities, the Trustee will have the right to vote all of the voting stocks
in the Trust and will vote in the same proportion as all other shares are
voted.
11
<PAGE>
Investors should be aware that the Trust is not a "managed" trust and, as a
result, the adverse financial condition of a company will not result in the
elimination of its securities from the portfolio of the Trust (the
"Portfolio") except under extraordinary circumstances (see Administration of
the Trust -- Trust Supervision). Some of the Securities in the Trust may also
be owned by other clients of the Sponsor and its 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. Potential investors also should be aware that the Sponsor
may change its views as to the investment merits of any of the Securities
during the life of the Trust and therefore should consult their own financial
advisers with regard to a purchase of Units. Investors should consult with
their own financial advisers prior to investing in the Trust to determine its
suitability. Also, a Holder should realize that by investing in foreign
securities indirectly through the Trust, the Holder will bear not only a
proportionate share of the fees and expenses of the Trust, but also,
indirectly, similar expenses of the underlying country funds. Since all of the
country fund shares will be purchased in the secondary market, their purchase
price will generally not reflect high initial sales charges.
Investors should note that in connection with the issuance of additional
Units during the Public Offering Period set forth in the Investment Summary,
the Sponsor may deposit additional Securities, contracts to purchase
Securities or cash (or a letter of credit in lieu of cash) with instructions
to purchase Securities, in each instance maintaining the original percentage
relationship, subject to adjustment under certain circumstances, among the
number of shares of each Security in the Trust. To the extent the price of a
Security increases or decreases between the time cash is deposited with
instructions to purchase the Security 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
Holder's Units and the Income per Unit received by the Trust.
The Trust may be terminated at any time and all outstanding Units liquidated
if the net asset value of the Trust reaches the level stated under Minimum
Value of Trust on page 2. Investors should note that if the net asset value of
the Trust should fall below the applicable minimum value, the Sponsor may then
in its sole discretion terminate the Trust before the Mandatory Termination
Date specified under Investment Summary.
PERFORMANCE OF WORLD EQUITY MARKETS
COMPOUNDED ANNUAL TOTAL RETURNS
DECEMBER 31, 1986 THROUGH DECEMBER 31, 1996
U.S. securities, which comprised more than half of the world's total stock
market capitalization ($6,514 billion) at the end of 1983, represented 42.04%
of total capitalization of ($20,178 billion) at the end of 1996. During the
past decade, foreign market capitalization increased from approximately $4
trillion to approximately $11 trillion. Sales literature concerning the Trust
may list or describe certain economic and political events by region which the
Sponsor believes have contributed to this change. The chart below shows how
average annual total returns (share prices with dividends reinvested, as
converted to U.S. dollars) of equity markets in selected major industrialized
countries compare over the past ten years.
<TABLE>
<CAPTION>
TOTAL
COUNTRY RETURN
------- ------
<S> <C>
Mexico 32.45%
Hong Kong 21.87
Malaysia 19.92
Netherlands 16.90
Sweden 16.42
U.S. 14.39
</TABLE>
SOURCE: MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) INDEX.
The returns above represent past performance of stocks in the countries
shown, generally representing at least 60% of total market capitalization in
each market; they are not guarantees of future performance and should not be
used as a predictor of returns to be expected on the Trust. Results have
varied substantially in individual years. These figures do not reflect sales
charges, commissions, expenses or taxes. Also, the Trust is invested only
indirectly in foreign equities. A Holder of Units would not necessarily
realize as high a return as shown above.
12
<PAGE>
THE PORTFOLIO
Currently there are more than 85 closed-end country funds, with total assets
of approximately $18 billion. Most of these funds invest in equities of a
particular country or region; some specialize in particular market sectors
such as companies that seek to capitalize on emerging market countries' needs
to develop infrastructure or industrial privatizing opportunities.
The Trust seeks to capitalize on global investing trends with a portfolio of
publicly traded country fund stocks selected by the Sponsor for above average
appreciation potential over the next 24 months. The Sponsor initially analyzed
global economic, political and market trends to develop target regional
weightings for the Trust portfolio. It then picked country funds believed to
offer the best combination of appreciation potential and attractive share
prices by evaluating the funds that invest in these markets in terms of
portfolio composition, management quality (knowledge of local taxation,
accounting practices and securities laws, and experience and expertise to
evaluate economic, political and monetary influences on the local region),
performance and expense ratios, and inherent value (whether the fund's share
price was above or below the value of its underlying securities). By investing
in a variety of country funds, the Trust seeks to take advantage of particular
advisers' knowledge and experience with respect to local countries and their
economies. Most investors lack the time, experience and information to do this
on their own.
The results of ownership of Units will differ from the results of ownership
of the underlying Securities of the Trust for various reasons, including sales
charges and expenses of the Trust. Additionally, results of ownership to
different Holders will vary depending on the net asset value of the underlying
Securities on the days such Holders bought and sold their Units. Of course,
any purchaser of securities, including Units, will have to pay sales charges
or commissions, which will reduce his total return.
Advertising and sales literature for the Trust may include excerpts from the
Sponsors' research reports on one or more of the stocks in the Trust,
including a brief description of its businesses and market sector, and the
basis on which the stock was selected. In selecting Securities for the Trust,
the Sponsor has not expressed any belief as to the potential of these
Securities for capital appreciation over a period longer than one year. There
is, of course, no assurance that any of the Securities in the Trust will
appreciate in value, and indeed any or all of the Securities may depreciate in
value at any time in the future. See Description of the Trust -- Risk Factors.
All of the Securities are publicly traded either on a stock exchange or in
the over-the-counter market. The contracts to purchase Securities deposited
initially in the Trust are expected to settle in three business days.
The Trust consists of such Securities as may continue to be held from time
to time in the Trust and any additional and replacement Securities acquired
and held by the Trust pursuant to the provisions of the Indenture (including
the provisions with respect to the deposit into the Trust of Securities in
connection with the sale of additional Units to the public) together with
undistributed income therefrom and undistributed and uninvested cash realized
from the disposition of Securities (see Administration of the Trust --
Accounts and Distributions; -- Trust Supervision). If sufficient Securities
are not available at what the Sponsor considers a reasonable price, excess
cash received on the creation of Units may be held in an interest-bearing
account with the Trustee until that cash can be invested in Securities.
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities. However, should any
contract deposited hereunder (or to be deposited in connection with the sale
of additional Units) fail, the Sponsor shall, on or before the next following
Distribution Day, cause to be refunded the attributable sales charge, plus the
attributable Cost of Securities to Trust listed under Portfolio, unless
substantially all of the monies held in the Trust to cover the purchase are
reinvested in replacement Securities in accordance with the Indenture (see
Administration of the Trust -- Portfolio Supervision).
Because certain of the Securities from time to time may be sold, or their
percentage may be reduced under certain limited circumstances described below,
or because Securities may be distributed in redemption of Units, no assurance
can be given that the Trust will retain for any length of time its present
size (see Redemption; Administration of the Trust -- Amendment and
Termination). For Holders who do not redeem their Units, investments in Units
of the Trust will be liquidated on the fixed date specified under Investment
Summary -- Mandatory Termination of Trust, and may be liquidated sooner if the
net asset value of the Trust falls below that specified under Investment
Summary -- Minimum Value of Trust (see Risk Factors).
INCOME
There is no assurance that any dividends will be declared or paid in the
future on the Securities.
13
<PAGE>
TAXES
TAXATION OF THE TRUST
The Trust intends to qualify for and elect the special tax treatment
applicable to "regulated investment companies" under Sections 851-855 of the
United States Internal Revenue Code of 1986, as amended (the "Code").
Qualification and election as a "regulated investment company" involve no
supervision of investment policy or management by any government agency. If
the Trust qualifies as a "regulated investment company" and distributes to
Holders 90% or more of its taxable income without regard to its net capital
gain (net capital gain is defined as the excess of net long-term capital gain
over net short-term capital loss), it will not be subject to Federal income
tax on any portion of its taxable income (including any net capital gains)
distributed to Holders in a timely manner. In addition, the Trust will not be
subject to the 4% excise tax on certain undistributed income of "regulated
investment companies" to the extent it distributes to Holders in a timely
manner at least 98% of its taxable income (including any net capital gain). It
is anticipated that the Trust will not be subject to Federal income tax or the
excise tax because the Indenture requires the distribution of the Trust's
entire taxable income (including any net capital gain) in a timely manner.
Although a portion of the Trust's taxable income (including any net capital
gain) for a taxable year may be distributed shortly after the end of the
calendar year, such a distribution will be treated for Federal income tax
purposes as having been received by Holders during the calendar year.
DISTRIBUTIONS
Distributions to Holders of the Trust's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to Holders to the
extent of the Trust's taxable income (without regard to its net capital gain)
for that year. Any excess will be treated as a return of capital and will
reduce the Holder's basis in his Units and, to the extent that such
distributions exceed his basis, will be treated as a gain from the sale of his
Units as discussed below. It is anticipated that substantially all of the
distributions of the Trust's dividend income and net short-term capital gain
will be taxable as ordinary income to Holders.
Distribution of the Trust's net capital gain (designated as capital gain
dividends by the Trust) will be taxable to Holders as long-term capital gain,
regardless of the length of time the Units have been held by a Holder. A
Holder may recognize a taxable gain or loss if the Holder sells or redeems his
Units. Any gain or loss arising from (or treated as arising from) the sale or
redemption of Units will be a capital gain or loss, except in the case of a
dealer in securities. Capital gains realized by corporations are generally
taxed at the same rate as ordinary income. However, capital gains are taxable
at a maximum rate of 28% to non-corporate Holders who have a holding period of
more than 12 months, and 20% for non-corporate Holders who have a holding
period of more than 18 months. Corresponding maximum rate and holding period
rules apply with respect to capital gains dividends distributed by the Trust,
without regard to the length of time the Units have been held by the Holder.
The deduction of capital losses is subject to limitations.
Distributions that are taxable as ordinary income to Holders will constitute
dividends for Federal income tax purposes. Because the Trust will be investing
in country funds that hold stock of foreign corporations, dividends paid by
the Trust will not be eligible for the dividends-received deduction.
A Holder's basis in his units will be equal to the cost of his units,
including the sales charge.
Holders will be taxed in the manner described above regardless of whether
distributions from the Trust are actually received by the Holder or are
reinvested pursuant to the Reinvestment Plan.
The Federal tax status of each year's distributions will be reported to
Holders and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Trust and to the tax treatment of
the distributions by the Trust to U.S. Holders. Distributions may also be
subject to state and local taxation and Holders should consult their own tax
advisers in this regard.
FOREIGN HOLDERS
A "Foreign Holder" is a person or entity that, for U.S. Federal income tax
purposes, is a non-resident alien individual, a foreign corporation, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust. If a
distribution of the Trust's taxable income (without regard to its net capital
gain) to a Foreign Holder is not effectively connected with a U.S. trade or
business carried on by the investor, such distribution will be subject to
withholding tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.
14
<PAGE>
A Foreign Holder generally will not be subject to Federal income tax with
respect to gain arising from the sale or redemption of Units or distributions
of the Trust's net capital gain (designated as capital gain dividends by the
Trust) unless the gain is effectively connected with a trade or business of
such Holder in the United States. In the case of a Foreign Holder who is a
non-resident alien individual, however, gain arising from the sale or
redemption of Units or distributions of the Trust's net capital gain
ordinarily will be subject to Federal income tax at a rate of 30% if such
individual is physically present in the U.S. for 183 days or more during the
taxable year and, in the case of the gain arising from the sale or redemption
of Units, either the gain is attributable to an office or other fixed place of
business maintained by the Holder in the United States or the Holder has a
"tax home" in the United States.
Foreign Holders should consult their own tax advisers to determine whether
investment in the Trust is appropriate.
RETIREMENT PLANS
This Trust may be well suited for purchase by Individual Retirement Accounts
("IRAs"), Keogh plans, pension funds and other qualified retirement plans.
Generally, capital gains and income received in each of the foregoing plans
are exempt from Federal taxation. Except with respect to certain IRAs known as
Roth IRAs, distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special 5 or 10 year averaging
or tax-deferred rollover treatment. Holders of Units in IRAs, Keogh plans and
other tax-deferred retirement plans should consult their plan custodian as to
the appropriate treatment of distributions. Investors considering
participation in any such plan should review specific tax laws related thereto
and should consult their attorneys or tax advisers with respect to the
establishment and maintenance of any such plan. Such plans are offered by
brokerage firms, including the Sponsor of this Trust, and other financial
institutions. Fees and charges with respect to such plans may vary.
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."
PUBLIC SALE OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is computed by adding to the
aggregate value of the Securities in the Trust (as determined by the Trustee),
including any Securities represented by deposit of purchase contracts, plus
any cash held with instructions to purchase Securities, divided by the number
of Units outstanding, a sales charge. This sales charge is equal to a gross
underwriting profit of 1.50% of the Public Offering Price (or 1.523% of the
net amount invested in Securities) on purchases of less than $1,000,000 and
1.25% of the Public Offering Price (1.266% of the net amount invested) on
purchases of $1,000,000 or more by a single purchaser, and is subject to
change by the Sponsor at any time. The reduced sales charge will apply to all
purchases on any one day by a single purchaser of Units. Units held in the
name of the purchaser's spouse or child under 21 years of age are deemed to be
purchased by a single purchaser. A trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account is also
considered a single purchaser. Purchasers on the Initial Date of Deposit will
be able to purchase Units at $1.00 each. To allow Units to be priced at $1.00,
the Units outstanding as of the Evaluation Time on the Initial Date of Deposit
will be split (or split in reverse). The Public Offering Price on any
subsequent date will vary from the Public Offering Price on the date of the
initial Prospectus (set forth under Investment Summary) in accordance with
fluctuations in the aggregate value of the underlying Securities. Units will
be sold to investors at the Public Offering Price next determined after
receipt of the investor's purchase order. A proportionate share of the amount
in the Income Account (described under Administration of the Trust -- Accounts
and Distributions) on the date of delivery of the Units to the purchaser is
added to the Public Offering Price.
The holders of units of The CountryFund Opportunity Trust, 1996 Series (the
"Prior Series") may exchange units of the Prior Series for Units of the Trust
at their relative net asset values, subject to a reduced sales charge of
1.45%. An exchange of a Prior Series for Units of the Trust will generally be
a taxable event. The exchange option described above will also be available to
investors in the Prior Series who elect to purchase Units of the Trust within
60 days of their liquidation of units in the Prior Series (see Exchange and
Rollover Privileges). The sales charge applicable to such exchanges will be
reduced to 1.20% on exchanges of $1,000,000 or more by a single investor.
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Valuation of Securities by the Trustee is made as of the close of business
on the New York Stock Exchange on each business day. Securities quoted on a
national stock exchange or NASDAQ National Market System are valued at the
closing sales price, or, if no closing sales price exists, at the mean between
the closing bid and offer prices. Securities not so quoted are valued at the
mean between bid and offer prices.
Employees of the Sponsor and its subsidiaries, affiliates and employee-
related accounts may purchase Units pursuant to employee benefit plans, at a
price equal to the aggregate value of the Securities in the Trust divided by
the number of Units outstanding plus a reduced sales charge of .5%. Sales to
these plans involve less selling effort and expense than sales to employee
groups of other companies.
PUBLIC DISTRIBUTION
Units will be distributed to the public at the Public Offering Price through
the Sponsor, as sole underwriter of the Trust, and may also be distributed
through dealers.
The Sponsor intends to qualify Units for sale in all states of the United
States where qualification is deemed necessary through the Sponsor and dealers
who are members of the National Association of Securities Dealers, Inc. Sales
to dealers, if any, will initially be made at prices which represent a
concession from the Public Offering Price per Unit to be established at the
time of sale by the Sponsor.
UNDERWRITER'S AND SPONSOR'S PROFITS
The Sponsor as sole underwriter receives a gross underwriting commission
equal to the sales charge of 1.50% of the Public Offering Price.
On the Initial Date of Deposit, the Sponsor also realized a profit or loss
on deposit of the Securities into the Trust in the amount set forth under
Investment Summary, which equals the difference between the cost of the
Securities to the Trust (which is based on the aggregate value of the
Securities on the Date of Deposit) and the purchase price of such Securities
to the Sponsor. On each subsequent deposit of Securities with respect to the
sale of additional Units to the public, the Sponsor similarly may realize a
profit or loss. The Sponsor also may realize profits or sustain losses as a
result of fluctuations after the Initial Date of Deposit in the aggregate
value of the Securities and hence of the Public Offering Price received by the
Sponsor for Units. Cash, if any, made available by buyers of Units to the
Sponsor prior to the settlement dates for purchase of Units may be used in the
Sponsor's business and may be of benefit to the Sponsor.
The Sponsor also receives an annual fee at the maximum rate of $.25 per
1,000 Units for the administrative and other services which it provides during
the life of the Trust (see Expenses and Charges -- Fees). The Sponsor has not
participated as sole underwriter or manager or member of any underwriting
syndicate from which any of the Securities in the Portfolio on the Initial
Date of Deposit were acquired, except as indicated under Portfolio.
In maintaining a market for the Units (see Market for Units), the Sponsor
will also realize profits or sustain losses in the amount of any difference
between the prices at which it buys Units (based on the aggregate value of the
Securities) and the prices at which it resells such Units (which include the
sales charge) or the prices at which it redeems such Units, as the case may
be.
MARKET FOR UNITS
While the Sponsor is not obligated to do so, its intention is to maintain a
market for Units and offer continuously to purchase Units from the Initial
Date of Deposit at prices, subject to change at any time, which will be
computed by adding (1) the aggregate value of Securities in the Trust, (2)
amounts in the Trust including dividends receivable on stocks trading ex-
dividend and (3) all other assets in the Trust; deducting therefrom the sum of
(a) taxes or other governmental charges against the Trust not previously
deducted, (b) accrued fees and expenses of the Trustee (including legal and
auditing expenses), the Sponsor and counsel to the Trust and certain other
expenses and (c) amounts for distribution to Holders of record as of a date
prior to the evaluation; and dividing the result of such computation by the
number of Units outstanding as of the date of computation. The Sponsor may
discontinue purchases of Units if the supply of Units exceeds demand or for
any other business reason. The Sponsor, of course, does not in any way
guarantee the enforceability, marketability or price of any Securities in the
Portfolio or of the Units. On any given day, however, the price offered by the
Sponsor for the purchase of Units shall be an amount not less than the
Redemption Price per Unit, based on the aggregate value of Securities in the
Trust on the date on which the Units are tendered for redemption (see
Redemption).
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The Sponsor may, of course, redeem any Units purchased in the secondary
market to the extent that it determines that it is undesirable to continue to
hold such Units in its inventory. Factors which the Sponsor will consider in
making such a determination will include the number of units of all series of
unit trusts which it has in inventory, the salability of such units and its
estimate of the time required to sell such units and general market
conditions. For a description of certain consequences of such redemption for
the remaining Holders, see Redemption.
REDEMPTION
Units may be redeemed by the Trustee at its corporate trust office upon
payment of any relevant tax without any other fee, accompanied by a written
instrument or instruments of transfer with the signature guaranteed by a
national bank or trust company, a member firm of any of the New York, Midwest,
American or Pacific Stock Exchanges, or in such other manner as may be
acceptable to the Trustee. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or
certificates of corporate authority.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions (see Administration of the Trust-- Accounts and
Distribution). The Securities to be sold will be selected by the Trustee from
those designated on the current list provided by the Sponsor for this purpose.
Provision is made in the Indenture under which the Sponsor may, but need not,
specify minimum amounts in which blocks of Securities are to be sold in order
to obtain the best price for the Trust. While these minimum amounts may vary
from time to time in accordance with market conditions, the Sponsor believes
that the minimum amounts which would be specified would be a sufficient number
of shares to obtain institutional rates of brokerage commissions (generally
between 1,000 and 5,000 shares).
A Holder may tender Units for redemption on any weekday (a "Tender Day")
which is not one of the following: New Year's Day, Martin Luther King, Jr.
Day, Washington's Birthday, Good Friday, Memorial Day (observed), Independence
Day, Labor Day, Thanksgiving or Christmas. The right of redemption may be
suspended and payment postponed for any period, determined by the Securities
and Exchange Commission ("SEC"), (1) during which the New York Stock Exchange,
Inc. is closed other than for customary weekend and holiday closings, (2)
during which the trading on that Exchange is restricted or an emergency exists
as a result of which disposal or evaluation of the Securities is not
reasonably practicable or (3) for such periods as the SEC may by order permit.
COMPUTATION OF REDEMPTION PRICE PER UNIT
Redemption Price per Unit is computed by the Trustee as of the Evaluation
Time on each June 30 and December 31 (or the last business day prior thereto),
as of the Evaluation Time next following the tender of any Unit for redemption
on any Tender Day, and on any other business day desired by the Trustee or the
Sponsor, by adding (1) the aggregate value of the Securities determined by the
Trustee, (2) amounts in the Trust including dividends receivable on stocks
trading ex-dividend (with appropriate adjustments to reflect monthly
distributions made to Holders) and (3) all other assets in the Trust;
deducting therefrom the sum of (a) taxes or other governmental charges against
the Trust not previously deducted, (b) accrued fees and expenses of the
Trustee (including legal and auditing expenses), the Sponsor and counsel to
the Trust and certain other expenses and (c) amounts for distribution to
Holders of record as of a date prior to the evaluation; and dividing the
result of such computation by the number of Units outstanding as of the date
thereof.
The aggregate value of the Securities shall be determined by the Trustee in
good faith in the following manner: if the Securities are listed on a national
securities exchange or The Nasdaq National Market, such evaluation shall
generally be based on the closing sale price on that exchange, if any, where
the Securities are principally traded (unless the Trustee deems such price
inappropriate as a basis for evaluation) or, if there is no closing sale price
on such exchange, at the mean between the closing offering and bid side
evaluation. If the Securities are not so listed or, if so listed and the
principal market therefor is other than on such exchange, such evaluation
shall generally be made by the Trustee in good faith based at the mean between
current bid and offer prices on the over-the-counter market (unless the
Trustee deems such mean inappropriate as a basis for evaluation) or, if bid
and offer prices are not available, (1) on the basis of the mean between
current bid and offer prices for comparable securities, (2) by the Trustee's
appraising the value of the Securities in good faith at the mean between the
bid side and the offer side of the market or (3) by any combination thereof.
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EXPENSES AND CHARGES
Initial Expenses -- All or a portion of the expenses incurred in
establishing the Trust, including the cost of the initial preparation,
printing and execution of the registration statement and the indenture, the
initial fees and expenses of the Trustee, legal and auditing expenses, and any
other out-of-pocket expenses, will be paid by the Trust and amortized over the
life of the Trust. Any balance of these organizational expenses as well as
advertising and selling expenses will be paid by the Underwriting Account at
no cost to the Trust.
Fees -- The Trustee's and Sponsor's fees are set forth under Investment
Summary. The Trustee receives for its services as Trustee and Distribution
Agent payable in monthly installments, the amount set forth under Investment
Summary. The Trustee's fee (in respect of services as Trustee), payable
monthly, is based on the largest number of Units outstanding during the
preceding month. Certain regular and recurring expenses of the Trust,
including certain mailing and printing expenses, are borne by the Trust. The
Trustee receives benefits to the extent that it holds funds on deposit in the
various non-interest bearing accounts created under the Indenture. The
Sponsor's fee, which is earned for trust supervisory services, is based on the
largest number of Units outstanding during the year. The Sponsor's fee, which
is not to exceed the maximum amount set forth under Investment Summary, may
exceed the actual costs of providing supervisory services for this Trust, but
at no time will the total amount the Sponsor receives for trust supervisory
services rendered to all series of Smith Barney Unit Trusts in any calendar
year exceed its aggregate cost of supplying these services in that year. In
addition, the Sponsor may also be reimbursed for bookkeeping or other
administrative services provided to the Trust in amounts not exceeding its
cost of providing those services. The fees of the Trustee and Sponsor may be
increased without approval of Holders in proportion to increases under the
classification "All Services Less Rent" in the Consumer Price Index published
by the United States Department of Labor.
Other Charges -- These include: (1) fees of the Trustee for extraordinary
services (for example, making distributions due to failure of contracts for
Securities), (2) expenses of the Trustee incurred for the benefit of the Trust
(including legal expenses) and expenses of counsel designated by the Sponsor,
(3) various governmental charges, (4) expenses and costs of action taken by
the Sponsor, in its discretion, or the Trustee, in its discretion, to protect
the Trust and the rights and interests of Holders (for example, expenses in
exercising the Trust's rights under the underlying Securities), (5)
indemnification of the Trustee for any losses, liabilities and expenses
incurred without gross negligence, bad faith or wilful misconduct on its part,
(6) indemnification of the Sponsor for any losses, liabilities and expenses
incurred without gross negligence, bad faith, wilful misconduct or reckless
disregard of its duties and (7) expenditures incurred in contacting Holders
upon termination of the Trust. The amounts of these charges and fees are
secured by a lien on the Trust.
Payment of Expenses -- Funds necessary for the payment of the above fees
will be obtained in the following manner: (1) first, by deductions from the
Income Account (see below) (which will reduce income distributions from the
Account); (2) to the extent the Income Account funds are insufficient, by
distribution from the Capital Account (see below); (3) to the extent the
Income and Capital Accounts are insufficient, by selling Securities from the
Portfolio and using the proceeds to pay the expenses (thereby reducing the net
asset value of the Units).
ADMINISTRATION OF THE TRUST
RECORDS
The Trustee keeps records of the transactions of the Trust at its corporate
trust office including names, addresses and holdings of all Holders, a current
list of the Securities and a copy of the Indenture. Such records are available
to Holders for inspection at reasonable times during business hours.
ACCOUNTS AND DISTRIBUTION
Dividends payable to the Trust are credited by the Trustee to an Income
Account, as of the date on which the Trust is entitled to receive such
dividends as a holder of record of the Securities. All other receipts (i.e.,
return of capital, stock dividends, if any, and gains) will be credited by the
Trustee to a Capital Account. If a Holder elects to receive his distributions
in cash, income will be distributed on the applicable Distribution Day, or
shortly thereafter to Holders of record on the related Record Day and shall
consist of an amount equal to the Holder's pro rata share of the distributable
balance in the Income Account as of that Record Day, after deducting estimated
expenses plus the Holder's pro rata share of the balance of the Capital
Account on said Record Day (excluding amounts reserved for the purchase of
Securities). The Trustee may withdraw from the Income Account, from time to
time, such amounts as it
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deems requisite to establish a reserve for any taxes or other governmental
charges that may be payable out of the Trust. Funds held by the Trustee in the
various accounts created under the Indenture do not bear interest.
Purchases at Market Discount -- Certain of the shareholder dividend
reinvestment, stock purchase or similar plans maintained by issuers of the
Securities offer shares pursuant to such plans at a discount from market
value. Subject to any applicable regulations and plan restrictions, the
Sponsor intends to direct the Trustee to participate in any such plans to the
greatest extent possible taking into account the Securities held by the Trust
in the issuers offering such plans.
The Trustee will follow a policy that it will place securities transactions
with a broker or dealer only if it expects to obtain the most favorable prices
and executions of orders. Transactions in securities held in the Trust are
generally made in brokerage transactions (as distinguished from principal
transactions) and the Sponsor or any of its affiliates may act as brokers
therein if the Trustee expects thereby to obtain the most favorable prices and
execution. The furnishing of statistical and research information to the
Trustee by any of the securities dealers through which transactions are
executed will not be considered in placing securities transactions.
TRUST SUPERVISION
The Trust is a unit investment trust which normally follows a buy and hold
investment strategy and is not actively managed. However, the Portfolio is
regularly reviewed. Traditional methods of investment management for a managed
fund (such as a mutual fund) typically involve frequent changes in a portfolio
of securities on the basis of economic, financial and market analyses. The
Portfolio of the Trust, however, will not be actively managed and therefore
the adverse financial condition of an issuer will not necessarily require the
sale of its Securities from the Portfolio. However, while it is the intention
of the Sponsor to continue the Trust's investment in the Securities in the
original proportions, it has the power but not the obligation to direct the
disposition of the Securities upon institution of certain legal proceedings,
default under certain documents adversely affecting future declaration or
payment of anticipated dividends, or a substantial decline in price or other
adverse market or credit factors that, in the opinion of the Sponsor, would
make the retention of the Securities detrimental to the interests of the
Holders or if the disposition of securities is necessary to enable the Trust
to make distributions of the Trust's capital gain net income or desirable in
order to maintain the qualification of the Trust as a regulated investment
company under the Code. In the event a public tender offer is made for a
Security or a merger or acquisition is announced affecting a Security, the
Sponsor may instruct the Trustee to tender or sell the Security on the open
market when in its opinion it is in the best interest of the Holders of the
Units to do so. The Sponsor is authorized under the Indenture to direct the
Trustee to invest the proceeds of any tender or sale of Securities not
required for redemption of Units in each of the remaining Securities in the
Trust, maintaining the proportionate relationship among the number of shares
of each of those Securities existing immediately after the disposition.
Proceeds not so invested will be distributed to Holders.
The Sponsor is authorized to direct the Trustee to acquire replacement
Securities ("Replacement Securities") to replace any Securities for which
purchase contracts have failed ("Failed Securities"), or, in connection with
the deposit of Additional Securities, when Securities of an issue originally
deposited are unavailable at the time of subsequent deposit, as described more
fully below. Replacement Securities shall satisfy certain conditions specified
in the Indenture including, among other conditions, requirements that the
Replacement Securities shall be selected by the Sponsor from a list of
securities maintained by it and updated from time to time and shall be
publicly-traded common stocks of closed-end country funds having, in the
opinion of the Sponsor, characteristics sufficiently similar to the
characteristics of the other Securities in the Trust to be acceptable for
acquisition by the Trust. The Securities on the current list maintained by the
Sponsor and updated from time to time from which Replacement Securities are to
be selected are set forth under Investment Summary. The Indenture also
requires that the purchase of the Replacement Securities will not (i)
disqualify the Trust as a regulated investment company under the Code, (ii)
result in more than 25% of the Trust consisting of securities of a single
issuer (or of two or more issuers which are Affiliated Persons as this term is
defined in the Investment Company Act of 1940) which are not registered and
are not being registered under the Securities Act of 1933, or (iii) result in
the Trust owning more than 50% of any single issue which has been registered
under the Securities Act of 1933. Any Securities received in exchange or
substitution for underlying Securities will be held by the Trustee subject to
the terms and conditions of the Indenture to the same extent as Securities
originally deposited thereunder. Within five days after the deposit of any
Replacement Securities, the Trust is required to give notice thereof to each
Holder, identifying the Securities eliminated and the Securities substituted
therefor. If Replacement Securities are not acquired with respect to a Failed
Security, the Sponsor will cause to be
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refunded the attributable sales charge, plus the attributable Cost of
Securities to Trust listed under Portfolio plus income attributable to the
Failed Security. 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 received in a non-taxable stock
dividend or stock split, shall be retained or disposed by the Trustee as
provided in the Indenture. The proceeds of any disposition shall be credited
to the Income or Capital Account of the Indenture.
The Indenture also authorizes the Sponsor to increase the size and number of
Units of the Trust by the deposit of Additional Securities, contracts to
purchase Additional Securities or cash or a letter of credit with instructions
to purchase Additional Securities in exchange for the corresponding number of
additional Units, provided that the original proportionate relationship among
the number of shares of each Security established on the Initial Date of
Deposit (the "Original Proportionate Relationship") is maintained to the
extent practicable. With respect to deposits of Additional Securities (or cash
or a letter of credit with instructions to purchase Additional Securities), in
connection with creating additional Units of the Trust, the Sponsor may
specify the minimum numbers in which Additional Securities will be deposited
or purchased. If a deposit is not sufficient to acquire minimum amounts of
each Security, Additional Securities may be acquired in the order of the
Security most under-represented immediately before the deposit when compared
to the Original Proportionate Relationship. If Securities of an issue
originally deposited are unavailable at the time of subsequent deposit or
cannot be purchased at reasonable prices or their purchase is prohibited or
restricted by law, regulation or policies applicable to the Trust or the
Sponsor, the Sponsor may (1) deposit cash or a letter of credit with
instructions to purchase the Security when practicable or (2) deposit (or
instruct the Trustee to purchase) Securities of one or more other issues
originally deposited or a Replacement Security that satisfies the conditions
for Replacement Securities as described above.
REINVESTMENT PLAN
Any distribution of income and any principal on Units held in street name
through Smith Barney Inc. or directly in the name of the Holder, unless the
Holder notifies his Financial Consultant at Smith Barney Inc. or the Trustee,
respectively, to the contrary, will be reinvested automatically in additional
Units of the Trust at no extra charge pursuant to the Trust's "Reinvestment
Plan". If the Holder does not wish to participate in the Reinvestment Plan,
the Holder must notify his Financial Consultant at Smith Barney Inc. or the
Trustee in writing no later than ten business days before the Distribution Day
for the first Distribution to which the notice applies.
Distributions being reinvested will be paid in cash to the Sponsor, who will
use them to purchase Units of the Trust at the Sponsor's Repurchase Price (the
net asset value per Unit without any sales charge) in effect at the close of
business on the Distribution Day. These may be either previously issued Units
repurchased by the Sponsor or newly issued Units created upon the deposit of
additional Securities in the Trust (see Description of the Trust--Structure
and Offering). Each participant will receive an account statement reflecting
any purchase or sale of Units under the Reinvestment Plan.
The costs of the Reinvestment Plan will be borne by the Trust. The Sponsor
reserves the right to amend, modify or terminate the Reinvestment Plan at any
time without prior notice.
REPORTS TO HOLDERS
The Trustee will furnish Holders with each distribution a statement of the
amount of income and the amount of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit. Within a
reasonable period of time after the termination of the Trust, the Trustee will
furnish to each person who at any time during the duration of the Trust was a
Holder of record a statement (1) as to the Income Account: income received;
deductions for applicable taxes and for fees and expenses of the Trustee and
counsel, and certain other expenses; amounts paid in connection with
redemptions of Units and the balance remaining after such deductions,
expressed in each case both as a total dollar amount and as a dollar amount
per Unit outstanding on the termination date; (2) as to the Capital Account:
the dates of disposition of any Securities and the net proceeds received
therefrom; deductions for payment of applicable taxes and for fees and
expenses of the Trustee and counsel and certain other expenses, to the extent
that the Income Account is insufficient, and the balance remaining after such
deductions, expressed both as a total dollar amount and as a dollar amount per
Unit outstanding on the termination date; (3) a list of the Securities held
and the number of Units outstanding on the termination date; (4) the
Redemption Price per Unit based upon the computation thereof made on the
termination date; and (5) amounts actually distributed during the life of the
Trust from the Income Account expressed both as a total dollar amount and a
dollar amount per Unit outstanding on the record date for the distribution.
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UNCERTIFICATED UNITS
All Holders are required to hold their Units in uncertificated form and in
"street name" by their broker, dealer or financial institution at the
Depository Trust Company ("DTC"). Units are transferable between accounts of
brokers, dealers and financial institutions that are members of DTC.
AMENDMENT AND TERMINATION
The Sponsor may amend the Indenture, with the consent of the Trustee but
without the consent of any of the Holders, (1) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent, (2) to change any provision thereof as may be required by the
SEC or any successor governmental agency and (3) to make such other provisions
as shall not materially adversely affect the interest of the Holders (as
determined in good faith by the Sponsor). The Indenture may also be amended in
any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the Holders of 51% of the Units, provided
that no such amendment or waiver will reduce the interest in the Trust of any
Holder without the consent of such Holder or reduce the percentage of Units
required to consent to any such amendment or waiver without the consent of all
Holders. The Indenture will terminate upon the earlier of the disposition of
the last Security held thereunder or the Mandatory Termination Date specified
under Investment Summary. The Indenture may also be terminated by the Sponsor
if the value of the Trust is less than the minimum value set forth under
Investment Summary (as described under Description of the Trust -- Risk
Factors) and may be terminated at any time by written instrument executed by
the Sponsor and consented to by Holders of 51% of the Units. The Trustee shall
deliver written notice of any termination to each Holder within a reasonable
period of time prior to the termination. Within a reasonable period of time
before and after such termination, the Trustee must sell all of the Securities
then held and distribute to each Holder, after deductions of accrued and
unpaid fees, taxes and governmental and other charges, such Holder's interest
in the Income and Capital Accounts. Such distribution will normally be made by
mailing a check in the amount of each Holder's interest in such accounts to
the address of such Holder appearing on the record books of the Trustee.
EXCHANGE AND ROLLOVER PRIVILEGES
Holders may exchange their Units of this Trust into units of any then
outstanding series of The CountryFund Opportunity Trust (an "Exchange Series")
at their relative net asset values, subject only to a reduced sales load (as
disclosed in the prospectus for the Exchange Series). The exchange option
described above will also be available to investors in the Trust who elect to
purchase units of an Exchange Series within 60 days of their liquidation of
Units in the Trust.
Holders who retain their Units until the termination of the Trust, may
reinvest their terminating distributions into units of a subsequent series of
The CountryFund Opportunity Trust (the "New Series") provided one is offered.
Such purchaser may be entitled to a reduced sales load (as disclosed in the
prospectus for the New Series) upon the purchase of units of the New Series.
Under the exchange and rollover privilege, the Sponsor's repurchase price
would be based upon the market value of the Securities in the Trust portfolio
and units in the Exchange Series or New Series will be sold to the Holder at a
price based on the aggregate market price of the securities in the portfolio
of the Exchange Series or New Series. Exercise of the exchange or rollover
privilege by Holders is subject to the following conditions: (i) the Sponsor
must have units available of an Exchange Series or New Series during initial
public offering or, if such period is completed, must be maintaining a
secondary market in the units of the available Exchange Series or New Series
and such units must be available in the Sponsor's secondary market account at
the time of the Holder's Elections; and (ii) exchange will be affected only in
whole units. Holders will not be permitted to advance any funds in excess of
their redemption in order to complete the exchange. Any excess proceeds
received from the Holder for exchange will be remitted to such Holder.
It is expected that the terms of the Exchange Series or New Series will be
substantially the same as the terms of the Trust described in this Prospectus,
and that similar reinvestment programs will be offered with respect to all
subsequent series of the Trust. The availability of these options do not
constitute a solicitation of an offer to purchase units of an Exchange Series
or New Series or any other Security. A Holder's election to participate in
either of these options will be treated as an indication of interest only.
Holders should contact their financial professionals to find out
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what suitable Exchange or New Series is available and to obtain a prospectus.
Holders may acquire units of those Series which are lawfully for sale in
states where they reside and only those Exchange Series in which the sponsor
is maintaining a secondary market. At any time prior to the exchange by the
Holder of Units of an Exchange Series, or the purchase by a Holder of units of
a New Series, such Holder may change its investment strategy and receive his
terminating distribution. An election of either of these options will not
prevent the Holder from recognizing capital gain or loss (except in the case
of loss, if and to the extent the Exchange or New Series, as the case may be,
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. Holders
should consult their own tax advisers in this regard. The Sponsor reserves the
right to modify, suspend or terminate either or both of these reinvestment
privileges at any time.
RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY
TRUSTEE
The Trustee or any successor may resign upon notice to the Sponsor. The
Trustee may be removed upon the direction of the Holders of 51% of the Units
at any time, or by the Sponsor without the consent of any of the Holders if
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor. In case of such
resignation or removal the Sponsor is to use its best efforts to appoint a
successor promptly and if upon resignation of the Trustee no successor has
accepted appointment within thirty days after notification, the Trustee may
apply to a court of competent jurisdiction for the appointment of a successor.
The Trustee shall be under no liability for any action taken in good faith in
reliance on prima facie properly executed documents or for the disposition of
monies or Securities, nor shall it be liable or responsible in any way for
depreciation or loss incurred by reason of the sale of any Security. This
provision, however, shall not protect the Trustee in cases of wilful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. In the event of the failure of the Sponsor to act, the
Trustee may act under the Indenture and shall not be liable for any of these
actions taken in good faith. The Trustee shall not be personally liable for
any taxes or other governmental charges imposed upon or in respect of the
Securities or upon the interest thereon. In addition, the Indenture contains
other customary provisions limiting the liability of the Trustee.
SPONSORS
The Sponsor may resign at any time if a successor Sponsor is appointed by
the Trustee in accordance with the Indenture. Any new Sponsor must have a
minimum net worth of $2,000,000 and must serve at rates of compensation deemed
by the Trustee to be reasonable and as may not exceed amounts prescribed by
the SEC. If the Sponsor fails to perform its duties or becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public
authorities, then the Trustee may (1) appoint a successor Sponsor at rates of
compensation deemed by the Trustee to be reasonable and as may not exceed
amounts prescribed by the SEC, (2) terminate the Indenture and liquidate the
Trust or (3) continue to act as Trustee without terminating the Indenture.
The Sponsor shall be under no liability to the Trust or to the Holders for
taking any action or for refraining from taking any action in good faith or
for errors in judgment and shall not be liable or responsible in any way for
depreciation of any Security or Units or loss incurred in the sale of any
Security or Units. This provision, however, shall not protect the Sponsor in
cases of wilful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties. The Sponsor may transfer all or substantially
all of its assets to a corporation or partnership which carries on its
business and duly assumes all of its obligations under the Indenture and in
such event it shall be relieved of all further liability under the Indenture.
MISCELLANEOUS
TRUSTEE
The name and address of the Trustee are stated on the back cover of this
Prospectus. The Trustee is subject to supervision and examination by the
Comptroller of the Currency, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System.
22
<PAGE>
LEGAL OPINION
The legality of the Units has been passed upon by Battle Fowler LLP, 75 East
55th Street, New York, New York 10022, as special counsel for the Sponsor.
AUDITORS
The Statement of Financial Condition and the Portfolio included in this
Prospectus have been audited by KPMG Peat Marwick LLP, independent auditors,
as indicated in their report with respect thereto, and is so included herein
in reliance upon the authority of said firm as experts in accounting and
auditing.
SPONSOR
Smith Barney Inc. ("Smith Barney"), was incorporated in Delaware in 1960 and
traces its history through predecessor partnerships to 1873. Smith Barney, an
investment banking and securities broker-dealer firm, is a member of the New
York Stock Exchange, Inc. and other major securities and commodities
exchanges, the National Association of Securities Dealers, Inc. and the
Securities Industry Association. Smith Barney is an indirect wholly-owned
subsidiary of The Travelers Inc. The Sponsor or an affiliate is investment
adviser, principal underwriter or distributor of more than 60 open-end
investment companies and investment manager of 12 closed-end investment
companies. Smith Barney also sponsors all Series of Corporate Securities
Trust, Government Securities Trust, Harris, Upham Tax-Exempt Fund and Tax
Exempt Securities Trust, and acts as co-sponsor of most Series of Defined
Asset Funds.
23
<PAGE>
[GRAPHIC]
THE COUNTRYFUND OPPORTUNITY TRUST
1997 SERIES
PROSPECTUS
This Prospectus does not contain all of the information with respect to the
investment company set forth in its registration statements and exhibits
relating thereto which have been filed with the Securities and Exchange
Commission, Washington, D.C. under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<S> <C>
Investment Summary 2
Independent Auditors' Report 7
Statement of Financial Condition 7
Portfolio 8
Description of the Trust 9
Risk Factors 9
Taxes 14
Public Sale of Units 15
Market for Units 16
Redemption 17
Expenses and Charges 18
Administration of the Trust 18
Resignation, Removal and Limitations on Liability 22
Miscellaneous 22
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SPONSOR: INDEPENDENT AUDITORS: TRUSTEE:
<S> <C> <C>
Smith Barney Inc. KPMG Peat Marwick LLP The Chase Manhattan Bank
388 Greenwich Street 345 Park Avenue Unit Investment Trust Department
New York, New York 10013 New York, New York 10154 4 New York Plaza
(212) 816-4000 New York, New York 10004
(800) 354-6565
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY
------------
- --------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
WITH RESPECT TO THIS TRUST NOT CONTAINED IN THIS PROSPECTUS; AND ANY
INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIEDUPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFERTO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO
WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
- --------------------------------------------------------------------------------
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
<TABLE>
<CAPTION>
SEC FILE OR
IDENTIFICATION NUMBER
---------------------
<C> <S> <C>
I. Bonding Arrangements and Date of Organization of
the Depositor filed pursuant to Items A and B of
Part II of the Registration Statement on Form S-6
under the Securities Act of 1933:
Smith Barney Inc. 2-55436
II. Information as to Officers and Directors of the
Depositor filed pursuant to Schedules A and D of
Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Smith Barney Inc. 8-8177
III. Charter documents of the Depositor filed as
Exhibits to the Registration Statement on Form S-
6 under the Securities Act of 1933 (Charter, By-
Laws):
Smith Barney Inc. 33-65332, 33-36077
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsors and Trustee are as follows:
Smith Barney Inc. 13-1912900
The Chase Manhattan Bank 13-4994650
</TABLE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities and
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.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
THE REGISTRATION STATEMENT ON FORM S-6 IS COMPRISED OF THE FOLLOWING PAPERS
AND DOCUMENTS:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference to the Cross-
Reference Sheet to the Registration Statement of The Uncommon Values
Unit Trust, 1985 Series, 1933 Act File No. 2-97046).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The signatures.
Written Consents of the following persons:
KPMG Peat Marwick LLP (included in Exhibit 5.1)
Battle Fowler LLP (included in Exhibit 3.1)
The following exhibits:
<TABLE>
<C> <S>
1.1 -- Form of Reference Trust Indenture (incorporated by reference to
Exhibit 1.1 to the Registration Statement of Smith Barney Unit Trusts
Equity Focus Trusts--The Bank & Thrift Series, 1933 Act File No. 33-
62815).
2.1 -- Form of Standard Terms and Conditions of Trust (incorporated by
reference to Exhibit 1.1.1 to the Registration Statement of Shearson
Lehman Brothers Unit Trusts, Utility Values Trust 1, 1933 Act File
No. 33-17053).
3.1 -- Opinion of counsel as to the legality of securities being issued
including their consent to the use of their name under the heading
"Miscellaneous --Legal Opinion" in the Prospectus.
5.1 -- Consent of KPMG Peat Marwick LLP to the use of their name under the
heading "Miscellaneous --Auditors" in the Prospectus.
</TABLE>
II-2
<PAGE>
SIGNATURES
The registrant, The CountryFund Opportunity Trust, 1997 Series, hereby
identifies CountryFund Opportunity Trust, 1994 Series C 1933 Act File No. 33-
49969 for purposes of the representations required by Rule 487 and represents
the following:
(1) That the portfolio securities deposited in the series as to the
securities of which this Registration Statement is being filed do not
differ materially in type or quality from those deposited in such previous
series;
(2) That, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the series with respect to the securities of which this
Registration Statement is being filed, this Registration Statement does not
contain disclosures that differ in any material respect from those
contained in the registration statements for such previous series as to
which the effective date was determined by the Commission or the staff; and
(3) That is has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment thereto to be signed
on its behalf by the undersigned thereunto duly authorized in the City of New
York and State of New York on the 18th day of November, 1997.
SIGNATURES APPEAR ON PAGE II-4.
A majority of the members of the Board of Directors of Smith Barney Inc. has
signed this Registration Statement or Amendment thereto pursuant to Powers of
Attorney authorizing the person signing this Registration Statement or
Amendment to the Registration Statement to do so on behalf of such members.
II-3
<PAGE>
SMITH BARNEY UNIT TRUSTS (REGISTRANT)
SMITH BARNEY INC.
(DEPOSITOR)
By the following persons* who constitute a majority of the Board of Directors
of Smith Barney Inc.:
Steven D. Black
James S. Boshart III
Robert A. Case
James Dimon
Robert Druskin
Robert H. Lessin
William J. Mills, II
Michael B. Panitch
Paul Underwood
/s/ Kevin Kopczynski
By___________________________________
Kevin Kopczynski (As authorized
signatory for Smith Barney Inc.
and Attorney-in-fact for the
persons listed above)
- --------
* Pursuant to Powers of Attorney filed under the 1933 Act file Numbers 33-
56722, 33-51999 and 333-21047.
II-4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from statements
of Financial Conditions and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0001047131
<NAME> COUNTRY FUND 1997
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-17-1997
<PERIOD-END> NOV-17-1997
<INVESTMENTS-AT-COST> 985,381
<INVESTMENTS-AT-VALUE> 985,381
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 14,500
<TOTAL-ASSETS> 999,881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,500
<TOTAL-LIABILITIES> 14,500
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 985,381
<SHARES-COMMON-STOCK> 1,000,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 985,381
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 985,381
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 3.1
[LETTERHEAD OF BATTLE FOWLER LLP]
November 17, 1997
Smith Barney Inc.
Unit Trust Department
388 Greenwich Street, 23rd Floor
New York, New York 10013
Re: The CountryFund Opportunity Trust, 1997 Series
Dear Sirs:
We have acted as special counsel for Smith Barney Inc. as Depositor, Sponsor
and Principal Underwriter (the "Depositor") of The CountryFund Opportunity
Trust, 1997 Series (the "Trust") in connection with the deposit of securities
(the "Securities") therein pursuant to the Trust Agreement referred to below,
by which the Trust was created and under which the units of fractional
undivided interest (the "Units") have been issued. Pursuant to the Trust
Agreement the Depositor has transferred to the Trust certain securities and
contracts to purchase certain securities together with irrevocable letters of
credit to be held by the Trustee upon the terms and conditions set forth in the
Trust Agreement. (All securities to be acquired by the Trust are collectively
referred to as the "Securities".)
In connection with our representation, we have examined the originals or
certified copies of the following documents relating to the creation of the
Trust, the deposit of the Securities and the issuance and sale of the Units:
(a) the Standard Terms and Condition of Trust dated October 20, 1987, as
amended March 3, 1988 and as amended on June 27, 1994, and the Reference Trust
Indenture of even date herewith relating to the Trust (collectively, the "Trust
Agreement") between the Depositor and The Chase Manhattan Bank as Trustee; (b)
the Closing Memorandum relating to the deposit of the Securities in the Trust;
(c) the Notification of Registration
on Form N-8A and the Registration Statement on Form N-8B-2, as amended,
relating to the Trust, as filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Investment Company Act of 1940 (the "1940
Act"); (d) the Registration Statement on Form S-6 (Registration No. 333-12497)
filed with the Commission pursuant to the Securities Act of 1933 (the "1933
Act"), and Amendment No. 1 thereto (said Registration Statement, as amended by
said Amendment No. 1 being herein called the "Registration Statement"); (e) the
proposed form of final prospectus (the "Prospectus") relating to the Units,
which is expected to be filed with the Commission on or about October 23, 1996;
(f) resolutions of the Executive Committees of the Depositor authorizing the
execution and delivery by the Depositor of the Trust Agreement and the
consummation of the transaction contemplated thereby; (g) the Certificates of
Incorporation and By-laws of the Depositor, each certified to by an authorized
officer of the Depositor as of a recent date; (h) a certificate of
<PAGE>
an authorized officer of the Depositor with respect to certain factual matters
contained therein ("Officers Certificate"); and (i) certificates or telegrams
of public officials as to matters set forth upon therein.
We have assumed the genuineness of all agreements, instruments and documents
submitted to us as originals and the conformity to originals of all copies
thereof submitted to us. We have also assumed the genuineness of all
signatures and the legal capacity of all persons executing agreements,
instruments and documents examined or relied upon by us.
Where matters are stated to be "to the best of our knowledge" or "known to
us," our knowledge is limited to the actual knowledge of those attorneys in
our office who have performed services for the Trust, their review of
documents provided to us by the Depositor in connection with this engagement
and inquiries of officers of the Depositor, the results of which are reflected
in the officers Certificate. We have not independently verified the accuracy
of the matters set forth in the written statements or certificates upon which
we have relied. We have not reviewed the financial statements, compilation of
the Securities held by the Trust, or other financial or statistical data
contained in the Registration Statement and the Prospectus, as to which we
understand you have been furnished with the reports of the accountants
appearing in the Registration Statement and the Prospectus. In addition, we
have made no specific inquiry as to whether any stop order or investigatory
proceedings have been commenced with respect to the Registration Statement or
the Depositor nor have we reviewed court or governmental agency dockets.
Statements in this opinion as to the validity, binding effect and
enforceability of agreements, instruments and documents are subject: (i) to
limitations as to enforceability imposed by bankruptcy, reorganization,
moratorium, insolvency and other laws of general application relating to or
affecting the enforceability of creditors' rights, and (ii) to limitations
under equitable principles governing the availability of equitable remedies.
We are not admitted to the practice of law in any jurisdiction but the State
of New York and we do not hold ourselves out as experts in or express any
opinion as to the laws of other states or jurisdictions except as to matters
of Federal and Delaware corporate law. No opinion is expressed as to the
effect that the law of any other jurisdiction might have upon the subject
matter of the opinions expressed herein under applicable conflicts of law
principles, rules or regulations or otherwise.
Based on and subject to the foregoing, we are of the opinion that:
(1) The Trust Agreement has been duly authorized and executed and
delivered by an authorized officer of the Depositor and is valid and
binding obligations of the Depositor in accordance with its terms.
(2) The execution and delivery of the Certificates evidencing the Units
has been duly authorized by the Depositor and such Certificates when
executed by the Depositor and the Trustee in accordance with the provisions
of the Certificates and the Trust Agreement and issued for the
consideration contemplated therein, will constitute fractional undivided
interest in the Trust, and will be entitled to the benefits of the Trust
Agreement. Upon payment of the consideration for the Units as provided in
the Trust Agreement and the Registration Statement, the Units will be fully
paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration
Statement and in the Prospectus under the heading "Legal Opinion". This
opinion is intended solely for the benefit of the addressee in connection with
the issuance of the Units of the Trust and may not be relied upon in any other
manner or by any other person without our express written consent.
Very truly yours,
Battle Fowler LLP
2
<PAGE>
EXHIBIT 5.1
CONSENT OF INDEPENDENT AUDITORS
To the Sponsor, Trustee and Unit Holders of
The CountryFund Opportunity Trust, 1997 Series:
We consent to the use of our report dated November 17, 1997 included herein
and to the reference to our firm under the heading "Auditors" in the
Prospectus.
KPMG PEAT MARWICK LLP
New York, New York
November 17, 1997
