As filed with the Securities and Exchange Commission on March 26, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-6
For Registration Under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
---------------------
A. EXACT NAME OF TRUST:
Equity Securities Trust, Series 18, Signature Series, Zacks Analysts Trust I
B. NAME OF DEPOSITOR:
Reich & Tang Distributors, Inc.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, New York 10020
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY OF COMMENTS TO:
PETER J. DEMARCO MICHAEL R. ROSELLA, Esq.
Reich & Tang Distributors, Inc. Battle Fowler LLP
600 Fifth Avenue 75 East 55th Street
New York, New York 10020 New York, New York 10022
(212) 856-6858
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Equity Securities Trust, Series 18,
Signature Series, Zacks Analysts Trust I is being registered under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment
Company Act of 1940, as amended, and Rule 24f-2 thereunder.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE SECURITIES
BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
No Filing Fee Required
H. APPROPRIATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the Registration
Statement.
|_| Check if it is proposed that this filing will become effective
immediately upon filing pursuant to Rule 487.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
696008.1
<PAGE>
- -------------------------------------------------------------------------------
INSERT LOGO
- -------------------------------------------------------------------------------
EQUITY SECURITIES TRUST
SERIES 18, SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
Equity Securities Trust, Series 18, Signature Series, Zacks Analysts Trust I
(the "Trust") consists of two separate underlying unit investment trusts
designated as Zacks Large Cap Trust ("Large Cap Trust") and Zacks Small Cap
Trust ("Small Cap Trust") (Large Cap Trust and Small Cap Trust may hereinafter
be referred to as the "Trust" or "Trusts"). The Sponsor is Reich & Tang
Distributors, Inc. The objective of the Large Cap Trust is to seek total return
through a combination of capital appreciation and current dividend income. The
Large Cap Trust seeks to achieve its objective by selecting the ten common
stocks from among the thirty stocks comprising the Dow Jones Industrial Average
("DJIA") which are expected to experience the greatest earnings per share
growth, as selected by the portfolio consultant, Zacks Investment Research
("Zacks"). The objective of the Small Cap Trust is to seek total return through
capital appreciation. The Small Cap Trust seeks to achieve its objective by
selecting the twenty common stocks of the companies from among the companies
listed on the Russell 2000 which are expected to experience the greatest
earnings per share growth, as selected by Zacks. The property of the Sponsor can
not give any assurance that the Trusts' objectives can be achieved. The Name
"Dow Jones Industrial Average" is the property of the Dow Jones & Company, Inc.,
and the name Russell 2000(R) Index is the property of the Frank Russell Company,
neither of which are affiliated with the Sponsor and have not participated in
any way in the creation of the Trusts or in the selection of the stocks included
in the Trusts and have not reviewed or approved any information included in this
Prospectus. Neither the Dow Jones & Company, Inc. nor the Frank Russell Company
have granted to the Trusts or the Sponsor a license to use the Dow Jones
Industrial Average or the Russell 2000(R) Index, respectively. The value of the
Units of the Trusts will fluctuate with fluctuations in the value of the
underlying securities in the Trust. Therefore, Unitholders who sell their Units
prior to termination of the Trusts may receive more or less than their original
purchase price upon sale. No assurance can be given that dividends will be paid
or that the Units will appreciate in value. The Trusts will terminate
approximately two years after the Initial Date of Deposit. Minimum Purchase: 100
Units.
This Prospectus consists of two parts. Part A contains the Summaries of
Essential Information including descriptive material relating to the Trusts and
the Statements of Financial Condition of the Trusts. Part B contains general
information about the Trusts. Part A may not be distributed unless accompanied
by Part B. Please read and retain both parts of this Prospectus for future
reference. The Securities and Exchange Commission ("SEC") maintains a website
that contains reports, proxy and information statements and other information
regarding the Trusts which is filed electronically with the SEC. The SEC's
Internet address is http:www.sec.gov. Offering materials for the sale of these
Units available through the Internet are not being offered directly or
indirectly to residents of a particular state nor is an offer of these Units
through the Internet specifically directed to any person in a state by, or on
behalf of, the issuer.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED APRIL ___, 1998
696012.4
<PAGE>
LARGE CAP TRUST
<TABLE>
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION AS OF APRIL ___, 1998:*
<S> <C>
DATE OF DEPOSIT: April ___, 1998 MANDATORY TERMINATION DATE: The earlier of
AGGREGATE VALUE OF _______, 2000 or the disposition of the last Security in
SECURITIES.................................. $ the Trust.
AGGREGATE VALUE OF SECURITIES CUSIP NUMBERS: Cash:
PER 100 UNITS............................... $ Reinvestment:
NUMBER OF UNITS................................ TRUSTEE: The Chase Manhattan Bank
FRACTIONAL UNDIVIDED INTEREST IN TRUSTEE'S FEE: $.___ per 100 Units outstanding
TRUST....................................... ESTIMATED ORGANIZATIONAL EXPENSES**:
PUBLIC OFFERING PRICE PER 100 UNITS $.60 per 100 Units
Aggregate Value of Securities in ESTIMATED OFFERING COSTS**: $.___ per 100
Trust.................................... $ Units
Divided By ______ Units (times 100)......... $ OTHER FEES AND EXPENSES: $.___ per 100 Units
Plus Sales Charge of 2.95% of Public outstanding
Offering Price........................... $ SPONSOR: Reich & Tang Distributors, Inc.
Public Offering Price+...................... $1,000.00 SPONSOR'S SUPERVISORY FEE: Maximum of $.25
SPONSOR'S REPURCHASE PRICE AND per 100 Units outstanding (see "Trust Expenses and
REDEMPTION PRICE PER Charges" in Part B).
100 UNITS++................................. $ PORTFOLIO CONSULTANT: Zacks Investment
EVALUATION TIME: 4:00 p.m. New York Time. Research Inc.
MINIMUM INCOME OR PRINCIPAL EXPECTED SETTLEMENT DATE***: _______ __,
DISTRIBUTION: $1.00 per 100 Units 1998
LIQUIDATION PERIOD: Beginning 5 days prior to RECORD DATE: June 15 and December 15
the Mandatory Termination Date. DISTRIBUTION DATE: June 30 and December 31
MINIMUM VALUE OF TRUST: The Trust may be ROLLOVER NOTIFICATION DATE****:
terminated if the value of the Trust is less than 40% of _________, 2000 or
another date as determined by the the aggregate value of the Securities at
the completion Sponsor.
of the Deposit Period.
</TABLE>
------------------
* The business day prior to the Initial Date of Deposit. The Initial Date
of Deposit is the date on which the Trust Agreement was signed and the deposit
of Securities with the Trustee made.
** The Trust (and therefore the Unitholders) will bear all or a portion of
its organizational costs, which costs include: the cost of preparing and
printing the registration statement, the trust indenture and the closing
documents; and the initial audit of the Trust. Total organizational expenses
will be amortized over the life of the Trust. Offering costs, including the
costs of registering securities with the SEC and the states, will be amortized
over the term of the initial offering period, which may be between 30 and 90
days. See "Trust Expenses" in Part B. These figures are based upon the
assumption that the Trust will reach a size of 1,500,000 Units as estimated by
the Sponsor; organizational expenses and offering costs per 100 Units will vary
with the actual size of the Trust. If the Trust does not reach this Unit level,
the Estimated Organizational Expenses and Offering Costs per 100 Units will be
higher.
*** The business day on which contracts to purchase securities in the
Trust are expected to settle.
**** If a Unitholder ("Rollover Unitholder") so specifies on or prior to
the Rollover Notification Date, the Rollover Unitholder's terminating
distribution will be reinvested as received in an available series of the Equity
Securities Trust, if offered (see "Trust Administration - Trust Termination").
+ On the Initial Date of Deposit there will be no cash in the Income or
Principal Accounts. Anyone purchasing Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
++ Any redemptions of over 2,500 Units may, upon request by a redeeming
Unitholder, be made in kind. The Trustee will forward the distributed securities
to the Unitholder's bank or broker-dealer account at The Depository Trust
Company in book-entry form. See "Liquidity--Trustee Redemption" in Part B.
A-2
696012.4
<PAGE>
SMALL CAP TRUST
<TABLE>
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION AS OF APRIL ___, 1998:*
<S> <C>
DATE OF DEPOSIT: April ___, 1998 MANDATORY TERMINATION DATE: The earlier of
AGGREGATE VALUE OF _______, 2000 or the disposition of the last Security in
SECURITIES.................................. $ the Trust.
AGGREGATE VALUE OF SECURITIES CUSIP NUMBERS: Cash:
PER 100 UNITS............................... $ Reinvestment:
NUMBER OF UNITS................................ TRUSTEE: The Chase Manhattan Bank
FRACTIONAL UNDIVIDED INTEREST IN TRUSTEE'S FEE: $.___ per 100 Units outstanding
TRUST....................................... ESTIMATED ORGANIZATIONAL EXPENSES**:
PUBLIC OFFERING PRICE PER 100 UNITS $.60 per 100 Units
Aggregate Value of Securities in ESTIMATED OFFERING COSTS**: $.___ per 100
Trust.................................... $ Units
Divided By _____ Units (times 100).......... $ OTHER FEES AND EXPENSES: $.___ per 100 Units
Plus Sales Charge of 2.95% of Public outstanding
Offering Price........................... $ SPONSOR: Reich & Tang Distributors, Inc.
Public Offering Price+...................... $1,000.00 SPONSOR'S SUPERVISORY FEE: Maximum of $.25
SPONSOR'S REPURCHASE PRICE AND per 100 Units outstanding (see "Trust Expenses and
REDEMPTION PRICE PER Charges" in Part B).
100 UNITS++................................. $ PORTFOLIO CONSULTANT: Zacks Investment
EVALUATION TIME: 4:00 p.m. New York Time. Research Inc.
MINIMUM INCOME OR PRINCIPAL EXPECTED SETTLEMENT DATE***: _____ __,
DISTRIBUTION: $1.00 per 100 Units 1998
LIQUIDATION PERIOD: Beginning 5 days prior to RECORD DATE: June 15 and December 15
the Mandatory Termination Date. DISTRIBUTION DATE: June 30 and December 31
MINIMUM VALUE OF TRUST: The Trust may be ROLLOVER NOTIFICATION DATE****: ________,
terminated if the value of the Trust is less than 40% of 2000 or another date as determined by the Sponsor.
the aggregate value of the Securities at the completion
of the Deposit Period.
</TABLE>
------------------
* The business day prior to the Initial Date of Deposit. The Initial Date
of Deposit is the date on which the Trust Agreement was signed and the deposit
of Securities with the Trustee made.
** The Trust (and therefore the Unitholders) will bear all or a portion of
its organizational costs, which costs include: the cost of preparing and
printing the registration statement, the trust indenture and the closing
documents; and the initial audit of the Trust. Total organizational expenses
will be amortized over the life of the Trust. Offering costs, including the
costs of registering securities with the SEC and the states, will be amortized
over the term of the initial offering period, which may be between 30 and 90
days. See "Trust Expenses" in Part B. These figures are based upon the
assumption that the Trust will reach a size of 1,500,000 Units as estimated by
the Sponsor; organizational expenses and offering costs per 100 Units will vary
with the actual size of the Trust. If the Trust does not reach this Unit level,
the Estimated Organizational Expenses and Offering Costs per 100 Units will be
higher.
*** The business day on which contracts to purchase securities in the
Trust are expected to settle.
**** If a Unitholder ("Rollover Unitholder") so specifies on or prior to
the Rollover Notification Date, the Rollover Unitholder's terminating
distribution will be reinvested as received in an available series of the Equity
Securities Trust, if offered (see "Trust Administration - Trust Termination").
+ On the Initial Date of Deposit there will be no cash in the Income or
Principal Accounts. Anyone purchasing Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
++ Any redemptions of over 2,500 Units may, upon request by a redeeming
Unitholder, be made in kind. The Trustee will forward the distributed securities
to the Unitholder's bank or broker-dealer account at The Depository Trust
Company in book-entry form. See "Liquidity--Trustee Redemption" in Part B.
A-3
696012.4
<PAGE>
OBJECTIVE. The Trust consists of two separate underlying unit investment trusts
designated as Zacks Large Cap Trust ("Large Cap Trust") and Zacks Small Cap
Trust ("Small Cap Trust"). The Sponsor is Reich & Tang Distributors, Inc. The
objective of the Large Cap Trust is to seek total return through a combination
of capital appreciation and current dividend income. The Large Cap Trust seeks
to achieve its objective by selecting the ten common stocks from among the
thirty stocks comprising the DJIA which are expected to experience the greatest
earnings per share growth, as selected by Zacks. Zacks will seek to create a
portfolio of stocks which tries to outperform both the DJIA and the "dogs of the
Dow" over a two-year period. The "dogs of the Dow" refers to the ten highest
dividend yielding stocks of the 30 stocks listed on the DJIA. The objective of
the Small Cap Trust is to seek total return through capital appreciation. The
Small Cap Trust seeks to achieve its objective by selecting the twenty common
stocks from among the companies listed on the Russell 2000, as selected by
Zacks. Zacks will seek to develop a portfolio of twenty stocks that outperforms
the Russell 2000 over a two-year period. The Sponsor can not give any assurance
that the Trusts' objectives can be achieved. Projected earnings growth for a
company is based on estimates compiled by approximately 3000 analysts employed
by 230 US brokerage firms on what a company's corporate earnings will be in
one-to-two years from the Date of Deposit. (See "The Trusts - The Securities" in
Part B). (See "The Trusts - the Securities" in Part B.) The name "Dow Jones
Industrial Average" is the property of Dow Jones & Company, Inc., and the name
Russell 2000(R) Index is the property of the Frank Russell Company, neither of
which are affiliated with the Sponsor and have not participated in any way in
the creation of the Trusts or in the selection of the stocks included in the
Trusts and have not reviewed or approved any information included in this
Prospectus. Neither the Dow Jones & Company, Inc. nor the Frank Russell Company
have granted to the Trusts or the Sponsor a license to use the Dow Jones
Industrial Average or the Russell 2000(R) Index, respectively. As used herein,
the term "Securities" means the common stocks initially deposited in the Trusts
and described in "Portfolio" in Part A and any additional securities acquired
and held by the Trusts pursuant to the provisions of the Indenture. Further, the
Securities may appreciate or depreciate in value, dependent upon the full range
of economic and market influences affecting corporate profitability, the
financial condition of issuers (including non-U.S. issuers) and the price of
equity securities in general and the Securities in particular. Therefore, there
is no guarantee that the objectives of the Trusts will be achieved.
DESCRIPTION OF PORTFOLIOS. The Large Cap Trust contains 10 issues of common
stock. 100% of the issues are represented by the Sponsor's contracts to
purchase. Based upon the principal business of each issuer and current market
values, the following industries are represented in the Portfolio*: [ ], __%;
[], __% __%; and [ ], __%.
The Small Cap Trust contains 20 issues of common stock. 100% of the issues are
represented by the Sponsor's contracts to purchase. Based upon the principal
business of each issuer and current market values, the following industries are
represented in the Portfolio: [ ], __%; [ ], __%; and [ ],.
PUBLIC OFFERING PRICE. The Public Offering Price per 100 Units of a Trust is
equal to the aggregate value of the underlying Securities (the price at which
they could be directly purchased by the public assuming they were available) in
the Trust divided by the number of Units outstanding times 100 plus a sales
charge of 2.95% of the Public Offering Price per 100 Units or 3.04% of the net
amount invested in Securities per 100 Units. The price of a single Unit, or any
multiple thereof, is calculated by dividing the Public Offering Price per 100
Units by 100 and multiplying by the number of Units. Any cash held by the Trust
will be added to the Public Offering Price. For additional information regarding
the Public Offering Price, repurchase and redemption of Units and other
essential information regarding a Trust, see the "Summary of Essential
Information." During the initial offering period orders involving at least
10,000 Units will be entitled to a volume discount from the Public Offering
Price. The Public Offering Price per Unit may vary on a daily basis in
accordance with
- --------
* A trust is considered to be "concentrated" in a particular category or
industry when the securities in that category or that industry
constitute 25% or more of the aggregate face amount of the portfolio.
A-4
696012.4
<PAGE>
fluctuations in the aggregate value of the underlying Securities and the price
to be paid by each investor will be computed as of the date the Units are
purchased. (See "Public Offering" in Part B.)
ESTIMATED NET ANNUAL DISTRIBUTIONS. The estimated net annual distributions to
Unitholders (based on the most recent quarterly or semi-annual ordinary dividend
distributed with respect to the Securities) as of the business day prior to the
Initial Date of Deposit per 100 Units was $____. This estimate will vary with
changes in a Trust's fees and expenses, actual dividends received, and with the
sale of Securities. In addition, because the issuers of common stock are not
obligated to pay dividends, there is no assurance that the estimated net annual
dividend distributions will be realized in the future.
DISTRIBUTIONS. Dividend distributions, if any, will be made on the Distribution
Dates to all Unitholders of record on the Record Date. For the specific dates
representing the Distribution Dates and Record Dates for a Trust, see "Summary
of Essential Information" in Part A. The final distribution will be made within
a reasonable period of time after the termination of a Trust. (See "Rights of
Unitholders--Distributions" in Part B.) Unitholders may elect to automatically
reinvest distributions (other than the final distribution in connection with the
termination of the Trust), into additional Units of a Trust, which are subject
to a reduced sales charge. See "Reinvestment Plan" in Part B.
MARKET FOR UNITS. The Sponsor, although not obligated to do so, intends to
maintain a secondary market for the Units and to continuously offer to
repurchase the Units of a Trust both during and after the initial public
offering. The secondary market repurchase price will be based on the market
value of the Securities in a Trust portfolio and will be the same as the
redemption price. (See "Liquidity--Sponsor Repurchase" for a description of how
the secondary market repurchase price will be determined.) If a market is not
maintained a Unitholder will be able to redeem his Units with the Trustee (see
"Liquidity-- Trustee Redemption" in Part B). As a result, the existence of a
liquid trading market for these Securities may depend on whether dealers will
make a market in these Securities. There can be no assurance of the making or
the maintenance of a market for any of the Securities contained in the portfolio
of a Trust or of the liquidity of the Securities in any markets made. [In
addition, a Trust may be restricted under the Investment Company Act of 1940, as
amended (the "1940 Act"), from selling Securities to the Sponsor.] The price at
which the Securities may be sold to meet redemptions and the value of the Units
will be adversely affected if trading markets for the Securities are limited or
absent.
TERMINATION. During the 5-day period prior to the Mandatory Termination Date
(the "Liquidation Period"), Securities will begin to be sold in connection with
the termination of a Trust and all Securities will be sold or distributed by the
Mandatory Termination Date. The Trustee may utilize the services of the Sponsor
for the sale of all or a portion of the Securities in the Trust. Any brokerage
commissions received by the Sponsor from the Trust in connection with such sales
will be in accordance with applicable law. The Sponsor will determine the
manner, timing and execution of the sales of the underlying Securities. The
Sponsor will attempt to sell the Securities as quickly as it can during the
Liquidation Period without, in its judgment, materially adversely affecting the
market price of the Securities, but all of the Securities will in any event be
disposed of by the end of the Liquidation Period. The Sponsor does not
anticipate that the period will be longer than five days, and it could be as
short as one day, depending on the liquidity of the Securities being sold.
Unitholders may elect one of the three options in receiving their terminating
distributions: (1) to receive their pro rata share of the underlying Securities
in-kind, if they own at least 2,500 units, (2) to receive cash upon the
liquidation of their pro rata share of the underlying Securities or (3) to
invest the amount of cash they would have received upon the liquidation of their
pro rata share of the underlying Securities in units of a future series of
Equity Securities Trust (if one is offered) at a reduced sales charge (see
"Rollover Option"). See "Trust Administration--Trust Termination" in Part B for
a description of how to select a termination distribution option. Unitholders
who have not chosen to receive distributions-in-kind will be at risk to the
extent that Securities are not sold; for this reason the Sponsor will be
inclined to sell the Securities in as short a period as it can without
materially adversely affecting the price of the Securities. Unitholders should
consult their own tax advisers in this regard.
A-5
696012.4
<PAGE>
ROLLOVER OPTION. Unitholders may elect to roll their terminating distributions
into the next available series of Equity Securities Trust at a reduced sales
charge of ___%. Rollover Unitholders must make this election on or prior to the
Rollover Notification Date. Upon making this election, a Unitholder's Units will
be redeemed when the last of the underlying Securities are sold and the proceeds
will be reinvested in units of the next available series of Equity Security
Trust. An election to rollover terminating distributions will generally be a
taxable event. See "Trust Administration--Trust Termination" in Part B for
details to make this election.
RISK CONSIDERATIONS. An investment in Units of a Trust should be made with an
understanding of the risks inherent in an investment in any of the Securities
including for common stocks, the risk that the financial condition of the
issuers of the Securities may become impaired or that the general condition of
the stock market may worsen (both of which may contribute directly to a decrease
in the value of the Securities and thus in the value of the Units). A Trust may
contain securities of foreign issuers. For a discussion of risks considerations,
see "Risk Considerations" in Part B of this Prospectus. The portfolio of a Trust
is fixed and not "managed" by the Sponsor. Since the Trusts will not sell
Securities in response to ordinary market fluctuation, but only (except for
certain extraordinary circumstances) at the Trust's termination or to meet
redemptions, the amount realized upon the sale of the Securities may not be the
highest price attained by an individual Security during the life of the Trust.
In connection with the deposit of Additional Securities subsequent to the
Initial Date of Deposit, if cash (or a letter of credit in lieu of cash) is
deposited with instructions to purchase Securities, to the extent the price of a
Security increases or decreases between the deposit and the time the Security is
purchased, Units may represent less or more of that Security and more or less of
the other Securities in the Trust. In addition, brokerage fees incurred in
purchasing Securities with cash deposited with instructions to purchase the
Securities will be an expense of the Trust. Price fluctuations during the period
from the time of deposit to the time the Securities are purchased, and payment
of brokerage fees, will affect the value of every Unitholder's Units and the
income per Unit received by a Trust.
The Sponsor cannot give any assurance that the business and investment
objectives of the issuers of the Securities will correspond with or in any way
meet the limited term objective of the Trusts. (See "Risk Considerations" in
Part B of this Prospectus.)
REINVESTMENT PLAN. Unitholders may elect to automatically reinvest their
distributions, if any (other than the final distribution in connection with the
termination of the Trust) into additional units of a Trust at a reduced sales
charge of 1.00%.
See "Reinvestment Plan" in Part B for details on how to enroll in the
Reinvestment Plan.
UNDERWRITING. Reich & Tang Distributors, Inc., 600 Fifth Avenue, New York, New
York 10020, will act as Underwriter for all of the Units of Equity Securities
Trust, Series 18, Signature Series, Zacks Analysts Trust I. The Underwriter will
distribute Units through various broker-dealers, banks and/or other eligible
participants (see "Public Offering--Distribution of Units" in Part B).
A-6
696012.4
<PAGE>
EQUITY SECURITIES TRUST
SERIES 18,
SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
STATEMENT OF FINANCIAL CONDITION AS OF OPENING OF BUSINESS, APRIL ___, 1998
ASSETS
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP
TRUST TRUST
Investment in Securities--Sponsor's Contracts to Purchase
<S> <C> <C>
Underlying Securities Backed by Letter of Credit (cost $ )(Note 1)....... $_________ $
Organizational Costs (Note 2).........................................................
Offering Costs (Note 3)...............................................................
----------------- -----------------
Total................................................................................. $_________ $
================= =================
LIABILITIES AND INTEREST OF UNITHOLDERS
Accrued Liabilities (Notes 2 and 3)................................................... $_________ $
Interest of Unitholders - Units of Fractional
Undivided Interest Outstanding (Series 18: ______ Units).......................
----------------- -----------------
Total................................................................................. $_________ $
================= =================
Net Asset Value per Unit.............................................................. $
$
================= =================
</TABLE>
- -------------------------
Notes to Statement:
(1) Equity Securities Trust, Series 18, Signature Series, Zacks Analysts
Trust I (the "Trust") is a unit investment trust created under the laws of the
State of New York and registered under the Investment Company Act of 1940. The
objective of the Trust, sponsored by Reich & Tang Distributors, Inc. (the
"Sponsor") is to seek to achieve capital appreciation. Current income will be
secondary to the objective of capital growth. On April ____, 1998, the "Date of
Deposit", Portfolio Deposits were received by The Chase Manhattan Bank, the
Trusts' Trustee, in the form of executed securities transactions, in exchange
for _______ units of each Trust. An irrevocable letter of credit issued by the
BankBoston, N.A. in an amount of $________ has been deposited with the Trustee
for the benefit of the Trusts to cover the purchases of such Securities as well
as any outstanding purchases of previously-sponsored unit investment trusts of
the Sponsor. Aggregate cost to the Trust of the Securities listed in the
Portfolio is determined by the Trustee on the basis set forth under "Public
Offering--Offering Price" as of 4:00 p.m. on April __, 1998. The Trusts will
terminate on ______, 2000, or earlier under certain circumstances as further
described in the Prospectus.
(2) Organizational costs incurred by a Trust have been deferred and will
be amortized on a straight line basis over the life of the Trust. The Trust will
reimburse the Sponsor for actual organizational costs incurred.
(3) Offering costs incurred by a Trust will be amortized over the term of
the initial offering period.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
A-7
696012.4
<PAGE>
EQUITY SECURITIES TRUST
SERIES 18, SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
LARGE CAP TRUST
PORTFOLIO
AS OF OPENING OF BUSINESS, APRIL __, 1998
<TABLE>
<CAPTION>
Market Value of
Number Stocks as a Market
Portfolio of Ticker Percentage Value Per Cost of Securities
No. Shares Name of Issuer (1) Symbol of the Trust(2) Share to the Trust(3)
----- -------- ------------------- ------ --------------- ------ ---------------
% $ $
<S> <C> <C> <C> <C> <C> <C> <C>
------ --------------
Total Investment in Securities 100% $
===== ==============
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on April ___, 1998.
All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be April ___, 1998.
(2) Based on the cost of the Securities to the Trust.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sales prices at the Evaluation Time on the day prior to the Initial Date
of Deposit. The Sponsor's Purchase Price is $_______. The Sponsor's Loss
on the Initial Date of Deposit is $___.
The accompanying notes form an integral part of the Financial Statements.
A-8
696012.4
<PAGE>
EQUITY SECURITIES TRUST
SERIES 18, SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
SMALL CAP TRUST
PORTFOLIO
AS OF OPENING OF BUSINESS, APRIL __, 1998
<TABLE>
<CAPTION>
Market Value of
Number Stocks as a Market
Portfolio of Ticker Percentage Value Per Cost of Securities
No. Shares Name of Issuer (1) Symbol of the Trust(2) Share to the Trust(3)
----- -------- ------------------- ------ --------------- ------ ---------------
% $
<S> <C> <C> <C> <C> <C>
------ ------------
Total Investment in Securities 100% $
====== ============
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on April ___, 1998.
All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be April ___, 1998.
(2) Based on the cost of the Securities to the Trust.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sales prices at the Evaluation Time on the day prior to the Initial Date
of Deposit. The Sponsor's Purchase Price is $_____. The Sponsor's Loss on
the Initial Date of Deposit is $____.
The accompanying notes form an integral part of the Financial Statements.
A-9
696012.4
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee and Unitholders,
Equity Securities Trust, Series 18,
Signature Series, Zacks Analysts Trust I
Zacks Large Cap Trust
Zacks Small Cap Trust
In our opinion, the accompanying Statements of Financial Condition,
including the Portfolios, presents fairly, in all material respects, the
financial position of Equity Securities Trust, Series 18, Signature Series,
Zacks Analysts Trust I (the "Trust"), Zacks Large Cap Trust, Zacks Small Cap,
Trust, at opening of business, April ___, 1998, in conformity with generally
accepted accounting principles. This financial statement is the responsibility
of the Trusts' management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of this financial
statement in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of the contracts for the securities at opening of business, April ___, 1998, by
correspondence with the Sponsor, provides a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
April ___, 1998
A-10
696012.4
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696012.4
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EQUITY SECURITIES TRUST
SERIES 18, SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUSTS
ORGANIZATION. Equity Securities Trust, Series 18, Signature Series, Zacks
Analysts Trust I consists of two separate underlying unit investment trusts
designated as Zacks Large Cap Trust ("Large Cap Trust") and Zacks Small Cap
Trust ("Small Cap Trust") (each also referred to herein as the "Trust" and
collectively as the "Trusts"). The Trust was created under the laws of the State
of New York pursuant to a Trust Indenture and Agreement (the "Trust Agreement"),
dated the Initial Date of Deposit, between Reich & Tang Distributors, Inc., as
Sponsor, and The Chase Manhattan Bank, as Trustee.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
securities including common stock and funds and delivery statements relating to
contracts for the purchase of certain such securities (collectively, the
"Securities") with an aggregate value as set forth in Part A and cash or an
irrevocable letter of credit issued by a major commercial bank in the amount
required for such purchases. Thereafter the Trustee, in exchange for the
Securities so deposited, has registered on the registration books of the Trusts
evidence of the Sponsor's ownership of all Units of the Trusts. The Sponsor has
a limited right to substitute other securities in a Trust portfolio in the event
of a failed contract. See "The Trusts--Substitution of Securities." The Sponsor
may also, in certain circumstances, direct the Trustee to dispose of certain
Securities if the Sponsor believes that, because of market or credit conditions,
or for certain other reasons, retention of the Security would be detrimental to
Unitholders. See "Trust Administration Portfolio--Supervision."
As of the Initial Date of Deposit, a "Unit" represents an undivided
interest or pro rata share in the Securities of a Trust in the ratio of one
hundred Units for the indicated amount of the aggregate market value of the
Securities initially deposited in the Trust as is set forth in the "Summary of
Essential Information." As additional Units are issued by a Trust as a result of
the deposit of Additional Securities, as described below, the aggregate value of
the Securities in the Trust will be increased and the fractional undivided
interest in the Trust represented by each Unit will be decreased. To the extent
that any Units are redeemed by the Trustee, the fractional undivided interest or
pro rata share in such Trust represented by each unredeemed Unit will increase,
although the actual interest in such Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
696012.4
B-1
<PAGE>
DEPOSIT OF ADDITIONAL SECURITIES. With the deposit of the Securities in
the Trusts on the Initial Date of Deposit, the Sponsor established a
proportionate relationship among the initial aggregate value of specified
Securities in the Trusts. During the 90 days subsequent to the Initial Date of
Deposit (the "Deposit Period"), the Sponsor may deposit additional Securities in
the Trusts that are substantially similar to the Securities already deposited in
the Trust ("Additional Securities"), contracts to purchase Additional Securities
or cash with instructions to purchase Additional Securities, in order to create
additional Units, maintaining to the extent practicable the original
proportionate relationship of the number of shares of each Security in the Trust
portfolio on the Initial Date of Deposit. These additional Units, which will
result in an increase in the number of Units outstanding, will each represent,
to the extent practicable, an undivided interest in the same number and type of
securities of identical issuers as are represented by Units issued on the
Initial Date of Deposit. It may not be possible to maintain the exact original
proportionate relationship among the Securities deposited on the Initial Date of
Deposit because of, among other reasons, purchase requirements, changes in
prices, or unavailability of Securities. The composition of a Trust portfolio
may change slightly based on certain adjustments made to reflect the disposition
of Securities and/or the receipt of a stock dividend, a stock split or other
distribution with respect to such Securities, including Securities received in
exchange for shares or the reinvestment of the proceeds distributed to
Unitholders. Deposits of Additional Securities in a Trust subsequent to the
Deposit Period must replicate exactly the existing proportionate relationship
among the number of shares of Securities in the Trust portfolio. Substitute
Securities may be acquired under specified conditions when Securities originally
deposited in the Trusts are unavailable (see "The Trust--Substitution of
Securities" below).
OBJECTIVE. The objective of the Large Cap Trust is to seek total return
through a combination of capital appreciation and current dividend income. The
Large Cap Trust seeks to achieve its objective by selecting the ten common
stocks from among the thirty stocks comprising the DJIA which are expected to
experience the greatest earnings per share growth, as selected by Zacks. Zacks
will seek to create a portfolio of stocks which tries to outperform both the
DJIA and the "dogs of the Dow" over a two-year period. The "dogs of the Dow"
refers to the ten highest yielding stocks of the 30 stocks listed on the DJIA.
The objective of the Small Cap Trust is to seek total return through capital
appreciation. The Small Cap Trust seeks to achieve its objective by selecting
the twenty common stocks from among the companies listed on the Russell 2000(R),
as selected by Zacks. Zacks will seek to develop a portfolio of twenty stocks
that outperforms the Russell 2000(R) over a two-year period. The Sponsor can not
give any assurance that the Trusts' objectives can be achieved. Projected
earnings growth for a company is based on estimates compiled by approximately
3000 analysts employed by 230 US brokerage firms on what a company's corporate
earnings will be in one-to-two years from the Date of Deposit. The name "Dow
Jones Industrial Average" is the property of Dow Jones & Company, Inc., and the
name Russell 2000(R) Index is the property of the Frank Russell Company, neither
of which are affiliated with the Sponsor and have not participated in any way in
the creation of the Trusts or in the selection of the stocks included in the
Trusts and have not reviewed or approved any information included in this
Prospectus. Neither the Dow Jones & Company, Inc. nor the Frank Russell Company
Inc. granted to the Trusts or the Sponsor a license to use the Dow Jones
Industrial Average or the Rusell 2000(R) Index, respectively. As used herein,
the term "Securities" means the common stocks initially deposited in the Trusts
and described in "Portfolio" in Part A and any additional securities acquired
and held by the Trusts pursuant to the provisions of the Indenture. Further, the
Securities may appreciate or depreciate in value, dependent upon the full range
of economic and market influences affecting corporate profitability, the
financial condition of issuers (including non-U.S. issuers) and the price of
equity securities in general and the Securities in particular. Therefore, there
is no guarantee that the objectives of the Trusts will be achieved. As used
herein, the term "Securities" means the stocks initially deposited in a Trust
and described in "Portfolio" in Part A and any additional stocks acquired and
held by the Trust pursuant to the provisions of the Indenture. All of the
Securities in a Trust are listed on a U.S. Stock exchange (or the
over-the-counter-exchange with respect to the Small Cap Trust).
The Trusts will terminate in approximately two years, at which time
investors may choose to either receive the distributions in kind (if they own at
least 2,500 Units), in cash or reinvest in a subsequent series of Equity
Securities Trust (if available) at a reduced sales charge. Since the Sponsor may
deposit additional Securities in connection with the sale of additional Units,
the yields on these Securities may change subsequent to the Initial Date of
Deposit. Further, the Securities may appreciate or depreciate in value,
dependent upon the full range of economic and market influences affecting
corporate profitability, the
696012.4
B-2
<PAGE>
financial condition of issuers (including non-U.S. issuers) and the prices of
equity securities in general and the Securities in particular. Therefore, there
is no guarantee that the objective of a Trust will be achieved.
THE SECURITIES. The stocks selected by Zacks are based on projected
earnings per share ("EPS") growth estimated by Wall Street analysts. Zacks uses
EPS estimates made by over 3,000 analysts employed by 230 U.S. brokerage firms
and are based on expectations made by such analysts as to what a company expects
to earn one-to-two years in the future. Zacks then formulates a consensus of
such analysts' expectations of EPS growth and then selects stocks for the Trusts
from among the companies listed on the consensus. Zacks adjusts the EPS growth
rate based on the level of consensus among the analysts making the EPS
estimates. The result is that stocks are selected by Zacks for each Trust based
on the criteria that such stocks have a high projected earnings growth and that
such EPS growth is supported by a strong consensus among the analysts regarding
that growth. The stocks selected in the Large Cap Trust are from among the most
well known and highly capitalized companies in America. The selection process of
the companies comprising the Small Cap Trust is the same except that the
companies (i) must have at least $100 million in market capitalization and not
be widely followed by Wall Street analysts (i.e., only 2 or 3 analysts follow
such company) and (ii) must have projections of profitability in the following
year. In addition, the stocks selected are listed on the Russell 2000(R) Index.
The Russell 2000(R) Index is a widely regarded small cap index consisting of
2000 small cap stocks and, as of the date of this Prospectus, has a total market
capitalization range of $162 million to $1.0 billion. Zacks then selects for the
Small Cap Trust those companies projected to grow the fastest applying the EPS
strategy described above.
The Trustee has not participated and will not participate in the selection
of Securities for the Trusts, and neither the Sponsor, Zacks nor the Trustee
will be liable in any way for any default, failure or defect in any Securities.
The contracts to purchase Securities deposited initially in a Trust are
expected to settle in three business days, in the ordinary manner for such
Securities. Settlement of the contracts for Securities is thus expected to take
place prior to the settlement of purchase of Units on the Initial Date of
Deposit.
SUBSTITUTION OF SECURITIES. In the event of a failure to deliver any
Security that has been purchased for the Trusts under a contract ("Failed
Securities"), the Sponsor is authorized under the Trust Agreement to direct the
Trustee to acquire other securities ("Substitute Securities") to make up the
original corpus of the Trust. In addition, the Sponsor, at its option, is
authorized under the Trust Agreement to direct the Trustee to reinvest in
Substitute Securities the proceeds of the sale of any of the Securities only if
such sale was due to unusual circumstances as set forth under "Trust
Administration--Portfolio Supervision."
The Substitute Securities must be purchased within 20 days after the sale
of the portfolio Security or delivery of the notice of the failed contract.
Where the Sponsor purchases Substitute Securities in order to replace Failed
Securities, (i) the purchase price may not exceed the purchase price of the
Failed Securities and (ii) the Substitute Securities must be substantially
similar to the Failed Securities. Where the Sponsor purchases Substitute
Securities in order to replace Securities it sold, the Sponsor will endeavor to
select Securities which are equity securities that possess characteristics that
are consistent with the objective of a Trust as set forth above. Such selection
may include or be limited to Securities previously included in the portfolio of
the Trust. No assurance can be given that the Trusts will retain their present
size and composition for any length of time.
The Trustee shall notify all Unitholders of the acquisition of the
Substitute Security, within five days thereafter, and the Trustee shall, on the
next Distribution Date which is more than 30 days thereafter, make a pro rata
distribution of the amount, if any, by which the cost to the Trust of the Failed
Security exceeded the cost of the Substitute Security plus accrued interest, if
any. In the event no reinvestment is made, the proceeds of the sale of
Securities will be distributed to Unitholders as set forth under "Rights of
Unitholders--Distributions." In addition, if the right of substitution shall not
be utilized to acquire Substitute Securities in the event of a failed contract,
the Sponsor will cause to be refunded the sales charge attributable to such
Failed Securities to all Unitholders, and distribute the principal and
dividends, if any, attributable to such Failed Securities on the next
Distribution Date. The proceeds from the sale of a Security or the exercise of
any redemption or call provision will be distributed
696012.4
B-3
<PAGE>
to Unitholders except to the extent such proceeds are applied to meet
redemptions of Units. (See "Liquidity--Trustee Redemption.")
RISK CONSIDERATIONS
FIXED PORTFOLIO. The value of the Units will fluctuate depending on all of
the factors that have an impact on the economy and the equity markets. These
factors similarly impact the ability of an issuer to distribute dividends.
Unlike a managed investment company in which there may be frequent changes in
the portfolio of securities based upon economic, financial and market analyses,
securities of a unit investment trust, such as the Trusts, are not subject to
such frequent changes based upon continuous analysis. All the Securities in the
Trusts are liquidated or distributed during the Liquidation Period. Since the
Trusts will not sell Securities in response to ordinary market fluctuation, but
only at a Trust's termination, the amount realized upon the sale of the
Securities may not be the highest price attained by an individual Security
during the life of the Trust. However, the Sponsor may direct the disposition by
the Trustee of Securities upon the occurrence of certain events. Some of the
Securities in the Trusts may also be owned by other clients of the Sponsor and
their affiliates. However, because these clients may have differing investment
objectives, the Sponsor may sell certain Securities from those accounts in
instances where a sale by a Trust would be impermissible, such as to maximize
return by taking advantage of market fluctuations. Investors should consult with
their own financial advisers prior to investing in a Trust to determine its
suitability. (See "Trust Administration-- Portfolio Supervision" below.)
ADDITIONAL SECURITIES. Investors should be aware that in connection with
the creation of additional Units subsequent to the Initial Date of Deposit, the
Sponsor may deposit Additional Securities, contracts to purchase Additional
Securities or cash with instructions to purchase Additional Securities, in each
instance maintaining the original proportionate relationship, subject to
adjustment under certain circumstances, of the numbers of shares of each
Security in the Trust. To the extent the price of a Security increases or
decreases between the time cash is deposited with instructions to purchase the
Security and the time the cash is used to purchase the Security, Units may
represent less or more of that Security and more or less of the other Securities
in the Trust. In addition, brokerage fees (if any) incurred in purchasing
Securities with cash deposited with instructions to purchase the Securities will
be an expense of the Trust. Price fluctuations between the time of deposit and
the time the Securities are purchased, and payment of brokerage fees, will
affect the value of every Unitholder's Units and the Income per Unit received by
the Trust. In particular, Unitholders 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. In addition, subsequent deposits to create such
additional Units will not be covered by the deposit of a bank letter of credit.
In the event that the Sponsor does not deliver cash in consideration for the
additional Units delivered, the Trust may be unable to satisfy its contracts to
purchase the Additional Securities without the Trustee selling underlying
Securities. Therefore, to the extent that the subsequent deposits are not
covered by a bank letter of credit, the failure of the Sponsor to deliver cash
to the Trust, or any delays in the Trust receiving such cash, would have
significant adverse consequences for the Trust.
COMMON STOCK. Since the Trusts contain primarily common stocks of domestic
issuers, an investment in Units of a Trust should be made with an understanding
of the risks inherent in any investment in common stocks including the risk that
the financial condition of the issuers of the Securities may become impaired or
that the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights of
creditors of, or holders of debt obligations or preferred stock issued by the
issuer. Holders of common stocks have a right to receive dividends only when,
if, and in the amounts declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks usually have the right to receive dividends at a fixed rate
when and as declared by the issuer's board
696012.4
B-4
<PAGE>
of directors, normally on a cumulative basis. Dividends on cumulative preferred
stock must be paid before any dividends are paid on common stock and any
cumulative preferred stock dividend which has been omitted is added to future
dividends payable to the holders of such cumulative preferred stock. Preferred
stocks are also usually entitled to rights on liquidation which are senior to
those of common stocks. For these reasons, preferred stocks generally entail
less risk than common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the Initial Date of Deposit.
FOREIGN SECURITIES. The Trust may hold securities of non-U.S. issuers.
There are certain risks involved in investing in securities of foreign
companies, which are in addition to the usual risks inherent in United States
investments. These risks include those resulting from fluctuations in currency
exchange rates, revaluation of currencies, future adverse political and economic
developments and the possible imposition of currency exchange blockages or other
foreign governmental laws or restrictions, reduced availability of public
information concerning issuers and the lack of uniform accounting, auditing and
financial reporting standards or of other regulatory practices and requirements
comparable to those applicable to domestic companies. Moreover, securities of
many foreign companies may be less liquid and their prices more volatile than
those of securities of comparable domestic companies. In addition, with respect
to certain foreign countries, there is the possibility of expropriation,
nationalization, confiscatory taxation and limitations on the use or removal of
funds or other assets of the Trust, including the withholding of dividends.
Foreign securities may be subject to foreign government taxes that could reduce
the yield on such securities. Since the Trust may invest in securities quoted in
currencies other than the United States dollar, changes in foreign currency
exchange rates may adversely affect the value of foreign securities in the
Portfolio and the net asset value of Units of the Trust. Investment in foreign
securities may also result in higher expenses due to the cost of converting
foreign currency to United States dollars, the payment of fixed brokerage
commissions on certain foreign exchanges, which generally are higher than
commissions on domestic exchanges, and expenses relating to foreign custody.
In addition, for the foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less publicly
available information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. However, the Sponsor anticipates that adequate
information will be available to allow the Sponsor to supervise the Portfolio as
set forth in "Trust Administration --Portfolio Supervision."
On the basis of the best information available to the Sponsor at the
present time none of the Securities is subject to exchange control restrictions
under existing law which would materially interfere with payment to the Trust of
dividends due on, or proceeds from sale of, the Securities either because the
particular jurisdictions have not adopted any currency regulations of this type
or because the issues qualify for an exemption, or the Trust, as an
extraterritorial investor, has qualified its purchase of the Securities as
exempt by following applicable "validation" or similar regulatory or exemptive
procedures. However, there can be no assurance that exchange control regulations
might not be adopted in the future which might adversely affect payments to the
Trust.
696012.4
B-5
<PAGE>
In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in the Portfolio and on the ability of the Trust to satisfy its
obligation to redeem Units tendered to the Trustee for redemption (see
"Liquidity").
EXCHANGE RATE FLUCTUATION. In recent years, foreign exchange rates have
fluctuated sharply. Income from foreign equity securities held by the Trust
would be payable in the currency of the country of their issuance. However, the
Trust will compute its income in United States dollars, and the computation of
income will be made on the date of its receipt by the Trust at the foreign
exchange rate in effect on that date. Therefore, if the value of the foreign
currency falls relative to the United States dollars between receipt of the
income and the making of Trust distributions, the risk of such decline will be
borne by Unitholders. In addition, the cost of converting such foreign currency
to United States dollars would also reduce the return to the Unitholder.
SMALL CAPITALIZATION STOCK. Investing in small capitalization stocks may
involve greater risk than investing in medium and large capitalization stocks,
since they can be subject to more abrupt or erratic price movements. Small
market capitalization companies ("Small-Cap Companies") are those with market
capitalizations of $1 billion or less at the time of the Trusts' investment.
Many Small-Cap Companies will have had their securities publicly traded, if at
all, for only a short period of time and will not have had the opportunity to
establish a reliable trading pattern through economic cycles. The price
volatility of Small-Cap Companies is relatively higher than larger, older and
more mature companies. The greater price volatility of Small- Cap Companies may
result from the fact that there may be less market liquidity, less information
publicly available or fewer investors who monitor the activities of these
companies. In addition, the market prices of these securities may exhibit more
sensitivity to changes in industry or general economic conditions. Some
Small-Cap Companies will not have been in existence long enough to experience
economic cycles or to demonstrate whether they are sufficiently well managed to
survive downturns or inflationary periods. Further, a variety of factors may
affect the success of a company's business beyond the ability of its management
to prepare or compensate for them, including domestic and international
political developments, government trade and fiscal policies, patterns of trade
and war or other military conflict which may affect industries or markets or the
economy generally.
YEAR 2000 ISSUE. Many existing computer programs were designed and
developed without considering the impact of the upcoming change in the century.
The problem exists when a computer program uses only two digits to identify a
year in the date field. Extensive problems can result to a company's business,
requiring substantial resources to remedy. The Sponsor believes that the "Year
2000" problem is material to the Sponsor's business and operations. Although the
Sponsor is addressing the problem with respect to its business operations, there
can be no assurance that the "Year 2000" problem will be properly or timely
resolved, which could have a material adverse effect on the Sponsor's results of
operations and, in turn, cash available for distribution.
LEGISLATION. From time to time Congress considers proposals to reduce the
rate of the dividends-received deduction which is available to certain
corporations. Enactment into law of a proposal to reduce the rate would
adversely affect the after-tax return to investors who can take advantage of the
deduction. Although recent legislation has established a reduced tax rate of 20%
for capital gains realized by individual investors who have held assets for more
than 18 months, this rate will generally not be available for Unitholders who
are not eligible, or do not elect, to receive their pro rata share of the
Securities in-kind because the term of the Trust is approximately two years.
Investors are urged to consult their own tax advisers. Further, at any time
after the Initial Date of Deposit, legislation may be enacted, with respect to
the Securities in the Trust or the issuers of the Securities. Changing
approaches to regulation, particularly with respect to the environment or with
respect to the petroleum industry, may have a negative impact on certain
companies represented in the Trust. There can be no assurance that future
legislation, regulation or deregulation will not have a material adverse effect
on the Trust or will not impair the ability of the issuers of the Securities to
achieve their business goals.
696012.4
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<PAGE>
LEGAL PROCEEDINGS AND LITIGATION. At any time after the Initial Date of
Deposit, legal proceedings may be initiated on various grounds, or legislation
may be enacted, with respect to the Securities in the Trust or to matters
involving the business of the issuer of the Securities. There can be no
assurance that future legal proceedings or legislation will not have a material
adverse impact on the Trust or will not impair the ability of the issuers of the
Securities to achieve their business and investment goals.
GENERALLY. There is no assurance that any dividends will be declared or
paid in the future on the Securities. Investors should be aware that there is no
assurance that the Trust's objective will be achieved.
PUBLIC OFFERING
OFFERING PRICE. In calculating the Public Offering Price, the aggregate
value of the Securities is determined in good faith by the Trustee on each
"Business Day" as defined in the Indenture in the following manner: because the
Securities are listed on a national securities exchange, this evaluation is
based on the closing sale prices on that exchange as of the Evaluation Time
(unless the Trustee deems these prices inappropriate as a basis for valuation).
If the Trustee deems these prices inappropriate as a basis for evaluation, then
the Trustee may utilize, at a Trust's expense, an independent evaluation service
or services to ascertain the values of the Securities. The independent
evaluation service shall use any of the following methods, or a combination
thereof, which it deems appropriate: (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Securities on the bid
side of the market or by such other appraisal deemed appropriate by the Trustee
or (c) by any combination of the above, each as of the Evaluation Time.
VOLUME AND OTHER DISCOUNTS. Units are available at a volume discount from
the Public Offering Price during the initial public offering based upon the
number of Units purchased. This volume discount will result in a reduction of
the sales charge applicable to such purchases. The amount of the volume discount
and the approximate reduced sales charge on the Public Offering Price applicable
to such purchases are as follows:
NUMBER OF UNITS APPROXIMATE REDUCED SALES CHARGE
10,000 but less than 25,000 2.45%
25,000 but less than 50,000 2.20%
50,000 but less than 100,000 2.00%
100,000 or more 1.75%
For transactions of at least 100,000 Units or more, the Sponsor intends to
negotiate the applicable sales charge and such charge will be disclosed to any
such purchaser. The Sponsor reserves the right to change the discounts from time
to time.
These discounts will apply to all purchases of Units by the same purchaser
during the initial public offering period. Units purchased by the same
purchasers in separate transactions during the initial public offering period
will be aggregated for purposes of determining if such purchaser is entitled to
a discount provided that such purchaser must own at least the required number of
Units at the time such determination is made. Units held in the name of the
spouse of the purchaser or in the name of a child of the purchaser under 21
years of age are deemed for the purposes hereof to be registered in the name of
the purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Employees (and their immediate families) of Reich & Tang Distributors,
Inc. (and its affiliates) and of the special counsel to the Sponsor, may,
pursuant to employee benefit arrangements, purchase Units of a Trust at a price
equal to the aggregate value of the underlying securities in the Trust during
the initial offering period, divided by the number of Units outstanding at no
sales charge. Such arrangements result in less selling effort and selling
expenses than sales to employee groups of other companies.
696012.4
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<PAGE>
Resales or transfers of Units purchased under the employee benefit arrangements
may only be made through the Sponsor's secondary market, so long as it is being
maintained.
Investors in any open-end management investment company or unit investment
trust that have purchased their investment within a five-year period prior to
the date of this Prospectus can purchase Units of the Trust in an amount not
greater in value than the amount of said investment made during this five-year
period at a reduced sales charge of 1.95% of the public offering price.
Units may be purchased in the primary or secondary market (including
purchases by Rollover Unitholders) at the Public Offering Price (for purchases
which do not qualify for a volume discount) less the concession the Sponsor
typically allows to brokers and dealers for purchases (see "Public
Offering--Distribution of Units") by (1) investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, (2) bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, (3) any person who, for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive the volume discount.
DISTRIBUTION OF UNITS. During the initial offering period and thereafter
to the extent additional Units continue to be offered by means of this
Prospectus, Units will be distributed by the Sponsor and dealers at the Public
Offering Price. The initial offering period is thirty days after each deposit of
Securities in the Trust and the Sponsor may extend the initial offering period
for successive thirty day periods. Certain banks and thrifts will make Units of
the Trust available to their customers on an agency basis. A portion of the
sales charge paid by their customers is retained by or remitted to the banks.
Under the Glass- Steagall Act, banks are prohibited from underwriting Units;
however, the Glass-Steagall Act does permit certain agency transactions and the
banking regulators have indicated that these particular agency transactions are
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
The Sponsor intends to qualify the Units for sale in substantially all
States through dealers who are members of the National Association of Securities
Dealers, Inc. Units may be sold to dealers at prices which represent a
concession of up to 2.0% per Unit, subject to the Sponsor's right to change the
dealers' concession from time to time. In addition, for transactions of at least
100,000 Units or more, the Sponsor intends to negotiate the applicable sales
charge and such charge will be disclosed to any such purchaser. Such Units may
then be distributed to the public by the dealers at the Public Offering Price
then in effect. The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units. The Sponsor reserves the right to change
the discounts from time to time.
Broker-dealers of the Trust, banks and/or others are eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their registered representatives who have sold a minimum
number of units of unit investment trusts created by the Sponsor during a
specified time period. In addition, at various times the Sponsor may implement
other programs under which the sales forces of brokers, dealers, banks and/or
others may be eligible to win other nominal awards for certain sales efforts or
under which the Sponsor will reallow to any such brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor, or participate in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales charges on
the sales generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time pursuant to
objective criteria established by the Sponsor pay fees to qualifying brokers,
dealers, banks and/or others for certain services or activities
696012.4
B-8
<PAGE>
which are primarily intended to result in sales of Units of the Trust. Such
payments are made by the Sponsor out of their own assets and not out of the
assets of the Trust. These programs will not change the price Unitholders pay
for their Units or the amount that the Trust will receive from the Units sold.
SPONSOR'S PROFITS. The Sponsor will receive a combined gross underwriting
commission equal to up to 2.95% of the Public Offering Price per 100 Units
(equivalent to 3.04% of the net amount invested in the Securities).
Additionally, the Sponsor may realize a profit on the deposit of the Securities
in the Trust representing the difference between the cost of the Securities to
the Sponsor and the cost of the Securities to the Trust (See "Portfolio"). The
Sponsor may realize profits or sustain losses with respect to Securities
deposited in the Trust which were acquired from underwriting syndicates of which
they were a member. All or a portion of the Securities initially deposited in
the Trust may have been acquired through the Sponsor.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
Initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsor for the Units. Cash, if any,
made available to the Sponsor prior to settlement date for the purchase of Units
may be used in the Sponsor's business subject to the limitations of 17 CFR
240.15c3-3 under the Securities Exchange Act of 1934 and may be of benefit to
the Sponsor.
Both upon acquisition of Securities and termination of the Trust, the
Trustee may utilize the services of the Sponsor for the purchase or sale of all
or a portion of the Securities in the Trust. The Sponsor may receive brokerage
commissions from the Trust in connection with such purchases and sales in
accordance with applicable law.
In maintaining a market for the Units (see "Sponsor Repurchase") the
Sponsor will realize profits or sustain losses in the amount of any difference
between the price at which it buys Units and the price at which it resells such
Units.
RIGHTS OF UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of a Trust will not be evidenced by
Certificates. All evidence of ownership of the Units will be recorded in
book-entry form at the Depository Trust Company ("DTC") through an investor's
brokerage account. Units held through DTC will be deposited by the Sponsor with
DTC in the Sponsor's DTC account and registered in the nominee name CEDE &
COMPANY. Individual purchases of beneficial ownership interest in the Trust may
be made in book-entry form through DTC. Ownership and transfer of Units will be
evidenced and accomplished directly and indirectly by book-entries made by DTC
and its participants. DTC will record ownership and transfer of the Units among
DTC participants and forward all notices and credit all payments received in
respect of the Units held by the DTC participants. Beneficial owners of Units
will receive written confirmation of their purchases and sale from the
broker-dealer or bank from whom their purchase was made. Units are transferable
by making a written request property accompanied by a written instrument or
instruments of transfer which should be sent registered or certified mail for
the protection of the Unit Holder. Holders must sign such written request
exactly as their names appear on the records of the Trust. Such signatures must
be guaranteed by a commercial bank or trust company, savings and loan
association or by a member firm of a national securities exchange.
DISTRIBUTIONS. Dividends received by the Trust are credited by the Trustee
to an Income Account for the Trust. Other receipts, including the proceeds of
Securities disposed of, are credited to a Principal Account for the Trust.
Distributions to each Unitholder from the Income Account are computed as
of the close of business on each Record Date for the following payment date and
consist of an amount substantially equal to such Unitholder's pro rata share of
the income credited to the Income Account, less expenses. Distributions from the
Principal Account of the Trust (other than amounts representing failed
contracts, as previously discussed) will be computed as of each Record Date, and
will be made to the Unitholders of the Trust on or shortly after the
Distribution Date. Proceeds representing principal received from the disposition
of any of the Securities between a Record Date and a Distribution Date which are
not used for redemptions of Units will be held
696012.4
B-9
<PAGE>
in the Principal Account and not distributed until the next Distribution Date.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the Distribution Date after such purchase.
As of each Record Date, the Trustee will deduct from the Income Account of
the Trust, and, to the extent funds are not sufficient therein, from the
Principal Account of the Trust, amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Trust Expenses and Charges").
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges that may be payable out of the Trust. Amounts so withdrawn
shall not be considered a part of such Trust's assets until such time as the
Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Income and Principal
Accounts such amounts as may be necessary to cover redemptions of Units by the
Trustee.
The dividend distribution per 100 Units, if any, cannot be anticipated and
may be paid as Securities are redeemed, exchanged or sold, or as expenses of the
Trust fluctuate. No distribution need be made from the Income Account or the
Principal Account until the balance therein is an amount sufficient to
distribute $1.00 per 100 Units.
RECORDS. The Trustee shall furnish Unitholders in connection with each
distribution a statement of the amount of dividends and interest, if any, and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per 100 Units. Within a reasonable time after the
end of each calendar year, the Trustee will furnish to each person who at any
time during the calendar year was a Unitholder of record, a statement showing
(a) as to the Income Account: dividends, interest and other cash amounts
received, amounts paid for purchases of Substitute Securities and redemptions of
Units, if any, deductions for applicable taxes and fees and expenses of the
Trust, and the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each 100 Units outstanding on the last business day of such
calendar year; (b) as to the Principal Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payments of
applicable taxes and fees and expenses of the Trust, amounts paid for purchases
of Substitute Securities and redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed both as a total
dollar amount and as a dollar amount representing the pro rata share of each 100
Units outstanding on the last business day of such calendar year; (c) a list of
the Securities held, a list of Securities purchased, sold or otherwise disposed
of during the calendar year and the number of Units outstanding on the last
business day of such calendar year; (d) the Redemption Price per 100 Units based
upon the last computation thereof made during such calendar year; and (e)
amounts actually distributed to Unitholders during such calendar year from the
Income and Principal Accounts, separately stated, of the Trust, expressed both
as total dollar amounts and as dollar amounts representing the pro rata share of
each 100 Units outstanding on the last business day of such calendar year.
The Trustee shall keep available for inspection by Unitholders at all
reasonable times during usual business hours, books of record and account of its
transactions as Trustee, including records of the names and addresses of
Unitholders, Certificates issued or held, a current list of Securities in the
portfolio and a copy of the Trust Agreement.
TAX STATUS
The following is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code").
In rendering the opinion set forth below, Battle Fowler LLP has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein. In the opinion of Battle Fowler LLP, special
counsel for the Sponsor, under existing law:
696012.4
B-10
<PAGE>
1. Each Trust will be classified as a grantor trust for Federal
income tax purposes and not as a partnership or association taxable as a
corporation. Classification of a Trust as a grantor trust will cause the
Trust not to be subject to Federal income tax, and will cause the
Unitholders of the Trust to be treated for Federal income tax purposes as
the owners of a pro rata portion of the assets of the Trust. All income
received by the Trust will be treated as income of the Unitholders in the
manner set forth below.
2. Each Trust is not subject to the New York Franchise Tax on
Business Corporations or the New York City General Corporation Tax. For a
Unitholder who is a New York resident, however, a pro rata portion of all
or part of the income of a Trust will be treated as income of the
Unitholder under the income tax laws of the State and City of New York.
Similar treatment may apply in other states.
3. During the 90-day period subsequent to the initial issuance date,
the Sponsor reserves the right to deposit Additional Securities that are
substantially similar to those establishing a Trust. This retained right
falls within the guidelines promulgated by the Internal Revenue Service
("IRS") and should not affect the taxable status of a Trust.
A taxable event will generally occur with respect to each Unitholder when
a Trust disposes of a Security (whether by sale, exchange or redemption) or upon
the sale, exchange or redemption of Units by such Unitholder. The price a
Unitholder pays for its Units, including sales charges, is allocated among its
pro rata portion of each Security held by the Trust (in proportion to the fair
market values thereof on the date the Unitholder purchases its Units) in order
to determine its initial cost for its pro rata portion of each Security held by
the Trust.
For Federal income tax purposes, a Unitholder's pro rata portion of
dividends paid with respect to a Security held by a Trust is taxable as ordinary
income to the extent of the issuing corporation's current and accumulated
"earnings and profits" as provided in Section 316 of the Code. A Unitholder's
pro rata portion of dividends paid on such Security that exceed such current and
accumulated earnings and profits will first reduce a Unitholder's tax basis in
such Security, and to the extent that such dividends exceed a Unitholder's tax
basis in such Security will generally be treated as capital gain.
A Unitholder's portion of gain, if any, upon the sale, exchange or
redemption of Units or the disposition of Securities held by a Trust will
generally be considered a capital gain and will be mid-term if the Unitholder
has held his Units for more than one year but not more than 18 months. Capital
gains are generally taxed at the same rates applicable to ordinary income,
although non-corporate Unitholders who realize mid-term capital gains may be
subject to a reduced tax rate of 28% on such gains, rather than the "regular"
maximum tax rate of 39.6%. Recent legislation has established a reduced tax rate
of 20% for capital gains realized by non-corporate investors who have held
assets for more than 18 months. This rate may be available for Unitholders who
are eligible to receive their pro rata share of the Securities in-kind because
the term of the Trusts is approximately two years. Tax rates may increase prior
to the time when Unitholders may realize gains from the sale, exchange or
redemption of the Units or Securities.
A Unitholder's portion of loss, if any, upon the sale or redemption of
Units or the disposition of Securities held by a Trust will generally be
considered a capital loss and will be long-term if the Unitholder has held his
Units for more than one year. Capital losses are deductible to the extent of
capital gains; in addition, up to $3,000 of capital losses ($1,500 in the case
of married individuals filing separately) recognized by non-corporate
Unitholders may be deducted against ordinary income.
Under Section 67 of the Code and the accompanying Regulations, a
Unitholder who itemizes his deductions may also deduct his pro rata share of the
fees and expenses of a Trust, but only to the extent that such amounts, together
with the Unitholder's other miscellaneous deductions, exceed 2% of his adjusted
gross income. The deduction of fees and expenses may also be limited by Section
68 of the Code, which reduces the amount of itemized deductions that are allowed
for individuals with incomes in excess of certain thresholds.
696012.4
B-11
<PAGE>
After the end of each calendar year, the Trustee will furnish to each
Unitholder an annual statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by a Trust
from the disposition of any Security, and the fees and expenses paid by the
Trust. The Trustee will also furnish annual information returns to each
Unitholder and to the Internal Revenue Service.
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unitholder's pro rata portion
of dividends that are taxable as ordinary income to Unitholders which are
received by a Trust from a domestic corporation under Section 243 of the Code or
from a qualifying foreign corporation under Section 245 of the Code (to the
extent the dividends are taxable as ordinary income, as discussed above) in the
same manner as if such corporation directly owned the Securities paying such
dividends. However, a corporation owning Units should be aware that Sections 246
and 246A of the Code impose additional limitations on the eligibility of
dividends for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code) during the 90-day period
beginning on the date that is 45 days before the date on which the stock becomes
ex-dividend. Moreover, the allowable percentage of the deduction will be reduced
from 70% if a corporate Unitholder owns certain stock (or Units) the financing
of which is directly attributable to indebtedness incurred by such corporation.
As discussed in the section "Termination", each Unitholder may have three
options in receiving its termination distributions, which are (i) to receive its
pro rata share of the underlying Securities in kind, (ii) to receive cash upon
liquidation of its pro rata share of the underlying Securities, or (iii) to
invest the amount of cash it would receive upon the liquidation of its pro rata
share of the underlying Securities in units of a future series of the Trusts (if
one is offered). There are special tax consequences should a Unitholder choose
option (i), the exchange of the Unitholder's Units for a pro rata portion of
each of the Securities held by the Trust plus cash. Treasury Regulations provide
that gain or loss is recognized when there is a conversion of property into
property that is materially different in kind or extent. In this instance, the
Unitholder may be considered the owner of an undivided interest in all of a
Trust's assets. By accepting the pro rata share of the number of Securities of
the Trust, in partial exchange for its Units, the Unitholder should be treated
as merely exchanging its undivided pro rata ownership of Securities held by the
Trust into sole ownership of a proportionate share of Securities. As such, there
should be no material difference in the Unitholder's ownership, and therefore
the transaction should be tax free to the extent the Securities are received.
Alternatively, the transaction may be treated as an exchange that would qualify
for nonrecognition treatment to the extent the Unitholder is exchanging its
undivided interest in all of the Trust's Securities for its proportionate number
of shares of the underlying Securities. In either instance, the transaction
should result in a non-taxable event for the Unitholder to the extent Securities
are received. However, there is no specific authority addressing the income tax
consequences of an in-kind distribution from a grantor trust.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trusts, are nevertheless taxed under Section 511 of the
Code on "unrelated business taxable income." Unrelated business taxable income
is income from a trade or business regularly carried on by the tax-exempt entity
that is unrelated to the entity's exempt purpose. Unrelated business taxable
income generally does not include dividend or interest income or gain from the
sale of investment property, unless such income is derived from property that is
debt-financed or is dealer property. A tax-exempt entity's dividend income from
the Trust and gain from the sale of Units in the Trust or the Trust's sale of
Securities is not expected to constitute unrelated business taxable income to
such tax-exempt entity unless the acquisition of the Unit itself is
debt-financed or constitutes dealer property in the hands of the tax-exempt
entity.
Before investing in a 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."
696012.4
B-12
<PAGE>
The Small Cap Trust may hold securities of foreign corporations. Dividends
paid by foreign issuers generally will be subject to withholding tax.
Prospective tax-exempt investors are urged to consult their own tax
advisers concerning the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units prior to investing in the
Trusts.
LIQUIDITY
SPONSOR REPURCHASE. Unitholders who wish to dispose of their Units should
inquire of the Sponsor as to current market prices prior to making a tender for
redemption. The aggregate value of the Securities will be determined by the
Trustee on a daily basis and computed on the basis set forth under "Trustee
Redemption." The Sponsor does not guarantee the enforceability, marketability or
price of any Securities in a Portfolio or of the Units. The Sponsor may
discontinue the repurchase of Units if the supply of Units exceeds demand, or
for other business reasons. The date of repurchase is deemed to be the date on
which Units are received in proper form (i.e., properly endorsed) by Reich &
Tang Distributors, Inc., 600 Fifth Avenue, New York, New York 10020. Units
received after 4 P.M., New York Time, will be deemed to have been repurchased on
the next business day. In the event a market is not maintained for the Units, a
Unitholder may be able to dispose of Units only by tendering them to the Trustee
for redemption.
Units purchased by the Sponsor in the secondary market may be reoffered
for sale by the Sponsor at a price based on the aggregate value of the
Securities in the Trust plus a 2.95% sales charge (or 3.04% of the net amount
invested) plus a pro rata portion of amounts, if any, in the Income Account. Any
Units that are purchased by the Sponsor in the secondary market also may be
redeemed by the Sponsor if it determines such redemption to be in its best
interest.
The Sponsor may, under certain circumstances, as a service to Unitholders,
elect to purchase any Units tendered to the Trustee for redemption (see "Trustee
Redemption"). Factors which the Sponsor will consider in making a determination
will include the number of Units of all Trusts which it has in inventory, its
estimate of the salability and the time required to sell such Units and general
market conditions. For example, if in order to meet redemptions of Units the
Trustee must dispose of Securities, and if such disposition cannot be made by
the redemption date (three calendar days after tender), the Sponsor may elect to
purchase such Units. Such purchase shall be made by payment to the Unitholder
not later than the close of business on the redemption date of an amount equal
to the Redemption Price on the date of tender.
TRUSTEE REDEMPTION. At any time prior to the Evaluation Time on the
business day preceding the commencement of the Liquidation Period (approximately
two years from the Initial Date of Deposit), Units may also be tendered to the
Trustee for redemption upon payment of any relevant tax by contacting the
Sponsor, broker, dealer or financial institution holding such Units in street
name. In certain instances, additional documents may be required, such as trust
instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian. At the present time there
are no specific taxes related to the redemption of Units. No redemption fee will
be charged by the Sponsor or the Trustee. Units redeemed by the Trustee will be
canceled.
Within three business days following a tender for redemption, the
Unitholder will be entitled to receive an amount for each Unit tendered equal to
the Redemption Price per Unit computed as of the Evaluation Time set forth under
"Summary of Essential Information" in Part A on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received after the close of trading on the New
York Stock Exchange (4:00 p.m. Eastern Time), the date of tender is the next day
on which such Exchange is open for trading, and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at the Redemption
Price computed on that day.
A Unitholder will receive his redemption proceeds in cash and amounts paid
on redemption shall be withdrawn from the Income Account, or, if the balance
therein is insufficient, from the Principal Account. All other amounts paid on
redemption
696012.4
B-13
<PAGE>
shall be withdrawn from the Principal Account. The Trustee is empowered to sell
Securities in order to make funds available for redemptions. Such sales, if
required, could result in a sale of Securities by the Trustee at a loss. To the
extent Securities are sold, the size and diversity of a Trust will be reduced.
The Securities to be sold will be selected by the Trustee in order to maintain,
to the extent practicable, the proportionate relationship among the number of
shares of each Stock. Provision is made in the Indenture under which the Sponsor
may, but need not, specify minimum amounts in which blocks of Securities are to
be sold in order to obtain the best price for the Trust. While these minimum
amounts may vary from time to time in accordance with market conditions, the
Sponsor believes that the minimum amounts which would be specified would be
approximately 100 shares for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in a Trust
determined by the Trustee on the basis of (i) the cash on hand in the Trust or
moneys in the process of being collected, (ii) the value of the Securities in
the Trust as determined by the Trustee, less (a) amounts representing taxes or
other governmental charges payable out of the Trust, (b) the accrued expenses of
the Trust and (c) cash allocated for the distribution to Unitholders of record
as of the business day prior to the evaluation being made. The Trustee may
determine the value of the Securities in a Trust in the following manner:
because the Securities are listed on a national securities exchange, this
evaluation is based on the closing sale prices on that exchange. Unless the
Trustee deems these prices inappropriate as a basis for evaluation or if there
is no such closing purchase price, then the Trustee may utilize, at the Trust's
expense, an independent evaluation service or services to ascertain the values
of the Securities. The independent evaluation service shall use any of the
following methods, or a combination thereof, which it deems appropriate: (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
value of the Securities on the bid side of the market or (c) by any combination
of the above.
Any Unitholder tendering 2,500 Units or more of a Trust for redemption may
request by written notice submitted at the time of tender from the Trustee in
lieu of a cash redemption a distribution of shares of Securities and cash in an
amount and value equal to the Redemption Price Per Unit as determined as of the
evaluation next following tender. To the extent possible, in kind distributions
("In Kind Distributions") shall be made by the Trustee through the distribution
of each of the Securities in book-entry form to the account of the Unitholder's
bank or broker-dealer at The Depository Trust Company. An In Kind Distribution
will be reduced by customary transfer and registration charges. The tendering
Unitholder will receive his pro rata number of whole shares of each of the
Securities comprising the Trust portfolio and cash from the Principal Accounts
equal to the balance of the Redemption Price to which the tendering Unitholder
is entitled. If funds in the Principal Account are insufficient to cover the
required cash distribution to the tendering Unitholder, the Trustee may sell
Securities in the manner described above.
The Trustee is irrevocably authorized in its discretion, if the Sponsor
does not elect to purchase a Unit tendered for redemption or if the Sponsor
tenders a Unit for redemption, in lieu of redeeming such Unit, to sell such Unit
in the over-the-counter market for the account of the tendering Unitholder at
prices which will return to the Unitholder an amount in cash, net after
deducting brokerage commissions, transfer taxes and other charges, equal to or
in excess of the Redemption Price for such Unit. The Trustee will pay the net
proceeds of any such sale to the Unitholder on the day he would otherwise be
entitled to receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on that Exchange is restricted or during which
(as determined by the SEC) an emergency exists as a result of which disposal or
evaluation of the Bonds is not reasonably practicable, or for such other periods
as the SEC may by order permit. The Trustee and the Sponsor are not liable to
any person or in any way for any loss or damage which may result from any such
suspension or postponement.
A Unitholder who wishes to dispose of his Units should inquire of his bank
or broker in order to determine if there is a current secondary market price in
excess of the Redemption Price.
696012.4
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<PAGE>
TRUST ADMINISTRATION
PORTFOLIO SUPERVISION. Each Trust is a unit investment trust and is not a
managed fund. Traditional methods of investment management for a managed fund
typically involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Portfolio of a Trust, however, will
not be managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its Securities from the portfolio. It is
unlikely that the Trusts will sell any of the Securities other than to satisfy
redemptions of Units, or to cease buying Additional Securities in connection
with the issuance of additional Units. However, the Trust Agreement provides
that the Sponsor may direct the disposition of Securities upon the occurrence of
certain events including: (1) default in payment of amounts due on any of the
Securities; (2) institution of certain legal proceedings; (3) default under
certain documents materially and adversely affecting future declaration or
payment of amounts due or expected; (4) determination of the Sponsor that the
tax treatment of a Trust as a grantor trust would otherwise be jeopardized; or
(5) decline in price as a direct result of serious adverse credit factors
affecting the issuer of a Security which, in the opinion of the Sponsor, would
make the retention of the Security detrimental to the Trust or the Unitholders.
Furthermore, the Trusts will likely continue to hold a Security and purchase
additional shares notwithstanding its ceasing to be included among the "buy" or
"strong buy" recommendations of at least three of the All-Star Analysts in that
industry.
In addition, the Trust Agreement provides as follows:
(a) If a default in the payment of amounts due on any Security occurs
pursuant to provision (1) above and if the Sponsor fails to give immediate
instructions to sell or hold that Security, the Trustee, within 30 days of
that failure by the Sponsor, shall sell the Security.
(b) It is the responsibility of the Sponsor to instruct the Trustee
to reject any offer made by an issuer of any of the Securities to issue
new securities in exchange and substitution for any Security pursuant to a
recapitalization or reorganization. If any exchange or substitution is
effected notwithstanding such rejection, any securities or other property
received shall be promptly sold unless the Sponsor directs that it be
retained.
(c) Any property received by the Trustee after the Initial Date of
Deposit as a distribution on any of the Securities in a form other than
cash or additional shares of the Securities, shall be promptly sold unless
the Sponsor directs that it be retained by the Trustee. The proceeds of
any disposition shall be credited to the Income or Principal Account of
the Trusts.
(d) The Sponsor is authorized to increase the size and number of
Units of the Trusts by the deposit of Additional Securities, contracts to
purchase Additional Securities or cash or a letter of credit with
instructions to purchase Additional Securities in exchange for the
corresponding number of additional Units from time to time subsequent to
the Initial Date of Deposit, provided that the original proportionate
relationship among the number of shares of each Security established on
the Initial Date of Deposit is maintained to the extent practicable. The
Sponsor may specify the minimum numbers in which Additional Securities
will be deposited or purchased. If a deposit is not sufficient to acquire
minimum amounts of each Security, Additional Securities may be acquired in
the order of the Security most under-represented immediately before the
deposit when compared to the original proportionate relationship. If
Securities of an issue originally deposited are unavailable at the time of
the subsequent deposit, the Sponsor may (i) deposit cash or a letter of
credit with instructions to purchase the Security when it becomes
available, or (ii) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a
Substitute Security.
TRUST AGREEMENT AND AMENDMENT. The Trust Agreement may be amended by the
Trustee and the Sponsor without the consent of Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the SEC
or any successor governmental agency; or
696012.4
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<PAGE>
(3) to make such other provisions in regard to matters arising thereunder as
shall not adversely affect the interests of the Unitholders.
The Trust Agreement may also be amended in any respect, or performance of
any of the provisions thereof may be waived, with the consent of investors
holding 66 2/3% of the Units then outstanding for the purpose of modifying the
rights of Unitholders; provided that no such amendment or waiver shall reduce
any Unitholder's interest in a Trust without his consent or reduce the
percentage of Units required to consent to any such amendment or waiver without
the consent of the holders of all Units. The Trust Agreement may not be amended,
without the consent of the holders of all Units in the Trust then outstanding,
to increase the number of Units issuable or to permit the acquisition of any
Securities in addition to or in substitution for those initially deposited in
such Trust, except in accordance with the provisions of the Trust Agreement. The
Trustee shall promptly notify Unitholders, in writing, of the substance of any
such amendment.
TRUST TERMINATION. The Trust Agreement provides that the Trusts shall
terminate as of the Evaluation Time on the business day preceding the
Liquidation Period or upon the earlier maturity, redemption or other
disposition, as the case may be, of the last of the Securities held in such
Trusts and in no event is it to continue beyond the Mandatory Termination Date.
If the value of a Trust shall be less than the minimum amount set forth under
"Summary of Essential Information" in Part A, the Trustee may, in its
discretion, and shall, when so directed by the Sponsor, terminate the Trust. The
Trust may also be terminated at any time with the consent of the investors
holding 100% of the Units then outstanding. The Trustee may utilize the services
of the Sponsor for the sale of all or a portion of the Securities in the Trust,
and in so doing, the Sponsor will determine the manner, timing and execution of
the sales of the underlying Securities. Any brokerage commissions received by
the Sponsor from the Trust in connection with such sales will be in accordance
with applicable law. In the event of termination, written notice thereof will be
sent by the Trustee to all Unitholders. Such notice will provide Unitholders
with the following three options by which to receive their pro rata share of the
net asset value of the Trust and requires their election of one of the three
options by notifying the Trustee prior to the commencement of the Liquidation
Period by returning a properly completed election request (to be supplied to
Unitholders at least 20 days prior to such date) (see Part A--"Summary of
Essential Information" for the date of the commencement of the Liquidation
Period):
1. A Unitholder who owns at least 2,500 units and whose interest in
the Trust would entitle him to receive at least one share of each
underlying Security will have his Units redeemed on commencement of the
Liquidation Period by distribution of the Unitholder's pro rata share of
the net asset value of the Trust on such date distributed in kind to the
extent represented by whole shares of underlying Securities and the
balance in cash within three business days next following the commencement
of the Liquidation Period. Unitholders subsequently selling such
distributed Securities will incur brokerage costs when disposing of such
Securities. Unitholders should consult their own tax adviser in this
regard;
2. to receive in cash such Unitholder's pro rata share of the net
asset value of the Trust derived from the sale by the Sponsor as the agent
of the Trustee of the underlying Securities over the Liquidation Period.
The Unitholder's pro rata share of its net assets of the Trust will be
distributed to such Unitholder within three days of the settlement of the
trade of the last Security to be sold; or
3. to invest such Unitholder's pro rata share of the net assets of
the Trust derived from the sale by the Sponsor as agent of the Trustee of
the underlying Securities over the Liquidation Period, in units of a
subsequent series of Equity Securities Trust (the "New Series"), provided
one is offered. It is expected that a special redemption and liquidation
will be made of all Units of this Trust held by a Unitholder (a "Rollover
Unitholder") who affirmatively notifies the Trustee on or prior to the
Rollover Notification Date set forth in the "Summary of Essential
Information" for the Trust in Part A. The Units of a New Series will be
purchased by the Unitholder within three business days of the settlement
of the trade for the last Security to be sold. Such purchaser will be
entitled to a reduced sales load upon the purchase of units of the New
Series. It is expected that the terms of the New Series will be
substantially the same as the terms of the Trust described in this
Prospectus, and that similar options with respect to the termination of
such New Series will be available. The
696012.4
B-16
<PAGE>
availability of this option does not constitute a solicitation of an offer
to purchase Units of a New Series or any other security. A Unitholder's
election to participate in this option will be treated as an indication of
interest only. At any time prior to the purchase by the Unitholder of
units of a New Series such Unitholder may change his investment strategy
and receive, in cash, the proceeds of the sale of the Securities. An
election of this option will not prevent the Unitholder from recognizing
taxable gain or loss (except in the case of a loss, if and to the extent
the New Series is treated as substantially identical to the Trust) as a
result of the liquidation, even though no cash will be distributed to pay
any taxes. Unitholders should consult their own tax advisers in this
regard.
Unitholders who do not make any election will be deemed to have elected to
receive the termination distribution in cash (option number 2).
The Sponsor has agreed that to the extent they effect the sales of
underlying securities for the Trustee in the case of the second and third
options over the Liquidation Period such sales will be free of brokerage
commissions. The Sponsor, on behalf of the Trustee, will sell, unless prevented
by unusual and unforeseen circumstances, such as, among other reasons, a
suspension in trading of a Security, the close of a stock exchange, outbreak of
hostilities and collapse of the economy, on each business day during the
Liquidation Period at least a number of shares of each Security which then
remains in the portfolio based on the number of shares of each issue in the
portfolio multiplied by a fraction the numerator of which is one and the
denominator of which is the number of days remaining in the Liquidation Period.
The Redemption Price per 100 Units upon the settlement of the last sale of
Securities during the Liquidation Period will be distributed to Unitholders in
redemption of such Unitholders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New
Series and the amount of other orders for Units in the New Series, the Sponsor
may purchase a large amount of securities for the New Series in a short period
of time. The Sponsor's buying of securities may tend to raise the market prices
of these securities. The actual market impact of the Sponsor's purchases,
however, is currently unpredictable because the actual amount of securities to
be purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the
Liquidation Period; depending on the number of sales required, the prices of and
demand for Securities, such sales may tend to depress the market prices and thus
reduce the proceeds of such sales. The Sponsor believes that the sale of
underlying Securities over the Liquidation Period as described above is in the
best interest of a Unitholder and may mitigate the negative market price
consequences stemming from the trading of large amounts of Securities. The
Securities may be sold in fewer than five days if, in the Sponsor's judgment,
such sales are in the best interest of Unitholders. The Sponsor, in implementing
such sales of securities on behalf of the Trustee, will seek to maximize the
sales proceeds and will act in the best interests of the Unitholders. There can
be no assurance, however, that any adverse price consequences of heavy trading
will be mitigated.
It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Securities: for highly liquid
Securities, the Sponsor will generally sell Securities on the first day of the
Liquidation Period; for less liquid Securities, on each of the first two days of
the Liquidation Period, the Sponsor will generally sell any amount of any
underlying Securities at a price no less than 1/2 of one point under the last
closing sale price of those Securities. On each of the following two days, the
price limit will increase to one point under the last closing sale price. After
four days, the Sponsor intends to sell the remaining underlying Securities,
without any price restrictions.
Section 17(a) of the 1940 Act generally prohibits principal transactions
between registered investment companies and their affiliates. Pursuant to an
exemptive order issued by the SEC, each terminating Zacks Analysts Trust can
sell underlying Securities directly to a New Series. The exemption will enable a
Trust to eliminate commission costs on these transactions. The price for those
securities transferred will be the closing sale price on the sale date on the
national securities exchange where the securities are principally traded, as
certified and confirmed by the Trustee.
696012.4
B-17
<PAGE>
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor any subsequent series of the Trust, without penalty or incurring
liability to any Unitholder. If the Sponsor so decides, the Sponsor will notify
the Trustee of that decision, and the Trustee will notify the Unitholders before
the commencement of the Liquidation Period. All Unitholders will then elect
either option 1, if eligible, or option 2.
By electing to "rollover" in the New Series, the Unitholder indicates his
interest in having his terminating distribution from the Trust invested only in
the New Series created following termination of the Trust; the Sponsor expects,
however, that a similar reinvestment program will be offered with respect to all
subsequent series of the Trust, thus giving Unitholders a yearly opportunity to
elect to roll their terminating distributions into a New Series. The
availability of the reinvestment privilege does not constitute a solicitation of
offers to purchase units of a New Series or any other security. A Unitholder's
election to participate in the reinvestment program will be treated as an
indication of interest only. The Sponsor intends to coordinate the date of
deposit of a future series so that the terminating trust will terminate
contemporaneously with the creation of a New Series. The Sponsor reserves the
right to modify, suspend or terminate the reinvestment privilege at any time.
THE SPONSOR. The Sponsor, Reich & Tang Distributors, Inc., a Delaware
corporation, is engaged in the brokerage business and is a member of the
National Association of Securities Dealers, Inc. Reich & Tang is also a
registered investment advisor. Reich & Tang maintains its principal business
offices at 600 Fifth Avenue, New York, New York 10020.The sole shareholder of
the Sponsor, Reich & Tang Asset Management, Inc. ("RTAM Inc.") is wholly owned
by NEIC Holdings, Inc. which, effective December 29, 1997, is wholly owned by
NEIC Operating Partnership, L.P. ("NEICOP"). The general partners of NEICOP are
New England Investment Companies, Inc. ("NEIC") and New England Investment
Companies, L.P. (""NEIC LP") which is owned approximately 99% by public
Unitholders and whose general partner is NEIC. NEICOP, with a principal place of
business at 399 Boyston Street, Boston, MA 02116, is a holding company of firms
engaged in the securities and investment advisory business. These affiliates in
the aggregate are investment advisors or managers to over 80 registered
investment companies. Reich & Tang is Sponsor (and Company-Sponsor, as the case
may be) for numerous series of unit investment trusts, including New York
Municipal Trust, Series 1 (and Subsequent Series), Municipal Securities Trust,
Series 1 (and Subsequent Series), 1st Discount Series (and Subsequent Series),
Multi-State Series 1 (and Subsequent Series), Mortgage Securities Trust, Series
1 (and Subsequent Series), Insured Municipal Securities Trust, Series 1 (and
Subsequent Series) and 5th Discount Series (and Subsequent Series), Equity
Securities Trust, Series 1, Signature Series, Gabelli Communications Income
Trust (and Subsequent Series) and Schwab Trusts.
NEIC is wholly owned by MetLife New England Holdings, Inc., a wholly-owned
subsidiary of Metropolitan Life Insurance Company ("MetLife"). Effective
December 30, 1997, MetLife owns approximately 47% of the limited partnership
interests of NEICOP.
MetLife is a mutual life insurance company with assets of $297.6 billion
at December 31, 1996. It is the second largest life insurance company in the
United States in terms of total assets. MetLife provides a wide range of
insurance and investment products and services to individuals and groups and is
the leader among United States life insurance companies in terms of total life
insurance in force, which exceeded $1.6 trillion at December 31, 1996 for
MetLife and its insurance affiliates. MetLife and its affiliates provide
insurance or other financial services to approximately 36 million people
worldwide.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations. The Sponsor will be under no liability to
Unitholders for taking any action, or refraining from taking any action, in good
faith pursuant to the Trust Agreement, or for errors in judgment except in cases
of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor. If at any time the Sponsor
shall resign or fail to perform any of its duties under the Trust Agreement or
becomes incapable of acting or becomes bankrupt or its affairs are taken over by
public authorities, then the Trustee may either (a) appoint a successor
696012.4
B-18
<PAGE>
Sponsor; (b) terminate the Trust Agreement and liquidate the Trusts; or (c)
continue to act as Trustee without terminating the Trust Agreement. Any
successor Sponsor appointed by the Trustee shall be satisfactory to the Trustee
and, at the time of appointment, shall have a net worth of at least $1,000,000.
THE TRUSTEE. The Trustee is The Chase Manhattan Bank with its principal
executive office located at 270 Park Avenue, New York, New York 10017 (800)
428-8890 and its unit investment trust office at 4 New York Plaza, New York, New
York 10004. The Trustee is subject to supervision by the Superintendent of Banks
of the State of New York, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System.
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment; or for any disposition of any
moneys, Securities or Units in accordance with the Trust Agreement, except in
cases of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties; provided, however, that the Trustee
shall not in any event be liable or responsible for any evaluation made by any
independent evaluation service employed by it. In addition, the Trustee shall
not be liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or the Trust which it may be required to pay under
current or future law of the United States or any other taxing authority having
jurisdiction. The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities pursuant to the
Trust Agreement.
For further information relating to the responsibilities of the Trustee
under the Trust Agreement, reference is made to the material set forth under
"Rights of Unitholders."
The Trustee may resign by executing an instrument in writing and filing
the same with the Sponsor, and mailing a copy of a notice of resignation to all
Unitholders. In such an event the Sponsor is obligated to appoint a successor
Trustee as soon as possible. In addition, if the Trustee becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public authorities,
the Sponsor may remove the Trustee and appoint a successor as provided in the
Trust Agreement. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. If upon resignation of the Trustee no successor has
been appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
the Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. Upon execution of a written acceptance of such appointment by
such successor Trustee, all the rights, powers, duties and obligations of the
original Trustee shall vest in the successor.
Any corporation into which the Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Trustee shall be a party, shall be the successor Trustee. The
Trustee must always be a banking corporation organized under the laws of the
United States or any State and have at all times an aggregate capital, surplus
and undivided profits of not less than $2,500,000.
THE PORTFOLIO CONSULTANT. The Portfolio Consultant is Zacks Investment
Research Inc., an Illinois corporation, with offices at 155 North Wacker Drive,
Chicago, Illinois 60606. Zacks is a 150 person consulting firm that summarizes,
interprets, organizes, distributes, and evaluates the research produced by the
3000 analysts employed by 230 United States brokerage firms. This price driving
flow of information has been tracked by Zacks since 1980 and is delivered, on a
daily basis, to retail brokers at the Zacks Web site, www.reswizard.com, and is
delivered, on a weekly basis, to individual investors at the Zacks Web site,
www.zacks.com.
Zacks Investment Management, a wholly owned subsidiary of Zacks, is a
registered investment advisor, with $60 million under management in hedge funds.
696012.4
B-19
<PAGE>
The Portfolio Consultant is not a Sponsor of the Trusts. The Portfolio
Consultant has been retained by the Sponsor, at its expense, to utilize its
equity expertise in selecting the Securities deposited in the Trust. The
Portfolio Consultant's only responsibility with respect to the Trust, in
addition to its role in Portfolio selection, is to monitor the Securities of the
Portfolio and make recommendations to the Sponsor regarding the disposition of
the Securities held by the Trust. The responsibility of monitoring the
Securities of the Portfolio means that if the Portfolio Consultant's views
materially change regarding the appropriateness of an investment in any Security
then held in the Trust based upon the investment objectives, guidelines, terms,
parameters, policies and restrictions supplied to the Portfolio Consultant by
the Sponsor, the Portfolio Consultant will notify the Sponsor of such change to
the extent consistent with applicable legal requirements. The Sponsor is not
obligated to adhere to the recommendations of the Portfolio Consultant regarding
the disposition of Securities. The Sponsor has the sole authority to direct the
Trust to dispose of Securities under the Trust Agreement. The Portfolio
Consultant has no other responsibilities or obligations to the Trust or the
Unitholders.
The Portfolio Consultant may resign or may be removed by the Sponsor at
any time on sixty days' prior notice. The Sponsor shall use its best efforts to
appoint a satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Portfolio
Consultant. If upon resignation of the Portfolio Consultant no successor has
accepted appointment within sixty days after notice of resignation, the Sponsor
has agreed to perform this function.
EVALUATION OF THE TRUST. The value of the Securities in a Trust portfolio
is determined in good faith by the Trustee on the basis set forth under "Public
Offering--Offering Price." The Sponsor and the Unitholders may rely on any
evaluation furnished by the Trustee and shall have no responsibility for the
accuracy thereof. Determinations by the Trustee under the Trust Agreement shall
be made in good faith upon the basis of the best information available to it,
provided, however, that the Trustee shall be under no liability to the Sponsor
or Unitholders for errors in judgment, except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. The Trustee, the Sponsor and the Unitholders may rely on
any evaluation furnished to the Trustee by an independent evaluation service and
shall have no responsibility for the accuracy thereof.
TRUST EXPENSES AND CHARGES
All or a portion of the expenses incurred in creating and establishing the
Trusts, including the cost of the initial preparation and execution of the Trust
Agreement, registration of the Trusts and the Units under the Investment Company
Act of 1940 and the Securities Act of 1933 and state registration fees, the
initial fees and expenses of the Trustee, legal expenses and other actual
out-of-pocket expenses, will be paid by the Trusts and charged to capital over
the life of the Trusts. Offering costs, including the costs of registering
securities with the Securities and Exchange Commission and the states, will be
charged to capital over the term of the initial offering period, which may be
between 30 and 90 days. All advertising and selling expenses, as well as any
organizational expenses not paid by the Trusts, will be borne by the Sponsor at
no cost to the Trusts.
The Sponsor will receive for portfolio supervisory services to the Trusts
an Annual Fee in the amount set forth under "Summary of Essential Information"
in Part A. The Sponsor's fee may exceed the actual cost of providing portfolio
supervisory services for the Trusts, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the Equity
Securities Trust in any calendar year exceed the aggregate cost to the Sponsor
of supplying such services in such year.
(See "Portfolio Supervision.")
The Trustee will receive, for its ordinary recurring services to the
Trusts, an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Trust Agreement, see "Trust
Administration" and "Rights of Unitholders."
The Trustee's fees applicable to a Trust are payable as of each Record
Date from the Income Account of the Trust to the extent funds are available and
then from the Principal Account. Both fees may be increased without approval of
the Unitholders
696012.4
B-20
<PAGE>
by amounts not exceeding proportionate increases in consumer prices for services
as measured by the United States Department of Labor's Consumer Price Index
entitled "All Services Less Rent."
The following additional charges are or may be incurred by a Trust: all
expenses (including counsel fees) of the Trustee incurred and advances made in
connection with its activities under the Trust Agreement, including the expenses
and costs of any action undertaken by the Trustee to protect the Trust and the
rights and interests of the Unitholders; fees of the Trustee for any
extraordinary services performed under the Trust Agreement; indemnification of
the Trustee for any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification of the
Sponsor for any losses, liabilities and expenses incurred in acting as sponsors
of the Trust without gross negligence, bad faith or willful misconduct on its
part; and all taxes and other governmental charges imposed upon the Securities
or any part of the Trust (no such taxes or charges are being levied, made or, to
the knowledge of the Sponsor, contemplated). The above expenses, including the
Trustee's fees, when paid by or owing to the Trustee are secured by a first lien
on the Trust to which such expenses are charged. In addition, the Trustee is
empowered to sell the Securities in order to make funds available to pay all
expenses.
Unless the Sponsor otherwise directs, the accounts of the Trust shall be
audited not less than annually by independent public accountants selected by the
Sponsor. The expenses of the audit shall be an expense of the Trust. So long as
the Sponsor maintains a secondary market, the Sponsor will bear any audit
expense which exceeds $.50 Cents per 100 Units. Unitholders covered by the audit
during the year may receive a copy of the audited financial statements upon
request.
REINVESTMENT PLAN
Income and principal distributions on Units (other than the final
distribution in connection with the termination of the Trusts) may be reinvested
by participating in the Trusts' reinvestment plan. Under the plan, the Units
acquired for participants will be either Units already held in inventory by the
Sponsor or new Units created by the Sponsor's deposit of Additional Securities
as described in "The Trusts-Organization" in this Part B. Units acquired by
reinvestment will be subject to a reduced sales charge of 1.00%. Investors
should inform their broker, dealer or financial institution when purchasing
their Units if they wish to participate in the reinvestment plan. Thereafter,
Unitholders should contact their broker, dealer or financial institution if they
wish to modify or terminate their election to participate in the reinvestment
plan. In order to enable a Unitholder to participate in the reinvestment plan
with respect to a particular distribution on their Units, such notice must be
made at least three business days prior to the Record Day for such distribution.
Each subsequent distribution of income or principal on the participant's Units
will be automatically applied by the Trustee to purchase additional Units of the
Trusts. The Sponsor reserves the right to demand, modify or terminate the
reinvestment plan at any time without prior notice. The reinvestment plan for
the Trusts may not be available in all states.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
Unitholders will be able to elect to exchange any or all of their Units of
a Trust for Units of one or more of any available series of Equity Securities
Trust, Insured Municipal Securities Trust, Municipal Securities Trust, New York
Municipal Trust or Mortgage Securities Trust (the "Exchange Trusts") subject to
a reduced sales charge as set forth in the prospectus of the Exchange Trust (the
"Exchange Privilege"). Unit owners of any registered unit investment trust for
which there is no active secondary market in the units of such trust (a
"Redemption Trust") will be able to elect to redeem such units and apply the
proceeds of the redemption to the purchase of available Units of one or more
series of an Exchange Trust (the "Conversion Trusts") at the Public Offering
Price for units of the Conversion Trust subject to a reduced sales charge as set
forth in the prospectus of the Conversion Trust (the "Conversion Offer"). Under
the Exchange Privilege, the Sponsor's repurchase price during the initial
offering period of the Units being surrendered will be based on the market value
of the Securities in a Trust portfolio or on the aggregate offer price of the
Bonds in the other Trust Portfolios; and, after the initial offering period has
been completed, will be based on the aggregate bid price of the securities in
the particular Trust portfolio. Under the Conversion
696012.4
B-21
<PAGE>
Offer, units of the Redemption Trust must be tendered to the trustee of such
trust for redemption at the redemption price determined as set forth in the
relevant Redemption Trust's prospectus. Units in an Exchange or Conversion Trust
will be sold to the Unitholder at a price based on the aggregate offer price of
the securities in the Exchange or Conversion Trust portfolio (or for units of
Equity Securities Trust, based on the market value of the underlying securities
in the trust portfolio) during the initial public offering period of the
Exchange or Conversion Trust; and after the initial public offering period has
been completed, based on the aggregate bid price of the securities in the
Exchange or Conversion Trust Portfolio if its initial offering has been
completed plus accrued interest (or for units of Equity Securities Trust, based
on the market value of the underlying securities in the trust portfolio) and a
reduced sales charge.
Except for Unitholders who wish to exercise the Exchange Privilege or
Conversion Offer within the first five months of their purchase of Units of the
Exchange or Redemption Trust, any purchaser who purchases Units under the
Exchange Privilege or Conversion Offer will pay a lower sales charge than that
which would be paid for the Units by a new investor. For Unitholders who wish to
exercise the Exchange Privilege or Conversion Offer within the first five months
of their purchase of Units of the Exchange or Redemption Trust, the sales charge
applicable to the purchase of units of an Exchange or Conversion Trust shall be
the greater of (i) the reduced sales charge or (ii) an amount which when coupled
with the sales charge paid by the Unitholder upon his original purchase of Units
of the Exchange or Redemption Trust would equal the sales charge applicable in
the direct purchase of units of an Exchange or Conversion Trust.
In order to exercise the Exchange Privilege the Sponsor must be
maintaining a secondary market in the units of the available Exchange Trust. The
Conversion Offer is limited only to unit owners of any Redemption Trust.
Exercise of the Exchange Privilege and the Conversion Offer by Unitholders is
subject to the following additional conditions (i) at the time of the
Unitholder's election to participate in the Exchange Privilege or the Conversion
Offer, there must be units of the Exchange or Conversion Trust available for
sale, either under the initial primary distribution or in the Sponsor's
secondary market, (iii) exchanges will be effected in whole units only, (iv)
Units of the Mortgage Securities Trust may only be acquired in blocks of 1,000
Units and (v) Units of the Equity Securities Trust may only be acquired in
blocks of 100 Units. Unitholders will not be permitted to advance any funds in
excess of their redemption in order to complete the exchange. Any excess
proceeds received from a Unitholder for exchange, or from units being redeemed
for conversion, will be remitted to such Unitholder.
The Sponsor reserves the right to suspend, modify or terminate the
Exchange Privilege and/or the Conversion Offer. The Sponsor will provide
Unitholders of the Trusts with 60 days' prior written notice of any termination
or material amendment to the Exchange Privilege or the Conversion Offer,
provided that, no notice need be given if (i) the only material effect of an
amendment is to reduce or eliminate the sales charge payable at the time of the
exchange, to add one or more series of the Trust eligible for the Exchange
Privilege or the Conversion Offer, to add any new unit investment trust
sponsored by Reich & Tang or a sponsor controlled by or under common control
with Reich & Tang, or to delete a series which has been terminated from
eligibility for the Exchange Privilege or the Conversion Offer, (ii) there is a
suspension of the redemption of units of an Exchange or Conversion Trust under
Section 22(e) of the 1940 Act, or (iii) an Exchange Trust temporarily delays or
ceases the sale of its units because it is unable to invest amounts effectively
in accordance with its investment objectives, policies and restrictions. During
the 60-day notice period prior to the termination or material amendment of the
Exchange Privilege described above, the Sponsor will continue to maintain a
secondary market in the units of all Exchange Trusts that could be acquired by
the affected Unitholders. Unitholders may, during this 60-day period, exercise
the Exchange Privilege in accordance with its terms then in effect.
To exercise the Exchange Privilege, a Unitholder should notify the Sponsor
of his desire to exercise his Exchange Privilege. To exercise the Conversion
Offer, a unit owner of a Redemption Trust should notify his retail broker of his
desire to redeem his Redemption Trust Units and use the proceeds from the
redemption to purchase Units of one or more of the Conversion Trusts. If Units
of a designated, outstanding series of an Exchange or Conversion Trust are at
the time available for sale and such Units may lawfully be sold in the state in
which the Unitholder is a resident, the Unitholder will be provided with a
current prospectus or prospectuses relating to each Exchange or Conversion Trust
in which he indicates an interest. He may then select the Trust
696012.4
B-22
<PAGE>
or Trusts into which he desires to invest the proceeds from his sale of Units.
The exchange transaction will operate in a manner essentially identical to a
secondary market transaction except that units may be purchased at a reduced
sales charge. The conversion transaction will be handled entirely through the
unit owner's retail broker. The retail broker must tender the units to the
trustee of the Redemption Trust for redemption and then apply the proceeds to
the redemption toward the purchase of units of a Conversion Trust at a price
based on the aggregate offer or bid side evaluation per Unit of the Conversion
Trust, depending on which price is applicable, plus accrued interest and the
applicable sales charge. The certificates must be surrendered to the broker at
the time the redemption order is placed and the broker must specify to the
Sponsor that the purchase of Conversion Trust Units is being made pursuant to
the Conversion Offer. The unit owner's broker will be entitled to retain a
portion of the sales charge.
TAX CONSEQUENCES OF THE EXCHANGE PRIVILEGE AND THE CONVERSION OFFER. A
surrender of Units pursuant to the Exchange Privilege or the Conversion Offer
will constitute a "taxable event" to the Unitholder under the Internal Revenue
Code. The Unitholder will realize a tax gain or loss that will be of a long- or
short-term capital or ordinary income nature depending on the length of time the
units have been held and other factors. (See "Tax Status".) A Unitholder's tax
basis in the Units acquired pursuant to the Exchange Privilege or Conversion
Offer will be equal to the purchase price of such Units. Investors should
consult their own tax advisors as to the tax consequences to them of exchanging
or redeeming units and participating in the Exchange Privilege or Conversion
Offer.
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to federal tax law have been passed upon by Battle Fowler LLP,
75 East 55th Street, New York, New York 10022 as counsel for the Sponsor.
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have acted
as counsel for the Trustee.
INDEPENDENT ACCOUNTANTS. The Statements of Financial Condition, including
the Portfolios, is included herein in reliance upon the report of Price
Waterhouse LLP, independent accountants, and upon the authority of said firm as
experts in accounting and auditing.
PERFORMANCE INFORMATION. Total returns, average annualized returns and/or
cumulative returns for various periods of the Trusts may be included from time
to time in advertisements, sales literature and reports to current or
prospective investors. Total return shows changes in Unit price during the
period plus reinvestment of dividends and capital gains, divided by the maximum
public offering price as of the date of calculation. Average annualized returns
show the average return for stated periods of longer than a year. Advertising
and sales literature for the Trusts may also include excerpts from the Sponsor's
research reports on one or more of the stocks in the Trusts, including a brief
description of its businesses and market sector, and the basis on which the
stock was selected. Figures for actual portfolios will reflect all applicable
expenses and, unless otherwise stated, the maximum sales charge. No provision is
made for any income taxes payable. Similar figures may be given for this Trust.
Trust performance may be compared to performance on a total return basis of the
Dow Jones Industrial Average, the S&P 500 Composite Price Stock Index, the
Russell 2000(R) Index or performance data from Lipper Analytical Services, Inc.
and Morningstar Publications, Inc. or from publications such as Money, The New
York Times, U.S. News and World Report, Business Week, Forbes or Fortune. As
with other performance data, performance comparisons should not be considered
representative of a Trust's relative performance for any future period.
696012.4
B-23
<PAGE>
<TABLE>
<S> <C>
No person is authorized to give any information or to ----------------------------------------------------
make any representations not contained in Parts A and B of EQUITY SECURITIES TRUST
this Prospectus; and any information or representation not ----------------------------------------------------
contained herein must not be relied upon as having been SIGNATURE SERIES, ZACKS
authorized by the Trust, the Trustee or the Sponsor. The ANALYSTS TRUST I
Trust is registered as a unit investment trust under the ----------------------------------------------------
Investment Company Act of 1940. Such registration does not
imply that the Trust or any of its Units have been guaranteed, EQUITY SECURITIES TRUST
sponsored, recommended or approved by the United States or SERIES 18, SIGNATURE SERIES,
any state or any agency or officer thereof. ZACKS ANALYSTS TRUST I
------------------ PROSPECTUS
This Prospectus does not constitute an offer to sell, or a DATED: APRIL ___, 1998
solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such
state. SPONSOR:
Table of Contents REICH & TANG DISTRIBUTORS, INC.
600 Fifth Avenue
Title Page New York, New York 10020
212-830-5400
PART A
Summary of Essential Information....................... A-2
Statement of Financial Condition....................... A-7 PORTFOLIO CONSULTANT:
Portfolio.............................................. A-8
Report of Independent Accountants...................... A-10 ZACKS INVESTMENT RESEARCH INC.
155 North Wacker Drive
PART B Chicago, Illinois 60606
The Trusts.............................................. B-1
Risk Considerations..................................... B-4
Public Offering......................................... B-7 TRUSTEE:
Rights of Unitholders................................... B-9
Tax Status.............................................. B-11 THE CHASE MANHATTAN BANK
Liquidity............................................... B-13 4 New York Plaza
Trust Administration.................................... B-15 New York, New York 10004
Trust Expenses and Charges.............................. B-21
Reinvestment Plan....................................... B-22
Exchange Privilege and Conversion Offer................. B-22
Other Matters........................................... B-24
</TABLE>
Parts A and B of this Prospectus do not contain all of the information set
forth in the registration statement and exhibits relating thereto, filed with
the Securities and Exchange Commission, Washington, D.C., under the Securities
Act of 1933, and the Investment Company Act of 1940, and to which reference is
hereby made.
696012.4
<PAGE>
PART II -- ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM A -- BONDING ARRANGEMENTS
The employees of Reich & Tang Distributors, Inc. are covered under Brokers'
Blanket Policy, Standard Form 14, in the amount of $11,000,000 (plus
$196,000,000 excess coverage under Brokers' Blanket Policies, Standard Form 14
+and Form B Consolidated). This policy has an aggregate annual coverage of $15
million.
ITEM B -- CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet (incorporated by reference to the
Cross-Reference Sheet to the Registration Statement of Equity
Securities Trust, Series 12, 1997 Triple Strategy Trust II).
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons:
Battle Fowler LLP (included in Exhibit 3.1)
Price Waterhouse LLP
Consent of Portfolio Consultant
The following exhibits:
*99.1.1 -- Reference Trust Agreement including certain amendments
to the Trust Indenture and Agreement referred to under Exhibit
99.1.1.1 below.
99.1.1.1 -- Form of Trust Indenture and Agreement (filed as
Exhibit 99.1.1.1 to Amendment No. 1 to Form S-6 Registration
Statement No. 33-62627 of Equity Securities Trust, Series 6,
Signature Series, Gabelli Entertainment and Media Trust on
November 16, 1995 and incorporate herein by reference).
99.1.3.5 -- Certificate of Incorporation of Reich & Tang
Distributors, Inc. (filed as Exhibit 99.1.3.5 to Form S-6
Registration Statement No. 333-44301 on January 15, 1998 and
incorporated herein by reference).
99.1.3.6 -- By-Laws of Reich & Tang Distributors, Inc.(filed as Exhibit
99.1.3.6 to Form S-6 Registration Statement No. 333-44301 on
January 15, 1998 and incorporated herein by reference).
99.1.4 -- Form of Agreement Among Underwriters (filed as Exhibit
99.1.4 to Amendment No. 1 to Form S-6 Registration Statement
No. 33-62627 of Equity Securities Trust, Series 6, Signature
Series, Gabelli Entertainment and Media Trust on November 16,
1995 and incorporated herein by reference).
99.2.1 -- Form of Certificate (filed as Exhibit 99.2.1 to Amendment
No. 1 to Form S-6 Registration Statement No. 33- 62627 of
Equity Securities Trust, Series 6, Signature Series, Gabelli
Entertainment and Media Trust on November 16, 1995 and
incorporated herein by reference).
*99.3.1 -- Opinion of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and to the use of their name under the headings
"Tax Status" and "Legal Opinions" in the Prospectus, and to
the filing of their opinion regarding tax status of the Trust.
99.6.0 -- Power of Attorney of Reich & Tang Distributors, Inc., the
Depositor, by its officers and a majority of its Directors
(filed as Exhibit 99.6.0 to Form S-6 Registration Statement
No. 333-44301 on January 15, 1998 and incorporated herein by
reference).
*99.27 -- Financial Data Schedule (for EDGAR filing only).
- ---------------------
* To be filed by amendment.
II-1
696008.1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Equity Securities Trust, Series 18, Signature Series, Zacks Analysts Trust I,
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of New York and State of New
York on the 26th day of March, 1998.
EQUITY SECURITIES TRUST, SERIES 18,
SIGNATURE SERIES,
ZACKS ANALYSTS TRUST I
(Registrant)
REICH & TANG DISTRIBUTORS, INC.
(Depositor)
By /s/ PETER J. DEMARCO
--------------------
Peter J. DeMarco
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons,
who constitute the principal officers and a majority of the directors of Reich &
Tang Distributors, Inc., the Depositor, in the capacities and on the dates
indicated.
Name Title Date
---- ----- ----
RICHARD E. SMITH, III President and Director
PETER S. VOSS Director
G. NEAL RYLAND Director
STEVEN W. DUFF Director
ROBERT F. HOERLE Managing Director March 26, 1998
PETER J. DEMARCO Executive Vice President
RICHARD I. WEINER Vice President
BERNADETTE N. FINN Vice President
LORRAINE C. HYSLER Secretary
RICHARD DE SANCTIS Treasurer
EDWARD N. WADSWORTH Executive Officer
By /s/ PETER J. DEMARCO
----------------
Peter J. DeMarco
as Executive Vice President
and Attorney-In-Fact*
- -----------------------------------
* Executed copies of Powers of Attorney were filed as Exhibit 99.6.0 to
Form S-6 Registration Statement No. 333-44301 on January 15, 1998.
II-2
696008.1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
registration statement on Form S-6 (the "Registration Statement") of our report
dated April ___, 1998, relating to the Statement of Financial Condition,
including the Portfolio, of Equity Securities Trust, Series 18, Signature
Series, Zacks Analysts Trust I which appears in such Prospectus. We also consent
to the reference to us under the heading "Independent Accountants" in such
Prospectus.
PRICE WATERHOUSE LLP
160 Federal Street
Boston, MA 02110
April ___, 1998
II-3
696008.1
<PAGE>
CONSENT OF PORTFOLIO CONSULTANT
The Sponsor, Trustee and Certificateholders
Equity Securities Trust, Series 18, Signature Series,
Zacks Analysts Trust III
We hereby consent to the use of the name "Zacks" included herein and to the
reference to our Firm in the Prospectus.
ZACKS INVESTMENT RESEARCH INC.
Chicago, Illinois
April ___, 1998
II-4
696008.1
