FIFTH AUTOMATIC COMMON EXCHANGE SECURITY TRUST, N-2/A, 1998-05-14

FIFTH AUTOMATIC COMMON EXCHANGE SECURITY TRUST
N-2/A, 1998-05-14

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1998

SECURITIES ACT FILE NO. 333-50597

INVESTMENT COMPANY ACT FILE NO. 811-08761

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

PRE-EFFECTIVE AMENDMENT NO. 1 /X/

POST-EFFECTIVE AMENDMENT NO. / /
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

AMENDMENT NO. 1 /X/

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

ESTEE LAUDER AUTOMATIC
COMMON EXCHANGE SECURITY TRUST

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

C/O GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 902-1000

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KENNETH L. JOSSELYN, ESQ.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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Copies to:

<TABLE>
<S> <C>
ROBERT E. BUCKHOLZ, JR., ESQ. JEAN E. HANSON, ESQ.
SULLIVAN & CROMWELL FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
125 BROAD STREET ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10004
</TABLE>

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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.

If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. / /

/ / This form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is 333- .
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

<TABLE>
<CAPTION>
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING REGISTERED OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C>
Trust Automatic Common Exchange Securities............................. $10,000,000 $2,950(2)
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee.

(2) Previously paid.

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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.
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<PAGE>

ESTEE LAUDER AUTOMATIC COMMON EXCHANGE SECURITY TRUST
CROSS-REFERENCE SHEET
(PURSUANT TO RULE 404(C) UNDER THE SECURITIES ACT OF 1933)
PART A & B OF PROSPECTUS*

<TABLE>
<CAPTION>
ITEM
NUMBER CAPTION LOCATION IN PROSPECTUS
- ------ -------------------------------------------------- --------------------------------------------------
<S> <C> <C>
1. Outside Front Cover............................... Front Cover Page
2. Inside Front and Outside Back Cover Page.......... Front Cover Page; Inside Front Cover Page; Outside
Back Cover Page
3. Fee Table and Synopsis............................ Prospectus Summary; Fee Table
4. Financial Highlights.............................. Not Applicable
5. Plan of Distribution.............................. Front Cover Page; Prospectus Summary; Underwriting
6. Selling Shareholders.............................. Not Applicable
7. Use of Proceeds................................... Use of Proceeds; Investment Objective and Policies
8. General Description of the Registrant............. Front Cover Page; Prospectus Summary;
The Trust; Investment Objective and Policies;
Risk Factors
9. Management........................................ Management and Administration of the Trust
10. Capital Stock, Long-Term Debt and Other
Securities...................................... Investment Objective and Policies; Description of
the Securities; Certain Federal Income Tax
Considerations
11. Defaults and Arrears on Senior Securities......... Not Applicable
12. Legal Proceedings................................. Not Applicable
13. Table of Contents of the Statement of Additional
Information..................................... Not Applicable
14. Cover Page........................................ Not Applicable
15. Table of Contents................................. Not Applicable
16. General Information and History................... The Trust
17. Investment Objective and Policies................. Investment Objective and Policies
18. Management........................................ Management and Administration of the Trust
19. Control Persons and Principal Holders of
Securities...................................... Management and Administration of the Trust
20. Investment Advisory and Other Services............ Management and Administration of the Trust
21. Brokerage Allocation and Other Practices.......... Investment Objective and Policies
22. Tax Status........................................ Certain Federal Income Tax Considerations
23. Financial Statements.............................. Statement of Assets and Liabilities
</TABLE>
- ------------------
* Pursuant to the General Instructions to Form N-2, all information required to
be set forth in Part B: Statement of Additional Information has been included
in Part A: The Prospectus. Information required to be included in Part C is
set forth under the appropriate item so numbered in Part C of this
Registration Statement.
i

<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MAY 14, 1998

Shares
Estee Lauder
Automatic Common Exchange Security Trust
$ Trust Automatic Common Exchange Securities (TRACES(TM)/(sm))

(Subject to exchange into Shares of Class A Common Stock of The Estee Lauder
Companies Inc.)

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

Each of the $ Trust Automatic Common Exchange Securities (the
'Securities') of Estee Lauder Automatic Common Exchange Security Trust (the
'Trust') represents the right to receive an annual distribution of $ ,
and will be exchanged for between 0. shares and one share of Class A Common
Stock, par value $.01 per share (the 'Class A Common Stock'), of The Estee
Lauder Companies Inc. (the 'Company') on the Exchange Date described below.

The Trust is a newly organized, finite-term Trust established to acquire and
hold a fixed portfolio of stripped U.S. Treasury securities maturing on a
quarterly basis through May , 2001, and forward purchase contracts (the
'Contracts') with one or more existing shareholders of the Company (the
'Sellers') relating to the Class A Common Stock. The Trust's investment
objective is to provide each registered holder of Securities (each, a 'Holder')
with a quarterly distribution of $ per Security and, on the Exchange Date,
a number of shares of Class A Common Stock per Security equal to the Exchange
Rate.

The Exchange Rate will vary in accordance with a formula, depending on the
Average Market Price (as defined herein) of the Class A Common Stock on the
Exchange Date:

-- if the Average Market Price is less than the Appreciation Threshold
Price but equal to or greater than the Initial Price, the Exchange
Rate will be the number of shares of Class A Common Stock having a
value (determined at the Average Market Price) equal to the Initial
Price;

-- if the Average Market Price is equal to or greater than the
Appreciation Threshold Price, the Exchange Rate will be 0. shares of
Class A Common Stock; and

-- if the Average Market Price is less than the Initial Price, the
Exchange Rate will be one share of Class A Common Stock.

For purposes of this formula, the Appreciation Threshold Price is $
and the Initial Price is $ . The formula will be subject to adjustment
in certain events. All Holders otherwise entitled to receive fractional shares
in respect of their aggregate holdings of Securities will receive cash in lieu
thereof.

In lieu of delivering Class A Common Stock, certain of the Contracts (the
'Extendible Contracts'), covering approximately % of the shares of Class A
Common Stock subject to all Contracts, entitle the Sellers thereunder to elect
to pay cash upon settlement of such Contracts in an amount equal to the then
Average Market Price of the number of shares of Class A Common Stock determined
pursuant to the above formula (the 'Cash Settlement Alternative'). Holders of
Securities will receive cash instead of Class A Common Stock upon settlement of
the Contracts to the extent such Sellers elect the Cash Settlement Alternative,
which may constitute up to % of the total consideration to be received by
Holders on the Exchange Date.

The Exchange Date under each Contract will be May , 2001, except that the
Extendible Contracts permit the Sellers thereunder (i) to elect to extend the
Exchange Date under such Contracts to August , 2001, provided such Sellers
deliver to the Trust additional U.S. Treasury securities sufficient to fund the
Trust's quarterly distribution on such date, and (ii) following such an
extension, to accelerate the Exchange Date under such contracts, to a date not
earlier than May , 2001, in connection with the consummation of a Rollover
Offering (as defined herein). If a Seller were to exercise its right to extend
the Exchange Date under an Extendible Contract, the Trustee will distribute on
May , 2001 those assets that are delivered to it under the Contracts on that
date, and it will distribute the assets that are delivered to it on the extended
Exchange Date promptly after it receives those assets. Following such a
distribution, the value of the Securities will be reduced, and there may be a
reduction in the liquidity of the Securities, during the period from May ,

2001 until the final Exchange Date, which will occur not later than August ,
2001. Holders of Securities will be entitled, notwithstanding any such extension
or acceleration, to receive the quarterly distribution payable on May , 2001,
and to receive an accrued distribution amount through the final Exchange Date,
if later.

Holders of Securities will receive distributions at a higher annual rate
than the current annual dividends paid on the Class A Common Stock. There is no
assurance, however, that the yield on the Securities will be higher than the
dividend yield on the Class A Common Stock over the term of the Trust. In
addition, the opportunity for equity appreciation afforded by an investment in
the Securities is less than that afforded by an investment in the Class A Common
Stock because Holders of Securities will realize no equity appreciation if, on
the Exchange Date, the Average Market Price of the Class A Common Stock is at or
below the Appreciation Threshold Price, and less than all of the appreciation if
at that time the Average Market Price is above the Appreciation Threshold Price.
Holders of Securities will realize the entire decline in equity value if the
Average Market Price is less than the price to public per Security shown below.

The Company is not affiliated with the Trust.

Application will be made to list the Securities on the New York Stock
Exchange under the symbol 'ECT'. Prior to this offering there has been no public
market for the Securities. The last reported sale price of the Class A Common
Stock on the New York Stock Exchange on May , 1998, was $ per share.

See 'Risk Factors' on Page 20 of this Prospectus for a Discussion of Certain
Factors Relevant to an Investment in the Securities.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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

<TABLE>
<CAPTION>
Price to Public Sales Load(1) Proceeds to the Trust(2)
--------------- ------------- ------------------------
<S> <C> <C> <C>
Per Security.................. $ $ (4) $
Total(3)...................... $ $ (4) $
</TABLE>

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(1) The Company and the Sellers have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933. See 'Underwriting'.
(2) Expenses of the offering, which are payable by the Sellers, are estimated
to be $ .

(3) The Trust has granted to the Underwriters an option for 30 days to purchase
up to an additional Securities at the price to the public per
Security, solely to cover over-allotments. If the option is exercised in
full, the total Price to Public, Sales Load and Proceeds to the Trust will
be $ , $ and $ , respectively. See
'Underwriting'.
(4) In light of the fact that the proceeds of the sale of the Securities will be
used in part by the Trust to purchase the Contracts from the Sellers, the
Underwriting Agreement provides that the Sellers will pay to the
Underwriters as compensation ('Underwriters' Compensation') $ per
Security. See 'Underwriting'.

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

The Securities are offered severally by the Underwriters, as specified
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that the Securities will be
ready for delivery in book entry form only through the facilities of The
Depository Trust Company, on or about May , 1998, against payment therefor in
immediately available funds.

Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.

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

The date of this Prospectus is May , 1998.

<PAGE>

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

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

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

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

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

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

<PAGE>

PROSPECTUS SUMMARY

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

THE TRUST

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

Investment Objective and Policies. The Trust will initially acquire and
hold a fixed portfolio of stripped U.S. Treasury securities maturing on a
quarterly basis through May , 2001, and the Contracts with the Sellers
obligating each Seller, on the Exchange Date, to deliver to the Trust a number
of shares of Class A Common Stock equal to the product of the Exchange Rate
times the initial number of shares subject to such Seller's Contract (or to the
extent a Seller that has the Cash Settlement Alternative elects to deliver cash
in lieu of shares of Class A Common Stock, an amount of cash equal to the
Average Market Price thereof). The Trust's investment objective is to provide
the holders of Securities ('Holders') with a quarterly distribution of $. per
Security (which amount equals the pro rata portion of the fixed quarterly cash
distributions from the proceeds of the maturing U.S. Treasury securities
acquired by the Trust with the proceeds of the Securities) and, on the Exchange
Date, a number of shares of Class A Common Stock per Security equal to the
Exchange Rate (or to the extent a Seller that has the Cash Settlement
Alternative elects to deliver cash in lieu of shares of Class A Common Stock, an
amount in cash equal to the Average Market Price thereof).

The Exchange Date under each Contract will be May , 2001, except that the
Extendible Contracts, which cover approximately % of the shares of Class A
Common Stock subject to all Contracts, permit the Sellers thereunder (i) to
elect to extend the Exchange Date under such Contracts to August , 2001
(subject to subsequent acceleration at the election of the Sellers in connection
with a Rollover Offering), provided such Sellers deliver to the Trust additional
U.S. Treasury Securities sufficient to fund the Trust's quarterly distribution
on such date, and (ii) following such an extension, to accelerate the Exchange
Date, to a date not earlier than May , 2001, in connection with the
consummation of a Rollover Offering. The Trustee will distribute on May , 2001
those assets that are delivered to it under the Contracts on that date under the
Contracts that are not Extendible Contracts and under the Extendible Contracts
that are not extended. To the extent any Sellers who are parties to Extendible
Contracts exercise their right to extend the Exchange Date under such Contracts,
the Trustee will distribute the assets that are delivered to it under those
Contracts on the extended Exchange Date promptly after it receives those assets.
Following such a distribution, the value of the Securities will be reduced, and
there may be a reduction in the liquidity of the Securities, during the period
from May , 2001 until the final Exchange Date, which will occur not later than
August , 2001. The Holders of record on the regular quarterly record date will
receive the full scheduled quarterly distribution on May , 2001. If the
Exchange Date under any Contracts occurs after May , 2001, the Holders of
record on such Exchange Date will receive a distribution, in an amount equal to
a portion of the regular quarterly distribution on the Securities proportionate
to the number of shares covered by the Extendible Contracts that are extended,

accruing to the Exchange Date but not thereafter.

The Exchange Rate will vary in accordance with a formula, depending on the
Average Market Price (as defined herein) of the Class A Common Stock on the
Exchange Date:

o if the Average Market Price is less than the Appreciation Threshold Price
but equal to or greater than the Initial Price, the Exchange Rate will be
the number of shares of Class A Common Stock having a value (determined
at the Average Market Price) equal to the Initial Price;

<PAGE>

o if the Average Market Price is equal to or greater than the Appreciation
Threshold Price, the Exchange Rate will be 0. shares of Class A Common
Stock; and

o if the Average Market Price is less than the Initial Price, the Exchange
Rate will be one share of Class A Common Stock.

For purposes of this formula, the Appreciation Threshold Price is $ and the
Initial Price is $ . The formula will be subject to adjustment in certain
events.

The Exchange Rate formula provides the Trust with the potential for a
portion of any capital appreciation above the Appreciation Threshold Price on
the Class A Common Stock, but no protection from depreciation of the Class A
Common Stock.

Holders otherwise entitled to receive fractional shares in respect of their
aggregate holdings of Securities will receive cash in lieu thereof. See
'Investment Objective and Policies--Trust Termination'.

Structure. The purchase price under the Contracts is equal to $ per share
of Class A Common Stock initially subject thereto and $ ( shares of
Class A Common Stock) in the aggregate (assuming no exercise of the
Underwriters' over-allotment option) and is payable to the Sellers by the Trust
at the closing of the offering of the Securities, out of the proceeds of such
offering. The obligations of the Sellers under the Contracts will be secured by
a pledge of the Class A Common Stock (or at the election of the Sellers, by

substitute collateral consisting of short-term, direct obligations of the U.S.
Government). See 'Investment Objective and Policies--The Contracts--Collateral
Arrangements; Acceleration'.

The balance of the offering proceeds will be used to purchase a fixed
portfolio comprised of stripped U.S. Treasury securities with face amounts and
maturities corresponding to the quarterly distributions payable with respect to
the Securities and the payment dates thereof through May , 2001. The Sellers
who are parties to Extendible Contracts may extend the Exchange Date under those
Contracts to August , 2001 (subject to subsequent acceleration at the election
of the Sellers in connection with a Rollover Offering), provided such Sellers
deliver to Trust, on or prior to May , 2001, additional U.S. Treasury
securities sufficent to fund the Trust's quarterly distribution on August ,
2001. If any such Sellers later accelerate the Exchange Date under any such
Contracts, such Sellers will be entitled, under the Extendible Contracts, to
repurchase such additional U.S. Treasury securities from the Trust on or prior
to the Exchange Date, as accelerated, at a price equal to the aggregate unpaid
distributions on the Securities accruing to such Exchange Date.

THE OFFERING

The Trust is offering Securities to the public at a purchase
price of $ per Security (which is equal to the last reported sale price of
the Class A Common Stock on the date of this Prospectus) through Goldman, Sachs
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc. (the 'Underwriters'). In addition, the Underwriters have been
granted options to purchase up to additional Securities solely for the
purpose of covering over-allotments. See 'Underwriting'.

THE SECURITIES

General. The Securities are designed to provide investors with a higher
distribution per Security than the dividend currently paid per share on the
Class A Common Stock. The annual distribution per Security is $ .
Based on the current annual dividend rate of $.34 per share of Class A Common
Stock, the annual per share distribution per Security is $ greater
than the current annual per share dividend rate on the Class A Common Stock.
Future declarations of dividends on the Class A Common Stock by the Company and
the amount of such dividends are discretionary with its Board of Directors and
subject to legal and other factors. Such further declarations will necessarily
depend on the Company's future earnings, financial condition, capital
requirements and other factors. Quarterly distributions on the Securities
through May , 2001 will consist solely of the cash received from the U.S.
Treasury securities acquired by the Trust with the proceeds of the Securities.
The Trust will not be

<PAGE>

entitled to any dividends that may be declared on the Class A Common Stock. A
portion of each year's distributions through May , 2001 on the Securities will
constitute a return of capital for U.S. federal income tax purposes. See
'Investment Objectives and Policies --Tax Treatment of Distributions'.

Holders will receive distributions at a higher annual rate than the current
annual dividends paid on the Class A Common Stock. There is no assurance,
however, that the yield on the Securities will be higher than the dividend yield
on the Class A Common Stock over the term of the Trust. In addition, the
opportunity for equity appreciation afforded by an investment in the Securities
is less than that afforded by an investment in the Class A Common Stock because
Holders will realize no equity appreciation if, on the Exchange Date, the
Average Market Price of the Class A Common Stock is at or below the Appreciation
Threshold Price (which represents an appreciation of % of the Initial
Price). Moreover, because a Holder will only receive 0. shares of Class A
Common Stock per Security (or, in the case of a cash settlement, the Average
Market Price thereof) if the Average Market Price exceeds the Appreciation
Threshold Price, Holders will only be entitled to receive upon exchange % of any
appreciation of the value of the Class A Common Stock in excess of the
Appreciation Threshold Price. Holders of Securities will realize the entire
decline in equity value if the Average Market Price on the Exchange Date is less
than the price to public per Security shown on the cover page hereof.

Distributions. Holders are entitled to receive distributions at the rate
per Security of $ per annum or $ per quarter, payable quarterly
on each February , May , August and November or, if any such date is
not a business day, on the next succeeding business day, to Holders of record
as of February , May , August and November , respectively. The first
distribution will be payable on August , 1998 to Holders of record as of
August , 1998. See 'Investment Objective and Policies--Tax Treatment of
Distributions'.

Mandatory Exchange. On the Exchange Date, each outstanding Security will
be exchanged automatically for between 0. shares and one share of Class A
Common Stock, subject to adjustment in the event of certain dividends or
distributions, subdivisions, splits, combinations, issuances of certain rights
or warrants or distributions of certain assets with respect to the Class A
Common Stock. In lieu of delivering Class A Common Stock, the Extendible
Contracts, which cover approximately % of the shares of Class A Common Stock
subject to all Contracts, entitle the Sellers thereunder to elect to pay cash
upon settlement of such Contracts in an amount equal to the then Average Market
Price of the number of shares of Class A Common Stock determined pursuant to the
above formula (the 'Cash Settlement Alternative'). Holders of Securities will
receive cash instead of Class A Common Stock on the Exchange Date to the extent
such Sellers elect the Cash Settlement Alternative, which may constitute up to

% of the total consideration to be received by Holders on the Exchange Date.

The 'Average Market Price' per share of Class A Common Stock on any date
means the average Closing Price per share of Class A Common Stock for the 20
Trading Days immediately prior to, but not including, such date, provided that
for purposes of determining the payment required upon cash settlement of a
Contract in connection with a Rollover Offering, 'Average Market Price' means
the Closing Price per share of Class A Common Stock on the Trading Day
immediately preceding the date that the Rollover Offering is priced (the
'Pricing Date') or, if the Rollover Offering is priced after 4:00 P.M., New York
City time, on the Pricing Date, the Closing Price per share on the Pricing Date.

'Rollover Offering' means a reoffering or refinancing of up to % of the
Securities effected not earlier than May , 2001 by means of a completed public
offering or offerings (which may include one or more exchange offers) by or on
behalf of the Sellers who are parties to Extendible Contracts. The Trustees will
notify the Holders of (i) any election of the Cash Settlement Alternative, and
whether it is intended to be in connection with a Rollover Offering, not less
than 30 nor more than 90 days prior to the Exchange Date, and (ii) any
acceleration of the Exchange Date in connection with a Rollover Offering, not
later than the Exchange Date.

In addition, in the event of a merger of the Company with another entity,
or the liquidation of the Company, or certain related events, Holders would
receive consideration in the form of cash or Marketable Securities (as defined
below under the caption 'Investment Objective and Policies--The
Contracts--Dilution Adjustments') rather than shares of Class A Common Stock.
Further, the

<PAGE>

occurrence of certain defaults by the Sellers under the Contracts or the
collateral arrangements would cause the acceleration of the Contracts and the
exchange of each Security for an amount of shares of Class A Common Stock (or
Marketable Securities), cash, or a combination thereof, in respect of the shares
of Class A Common Stock and the U.S. Treasury Securities. See 'Investment
Objective and Policies--The Contracts--Collateral Arrangements; Acceleration';
'--The U.S. Treasury Securities' and '--Trust Termination'.

Voting Rights. Holders will have the right to vote on matters affecting
the Trust, as described below under the caption 'Description of the Securities',
but will have no voting rights with respect to the Class A Common Stock prior to

receipt of shares of Class A Common Stock by the Holders as a result of the
exchange of the Securities for the Class A Common Stock on the Exchange Date or
upon earlier settlement. See 'Investment Objective and Policies--The Company'
and 'Description of the Securities'.

THE COMPANY

The Estee Lauder Companies Inc. is one of the world's leading manufacturers
and marketers of quality skin care, makeup, fragrance and hair care products.
The Company's products are sold in over 100 countries and territories under the
following well-recognized brand names: Estee Lauder, Clinique, Aramis,
Prescriptives, Origins, MoAoC, Bobbi Brown essentials, jane and Aveda. The
Company is also the global licensee for fragrances and cosmetics for the Tommy
Hilfiger, Donna Karan New York and DKNY brands.

Reference is made to the accompanying prospectus of the Company (pages A-1
through A- hereto) which describes the Company and the shares of Class A Common
Stock of the Company deliverable to the Holders upon the exchange of the
Securities on the Exchange Date. The Company is not affiliated with the Trust
and will not receive any of the proceeds from the sale of the Securities. The
Company prospectus relates to an aggregate of shares of Class A
Common Stock (plus an additional shares that may be delivered upon
exercise of the Underwriters' over-allotment option).

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

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

MANAGEMENT AND ADMINISTRATION OF THE TRUST

The Trust will be internally managed and will not have an investment

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

<PAGE>

LIFE OF THE TRUST

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

RISK FACTORS

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

Holders will receive distributions at a higher annual rate than the current
annual dividends paid on the Class A Common Stock. There is no assurance,
however, that the yield on the Securities will be higher than the dividend yield
on the Class A Common Stock over the term of the Trust. In addition, the
opportunity for equity appreciation afforded by an investment in the Securities
is less than that afforded by an investment in the Class A Common Stock because
Holders will realize no equity appreciation if, on the Exchange Date, the
Average Market Price of the Class A Common Stock is at or below the Appreciation
Threshold Price (which represents an appreciation of % of the Initial Price).
Moreover, because a Holder will only receive 0. shares of Class A Common
Stock per Security (or to the extent that a Seller that has the Cash Settlement
Alternative elects to deliver cash in lieu of shares of Class A Common Stock,
the Average Market Price thereof) if the Average Market Price exceeds the
Appreciation Threshold Price, Holders will only be entitled to receive upon
exchange % of any appreciation of the value of the Class A Common Stock in

excess of the Appreciation Threshold Price. Holders of Securities will realize
the entire decline in equity value if the Average Market Price on the Exchange
Date is less than the price to public per Security shown on the cover page
hereof.

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

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

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

<PAGE>

LISTING

Application will be made to list the Securities on the New York Stock
Exchange (the 'NYSE') under the symbol 'ECT'.

FEES AND EXPENSES

In light of the fact that the proceeds of the sale of the Securities will
be used in part by the Trust to purchase the Contracts from the Sellers, the
Underwriting Agreement provides that the Sellers will pay Underwriters'
Compensation to the Underwriters of $ . per Security. See 'Underwriting'.
Estimated organization costs of the Trust in the amount of $10,000 and estimated
costs of the Trust in connection with the initial registration and public
offering of the Securities in the amount of $ will be paid by the
Sellers. Each of the Administrator, the Custodian and the Paying Agent, and each
Trustee will be paid by the Sellers at the closing of the offering of the
Securities a one-time, up-front amount in respect of its ongoing fees and, in

the case of the Administrator, anticipated expenses of the Trust (estimated to
be $ in the aggregate), over the term of the Trust. The Sellers have
agreed to pay any on-going expenses of the Trust in excess of these estimated
amounts and to reimburse the Trust for any amounts it may be required to pay as
indemnification to any Trustee, the Administrator, the Custodian or the Paying
Agent. See 'Management and Administration of the Trust--Estimated Expenses'.

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

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

ANNUAL EXPENSES
Management Fees.................................................... 0%
Other Expenses..................................................... %
---
Total Annual Expenses......................................... %
---
---
</TABLE>

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

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

<PAGE>

THE TRUST

The Trust is a newly organized New York trust and is registered as a
closed-end investment company under the Investment Company Act. The Trust was
formed on April 21, 1998 pursuant to a trust agreement dated as of such date and
amended and restated as of May , 1998. The address of the Trust is 85 Broad
Street, New York, New York 10004 (telephone no. (212) 902-1000).

USE OF PROCEEDS

The net proceeds of this offering will be used immediately upon the closing
of this offering (a) to purchase a fixed portfolio comprised of stripped U.S.
Treasury securities with face amounts and maturities corresponding to the
quarterly distributions payable with respect to the Securities and the payment
dates thereof through May , 2001, and (b) to pay the purchase price under the
Contracts to the Sellers.

INVESTMENT OBJECTIVE AND POLICIES

GENERAL

With the proceeds of the Securities, the Trust will acquire and hold a
fixed portfolio of stripped U.S. Treasury securities maturing on a quarterly
basis through May , 2001 and the Contracts relating to the Class A Common
Stock of the Company. The Trust's investment objective is to provide each Holder
with a quarterly cash distribution of $ . per Security (which amount equals
the pro rata portion of the fixed quarterly distributions from the proceeds of
the maturing U.S. Treasury securities held by the Trust) and, on the Exchange
Date, a number of shares of Class A Common Stock per Security equal to the
Exchange Rate (or to the extent a Seller that has the Cash Settlement
Alternative elects to deliver cash in lieu of shares of Class A Common Stock an
amount in cash equal to the Average Market Price thereof).

Contracts and under the Extendible Contracts that are not extended. To the
extent any Sellers who are parties to Extendible Contracts exercise their right
to extend the Exchange Date under such Contracts, the Trustee will distribute
the assets that are delivered to it under those Contracts on the extended
Exchange Date promptly after it receives those assets. Following such a
distribution, the value of the Securities will be reduced, and there may be a
reduction in the liquidity of the Securities, during the period from May ,
2001 until the final Exchange Date, which will occur not later than August ,
2001. The Holders of record on the regular quarterly record date will receive
the full scheduled quarterly distribution on May , 2001. If the Exchange Date
under any Contracts occurs after May , 2001, the Holders of record on such
Exchange Date will receive distributions accruing to the Exchange Date, in an
amount equal to the regular quarterly distribution on the Securities multiplied
by a fraction, the numerator of which is the number of shares covered by the
Extendible Contracts that are extended by the Sellers and the denominator of
which is the total number of shares covered by all the Contracts. No
distributions will accrue after the final Exchange Date.

The Exchange Rate will vary in accordance with a formula, depending on the
Average Market Price of the Class A Common Stock on the Exchange Date:

<PAGE>

o if the Average Market Price is equal to or greater than the Appreciation
Threshold Price, the Exchange Rate will be 0. shares of Class A Common
Stock; and

o if the Average Market Price is less than the Initial Price, the Exchange
Rate will be one share of Class A Common Stock.

The formula will be subject to adjustment in certain events. See '--The
Contracts--Dilution Adjustments'. For purposes of the first part of the formula,
the Exchange Rate will be rounded upward or downward to the nearest 1/10,000 (or
if there is not a nearest 1/10,000, to the next lower 1/10,000). Holders
otherwise entitled to receive fractional shares in respect of their aggregate
holdings of Securities will receive cash in lieu thereof. See '--Trust
Termination'.

The 'Average Market Price' per share of Class A Common Stock on any date
means the average Closing Price (as defined below) of a share of Class A Common
Stock on the 20 Trading Days (as defined below) immediately prior to but not
including such date, provided that for purposes of determining the payment
required upon cash settlement of a Contract in connection with a Rollover
Offering, 'Average Market Price' means the Closing Price per share of Class A
Common Stock on the Trading Day immediately preceding the date that the Rollover
Offering is priced (the 'Pricing Date') or, if the Rollover Offering is priced
after 4:00 P.M., New York City time, on the Pricing Date, the Closing Price per
share on the Pricing Date.

'Rollover Offering' means a reoffering or refinancing of up to % of the
Securities effected not earlier than May , 2001, by means of a completed
public offering or offerings (which may include one or more exchange offers) by
or on behalf of the Sellers who are parties to Extendible Contracts. The
Trustees will notify the Holders of (i) any election of the Cash Settlement
Alternative, and whether it is intended to be in connection with a Rollover
Offering, not less than 30 nor more than 90 days prior to the Exchange Date, and
(ii) any acceleration of the Exchange Date in connection with a Rollover
Offering, not later than the Exchange Date.

The 'Closing Price' of the Class A Common Stock on any date of
determination means the daily closing sale price (or, if no closing sale price
is reported, the last reported sale price) of the Class A Common Stock as
reported on the NYSE Consolidated Tape on such date of determination or, if the
Class A Common Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Class A Common Stock is so listed, or if the
Class A Common Stock is not so listed on a United States national or regional
securities exchange, as reported by The NASDAQ National Market or, if the Class
A Common Stock is not so reported, the last quoted bid price for the Class A
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, provided that if any event that
results in an adjustment to the number of shares of Class A Common Stock
deliverable under the Contracts as described under '--The Contracts--Dilution
Adjustments' occurs prior to the Exchange Date, the Closing Price as determined
pursuant to the foregoing will be appropriately adjusted to reflect the
occurrence of such event.

A 'Trading Day' means a day on which the Class A Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.

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

<PAGE>

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

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

<TABLE>
<CAPTION>
AVERAGE MARKET PRICE NUMBER OF SHARES
OF CLASS A COMMON OF CLASS A
STOCK COMMON STOCK
-------------------- ----------------

TAX TREATMENT OF DISTRIBUTIONS

The following table sets forth information regarding the distributions to
be received on the U.S. Treasuries to be acquired by the Trust with a portion of
the proceeds of the Offering (assuming no exercise of the Underwriters'
over-allotment option), the portion of each year's distributions through May ,
2001 that will constitute a return of capital for U.S. federal income tax
purposes and the amount of original issue discount accruing (assuming a
yield-to-maturity accrual election in respect of any short-term U.S. Treasury
securities) on such U.S. Treasuries with respect to a Holder who acquires its
Securities at the issue price from an Underwriter pursuant to the original
offering. See 'Certain Federal Income Tax Considerations--Recognition of
Original Issue Discount on the U.S. Treasury Securities'. Holders should not be
required to include any amounts in income upon the Trust's receipt of additional
U.S. Treasury securities as a result of the extension of the Exchange Date and
should not be required to include any original issue discount in income in
respect of such U.S. Treasury Securities. See 'Certain Federal Income Tax
Considerations--Extension of the Exchange Date'.

<TABLE>
<CAPTION>
ANNUAL GROSS
ANNUAL GROSS DISTRIBUTIONS FROM ANNUAL RETURN OF ANNUAL INCLUSION OF
DISTRIBUTIONS FROM U.S. TREASURIES CAPITAL PER ORIGINAL ISSUE DISCOUNT
YEAR U.S. TREASURIES PER SECURITY SECURITY IN INCOME PER SECURITY
- ---------------------------- ------------------ ------------------ ---------------- -----------------------
<S> <C> <C> <C> <C>
1998........................
1999........................
2000........................
2001........................
</TABLE>

The annual distribution of $ per Security is payable quarterly on each
February , May , August and November , commencing August , 1998.
Quarterly distributions on the Securities through May , 2001 will consist
solely of the cash received from the U.S. Treasury securities acquired by the
Trust with the proceeds of the Securities. The Trust will not be entitled to any
dividends that may be declared on the Class A Common Stock. See 'Management and
Administration of the Trust--Distributions'.

ENHANCED YIELD; LESS EQUITY APPRECIATION THAN CLASS A COMMON STOCK; NO
DEPRECIATION PROTECTION

Holders will receive distributions at a higher annual rate than the current

annual dividends paid on the Class A Common Stock. However, there is no
assurance that the yield on the Securities will be higher than the dividend
yield on the Class A Common Stock over the term of the Trust. In addition, the
opportunity for equity appreciation afforded by an investment in the Securities
is less than that afforded

<PAGE>

by an investment in the Class A Common Stock because Holders will realize no
equity appreciation if, on the Exchange Date, the Average Market Price of the
Class A Common Stock is at or below the Appreciation Threshold Price (which
represents an appreciation of % of the Initial Price). Moreover, because
Holders will only receive 0. shares of Class A Common Stock per Security (or the
Average Market Price thereof) if the Average Market Price exceeds the
Appreciation Threshold Price, Holders will only be entitled to receive upon
exchange % (the percentage equal to the Initial Price divided by the
Appreciation Threshold Price) of any appreciation of the value of the Class A
Common Stock in excess of the Appreciation Threshold Price. Holders of
Securities will realize the entire decline in value if the Average Market Price
on the Exchange Date is less than the price to public per Security shown on the
cover page hereof.

THE COMPANY

The Class A Common Stock is traded on the New York Stock Exchange. The
following table sets forth, for the fiscal quarters indicated, the reported high
and low sales prices of the Class A Common Stock on the New York Stock Exchange
Composite Tape and the cash dividends per share of Class A Common Stock declared
in respect of such quarters. As of May 8, 1998, there were approximately 2,500
record holders of Class A Common Stock and 12 record holders of Class B Common
Stock.

<TABLE>
<CAPTION>
MARKET PRICE
OF

CLASS A
COMMON STOCK
-------------- CASH
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
FISCAL 1997
First Quarter................................................................. $47 1/2 $34 3/4 $.085
Second Quarter................................................................ 53 1/2 42 3/8 .085
Third Quarter................................................................. 52 1/4 44 7/8 .085
Fourth Quarter................................................................ 52 1/2 39 3/8 .085

FISCAL 1998
First Quarter................................................................. $50 15/16 $44 3/4 $.085
Second Quarter................................................................ 56 3/8 39 .085
Third Quarter................................................................. 69 48 1/2 .085
Fourth Quarter (through May 12, 1998)......................................... 73 15/16 64 11/16 .085(1)
</TABLE>

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

(1) The dividend with respect to the Common Stock is payable July 2, 1998 to
holders of record on June 15, 1998.

The Company expects to continue the payment of cash dividends in the
future, but there can be no assurance that such payment of cash dividends will
continue.

Holders will not be entitled to rights with respect to the Class A Common
Stock (including, without limitation, voting rights and rights to receive
dividends or other distributions in respect thereof) until receipt of shares of
Class A Common Stock by the Holders as a result of the exchange of the
Securities for the Class A Common Stock on the Exchange Date.

Reference is made to the accompanying prospectus of the Company, dated May
, 1998 (pages A-1 through A- hereto) which describes the Company and the
shares of Class A Common Stock deliverable to the Holders upon mandatory
exchange of the Securities on the Exchange Date. The Company is not affiliated
with the Trust and will not receive any of the proceeds from the sale of the
Securities. The Company prospectus relates to an aggregate of shares
of Class A Common

<PAGE>

Stock (plus an additional shares that may be delivered upon exercise
of the Underwriters' over-allotment option).

THE CONTRACTS

General. The Trust will enter into a Contract with each Seller obligating
that Seller to deliver to the Trust on the Exchange Date a number of shares of
Class A Common Stock equal to the product of the Exchange Rate times the initial
number of shares of Common Stock subject to such Contract. The aggregate initial
number of shares of Common Stock under the Contracts will equal the aggregate
number of Securities offered hereby (subject to increase in the event the
Underwriters exercise their over-allotment option). The Extendible Contracts,
which cover approximately % of the shares of Class A Common Stock subject to
all Contracts, also provide that the Sellers thereunder may deliver to the Trust
upon settlement of such Contracts, at the Seller's option, an amount of cash
equal to the then Average Market Price of the number of shares of Class A Common
Stock deliverable pursuant to such Contracts (the 'Cash Settlement
Alternative'). If a Seller having the Cash Settlement Alternative elects to
deliver cash in lieu of shares of Class A Common Stock, such Seller would be
required to deliver cash in respect of all shares deliverable pursuant to such
Seller's Contract. The Trustees will notify the Holders of (i) any election of
the Cash Settlement Alternative, and whether it is intended to be in connection
with a Rollover Offering (which would affect the computation of the Average
Market Price in connection with such settlement, as described under 'General'
above), not less than 30 nor more than 90 days prior to the Exchange Date, and
(ii) any acceleration of the Exchange Date in connection with a Rollover
Offering, not later than the Exchange Date. The cash payment received by the
Trust upon such settlement in connection with a Rollover Offering will be
distributed to Holders within five business days of the Exchange Date. If notice
of a cash settlement in connection with a Rollover Offering is given but the
Rollover Offering is not completed, the Contracts will settle by cash payment on
May , 2001 (or August , 2001, if the Exchange Date was previously extended)
and the Average Market Price will be computed on the basis of the average
Closing Price for 20 Trading Days.

The Exchange Date may be extended to August , 2001 (subject to subsequent
acceleration at the election of the Sellers in connection with a Rollover
Offering), provided the Sellers deliver to Trust, on or prior to May , 2001,
additional U.S. Treasury securities sufficient to fund the Trust's quarterly
distribution on August , 2001. If any such Sellers later accelerate the
Exchange Date under any such Contracts, such Sellers will be entitled, under the
Extendible Contracts, to repurchase such additional U.S. Treasury securities
from the Trust on or prior to the Exchange Date as accelerated, at a price equal
to the aggregate unpaid distributions on the Securities accruing to such
Exchange Date. The Trustees will notify the Holders of (i) any extension of the
Exchange Date to August , 2001, not less than 30 nor more than 90 days prior
to May , 2001 and (ii) any subsequent acceleration in connection with a
Rollover Offering, not later than the Exchange Date, as so extended.

Each Contract also provides that if the Seller thereunder delivers
Securities to the Trust on or prior to the Exchange Date, its obligation under
the Contract will be proportionately reduced. Such delivery of Securities in
partial or complete satisfaction of a Seller's obligations will not affect the
amount of Class A Common Stock or cash receivable by Holders of Securities that
remain outstanding on the Exchange Date.

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

Dilution Adjustments. The Exchange Rate is subject to adjustment if the
Company (i) pays a stock dividend or makes a distribution with respect to the
Class A Common Stock in shares of such stock, (ii) subdivides or splits its
outstanding shares of Class A Common Stock, (iii) combines its outstanding
shares of Class A Common Stock into a smaller number of shares, or (iv) issues
by reclassification of its shares of Class A Common Stock any shares of other
common stock of the Company. In any such event, the Exchange Rate shall be
adjusted as follows: for each share of Class A Common Stock that

<PAGE>

would have been deliverable upon exchange prior to the adjustment, the Holder
will receive the number of shares of Class A Common Stock (or, in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Company issued pursuant thereto), or fraction thereof, that
a shareholder who held one share of Class A Common Stock immediately prior to
such event would be entitled solely by reason of such event to hold immediately
after such event.

In addition, if the Company issues rights or warrants to all holders of
Class A Common Stock entitling them to subscribe for or purchase shares of Class
A Common Stock at a price per share less than the Then-Current Market Price of
the Class A Common Stock (as defined below) (other than rights to purchase Class
A Common Stock pursuant to a plan for the reinvestment of dividends or
interest), then the Exchange Rate shall be adjusted pursuant to the following
formula:

OS + AS
A = ER X -------
OS + PS

where

ER = the Exchange Rate prior to the adjustment;

OS = the number of shares of Class A Common Stock outstanding immediately
prior to the time (determined as described below) the adjustment is
calculated by reason of the issuance of such rights or warrants;

AS = the number of additional shares offered for subscription or purchase
pursuant to such rights or warrants; and

PS = the number of additional shares that the aggregate offering price of
the shares so offered for subscription or purchase would purchase at
the Then-Current Market Price.

To the extent that, after expiration of such rights or warrants, the shares
offered thereby shall not have been delivered, the Exchange Rate shall be
further adjusted to equal the Exchange Rate that would have been in effect had
the foregoing adjustment been made upon the basis of delivery of only the number
of shares of Class A Common Stock actually delivered.

The 'Then-Current Market Price' of the Class A Common Stock means the
average Closing Price per share of Class A Common Stock for a Calculation Period
of five Trading Days immediately prior to the time such adjustment is effected
(or, in the case of an adjustment effected at the opening of business on the
business day following a record date, as described below, immediately prior to
the earlier of the time such adjustment is effected and the related 'ex-date' on
which the shares of Class A Common Stock first trade regular way on their
principal market without the right to receive the relevant dividend,
distribution or issuance); provided that if no Closing Price for the Class A
Common Stock is determined for one or more (but not all) of such Trading Days,
such Trading Day shall be disregarded in the calculation of the Then-Current
Market Price (but no additional Trading Days shall be added to the Calculation
Period). If no Closing Price for the Class A Common Stock is determined for any
of such Trading Days, the most recently available Closing Price for the Class A
Common Stock prior to such five Trading Days shall be the Then-Current Market
Price. 'Calculation Period' means any period of Trading Days for which an
average security price must be determined pursuant to the Contracts.

In addition, if the Company pays a dividend or makes a distribution to all
holders of Class A Common Stock, in either case, of evidences of its
indebtedness or other non-cash assets (excluding any stock dividends or
distributions in shares of Common Stock) or issues to all holders of Class A

Common Stock rights or warrants to subscribe for or purchase any of its
securities (other than rights or warrants referred to in the second paragraph of
this subsection), then the Exchange Rate shall be adjusted pursuant to the
following formula:

T
A = ER X -------
T - V

where

ER = the Exchange Rate prior to adjustment;

T = the Then-Current Market Price per share of Class A Common Stock; and

<PAGE>

V = the fair market value (as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator) as of the time the adjustment is calculated of the
portion of such evidences of indebtedness, non-cash assets or rights or
warrants payable in respect of one share of Class A Common Stock.

In addition, if the Company distributes cash (other than an Excluded
Distribution ), by dividend or otherwise, to all holders of Class A Common Stock
or makes an Excess Purchase Payment, then the Exchange Rate shall be adjusted
pursuant to the following formula:

T
A = ER X -------
T - D

where

ER = the Exchange Rate prior to adjustment;

T = the Then-Current Market Price on the record date in respect of such
distribution; and

D = the amount of such distribution applicable to one share of Class A
Common Stock that would not be a Permitted Dividend (or in the case of an Excess
Purchase Payment, the aggregate amount of such Excess Purchase Payment divided
by the number of outstanding shares of Class A Common Stock on such record
date).

For purposes of these adjustments,

(a) the term 'Excluded Distribution' means any Permitted Dividend, any cash
distributed in consideration of fractional shares of Class A Common
Stock and any cash distributed in a Reorganization Event;

(b) the term 'Permitted Dividend' means any quarterly cash dividend in
respect of the Class A Common Stock, other than a quarterly cash
dividend that exceeds the immediately preceding quarterly cash
dividend, and then only to the extent that the per share amount of such
dividend results in an annualized dividend yield on the Class A Common
Stock in excess of %; and

(c) the term 'Excess Purchase Payment' means the excess, if any, of (i) the
cash and the value (as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator, whose determination shall be conclusive) of all other
consideration paid by the Company with respect to one share of Class A
Common Stock acquired in a tender offer or exchange offer by the
Company over (ii) the Then-Current Market Price per share of Class A
Common Stock.

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

Dilution adjustments shall be effected: (i) in the case of any dividend,
distribution or issuance described above, at the opening of business on the
business day following the record date for determination of holders of Class A
Common Stock entitled to receive such dividend, distribution or issuance or, if
the announcement of any such dividend, distribution or issuance is after such
record date, at the time such dividend, distribution or issuance shall be
announced by the Company; (ii) in the case of any subdivision, split,
combination or reclassification described above, on the effective date of such
transaction; (iii) in the case of any Excess Purchase Payment for which the
Company shall announce, at or prior to the time it commences the relevant share
repurchase, the repurchase price for such shares to be repurchased, on the date
of such announcement; and (iv) in the case of any other Excess Purchase Payment,
on the date that the holders of Class A Common Stock become entitled to payment
with respect thereto. There will be no adjustment under the Contracts in respect
of any dividends, distributions, issuances or repurchases that may be declared
or announced after the Exchange Date. If any announcement or declaration of a
record date in respect of a dividend, distribution, issuance or repurchase shall
subsequently be canceled by the Company, or such dividend, distribution,
issuance or repurchase shall fail to receive requisite approvals or shall fail

to occur for any other reason, then the Exchange Rate shall be further adjusted
to equal the Exchange Rate that would have been in effect had the adjustment for
such dividend, distribution, issuance or repurchase not been

<PAGE>

made. If after an announcement of a share repurchase, the Company reduces the
repurchase price or repurchases fewer shares than announced, upon completion of
such share repurchase, the Exchange Rate shall be further adjusted to equal the
Exchange Rate that would have been in effect had the adjustment for such
repurchase been based on the actual price and amount repurchased. All
adjustments described herein shall be rounded upward or downward to the nearest
1/10,000 (or if there is not a nearest 1/10,000, to the next lower 1/10,000). No
adjustment in the Exchange Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of the foregoing are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment.

In the event of a Reorganization Event, the Exchange Rate will be adjusted
such that, on the Exchange Date, each Holder will receive for each Security cash
in an amount equal to:

(i) if the Transaction Value (as defined below) is less than the
Appreciation Threshold Price but equal to or greater than the Initial Price, the
Initial Price,

(ii) if the Transaction Value is greater than or equal to the Appreciation
Threshold Price, 0. multiplied by the Transaction Value, and

(iii) if the Transaction Value is less than the Initial Price, the
Transaction Value;

provided, however, that if the consideration received by holders of Class A
Common Stock in such Reorganization Event does not include Marketable
Securities, then (a) the Sellers' delivery obligations under the Contracts will
be accelerated, and the Transaction Value will be deliverable promptly upon
consummation of the Reorganization Event; (b) the Custodian will liquidate the
U.S. Treasury securities acquired by the Trust at closing and then held by the
Trust; and (c) such Transaction Value and the proceeds of such liquidation will
be distributed to the Holders.

Notwithstanding the foregoing, to the extent that any Marketable Securities
(as defined below) are received by holders of Class A Common Stock in such
Reorganization Event, then in lieu of delivering cash as provided above, the
Sellers may at their option deliver a proportional amount of such Marketable
Securities on the Exchange Date. If the Sellers elect to deliver Marketable
Securities on the Exchange Date, Holders will be responsible for the payment of

any and all brokerage and other transaction costs upon the sale of such
securities.

'Reorganization Event' means (A) any consolidation or merger of the
Company, or any surviving entity or subsequent surviving entity of the Company
(a 'Company Successor'), with or into another entity (other than a merger or
consolidation in which the Company is the continuing corporation and in which
the Class A Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of the
Company or another corporation), (B) any sale, transfer, lease or conveyance to
another corporation of the property of the Company or any Company Successor as
an entirety or substantially as an entirety, (C) any statutory exchange of
securities of the Company or any Company Successor with another corporation
(other than in connection with a merger or acquisition) or (D) any liquidation,
dissolution or winding up of the Company or any Company Successor.

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

<PAGE>

number of shares of Marketable Securities included in the calculation of
Transaction Value for purposes of the preceding clause (iii) shall be subject to
adjustment if a dilution event of the type described above shall occur with
respect to the issuer of the Marketable Securities between the time of the
Reorganization Event and the Exchange Date.

For purposes of determining Transaction Value, the term 'Trading Day' and
'Closing Price' will have the same meaning, as applied to the Marketable
Securities, as these terms have as applied to the Class A Common Stock for

purposes of determining the Average Market Price.

'Marketable Securities' means any common equity securities (whether voting
or non-voting) listed on a U.S. national securities exchange or reported by The
NASDAQ National Market.

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

Collateral Arrangements; Acceleration. Each Seller's obligations under the
Contract between such Seller and the Trust initially will be secured by a
security interest in the maximum number of shares of Class A Common Stock
subject to such Contract (subject to adjustment in accordance with the dilution
adjustment provisions of such Contract, described above), pursuant to a
Collateral Agreement between such Sellers and , as
collateral agent (the 'Collateral Agent'). Unless a Seller is in default in its
obligations under its Collateral Agreement, such Seller will be permitted to
substitute for the pledged shares of Class A Common Stock collateral consisting
of short-term, direct obligations of the U.S. Government. Any U.S. Government
obligations pledged as substitute collateral will be required to have an
aggregate market value at the time of substitution and at daily mark-to-market
valuations thereafter of not less than 150% (or, from and after any
Insufficiency Determination that shall not be cured by the close of business on
the next business day thereafter, as described below, 200%) of the product of
the market price of the Class A Common Stock at the time of each valuation times
the number of shares of Class A Common Stock for which such obligations are
being substituted. The Collateral Agreements will provide that, in the event of
a Reorganization Event, each Seller will pledge as alternative collateral any
Marketable Securities received by it in respect of the maximum number of shares
of Class A Common Stock subject to its Contract at the time of the
Reorganization Event, plus cash in an amount equal to 100% of such Seller's Cash
Delivery Obligations (or U.S. Government obligations having an aggregate market
value when pledged and at daily mark-to-market valuations thereafter of not less
than 105% thereof). The Collateral Agent will be required, under the Collateral
Agreements, to invest any such cash in U.S. Treasury securities maturing on or
before May , 2001. A Seller's 'Cash Delivery Obligations' shall be the
Transaction Value of any consideration other than Marketable Securities received
by such Seller in respect of the maximum number of shares subject to its
Contract at the time of the Reorganization Event. The number of shares of
Marketable Securities required to be pledged shall be subject to adjustment if
any event requiring a dilution adjustment under the Contracts shall occur. The
Sellers will be permitted to substitute U.S. Government obligations for
Marketable Securities pledged at the time of or after any Reorganization Event.
Any U.S. Government obligations so substituted will be required to have an
aggregate market value at the time of substitution and at daily mark-to-market
valuations thereafter of not less than 150% (or, from and after any
Insufficiency Determination that shall not be cured by the close of business on
the next business day thereafter, as described below, 200%) of the product of

the market price per share of Marketable Securities at the time of each
valuation times the number of shares of Marketable Securities for which such
obligations are being substituted. The Collateral Agent will promptly pay over
to each Seller any dividends, interest, principal or other payments received by
the Collateral Agent in respect of any collateral pledged by such Seller,
including any substitute collateral, unless such Seller is in default of its
obligations under its Collateral Agreement, or unless the payment of such amount
to such Seller would cause the collateral to become insufficient under its
Collateral Agreement. Each Seller shall have the right to vote any pledged
shares of Class A Common Stock or Marketable Securities for so long as such
shares are owned by it and pledged under its Collateral Agreement, including
after an event of default under such Seller's Contract or Collateral Agreement.

<PAGE>

If the Collateral Agent shall determine (an 'Insufficiency Determination')
that U.S. Government obligations pledged by any Seller as substitute collateral
shall fail to meet the foregoing requirements at any valuation, or that such
Seller has failed to pledge additional collateral required as a result of a
dilution adjustment increasing the maximum number of shares of Class A Common
Stock or shares of Marketable Securities subject to such Contract, and such
failure shall not be cured by the close of business on the next business day
after such determination, then, unless a Collateral Event of Default (as defined
below) under such Collateral Agreement shall have occurred and be continuing,
the Collateral Agent shall commence (i) sales of the collateral consisting of
U.S. Government obligations and (ii) purchases, using the proceeds of such
sales, of shares of Class A Common Stock or shares of Marketable Securities, in
an amount sufficient to cause the collateral to meet the requirements under such
Collateral Agreement. The Collateral Agent shall discontinue such sales and
purchases if at any time a Collateral Event of Default under such Collateral
Agreement shall have occurred and be continuing. A 'Collateral Event of Default'
under such Seller's Collateral Agreement shall mean, at any time, (A) if no U.S.
Government obligations shall be pledged as substitute collateral at such time,
failure of the collateral to consist of at least the maximum number of shares of
Class A Common Stock subject to such Seller's Contract at such time (or, if a
Reorganization Event shall have occurred at or prior to such time, failure of
the collateral to include the maximum number of shares of any Marketable
Securities required to be pledged as described above); (B) if any U.S.
Government obligations shall be pledged as substitute collateral for shares of
Class A Common Stock (or shares of Marketable Securities) at such time, failure
of such U.S. Government obligations to have a market value at such time of at
least 105% of the market price per share of Class A Common Stock (or the
then-Average Market Price per share of Marketable Securities, as the case may
be) times the difference between (x) the maximum number of shares of Class A
Common Stock (or shares of Marketable Securities) subject to such Contract at
such time and (y) the number of shares of Class A Common Stock (or shares of
Marketable Securities) pledged as collateral at such time; and (C) at any time
after a Reorganization Event in which consideration other than Marketable
Securities shall have been delivered, failure of any U.S. Government obligations
pledged in respect of Cash Delivery Obligations to have a market value at such

time of at least 105% of such Cash Delivery Obligations, if such failure shall
not be cured within one business day after notice thereof is delivered to such
Seller.

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

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

<PAGE>

Securities then pledged, plus any cash then pledged, plus cash generated from
the liquidation of U.S. Government obligations then pledged). See '--Trust
Termination'.

Description of the Sellers. The Sellers are .
Reference is made to the caption 'Selling Stockholders' in the Company's
prospectus for information about the Sellers.

THE U.S. TREASURY SECURITIES

The Trust will purchase with a portion of the proceeds of the Securities
and hold a fixed portfolio of zero-coupon ('stripped') U.S. Treasury securities
with face amounts and maturities corresponding to the quarterly distributions
payable with respect to the Securities and the payment dates thereof through May
, 2001. Up to 30% of the Trust's total assets may be invested in these U.S.
Treasury securities. In the event that any Contract is accelerated, then a
proportionate amount of the U.S. Treasury securities acquired by the Trust with
the proceeds of the Securities and then held by the Trust shall be liquidated by
the Administrator and the proceeds thereof distributed pro rata to the Holders,
together with the amounts distributed upon acceleration. See '--Collateral
Arrangements; Acceleration' and '--Trust Termination'.

Additional U.S. Treasury securities may be transferred to the Trust in
connection with an extension of the Exchange Date by certain Sellers to August
, 2001. If any such Sellers later accelerate the Exchange Date under any such
Contracts, such Sellers will be entitled under the Extendible Contracts to
repurchase such additional U.S. Treasury securities from the Trust on or prior
to the Exchange Date, at a price equal to the aggregate unpaid distributions on
the Securities accruing to the Exchange Date.

TEMPORARY INVESTMENTS

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

INVESTMENT RESTRICTIONS

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

Because of the foregoing limitations, the Trust's investments will be
concentrated in the cosmetics industry, which is the industry in which the
Company operates. The Trust is not permitted to purchase restricted securities.

TRUST TERMINATION

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

<PAGE>

RISK FACTORS

INTERNAL MANAGEMENT; NO PORTFOLIO MANAGEMENT

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

LIMITED APPRECIATION POTENTIAL; CLASS A COMMON STOCK DEPRECIATION RISK

The Trust anticipates that on the Exchange Date, it will receive the Class
A Common Stock deliverable pursuant to the Contracts, which it will then
distribute to Holders. Although the yield on the Securities is higher than the
current dividend yield on the Class A Common Stock, there is no assurance that
the yield on the Securities will be higher than the dividend yield on the Class
A Common Stock over the term of the Trust. In addition, because the Contracts
call for the Sellers to deliver less than the full number of shares of Class A
Common Stock subject to the Contracts where the Average Market Price equals or

exceeds the Initial Price (and therefore less than one full share of Class A
Common Stock for each outstanding Security), the Securities have more limited
appreciation potential than the Class A Common Stock. Therefore, the Securities
may trade below the value of the Class A Common Stock if the Class A Common
Stock appreciates in value. The value of the Class A Common Stock to be received
by Holders on the Exchange Date (and any cash received in lieu thereof) may be
less than the amount paid for the Securities. Holders of Securities will realize
the entire decline in value if the Average Market Price is less than the price
to public per Security shown on the cover page hereof.

DILUTION ADJUSTMENTS; SHAREHOLDER RIGHTS

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

TRADING VALUE; LISTING

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

<PAGE>

Stock is traded and the market segment of which the Company is a part) and
fluctuations in interest rates and other factors that are difficult to predict
and beyond the Trust's control. The Trust believes, however, that because of the
yield on the Securities and the formula for determining the number of shares of
Class A Common Stock to be delivered on the Exchange Date, the Securities will
tend to trade at a premium to the market value of the Class A Common Stock to
the extent the Class A Common Stock price falls and at a discount to the market
value of the Class A Common Stock to the extent the Class A Common Stock price
rises. There can, however, be no assurance that the Securities will trade at a
premium to the market value of the Class A Common Stock.

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

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

NON-DIVERSIFIED STATUS

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

DESCRIPTION OF THE SECURITIES

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

Holders are entitled to a full vote for each Security held on all matters
to be voted on by Holders and are not able to cumulate their votes in the
election of Trustees. The Trustees of the Trust have been selected initially by
Goldman Sachs, as the initial Holder of Securities of the Trust. The Trust
intends to hold annual meetings as required by the rules of the NYSE. The
Trustees may call special meetings of Holders for action by Holder vote as may
be required by either the Investment Company Act or the Amended and Restated
Trust Agreement. The Holders have the right, upon the declaration in writing or
vote of more than two-thirds of the outstanding Securities, to remove a Trustee.
The Trustees will call a meeting of Holders to vote on the removal of a Trustee
upon the written request of the Holders of record of 10% of the Securities or to
vote on other matters upon the written request of the Holders of record of

<PAGE>

51% of the Securities (unless substantially the same matter was voted on during
the preceding 12 months). The Trustees shall establish, and notify the Holders
in writing of, the record date for each such meeting which shall be not less
than 10 nor more than 50 days before the meeting date. Holders at the close of
business on the record date will be entitled to vote at the meeting. The Trust
will also assist in communications with other Holders as required by the
Investment Company Act.

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

BOOK-ENTRY-ONLY ISSUANCE

The Depository Trust Company ('DTC') will act as securities depository for
the Securities. The information in this section concerning DTC and DTC's

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

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

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

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

Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial

<PAGE>

Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.

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

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

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

MANAGEMENT AND ADMINISTRATION OF THE TRUST

TRUSTEES

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

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

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND ADDRESS TITLE DURING PAST FIVE YEARS
- -------------------------------------- -------------------------------------- -----------------------
<S> <C> <C>
Managing Trustee
Trustee
Trustee
</TABLE>

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

ADMINISTRATOR

The day-to-day affairs of the Trust will be managed by as Trust
Administrator pursuant to an Administration Agreement. Under the Administration
Agreement, the Trustees have delegated most of their operational duties to the
Administrator, including without limitation, the duties to: (i) receive invoices
for expenses incurred by the Trust; (ii) with the approval of the Trustees,
engage legal and

<PAGE>

other professional advisors (other than the independent public accountants for
the Trust); (iii) instruct the Paying Agent to pay distributions on Securities
as described herein; (iv) prepare and mail, file or publish all notices,
proxies, reports, tax returns and other communications and documents, and keep
all books and records, for the Trust; (v) at the direction of the Trustees,
institute and prosecute legal and other appropriate proceedings to enforce the
rights and remedies of the Trust; and (vi) make all necessary arrangements with
respect to meetings of Trustees and any meetings of Holders. The Administrator,
however, will not select the independent public accountants for the Trust or
sell or otherwise dispose of the Trust assets (except in connection with an
acceleration of a Contract or the settlement of the Contracts and upon
termination of the Trust), subject to the Sellers' right to repurchase U.S.
Treasury securities transferred to the Trust in connection with an extension of
the Exchange Date.

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

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

The address of the Administrator is .

CUSTODIAN

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

PAYING AGENT

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

INDEMNIFICATION

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

DISTRIBUTIONS

The Trust intends to distribute to Holders on a quarterly basis an amount
equal to $ . per Security (which amount equals the pro rata portion of the
fixed quarterly cash distributions from the proceeds of the maturing U.S.
Treasury securities acquired by the Trust with the proceeds of the Securities).
The first distribution, reflecting the Trust's operations from the date of this
offering, will be made on August , 1998 to Holders of record as of August ,
1998. Thereafter, distributions will be made on February

<PAGE>

, May , August and November , of each year to Holders of record as of

each February , May , August and November , respectively. A portion of
each such distribution through May , 2001 should be treated as a tax-free
return of the Holder's investment. See 'Investment Objective and Policies--Tax
Treatment of Distributions' and 'Certain Federal Income Tax Considerations--
Recognition of Interest on the U.S. Treasury Securities'.

In connection with any extension of the Exchange Date to August , 2001,
the Sellers who elect to extend the Exchange Date will be required to deliver to
the Trust, on or prior to May, 2001, additional U.S. Treasury securities
sufficient to fund the Trust's quarterly distribution on August, 2001. If any
such Sellers later accelerate the Exchange Date under any such Contracts, such
Sellers will be entitled under the Extendible Contracts to repurchase such
additional U.S. Treasury securities from the Trust on or prior to the Exchange
Date as accelerated, at a price equal to the aggregate unpaid distributions on
the Securities accruing to such Exchange Date.

Upon termination of the Trust, as described under the caption 'Investment
Objective and Policies--Trust Termination', each Holder of Securities
outstanding on the date of termination will receive any remaining net assets of
the Trust, subject to the Sellers' right to repurchase U.S. Treasury securities
transferred to the Trust in connection with an extension of the Exchange Date.

The Trust does not permit the reinvestment of distributions.

ESTIMATED EXPENSES

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

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

<PAGE>

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

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

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

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

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

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

Recognition of Original Issue Discount on the U.S. Treasury Securities.
The U.S. Treasury securities in the Trust will consist of stripped U.S. Treasury
securities. A Holder will be required to treat its pro rata portion of each U.S.
Treasury security acquired by the Trust with the proceeds of the Securities as a
bond that was originally issued on the date the Trust acquired the relevant U.S.

Treasury securities and will include original issue discount in income over the
life of the U.S. Treasury securities in an amount equal to the Holder's pro rata
portion of the excess of the amounts payable on such U.S. Treasury securities
over the value of the U.S. Treasury securities at the time the Trust acquires
them. The amount of such excess will constitute only a portion of the total
amounts payable in respect of U.S. Treasury securities held by the Trust,
however. Consequently, a substantial portion of each quarterly cash distribution
to the Holders will be treated as a tax-free return of the Holders' investment
in the U.S. Treasury securities and will not be considered current income for
federal income tax purposes. See 'Investment Objective and Policies--Tax
Treatment of Distributions'.

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

<PAGE>

Extension of the Exchange Date. Holders should not be required to include
any amounts in income upon the Trust's receipt of additional U.S. Treasury
Securities as a result of the extension of the Exchange Date by a Seller and
should not be required to include any original issue discount in respect of such
U.S. Treasury Securities.

Although there is no direct authority for the treatment of the cash
distribution paid on the Securities on the extended Exchange Date, it is likely
that such distribution should not be considered income to a Holder upon receipt,
but instead should be considered to reduce a Holder's basis with respect to such
Holder's pro rata portion of the Contracts held by the Trust, by analogy to the
treatment of rebates or option premiums. If such treatment is respected, receipt
of the cash distribution on the extended Exchange Date will increase the amount
of gain (or decrease the amount of loss) recognized by a Holder on a subsequent
sale or other disposition of the Contracts or the Class A Common Stock
(including a disposition pursuant to cash settlement of the Contracts). Because
there can be no assurance that the Internal Revenue Service will agree with this
characterization of the cash distribution paid on the extended Exchange Date,
Holders are urged to consult their tax advisors concerning the tax consequences
of receiving such payment.

Tax Basis of the U.S. Treasury Securities and the Contracts. A Holder's
initial tax basis in the Contracts and the U.S. Treasury securities,
respectively, will equal its pro rata portion of the amounts paid for them by
the Trust. It is currently anticipated that % and % of the net proceeds
of the offering will be used by the Trust to purchase the U.S. Treasury
securities and as payments for the Contracts, respectively. A Holder's tax basis
in the U.S. Treasury securities will be increased by the amounts of original
issue discount included in income in respect of U.S. Treasury securities and
decreased by each amount of cash received in respect of U.S. Treasury
securities. A Holder's tax basis in the Contracts will be reduced by the receipt
of any cash distributions paid by the Sellers as a result of an extension of the
Exchange Date (See '--Extension of the Exchange Date,' above).

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

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

Distribution of Cash. If the Trust receives cash upon settlement of the
Contracts, a Holder will recognize capital gain or loss equal to the difference
between the Holder's allocable portion of the amount of cash received and the
Holder's basis of the Contracts settled therefor. Any gain or loss will be
capital gain or loss which is taxable to Holders as described below under 'Sale
of Securities'.

Sale of Securities. A Holder who sells Securities will be treated as
having sold its pro rata portions of the U.S. Treasury securities and the
Contracts underlying the Securities. The Holder will therefore recognize capital
gain or loss equal to the difference between the amount realized and the
Holder's aggregate tax bases in its pro rata portions of the U.S. Treasury
securities and the Contracts. Any gain or loss will be long-term capital gain or
loss if the Trust has held the relevant property for more than one year
Long-term capital gain of an individual Holder will be subject to a maximum tax
rate of 28% in respect of property held for more than one year. The maximum rate
is reduced to 20% in respect of property held in excess of 18 months.

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

<PAGE>

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

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

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

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Trust has agreed to sell to each Underwriter named below, and each Underwriter

has agreed to purchase from the Trust, the number of Securities set forth
opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SECURITIES
- --------------------------------------------------------------------------------- ---------
<S> <C>
Goldman, Sachs & Co..............................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................................
J.P. Morgan Securities Inc.......................................................
Total.......................................................................
---------
---------
</TABLE>

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

The Underwriters propose to offer the Securities in part directly to the
public at the price to the public set forth on the cover page of this Prospectus
and in part to certain securities dealers at such price less a concession of
$ per Security. The Underwriters may allow, and such dealers may re-allow,
a concession not in excess of $ per Security to certain brokers and
dealers. After the Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters. The sales load of $ per Security is equal to % of the
initial public offering price. Investors must pay for any Securities purchased
in the initial public offering on or before May , 1998.

In connection with the offering, the Underwriters may purchase and sell the
Securities and the Class A Common Stock in the open market. These transactions
may include over-allotment and stabilizing transactions and purchases to cover
short positions created by the Underwriters in connection with the offering.
Stabilizing transactions consist of certain bids or purchases for the purpose

<PAGE>

of preventing or retarding a decline in the market price of the securities or
the Class A Common Stock; and short positions created by the Underwriters
involve the sale by the Underwriters of a greater number of Securities than they

are required to purchase from the Trust in the offering. The Underwriters also
may impose a penalty bid, whereby selling concessions allowed to broker-dealers
in respect of the Securities sold in the offering may be reclaimed by the
Underwriters if such securities are repurchased by the Underwriters in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Securities which may be higher than
the price that might otherwise prevail in the open market, and these activities,
if commenced, may be discontinued at any time. These transactions may be
effected on the NYSE, in the over-the-counter market or otherwise.

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

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

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

The Securities will be a new issue of securities with no established
trading market. Application has been made to list the Securities on the NYSE.
Goldman Sachs have advised the Company that they intend to make a market in the
Securities, but they are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the Securities.

The Underwriters have informed the Trust that they do not expect sales to
any accounts over which they exercise discretionary authority to exceed 5% of
the total number of Securities offered by them.

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

One Security has been subscribed for by Goldman Sachs at an aggregate
purchase price of $100.00. No Securities will be sold to the public until the
Securities subscribed for have been purchased and the purchase price thereof
paid in full to the Trust.

VALIDITY OF SECURITIES

The validity of the Securities will be passed upon for the Trust by
Sullivan & Cromwell, New York, New York, and for the Underwriters by Fried,
Frank, Harris, Shriver & Jacobson (a partnership including professional
corporations), New York, New York.

EXPERTS

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

<PAGE>

FURTHER INFORMATION

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

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

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

We have audited the accompanying statement of assets and liabilities of Estee
Lauder Automatic Common Exchange Security Trust as of May , 1998. This
financial statement is the responsibility of the Trust's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.

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

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Estee Lauder Automatic Common
Exchange Security Trust, as of May , 1998 in conformity with generally
accepted accounting principles.

New York, New York

May , 1998

<PAGE>

ESTEE LAUDER AUTOMATIC COMMON EXCHANGE SECURITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY , 1998

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

LIABILITIES
$ 0
----

Net Assets
Balance applicable to 1 Security outstanding...................... $100
----
Net asset value per Security...................................... $100
----
----
</TABLE>

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

(1) Estee Lauder Automatic Common Exchange Security Trust (the 'Trust') was
established on April 21, 1998 and has had no operations to date other than
matters relating to its organization and registration as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940. Costs incurred in connection with the organization of the Trust will
be paid by the Underwriters.

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

The Trust is a newly organized, finite-term trust established to purchase
and hold a portfolio of stripped U.S. treasury securities and a forward
purchase contract with existing shareholders of The Estee Lauder Companies
Inc. relating to the Class A Common Stock of The Estee Lauder Companies Inc.
The Trust will be internally managed and will not have an investment
adviser. The administration of the Trust, which will be overseen by the
trustees, will be carried out by as trust administrator.
will also serve as custodian, paying agent, registrar and
transfer agent with respect to the Securities. Ongoing fees and anticipated

expenses for the term of the Trust will be paid for by .

(3) The Trust issued one Security on May , 1998 to Goldman, Sachs & Co. in
consideration for the aggregate purchase price of $100.

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

<PAGE>

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

No person has been authorized to give any information or make any
representations other than those contained in this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy securities other than the securities to which it
relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................................. 3
The Trust........................................... 9
Use of Proceeds..................................... 9
Investment Objective and Policies................... 9
Risk Factors........................................ 20
Description of the Securities....................... 21
Management and Administration of the Trust.......... 23
Certain Federal Income Tax Considerations........... 26
Underwriting........................................ 28
Validity of Securities.............................. 29
Experts............................................. 29
Further Information................................. 30
Report of Independent Accountants................... 31
Statement of Assets and Liabilities................. 32
</TABLE>

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

Through and including June , 1998 (25 days after the date of this
Prospectus) all dealers effecting transactions in the Securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

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

Estee Lauder Automatic
Common Exchange
Security Trust

$ . Trust Automatic Common
Exchange Securities
(TRACES(TM)/(sm))

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

PROSPECTUS

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

Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.

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

<PAGE>

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

<TABLE>
<S> <C>
Part A-- Report of Independent Accountants.
Statement of Assets and Liabilities.
Part B-- None.
</TABLE>

(b) Exhibits

<TABLE>
<S> <C>
2.a.(i) Trust Agreement**
2.a.(ii) Form of Amended and Restated Trust Agreement*
Form of Specimen Certificate of Trust Automatic Common Exchange Security (included in Exhibit
2.d 2.a.(ii))*
2.h Form of Underwriting Agreement*
2.j Form of Custodian Agreement*
2.k.(i) Form of Administration Agreement*
2.k.(ii) Form of Paying Agent Agreement*
2.k.(iii) Form of Purchase Contract*
2.k.(iv) Form of Collateral Agreement*
2.k.(v) Form of Fund Expense Agreement*
2.k.(vi) Form of Fund Indemnity Agreement*
2.l Opinion and Consent of Counsel to the Trust*
2.n.(i) Tax Opinion of Counsel to the Trust (Consent contained in Exhibit 2.n.(i))*
2.n.(iii) Consent of Independent Public Accountants*
2.n.(iv) Consents to Being Named as Trustee*
2.p Form of Subscription Agreement*
2.r Financial Data Schedule*
</TABLE>

- ------------------
* To be Filed by Amendment.

** Previously Filed.

ITEM 25. MARKETING ARRANGEMENTS

See the Form of Underwriting Agreement to be filed as Exhibit 2.h to this
Registration Statement.

ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:

<TABLE>
<S> <C>
Registration fees........................................................................... $
New York Stock Exchange listing fee.........................................................
Printing (other than certificates)..........................................................
Fees and expenses of qualification under state securities laws
(excluding fees of counsel)...............................................................
Accounting fees and expenses................................................................
Legal fees and expenses.....................................................................
NASD fees...................................................................................
Miscellaneous...............................................................................
-------
Total....................................................................................... $
-------
-------
</TABLE>

C-1

<PAGE>

ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Prior to April 21, 1998 the Trust had no existence. As of the effective
date, the Trust will have entered into a Subscription Agreement for one Security
with Goldman, Sachs & Co. and an Underwriting Agreement with respect to
Securities with Goldman, Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES

<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ---------------------------------------------------------------------------- --------------
<S> <C>
Trust Automatic Common Exchange Securities.................................. 1
</TABLE>

ITEM 29. INDEMNIFICATION

The Underwriting Agreement, to be filed as Exhibit 2.h to this Registration
Statement, provides for indemnification to the Underwriters against certain

liabilities, including liabilities under the Securities Act of 1933, as amended
(the 'Securities Act').

The Amended and Restated Trust Agreement filed as Exhibit 2.a.(ii) to this
Registration Statement provides for indemnification to each Trustee against any
claim or liability incurred in acting as Trustee of the Trust, except in the
case of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Trustee's duties. The Custodian Agreement, Administration Agreement and
Paying Agent Agreement filed as Exhibits 2.j, 2.k.(i) and 2.k.(iii) to this
Registration Statement provide for indemnification to the Custodian,
Administrator and Paying Agent against any loss or expense incurred in the
performance of their obligations under the respective agreements, unless such
loss or expense is due to willful misfeasance, bad faith, gross negligence or
reckless disregard of their obligations. The Fund Indemnity Agreement filed as
Exhibit 2.k.(vi) to this Registration Statement provides that Goldman Sachs will
indemnify the Trust for certain indemnification expenses incurred under the
Amended and Restated Trust Agreement, the Custodian Agreement, the
Administration Agreement and the Paying Agent Agreement.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to trustees, officers and controlling persons of the
Registrant, pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Not Applicable.

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

The Trust's accounts, books and other documents are currently located at
the offices of the Registrant, c/o Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004 and at the offices of ,
, the Registrant's Administrator, Custodian, paying
agent, transfer agent and registrar.

C-2

<PAGE>

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. UNDERTAKINGS

(a) The Registrant hereby undertakes to suspend offering of its units until
it amends its prospectus if (1) subsequent to the effective date of its
Registration Statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of the Registration Statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.

(b) The Registrant hereby undertakes that (i) for the purpose of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the Registrant
under Rule 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; (ii) for the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.

C-3

<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THERETO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE 13TH
DAY OF MAY, 1998.

ESTEE LAUDER AUTOMATIC COMMON
EXCHANGE SECURITY TRUST

By: /s/ PAUL S. EFRON
---------------------------------
Paul S. Efron
Trustee

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON, IN
THE CAPACITIES AND ON THE DATE INDICATED.

<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------ ---------------------------------------- -------------------
<S> <C> <C>
/s/ PAUL S. EFRON Principal Executive Officer, May 13, 1998
- ------------------------------------------ Principal Financial Officer,
Paul S. Efron Principal Accounting Officer and Trustee
</TABLE>

C-4

<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- --------------------------------------------------------------------------------------- ----------
<S> <C> <C> <C>
2.a.(i) -- Trust Agreement**
2.a.(ii) -- Form of Amended and Restated Trust Agreement*
2.d -- Form of Specimen Certificate of Trust Automatic Common Exchange Security (included in
Exhibit 2.a.(ii))*
2.h -- Form of Underwriting Agreement*
2.j -- Form of Custodian Agreement*
2.k.(i) -- Form of Administration Agreement*
2.k.(ii) -- Form of Paying Agent Agreement*
2.k.(iii)-- Form of Purchase Contract*
2.k.(iv) -- Form of Collateral Agreement*
2.k.(v) -- Form of Fund Expense Agreement*
2.k.(vi) -- Form of Fund Indemnity Agreement*
2.l -- Opinion and Consent of Counsel to the Trust*
2.n.(i) -- Tax Opinion of Counsel to the Trust (Consent contained in Exhibit 2.n.(i))*
2.n.(iii)-- Consent of Independent Public Accountants*
2.n.(iv) -- Consents to Being Named as Trustee* 2.p Form of Subscription Agreement*
2.r -- Financial Data Schedule*
</TABLE>

- ------------------
* To be Filed by Amendment.

** Previously Filed.