REGISTRATION NO. 333-45004
CIK# 1117951
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
RANSON UNIT INVESTMENT TRUSTS, SERIES 98
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206-2241
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ALEX R. MEITZNER MARK J. KNEEDY
Ranson & Associates, Inc. c/o Chapman and Cutler
250 North Rock Road, Suite 150 111 West Monroe Street
Wichita, Kansas 67206-2241 Chicago, Illinois 60603
E. TITLE OF SECURITIES BEING REGISTERED: Units of Beneficial Interest
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date
of the Registration Statement.
[X] Check box if it is proposed that this filing will become effective at
10:00 A.M. on September 14, 2000 pursuant to paragraph (b) of Rule 487.
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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.
<PAGE>
[LOGO] RANSON UNIT INVESTMENT TRUSTS, SERIES 98
VALUE LINE #1 STRATEGY TRUST, SERIES 11 (SEPTEMBER 2000 SERIES)
A portfolio of 100 stocks ranked #1 for Timeliness(TM)
by The Value Line Investment Survey(R)
seeking capital appreciation
Prospectus
September 14, 2000
As with any investment, the Securities and Exchange Commission has not
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any contrary representation is a criminal offense.
<PAGE>
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INVESTMENT SUMMARY
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INVESTMENT OBJECTIVE
The trust seeks to provide capital appreciation by investing in a portfolio
of the 100 stocks ranked #1 for Timeliness(TM) by The Value Line
Investment Survey(R) on September 1, 2000.
INVESTMENT STRATEGY
The trust is part of a long-term investment strategy that seeks to offer a
convenient way to apply the Value Line #1 Strategy over time. Created in 1931,
The Value Line Investment Survey uses a ranking system that has been operating
essentially in its present form since 1965. The Value Line Timeliness(TM) Rank
uses a ranking scale of 1 (highest) to 5 (lowest) and measures potential price
performance during the next six to twelve months relative to approximately 1700
stocks covered by The Value Line Investment Survey. The trust seeks to invest
in the stocks currently ranked #1 for Timeliness(TM) for about 14 months. The
trust will then terminate and you will be able to reinvest your proceeds into a
new trust that applies the Value Line #1 Strategy at that time, if available.
This "rollover" strategy offers a long-term investment approach based on
periodic analysis of the Value Line Timeliness(TM) Rank.
<TABLE>
<CAPTION>
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PORTFOLIO DIVERSIFICATION
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<S> <C>
SEMICONDUCTORS 19%
ELECTRONICS 13%
HEALTHCARE SERVICES 13%
CONSUMER, CYCLICAL 11%
SOFTWARE 10%
TELECOMMUNICATIONS 9%
COMMERCIAL SERVICES 8%
PHARMACEUTICAL 6%
COMPUTERS 5%
ENERGY 3%
INDUSTRIAL 3%
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</TABLE>
PRINCIPAL RISKS
As with all investments, you can lose money by investing in this trust. The
trust also might not perform as well as you expect. This can happen for reasons
such as these:
* STOCK PRICES CAN BE VOLATILE. The value of your investment may fall over
time.
* WE DO NOT ACTIVELY MANAGE THE PORTFOLIO. The trust will generally hold,
and may continue to buy, the same stocks even if the Value Line ranking
changes.
* Many of the stocks in the portfolio are issued by technology companies.
These companies include companies involved in computers, electronics, the
Internet, semiconductors, software and telecommunications. NEGATIVE
DEVELOPMENTS IN THE TECHNOLOGY INDUSTRY WILL AFFECT THE VALUE OF YOUR
INVESTMENT GREATER THAN IN A MORE DIVERSIFIED INVESTMENT. Technology
stocks tend to experience above-average price volatility.
* Many of the stocks in the portfolio are issued by consumer products
companies. These include companies that make and distribute items such as
clothing, appliances, food products and other consumer goods. NEGATIVE
DEVELOPMENTS IN THE CONSUMER PRODUCTS INDUSTRY WILL AFFECT THE VALUE OF
YOUR INVESTMENT GREATER THAN IN A MORE DIVERSIFIED INVESTMENT.
* All strategy-based portfolios have operating expenses and transaction
costs. THIS MEANS THAT A STRATEGY-BASED PORTFOLIO MAY NOT TRACK ITS
HYPOTHETICAL STRATEGY PERFORMANCE EXACTLY. Your trust may not be able to
own all strategy stocks in the exact strategy weightings.
2 Investment Summary
<PAGE>
WHO SHOULD INVEST
You should consider this investment if you:
* want to own a defined portfolio of stocks selected based on potential stock
price performance over the next six to twelve months.
* seek capital appreciation.
* want to pursue a long-term investment strategy based on successive rankings
of potential six to twelve month stock price performance.
You should not consider this investment if you:
* are uncomfortable with the trust's strategy.
* are uncomfortable with the risks of an unmanaged investment in stocks.
* want current income or capital preservation.
<TABLE>
<CAPTION>
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ESSENTIAL INFORMATION
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<S> <C>
UNIT PRICE AT INCEPTION $10.00
INCEPTION DATE September 14, 2000
TERMINATION DATE November 14, 2001
DISTRIBUTION DATES 15th day of January, April,
July and October
RECORD DATES 1st day of January, April,
July and October
CUSIP NUMBERS
Cash distributions (all accounts) 753269521
Reinvested distributions
Standard Accounts 753269539
Wrap Fee Accounts 753269547
MINIMUM INVESTMENT
Standard accounts $1,000/100 units
Retirement accounts and
custodial accounts for minors $250/25 units
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</TABLE>
FEES AND EXPENSES
As with any investment, you will incur expenses when you invest in the trust.
The amounts below are estimates of the direct and indirect expenses that you may
incur based on a $10 unit price. Actual expenses may vary.
<TABLE>
<CAPTION>
AS A % OF
$1,000 INVESTED
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<S> <C>
INITIAL SALES FEE PAID ON PURCHASE 1.00%
DEFERRED SALES FEE IN FIRST YEAR 1.90
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MAXIMUM SALES FEE 2.90%
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ORGANIZATION COSTS
(amount per 100 units paid by trust at
end of initial offering period) $5.00
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<CAPTION>
AS A % OF AMOUNT PER
ANNUAL EXPENSES $1,000 INVESTED 100 UNITS
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<S> <C> <C>
Trustee's fee and expenses 0.08% $0.80
Creation and development fee 0.25% 2.50
Supervisory and evaluation fees 0.05% 0.50
Licensing fees 0.20% 2.00
----- -----
Total 0.58% $5.80
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</TABLE>
The deferred sales fee is fixed at $0.19 per unit and accrues daily from
November 14, 2000 through January 14, 2001. The creation and development fee
compensates the sponsor for creating and developing your trust. The trust
accrues this fee daily during the life of the trust based on average daily net
asset value (not to exceed 0.75 percent of your initial investment over the life
of the trust). The trust pays both fees to the sponsor monthly.
EXAMPLE
This example helps you compare the cost of investing in this trust with the
cost of investing in other unit trusts and mutual funds. In the example we
assume that you reinvest your investment in a new trust each year, the expenses
above do not change and the trust's annual return is 5%. The example only
illustrates the effect of expenses-your actual returns and expenses will vary.
Based on these assumptions, you would pay these expenses for every $10,000 you
invest in the trust:
1 year $401
3 years $1,021
5 years $1,667
10 years $3,399
These amounts are the same regardless of whether you sell your investment at
the end of a period or continue to hold your investment.
Investment Summary 3
<PAGE>
<TABLE>
<CAPTION>
THE PORTFOLIO (at inception)
Ticker Company Initial Price per Cost to
Symbol Name Industry Shares Share Portfolio
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AD Advo Inc. Communications 65 $ 38.43750 $ 2,498
ADBE Adobe Systems Inc Technology 20 125.93750 2,519
ADCT ADC Telecommunications Inc. Communications 73 35.06250 2,560
ADI Analog Devices Inc. Technology 29 89.25000 2,588
AEIS Advanced Energy Industries Industrial 58 45.43750 2,635
ALA Alcatel SA Communications 34 73.37500 2,495
ALO Alpharma Inc. Consumer, Non-cyclical 48 52.18750 2,505
ALTR Altera Corp Technology 46 54.00000 2,484
AMAT Applied Materials Inc. Technology 34 74.00000 2,516
AMD Advanced Micro Devices Technology 87 28.43750 2,474
APOL Apollo Group Inc. Consumer, Non-cyclical 54 46.00000 2,484
ARW Arrow Electronics Inc. Industrial 69 35.62500 2,458
AZR Aztar Corp. Consumer, Cyclical 164 15.12500 2,481
BARZ Barra Inc. Technology 42 60.56250 2,544
BEAS BEA Systems Inc. Technology 40 65.56250 2,623
CAEIF CAE Inc. Industrial 186 13.43000 2,498
CDT Cable Design Technologies Corp. Industrial 99 25.31250 2,506
CDWC CDW Computer Centers Inc. Consumer, Cyclical 32 79.87500 2,556
CREE Cree Inc. Technology 21 116.50000 2,447
CSGS CSG Systems International Technology 52 48.68750 2,532
CYTC Cytyc Corp. Consumer, Non-cyclical 64 39.00000 2,496
DGX Quest Diagnostics Inc. Consumer, Non-cyclical 21 119.00000 2,499
DLTR Dollar Tree Stores Inc. Consumer, Cyclical 59 42.37500 2,500
DP Diagnostic Products Corp. Consumer, Non-cyclical 58 43.18750 2,505
DY Dycom Industries Inc. Industrial 49 50.00000 2,450
EDMC Education Management Corp Consumer, Non-cyclical 100 25.50000 2,550
ELN Elan Corp Plc Consumer, Non-cyclical 46 53.43750 2,458
EMC EMC Corp-Mass Technology 27 94.68750 2,557
ESA Extended Stay America Inc. Consumer, Cyclical 173 14.50000 2,509
ESIO Electro Scientific Inds Inc. Industrial 70 36.25000 2,538
FLEX Flextronics International Ltd. Industrial 31 82.98438 2,573
GLW Corning Inc. Communications 9 286.00000 2,574
GTRC Guitar Center Inc. Consumer, Cyclical 167 14.56250 2,432
IDTI Integrated Device Technology Inc. Technology 29 87.39063 2,534
IMNX Immunex Corp. Consumer, Non-cyclical 54 47.62500 2,572
IMPH Impath Inc. Consumer, Non-cyclical 61 45.00000 2,745
IRF International Rectifier Corp. Technology 41 62.00000 2,542
ITWO I2 Technologies Inc. Technology 15 172.00000 2,580
IVX Ivax Corp. Consumer, Non-cyclical 61 40.87500 2,493
JBL Jabil Circuit Inc. Industrial 42 61.87500 2,599
JDSU JDS Uniphase Corp. Communications 24 104.81250 2,516
KCP Kenneth Cole Productions Inc. Consumer, Cyclical 65 38.37500 2,494
LH Laboratory Corp. Of America Holdings Consumer, Non-cyclical 19 130.43750 2,478
LLTC Linear Technology Corp. Technology 37 66.75000 2,470
LMS Lamson & Sessions Co. Industrial 121 21.00000 2,541
MACR Macromedia Inc. Technology 44 56.93750 2,505
MCHP Microchip Technology Inc. Industrial 39 62.75000 2,447
MCRL Micrel Inc. Technology 34 72.90625 2,479
MEDI Medimmune Inc. Consumer, Non-cyclical 32 80.35938 2,572
MENT Mentor Graphics Corp. Technology 117 21.37500 2,501
4 Investment Summary
<PAGE>
<CAPTION>
Ticker Company Initial Price per Cost to
Symbol Name Industry Shares Share Portfolio
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MERQ Mercury Interactive Corp. Technology 21 $119.93750 $ 2,519
MNMD Minimed Inc. Consumer, Non-cyclical 33 77.00000 2,541
MU Micron Technology Inc. Technology 38 66.00000 2,508
MXIM Maxim Integrated Products Technology 31 81.00000 2,511
NDN 99 Cents Only Stores Consumer, Cyclical 49 51.37500 2,517
NEWP Newport Corp. Communications 17 152.25000 2,588
NSIT Insight Enterprises Inc. Consumer, Cyclical 50 51.00000 2,550
NT Nortel Networks Corporation Communications 37 66.87500 2,474
NTAP Network Appliance Inc. Communications 23 112.00000 2,576
NVLS Novellus Systems Inc. Technology 49 54.93750 2,692
OCA Orthodontic Centers Of America Consumer, Non-cyclical 74 32.87500 2,433
OIL Triton Energy Ltd. Energy 52 48.81250 2,538
OO Oakley Inc. Consumer, Non-cyclical 132 18.75000 2,475
ORCL Oracle Corporation Technology 31 81.81250 2,536
OXHP Oxford Health Plans Consumer, Non-cyclical 87 29.43750 2,561
PAYX Paychex Inc. Consumer, Non-cyclical 57 43.68750 2,490
PCP Precision Castparts Corp. Industrial 32 79.00000 2,528
PHSY Pacificare Health Systems Consumer, Non-cyclical 47 52.62500 2,473
PLT Plantronics Inc. Communications 51 49.12500 2,505
PLXS Plexus Corp. Consumer, Non-cyclical 38 65.37500 2,484
PMCS PMC - Sierra Inc. Technology 12 206.00000 2,472
RHI Robert Half International Inc. Consumer, Non-cyclical 80 31.31250 2,505
RMBS Rambus Inc. Technology 30 84.46875 2,534
RMD Resmed Inc. Consumer, Non-cyclical 70 35.62500 2,494
ROG Rogers Corp. Industrial 76 33.12500 2,518
RWY Rent-Way Inc. Consumer, Non-cyclical 89 28.31250 2,520
SANM Sanmina Corp. Industrial 24 102.87500 2,469
SAPE Sapient Corp. Technology 52 47.50000 2,470
SAWS Sawtek Inc. Industrial 58 46.62500 2,704
SCRI SICOR Inc. Consumer, Non-cyclical 238 10.43750 2,484
SEBL Siebel Systems Inc Technology 27 94.06250 2,540
SEIC SEI Investments Co. Technology 38 66.78125 2,538
SFA Scientific-Atlanta Inc. Communications 36 67.50000 2,430
SMTC Semtech Corp. Technology 24 106.18750 2,549
SNDK Sandisk Corp. Technology 31 80.06250 2,482
SUNW Sun Microsystems Inc. Technology 21 118.18750 2,482
TBL Timberland Company Consumer, Cyclical 60 41.50000 2,490
TECD Tech Data Corp. Consumer, Cyclical 49 51.06250 2,502
TECH Techne Corp. Consumer, Non-cyclical 26 96.50000 2,509
TER Teradyne Inc. Technology 49 51.43750 2,520
TGH Trigon Healthcare Inc. Consumer, Non-cyclical 50 49.25000 2,463
TTI Tetra Technologies Inc. Energy 164 15.87500 2,604
TXCC Transwitch Corp. Technology 56 43.75000 2,450
UNH UnitedHealth Group Incorporated Consumer, Non-cyclical 27 91.50000 2,471
VOL Volt Information Sciences Inc. Consumer, Non-cyclical 86 28.62500 2,462
VPI Vintage Petroleum Inc Energy 111 22.18750 2,463
VSH Vishay Intertechnology Inc. Industrial 70 36.12500 2,529
VTSS Vitesse Semiconductor Corp. Technology 32 83.50000 2,672
WAT Waters Corp. Industrial 35 72.87500 2,551
XLNX Xilinx Inc. Technology 30 84.31250 2,529
--------
$252,017
========
</TABLE>
Investment Summary 5
<PAGE>
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UNDERSTANDING YOUR INVESTMENT
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HOW TO BUY UNITS
You can buy units of the trust on any business day by contacting your
financial professional or Ranson. Unit prices are available daily on the
Internet at WWW.RANSON.COM. The unit price includes:
* the value of the stocks,
* the initial sales fee, and
* cash and other net assets in the portfolio.
We often refer to the purchase price of units as the "offer price." We must
receive your order to buy units prior to the close of the New York Stock
Exchange (normally 4:00 p.m. Eastern time) to give you the price for that day.
If we receive your order after this time, you will receive the price computed on
the next business day.
RETIREMENT ACCOUNTS. The portfolio may be suitable for purchase in tax-
advantaged retirement accounts. You should contact your financial professional
about the accounts offered and any additional fees imposed. In addition, you
can invest in a Ranson UIT retirement account directly with the trustee. We
reduce the minimum investment to only $250 for these accounts. Please contact
The Bank of New York for more information and an application. The trustee will
assess an annual fee per account (currently $12) which can be deducted from your
account if do not wish to pay it separately.
VALUE OF THE STOCKS. We determine the value of the stocks as of the close of
the New York Stock Exchange on each day that exchange is open. During the
initial offering period, the value of the stocks includes organization costs.
Pricing the Stocks. We generally determine the value of stocks using the
last sale price for stocks traded on a national securities exchange or the
Nasdaq Stock Market. In some cases we will price a stock based on the last
asked or bid price in the over-the-counter market or by using other recognized
pricing methods. We will only do this if a stock is not principally traded on a
national securities exchange or the Nasdaq Stock Market, or if the market quotes
are unavailable or inappropriate.
The trustee determined the initial prices of the stocks shown in "The
Portfolio" in this prospectus. The trustee determined these initial prices as
described above at the close of the New York Stock Exchange on the business day
before the date of this prospectus. On the first day we sell units we will
compute the unit price as of the close of the New York Stock Exchange or the
time the registration statement filed with the Securities and Exchange
Commission becomes effective, if later.
Organization Costs. During the initial offering period, part of the value of
the stocks represents an amount that will pay the costs of creating your trust.
These costs include the costs of preparing the registration statement and legal
documents, federal and state registration fees, the initial fees and expenses of
the trustee and the initial audit. Your trust will sell stocks to reimburse us
for these costs at the end of the initial offering period or after six months,
if earlier.
SALES FEE. You pay a fee when you buy units. The total fee equals 2.90% of
your unit price at the time of purchase. To keep your
6 Understanding Your Investment
<PAGE>
money working longer, we defer payment of $0.19 of this fee per unit. Your
trust accrues part of this fee each day as described on page three. You pay the
remaining sales fee at the time you buy units (approximately 1.00% of your unit
price).
REDUCING YOUR SALES FEE. We offer a variety of ways for you to reduce the
fee you pay. It is your financial professional's responsibility to alert us of
any discount when you order units. Since the deferred sales fee is a fixed
dollar amount per unit, your trust must charge the deferred sales fee per unit
regardless of any discounts. However, if you are eligible to receive a discount
such that your total sales fee is less than the fixed dollar amount of the
deferred sales fee, we will credit you the difference between your total sales
fee and the deferred sales fee at the time you buy units.
Large Purchases. You can reduce your fee by increasing the size of your
investment:
<TABLE>
<CAPTION>
If you purchase: Your fee will be:
---------------- -----------------
<S> <C>
Less than $100,000 2.90%
$100,000 - $249,999 2.70
$250,000 - $499,999 2.50
$500,000 - $999,999 2.30
$1,000,000 or more 2.10
</TABLE>
We apply these fees as a percent of the unit price at the time of purchase.
We also apply the different purchase levels on a unit basis using a $10 unit
equivalent. For example, if you purchase between 10,000 and 24,999 units, your
fee is 2.70% of your unit price.
You may AGGREGATE unit purchases by the same person on any single day from
any one broker-dealer to qualify for a purchase level. You can include these
purchases as your own for purposes of this aggregation:
* purchases by your spouse or minor children and
* purchases by your trust estate or fiduciary accounts.
You may also use a LETTER OF INTENT to combine purchases over time to qualify
for a purchase level. Under this option, you must give us a letter of intent to
purchase a specified amount of units of any Ranson unit trust over a specified
time period. The letter must specify a time period of no more than 13 months.
Once you sign a letter of intent, we will reduce your fee based on your total
purchase commitment as shown in the table above. If your purchases exceed the
level specified in your letter, you will still receive the additional fee
reduction for your purchases shown in the table above (we will not cap your
discount). If your total purchases are less than the level specified in your
letter, you must pay the fee difference to us. We reserve the right to redeem
your units if you do not pay the difference.
The discounts described above apply only during the initial offering period.
Advisory and Wrap Fee Accounts. We reduce your sales fee for purchases made
through registered investment advisers, certified financial planners or
registered broker-dealers who charge periodic fees in lieu of commissions or who
charge for financial planning or for investment advisory or asset management
services or provide these services as part of an investment account where a
comprehensive "wrap fee" is imposed. We reduce your fee by the amount of the
fee that we would normally pay to your financial professional. You pay only the
portion of the fee that the sponsor retains. This table provides an example of
the
Understanding Your Investment 7
<PAGE>
sales fee you will pay per unit if you purchase units in this type of account.
<TABLE>
<S> <C>
Fee paid on purchase $0.000
Deferred sponsor retention 0.065
------
Total $0.065
======
</TABLE>
This discount applies during the initial offering period and in the secondary
market. Your financial professional may purchase units with the Wrap Fee
Account CUSIP number to facilitate purchases under this discount, however, we do
not require that you buy units with this CUSIP number to qualify for the
discount. If you purchase units with this special CUSIP number, you should be
aware that all distributions will automatically reinvest into additional units
of your trust.
Exchange or Rollover Option. We waive the initial sales fee on units of the
trust offered in this prospectus if you buy your units with redemption or
termination proceeds from any other Ranson unit trust. You may also purchase
units of the trust offered in this prospectus at this reduced fee if you
purchase your units with termination proceeds from an unaffiliated unit trust
that has the same investment strategy as this trust. In order to qualify for
this discount, your unit redemption or trust termination must occur on the same
day that you purchase units of the trust offered in this prospectus. These
discounts apply only during the initial offering period.
Employees. We do not charge the sales fee that we would normally pay to your
financial professional for purchases made by officers, directors and employees
and their family members (spouses, children and parents) of Ranson and its
affiliates; officers, directors, and employees and their family members
(spouses, children and parents) of Value Line Publishing, Inc. and its
affiliates; or by registered representatives of selling firms and their family
members (spouses, children and parents). You pay only the portion of the fee
that the sponsor retains. You may purchase units with the Wrap Fee Account
CUSIP number to facilitate purchases under this discount, however we do not
require that you buy units with this CUSIP number to qualify for the discount.
If you purchase units with this special CUSIP number, you should be aware that
all distributions will automatically reinvest into additional units of your
trust. This discount applies during the initial offering period and in the
secondary market.
Dividend Reinvestment Plan. We do not charge any sales fee when you reinvest
distributions from your trust into additional units of the trust. Since the
deferred sales fee is a fixed dollar amount per unit, your trust must charge the
deferred sales fee per unit regardless of this discount. If you elect the
distribution reinvestment plan, we will credit you with additional units with a
dollar value sufficient to cover the amount of any remaining deferred sales fee
that will be collected on such units at the time of reinvestment. The dollar
value of these units will fluctuate over time. This discount applies during the
initial offering period and in the secondary market.
HOW TO SELL YOUR UNITS
You can sell your units on any business day by contacting your financial
professional or Ranson. Unit prices are available daily on the Internet at
WWW.RANSON.COM or through your financial professional. We often refer to the
sale price of units as the "bid price." You pay any remaining sales fee when
you sell or redeem your units.
8 Understanding Your Investment
<PAGE>
SELLING UNITS. We may maintain a secondary market for units. This means
that if you want to sell your units, we may buy them at the current price. We
may then resell the units to other investors at the public offering price or
redeem them for the redemption price. Our secondary market repurchase price is
generally the same as the redemption price. Certain broker-dealers might also
maintain a secondary market in units. You should contact your financial
professional for current unit prices to determine the best price available. We
may discontinue our secondary market at any time without notice. Even if we do
not make a market, you will be able to redeem your units with the trustee on any
business day for the current price.
REDEEMING UNITS. You may also redeem your units directly with the trustee,
The Bank of New York, on any day the New York Stock Exchange is open. The
trustee must receive your completed redemption request prior to the close of the
New York Stock Exchange for you to receive the unit price for a particular day.
If your request is received after that time or is incomplete in any way, you
will receive the next price computed after the trustee receives your completed
request. Rather than contacting the trustee directly, your financial
professional may also be able to redeem your units by using the Investors'
Voluntary Redemptions and Sales (IVORS) automated redemption service offered
through Depository Trust Company.
If you redeem your units, the trustee will generally send you a payment for
your units no later than seven days after it receives all necessary
documentation (this will usually only take three business days). The only time
the trustee can delay your payment is if the New York Stock Exchange is closed
(other than weekends or holidays), the Securities and Exchange Commission
determines that trading on that exchange is restricted or an emergency exists
making sale or evaluation of the stocks not reasonably practicable, and for any
other period that the Securities and Exchange Commission permits.
To redeem your units, you must send the trustee any certificates for your
units. You must properly endorse your certificates or sign a written transfer
instrument with a signature guarantee. The trustee may require additional
documents such as a certificate of corporate authority, trust documents, a death
certificate, or an appointment as executor, administrator or guardian. The
trustee cannot complete your redemption or send your payment to you until it
receives all of these documents in completed form.
You can request an in kind distribution of the stocks underlying your units
if you own units worth at least $1,000,000 or you originally paid at least that
amount for your units. This option is generally available only for stocks
traded and held in the United States. The trustee will make any in kind
distribution of stocks by distributing applicable stocks in book entry form to
the account of your financial professional at Depository Trust Company. You will
receive whole shares of the applicable stocks and cash equal to any fractional
shares. You may not request this option in the last 30 days of your trust's
life. We may discontinue this option at any time without notice.
EXCHANGE OPTION. You may be able to exchange your units for units of other
Ranson unit trusts at a reduced sales fee. You can contact your financial
professional or Ranson for more information about trusts currently available for
exchanges. Before you exchange units, you should read the prospectus carefully
and
Understanding Your Investment 9
<PAGE>
understand the risks and fees. You should then discuss this option with your
financial professional to determine whether your investment goals have changed,
whether current trusts suit you and to discuss tax consequences. To qualify for
a reduced sales fee, you must purchase units in a subsequent trust on the same
day that you redeem units of your current trust. We may discontinue this option
at any time.
DISTRIBUTIONS
QUARTERLY DIVIDENDS. Your trust generally pays dividends from its net
investment income along with any excess capital on each quarterly distribution
date to unitholders of record on the preceding record date. You can elect to:
* reinvest distributions in additional units of your trust at no fee,
* reinvest distributions in various mutual funds, or
* receive distributions in cash.
You may change your election by contacting your financial professional or the
trustee. Once you elect to participate in a reinvestment program, the trustee
will automatically reinvest your distributions into additional units or mutual
fund shares at their net asset value on the distribution date. We waive the
sales fee for reinvestments into units of your trust. We cannot guarantee that
units or mutual fund shares will always be available for reinvestment. If units
or fund shares are unavailable, you will receive cash distributions. We may
discontinue these options at any time without notice.
In some cases, your trust might pay a special distribution if it holds an
excessive amount of principal pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
stock is in your portfolio. The amount of your distributions will vary from
time to time as companies change their dividends or trust expenses change.
REINVEST IN YOUR TRUST. You can keep your money working by electing to
reinvest your distributions in additional units of your trust. The easiest way
to do this is to have your financial professional purchase units with one of the
Reinvestment CUSIP numbers listed in the "Investment Summary" section of this
prospectus. You may also make or change your election by contacting your
financial professional or the trustee.
REINVEST IN MUTUAL FUNDS. You can also elect to automatically reinvest your
distributions in certain mutual funds. Unlike your trust, these mutual funds
are managed funds that have different objectives. You can obtain information
about these funds from Ranson.
REPORTS. The trustee will send your financial professional a statement
showing income and other receipts of your trust for each distribution. Each
year the trustee will also provide an annual report on your trust's activity and
certain tax information. You can request copies of stock evaluations to enable
you to complete your tax forms and audited financial statements for your trust,
if available.
INVESTMENT RISKS
All investments involve risk. This section describes the main risks that can
impact the value of the stocks in your portfolio. You should understand these
risks before you invest. If the value of the stocks falls, the value of your
units
10 Understanding Your Investment
<PAGE>
will also fall. We cannot guarantee that your trust will achieve its objective
or that your investment return will be positive over any period.
MARKET RISK is the risk that the value of the stocks will fluctuate. This
could cause the value of your units to fall below your purchase price. Market
value fluctuates in response to various factors. These can include changes in
interest rates, inflation, the financial condition of the stock's issuer or even
perceptions of the issuer. Even though we carefully supervise your portfolio,
you should remember that we do not manage your portfolio. Your trust will not
sell a stock solely because the market value falls as is possible in a managed
fund.
CONCENTRATION RISK is the risk that your portfolio is less diversified
because it concentrates in a particular type of stock. When a certain type of
stock makes up more than 25% of a trust, the trust is considered to be
"concentrated" in that stock type. Your portfolio currently concentrates in
TECHNOLOGY COMPANIES and CONSUMER PRODUCTS COMPANIES.
Before you invest in TECHNOLOGY COMPANIES, you should understand that:
* These companies encounter
> rapid changes in technology,
> worldwide competition,
> rapid obsolescence of products and services,
> cyclical market patterns,
> rapidly evolving industry standards, and
> frequent new product introductions.
* An unexpected change in one or more of the technologies affecting an
issuer's products or in the market for products based on a particular
technology could negatively affect an issuer's operating results.
* Operating results and customer relationships can be hurt by
> an increase in price, or an interruption or reductions in supply, of any
key components, and
> the failure of an issuer to comply with rigorous industry standards.
Before you invest in CONSUMER PRODUCTS COMPANIES, you should understand that:
* The economic health of consumers has a significant impact on spending on
consumer products. A weak economy and its effect on consumer spending would
adversely affect consumer products companies.
* These companies encounter
> cyclical revenues and earnings that can vary significantly at different
times of the year and
> extensive competition.
* Operating results and stock price performance can be hurt by
> changing consumer tastes,
Understanding Your Investment 11
<PAGE>
> product liability litigation, and
> increased governmental regulation.
CORRELATION RISK is the risk that the performance of the portfolio might not
correspond exactly with the hypothetical strategy performance. This can happen
for reasons such as:
* the impracticability of owning each of the stocks with the exact strategy
weightings at a given time, and
* fees and expenses of the trust.
THE VALUE LINE #1 STRATEGY
The Value Line Investment Survey was created in 1931. The Value Line ranking
system has been operating essentially in its present form since 1965. It is
backed by disciplined, objective, quantitative analytical methodologies that
have proven themselves over the last 60 years. The Value Line Timeliness(TM)
Rank seeks to measure potential price performance during the next six to twelve
months relative to approximately 1700 stocks covered by The Value Line
Investment Survey. These stocks currently represent 95 industries and
approximately 94% of the trading volume on all United States stock exchanges.
The Value Line Timeliness(TM) Rank uses a ranking scale of 1 (highest) to 5
(lowest). The components of the ranking system are the long-term trend of
earnings, prices, recent earnings and price momentum and earnings surprises. A
computer program combines these elements into a forecast of relative price
behavior of each stock for the six to twelve months ahead relative to all other
stocks in the coverage universe. The Value Line Investment Survey describes its
ranking system as follows:
RANK 1 (HIGHEST): Value Line anticipates this stock to be one of the best
relative price performers during the next six to twelve months (100 stocks).
RANK 2 (ABOVE AVERAGE): Value Line anticipates better-than-average price
performance (300 stocks).
RANK 3 (AVERAGE): Value Line anticipates price performance in line with the
market (900 stocks).
RANK 4 (BELOW AVERAGE): Value Line anticipates below-average price
performance (300 stocks).
RANK 5 (LOWEST): Value Line anticipates the poorest relative price
performance (100 stocks).
Value Line changes the Timeliness(TM) rank from time to time based on new
earnings reports, changes in the price movement of a stock relative to the
market, a combination of the earnings and price factors, or shifts in the
relative positions of other stocks. The portfolio will not change as a result
of any change in Timeliness(TM) rank during the trust's life. The portfolio
will remain fixed until termination except as otherwise described in this
prospectus and as provided in the trust agreement. The Timeliness(TM) rank is
the view of The Value Line Investment Survey. It is not the view of Ranson.
The rank cannot predict future performance and does not guarantee future
performance.
This table shows hypothetical price appreciation for the stocks in the Dow
Jones Industrial Average and the Standard & Poor's 500 Index compared with
stocks selected using the Value Line #1 Strategy (not your trust or any previous
12 Understanding Your Investment
<PAGE>
series). This information is not meant to indicate your future return. The
table does not assume reinvestment of dividends. Your investment return will
differ from the hypothetical returns of the strategy. Returns have fluctuated
significantly in the past and have not always been positive.
<TABLE>
<CAPTION>
HYPOTHETICAL PRICE APPRECIATION
-------------------------------
DOW JONES STANDARD & VALUE
INDUSTRIAL POOR'S 500 LINE #1
YEAR AVERAGE INDEX STRATEGY
---- ---------- ---------- --------
<S> <C> <C> <C>
1965 10.88% 9.06% 33.60%
1966 -18.94 -13.09 3.10
1967 15.20 20.09 39.20
1968 4.27 7.66 31.20
1969 -15.19 -11.36 -17.70
1970 4.82 0.10 -8.90
1971 6.11 10.79 26.50
1972 14.58 15.63 10.10
1973 -13.20 -17.37 -17.10
1974 -23.64 -29.72 -23.10
1975 44.46 31.55 51.60
1976 22.80 1.15 35.30
1977 -12.91 -11.50 15.80
1978 2.66 1.06 19.80
1979 10.60 12.31 25.60
1980 21.90 29.77 50.20
1981 -3.61 -9.73 -1.90
1982 26.85 14.76 33.70
1983 25.82 17.27 25.20
1984 1.29 1.40 -8.60
1985 33.28 26.33 38.60
1986 27.00 14.62 23.50
1987 5.66 2.03 -1.20
1988 16.03 12.40 16.00
1989 32.09 27.25 28.70
1990 -0.73 -6.56 -6.60
1991 24.19 26.31 56.70
1992 7.39 4.46 10.10
1993 16.87 7.06 18.50
1994 5.03 -1.54 4.60
1995 36.67 34.11 31.30
1996 28.71 20.60 27.00
1997 24.78 31.01 25.80
1998 16.10 26.67 9.30
1999 25.22 19.53 23.70
6/30/00 -9.13 -1.00 17.60
<FN>
--------------------
* The table above does not reflect the sales fee or expenses you pay on your
units. It also does not reflect the effect of taxes. As with any strategy-
based portfolio, your return may differ from that of the hypothetical strategy.
For example, this could happen because the trust may not be fully invested at
all times, trusts are established at different times during the year, the trust
has a 14 month term rather than one year, the trust will bear brokerage
commissions in buying and selling stocks, and the weightings of stocks in the
trust may not replicate their weightings in the hypothetical strategy at all
times.
</TABLE>
When reviewing any historical performance information, you should keep in
mind that past performance cannot guarantee future results. Many stocks,
especially those issued by technology companies, have exhibited above-average
price appreciation and extreme volatility in recent years during a period of a
generally rising stock market. No one can assure you that this will continue or
that the performance of stocks will replicate the performance exhibited in the
past.
HOW THE TRUST WORKS
YOUR TRUST. Your trust is a unit investment trust registered under the
Investment Company Act of 1940 and the Securities Act of 1933. We created the
trust under a trust agreement between Ranson & Associates, Inc. (as sponsor,
evaluator and supervisor) and The Bank of New York (as trustee). To create your
trust, we deposited contracts to purchase stocks with the trustee along with an
irrevocable letter of credit or other consideration to pay for the stocks. In
exchange, the trustee delivered units of your trust to us. Each unit represents
an undivided interest in the assets
Understanding Your Investment 13
<PAGE>
of your trust. These units remain outstanding until redeemed or until your
trust terminates.
CHANGING YOUR PORTFOLIO. Your trust is not a managed fund. Unlike a managed
fund, we designed your portfolio to remain relatively fixed after its inception.
Your trust will generally buy and sell stocks:
* to pay expenses,
* to issue additional units or redeem units,
* in limited circumstances to protect the trust,
* to make required distributions or avoid imposition of taxes on the
trust, or
* as permitted by the trust agreement.
Your trust will generally reject any offer for securities or property other
than cash in exchange for the stocks in its portfolio. However, if a public
tender offer has been made for a stock or a merger or acquisition has been
announced affecting a stock, your trust may either sell the stock or accept a
tender offer for cash if the supervisor determines that the sale or tender is in
the best interest of unitholders. The trustee will distribute any cash proceeds
to unitholders. If your trust receives securities or property other than cash,
it may either hold the securities or property in its portfolio or sell the
securities or property and distribute the proceeds. For example, this could
happen in a merger or similar transaction.
We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio. When your
trust buys stocks, it will pay brokerage or other acquisition fees. You could
experience a dilution of your investment because of these fees and fluctuations
in stock prices between the time we create units and the time your trust buys
the stocks. When your trust buys or sells stocks, we may direct that it place
orders with and pay brokerage commissions to brokers that sell units or are
affiliated with your trust. We may consider whether a firm sells units of our
trusts when we select firms to handle these transactions.
AMENDING THE TRUST AGREEMENT. Ranson and the trustee can change the trust
agreement without your consent to correct any provision that may be defective or
to make other provisions that will not adversely affect your interest (as
determined by Ranson and the trustee). We cannot change this agreement to
reduce your interest in your trust without your consent. Investors owning two-
thirds of the units in your trust may vote to change this agreement.
TERMINATION OF YOUR TRUST. Your trust will terminate no later than the
termination date listed in the "Investment Summary" section of this prospectus.
The trustee may terminate your trust early if the value of the trust is less
than 20% of the original value of the stocks in the trust at the time of
deposit. At this size, the expenses of your trust may create an undue burden on
your investment. Investors owning two-thirds of the units in your trust may
also vote to terminate the trust early. We may also terminate your trust in
other limited circumstances.
The trustee will notify you of any termination and sell any remaining stocks.
The trustee will send your final distribution to you within a reasonable time
following liquidation of all the stocks after deducting final expenses. Your
termination distribution may be less than the price you originally paid for your
units. You may be able to request an in kind distribution of the
14 Understanding Your Investment
<PAGE>
stocks underlying your units at termination. Please refer to the section
entitled "How to Sell Your Units-Redeeming Units" for information on in kind
distributions.
RANSON. We are an investment banking firm created in 1995 by former owners
and employees of Ranson Capital Corporation. We are the successor to a series
of companies first organized in 1935. During our history we have been active in
public and corporate finance and have distributed bonds, mutual funds and unit
trusts in the primary and secondary markets. We are a registered broker-dealer
and member of the National Association of Securities Dealers, Inc. If we fail
to or cannot perform our duties as sponsor or become bankrupt, the trustee may
replace us, continue to operate your trust without a sponsor, or terminate your
trust. You can contact us at our headquarters at 250 North Rock Road, Ste. 150,
Wichita, Kansas 67206-2241 or by using the contacts listed on the back cover of
this prospectus.
Ranson and your trust have adopted a code of ethics requiring Ranson's
employees who have access to information on trust transactions to report
personal securities transactions. The purpose of the code is to avoid potential
conflicts of interest and to prevent fraud, deception or misconduct with respect
to your trust.
THE TRUSTEE. The Bank of New York is the trustee of your trust. It is a
trust company organized under New York law. You can contact the trustee by
calling the telephone number on the back cover of this prospectus or write to
Unit Investment Trust Division, 101 Barclay Street, New York, New York 10007.
We may remove and replace the trustee in some cases without your consent. The
trustee may also resign by notifying Ranson and investors.
HOW WE DISTRIBUTE UNITS. We sell units to the public through broker-dealers
and other firms. We pay part of the sales fee to these distribution firms when
they sell units. The distribution fee during the initial offering period is as
follows:
<TABLE>
<CAPTION>
If a firm distributes: It will earn:
--------------------- ------------
<S> <C>
Less than $100,000 2.25%
$100,000 - $249,999 2.05
$250,000 - $499,999 1.85
$500,000 - $999,999 1.65
$1,000,000 or more 1.45
</TABLE>
We apply these amounts as a percent of the unit price per transaction at the
time of the transaction. We also apply the different distribution levels on a
unit basis using a $10 unit equivalent. For example, if a firm distributes
between 10,000 and 24,999 units, it earns 2.05% of the unit price. In addition,
firms can earn additional amounts based on total sales of all Ranson Value Line
#1 Strategy Trusts during calendar year 2000:
<TABLE>
<CAPTION>
It will earn an
If a firm sells this amount: additional:
--------------------------- ---------------
<S> <C>
$5,000,000 - $9,999,999 0.050%
$10,000,000 - $24,999,999 0.100
$25,000,000 or more 0.125
</TABLE>
We apply these amounts as a percent of the total distribution price. We pay
these additional amounts out of our own assets and not out of your sales fee
directly.
We generally register units for sale in various states in the U.S. We do not
register units for sale in any foreign country. It is your financial
professional's responsibility to make sure that units are registered or exempt
from registration if you are a foreign investor or if you want to buy units in
another country. This prospectus does not constitute an offer of units
Understanding Your Investment 15
<PAGE>
in any state or country where units cannot be offered or sold lawfully. We may
reject any order for units in whole or in part.
We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to
create units. For example, we lost $199 on the initial deposit of stocks into
the trust.
TAXES
This section summarizes some of the main U.S. federal income tax consequences
of owning units of your trust. This section is current as of the date of this
prospectus. Tax laws and interpretations change frequently, and these summaries
do not describe all of the tax consequences to all taxpayers. For example, these
summaries generally do not describe your situation if you are a non-U.S. person,
a broker-dealer, or other investor with special circumstances. In addition, this
section does not describe your state or foreign taxes. As with any investment,
you should consult your own tax professional about your particular consequences.
TRUST STATUS. Your trust will not be taxed as a corporation for federal
income tax purposes. As a unit owner, you will be treated as the owner of a pro
rata portion of the stocks and other assets held by the trust, and as such you
will be considered to have received a pro rata share of income (i.e., dividends
and capital gains, if any) from each stock when such income is considered to be
received by a trust. This is true even if you elect to have your distributions
automatically reinvested into additional units. In addition, the income from the
trust that you must take into account for federal income tax purposes is not
reduced for amounts used to pay the deferred sales fee.
YOUR TAX BASIS AND INCOME OR LOSS UPON DISPOSITION. If your trust disposes
of stocks, you will generally recognize gain or loss. If you dispose of your
units or redeem your units for cash, you will also generally recognize gain or
loss. To determine the amount of this gain or loss, you must subtract your tax
basis in the related stocks from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each stock or
other trust asset by apportioning the cost of your units, generally including
sales fees, among each stock or other trust asset ratably according to their
value on the date you purchase your units. In certain circumstances, however,
you may have to adjust your tax basis after you purchase your units (for
example, in the case of certain dividends that exceed a corporation's
accumulated earnings and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest tax
bracket). Net capital gain equals net long-term capital gain minus net short-
term capital loss for the taxable year. Capital gain or loss is long-term if the
holding period for the asset is more than one year and is short-term if the
holding period for the asset is one year or less. You must exclude the date you
purchase your units to determine the holding period of your units. The tax rates
for capital gains realized from assets held for one year or less are generally
the same as for ordinary income. The tax laws may, however, treat certain
capital gains as ordinary income in special situations.
16 Understanding Your Investment
<PAGE>
EXCHANGES AND ROLLOVERS. If you elect to reinvest the proceeds from your
trust in a future trust, it is considered a sale for federal income tax
purposes, and any gain on the sale will be treated as a capital gain, and any
loss will be treated as a capital loss. However, any loss you incur in
connection with the exchange of units of your trust for units of a future trust
will generally be disallowed with respect to this deemed sale and subsequent
deemed repurchase, to the extent the two trusts have substantially identical
stocks under the wash sale provisions of the Internal Revenue Code.
IN-KIND DISTRIBUTIONS. Under certain circumstances, you may request a
distribution of stocks from your trust when you redeem your units or at the
trust's termination. If you request an in-kind distribution you will be
responsible for any expenses related to this distribution. By electing to
receive an in-kind distribution, you will receive whole shares of stock plus,
possibly, cash. You will not recognize gain or loss if you only receive stocks
in exchange for your pro rata portion of the stocks held by your trust. However,
if you also receive cash in exchange for a fractional share of a stock held by
your trust, you will generally recognize gain or loss based on the difference
between the amount of cash you receive and your tax basis in the fractional
share of the stock.
LIMITATIONS ON THE DEDUCTIBILITY OF TRUST EXPENSES. Generally, for federal
income tax purposes you must take into account your full pro rata share of your
trust's income, even if some of that income is used to pay trust expenses. You
may deduct your pro rata share of each expense paid by your trust to the same
extent as if you directly paid the expense. You may, however, be required to
treat some or all of the expenses of your trust as miscellaneous itemized
deductions. Individuals may only deduct certain miscellaneous itemized
deductions to the extent they exceed 2% of adjusted gross income.
FOREIGN, STATE AND LOCAL TAXES. Distributions by your trust that are treated
as U.S. source income (e.g., dividends received on stocks of domestic
corporations) will generally be subject to U.S. income taxation and withholding
in the case of units held by non-resident alien individuals, foreign
corporations or other non-U.S. persons, subject to any applicable treaty.
However, distributions by your trust that are derived from dividends of stocks
of a foreign corporation and that are not effectively connected to your conduct
of a trade or business within the United States will generally not be subject to
U.S. income taxation and withholding in the case of units held by non-resident
alien individuals, foreign corporations or other U.S. persons, provided that
less than 25 percent of the gross income of the foreign corporation over the
three-year period ending with the close of the taxable year preceding payment
was effectively connected to the conduct of a trade or business within the
United States.
Some distributions by your trust may be subject to foreign withholding taxes.
Any dividends withheld will nevertheless be treated as income to you. However,
because you are deemed to have paid directly your share of foreign taxes that
have been paid or accrued by a trust, you may be entitled to a foreign tax
credit or deduction for U.S. tax purposes with respect to such taxes.
EXPENSES
Your trust will pay various expenses to conduct its operations. The
"Investment Summary"
Understanding Your Investment 17
<PAGE>
section of this prospectus shows the estimated amount of these expenses.
Your trust will pay a fee to the trustee for its services. The trustee also
benefits when it holds cash for your trust in non-interest bearing accounts.
Your trust will reimburse us as supervisor and evaluator for providing portfolio
supervisory services and for evaluating your portfolio. Our reimbursements may
exceed the costs of the services we provide to your trust but will not exceed
the costs of services provided to all Ranson unit investment trusts in any
calendar year. All of these fees may adjust for inflation without your
approval.
Your trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" as a percentage of your trust's average daily net
asset value (not to exceed 0.75 percent of your initial investment over the life
of the trust). The sponsor does not use the fee to pay distribution expenses or
as compensation for sales efforts.
Your trust will also pay its general operating expenses. Your trust may pay
expenses such as trustee expenses (including legal and auditing expenses),
various governmental charges, fees for extraordinary trustee services, costs of
taking action to protect your trust, costs of indemnifying the trustee and
Ranson, legal fees and expenses, expenses incurred in contacting you and costs
incurred to reimburse the trustee for advancing funds to meet distributions.
Your trust will also pay a license fee to Value Line Publishing, Inc. for the
use of various trademarks and trade names. Your trust may pay the costs of
updating its registration statement each year. The trustee may sell stocks to
pay any trust expenses.
EXPERTS
LEGAL MATTERS. Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603 (http://www.chapman.com), acts as counsel for Ranson and has given an
opinion that the units are validly issued.
INDEPENDENT AUDITORS. Allen, Gibbs & Houlik, L.C., independent auditors,
audited the statement of financial condition and the portfolio included in this
prospectus.
ADDITIONAL INFORMATION
This prospectus does not contain all the information in the registration
statement that your trust filed with the Securities and Exchange Commission.
The Information Supplement, which was filed with the Securities and Exchange
Commission, includes more detailed information about the stocks in your
portfolio, investment risks and general information about your trust. You can
obtain the Information Supplement by contacting Ranson or the Securities and
Exchange Commission as indicated on the back cover of this prospectus. This
prospectus incorporates the Information Supplement by reference (it is legally
considered part of this prospectus).
18 Understanding Your Investment
<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 98
We have audited the accompanying statement of financial condition, including the
trust portfolio, of Ranson Unit Investment Trusts, Series 98, as of the opening
of business on September 14, 2000, the initial date of deposit. The statement
of financial condition is the responsibility of the sponsor. Our responsibility
is to express an opinion on the statement of financial condition based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of financial condition is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of financial condition. Our
procedures included confirmation of the purchases of securities to be deposited
in the trust by correspondence with the trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
sponsor, as well as evaluating the overall statement of financial condition
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of financial condition referred to above presents
fairly, in all material respects, the financial position of Ranson Unit
Investment Trusts, Series 98 as of September 14, 2000, in conformity with
generally accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
September 14, 2000
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL CONDITION
AT THE OPENING OF BUSINESS ON SEPTEMBER 14, 2000, THE INITIAL DATE OF DEPOSIT
<S> <C>
INVESTMENT IN STOCKS
Contracts to purchase stocks (1) (2) $252,017
========
Number of units 25,456
========
LIABILITIES AND INTEREST OF INVESTORS
Liabilities
Organization costs (3) $ 1,273
Deferred sales fee (4) 4,837
--------
6,110
--------
Interest of investors
Cost to investors (5) 254,560
Less: gross underwriting commission and organization costs (5) 8,653
--------
Net interest of investors (1) (2) (5) 245,907
--------
Total $252,017
========
<FN>
--------------------
(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the trustee.
(2) Cash or an irrevocable letter of credit issued by Intrust Bank, N.A.,
Wichita, Kansas has been deposited with the trustee covering the funds
(aggregating $252,216) necessary for the purchase of the securities in the
trust represented by purchase contracts.
(3) A portion of the public offering price represents an amount sufficient to pay
for all or a portion of the costs incurred in establishing the trust. The
amount of these costs are set forth in the "Fees and Expenses." A
distribution will be made as of the close of the initial offering period or
six months after the initial date of deposit (if earlier) to an account
maintained by the trustee from which this obligation of the investors will be
satisfied.
(4) The total sales fee consists of an initial sales fee and a deferred sales
fee. The initial sales fee is equal to the difference between the total
sales fee and the deferred sales fee. The total sales fee is 2.90%
(equivalent to 2.929% of the net amount invested). The deferred sales fee is
equal to $0.19 per Unit.
(5) The aggregate cost to investors includes the applicable sales fee assuming no
reduction of sales fees for quantity purchases.
</TABLE>
Understanding Your Investment 19
<PAGE>
CONTENTS
Investment Summary
------------------------------------------------------------------
A concise description 2 Investment Objective
of essential information 2 Investment Strategy
about the portfolio 2 Principal Risks
3 Who Should Invest
3 Essential Information
3 Fees and Expenses
4 The Portfolio
Understanding Your Investment
------------------------------------------------------------------
Detailed information to 6 How to Buy Units
help you understand 8 How to Sell Your Units
your investment 10 Distributions
10 Investment Risks
12 The Value Line #1 Strategy
13 How the Trust Works
16 Taxes
17 Expenses
18 Experts
18 Additional Information
19 Report of Independent Auditors
19 Statement of Financial Condition
Where to Learn More
------------------------------------------------------------------
You can contact us for VISIT US ON THE INTERNET
free information about http://www.ranson.com
this and other invest- BY E-MAIL
ments, including the [email protected]
Information Supplement. CALL RANSON
(800) 345-7999
Pricing Line (888) 248-4954
CALL THE BANK OF NEW YORK
(800) 701-8178 (investors)
(800) 647-3383 (brokers)
Additional Information
------------------------------------------------------------------
This prospectus does not contain all information filed with the
Securities and Exchange Commission. To obtain or copy this
information, including the Information Supplement (a duplication
fee may be required):
E-MAIL: [email protected]
WRITE: Public Reference Section
Washington, D.C. 20549-0102
VISIT: http://www.sec.gov (EDGAR Database)
CALL: 1-202-942-8090 (only for information on
the operation of the Public Reference Section)
REFER TO:
RANSON UNIT INVESTMENT TRUSTS, SERIES 98
Securities Act file number: 333-45004
Investment Company Act file number: 811-3763
--------------------
When units of the trust are no longer available, we may use this prospectus
as a preliminary prospectus for a future trust. In this case you should note
that:
The information in this prospectus is not complete with respect to future
trusts and may be changed. No one may sell units of a future trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell units and is not
soliciting an offer to buy units in any state where the offer or sale is not
permitted.
<PAGE>
RANSON
UNIT
INVESTMENT
TRUSTS
VALUE LINE #1
STRATEGY TRUST
[LOGO]
SERIES 11
PROSPECTUS SEPTEMBER 14, 2000
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 98
VALUE LINE #1 STRATEGY TRUST, SERIES 11
INFORMATION SUPPLEMENT
This Information Supplement provides additional information concerning each
trust described in the prospectus for the Ranson Unit Investment Trusts series
identified above. This Information Supplement should be read in conjunction
with the prospectus. It is not a prospectus. It does not include all of the
information that an investor should consider before investing in a trust. It
may not be used to offer or sell units of a trust without the prospectus. This
Information Supplement is incorporated into the prospectus by reference and has
been filed as part of the registration statement with the Securities and
Exchange Commission. Investors should obtain and read the prospectus prior to
purchasing units of a trust. You can obtain the prospectus without charge by
contacting your financial professional or by contacting Ranson & Associates,
Inc. at 250 North Rock Road, Suite 150, Wichita, Kansas 67206-2241, or at (800)
345-7999. This Information Supplement is dated as of the date of the
prospectus.
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CONTENTS
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General Information 2
Value Line Publishing, Inc. Licensing Agreement 2
Investment Objective and Policies 3
Risk Factors 4
Administration of the Trust 6
Portfolio Transactions and Brokerage Allocation 12
Purchase, Redemption and Pricing of Units 13
Performance Information 17
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GENERAL INFORMATION
Each trust is one of a series of separate unit investment trusts created
under the name Ranson Unit Investment Trusts and registered under the Investment
Company Act of 1940 and the Securities Act of 1933. Each trust was created as a
common law trust on the inception date described in the prospectus under the
laws of the state of New York. Each trust was created under a trust agreement
among Ranson & Associates, Inc. (as sponsor, evaluator and supervisor) and The
Bank of New York (as trustee).
When your trust was created, the sponsor delivered to the trustee securities
or contracts for the purchase thereof for deposit in the trust and the trustee
delivered to the sponsor documentation evidencing the ownership of units of the
trust. After your trust is created, the sponsor may deposit additional
securities in the trust, contracts to purchase additional securities along with
cash (or a bank letter of credit in lieu of cash) to pay for such contracted
securities or cash (including a letter of credit) with instructions to purchase
additional securities. Such additional deposits will be in amounts which will
seek to maintain, for the first 60 days, as closely as possible the same
original percentage relationship among the number of shares of each security in
the trust established by the initial deposit of securities and, thereafter, the
same percentage relationship that existed on such 60th day. If the sponsor
deposits cash, existing and new investors may experience a dilution of their
investments and a reduction in their anticipated income because of fluctuations
in the prices of the securities between the time of the cash deposit and the
purchase of the securities and because the trust will pay the associated
brokerage fees.
A trust consists of (a) the securities listed under "The Portfolio" in the
prospectus as may continue to be held from time to time in the trust, (b) any
additional securities acquired and held by the trust pursuant to the provisions
of the trust agreement and (c) any cash held in the accounts of the trust.
Neither the sponsor nor the trustee shall be liable in any way for any failure
in any of the securities. However, should any contract for the purchase of any
of the securities initially deposited in a trust fail, the sponsor will, unless
substantially all of the moneys held in the trust to cover such purchase are
reinvested in substitute securities in accordance with the trust agreement,
refund the cash and sales charge attributable to such failed contract to all
unitholders on the next distribution date.
VALUE LINE PUBLISHING, INC. LICENSING AGREEMENT
The sponsor has entered into a license agreement with Value Line Publishing,
Inc. (the "License Agreement"), under which the trust (through the sponsor) is
granted licenses to use the trademark and tradenames "Value Line", "The Value
Line Investment Survey", or other applicable marks solely in materials relating
to the creation and issuance, marketing and promotion of such trust and in
accordance with any applicable federal and state securities law to indicate the
source of the Value Line Timeliness Ranking System ("System") as a basis for
determining the composition of the trust's portfolio. As consideration for the
grant of the license, the trust will pay to Value Line Publishing, Inc. a
quarterly fee. If the System ceases to be compiled or made available or the
anticipated correlation between Value Line #1 Strategy Trust and the System is
not maintained, the sponsor may direct that the trust continue to be operated
using the System as it existed on the last date on which it was available.
Value Line Publishing, Inc.'s ("VLPI") only relationship to Ranson is VLPI's
licensing to Ranson of certain VLPI trademarks and trade names and the Value
Line Timeliness Ranking System (the "System"), which is composed by VLPI without
regard to Ranson, the trust or any investor. VLPI has no obligation to take the
needs of Ranson or any investor in the trust into consideration in composing the
System. The trust results may differ from the hypothetical or published results
of the Value Line Timeliness Ranking System. VLPI is not responsible for and
has not participated in the determination of the prices and composition of the
trust or the timing of the issuance for sale of the trust or in the calculation
of the equations by which the trust is to be converted into cash. VLPI MAKES NO
WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM USAGE OF TRADE, COURSE OF DEALING
OR COURSE
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OF PERFORMANCE, AND VLPI MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY
OTHER BENEFITS THAT MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR
MATERIALS GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET
ANY REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES NOT
GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED FROM THE
SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION WITH THE
ADMINISTRATION, MARKETING OR TRADING OF THE TRUST; OR (II) FOR ANY LOSS, DAMAGE,
COST OR EXPENSE SUFFERED OR INCURRED BY ANY INVESTOR OR OTHER PERSON OR ENTITY
IN CONNECTION WITH THIS TRUST, AND IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST
PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR
EXEMPLARY DAMAGES IN CONNECTION WITH THE TRUST.
"VALUE LINE," "THE VALUE LINE INVESTMENT SURVEY" OR OTHER APPLICABLE MARKS
ARE REGISTERED TRADEMARKS OF VALUE LINE, INC. OR VALUE LINE PUBLISHING, INC.
THAT ARE LICENSED TO RANSON & ASSOCIATES, INC. THIS TRUST IS NOT SPONSORED,
ENDORSED, SOLD OR PROMOTED BY VALUE LINE PUBLISHING, INC., VALUE LINE, INC. OR
VALUE LINE SECURITIES, INC. RANSON & ASSOCIATES, INC. IS NOT AFFILIATED WITH
ANY VALUE LINE COMPANY.
INVESTMENT OBJECTIVE AND POLICIES
The trust seeks to invest equally in the 100 stocks ranked #1 for
Timeliness(TM) by The Value Line Investment Survey as of the date set forth in
the prospectus. Created in 1931, The Value Line Investment Survey uses a
ranking system that has been operating in its present form since 1965. The
Value Line Timeliness(TM) Rank uses a ranking scale of 1 (highest) to 5 (lowest)
and measures potential price performance during the next six to twelve months
relative to approximately 1700 stocks covered by The Value Line Investment
Survey. The components of the ranking system are the long-term trend of
earnings, prices, recent earnings and price momentum, and earnings surprises. A
computer program combines these elements into a forecast of relative price
behavior of each stock relative to all other stocks in the coverage universe.
The trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its securities from a portfolio.
The trust agreement provides that the sponsor may (but need not) direct the
trustee to dispose of a security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of a
security has declined to such an extent or other such credit factors exist so
that in the opinion of the sponsor the retention of such securities would be
detrimental to the trust. If a public tender offer has been made for a security
or a merger or acquisition has been announced affecting a security, the trustee
may either sell the security or accept a tender offer for cash if the supervisor
determines that the sale or tender is in the best interest of unitholders. The
trustee will distribute any cash proceeds to unitholders. Pursuant to the trust
agreement and with limited exceptions, the trustee may sell any securities or
other properties acquired in exchange for securities such as those acquired in
connection with a merger or other transaction. If offered such new or exchanged
securities or property other than cash, the trustee shall reject the offer.
However, in the event such securities or property are nonetheless acquired by
the trust, they may be accepted for deposit in a trust and either sold by the
trustee or held in a trust pursuant to the direction of the sponsor. Proceeds
from the sale of securities (or any securities or other property received by the
trust in exchange for securities) are credited to the Capital Account for
distribution to unitholders or to meet redemptions. Except as stated in the
trust agreement, herein, or in the prospectus, the acquisition by the trust of
any securities other than the portfolio securities is prohibited. The trustee
may sell securities, designated by the sponsor, from the trust
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for the purpose of redeeming units of a trust tendered for redemption and the
payment of expenses and for such other purposes as permitted under the trust
agreement.
Notwithstanding the foregoing, the trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided herein, in the prospectus or in the
trust agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited. The trustee may sell securities from a
trust for the purpose of redeeming units tendered for redemption and the payment
of expenses.
RISK FACTORS
STOCKS. An investment in units of a trust should be made with an
understanding of the risks inherent in an investment in equity securities,
including the risk that the financial condition of issuers of the securities may
become impaired or that the general condition of the stock market may worsen
(both of which may contribute directly to a decrease in the value of the
Securities and thus, in the value of the units) or the risk that holders of
common stock have a right to receive payments from the issuers of those stocks
that is generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders of common
stock generally rank inferior to the rights of holders of preferred stock.
Common stocks are especially susceptible to general stock market movements and
to volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises.
Holders of common stock incur more risk than the holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stock
issued by the issuer. Holders of common stock of the type held by a trust have
a right to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stock have the right to
receive dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends payable
to the holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of capital debt securities. Indeed, the issuance of debt securities
or even preferred stock will create prior claims for payment of principal,
interest, liquidation preferences and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its common
stock or the rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. Further, unlike debt securities which
typically have a stated principal amount payable at maturity (whose value,
however, will be subject to market fluctuations prior thereto), common stocks
have neither a fixed principal amount nor a maturity and have values which are
subject to market fluctuations for as long as the stocks remain outstanding.
The value of the securities in a portfolio thus may be expected to fluctuate
over the entire life of a trust to values higher or lower than those prevailing
at the time of purchase.
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TECHNOLOGY ISSUERS. Because the trust generally includes a concentration of
technology and technology-related companies, an investment in units should be
made with an understanding of the characteristics of the technology industry and
the risks which such an investment may entail. Technology companies generally
include companies involved in the development, design, manufacture and sale of
computers, computer related equipment, computer networks, communications
systems, telecommunications products, semiconductors, electronic products, and
other related products, systems and services. The market for technology
products is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and frequent
new product introductions. The success of the issuers of the securities depends
in substantial part on the timely and successful introduction of new products.
An unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the securities will be able to
respond timely to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements of
new products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of technology
common stocks to fluctuate substantially. In addition, technology company
stocks have experienced extreme price and volume fluctuations that often have
been unrelated to the operating performance of such companies. This market
volatility may adversely affect the market price of the securities and therefore
the ability of a unitholder to redeem units at a price equal to or greater than
the original price paid for such units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely and
cost effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for, or
an interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous industry standards. Any failure to comply with
such standards may result in a significant loss or reduction of sales. Because
many products and technologies of technology companies are incorporated into
other related products, such companies are often highly dependent on the
performance of the personal computer, electronics and telecommunications
industries. There can be no assurance that these customers will place
additional orders, or that an issuer of securities will obtain orders of similar
magnitude as past orders from other customers. Similarly, the success of
certain technology companies is tied to a relatively small concentration of
products or technologies. Accordingly, a decline in demand of such products,
technologies or from such customers could have a material adverse impact on
issuers of the securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the securities to protect their proprietary rights
will be adequate to prevent misappropriation of their technology or that
competitors will not independently develop technologies that are substantially
equivalent or superior to such issuers' technology.
Certain issuers of the securities may derive a significant amount of business
in foreign markets. Many countries, especially emerging market countries, have
regulatory requirements that differ from U.S. requirements and are characterized
by less developed and more volatile economies. International sales and
operations are subject to certain risks, including unexpected changes in
regulatory environments, exchange rates, tariffs and other barriers, political
and economic instability and potentially adverse tax consequences. All of these
factors could have a material adverse impact on the financial condition of
certain issuers.
CONSUMER PRODUCTS COMPANIES. The trust invests in a significant number of
issuers within the consumer goods industry. Any negative impact on this
industry will have a greater impact on the value of units than on a portfolio
diversified over several industries. These companies generally include
companies in the consumer cyclicals and
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consumer non-cyclicals sectors. You should understand the risks of these
companies before you invest. These companies face risks due to cyclicality of
revenues and earnings, changing consumer demands, regulatory restrictions,
products liability litigation, extensive competition, foreign tariffs, foreign
exchange rates, transportation costs, the cost of raw materials, unfunded
pension fund liabilities and employee and retiree benefit costs and financial
deterioration resulting from leveraged buy-outs, takeovers or acquisitions.
Because the economic health of consumers greatly impacts these companies,
recession or tightening of consumer credit or spending could adversely affect
these issuers. Pharmaceutical companies face additional risks such as extensive
governmental regulation, lengthy governmental drug review processes and
substantial research and development costs. The failure to obtain government
approval or successful test results for a drug could have a substantial negative
impact on a company. All of these factors can have a negative impact on the
value of your units.
LIQUIDITY. Whether or not the securities are listed on a national securities
exchange, the principal trading market for the securities may be in the
over-the-counter market. As a result, the existence of a liquid trading
market for the securities may depend on whether dealers will make a market
in the securities. There can be no assurance that a market will be made
for any of the securities, that any market for the securities will be
maintained or of the liquidity of the securities in any markets made. In
addition, a trust is restricted under the Investment Company Act of 1940
from selling securities to the sponsor. The price at which the securities
may be sold to meet redemptions and the value of a trust will be adversely
affected if trading markets for the securities are limited or absent.
ADDITIONAL DEPOSITS. The trust agreement authorizes the sponsor to increase
the size of a trust and the number of units thereof by the deposit of additional
securities, or cash (including a letter of credit) with instructions to purchase
additional securities, in such trust and the issuance of a corresponding number
of additional units. If the sponsor deposits cash, existing and new investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the securities
between the time of the cash deposit and the purchase of the securities and
because a trust will pay the associated brokerage fees. To minimize this
effect, the trusts will attempt to purchase the securities as close to the
evaluation time or as close to the evaluation prices as possible.
LITIGATION AND LEGISLATION. From time to time Congress considers proposals
to reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time litigation may be
initiated on a variety of grounds, or legislation may be enacted with respect to
the securities in a trust or the issuers of the securities. There can be no
assurance that future litigation or legislation will not have a material adverse
effect on the trust or will not impair the ability of issuers to achieve their
business goals.
ADMINISTRATION OF THE TRUST
DISTRIBUTIONS TO UNITHOLDERS. Income received by a trust is credited by the
trustee to the Income Account of the trust. Other receipts are credited to the
Capital Account of a trust. Income received by a trust will be distributed on
or shortly after the distribution dates each year shown in the prospectus on a
pro rata basis to unitholders of record as of the preceding record date shown in
the prospectus. All distributions will be net of applicable expenses. There is
no assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, excess amounts from the
Capital Account of a trust, if any, will be distributed at least annually to the
unitholders then of record. Proceeds received from the disposition of any of
the securities after a record date and prior to the following distribution date
will be held in the Capital Account and not distributed until the next
distribution date applicable to the Capital Account. The trustee shall be
required to make a distribution from the Capital Account if the cash balance on
deposit therein available for distribution shall be sufficient to distribute at
least $1.00 per 100 units. The trustee is not required to pay interest on funds
held in the Capital or Income Accounts (but may itself earn interest thereon and
therefore benefits from the use of such funds). The trustee is authorized to
reinvest any funds held in the Capital or Income Accounts, pending distribution,
in U.S. Treasury obligations which
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mature on or before the next applicable distribution date. Any obligations so
acquired must be held until they mature and proceeds therefrom may not be
reinvested.
The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the unitholders' pro rata share of
the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a trust at a constant
rate throughout the year, such distributions to unitholders are expected to
fluctuate. Persons who purchase units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner
of units, and thereby a unitholder of record, on the date of settlement provided
payment has been received. Notification to the trustee of the transfer of units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
The trustee will periodically deduct from the Income Account of a trust and,
to the extent funds are not sufficient therein, from the Capital Account of a
trust amounts necessary to pay the expenses of a trust. The trustee also may
withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust.
Amounts so withdrawn shall not be considered a part of a trust's assets until
such time as the trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the trustee may withdraw from the Income and
Capital Accounts of a trust such amounts as may be necessary to cover
redemptions of units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional units of their trust without a sales fee. In addition,
unitholders may elect to have distributions of capital (including capital gains,
if any) or dividends or both automatically invested without charge in shares of
certain mutual funds, including certain funds underwritten or advised by Scudder
Kemper Investments, Inc., at net asset value if such funds are registered in
such unitholder's state of residence. Since the portfolio securities and
investment objectives of such mutual funds generally will differ significantly
from those of a trust, unitholders should carefully consider the consequences
before selecting such mutual funds for reinvestment. Detailed information with
respect to the investment objectives and the management of such mutual funds is
contained in the prospectus, which can be obtained from the sponsor upon
request. An investor should read the prospectus of the reinvestment fund
selected prior to making the election to reinvest. Unitholders who desire to
have such distributions automatically reinvested should inform their broker at
the time of purchase or should file with the Program Agent referred to below a
written notice of election.
Your trust will pay any deferred sales fee per unit regardless of any sales
fee discounts. However, if you are eligible to receive a discount such that the
sales fee you must pay is less than the applicable deferred sales fee, you will
be credited the difference between your sales fee and the deferred sales fee at
the time you buy your units. Accordingly, if you elect to have distributions on
your units reinvested into additional units of your trust, you will be credited
the amount of any remaining deferred sales charge on such units at the time of
reinvestment.
Unitholders who are receiving distributions in cash may elect to participate
in distribution reinvestment by filing with the Program Agent an election to
have such distributions reinvested without charge. Such election must be
received by the Program Agent at least ten days prior to the record date
applicable to any distribution in order to be in effect for such record date.
Any such election shall remain in effect until a subsequent notice is received
by the Program Agent.
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its Unit Investment Trust Division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the trustee will furnish
to each unitholder a statement of the amount of income and the amount of other
receipts, if any, which are being distributed, expressed in each case as a
dollar amount per unit.
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The accounts of a trust are required to be audited annually, at the related
trust's expense, by independent public accountants designated by the sponsor,
unless the sponsor determines that such an audit would not be in the best
interest of the unitholders of the trust. The accountants' report will be
furnished by the trustee to any unitholder upon written request. Within a
reasonable period of time after the end of each calendar year, the trustee shall
furnish to each person who at any time during the calendar year was a unitholder
of a trust a statement, covering the calendar year, setting forth for the trust:
(A) As to the Income Account:
(1) Income received;
(2) Deductions for applicable taxes and for fees and expenses of the
trust and for redemptions of units, if any; and
(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a dollar
amount representing the pro rata share of each unit outstanding on
the last business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any securities and the net proceeds
received therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses of
the trust held for distribution to unitholders of record as of a
date prior to the determination; and
(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each unit outstanding on the
last business day of such calendar year; and
(C) The following information:
(1) A list of the securities as of the last business day of such
calendar year;
(2) The number of units outstanding on the last business day of such
calendar year;
(3) The redemption price based on the last evaluation made during such
calendar year;
(4) The amount actually distributed during such calendar year from the
Income and Capital Accounts separately stated, expressed both as
total dollar amounts and as dollar amounts per unit outstanding on
the record dates for each such distribution.
RIGHTS OF UNITHOLDERS. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to claim
an accounting or to bring any action or proceeding in any court for partition or
winding up of a trust. No unitholder shall have the right to control the
operation and management of a trust in any manner, except to vote with respect
to the amendment of the trust agreement or termination of a trust.
AMENDMENT AND TERMINATION. The trust agreement may be amended by the trustee
and the sponsor without the consent of any of the unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
unitholders. The trust agreement with respect to any trust may also be amended
in any respect by the
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sponsor and the trustee, or any of the provisions thereof may be waived, with
the consent of the holders of units representing 66 2/3% of the units then
outstanding of the trust, provided that no such amendment or waiver will reduce
the interest of any unitholder thereof without the consent of such unitholder or
reduce the percentage of units required to consent to any such amendment or
waiver without the consent of all unitholders of the trust. In no event shall
the trust agreement be amended to increase the number of units of a trust
issuable thereunder or to permit the acquisition of any securities in addition
to or in substitution for those initially deposited in the trust, except in
accordance with the provisions of the trust agreement. The trustee shall
promptly notify unitholders of the substance of any such amendment.
The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date set forth in the prospectus. If the value of a trust shall be less than
the applicable minimum value stated in the prospectus (generally 20% of the
total value of securities deposited in the trust during the initial offering
period), the trustee may, in its discretion, and shall, when so directed by the
sponsor, terminate the trust. A trust may be terminated at any time by the
holders of units representing 66 2/3% of the units thereof then outstanding. In
addition, the sponsor may terminate a trust if it is based on a security index
and the index is no longer maintained.
Beginning nine business days prior to, but no later than, the mandatory
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.
The sponsor will attempt to sell the securities as quickly as it can during
the termination proceedings without in its judgment materially adversely
affecting the market price of the securities, but it is expected that all of the
securities will in any event be disposed of within a reasonable time after a
trust's termination. The sponsor does not anticipate that the period will be
longer than one month, and it could be as short as one day, depending on the
liquidity of the securities being sold. The liquidity of any security depends
on the daily trading volume of the security and the amount that the sponsor has
available for sale on any particular day. Of course, no assurances can be given
that the market value of the securities will not be adversely affected during
the termination proceedings.
Approximately thirty days prior to termination of a trust, the trustee will
notify unitholders of the termination and provide a form allowing qualifying
unitholders to elect an in kind distribution. A unitholder who owns the minimum
number of units shown in the prospectus may request an in kind distribution from
the trustee instead of cash. The trustee will make an in kind distribution
through the distribution of each of the securities of the trust in book entry
form to the account of the unitholder's bank or broker-dealer at Depository
Trust Company. The unitholder will be entitled to receive whole shares of each
of the securities comprising the portfolio of a trust and cash from the Capital
Account equal to the fractional shares to which the unitholder is entitled. The
trustee may adjust the number of shares of any security included in a
unitholder's in kind distribution to facilitate the distribution of whole
shares. The sponsor may terminate the in kind distribution option at any time
upon notice to the unitholders. Special federal income tax consequences will
result if a unitholder requests an in kind distribution.
Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof (upon surrender
for cancellation of certificates for units, if issued) their pro rata share of
the balances remaining in the Income and Capital Accounts of the trust.
The sponsor currently intends, but is not obligated, to offer for sale units
of a subsequent series of a trust at approximately the time of the mandatory
termination date. If the sponsor does offer such units for sale, unitholders
may be given the opportunity to purchase such units at a public offering price
which includes a reduced sales fee. There is, however, no assurance that units
of any new series of a trust will be offered for sale at that time, or if
offered, that there will be sufficient units available for sale to meet the
requests of any or all unitholders.
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THE TRUSTEE. The trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its Unit Investment Trust
Division offices at 101 Barclay Street, New York, New York 10007, telephone 1-
800-701-8178. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of Governors
of the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of any trust. In accordance with the trust agreement,
the trustee shall keep records of all transactions at its office. Such records
shall include the name and address of, and the number of units held by, every
unitholder of a trust. Such books and records shall be open to inspection by
any unitholder at all reasonable times during usual business hours. The trustee
shall make such annual or other reports as may from time to time be required
under any applicable state or federal statute, rule or regulation. The trustee
shall keep a certified copy or duplicate original of the trust agreement on file
in its office available for inspection at all reasonable times during usual
business hours by any unitholder, together with a current list of the securities
held in each trust. Pursuant to the trust agreement, the trustee may employ one
or more agents for the purpose of custody and safeguarding of securities
comprising a trust.
Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor.
The trustee or successor trustee must mail a copy of the notice of
resignation to all unitholders then of record, not less than sixty days before
the date specified in such notice when such resignation is to take effect. The
sponsor upon receiving notice of such resignation is obligated to appoint a
successor trustee promptly. If, upon such resignation, no successor trustee has
been appointed and has accepted the appointment within thirty days after
notification, the retiring trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The sponsor may at any time
remove the trustee, with or without cause, and appoint a successor trustee as
provided in the trust agreement. Notice of such removal and appointment shall
be mailed to each unitholder by the sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original trustee shall vest in the
successor. The trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. Ranson & Associates, Inc., the sponsor, is an investment
banking firm created in 1995 by a number of former owners and employees of
Ranson Capital Corporation. Ranson & Associates, Inc. is the successor sponsor
to unit investment trusts formerly sponsored by EVEREN Unit Investment Trusts, a
service of EVEREN Securities, Inc. Ranson & Associates, Inc. is also the
sponsor and successor sponsor of Series of The Kansas Tax-Exempt Trust and
Multi-State Series of The Ranson Municipal Trust. Ranson & Associates, Inc.
is the successor to a series of companies, the first of which was originally
organized in Kansas in 1935. During its history, Ranson & Associates, Inc.
and its predecessors have been active in public and corporate finance and
have sold bonds and unit investment trusts and maintained secondary market
activities relating thereto. At present, Ranson & Associates, Inc., which
is a member of the National Association of Securities Dealers, Inc., is the
sponsor to each of the above-named unit investment trusts and serves as the
financial advisor and as an underwriter for Kansas municipalities. The
sponsor's offices are located at 250 North Rock Road, Suite 150, Wichita,
Kansas 67206-2241.
If at any time the sponsor shall fail to perform any of its duties under the
trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the trust agreement and liquidate any trust as
provided therein, or (c) continue to act as trustee without terminating the
trust agreement.
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The foregoing financial information with regard to the sponsor relates to the
sponsor only and not to the trust. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the sponsor and its ability to carry out its contractual
obligations with respect to the trust. More comprehensive financial information
can be obtained upon request from the sponsor.
THE SUPERVISOR AND EVALUATOR. Ranson & Associates, Inc., the sponsor, also
serves as evaluator and supervisor. The evaluator and supervisor may resign or
be removed by the trustee in which event the trustee is to use its best efforts
to appoint a satisfactory successor. Such resignation or removal shall become
effective upon acceptance of appointment by the successor evaluator. If upon
resignation of the evaluator no successor has accepted appointment within thirty
days after notice of resignation, the evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Notice of such
registration or removal and appointment shall be mailed by the trustee to each
unitholder.
LIMITATIONS ON LIABILITY. The sponsor is liable for the performance of its
obligations arising from its responsibilities under the trust agreement, but
will be under no liability to the unitholders for taking any action or
refraining from any action in good faith pursuant to the trust agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any securities.
The trust agreement provides that the trustee shall be under no liability for
any action taken in good faith in reliance upon prima facie properly executed
documents or for the disposition of moneys, securities or certificates except by
reason of its own negligence, bad faith or willful misconduct, or its reckless
disregard for its duties under the trust agreement, nor shall the trustee be
liable or responsible in any way for depreciation or loss incurred by reason of
the sale by the trustee of any securities. In the event that the sponsor shall
fail to act, the trustee may act and shall not be liable for any such action
taken by it in good faith. The trustee shall not be personally liable for any
taxes or other governmental charges imposed upon or in respect of the securities
or upon the interest thereof. In addition, the trust agreement contains other
customary provisions limiting the liability of the trustee.
The trustee and unitholders may rely on any evaluation furnished by the
evaluator and shall have no responsibility for the accuracy thereof. The trust
agreement provides that the determinations made by the evaluator shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.
EXPENSES OF THE TRUST. The sponsor will not charge a trust any fees for
services performed as sponsor. The sponsor will receive a portion of the sale
commissions paid in connection with the purchase of units and will share in
profits, if any, related to the deposit of securities in the trust.
The trustee receives for its services that fee set forth in the prospectus.
The trustee's fee which is calculated monthly is based on the largest number of
units of a trust outstanding during the calendar year for which such
compensation relates. The trustee benefits to the extent there are funds for
future distributions, payment of expenses and redemptions in the Capital and
Income Accounts since these Accounts are non-interest bearing and the amounts
earned by the trustee are retained by the trustee. Part of the trustee's
compensation for its services to a trust is expected to result from the use of
these funds.
In its capacity as supervisor, the sponsor will charge a trust a surveillance
fee for services performed for the trust in an amount not to exceed that amount
set forth in the prospectus but in no event will such compensation, when
combined with all compensation received from other unit investment trusts for
which the sponsor both acts as sponsor and provides portfolio surveillance,
exceed the aggregate cost to the sponsor for providing such services. Such fee
shall be based on the total number of units of the related trust outstanding as
of the January record date for any annual period.
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For evaluation of the securities in a trust, the evaluator shall receive that
fee set forth in the prospectus, payable monthly, based upon the largest number
of units of the trust outstanding during the calendar year for which such
compensation relates.
The trustee's fee, supervisor's fee and evaluator's fee are deducted from the
Income Account of the related trust to the extent funds are available and then
from the Capital Account. Each such fee may be increased without approval of
unitholders by amounts not exceeding a proportionate increase in the Consumer
Price Index or any equivalent index substituted therefor.
The trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" as a percentage of your trust's average daily net
asset value (not to exceed the percentage of your initial investment over the
life of the trust set forth in the prospectus). The sponsor does not use the
fee to pay distribution expenses or as compensation for sales efforts.
The trust will pay a license fee to Value Line Publishing, Inc. for use of
certain trademarks.
The following additional charges are or may be incurred by the trust: (a)
fees for the trustee's extraordinary services; (b) expenses of the trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the trustee to protect the trust or the rights and interests of the
unitholders; (e) indemnification of the trustee for any loss, liability or
expense incurred by it in the administration of the trust not resulting from
negligence, bad faith or willful misconduct on its part or its reckless
disregard for its obligations under the trust agreement; (f) indemnification of
the sponsor for any loss, liability or expense incurred in acting in that
capacity without gross negligence, bad faith or willful misconduct or its
reckless disregard for its obligations under the trust agreement; (g) any
offering costs incurred after the end of the initial offering period; and (h)
expenditures incurred in contacting unitholders upon termination of the trust.
The fees and expenses set forth herein are payable out of a trust and, when
owing to the trustee, are secured by a lien on the trust. Since the securities
are all stocks, and the income stream produced by dividend payments, if any, is
unpredictable, the sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of a trust. If the balances in the
Income and Capital Accounts are insufficient to provide for amounts payable by
the trust, the trustee has the power to sell securities to pay such amounts.
These sales may result in capital gains or losses to unitholders. It is
expected that the income stream produced by dividend payments may be
insufficient to meet the expenses of a trust and, accordingly, it is expected
that securities will be sold to pay all of the fees and expenses of the trust.
A trust may pay the costs of updating its registration statement each year.
Unit investment trust sponsors have historically paid these expenses.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the supervisor to specify minimum amounts (such
as 100 shares) in which blocks of securities are to be sold. In effecting
purchases and sales of a trust's portfolio securities, the sponsor may direct
that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the trust, the sponsor or dealers
participating in the offering of units. In addition, in selecting among firms
to handle a particular transaction, the sponsor may take into account whether
the firm has sold or is selling products which it sponsors.
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PURCHASE, REDEMPTION AND PRICING OF UNITS
PUBLIC OFFERING PRICE. Units of a trust are offered at the public offering
price (which is based on the aggregate underlying value of the securities in the
trust and includes the initial sales fee plus a pro rata share of any
accumulated amounts in the accounts of the trust). The initial sales fee is
equal to the difference between the maximum sales fee and the maximum deferred
sales fee. The maximum sales fee is 2.90% of the public offering price
(equivalent to 2.929% of the net amount invested). The deferred sales fee will
be collected as described in the prospectus. The total amount of deferred sales
fee payments will be $0.19 per unit. Units purchased subsequent to the initial
deferred sales fee payment will be subject to the initial sales fee and the
remaining deferred sales fee payments. Units sold or redeemed prior to such
time as the entire applicable deferred sales fee has been collected will be
assessed the remaining deferred sales fee at the time of such sale or
redemption. During the initial offering period, portion of the public offering
price includes an amount of securities to pay for all or a portion of the costs
incurred in establishing a trust. These costs include the cost of preparing the
registration statement, the trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the trust portfolio, legal fees and the initial fees and
expenses of the trustee. These costs will be deducted from a trust as of the
end of the initial offering period or after six months, if earlier.
As indicated above, the initial public offering price of the units was
established by dividing the aggregate underlying value of the securities by the
number of units outstanding. Such price determination as of the opening of
business on the date a trust was created was made on the basis of an evaluation
of the securities in the trust prepared by the trustee. After the opening of
business on this date, the evaluator will appraise or cause to be appraised
daily the value of the underlying securities as of the close of the New York
Stock Exchange on days the New York Stock Exchange is open and will adjust the
public offering price of the units commensurate with such valuation. Such
public offering price will be effective for all orders received at or prior to
the close of trading on the New York Stock Exchange on each such day. Orders
received by the trustee, sponsor or any dealer for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price.
The value of the securities is determined on each business day by the
evaluator based on the closing sale prices on a national securities exchange or
The Nasdaq National Market or by taking into account the same factors referred
to under "Computation of Redemption Price."
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, units of a
trust will be distributed to the public at the public offering price thereof.
Upon the completion of the initial offering, units which remain unsold or which
may be acquired in the secondary market may be offered at the public offering
price determined in the manner provided above.
The sponsor intends to qualify units of a trust for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Broker-dealers and
others will be allowed a concession or agency commission in connection with the
distribution of units during the initial offering period as set forth in the
prospectus.
Certain commercial banks may be making units of a trust available to their
customers on an agency basis. A portion of the sales charge paid by their
customers is retained by or remitted to the banks in the amount of the broker-
dealer concession or agency commission set forth in the prospectus. Banks may
be prohibited from underwriting trust units; however, certain agency
transactions may be permitted. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein and banks
and financial institutions may be required to register as dealers pursuant to
state law. The sponsor reserves the right to change the concessions or agency
commissions set forth in the prospectus from time to time. In addition to such
concessions or agency commissions, the sponsor may, from time to time, pay or
allow additional concessions or agency commissions, in the
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form of cash or other compensation, to dealers employing registered
representatives who sell, during a specified time period, a minimum dollar
amount of units of unit investment trusts underwritten by the sponsor. At
various times the sponsor may implement programs under which the sales force of
a broker or dealer may be eligible to win nominal awards for certain sales
efforts, or under which the sponsor will reallow to any such broker or dealer
that sponsors sales contests or recognition programs conforming to criteria
established by the sponsor, or participates in sales programs sponsored by the
sponsor, an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such programs.
Also, the sponsor in its discretion may from time to time pursuant to objective
criteria established by the sponsor pay fees to qualifying brokers or dealers
for certain services or activities which are primarily intended to result in
sales of units of a trust. Such payments are made by the sponsor out of its own
assets, and not out of the assets of any trust. These programs will not change
the price unitholders pay for their units or the amount that a trust will
receive from the units sold. The difference between the discount and the sales
charge will be retained by the sponsor.
The sponsor reserves the right to reject, in whole or in part, any order for
the purchase of units.
SPONSOR PROFITS. The sponsor will receive gross sales charges equal to the
percentage of the public offering price of the units of a trust described in the
prospectus. In addition, the sponsor may realize a profit (or sustain a loss)
as of the date a trust is created resulting from the difference between the
purchase prices of the securities to the sponsor and the cost of such securities
to the trust. Thereafter, on subsequent deposits the sponsor may realize
profits or sustain losses from such deposits. The sponsor may realize
additional profits or losses during the initial offering period on unsold units
as a result of changes in the daily market value of the securities in the trust.
MARKET FOR UNITS. After the initial offering period, the sponsor may
maintain a market for units of a trust offered hereby and continuously offer to
purchase said units at prices, determined by the evaluator, based on the value
of the underlying securities. While the sponsor may repurchase units from time
to time, it does not currently intend to maintain an active secondary market for
units. Unitholders who wish to dispose of their units should inquire of their
broker as to current market prices in order to determine whether there is in
existence any price in excess of the redemption price and, if so, the amount
thereof. Unitholders who sell or redeem units prior to such time as the entire
deferred sales fee on such units has been collected will be assessed the amount
of the remaining deferred sales fee at the time of such sale or redemption. The
offering price of any units resold by the sponsor will be in accord with that
described in the currently effective prospectus describing such units. Any
profit or loss resulting from the resale of such units will belong to the
sponsor. If the sponsor decides to maintain a secondary market, it may suspend
or discontinue purchases of units of the trust if the supply of units exceeds
demand, or for other business reasons.
REDEMPTION. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making a
written request to the trustee at its Unit Investment Trust Division office in
the city of New York and, in the case of units evidenced by a certificate, by
tendering such certificate to the trustee properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
trustee. Unitholders must sign the request, and such certificate or transfer
instrument, exactly as their names appear on the records of the trustee and on
any certificate representing the units to be redeemed. If the amount of the
redemption is $500 or less and the proceeds are payable to the unitholder(s) of
record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the trustee. A certificate should only be sent by registered or
certified mail for the protection of the unitholder. Since tender of the
certificate is required for redemption when one has been issued, units
represented by a certificate cannot be redeemed until the certificate
representing such units has been received by the purchasers.
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Redemption shall be made by the trustee no later than the seventh day
following the day on which a tender for redemption is received (the "Redemption
Date") by payment of cash equivalent to the redemption price, determined as set
forth below under "Computation of Redemption Price," as of the close of the New
York Stock Exchange next following such tender, multiplied by the number of
units being redeemed. Any units redeemed shall be canceled and any undivided
fractional interest in the related trust extinguished. The price received upon
redemption might be more or less than the amount paid by the unitholder
depending on the value of the securities in the trust at the time of redemption.
Unitholders who sell or redeem units prior to such time as the entire deferred
sales fee on such units has been collected will be assessed the amount of the
remaining deferred sales fee at the time of such sale or redemption.
Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished the redeeming unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the unitholder only when filing a tax return. Under normal circumstances the
trustee obtains the unitholder's tax identification number from the selling
broker. However, any time a unitholder elects to tender units for redemption,
such unitholder should make sure that the trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the trustee has not been previously provided such number, one must
be provided at the time redemption is requested. Any amounts paid on redemption
representing unpaid dividends shall be withdrawn from the Income Account of a
trust to the extent that funds are available for such purpose. All other
amounts paid on redemption shall be withdrawn from the Capital Account for a
trust.
Unitholders tendering units for redemption may request a distribution in kind
(a "Distribution In Kind") from the trustee in lieu of cash redemption a
unitholder may request a Distribution In Kind of an amount and value of
securities per unit equal to the redemption price per unit as determined as of
the evaluation time next following the tender, provided that the tendering
unitholder is (1) entitled to receive at least $1,000,000 of proceeds as part of
his or her distribution or if he paid at least $1,000,000 to acquire the units
being tendered and (2) the unitholder has elected to redeem at least thirty days
prior to the termination of the trust. If the unitholder meets these
requirements, a Distribution In Kind will be made by the trustee through the
distribution of each of the securities of the trust in book entry form to the
account of the unitholder's bank or broker-dealer at Depository Trust Company.
The tendering unitholder shall be entitled to receive whole shares of each of
the securities comprising the portfolio of the trust and cash from the Capital
Account equal to the fractional shares to which the tendering unitholder is
entitled. The trustee shall make any adjustments necessary to reflect
differences between the redemption price of the units and the value of the
securities distributed in kind as of the date of tender. If funds in the
Capital Account are insufficient to cover the required cash distribution to the
tendering unitholder, the trustee may sell securities. The in kind redemption
option may be terminated by the sponsor at any time.
The trustee is empowered to sell securities in order to make funds available
for the redemption of units. To the extent that securities are sold or redeemed
in kind, the size of a trust will be, and the diversity of a trust may be,
reduced but each remaining unit will continue to represent approximately the
same proportional interest in each security. Sales may be required at a time
when securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the unitholder depending on the value of the
securities in the portfolio at the time of redemption.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the trustee of securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
securities in accordance with the trust agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
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COMPUTATION OF REDEMPTION PRICE. The redemption price per unit (as well as
the secondary market public offering price) will generally be determined on the
basis of the last sale price of the securities in a trust. The redemption price
per unit is the pro rata share of each unit in a trust determined on the basis
of (i) the cash on hand in the trust or moneys in the process of being collected
and (ii) the value of the securities in the trust less (a) amounts representing
taxes or other governmental charges payable out of the trust, (b) any amount
owing to the trustee for its advances and (c) the accrued expenses or remaining
deferred sales fees of the trust. During the initial offering period, the
redemption price and the secondary market repurchase price will also include
estimated organizational and offering costs. The evaluator may determine the
value of the securities in the trust in the following manner: if the security is
listed on a national securities exchange or the Nasdaq Stock Market, the
evaluation will generally be based on the last sale price on the exchange or
Nasdaq (unless the evaluator deems the price inappropriate as a basis for
evaluation). If the security is not so listed or, if so listed and the
principal market for the security is other than on the exchange or Nasdaq, the
evaluation will generally be made by the evaluator in good faith based on the
last bid price on the over-the-counter market (unless the evaluator deems such
price inappropriate as a basis for evaluation) or, if a bid price is not
available, (1) on the basis of the current bid price for comparable securities,
(2) by the evaluator's appraising the value of the securities in good faith at
the bid side of the market or (3) by any combination thereof.
RETIREMENT PLANS. A trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts. Fees and charges with respect
to such plans may vary.
The trustee has agreed to act as custodian for certain retirement plan
accounts. An annual fee per account, if not paid separately, will be assessed
by the trustee and paid through the liquidation of shares of the reinvestment
account. An individual wishing the trustee to act as custodian must complete a
Ranson UIT/IRA application and forward it along with a check made payable to The
Bank of New York. Certificates for Individual Retirement Accounts cannot be
issued.
OWNERSHIP OF UNITS. Ownership of units will not be evidenced by certificates
unless a unitholder, the unitholder's registered broker/dealer or the clearing
agent for such broker/dealer makes a written request to the trustee. Units are
transferable by making a written request to the trustee and, in the case of
units evidenced by a certificate, by presenting and surrendering such
certificate to the trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the trustee and on any certificate representing
the units to be transferred. Such signatures must be guaranteed as described
above.
Units may be purchased and certificates, if requested, will be issued in
denominations of one unit or any multiple thereof, subject to the minimum
investment requirement. Fractions of units, if any, will be computed to three
decimal places. Any certificate issued will be numbered serially for
identification, issued in fully registered form and will be transferable only on
the books of the trustee. The trustee may require a unitholder to pay a
reasonable fee, to be determined in the sole discretion of the trustee, for each
certificate re-issued or transferred and to pay any governmental charge that may
be imposed in connection with each such transfer or interchange. The trustee at
the present time does not intend to charge for the normal transfer or
interchange of certificates. Destroyed, stolen, mutilated or lost certificates
will be replaced upon delivery to the trustee of satisfactory indemnity
(generally amounting to 3% of the market value of the units), affidavit of loss,
evidence of ownership and payment of expenses incurred.
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PERFORMANCE INFORMATION
Information contained in this Information Supplement or in the prospectus, as
it currently exists or as further updated, may also be included from time to
time in other prospectuses or in advertising material. Information on the
performance of a trust strategy or the actual performance of a trust may be
included from time to time in other prospectuses or advertising material and may
reflect sales charges and expenses of a trust. The performance of a trust may
also be compared to the performance of money managers as reported in SEI Fund
Evaluation Survey or of mutual funds as reported by Lipper Analytical Services
Inc. (which calculates total return using actual dividends on ex-dates
accumulated for the quarter and reinvested at quarter end), Money Magazine Fund
Watch (which rates fund performance over a specified time period after sales
charge and assuming all dividends reinvested) or Wiesenberger Investment
Companies Service (which states fund performance annually on a total return
basis) or of the New York Stock Exchange Composite Index, the American Stock
Exchange Index (unmanaged indices of stocks traded on the New York and American
Stock Exchanges, respectively), the Dow Jones Industrial Average (an index of 30
widely traded industrial common stocks) or the Standard & Poor's 500 Index (an
unmanaged diversified index of 500 stocks) or similar measurement standards
during the same period of time.
17
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents.
The facing sheet
The Prospectus
The Signatures
The following exhibits.
1.1. Trust Agreement.
1.1.1. Standard Terms and Conditions of Trust. Reference is made to
Exhibit 1.1.1 to the Registration Statement on Form S-6 for Ranson Unit
Investment Trusts, Series 53 (File No. 333-17811) as filed on January 7,
1997.
2.1. Form of Certificate of Ownership (pages three and four of the Standard
Terms and Conditions of Trust included as Exhibit 1.1.1).
2.2 Form of Code of Ethics. Reference is made to Exhibit 2.2 to the
Registration Statement on Form S-6 for Ranson Unit Investment Trusts,
Series 92 (File No. 333-31782) as filed on March 14, 2000.
3.1. Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under "Legal
Opinions" in the Prospectus.
3.2 Opinion of counsel to the Sponsor as to the tax status of the securities
being registered.
4.1. Consent of Independent Auditors.
S-1
<PAGE>
SIGNATURES
The Registrant, Ranson Unit Investment Trusts, Series 98 hereby identifies
Ranson Unit Investment Trusts, Series 53 and Series 90, EVEREN Unit Investment
Trusts, Series 39, Kemper Defined Funds, Series 45 and Kemper Equity Portfolio
Trusts, Series 1 for purposes of the representations required by Rule 487 and
represents the following: (1) that the portfolio securities deposited in the
series as to the securities of which this Registration Statement is being filed
do not differ materially in type or quality from those deposited in such
previous series; (2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide essential financial
information for, the series with respect to the securities of which this
Registration Statement is being filed, this Registration Statement does not
contain disclosures that differ in any material respect from those contained in
the registration statements for such previous series as to which the effective
date was determined by the Commission or the staff; and (3) that it has complied
with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ranson Unit Investment Trusts, Series 98 has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Wichita, and State of Kansas, on the 14th day of
September 2000.
RANSON UNIT INVESTMENT TRUSTS, SERIES 98,
Registrant
By: RANSON & ASSOCIATES, INC.,
Depositor
By: /s/ ALEX R. MEITZNER
---------------------------------------
Alex R. Meitzner
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on September 14, 2000 by the following persons,
who constitute a majority of the Board of Directors of Ranson & Associates, Inc.
SIGNATURE TITLE
---------------------- -----------------------
/s/ DOUGLAS K. ROGERS Executive Vice )
---------------------- President and Director )
Douglas K. Rogers
/s/ ALEX R. MEITZNER Chairman of the Board )
---------------------- of Directors )
Alex R. Meitzner
/s/ ROBIN K. PINKERTON President, Secretary, )
---------------------- Treasurer and Director ) /s/ ALEX R. MEITZNER
Robin K. Pinkerton -----------------------
Alex R. Meitzner
-------------------------------------------------------------------------------
An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration Statement
on Form S-6 of The Kansas Tax-Exempt Trust, Series 51 (File No. 33-46376) and
Series 52 (File No. 33-47687) and the same are hereby incorporated herein by
this reference.
S-2
