DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
THE STRIPPED ("ZERO")
U.S. TREASURY SECURITIES FUND
PROVIDENT MUTUAL SERIES A
A PROVIDENT MUTUAL VARIABLE LIFE ACCOUNT INVESTMENT
- PORTFOLIO OF "ZERO COUPON" U.S. TREASURY
SECURITIES
- DESIGNED FOR SAFETY OF CAPITAL AND HIGH YIELD TO
MATURITY
- UNITS SOLD TO SEPARATE INVESTMENT ACCOUNTS OF
PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF
PHILADELPHIA TO FUND BENEFITS UNDER VARIABLE LIFE
INSURANCE POLICIES
-----------------------------------------------------
The Securities and Exchange Commission has not
SPONSORS: approved or disapproved these Securities or passed
MERRILL LYNCH, upon the adequacy of this prospectus. Any
PIERCE, FENNER & SMITH representation to the contrary is a criminal offense.
INCORPORATED Prospectus dated April 28, 2000.
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CONTENTS
PAGE
---
Risk/Return Summary.................. 3
What You Can Expect From Your
Investment......................... 5
Distributions...................... 5
Records and Reports................ 5
The Risks You Face................... 5
Price Risk......................... 5
Selling or Exchanging Units.......... 5
Sponsor's Secondary Market......... 5
Selling Units to the Trustee....... 5
How The Fund Works................... 6
Pricing............................ 6
Evaluations........................ 6
Income............................. 6
Expenses........................... 6
Portfolio Changes.................. 6
Termination........................ 6
Certificates....................... 7
Trust Indenture.................... 7
Legal Opinion...................... 8
Auditors........................... 8
Sponsor............................ 8
Trustee............................ 8
Sponsor's Profits.................. 8
Code of Ethics..................... 8
Year 2000 Issues................... 8
Taxes................................ 9
Supplemental Information............. 9
Financial Statements................. D-1
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2
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RISK/RETURN SUMMARY
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1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks safety of capital and
high yield to maturity by investing
primarily in a fixed portfolio of
Stripped U.S. Treasury securities.
Units are currently offered only to
Provident Mutual's Variable Zero Coupon
Bond Separate Account to fund the
benefits under variable insurance
policies issued by Provident Mutual.
These Accounts invest in units in
accordance with allocation instructions
received by policyowners. Accordingly,
the interests of a policyowner in the
units are subject to the terms of the
insurance policy.
The rights of the Accounts as holders of
units should be distinguished from the
rights of the policyowners. Please
review the accompanying prospectus for
the insurance policies, which describes
the rights of and risks to policyowners.
The term 'you' in this Prospectus refers
to the Accounts (or the Sponsor if it
holds units in the secondary market).
2. WHAT ARE STRIPPED U.S. TREASURY
SECURITIES?
These are debt obligations directly
issued by the U.S. Treasury. They do not
make any periodic payments of interest
before maturity and are priced at a deep
discount from face amount. They pay a
fixed amount of principal at maturity.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund consists of the 2006 Trust, a
unit investment trust that is designated
by the year in which its Stripped
Treasury securities mature. The trust
also contains an interest-bearing U.S.
Treasury note to provide income to pay
the trust's expenses.
- Unlike a mutual fund, the portfolio of
this unit investment trust is not
managed.
- For each 1,000 units purchased, you will
receive a total distribution of
approximately $1,000 for units held
until maturity of the underlying
securities in the trust.
- The securities in the Fund BUT NOT THE
FUND OR THE UNITS are backed by the full
faith and credit of the United States.
- 100% of the trust's portfolio consists
of U.S. Treasury securities.
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4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates can reduce the
value of the units.
- Since the portfolio is priced at a deep
discount from face amount, unit prices
may be subject to greater fluctuations in
response to changing interest rates. This
risk is greater than on debt securities
that pay interest currently and increases
when the time to maturity is longer.
- If units are sold before the underlying
securities mature, the value of your
units may decrease, because market prices
of the securities before maturity will
vary with changes in interest rates and
other factors.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want safety of capital with a
locked-in yield to maturity. You benefit
from a portfolio of U.S. government
securities with fixed returns and a
stated maturity.
The Fund is NOT appropriate for you if
you want current income or a speculative
investment that changes to take advantage
of market movements.
</TABLE>
3
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6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses
the Account may pay, directly or
indirectly, when it invests in the Fund.
TRANSACTION CHARGES
Provident Mutual initially pays a
transaction charge to the Sponsor on the
units sold to the Account, and Provident
Mutual intends to recover this amount
through an asset charge. See the
accompanying Prospectus for the
insurance policies for further
information. The transaction charge is
based on the remaining years to maturity
of the Stripped Treasury Security:
</TABLE>
<TABLE>
<CAPTION>
PERCENT
OF OFFERING
REMAINING YEARS TO MATURITY PRICE
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<C> <S> <C>
Less than 2 years............... 0.25%
At least 2 years but less than 3
years........................... 0.50
At least 3 years but less than 5
years........................... 0.75
At least 5 years but less than 8
years........................... 1.00
At least 8 years................ 1.50
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL OPERATING EXPENSES
Trustee's Annual Fee and Expenses
Per $1,000 face amount of the underlying
securities. $0.50
</TABLE>
<TABLE>
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7. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not
managed and securities are not sold
because of market changes. To lock in the
yield on the purchase date, a trust holds
securities to maturity unless sales are
needed to raise cash for redemptions.
8. HOW DO I BUY UNITS?
Each Account buys units from the Sponsor.
There is no minimum investment.
UNIT PRICE PER 1,000 UNITS
(as of December 31, 1999)
</TABLE>
<TABLE>
<CAPTION>
SERIES A
2006
TRUST
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<C> <S> <C>
$680.07
Net asset value (based on offer
side evaluation of underlying
securities)
$ 6.87
Plus transaction charge
-------
$686.94
Unit price per 1,000 Units
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<TABLE>
<C> <S>
Unit price is based on the net asset value of
the Fund plus the applicable transaction charge
shown below. Any principal cash, and any net
accrued but undistributed interest on the unit
is added to the unit price. An independent
evaluator prices the securities at their offer
side values at 3:30 p.m. Eastern time each
business day. Unit price varies daily with
changes in the prices of the securities in the
trust.
9. HOW DO I SELL UNITS?
An Account may sell units at any time to the
Sponsor or the Trustee for the net asset value
determined at the close of business on the date
of sale. You will not pay any fee when you sell
your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
Stripped Treasury securities do not pay interest
until they mature; consequently, you should not
expect any distributions of interest income.
When the Stripped Treasury security matures, the
proceeds will be distributed to the Accounts. A
distribution will be made in cash two business
days following the maturity of the Stripped
Treasury security.
The Accounts (not the policyowners) have
significant amounts of income attributed to them
annually as original issue discount is accrued
on the Stripped Treasury securities.
</TABLE>
4
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
DISTRIBUTIONS
The trust normally holds any net income and principal received until the
Stripped Treasury security matures. However, the Trustee may distribute any
available balances in the Income and Capital Accounts once a year, as instructed
by the Sponsor.
RECORDS AND REPORTS
The Accounts receive:
- - with any distribution, a statement of income and other payments;
- - an annual report on Fund transactions; and
- - annual tax information. THIS IS ALSO SENT TO THE IRS.
You will receive audited financial statements of the Fund once a year.
THE RISK YOU FACE
PRICE RISK
Investing involves risks, including the risk that your investment before
maturity will decline in value if interest rates rise. Generally, the price of
Stripped Treasury securities fluctuates more widely than prices of debt
securities that pay interest currently. Also, securities with longer maturities
will change in value more than securities with shorter maturities. Of course, we
cannot predict how interest rates may change.
SELLING OR EXCHANGING UNITS
SPONSOR'S SECONDARY MARKET
While we are not obligated to do so, we intend to buy back units at their offer
side value without any fee or charge. We may resell the units to an Account or
to the Trustee.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, an Account can sell units
to the Trustee at any time at a price based on the lower bid side evaluation of
the securities in the trust. It must deliver instructions to the Trustee (with
coordinated delivery or assignment of any outstanding certificates if issued).
Within seven days after receiving a redemption request in proper form, the
Trustee will transmit the proceeds as directed by the redemption instructions.
An Account may opt to receive securities rather than cash. Contact the Trustee
for additional information.
If there is no secondary market, the Trustee may sell your units in the
over-the-counter market for a higher price, but it is not obligated to do so. In
that case, you will receive the net proceeds of the sale.
If the Fund does not have cash available to pay for units redeemed, the Sponsor
will select securities to be sold, based on market and credit factors. These
sales could be made at times when the securities would not otherwise be sold and
may result in receiving less than the unit par value and also reduce the size
and diversity of the trust.
Payments for units could be delayed:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
5
<PAGE>
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the securities, less expenses,
up to, but not including, the settlement date, which is usually the business day
after purchase of the unit.
EVALUATIONS
An independent Evaluator values the securities on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas;
and the following federal holidays: Columbus Day and Veterans Day). Values are
based on current offer prices for the securities or comparable bonds.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid semi-annually. It also benefits when it holds cash for a
trust in non-interest bearing accounts. The Trustee may also receive additional
amounts:
- to reimburse the Trustee for the trust's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsor;
- costs of actions taken to protect a trust and other legal fees and expenses;
- termination expenses and any governmental charges.
The trust also pays the Evaluator's fees.
The Trustee's and Evaluator's fees may be adjusted for inflation without
investors' approval.
If trust expenses exceed initial estimates, the trust will owe the excess. The
Trustee has a lien on trust assets to secure reimbursement of trust expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsor and Trustee are not liable for any default or defect in a security.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
securities in the portfolio even if adverse financial circumstances occur.
However, we may sell a security in certain cases if we believe that certain
adverse credit or other conditions exist.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of securities that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the trust relative to its original size;
- level of trust expenses;
- yield to maturity;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
TERMINATION
Each trust terminates following the stated maturity or sale of the last security
in its portfolio. The trust may also terminate earlier with the consent of
investors holding
6
<PAGE>
51% of the units or its total assets are less than 40% of the face amount of
securities deposited. We will decide whether to terminate a trust early based on
the same factors used in deciding whether or not to offer units in the secondary
market.
When a trust is about to terminate the Account will receive a notice, and it
will be unable to sell units of the trust after that time. On or shortly before
termination, we will sell any remaining securities, and you will receive your
final distribution. Any security that cannot be sold at a reasonable price may
continue to be held by the Trustee in a liquidating trust pending its final
sale.
You will bear your share of the expenses associated with termination, including
costs in selling securities. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. An Account transfer certificates
by complying with the requirements for redeeming certificates, described above.
It can replace lost or mutilated certificates by delivering satisfactory
indemnity and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a trust Indenture, a contract
among the Sponsor, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsor and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsor).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsor. The Sponsor may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsor determines that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsor and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsor will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
If the Sponsor fails to perform its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the trusts; or
- continue to act as Trustee without a Sponsor.
The trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsor and the Evaluator.
7
<PAGE>
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsor, has given an opinion that the units are validly
issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Financial Statements included in this
Prospectus.
SPONSOR
The Sponsor is:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
The Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer the
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Departament, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
SPONSOR'S PROFITS
Upon the sale of units, the Sponsor receives the transaction charge from an
Account (as set out above). The Sponsor also realizes a profit or loss on each
deposit of securities in a trust.
In maintaining a secondary market, the Sponsor will also realize profits or
sustain losses in the amount of any difference between the prices at which it
buys units and the prices at which it resells or redeems those units.
CODE OF ETHICS
The Fund and the Agent for the Sponsor have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this prospectus.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Trust as a whole.
8
<PAGE>
TAXES
The following discussion relates only to the Accounts as holders of units, and
not to policyowners. The separate prospectus for the insurance policies,
attached, describes tax consequences to policyowners.
In the opinion of our counsel, under existing law:
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each Stripped Treasury
security in the Fund.
The zero coupon bonds will be considered to have been issued at an "original
issue discount" for federal income tax purposes. As a result, you will be
required to include original issue discount in respect of the zero coupon bonds
as it accrues, in accordance with a constant yield method based on a compounding
of interest.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the securities that may be in the Fund's portfolio and general information
about the structure and operation of the Fund. The supplemental information is
also available from the SEC.
9
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THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders
of The Stripped ("Zero")
U.S. Treasury Securities Fund,
Provident Mutual Series A:
We have audited the accompanying statement of condition of the 2006 Trust of The
Stripped ("Zero") U.S. Treasury Securities Fund, Provident Mutual Series A,
including the portfolio, as of December 31, 1999 and the related statements of
operations and of changes in net assets for the years ended December 31, 1999,
1998 and 1997. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
December 31, 1999, as shown in such portfolio, were confirmed to us by The Chase
Manhattan Bank, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the 2006 Trust of The Stripped
("Zero") U.S. Treasury Securities Fund, Provident Mutual Series A at December
31, 1999 and the results of its operations and changes in its net assets for the
above-stated years in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
March 14, 2000
D - 1
<PAGE>
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
STATEMENT OF CONDITION
AS OF DECEMBER 31, 1999
2006 TRUST
TRUST PROPERTY:
Investment in marketable securities
(see Portfolio and Note 1) ............................... $ 12,629,750
Other ...................................................... 4,318
Total trust property ............................. 12,634,068
LESS LIABILITY - Other ....................................... 750
NET ASSETS (Note 2) .......................................... $ 12,633,318
UNITS OUTSTANDING ............................................ 18,588,391
UNIT VALUE ................................................... $ 0.67963
See Notes to Financial Statements.
D - 2
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THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
2006 TRUST
Years Ended December 31,
1999 1998 1997
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ..................................... $ 8,534 $ 7,768 $ 5,944
Accretion of original issue discount ................ 755,347 616,536 455,799
Trustee's fees and expenses ......................... (8,154) (7,040) (5,806)
Net investment income ............................... 755,727 617,264 455,937
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on securities sold or redeemed ........ 35,259 32,282
Unrealized appreciation (depreciation) of
investments ....................................... (1,594,882) 783,516 356,227
Net realized and unrealized gain (loss) on
investments ....................................... (1,559,623) 783,516 388,509
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $ (803,896) $ 1,400,780 $ 844,446
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
2006 TRUST
Years Ended December 31,
1999 1998 1997
<S> <C> <C> <C>
OPERATIONS:
Net investment income ............................... $ 755,727 $ 617,264 $ 455,937
Realized gain on securities sold or redeemed ........ 35,259 32,282
Unrealized appreciation (depreciation)
of investments .................................... (1,594,882) 783,516 356,227
Net increase (decrease) in net assets resulting
from operations ................................... (803,896) 1,400,780 844,446
CAPITAL SHARE TRANSACTIONS (Note 3):
Issuance of units ................................... 1,269,786 2,493,669 1,898,370
Redemptions of 559,952 and 562,595 units,
respectively ...................................... (380,052) (310,074)
Net capital share transactions ...................... 889,734 2,493,669 1,588,296
NET INCREASE IN NET ASSETS ............................ 85,838 3,894,449 2,432,742
NET ASSETS, BEGINNING OF YEAR ......................... 12,547,480 8,653,031 6,220,289
NET ASSETS, END OF YEAR ............................... $12,633,318 $12,547,480 $ 8,653,031
UNIT VALUE, END OF YEAR ............................... $ 0.67963 $ 0.72503 $ 0.63456
UNITS OUTSTANDING, END OF YEAR ........................ 18,588,391 17,306,267 13,636,339
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities.
(b) Cost of securities is based on offering side evaluations for the
securities at Dates of Deposit. Cost of securities subsequent to
dates of purchase has been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities. Realized
gain and loss on sales of securities are determined using the first-
in, first-out cost basis.
(c) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
2. NET ASSETS, DECEMBER 31, 1999
Cost of 18,588,391 units at Dates of Deposit $10,178,199
Less sales charge 178,119
Net amount applicable to Holders 10,000,080
Redemptions of units - net cost of 3,033,059 units less
redemption amounts 198,034
Realized gain on securities sold or redeemed 121,181
Unrealized depreciation of investments (155,088)
Undistributed net investment income - accretion of original
issue discount ($2,465,716) plus excess ($3,395) of
interest income over Trustee's fees and expenses 2,469,111
Net assets $12,633,318
3. CAPITAL SHARE TRANSACTIONS
Additional units were issued by the Trust during the years ended
December 31, 1999, 1998 and 1997 as follows:
1999 1998 1997
1,842,076 3,669,928 3,186,018
Units may be redeemed at the office of the Trustee upon tender thereof
generally on any business day or, in the case of uncertificated units, upon
delivery of a request for redemption and payment of any relevant tax. The
Trustee will redeem units either in cash or in kind at the option of the
Holder as specified in writing to the Trustee.
D - 5
<PAGE>
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
NOTES TO FINANCIAL STATEMENTS
4. INCOME TAXES
All Fund items of income received, accretion of original issue discount,
expenses paid, and realized gains and losses on securities sold are
attributable to the Holders, on a pro rata basis, for Federal income tax
purposes in accordance with the grantor trust rules of the United States
Internal Revenue Code.
At December 31, 1999, the cost of investment securities for Federal income
tax purposes was approximately equivalent to the adjusted cost as shown in
the Trust's portfolio.
5. DISTRIBUTIONS
It is anticipated that the Trust will not make any distributions until the
first business day following the maturity of its holdings in the Stripped
Treasury Securities which are noninterest-bearing.
D - 6
<PAGE>
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
PORTFOLIO
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Portfolio No. Adjusted
and Title of Interest Face Cost Value
Securities Rate Maturities Amount (Note A) (Note A)
<S> <C> <C> <C> <C> <C>
2006 TRUST
1.Stripped Treasury 0% 2/15/06 $18,666,000 $12,663,389 $12,516,169
Securities
2.U.S. Treasury
Bonds 9.375 2/15/06 99,523 121,449 113,581
Total $18,765,523 $12,784,838 $12,629,750
</TABLE>
Note A - See Note 1 to Financial Statements.
D - 7
<PAGE>
<TABLE>
<S> <C>
HAVE QUESTIONS ? THE STRIPPED ("ZERO") U.S TREASURY
Request the most recent free SECURITIES FUND, PROVIDENT MUTUAL
Information Supplement SERIES A
that gives more details about ---------------------------------------
the Fund, by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file number:
33-02455);
- Investment Company Act of 1940 (file
no. 811- 4541).
TO OBTAIN COPIES AT PRESCRIBED
RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
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