File No. 33-44634
CIK #882197
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 4
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Twenty-First Century Trust, Series 2
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on February 23, 1996 pursuant to paragraph (b) of Rule 485.
21st Century Trust
SERIES 2
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.Please retain both parts of this Prospectus for future reference.
The Trust
The objectives of the Trust are protecting capital for Unitholders who
purchase Units at the Initial Public Offering Price or less and hold their
Units through the Mandatory Termination Date and providing dividend income and
capital appreciation through investment in a fixed portfolio consisting of
"zero coupon" obligations (i.e., securities which accrue but do not
pay income currently, are sold at a discount and represent an obligation to
pay a fixed amount at a future date) issued by the United States government
("Zero Coupon Obligations" ) and of publicly traded common stocks which
provide income or are considered to have the potential for capital
appreciation (the "Equity Securities" ) (collectively, the "
Portfolio" ). The value of the Units of a Trust will fluctuate with the
value of the Portfolio (see "Summary of Essential Financial
Information" in this Part One and "The Trusts" in Part Two). The
Units being offered by this Prospectus are issued and outstanding Units which
have been purchased by Edward D. Jones & Co. (the "Underwriter" ) in
the secondary market or upon tender to the Trustee for redemption. The profit
or loss resulting from the sale of Units will accrue to the Underwriter. No
proceeds from the sale of Units will be received by the Trust.
Public Offering Price
The Public Offering Price of the Units is based upon the Evaluator's
evaluation of the pro rata share of the bid prices of the Zero Coupon
Obligations and the underlying market value of the Equity Securities of a
Trust, plus or minus a pro rata share of cash and amounts receivable in
respect of Equity Securities trading ex-dividend. The Public Offering Price
includes a sales charge of 2.9% (2.99% of the aggregate market value of the
underlying Securities) until July 1, 1996, at which time the sales charge will
decrease. See "Summary of Essential Financial Information" in this
Part One. Unless terminated earlier, the Trust will terminate on the Mandatory
Termination Date as set forth in the "Summary of Essential Financial
Information" in this Part One, and any Securities then held will, within a
reasonable time thereafter, be sold by the Trustee. Any securities sold at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder may be more or
less than the amount such Unitholder paid for his Units.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Date of this Prospectus is March 20, 1996
Unison Investment Trusts Ltd.
21ST CENTURY TRUST, SERIES 2
Summary of Essential Financial Information
As of December 20, 1995
Sponsor & Supervisor:Unison Investment Trusts Ltd.
Administrator:Van Kampen American Capital Distributors, Inc.
Evaluator:American Portfolio Evaluation Services
(A division of a subsidiary of the Administrator)
Trustee:The Bank of New York
<TABLE>
<CAPTION>
21st
Century
Trust
<S> <C>
General Information
Number of Units.................................................................................... 573,364
Fractional Undivided Interest in Trust per Unit.................................................... 1/573,364
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>................................................... $15,140,597.80
Aggregate Value Securities per Unit (including accumulated dividends)............................. $26.42
Sales charge 2.9% (2.99% of Aggregate Value of Securities excluding principal cash per Unit)<F3>... $.79
Public Offering Price per Unit <F2><F3>........................................................... $27.21
Redemption Price per Unit.......................................................................... $26.42
Excess of Public Offering Price per Unit over Redemption Price per Unit............................ $.79
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.005 per Unit
Evaluator's Annual Fee ...............$10.00 per evaluation
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4:00 P.M. Eastern time on days of trading on the
New York Stock Exchange next following receipt of an order for a sale or purchase of Units or receipt by The Bank of New York of
Units tendered for redemption.
Date of Deposit.......................January 15, 1992
Mandatory Termination Date............February 28, 2002
The Trust may be terminated if the market value of such Trust at any time is less than 80%
Minimum Termination Value.............of the market value of the Securities deposited in the Trust on the date of deposit.
Trustee's Annual Fee..................$.008 per Unit
Income Distribution Record Date.......December 10 of each year.
Income Distribution Date..............December 20 of each year.
December 20 of each year, unless the amount in the Capital Account available to be
distributed is less than $1.00 per 100 Units outstanding or earlier if the amount is greater
Capital Account Distribution Date.....than $10.00 per 100 Units outstanding.
<FN>
<F1>Equity Securities listed on a national securities exchange or the NASDAQ
National Market System are valued at the closing sale price, or if no such
price exists or if the Equity Security is not listed, at the closing asked
price thereof.
<F2>Anyone ordering Units will have included in the Public Offering Price a pro
rata share of any cash in such Accounts.
<F3>Effective on each July 1, commencing July 1, 1992, the secondary sales charge
will decrease by .5 of 1% to a minimum sales charge of 1.4%. See "Public
Offering-Offering Price" in Part Two.
</TABLE>
PORTFOLIO
As of November 30, 1995, 21st Century Trust, Series 2, consists of 29
issues of Equity Securities and 1 issue of Zero Coupon Obligations issued by
the U.S. Government which will mature on February 15, 2002. See related
portfolio herein in Part One.
<TABLE>
PER UNIT INFORMATION
<CAPTION>
1992<F1> 1993 1994 1995
<S> <C> <C> <C> <C>
Net asset value per Unit at beginning of period.................................... $ 20.27 $ 20.47 $ 22.20 $ 21.33
Net asset value per Unit at end of period.......................................... $ 20.47 $ 22.20 $ 21.33 $ 26.55
Distributions to Unitholders of investment income including accumulated dividends
paid on Units redeemed (average Units outstanding for entire period)............... $ -- $ .14 $ .17 $ .20
Distributions to Unitholders from Security redemption proceeds (average Units
outstanding for entire period)..................................................... $ -- $ -- $ -- $ .21
Unrealized appreciation (depreciation) of Securities (per Unit outstanding at end
of period)......................................................................... $ 1.21 $ 1.69 $ (1.06) $ 4.29
Units outstanding at end of period................................................. 668,564 668,564 629,964 578,364
<FN>
<F1>For the period from January 15, 1992 (date of deposit) through November 30,
1992.
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of Unison Investment Trusts Ltd. and the Unitholders of 21st
Century Trust, Series 2:
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of 21st Century Trust,
Series 2 as of November 30, 1995, and the related statements of operations and
changes in net assets for the year then ended. These financial statements are
the responsibility of the Trustee and the Administrator. Our responsibility is
to express an opinion on such statements 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 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. Our
procedures included confirmation of securities owned at November 30, 1995 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Administrator, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 21st Century Trust, Series 2
as of November 30, 1995, and the results of operations and changes in net
assets for the year then ended, in conformity with generally accepted
accounting principles.
Chicago, Illinois GRANT THORNTON LLP
December 22, 1995
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of Unison Investment Trusts Ltd., United States Trust Company
of New York and the Unitholders of 21st Century Trust, Series 2:
We have audited the accompanying statements of operations and changes in net
assets of 21st Century Trust, Series 2 for the years ended November 30, 1993
and 1994. These financial statements are the responsibility of Unison
Investment Trusts Ltd. (the "Sponsor" ). 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 statements of operations and
changes in net assets are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of operations and changes in net assets. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, 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 statements of operations and changes in net assets
referred to above present fairly, in all material respects, the results of
operations and changes in net assets of 21st Century Trust, Series 2 for the
years ended November 30, 1993 and 1994, in conformity with generally accepted
accounting principles.
St. Louis, Missouri ARTHUR ANDERSEN LLP
February 17, 1995
<TABLE>
21ST CENTURY TRUST
SERIES 2
Statements of Condition
November 30, 1995
<CAPTION>
21st
Century
Trust
<S> <C>
Trust property
Cash.................................................................................. $ 98,336
Securities at market value (cost $13,040,580) (note 1)................................ 15,237,165
Accumulated dividends................................................................. 22,072
Receivable for securities sold........................................................ --
$ 15,357,573
Liabilities and interest to Unitholders
Cash overdraft........................................................................ $ --
Redemptions payable................................................................... --
Interest to Unitholders............................................................... 15,357,573
$ 15,357,573
Analysis of Net Assets
Interest of Unitholders (578,364 Units of fractional undivided interest outstanding)
Cost to original investors of 668,564 Units (note 1).................................. $ 13,447,860
Less initial underwriting commission (note 3)......................................... 659,067
12,788,793
Less redemption of 90,200 Units....................................................... 2,024,525
10,764,268
Undistributed net investment income
Net investment income................................................................. 2,578,670
Less distributions to Unitholders..................................................... 322,458
2,256,212
Realized gain (loss) on Security sale or redemption................................... 267,081
Unrealized appreciation (depreciation) of Securities (note 2)......................... 2,196,585
Distributions to Unitholders of Security sale or redemption proceeds.................. (126,573)
Net asset value to Unitholders........................................................ $ 15,357,573
Net asset value per Unit (578,364 Units outstanding)................................... $ 26.55
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
21ST CENTURY TRUST, SERIES 2
Statements of Operations
Years ended November 30,
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Investment income
Dividend Income..................................................... $ 125,310 $ 129,933 $ 135,594
Interest Income..................................................... 546,313 576,968 581,555
Expenses............................................................. 671,623 706,901 717,149
Trustee fees and expenses........................................... 15,059 14,642 11,298
Total expenses...................................................... 15,059 14,642 11,298
Net investment income............................................... 656,564 692,259 705,851
Realized gain (loss) from Security sale or redemption
Proceeds............................................................ -- 809,617 1,341,248
Cost................................................................ -- 747,176 1,136,608
Realized gain (loss)................................................ -- 62,441 204,640
Net change in unrealized appreciation (depreciation) of Securities... 586,285 (1,245,670) 2,480,772
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..... $ 1,242,849 $ (490,970) $ 3,391,263
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Years ended November 30,
<CAPTION>
Increase (decrease) in net assets 1993 1994 1995
<S> <C> <C> <C>
Operations:
Net investment income.............................................................. $ 656,564 $ 692,259 $ 705,851
Realized gain (loss) on Security sale or redemption................................ -- 62,441 204,640
Net change in unrealized appreciation (depreciation) of Securities................. 586,285 (1,245,670) 2,480,772
Net increase (decrease) in net assets resulting from operations.................... 1,242,849 (490,970) 3,391,263
Distributions to Unitholders from:
Net investment income.............................................................. (91,593) (109,644) (121,221)
Security sale or redemption proceeds............................................... -- -- (126,573)
Redemption of Units -- (804,621) (1,219,904)
Total increase (decrease).......................................................... 1,151,256 (1,405,235) 1,923,565
Net asset value to Unitholders
Beginning of period................................................................ 13,687,987 14,839,243 13,434,008
Additional Securities purchased from the proceeds of Unit Sales.................... -- -- --
End of period (including undistributed net investment income of $1,088,968,
$1,671,582 and $2,256,212, respectively)............................................ $ 14,839,243 $ 13,434,008 $ 15,357,573
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
21ST CENTURY TRUST, SERIES 2
PORTFOLIO as of November 30, 1995
<CAPTION>
Current
Annualized
Number Dividend Market Aggregate
Portfolio of per Value Per Market
Number Shares Name of Issuer of Securities Share <F1> Share Value Ranking
<S> <C> <C> <C> <C> <C> <C>
1 5,975 AMP Incorporated <F2> 0.92 $ 40.125 $ 239,747 A-
2 5,512 Abbott Laboratories 0.84 40.625 223,925 A+
3 8,497 Albertson's, Inc. 0.52 30.750 261,283 A+
4 3,683 American International Group, Inc. <F3> 0.34 89.750 330,549 A+
5 5,278 ConAgra, Inc. 0.95 39.875 210,460 A+
6 4,779 Dillard Department Stores, Inc. 0.12 28.875 137,994 A+
7 4,888 Walt Disney Co. 0.36 60.125 293,891 A
8 3,451 Emerson Electric Co. 1.96 78.000 269,178 A+
9 10,931 Food Lion, Inc. 0.10 5.9375 64,903 A-
10 4,129 Gannett Company, Inc. 1.40 61.000 251,869 A
11 4,142 Hershey Foods Corp. 1.44 61.750 255,768 A
12 3,216 Johnson & Johnson 1.32 86.625 278,586 A+
13 3,644 Loctite Corp. 1.00 48.875 178,100 A
14 3,428 Merck & Co. 1.36 61.875 212,108 A+
15 3,662 Minnesota Mining & Manufacturing Company 1.88 65.500 239,861 A+
16 2,599 Mobil Corporation 3.70 104.375 271,271 B+
17 5,032 Nordstrom, Inc. 0.50 39.250 197,506 A+
18 5,236 PepsiCo, Inc. 0.80 55.250 289,289 A+
19 4,126 Pfizer Inc. <F4> 1.04 58.000 239,308 A-
20 5,504 Pitney Bowes, Inc. 1.20 44.750 246,304 A+
21 5,444 Rubbermaid, Inc. 0.56 27.500 149,710 A+
22 6,868 Sara Lee Corporation 0.76 32.250 221,493 A
23 5,226 Schering-Plough Corporation <F5> 1.16 57.375 299,842 A+
24 4,906 The J.M. Smucker Company 0.52 20.875 102,413 A
25 6,074 State Street Boston Corp. 0.68 45.000 273,330 A+
26 6,777 SUPERVALU INC. 0.98 32.250 218,558 A-
27 6,074 Wachovia Corp. 1.44 45.000 273,330 A-
28 9,812 Walgreen Co. <F6> 0.44 29.125 285,774 A+
29 4,438 WMX Technologies Inc. 0.60 29.500 130,921 A-
153,331 $ 6,647,271
Maturity
Value Name of Issuer and Title of Security
Interest Portion U.S. Treasury Separate Trading
of Registered Interest and Principal of
12,146,000 Securities (STRIPS) Due February 15, 2002 $ 8,589,894
$ 15,237,165
The accompanying notes are an integral part of this statement.
<FN>
<F1>Based on the latest quarterly or semi-annual dividend declaration. There can
be no assurance that furture dividend payments will be maintained in an amount
equal to the dividends listed below.
<F2>On January 25, 1995, AMP Incorporated declared a 2 for 1 split payable on
March 1, 1995.
<F3>On Mary 24, 1995, American International Group, Inc. declared a 3 for 2 split
payable on July 28, 1995.
<F4>On April 27, 1995, Pfizer, Inc. declared a 2 for 1 split payable on June 30,
1995.
<F5>On April 4, 1995, Schering-Plough Corporation declared a 2 for 1 split payable
on June 9, 1995.
<F6>On July 12, 1995, Walgreen Co. declared a 2 for 1 split payable on August 8,
1995.
</TABLE>
21ST CENTURY TRUST
SERIES 2
Notes to Financial Statements
Novemeber 30, 1993, 1994 and 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange or
the NASDAQ National Market System are valued at the last closing sales price.
Treasury obligations are valued at the closing bid price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange or the NASDAQ National
Market System, on the closing sale prices on the exchange. The original cost
of the Treasury obligations was based on the closing bid price. In each case,
the costs were determined on the day of the various Dates of Deposit and
included brokerage commissions.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in such Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value determined
by the Evaluator and (3) accumulated dividends thereon, less accrued expenses
of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of such Trust and, accordingly, no provision has been made for
Federal income taxes.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis. Since the date of deposit, undistributed
net investment income includes $2,135,538 of accrued interest.
Certain Reclassifications - Certain reclassifications have been made to
conform to the 1995 presentation.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at November 30, 1995is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized Appreciation $ 2,545,858
Unrealized Depreciation (349,273)
$ 2,196,585
</TABLE>
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities
in the portfolio of the Trust plus accumulated dividends to the date of
settlement. If the supply of Units exceeds demand, or for other business
reasons, the Sponsor may discontinue purchases of Units at such prices. In the
event that a market is not maintained for the Units, a Unitholder desiring to
dispose of his Units may be able to do so only by tendering such Units to the
Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on the underlying
value of the Securities per unit on the date of an investor's purchase, plus a
sales charge of 4.9% of the public offering price which is equivalent to
5.152% of the aggregate offering price of the Securities. The secondary market
cost to investors is based on the determination of the underlying value of the
Securities per unit on the date of an investor's purchase, a sales charge of
2.9% of the public offering price which is 2.99% of the underlying value of
the Securities. Effective each July 1, the secondary sales charge will
decrease by .5 of 1% to a minimum sales charge of 1.4%.
Compensation of Sponsor - The Sponsor receives a fee for providing portfolio
supervisory services for the Trust ($.005 per Unit, not to exceed the
aggregate cost of the Sponsor for providing such services to all applicable
Trusts). This fee may be adjusted for increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index.
Compensation of Evaluator - The Evaluator receives an annual fee for
regularly evaluating the Trust's portfolio.
NOTE 4 - REDEMPTION OF UNITS
During the years ended November 30, 1993, 1994 and 1995, 0 Units, 38,600 Units
and 51,600 Units, respectively, were presented for redemption.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMMPANIED BY PART ONE. BOTH
PARTS OF THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
PROSPECTUS PART TWO
The Trusts. The objectives of the Trusts are protecting capital, for
Unitholders who purchase at the initial offering price, or less, and hold
their Units through the Mandatory Termination Date and providing dividend
income and capital appreciation through investment in a portion of a portfolio
consisting of "zero coupon" obligations ("Zero Coupon Obligations") issued by
the U.S. Government and the remainder of Trust's portfolio in common stocks
and, in the case of Series 9, American Depositary Receipts ("ADRs") of
publicly traded companies ("Equity Securities") (collectively, the
"Portfolio"). The value of the Units of a Trust will fluctuate with the value
of the relevant Portfolio. The Trusts consist of a series of unit investment
trusts. The Units being offered by this Prospectus are issued and outstanding
Units which have been purchased by Edward D. Jones & Co. (the "Underwriter")
in the secondary market or from the Trustee after having been tendered for
redemption. The profit or loss resulting from the sale of Units will accrue to
the Underwriter. No proceeds from the sale of the Units will be received by
the Trusts.
Public Offering Price. The secondary market Public Offering Price of the Units
is based on the Evaluator's evaluation of the pro rata share of the bid prices
of the Zero Coupon Obligations and the underlying market value of the Equity
Securities in the Portfolio of a Trust, including a sales charge as set forth
in "Public Offering Price" in the "Summary of Essential Financial Information"
in Part One.
NEITHER THESE TRANSACTIONS NOR THE SECURITIES OFFERED HEREBY HAVE BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THESE
TRANSACTIONS OR UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Sponsor: Unison Investment Trusts, LTD.
Prospectus Part Two dated October 17, 1995
<TABLE>
<CAPTION>
Title Page
<S> <C>
INTRODUCTION..................................................... 3
THE TRUSTS....................................................... 3
Summary Description of the Portfolio............................ 3
Objectives and Portfolio Selection.............................. 6
PUBLIC OFFERING.................................................. 7
General......................................................... 7
Public Offering Price........................................... 8
Unit Distribution............................................... 8
Public Market................................................... 8
Sponsor's and Underwriter's Profit.............................. 8
FEDERAL TAXATION................................................. 8
General Consequences............................................ 8
Taxation of Dividends Received by a Trust....................... 9
Corporate Unitholders Dividends Received Deduction.............. 9
Limitations on Deductibility of Trust Expenses by Individual
Unitholders...................................................... 10
Disposition of Securities by a Trust and Disposition of Units... 10
Special Tax Consequences of In Kind Distributions Upon
Redemption of Units.............................................. 10
Computation of the Unitholder's Tax Basis....................... 10
Back-Up Withholding............................................. 11
STATUS OF THE TRUSTS UNDER NEW YORK STATE AND CITY LAW........... 11
RIGHTS OF UNITHOLDERS............................................ 11
Units........................................................... 11
Certain Limitations............................................. 12
Redemption of Units............................................. 12
TRUST OPERATING EXPENSES......................................... 14
Initial Costs................................................... 14
Fees............................................................ 14
Miscellaneous Expenses.......................................... 15
ADMINISTRATION OF THE TRUSTS..................................... 15
Records and Accounts............................................ 15
Distributions of Income and Capital............................. 15
Administration of the Portfolio................................. 16
Reports to Unitholders.......................................... 16
Amendment or Termination........................................ 17
Limitations on Liabilities...................................... 18
MISCELLANEOUS.................................................... 18
The Sponsor..................................................... 18
The Trustee..................................................... 19
The Evaluator................................................... 19
Legal Opinions.................................................. 20
Auditors........................................................ 20
</TABLE>
INTRODUCTION
Each series of 21st Century Trust (a "Trust") was created under the laws of
the State of New York pursuant to a Trust Agreement (the "Agreement") and a
related Standard Terms and Conditions of Trust (the "Indenture," as amended
and restated, collectively with the Agreement, the "Indenture and Agreement")
by and between Unison Investment Trusts Ltd. (the "Sponsor"), as depositor,
United States Trust Company, as trustee and Kenny S&P Evaluation Services, a
division of J.J. Kenny Co., Inc., as evaluator. Pursuant to the Indenture and
Agreement, The Bank of New York (the "Trustee" ) was named successor
trustee to United States Trust Company and Van Kampen American Capital
Investment Advisory Corp. (the "Evaluator" ) was named successor
evaluator to Kenny S&P Evaluation Services, a division of J.J. Kenny Co.,
Inc., both effective June 19, 1995. The purpose and objective of each Trust is
to protect capital, for Unitholders who purchase at the initial offering
price, or less, and hold their Units through the Mandatory Termination Date,
and to provide income and capital appreciation by investing a portion of its
portfolio in "zero coupon" obligations (i.e., securities which accrue but do
not pay income currently, are sold at a discount and represent an obligation
to pay a fixed amount at a future date) issued by the U.S. Government (the
"Zero Coupon Obligations") and the remainder of such Trust's portfolio in
publicly traded common stocks issued by United States corporations and, in the
case of Series 9, American Depositary Receipts ("ADRs") (the "Equity
Securities") which provide income or are considered to have the potential for
capital appreciation (such Zero Coupon Obligations and the Equity Securities
are collectively referred to herein as the "Portfolio" or the "Portfolio
Securities"), allowing investors greater diversification than they might be
able to acquire individually. Series 9 may contain ADRs which are receipts
issued by United States depositaries evidencing ownership of common stocks
issued by corporations formed in countries other than the United States and on
deposit with custodians located outside the United States. The issuers of the
publicly traded common stocks in the Portfolio, together with the foreign
issuers of the common stocks underlying any ADRs are collectively referred to
herein as the "Issuers". Both the publicly traded common stocks and any ADRs
provide income or are considered to have the potential for capital
appreciation or both. ADRs provide income in the form of distribution payments
of dividends received on the underlying foreign securities, while common
stocks provide income in the form of dividends. Any reference in this
Prospectus Part Two to "dividends" shall also refer to distribution payments
made with respect to any ADRs in the Portfolio. The Zero Coupon Obligations
are backed by the full faith and credit of the U.S. Government. The guarantee
of the U.S. Government does not apply to the market value of the Zero Coupon
Obligations, the Equity Securities or the Units of a Trust, the net asset
value of which will fluctuate and, prior to maturity, may be more or less than
a purchaser's acquisition cost. There is no assurance that these objectives
will be met because the payment and level of dividends is dependent upon,
among other things, the amount each Issuer has available for such purpose and,
with respect to ADRs, the exchange rates in effect at the time of the
conversion. Furthermore, diversification of a Trust's assets will not
eliminate the risk of loss inherent in the ownership of "zero coupon"
obligations and Equity Securities.
THE TRUSTS
Summary Description of the Portfolio
An investment in Units of a Trust should be made with an understanding of the
risks inherent in an investment in Zero Coupon Obligations and Equity
Securities.
Each Trust consists of (a) the Portfolio Securities listed under "Portfolio"
in Part One, which Portfolio Securities shall continue to be held in each
Trust unless (i) there are Failed Contract Securities and no Replacement
Securities are purchased with respect thereto (see "The Trusts -- Objectives
and Portfolio Selection" herein) or (ii) there is a redemption of Units which
requires the sale of Portfolio Securities (see "Rights of Unitholders --
Redemption of Units" herein) and (b) any additional Portfolio Securities
acquired and held by each Trust pursuant to the provisions of the Indenture
and Agreement plus cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any default in or
failure to make distributions on any of the Portfolio Securities. However,
should any contract for the purchase of any of the Portfolio Securities
initially deposited hereunder fail, the Sponsor will, unless substantially all
of the moneys held in a Trust to cover such purchase are reinvested in
Replacement Securities in accordance with the Agreement, refund the cash,
sales charge and transaction fees attributable to such failed contract to all
Unitholders on the twentieth day of the month following the expiration of the
period in which the Sponsor is permitted to deliver Replacement Securities as
provided in the Indenture and Agreement. (See "The Trusts -- Objectives and
Portfolio Selection" herein.)
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested by the
Trustee, no assurance can be given that a Trust will retain, for any length of
time, its present size and composition. Although the Portfolio is not managed,
the Sponsor may instruct the Trustee to sell Equity Securities under certain
limited circumstances or to sell or hold securities offered or distributed to
a Trust by an issuer of Equity Securities. (See "Rights of Unitholders --
Redemption of Units" herein.) Equity Securities, however, will not be sold by
a Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation. (See "Administration of the Trusts
- --Administration of the Portfolio" herein.)
The Zero Coupon Obligations deposited in a Trust consist of the interest
and/or principal components of U.S. Treasury obligations. The Zero Coupon
Obligations evidence the right to receive a fixed amount at a future date from
the U.S. Government, and are backed by the full faith and credit of the U.S.
Government. Zero Coupon Obligations are purchased at a deep discount because
the buyer obtains only the right to a fixed amount at a fixed date in the
future and does not receive any interest payments prior to maturity. The lack
of current interest payments also means that any income tax owed on the
accreting income would have to be paid from other sources. The effect of
owning deep discount bonds which do not make current interest payments (such
as the Zero Coupon Obligations) is that a fixed yield is earned not only on
the original investment but also, in effect, on all earnings during the life
of the discount obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income on such
obligations at a rate as high as the implicit yield on the discount
obligation, but at the same time eliminates the holder's ability to reinvest
at higher rates in the future. For this reason, the Zero Coupon Obligations
are subject to substantially greater price fluctuations during periods of
changing interest rates than are securities of comparable quality which make
regular interest payments. Because these price fluctuations affect the
Evaluator's determination of the market value of the Units, a Unitholder that
sells or redeems Units prior to the Mandatory Termination Date may realize a
loss upon such sale or redemption.
An investor should also have an understanding of the risks which an investment
in equity securities, including common stock and ADRs, entails before making
an investment in Units. Because the ADRs eligible for deposit in Series 9
represent ownership of the common stock of foreign corporations, the
considerations described herein with respect to common stock also apply
generally to any ADRs in a Trust. Such risks include those arising from the
fact that the rights of common stock owners to payments are generally inferior
to creditors, debt holders and preferred stock owners of the issuing company.
Common stock owners are also subject to risks of declines in the general
equity market or in the market for the company's industry sector and the
worsening of the financial condition of a company or the economy in which it
operates. Such risks may result in declines in values of the common stocks
which in turn would negatively affect the value of Units. Although actions
have been taken to provide a diversified portfolio of equity securities which
tends to reduce the effects of these risks, no guarantee can be made that they
will not occur and negatively affect the value of Units.
Holders of common stock of the type held in a Trust have a right to receive
dividends only when, if, and in the amounts declared by the issuer's board of
directors and to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. The issuance of debt securities and preferred stock will create superior
claims for payment of principal and interest (in the case of debt securities)
and dividends (in the case of preferred stock) 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 (which
value will be subject to market fluctuations prior thereto), or preferred
stocks which typically have liquidation preference and which may have stated
optional or mandatory redemption provisions, common stocks do not have a fixed
principal amount or a maturity date and their value is subject to market
fluctuations for as long as the common stocks remain outstanding. The market
value of the Securities in such Trust thus is expected to fluctuate over the
entire life of a Trust to market values higher or lower than those prevailing
on the Date of Deposit. The Sponsor may direct the Trustee to dispose of
Securities under certain specified circumstances but the Securities will not
be sold by the Trustee as a result of ordinary market fluctuations. (See
"Administration of the Trusts -- Administration of the Portfolio" herein.)
An investment in Units of Series 9 should also be made with an understanding
of the additional risks and consequences an investment in ADRs entails, which
include risks involved in the ADRs themselves and those inherent in foreign
securities as well as the investor's risk of becoming subject to special tax
consequences due to the receipt of income from foreign sources. (See "Federal
Taxation -- Taxation of Dividends Received by a Trust" herein.) An ADR is a
receipt that is issued by an American depositary, usually a bank, and which is
denominated in and represents the ownership of a specified number of foreign
securities on deposit with a foreign entity, also usually a bank, that acts as
custodian of and transfer and collection agent with respect to such foreign
securities. The depositary and custodian usually charge fees upon the deposit
and withdrawal of securities, the conversion of dividends to U.S. dollars, the
disposition of non-cash distributions and the performance of other services.
ADRs, although not necessarily the underlying securities, are registered with
the Securities and Exchange Commission.
Ownership of ADRs by U.S. investors can provide certain advantages over direct
ownership of the foreign securities, including greater ease of transferability
and simplified collection and conversion of dividends paid in foreign
currencies. However, ownership of ADRs also poses certain disadvantages in
comparison to direct ownership of the foreign securities. For example, holders
of ADRs may not be able to participate in foreign warrant and rights offerings
or in certain exchange or tender offers involving foreign issuers. ADR
depositaries will typically sell warrants and subscription rights, if they are
transferable, and distribute the proceeds, which are often less than the value
of the securities represented by such warrants or subscription rights, to the
ADR holders. Further, in some cases the voting rights of owners of foreign
stock are restricted by the home country, and the flow of information from the
foreign issuer to ADR holders may be delayed or reduced.
ADR holders have the right to demand and receive actual securities in exchange
for their ADRs. Furthermore, ADR facilities may be terminated, in which case
the ADR holder may come into possession of the underlying securities. If such
an event were to occur, the advantages of holding ADRs described above would
be lost and the tax consequences to the holder could change. Neither the
Trustee nor the Sponsor is authorized under the Indenture and Agreement to
initiate such an exchange. However, if an ADR facility is terminated, the
Sponsor may, but is not required to, direct the Trustee to sell any underlying
securities it may receive and distribute the proceeds of such sale to the
Unitholders pursuant to the terms of the Indenture and Agreement. In some
cases, an unsponsored ADR facility (see below for a discussion of sponsored
and unsponsored ADRs) may be terminated upon the creation of a sponsored ADR
facility. In such cases, it is the usual practice for the sponsor of the
facility to effect an exchange of its sponsored ADRs for the outstanding
unsponsored ADRs and to pay the costs of such exchange. Such an occurrence, in
and of itself, will not constitute an event that gives rise to the ability of
the Sponsor to direct the Trustee to sell the ADR. See, "Administration of the
Trusts -- Administration of the Portfolio" herein.
An ADR facility may be established by a foreign issuer that seeks to have its
securities traded in the United States, in which case the ADRs are referred to
as "sponsored", or the ADR facility may be initiated by an entity unrelated to
the foreign issuer, usually a brokerage firm, that seeks to make a market in
the foreign security, in which case the ADRs are referred to as "unsponsored".
In the case of a sponsored ADR, the foreign issuer enters into an arrangement
with a single American depositary and a foreign custodian and usually agrees
to pay certain administrative and shareholder related fees and expenses,
although ADR holders will bear certain costs. Under the terms of most
sponsored ADRs, depositaries undertake to distribute notices of shareholder
meetings and voting instructions and to make other shareholder communications
available to ADR holders upon the foreign issuer's instruction. Generally, the
underlying security of a sponsored ADR will be registered with the Securities
and Exchange Commission, making the ADR eligible for listing on United States
exchanges.
In the case of an unsponsored ADR, the fees and expenses of the facility are
generally born solely by the ADR holders. In addition, the depositary is
frequently under no contractual obligation to distribute shareholder
communications of any type or to pass through voting rights to the ADR
holders. Other unsponsored ADRs with respect to the same underlying security
are often established by other market makers and depositaries. Such duplicate
ADRs are treated as fungible in the trading markets. Therefore, when duplicate
unsponsored ADRs exist, there is no mechanism that links a particular
unsponsored ADR to its actual depositary or the distributions made by it.
Instead, unsponsored ADRs are usually held on deposit with U.S. clearing
agencies, which take in the various unsponsored ADR distributions and forward
them on to the ADR owners. Additionally, if a holder of an unsponsored ADR
seeks to exchange the ADR for the underlying securities there can be delays in
settlement if it becomes necessary to trace the ADR to its issuing depositary.
This may occur if other depositaries refuse to accept the ADR or have
insufficient securities to effect the exchange. Because the underlying
securities are not generally registered in the United States and because the
underlying securities may have been issued at different times, there is a
possibility that if an unsponsored ADR is exchanged for underlying securities,
or the ADR holder otherwise receives the underlying securities, such holder
may come into possession of unregistered restricted securities which cannot be
sold in the U.S. until certain statutory waiting periods have expired.
Elements of risk associated with investing in the securities of foreign
issuers of equity securities include but are not limited to trade balances and
imbalances and related economic policies; currency exchange rate fluctuations;
non-U.S. currency exchange control policies; expropriation or confiscatory
taxation; limitations on the removal of funds or other assets; political or
social instability; the diverse structure and liquidity of securities markets
in various countries and regions; policies of governments with respect to
possible nationalization of their own industries; and other specific local
political and economic considerations. Companies located outside the United
States may operate under different accounting, auditing and financial
reporting regulations than U.S. companies. In addition, because ADRs represent
ownership of securities issued by a foreign company, often less information is
available about the issuer than would be the case for publicly held United
States companies. Further, it may be more difficult to obtain and enforce a
judgment against a foreign issuer.
An investment in Units should be made with particular attention to risks
presented by probable changes in future currency exchange rate relationships,
especially during periods of broad adjustments in such relationships. The
securities underlying any ADRs in the Portfolio have been issued by
corporations that, to the extent they pay dividends, pay them in foreign
currencies. In the past, most foreign currencies values have fluctuated widely
against the United States dollar for many reasons, including supply and demand
of the respective currency, monetary policies, the soundness of the world
economy and the strength of a particular foreign economy as compared to the
economies of the United States and other countries. Thus, even though a
foreign Issuer's dividend payment may remain constant in its local currency,
the U.S. dollar value of the distribution will vary with fluctuations in the
U.S. dollar exchange rates for the relevant currency. The Sponsor anticipates
that dividends received by the foreign custodians in foreign currencies will
be converted on the date of receipt, or as soon as practicable thereafter, to
U.S. dollars. Due to fluctuations in exchange rates and possible delays in the
conversions of dividends to U.S. dollars, the U.S. dollar value of the
dividend on the date of receipt may not reflect, exactly, the actual amount in
U.S. dollars the Trust will receive.
To the best knowledge of the Sponsor, none of the foreign securities
underlying any ADRs in the Portfolio were subject to currency exchange control
restrictions which would materially interfere with the payment or receipt of
dividends on such underlying securities. However, there can be no assurance
that currency exchange control regulations will not be adopted in the future
that would adversely affect such payments.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made.
Unitholders will be unable to dispose of any of the Equity Securities in the
Portfolio, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in each Trust and will vote such stocks in accordance
with the instructions of the Sponsor.
Each of the risks referred to above could adversely affect the ability and the
inclination of the Issuers to declare or to pay dividends and the ability of
holders of common stock and ADRs to realize any value from the assets of the
Issuers upon liquidation or bankruptcy.
Objectives and Portfolio Selection
The objectives of each Trust are to protect Unitholders' capital, and provide
investors with income and capital appreciation by investing a portion of the
portfolio in Zero Coupon Obligations and the remainder in Equity Securities.
Each Trust has a Mandatory Termination Date as set forth under "Summary of
Essential Information" in Part One. The Zero Coupon Obligations evidence the
right to receive a fixed amount at the maturity date thereof from the U.S.
Government and are backed by the full faith and credit of the U.S. Government.
The guarantee of the U.S. Government does not apply to the market value of the
Zero Coupon Obligations or the Units of the Trusts, the net asset value of
which will fluctuate and, prior to maturity, may be worth more or less than a
Unitholder's acquisition cost for such Units. There is no guarantee that a
Trust's objectives will be achieved because such objectives are subject to the
continuing ability of the respective Issuers to continue to declare and pay
dividends and because the market value of the Portfolio Securities can be
affected by a variety of factors. (See "The Trusts -- Summary Description of
the Portfolio" herein.) Common stocks may be especially susceptible to general
stock market movements and to volatile increases and decreases in value as
market confidence in and perception of the Issuers change, thus investors
should be aware that there can be no assurance that the value of the Equity
Securities will increase. However, each Trust has been organized so that
purchasers of Units should receive, at the termination of a Trust at the
Mandatory Termination Date, an amount at least equal to the Initial Public
Offering Price, which is equal to or less than the per Unit value upon
maturity of the Zero Coupon Obligations, even if the Equity Securities never
paid a dividend and the value of the Equity Securities in each Trust decreased
to zero, which the Sponsor considers highly unlikely.
In selecting any ADRs for inclusion in the Series 9 Portfolio, in addition to
the factors associated with the selection of Equity Securities of any Issuer,
the Sponsor considered the following factors, among others: (1) the location
of the foreign issuer of the securities underlying the ADRs; (2) the
likelihood of favorable market and political conditions in the country in
which such foreign issuer is located; (3) the amount of publicly available
information available from such foreign issuer; and (4) historical and recent
fluctuations in the exchange rate of the currency of such foreign issuer
relative to the U.S. Dollar.
In the event of a failure of a contract for the purchase of Portfolio
Securities for reasons beyond the control of the Sponsor or Trustee (the
"Failed Contract Securities"), the Sponsor may purchase an equal number and
type of the Failed Contract Securities (the "Replacement Securities") and
deposit such Replacement Securities in a Trust. The Replacement Securities
must be purchased within 30 days after delivery by the Sponsor to the Trustee
of notice of the failed contract, and the cost to such Trust for such
Replacement Securities may not exceed the amount available under the letter of
credit deposited by the Sponsor with respect to such Failed Contract
Securities.
With respect to Replacement Securities for the Zero Coupon Obligations, such
Replacement Securities shall be of the type originally selected for deposit in
such Trust and must have the same maturity value as the Failed Contract
Security and the same Zero Coupon Maturity Date, which must be prior to the
Mandatory Termination Date. In addition, the purchase of Replacement
Securities shall not adversely affect the federal income tax status of a
Trust. In the event the Sponsor is unable to replace the Failed Contract
Securities as provided above, the Trustee shall distribute to the Unitholders
from the cash in such Trust attributable to such Failed Contract Securities an
amount equal to the market value of such Failed Contract Securities (as
determined by the Evaluator) on the Business Day prior to the day the contract
or contracts relating to such Failed Contract Securities were deposited in
such Trust and, if such Failed Contract Securities are Equity Securities,
shall sell all other Equity Securities, if any, issued by the issuer of such
Failed Contract Securities and shall distribute to the Unitholders their
respective pro rata interest in the proceeds of such sale. Neither the Sponsor
nor the Trustee shall be liable in any way for any failure of any contract for
the purchase of the Portfolio Securities. However, should any contract for the
purchase of any of the Portfolio Securities deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in a Trust to cover
such purchase are reinvested in Replacement Securities in accordance with the
Trust Agreement, refund the cash and sales charge attributable to such failed
contract to all Unitholders on the twentieth day of the month following the
expiration of the period in which the Sponsor is permitted to deliver
Replacement Securities as provided in the Indenture and Agreement. In the
event of any refund, each individual Unitholder's basis will be reduced by the
amount refunded to such Unitholder, and each Unitholder's income would also be
reduced by such Unitholder's pro rata interest in the income attributable to
the Failed Contract Securities. Because certain of the Equity Securities from
time to time may be sold under certain circumstances described herein, and
because the proceeds from such events will be distributed to Unitholders and
will not be reinvested, and because under certain circumstances, in connection
with offers or distributions by Issuers of Equity Securities, additional
and/or different securities may be deposited in a Trust, no assurance can be
given that a Trust will retain for any length of time its present size and
composition. (See "Administration of the Trusts -- Administration of the
Portfolio" herein.)
Because the Series 9 Trust may hold ADRs representing proof of ownership of
foreign securities on deposit with foreign custodians and there is a
possibility that at some future date an ADR will be terminated causing such
Trust to hold the foreign securities represented by such an ADR, Units of
Series 9 may not be an appropriate investment for a pension plan subject to
Title I of the Employee Retirement Income Security Act of 1974 ("ERISA").
Prospective investors subject to ERISA should consult their tax advisors in
determining the appropriateness of an investment in the Series 9 Trust. Unless
a Unitholder purchases Units of a Trust on the Date of Deposit (or another
date when the value of the Units is less than or equal to the Initial Public
Offering Price), total distributions, including distributions made upon
termination of a Trust, may be less than the amount paid for a Unit.
PUBLIC OFFERING
General
Units of each Trust are offered for sale at the Public Offering Price which in
the secondary market is based on the Evaluator's evaluation of the pro rata
share of the bid prices of the Zero Coupon Obligations and the underlying
market value of the Equity Securities of a Trust plus or minus the pro rata
share of cash, if any, in the Income Account and the Capital Account of each
Trust (other than amounts required to be distributed by the Trustee pursuant
to the Indenture and Agreement), and includes a sales charge as described in
"Public Offering -- Public Market" below.
Public Offering Price
On any particular date, the Public Offering Price will vary from the amounts
set forth on the "Summary of Essential Information" page in Part One in
accordance with fluctuations in the aggregate market value of the Portfolio
Securities, the amount of available cash on hand in a Trust and the amount of
certain accrued fees and expenses.
As more fully described in the Indenture and Agreement the aggregate market
value of the Portfolio Securities is determined on each Business Day by the
Evaluator. (See "Rights of Unitholders --Redemption of Units" herein.)
Determinations are effective for transactions effected subsequent to the last
preceding determination.
Although payment is normally made three business days following an order for
the purchase of Units, payment may be made prior thereto. However, evidence of
ownership of the Units so ordered will be made three business days following
such order or shortly thereafter. A person will become the owner of Units on
the date of settlement provided payment has been received. Cash, if any, made
available to the Underwriter prior to the date of settlement for the purchase
of Units may be used in the Underwriter's businesses and may be deemed to be a
benefit to the Underwriter, subject to the limitations of Rule 15c3-3 under
the Securities Exchange Act of 1934.
Unit Distribution
Units purchased by the Underwriter in the secondary market, if any, may be
offered by this Prospectus at the secondary Public Offering Price in the
manner described.
The Sponsor intends to qualify Units in states selected by the Sponsor for
sale by the Underwriter and from time to time may offer Units for sale through
dealers who are members of the National Association of Securities Dealers,
Inc. Such dealers, if any, may be allowed a concession or agency commission by
the Underwriter.
The Underwriter reserves the right to reject, in whole or in part, any order
for the purchase of Units and to change the amount of the concessions to
dealers from time to time.
Public Market
While not obligated to do so, the Underwriter intends to maintain, at its
expense, a secondary market for Units of each Trust and to continuously offer
to repurchase Units from Unitholders at the Redemption Price calculated by the
Evaluator. (See "Right of Unitholders -- Redemption of Units" herein.) Any
Units repurchased by the Underwriter at the Redemption Price may be reoffered
to the public by the Underwriter at the then current Public Offering Price,
which price includes a sales charge. Effective on each July 1 such sales
charge will be reduced as set forth in the "Summary of Essential Financial
Information" in Part One. Any profit or loss resulting from the resale of such
Units will belong to the Underwriter.
If the supply of Units exceeds the demand (or for any other business reason),
the Underwriter may, at any time, from time to time, or permanently,
discontinue the repurchase of Units of a series at the Redemption Price.
Alternatively, Unitholders may redeem their Units through the Trustee,
although the Sponsor shall have the right to purchase such tendered Units at a
price not less than the price the Unitholder would receive from the Trustee
upon tender. Unitholders may be able, upon request, to receive an "in kind"
distribution of the Securities evidenced by their Units. (See "Rights of
Unitholders -- Redemption of Units" herein.) A Unitholder who wishes to
dispose of his Units should inquire of his 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.
Sponsor's and Underwriter's Profit
As stated in "Public Offering -- Public Market" above, the Underwriter intends
to maintain a secondary market for the Units of each Trust. In so maintaining
a market, the Underwriter will realize a profit or sustain a loss in the
amount of any difference between the prices at which such Units were bought
and the prices at which such Units were resold (such prices include a sales
charge) or the prices at which such Units were redeemed, as the case may be.
FEDERAL TAXATION
The following is a discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units which
will generally apply to individual Unitholders. The summary is limited to
investors who hold the Units as "capital assets" (generally, property held for
investment) within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code"). Unitholders should consult their tax advisors
in determining the particular federal, state, local and any other tax
consequences of the purchase, ownership and disposition of Units in a Trust
which may apply to their specific circumstances.
Counsel for the Sponsor, under existing law at the time of the initial deposit
of the Trusts rendered an opinion substantially to the effect that:
General Consequences
Each Trust is not an association taxable as a corporation for federal income
tax purposes.
Each Unitholder of a Trust will be considered the owner of a pro rata portion
of that Trust's assets for federal income tax purposes under Subpart E,
Subchapter J of Chapter 1 of the Code. Each Unitholder will be considered to
have received its pro rata share of income, deductions and credits derived
from the operation of such Trust.
Each Unitholder will have a taxable event when a Portfolio Security is
disposed of in a taxable transaction (whether by sale, liquidation, redemption
or otherwise) or when the Unitholder redeems or sells its Units in a taxable
transaction. The cost of the Units to a Unitholder on the date such Units are
purchased is allocated among the Portfolio Securities held by such Trust (in
accordance with the proportion of the fair market values of such Portfolio
Securities) in order to determine the Unitholder's tax basis in the
Unitholder's pro rata portion of each Portfolio Security, and such tax basis
will be subject to certain adjustments discussed below.
The Zero Coupon Obligations held in a Trust are U.S. government obligations
which accrue but do not pay income currently, are sold at a discount and
represent an obligation to pay a fixed amount at a future date. The Zero
Coupon Obligations are treated as bonds which were originally issued at an
original issue discount. For tax purposes, original issue discount is treated
as a form of interest, and the amount of original issue discount is generally
the difference between the purchase price of the obligation and either (i) its
stated redemption price at maturity or (ii) the amount payable on the due date
of the Zero Coupon Obligation. A Unitholder will be required to include in
gross income the sum of his daily portions of the original issue discount
determined for each day during which the Zero Coupon Obligation is held in
such Trust and will be subject to federal income tax on the total amount of
such original issue discount which accrues during such taxable year even
though the income is not distributed to the Unitholder until termination of
such Trust. In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual compounding of
accrued interest. In the case of the Zero Coupon Obligations this method will
generally result in an increasing amount of income to be reported by a
Unitholder each year during the term of his investment in such Trust. There
can be no assurance that dividend income distributed to a Unitholder during a
taxable year will equal or exceed the amount of such Unitholder's share of
income subject to tax including his share of original issue discount subject
to tax.
Taxation of Dividends Received by a Trust
For federal income tax purposes, a Unitholder's pro rata portion of taxable
dividends paid by a corporation with respect to any Equity Security will be
taxable as ordinary income to the extent of such corporation's current and
accumulated "earnings and profits" as such term is defined in Section 316 of
the Code. A Unitholder's pro rata portion of taxable dividends which exceed
such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Equity Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity Security, shall be
treated as capital gain. Such capital gain will be short-term unless a
Unitholder has held its Units and the Trust has held such Equity Security for
more than one year. Under certain circumstances corporate Unitholders may be
able to deduct from gross income a portion of dividends received by a Trust
with respect to Equity Securities held by such Trust and, accordingly, should
consult their tax advisors concerning the federal income tax consequences of
such distributions.
Series 9. Distributions paid on ADRs also may be subject to a withholding tax
imposed by foreign countries. Tax treaties between certain countries and the
United States may reduce or eliminate such withholding taxes. Distributions
received on ADRs may be reduced by the amount of any applicable foreign
withholding tax.
Generally, any foreign withholding taxes deducted from distributions paid on
ADRs may be used as a credit or a deduction against federal income tax
liability. A Unitholder should consult its tax advisor regarding the
applicability of the foreign tax credit and the applicability of the deduction
of foreign withholding taxes to its specific circumstances.
Corporate Unitholders Dividends Received Deduction
A corporation (other than a corporation taxed as an S Corporation, a regulated
investment company, a real estate mortgage investment conduit, or a real
estate investment trust) which owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unitholder's pro rata
portion of taxable dividends received from domestic corporations by a Trust in
the same manner as if such corporation directly owned the Equity Securities
paying such dividends. A corporation owning Units should be aware that
Sections 246 and 246A of the Code impose certain limitations on the
deductibility of a corporate Unitholder's pro rata share of taxable dividends
received by such Trust including the following: (1) the aggregate amount of
the dividends received deduction is limited to 70%, or, in some cases, 80%, of
the corporate Unitholder's taxable income with certain adjustments; (2) the
Units with respect to which the dividends are received must generally have
been held by the corporation for more than 45 days (90 days in the case of
certain preference dividends); and (3) the Code contains specific rules which
are generally designed to reduce or eliminate the dividends received deduction
to the extent a corporation has incurred debt to acquire its Units.
Additionally, a corporate Unitholder who has held its Units for 2 years or
less may be required to reduce its tax basis in its Units by the amount of the
nontaxed portion of certain extraordinary dividends paid to a Trust. Due to
the complexity of the requirements relating to the dividends received
deduction, corporate Unitholders should consult their tax advisors concerning
the application of the dividends received deduction to their specific
circumstances. Upon written request, the Trustee shall furnish information
regarding the source, amount and date of receipt of dividends paid to a Trust.
Limitations on Deductibility of Trust Expenses by Individual Unitholders
Each Unitholder's pro rata share of each expense paid by a Trust is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by the Unitholder. However, individual Unitholders may deduct certain
miscellaneous itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses only to the extent they exceed
2% of such individual's adjusted gross income. Accordingly, individual
Unitholders may be required to treat some or all of the expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
Disposition of Securities by a Trust and Disposition of Units
If a Unitholder disposes of a Unit, the Unitholder is deemed thereby to have
disposed of the Unitholder's pro rata interest in all of a Trust's assets
represented by such Unit, including the Unitholder's pro rata portion of all
the Portfolio Securities. A Unitholder will recognize gain (or loss) when all
or part of the Unitholder's pro rata interest in a Portfolio Security is
disposed of (whether through a disposition of its Unit or a disposition of the
Portfolio Security by such Trust) in a taxable transaction for an amount
greater (or less) than the Unitholder's tax basis therein.
Unless the investor in a Unit is a dealer, gain or loss recognized on a sale
or exchange of a Portfolio Security or a Unit will be, under current law,
capital gain or loss. Any capital gain or loss arising from the disposition of
a Portfolio Security by a Trust or the disposition of Units by a Unitholder
will be short-term capital gain or loss unless such Portfolio Security and
Unit has been held for more than one year in which case such capital gain or
loss will be long-term.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units
As discussed in "Rights of Unitholders -- Redemption of Units", upon
termination of a Trust a Unitholder tendering 2,500 Units or more for
redemption may request an In Kind Distribution of Equity Securities. As
previously discussed, prior to the redemption of Units, a Unitholder is
considered as owning a pro rata portion of each of such Trust's assets for
federal income tax purposes. The receipt of an In Kind Distribution upon the
redemption of Units would be deemed an exchange of such redeeming Unitholder's
pro rata portion of each Equity Security (or, with respect to Series 9, ADRs)
and other assets held by such Trust in exchange for an undivided interest in
whole shares of stock (or, with respect to Series 9, ADRs) and possibly cash.
A Unitholder must elect to have his Equity Securities exchanged entirely in
kind plus cash for fractional shares or entirely for cash.
There are different potential tax consequences which may occur under an In
Kind Distribution with respect to each Portfolio Security owned by a Trust.
The Unitholder will recognize gain or loss on the Zero Coupon Obligation in an
amount equal to the difference between the Unitholder's basis in the Zero
Coupon Obligation and the cash received. In Rev. Rul. 90-7, 1990-1 C.B. 153,
which revoked the Internal Revenue Service's ("Service") prior ruling position
on this issue, the Service held that if a Unitholder receives only whole
shares of a security in exchange for its pro rata interest in each such
security held by the trust, no gain or loss would be recognized upon such
exchange because the exchange effects no material difference in the
Unitholder's position. If the Unitholder receives whole shares of a particular
Equity Security plus cash in lieu of a fractional share of such Equity
Security, or if the Unitholder receives only cash in lieu of a fractional
share of an Equity Security, gain or loss would be recognized in an amount
equal to the difference between the amount of cash received and the
Unitholder's adjusted basis in the fractional share. The Unitholder's tax
basis in the shares of such particular Equity Security which the Unitholder
receives as part of the In Kind Distribution would equal the Unitholder's
basis in such particular Equity Security before the redemption, increased or
decreased by any gain or loss recognized by the Unitholder on the receipt of
cash in lieu of a fractional share of such particular Equity Security, and
decreased by any cash received in lieu of a fractional share of such
particular Equity Security. Redeeming Unitholders who request an In Kind
Distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis
Initially, a Unitholder's tax basis in its Units will equal the price
(including brokerage commissions) paid by such Unitholder for the Units. A
Unitholder initially determines its tax basis in that portion of each of the
Portfolio Securities held by a Trust that the Unitholder is considered to own,
by allocating the cost of the Units among the Portfolio Securities held in
such Trust in accordance with the proportion of the fair market values of such
Portfolio Securities on the date the Units are purchased.
The sale or exchange of Units (other than in a redemption) will not affect the
tax basis of Unitholders not participating in the sale or exchange. A
Unitholder's tax basis in its Units and its pro rata portion of a Equity
Security held by a Trust will be reduced to the extent cash dividends paid
with respect to such Equity Security are received by such Trust which are not
taxable as ordinary income because such dividend exceeds current and
accumulated earnings and profits of the Issuer of the Equity Security as
described above.
Back-up Withholding
Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee (or, in the case of Units held in
book-entry form only, to the owner of record of such Units) and to certify
that the Unitholder has not been notified that payments to the Unitholder are
subject to back-up withholding. If the proper taxpayer identification number
and appropriate certification are not provided when requested, distributions
by a Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to 31% back-up withholding. Distributions by a Trust
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons.
STATUS OF THE TRUSTS UNDER NEW YORK STATE AND CITY LAW
In the opinion of Counsel for the Sponsor for New York tax matters at the time
of the initial deposit, each Trust is not an association taxable as a
corporation and the income of such Trust will be treated as the income of the
Unitholders under the existing income tax laws of the State and City of New
York.
The foregoing discussions relate only to United States federal and New York
State and City income taxes. Unitholders may be subject to state and local
taxation in other jurisdictions. Unitholders should consult their tax advisors
regarding potential state or local taxation with respect to the Units.
RIGHTS OF UNITHOLDERS
Units
A certificate representing 100% of the fractional undivided interest in and
ownership of the Units will be registered in the name or to the order of the
Underwriter on the books of the depository, The Depository Trust Company
("DTC" or the "Depository"). Accordingly, the Underwriter or its designee will
be the holder of record of the Units.
The Units will be issued in book-entry form only and the Unitholders will not
be entitled to receive physical certificates representing their Units. A
Unitholder's ownership of Units will be recorded on or through the records of
the Underwriter or any other brokerage firm that maintains such Unitholder's
account for such purpose. In turn, the brokerage firm's record ownership of
such Units will be recorded on the records of the Depository (or of a DTC
participating firm that acts as agent for the brokerage firm if a Unitholder's
brokerage firm is not a DTC participant). Therefore, a Unitholder must rely
upon the foregoing procedures to evidence such Unitholder's beneficial
ownership of a Unit. Beneficial ownership of a Unit may only be transferred by
compliance with the procedures of such brokerage firms and DTC participants.
Neither the Trustee nor the Sponsor will have any responsibility or liability
for any aspect of the records relating to or payments made by such brokerage
firms or DTC participants on account of beneficial ownership interests in the
Units or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DTC, which is a New York-chartered limited purpose trust company, performs
services for its participants, some of whom (and/or whose representatives) own
DTC. In accordance with its normal procedures, DTC is expected to record
separately the positions held by each DTC participant in the Units, whether
held for its own account or as a nominee for another person. The Underwriter
is a DTC participant.
Each distribution from the Income Account and payment upon redemption of a
Unit will be paid to the Depository for the benefit of the record holder of
the Units as shown on the books of the Depository. The Depository will be
responsible for crediting the amount of such payments to the accounts of the
applicable DTC participants in accordance with the Depository's normal
procedures, which currently provide for payments in next-day funds settled
through the New York Clearing House. Each DTC participant will be responsible
for disbursing such payments to the beneficial owners of the Units that it
represents and to each brokerage firm for which it acts as agent. Each such
brokerage firm will be responsible for disbursing funds to the beneficial
owners of the Units that it represents.
If the foregoing book-entry procedures are terminated by the Depository for
any reason, definitive Certificates will be issued in appropriate amounts as
requested by the DTC participants holding the Units.
The Trustee is authorized to treat as the record owner of Units that person
who is registered as such owner on the books of the Trustee. Units are
transferable by presentation of transfer instructions to the Trustee
accompanied by such documents executed by the Unitholder or his authorized
attorney and such Unitholder's brokerage firm as the Trustee deems necessary
to establish the authority of the person making such transfer. In certain
instances, the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each Unit transferred and to pay any
governmental charge that may be imposed in connection with each such transfer.
Certain Limitations
No Unitholder shall have the right to vote except in certain circumstances
relating to the amendment and termination of a Trust. (See "Administration of
the Trusts -- Amendment or Termination" herein.) Unitholders shall have no
right to control the operation or administration of a Trust in any manner,
except upon the vote of 51% of the Unitholders outstanding at any time for
purposes of amendment or termination of a Trust, all as provided in the
Agreement. Unitholders will be unable to dispose of any of the Portfolio
Securities, as such, and will not be able to vote the Portfolio Securities. No
Unitholder shall ever be under any liability to any third party for any action
taken by the Trustee or Sponsor.
Redemption of Units
Requests for redemption of a Unit at the option of a Unitholder must first be
presented to the Unitholder's brokerage firm. Such brokerage firm (if such
firm is a DTC participant and, if not, through the DTC participant acting on
behalf of such firm) will present such redemption request to DTC and DTC, in
turn, will present such request to the Trustee for processing in accordance
with the applicable redemption provisions of the Agreement. The Trustee may
require a Unitholder and such Unitholder's brokerage firm to submit additional
information or certifications to the Trustee to evidence compliance with the
applicable redemption provisions of the Agreement. Units will be deemed to be
"tendered" to the Trustee when the Trustee is in physical possession of
transfer instructions and such other documentation as may be required by the
Trustee to effect the redemption of the Units. Compliance with the foregoing
procedures may result in delays in the processing of redemption requests by
Unitholders. No redemption fee will be charged by the Trustee.
On the third business day following such tender the Unitholder will be
entitled to receive in cash an amount for each Unit equal to the Redemption
Price per Unit (unless the redeeming Unitholder elects an In-Kind Distribution
as described below) next computed as of the Evaluation Time set forth in the
"Summary of Essential Information" in Part One on the date of tender. The
"date of tender" is deemed to be the date on which the Units are received by
the Trustee, except that as regards Units received after the Evaluation Time,
the date of tender is the next day on which the exchange is open for trading
and such Units will be deemed to have been tendered at the Redemption Price
computed on that day.
Any amounts paid on redemption representing income received will be withdrawn
from the Income Account to the extent funds are available. All other amounts
will be withdrawn from the Capital Account. If such available funds shall be
insufficient, the Trustee is empowered to sell such Portfolio Securities as
have been designated for such purpose in order to make funds available for
redemption, provided however, that the Zero Coupon Obligations may not be sold
unless the sale of such Zero Coupon Obligations will not reduce the Maturity
Value of the Zero Coupon Obligations still held in a Trust below the amount
required to distribute from the proceeds of the sale or maturity of the Zero
Coupon Obligations upon the termination of a Trust at the Mandatory
Termination Date an amount at least equal to the Initial Public Offering
Price. In the event that (i) Zero Coupon Obligations may not be sold to fund a
redemption of Units pursuant to the preceding sentence, and (ii) no other
Trust's assets are available for liquidation to fund such redemption, the
Trustee will advance to a Trust such amounts as may be necessary to pay the
Redemption Price of the tendered Units. The Trustee shall be reimbursed the
amount of any such advance from such Trust as soon as the Zero Coupon
Obligations may be sold in such amount as will not reduce the Maturity Value
of the Zero Coupon Obligations still held in such Trust below the amount
required to distribute an amount at least equal to the Initial Public Offering
Price from the proceeds of the sale or maturity of the Zero Coupon Obligations
upon the termination of such Trust at the Mandatory Termination Date.
At the Mandatory Termination Date, Unitholders tendering 2,500 Units or more
for redemption may request from the Trustee in lieu of a cash redemption a
distribution in kind ("In-Kind Distributions") of an amount and value of
Equity Securities per Unit equal to the Market Value of such Unitholder's
Units. At the Mandatory Termination date, a Unitholder must elect to have its
Units redeemed either entirely in kind plus cash for fractional shares or
entirely in cash. An In-Kind Distribution of Units will be made by the Trustee
through the distribution of each of the Portfolio Securities in book-entry
form to the account of the Unitholder's bank or broker-dealer at The
Depository Trust Company. The tendering Unitholder will receive his pro rata
number of whole shares of each of the Equity Securities in a Trust plus cash
from the Capital Account equal to the fractional shares to which the tendering
Unitholder is entitled. The cash received by the tendering Unitholder will be
reduced by any costs determined by the Trustee in its sole discretion to
result from the registration and transfer of Equity Securities or otherwise
resulting from an In-Kind Distribution. In implementing these redemption
procedures, the Trustee shall make any adjustments necessary to reflect
differences between the Redemption Price 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 Portfolio Securities according to the criteria discussed above.
Sales of Portfolio Securities may be required at a time when Portfolio
Securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption of Units 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. Equity
Securities will be sold to meet redemptions of Units before Zero Coupon
Obligations, although Zero Coupon Obligations may be sold if a Trust is
assured of retaining a sufficient principal amount of Zero Coupon Obligations
to provide funds upon maturity of a Trust at least equal to the Initial Public
Offering Price. Special federal income tax consequences will result if a
Unitholder requests an In-Kind Distribution. (See "Federal Taxation" herein.)
The Redemption Price per Unit of a Trust is determined on the basis of the bid
price of the Zero Coupon Obligations and the aggregate underlying value of the
Equity Securities in a Trust plus or minus cash, if any, in the Income and
Capital Accounts of such Trust, while the Public Offering Price per Unit
during the initial offering period will be determined on the basis of the
offering price of such Zero Coupon Obligations, as of the close of trading on
the New York Stock Exchange on the date any such determination is made, and
the aggregate underlying value of the Equity Securities in such Trust, plus or
minus cash, if any, in the Income Account and Capital Account of such Trust.
On the initial Date of Deposit the Public Offering Price per Unit, which is
based on the offering prices of the Zero Coupon Obligations and the aggregate
underlying value of the Equity Securities in a Trust and includes the sales
charge, exceeded the unit value at which Units could have been redeemed (based
upon the current bid prices of the Zero Coupon Obligations and the Market
Value of the Equity Securities in a Trust) by the amount shown under "Summary
of Essential Information" in Part One. The Redemption Price per Unit is the
pro rata share of each Unit determined by the Trustee by adding: (a) the cash
on hand in such Trust (excluding (1) cash, cash equivalents or letters of
credit deposited in such Trust to purchase Portfolio Securities, unless such
cash or letters of credit have been deposited in the Income and Capital
Accounts because of failure to apply such monies to the purchase of Portfolio
Securities and excluding (2) monies, if any, reserved for payment of
applicable taxes or other governmental charges or credited to the Expense
Reserve Fund); (b) the aggregate value of the Securities (including "when
issued" contracts, if any) held in such Trust, as determined by the Evaluator
on the basis of bid prices of the Zero Coupon Obligations and the aggregate
underlying value of the Equity Securities in such Trust next computed; and (c)
all other income from the Portfolio Securities (including dividends receivable
on Equity Securities trading ex-dividend as of the date of computation)
together with all other assets of such Trust; and deducting therefrom: (i)
amounts representing any applicable taxes or governmental charges payable out
of the Trust; (ii) commencing with the first Evaluation of such Trust after
the expiration of the period during which the Sponsor is permitted to make
deposits of additional Portfolio Securities or the Trustee's earlier receipt
of written notice from the Sponsor that no further such deposits shall be
made, an amount representing estimated accrued expenses of such Trust,
including but not limited to fees and expenses of the Trustee (including legal
and auditing fees), the Evaluator and supervisory fees, if any; (iii) cash
held for distribution to Unitholders of record of such Trust as of the
business day prior to the evaluation being made; and (iv) other liabilities
incurred by such Trust; and finally dividing the result of such computation by
the number of Units of such Trust outstanding as of the date thereof.
The aggregate value of the Equity Securities is determined in the following
manner: if the Equity Securities are listed on a national securities exchange,
the evaluation is generally based on the last closing sale prices on that
exchange (unless it is determined that these prices are inappropriate as a
basis for valuation) or, if there is no closing sale price on that exchange,
at the closing bid prices. If the Equity Securities are not so listed or, if
so listed and the principal market therefore is other than on the exchange,
the evaluation shall generally be based on the current bid price (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities on the bid side of the market or (c) by any combination
of the above.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or during which the Securities and Exchange
Commission determines that trading on that Exchange is restricted or any
emergency exists, as a result of which disposal or evaluation of the Portfolio
Securities is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under certain extreme
circumstances, the Sponsor may apply to the Securities and Exchange Commission
for an order permitting a full or partial suspension of the right of
Unitholders to redeem their Units. 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.
The Indenture requires that the Trustee notify the Sponsor of any tender of
Units for redemption. The Sponsor may, and so long as the Underwriter is
maintaining a secondary market for Units, the Underwriter may, prior to the
close of business on the day of tender, purchase any Units tendered to the
Trustee for redemption by making payment therefor to the Unitholder in an
amount not less than that which would have been paid by the Trustee had the
Units been redeemed by the Trustee. (See "Public Offering -- Public Market"
herein.) Units held by the Sponsor or the Underwriter may be tendered to the
Trustee for redemption in the same manner as any other Units.
The offering price of any Units resold by the Underwriter will be the Public
Offering Price determined in the manner provided in this Prospectus. (See
"Public Offering -- Public Offering Price" herein.) Any profit resulting from
the resale of such Units will belong to the Underwriter which likewise will
bear any loss resulting from a lower offering or redemption price subsequent
to its acquisition of such Units. (See "Public Offering -- Sponsor's and
Underwriter's Profit" herein.)
TRUST OPERATING EXPENSES
Initial Costs
All costs and expenses incurred in creating and establishing the Trusts,
including the cost of the initial preparation, printing and execution of the
Indenture and Agreement, legal and auditing expenses, advertising and selling
expenses, expenses of the Trustee, the Evaluator and other out-of-pocket
expenses have been borne by the Sponsor at no cost to the Trusts. Other than
the Sponsor's Supervisory Fees described below, the Sponsor will not receive
any fees in connection with its activities relating to the Trusts. However,
the Underwriter, an affiliate of the Sponsor, will receive sales commissions
and may realize other profits (or losses) in connection with the sale of Units
as described under "Public Offering -- Sponsor's and Underwriter's Profits"
above and will be indemnified by the respective Trusts as described under
"Miscellaneous Expenses" below.
Fees
The Sponsor's supervisory fee, if any, earned for supervising the Portfolio is
based upon the number of Units outstanding on the first December Record Date
and thereafter on the December Record Date of the prior calendar year and will
be payable annually on or before each Distribution Date. The Sponsor's fee is
currently $0.50 per 100 Units (and shall not exceed $0.50 per 100 Units per
year) and may exceed the actual costs of providing these supervisory services,
but at no time will the total amount the Sponsor receives for these
supervisory services, when combined with all compensation received with
respect to any other series of trusts in any calendar year, exceed the
aggregate cost to it of supplying such services in such year.
Under the Indenture and Agreement, for its services as trustee and evaluator
the Trustee will receive fees in the amount set forth in "Summary of Essential
Information -- Trustee's Fee and Estimated Expenses" in Part One, computed and
paid monthly on the basis of the largest number of Units outstanding for such
Trust at any time during the calendar year. The Trustee is entitled to receive
a minimum fee of $2,500 per year for services performed and expenses incurred
on behalf of a Trust. Certain regular and recurring expenses of a Trust,
including certain mailing and printing expenses, are borne by such Trust.
The Sponsor's fee, if any, is paid annually and is based upon the largest
number of Units outstanding at any time during the calendar year. The
Trustee's fees are payable monthly on or before each Distribution Date from
the Income Account, to the extent funds are available and thereafter from the
Capital Account. Any such fees may be increased without approval of the
Unitholders in proportion to increases under the classification "All Services
Less Rent" in the Consumer Price Index published by the United States
Department of Labor. The Trustee also receives benefits to the extent that it
holds funds on deposit in various non-interest bearing accounts created under
the Indenture and Agreement. For a discussion of the services rendered by the
Trustee pursuant to its obligations under the Indenture and Agreement, see
"Administration of the Trusts" herein.
Miscellaneous Expenses
The following additional charges are or may be incurred by each of the Trusts:
(a) fees of the Trustee for extraordinary services, (b) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (c) fees of the Evaluator, (d) expenses of the Evaluator, (e)
various governmental charges, (f) expenses and costs of any action taken by
the Trustee to protect the Trusts and the rights and interests of Unitholders,
(g) indemnification of the Trustee for any loss, liability or expenses
incurred in the administration of the Trusts without negligence, bad faith or
willful misconduct on its part and (h) expenditures incurred in contacting
Unitholders upon termination of the Trusts.
The fees and expenses set forth herein are payable out of the respective
Trusts. When such fees and expenses are paid by or owing to the Trustee, they
are secured by a lien on the Portfolio Securities in the relevant Trust. Since
the income stream produced by dividend payments on the Portfolio Securities is
unpredictable, the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of a particular Trust. The Trustee may
establish an expense reserve fund for the payment of fees and expenses due and
owing to the Trustee (the "Expense Reserve Fund"). The Sponsor and the Trustee
shall take such steps as they deem necessary to (1) determine the amounts
necessary for reserve, (2) to fund the Expense Reserve Fund, (3) to decide
whether to withdraw funds from the Expense Reserve Fund, and (4) to determine
the amount of the withdrawal from the Expense Reserve Fund. If the balances in
the Income Account and Capital Account are insufficient to provide for amounts
payable by the relevant Trust, the Trustee has the power to (1) sell Portfolio
Securities to pay such amounts, provided, however, that no Zero Coupon
Obligations may be sold to pay any fees or expenses of such Trust, unless such
Trust is assured of retaining a sufficient principal amount of Zero Coupon
Obligations to provide funds on termination of a particular Trust on the
Mandatory Termination Date at least equal to the Initial Public Offering Price
and/or (2) make withdrawals from the Expense Reserve Fund to pay such amounts.
Withdrawal from the Expense Reserve Fund shall only be made if no Equity
Securities are available to be sold to satisfy the fees and expenses of a
particular Trust. Sales of Equity Securities to pay the fees and expenses of a
particular Trust may result in capital gains or losses to Unitholders. (See
"Federal Taxation" herein.)
ADMINISTRATION OF THE TRUSTS
Records and Accounts
The Trustee will keep records and accounts of all transactions of each Trust
at its offices at 101 Barclay Street, New York, New York 10286. These records
and accounts will be available for inspection by Unitholders at reasonable
times during normal business hours. The Trustee will keep on file for
inspection by Unitholders an executed copy of the Indenture and Agreement
together with a current list of the Portfolio Securities then held in each
Trust. In connection with the storage and handling of certain Portfolio
Securities deposited in a Trust, the Trustee is authorized to use the services
of Depository Trust Company. These services would include safekeeping of the
Portfolio Securities, coupon-clipping, computer book-entry transfer and
institutional delivery services.
Distributions of Income and Capital
The Trustee will credit to the Income Account all cash dividends received by
and payable to the relevant Trust. Other receipts are credited to the Capital
Account. Distributions from the Income Account and the Capital Account
generally will be distributed on the Distribution Date or Dates set forth in
the Trust Agreement applicable to such Trust. Distributions will be made to
Unitholders of record on the Record Date set forth in the Trust Agreement
applicable to such Trust. The Trustee shall not be required to make a
distribution from the Capital Account unless the cash balance on deposit
therein available for distribution shall be sufficient to distribute at least
$1.00 per 100 Units. If the amounts in the Capital Account are sufficient to
distribute at least $10.00 per 100 Units, such amounts shall be distributed on
or shortly after the twentieth day of the next succeeding month after such
amounts are accumulated. The Trustee is not required to pay interest on funds
held in the Capital Account or Income Account (but may itself earn interest
thereon and therefore benefits from the use of such funds).
As of the first day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account, amounts necessary to pay the expenses of the relevant Trust (as
determined on the basis set forth under "Trust Operating Expenses" herein),
provided, however, that no Zero Coupon Obligations may be sold to pay any fees
or expenses of a particular Trust, except under the conditions set forth under
"Trust Operating Expenses -- Miscellaneous Expense" herein. The Trustee may
also withdraw from the Income and Capital Accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges payable out of such Trust (the "Tax Reserve Fund").
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 such amounts as may be necessary to cover redemptions of
Units.
Administration of the Portfolio
The Trusts are not "managed" by the Sponsor or the Trustee and neither the
Sponsor nor the Trustee has the authority to manage a Trust's assets fully in
an attempt to take advantage of various market conditions to improve a Trust's
market value; their activities described below are governed solely by the
provisions of the Indenture and Agreement. The original proportionate
relationship among the number of shares of each Equity Security in a Trust
will be adjusted to reflect the occurrence of a stock dividend, stock split,
merger, reorganization or a similar event which affects the capital structure
of an Issuer which does not affect such Trust's percentage ownership of the
common stock equity of such Issuer at the time of such event. The Sponsor may
direct the Trustee to dispose of Equity Securities (1) upon default in payment
dividends, after declared and when due and payable, (2) if any action or
proceeding has been instituted at law or equity seeking to restrain or enjoin
the payment of dividends on any such Equity Securities, or if there exists any
legal question or impediment affecting such Equity Securities or the payment
of dividends on the same, (3) if there has occurred any breach of covenant or
warranty in any document relating to an Issuer which would adversely affect
either immediately or contingently the payment of dividends on such Equity
Securities, or the general credit standing of an Issuer or otherwise impair
the sound investment character of such Equity Securities, (4) if there has
been a default in the payment of dividends, or the principal of or income or
premium, if any, on any other outstanding obligations of an Issuer (which, for
purposes of this clause, shall, with respect to Series 9, mean either or both
an Issuer of the security underlying an ADR and the depositary for such ADR),
(5) if the price of any such Equity Securities had declined to such an extent
or other such market or credit factors exist that in the opinion of the
Sponsor as evidenced in writing to the Trustee, the retention of such Equity
Securities would be detrimental to the Trust and to the interests of the
unitholders, (6) if all of the Portfolio Securities in a Trust will be sold
pursuant to termination of a Trust as provided in the Indenture and Agreement,
(7) if such sale is required due to Units tendered for redemption, or (8) upon
the occurrence of a change in the business of an Issuer (which, for purposes
of this clause, shall, with respect to Series 9, mean either or both an Issuer
of the security underlying an ADR and the depositary for such ADR) that would
have caused the Sponsor not to include the Securities of such Issuer in the
Portfolio had such circumstances existed prior to the formation of the Trust.
The proceeds of any such disposition of the Equity Securities will be
deposited in the Capital Account of the relevant Trust and distributed to
Unitholders thereof in accordance with the Indenture and Agreement. If a
failure to pay declared cash dividends on any of the Equity Securities occurs
and if the Sponsor does not, within 30 days after notification, instruct the
Trustee to sell or hold such Equity Securities, the Indenture provides that
the Trustee may in its discretion sell such Equity Securities. As the holder
of the Equity Securities, the Trustee will have the right to vote all of the
voting stocks in the Trusts and will vote such stocks in accordance with the
instructions of the Sponsor or, in the absence of such instructions, according
to the recommendations, if any, of the Issuer's management.
The Trustee may also sell Portfolio Securities designated by the Sponsor, or
if not so directed, in its own discretion, for the purpose of redeeming Units
of a Trust tendered for redemption and the payment of expenses; provided,
however, that in the case of Portfolio Securities sold to meet redemption
requests, Zero Coupon Obligations may only be sold if such Trust is assured of
retaining a sufficient principal amount of Zero Coupon Obligations to provide
funds on termination of such Trust at the Mandatory Termination Date at least
equal to the Initial Public Offering Price. Zero Coupon Obligations may not be
sold by the Trustee to meet a Trust's expenses, unless such Trust is assured
of retaining a sufficient principal amount of Zero Coupon Obligations to
provide funds on termination of such Trust at the Mandatory Termination Date
at least equal to the Initial Public Offering Price.
Reports to Unitholders
In connection with each distribution, the Trustee shall furnish the Unitholder
of record a statement of the amount of income and the amount of other receipts
(received since the preceding distribution), if any, being distributed,
expressed in each case as a dollar amount representing the pro rata share for
each 100 Units outstanding. 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 registered Unitholder, a statement (i) as
to the Income Account: dividends received, deductions for applicable taxes,
fees and expenses of the relevant Trust, cash amounts paid for purchases of
Portfolio Securities to replace Failed Contract Securities and for redemptions
of Units, if any, amounts reserved for purchases of Contract Securities or
Failed Securities, and 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 per 100 Units outstanding on the
last Business Day of such calendar year; (ii) as to the Capital Account: the
dates of disposition of any Portfolio Securities and the net proceeds received
therefrom, cash amounts paid for purchases of Portfolio Securities to replace
Failed Contract Securities and for redemption of Units, deductions for payment
of applicable taxes and fees and expenses of the relevant Trust and the
balance remaining after such distributions and deductions expressed both as a
total dollar amount and as a dollar amount representing the pro rata share per
100 Units outstanding on the last Business Day of such calendar year; (iii) a
list of the Portfolio Securities held and the number of Units outstanding on
the last Business Day of such calendar year; (iv) the Redemption Price per
Unit based upon the last Trustee evaluation thereof made during such calendar
year; and (v) amounts actually distributed during such calendar year from the
Income and Capital Accounts, separately stated, expressed both as total dollar
amounts and as dollar amounts representing the pro rata share per 100 Units
outstanding.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Sponsor, with evaluations
of the Securities in the relevant Trust.
Amendment or Termination
The Indenture and Agreement may be amended by the Trustee and the Sponsor
without the consent of any of the Unitholders (i) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent with any other provision, or (ii) to make such other provisions
as shall not adversely affect the Unitholders, provided, however, that the
Indenture and Agreement may not be amended to (a) increase the number of
Units, except as the result of the deposit of additional Portfolio Securities
pursuant to the Indenture and Agreement, (b) permit the acquisition of
additional or substitute securities except as expressly provided therein or
(c) permit the Trust to engage in any kind of business. The Indenture and
Agreement may also be amended in any respect by the Trustee and Sponsor, or
any of the provisions thereof may be waived, with the consent of the holders
of 51% of the Units then outstanding, provided that no such amendment or
waiver will reduce the interest in the Trust of any Unitholder 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. The Trustee shall advise the Unitholders of any amendment
promptly after execution thereof.
In the event of any termination of a particular Trust prior to the Zero Coupon
Obligations Maturity Date, the Trustee shall proceed to liquidate the
Portfolio Securities then held and make the payments and distributions
provided for below except that in such event, the distribution to each
Unitholder shall be made in cash and shall be such Unitholder's pro rata
interest in the balance of the Capital and Income accounts after the
deductions discussed below. In the event that a Trust shall terminate on or
after the Zero Coupon Obligations Maturity Date, the Underwriter shall, not
less than 60 days prior to the Zero Coupon Obligations Maturity Date, send a
written notice to all Unitholders of record owning at least 2,500 Units. Such
notice shall allow such Unitholders to elect to receive an In Kind
Distribution of their pro rata share of the Equity Securities, to the extent
of whole shares. The Trustee will honor duly executed requests for In-Kind
Distributions received (accompanied by the electing Unitholder's Certificate
or other evidence satisfactory to the Trustee of the electing Unitholder's
ownership of the Units) by the close of business five days prior to the Zero
Coupon Obligations Maturity Date. Unitholders who request an In-Kind
Distribution shall receive such Unitholder's pro rata portion of each of the
Equity Securities segregated for distribution in kind, in whole shares and
cash equal to such Unitholder's pro rata portion of the Income and Capital
Accounts. Unitholders who do not effectively request an In-Kind Distribution
shall receive their distribution upon termination in cash.
Commencing on the Zero Coupon Obligations Maturity Date for a particular
Trust, Equity Securities will begin to be sold in connection with the
termination of the Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice of any
termination of a Trust shall be given by the Trustee to each Unitholder at his
address appearing on the registration books of such Trust maintained by the
Trustee. The Trustee will honor duly executed requests for In-Kind
Distribution. To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee, must be returned
to the Trustee at least five business days prior to the Zero Coupon
Obligations Maturity Date. All Unitholders will receive their pro rata portion
of the amounts received on account of the Zero Coupon Obligations in cash upon
the termination of such Trust at the Mandatory Termination Date. All
Unitholders will receive their pro rata portion of the amounts remaining in
the Expense Reserve Fund, if any, in cash upon the termination of such Trust
at the Mandatory Termination Date. Unitholders not electing a distribution of
shares of Equity Securities will receive a cash distribution from the sale of
the remaining Equity Securities within a reasonable time after such Trust is
terminated. Regardless of the distribution involved, the Trustee will deduct
from the funds of such Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation
of the Trustee and costs of liquidation and any amounts required as a reserve
to provide for payment of any applicable taxes or other governmental charges.
In addition to the referenced deductions, if the Unitholder requests an
In-Kind Distribution, the Trustee shall also deduct any costs determined by
the Trustee in its sole discretion to be incidental to the registration and
transfer of Equity Securities or otherwise resulting from the Unitholder's
election to receive an In-Kind Distribution, from the cash amount of such
Unitholder's termination distribution. Any sale of Securities in a Trust upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time. The Trustee will then distribute to
each Unitholder his pro rata share of the balance of the Income and Capital
Accounts.
A Trust may be liquidated at any time by consent of Unitholders representing
51% of the Units then outstanding or by the Trustee when the value of such
Trust, as shown by any evaluation, is less than the Minimum Termination Value
indicated under "Summary of Essential Financial Information" in Part One. The
Indenture and Agreement will terminate upon the sale or other disposition of
the last Portfolio Security held thereunder, but in no event will it continue
beyond the Mandatory Termination Date stated under "Summary of Essential
Information" in Part One.
Written notice of any termination of a Trust shall be given by the Trustee to
each relevant Unitholder at his address appearing on the registration books of
each Trust maintained by the Trustee. If a Trust terminates on the Mandatory
Termination Date, the Trustee will provide written notice thereof to all
Unitholders at least 30 days before such Mandatory Termination Date. The
notice will include a form enabling Unitholders owning 1,200 or more Units of
one of such Series to request an In Kind Distribution rather than payment in
cash upon termination of a Trust. Such request must be returned to the Trustee
at least three business days prior to the Mandatory Termination Date. Within a
reasonable period of time after termination, the Trustee will sell any
Portfolio Securities remaining in a Trust. The Trustee will deduct from the
funds of a Trust any accrued costs, expenses, advances or indemnities provided
by the Indenture and Agreement, including estimated compensation of the
Trustee and costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. The
Trustee will then distribute to each Unitholder who does not request an In
Kind Distribution his pro rata share of the balance of the Income and Capital
Accounts. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the amount paid by such Unitholder for
Units. Any sale of Portfolio Securities in a Trust upon termination may result
in a lower amount than might otherwise be realized if such sale were not
required at such time.
With such distribution to the Unitholders the Trustee will furnish a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion determines that any amounts held in reserve are
no longer necessary, it will make distributions thereof to Unitholders in the
same manner.
Limitations on Liabilities
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from taking any action in good faith
pursuant to the Indenture and Agreement, or for errors in judgment or, in the
case of the Sponsor, for errors in judgment in directing or failing to direct
the Trustee, but shall be liable only for their own willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
their reckless disregard of their obligations and duties hereunder. The
Trustee shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Portfolio Securities. In the event of the
failure of the Sponsor to act under the Indenture and Agreement, the Trustee
may act thereunder and shall not be liable for any action taken by it in good
faith under the Indenture and Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Portfolio Securities or upon the interest
thereon or upon it as Trustee under the Indenture and Agreement or upon or in
respect of a Trust which the Trustee may be required to pay under any present
or future law of the United States of America or of any other taxing authority
having jurisdiction. In addition, the Indenture and Agreement contain other
customary provisions limiting the liability of the Trustee.
The Sponsor and Unitholders may rely on any evaluation furnished by the
Trustee and shall have no responsibility for the accuracy thereof.
Determinations by the Trustee under the Indenture and Agreement shall be made
in good faith upon the basis of the best information available to it,
provided, however, that the Trustee shall be under no liability to the Sponsor
or Unitholders for errors in judgment. This provision shall not protect the
Trustee in any case of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.
MISCELLANEOUS
The Sponsor
Unison Investment Trusts L.P., d/b/a Unison Investment Trusts Ltd., a Missouri
limited partnership formed on March 24, 1987 ("Unison"), is the Sponsor of the
Trusts. The Jones Financial Companies, A Limited Partnership, a Missouri
limited partnership ("JFC"), which directly or indirectly owns Edward D. Jones
& Co., a Missouri limited partnership ("EDJ"), is the limited partner in
Unison, and Unison Capital Corp., Inc. ("UCC"), a Missouri corporation, is the
general partner of Unison. UCC is a wholly-owned subsidiary of LHC, Inc.
("LHC"), which is a wholly-owned subsidiary of JFC. The principal offices of
Unison, JFC, EDJ, UCC and LHC are located at 201 Progress Parkway, Maryland
Heights, Missouri 63043. The Sponsor has also acted as the sponsor of Insured
Tax-Free Income Trust ("ITFIT"), a unit investment trust consisting of a
portfolio of state, municipal and public authority debt obligations. In
addition, the Sponsor has also acted as the sponsor of Central Equity Trust,
Utility Series ("CET Utility"), a unit investment trust consisting of a
portfolio of dividend-paying publicly traded common stocks issued by domestic
electric, gas, water and/or telephone utility companies. As sponsor of CET
Utility, the Sponsor performs activities that are substantially similar to
those it performs for the Trusts.
The Sponsor is liable for the performance of its obligations under the
Indenture and Agreement. If the Sponsor shall fail to perform any of its
duties under the Indenture and Agreement or become incapable of acting or
become bankrupt or its affairs are taken over by public authorities, then the
Sponsor shall be discharged. In such event, the Trustee shall: (i) appoint a
successor Sponsor or Sponsors or (ii) terminate the Indenture and Agreement
and liquidate a Trust in accordance with the provisions thereof. The Sponsor
may also resign if the Sponsor and Trustee together appoint a new Sponsor by
written instrument executed among the Sponsor, the Trustee and the new
sponsor. The Indenture and Agreement provide for the appointment of a new
Sponsor with a net worth of at least $1,000,000 to replace a resigning Sponsor
prior to such resignation. However, it is not an ongoing obligation of the
Sponsor to maintain this level of net worth. The Indenture and Agreement also
provide that the Trustee shall mail to each Unitholder notice of the discharge
or resignation of the Sponsor and of any appointment of a new Sponsor.
The Trustee
The Trustee is The Bank of New York, a banking corporation organized under the
laws of the State of New York, with its offices at 101 Barclay Street, New
York, New York 10286.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Portfolio Securities.
Under the Indenture and Agreement, the Trustee or any successor trustee may
resign and be discharged from the Trusts created by the Indenture and
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 60 days before
the date specified in such notice of 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 30 days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting, is adjudged to be bankrupt or is taken over by public
authorities or under certain changes in control of the Trustee, the Sponsor
may remove the Trustee and appoint a successor trustee as provided in the
Indenture and 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 resignation or removal of a Trustee becomes effective only when
the successor trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a corporation which is authorized to exercise trust powers, is
organized under the laws of the United States or any State and having at all
times an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Effective June 19, 1995, United States Trust Company of New York resigned as
Trustee and The Bank of New York was appointed successor trustee.
The Evaluator
The Evaluator is Van Kampen American Capital Investment Advisory Corp., a
Delaware corporation, with main offices located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181. Van Kampen American Capital Investment
Advisory Corp. is a wholly owned subsidiary of Van Kampen American Capital
Inc., which itself is a sponsor of a substantial number of unit investment
trusts.
The duty of the Evaluator is to accurately determine the Market Value of the
Portfolio Securities (1) at any time upon the request of the Trustee and/or
Sponsor, (2) during the initial offering period, (3) after the initial
offering and (4) at any time to determine Redemption Price.
Under the Indenture and Agreement, the Evaluator or any successor evaluator
may resign and be discharged from the Trusts created by the Indenture and
Agreement by executing an instrument in writing and filing the same with the
Sponsor and the Trustee. The Evaluator or successor evaluator must mail a copy
of the notice of resignation to the Sponsor and the Trustee, not less than 60
days before the date such notice of resignation is to take effect. The Sponsor
and the Trustee upon receiving notice of such resignation are obligated to
appoint a successor evaluator promptly. If, upon such resignation, no
successor evaluator has been appointed and has accepted the appointment within
30 days after notification, the retiring Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Upon execution of a
written acceptance of such appointment by such successor evaluator, all the
rights, powers, duties and obligations of the original Evaluator shall vest in
the successor. The resignation or removal of an Evaluator becomes effective
only when the successor evaluator accepts its appointment as such or when a
court of competent jurisdiction appoints a successor evaluator.
Any corporation into which an Evaluator may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which an Evaluator shall be a party, shall be the successor evaluator.
Effective June 19, 1995, Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc., resigned as Evaluator and Van Kampen American Capital
Investment Advisory Corp. was appointed successor evaluator.
Legal Opinions
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe, Chicago, Illinois 60602
Auditors
The statement of condition and portfolio of Trust Securities included in this
Prospectus have been audited by Grant Thornton LLP, independent public
accountants, as indicated in their report with respect thereto in Part One of
this Prospectus, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.
21ST CENTURY TRUST
Sponsor: Unison Investment Trusts Ltd.
12555 Manchester Road
St. Louis, Missouri 63131
Trustee: The Bank of New York
101 Barclay Street
New York, New York 10286
Evaluator: Van Kampen American Capital
Investment Advisory Corp.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Legal Counsel: Chapman and Cutler
111 West Monroe
Chicago, Illinois 60603
Independent Public Grant Thornton LLP
Accountants: 130 East Randolph Drive
Chicago, Illinois 60601
Except as to statements made herein furnished by the Trustee or the Evaluator,
neither the Trustee nor the Evaluator has assumed any responsibility for the
accuracy, adequacy and completeness of the information contained in this
Prospectus.
This Prospectus does not contain all the information set forth in the
registration statements and exhibits relating thereto, filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, as amended, and the Investment Company Act of 1940, as amended, and
to which reference is hereby made.
No person is authorized to give any information or to make representations not
contained in this Prospectus or in supplementary sales literature prepared by
the Sponsor, and any information or representations not contained therein must
not be relied upon as having been authorized by either the Trusts, the
Trustee, the Sponsor or the Evaluator. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, Units in any State to any
person to whom it is not lawful to make such offer in such State. Each Trust
is registered as a Unit Investment Trust under the Investment Company Act of
1940, as amended. Such registration does not imply that the Trusts or any
Units have been guaranteed, sponsored, recommended or approved by the United
States or any State or agency or officer thereof.
PROSPECTUS
PART TWO
SERIES
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Twenty-First Century Trust, Series 2, certifies that it meets
all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and
its seal to be hereunto affixed and attested, all in the City of Chicago
and State of Illinois on the 23rd day of February, 1996.
Twenty-First Century Trust, Series 2
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Depositor)
By Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Post Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities on February 23, 1996:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
)
William R. Molinari President and Chief )
Operating Officer )
)
Ronald A. Nyberg Executive Vice President )
and General Counsel )
)
William R. Rybak Executive Vice President and )
Chief Financial Officer )
Sandra A. Waterworth ) (Attorney in Fact)*
____________________
* 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 Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated December 15, 1995 accompanying the
financial statements of Twenty-First Century Trust, Series 2 as of
October 31, 1995, and for the period then ended, contained in this Post-
Effective Amendment No. 4 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
February 23, 1996
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<DISTRIBUTIONS-OF-INCOME> (121221)
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<ACCUMULATED-GAINS-PRIOR> 62441
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<PER-SHARE-NAV-BEGIN> 21.33
<PER-SHARE-NII> 1.22
<PER-SHARE-GAIN-APPREC> 4.643
<PER-SHARE-DIVIDEND> 0.234
<PER-SHARE-DISTRIBUTIONS> 0.219
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