<PAGE>
As filed with the Securities and Exchange Commission on July 29, 1997.
Registration No. 33-50138
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
MIDWEST EQUITY TRUST, FINANCIAL SECURITIES SERIES 1
(Exact name of Trust)
NATCITY INVESTMENTS, INC.
(Exact name of Depositor)
251 North Illinois Street, Suite 500
Indianapolis, Indiana 46204
(Complete address of Depositor's principal executive offices)
J. Douglas Townsend
NatCity Investments, Inc.
251 North Illinois Street, Suite 500
Indianapolis, Indiana 46204
(Name and complete address of agent for service)
COPY TO:
J. Jeffrey Brown, Esq.
Baker & Daniels
300 North Meridian Street
Suite 2700
Indianapolis, Indiana 46204
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b), or
/X/ On July 31, 1997 pursuant to paragraph (b), or
/ / 60 days after filing pursuant to paragraph (a)(1), or
/ / On (date) pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Trust
has registered an indefinite number of its Units of fractional undivided
interests. A Rule 24f-2 Notice for the Trust's fiscal year ended March 31, 1997
was filed on May 8, 1997.
<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
The investment objective of the Trust is to provide for long-term capital
appreciation through an investment in publicly traded common stocks of selected
commercial banks, savings associations and bank or savings association holding
companies with operations in Indiana, Michigan, Ohio, Kentucky and Illinois.
At March 31, 1997, there were 405,077 Units of the Trust outstanding. The
Units offered by this Prospectus are outstanding Units that have been purchased
by the Sponsor in the secondary market or from the Trustee after having been
tendered for redemption. No proceeds from the sale of Units will be received by
the Trust, and any profit or loss on the sale of the Units will accrue to the
Sponsor.
The Public Offering Price per Unit is the Net Asset Value per Unit next
computed after a purchase order is received, plus a sales charge of up to 6.25%
of the Public Offering Price (6.67% of the net amount invested). At March 31,
1997, the Public Offering Price per Unit was $18.67. Only whole Units may be
purchased.
Read and retain this Prospectus for future reference.
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.
SPONSOR:
NATCITY INVESTMENTS, INC.
Prospectus dated July 31, 1997
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF MARCH 31, 1997
Sponsor: NatCity Investments, Inc.
Trustee: Chase Manhattan Bank
Number of Units Outstanding. . . . . . . . . . . 405,077
Fractional Undivided Interest in the Trust
Represented by each Unit . . . . . . . . . . . 1/405,077
Calculation of Public Offering Price per Unit1
Net Asset Value of the Trust2. . . . . . . . . $ 7,116,816
Divided by 405,077 Units . . . . . . . . . . . $ 17.57
Plus Sales Charge of 6.25% of Public Offering Price
(6.67% of net amount invested). . . . . . . $ 1.10
Public Offering Price per Unit1. . . . . . . . $ 18.67
Redemption Price (and Sponsor's Repurchase Price) per Unit3 $ 17.57
Excess of Public Offering Price per Unit
over Redemption Price per Unit3. . . . . . . . $ 1.10
Date Trust Established . . . . . . . . . . . . . May 20, 1993
Income Record Dates. . . . . . . . . . . . . . . December 15
and June 15 of each year
Income Distribution Dates. . . . . . . . . . . . December 31
and June 30 of each year
Capital Record Dates . . . . . . . . . . . . . . the last day of any month
on which the distributable
balance of the Capital Account
is $1.00 or more per 100 Units
Capital Distribution Dates . . . . . . . . . . . the 20th day of the month
following a Capital Record Date
Mandatory Termination Date . . . . . . . . . . . May 20, 1998
Liquidation Amount . . . . . . . . . . . . . . . $ 2,259,592
Estimated Annual Expenses of the Trust (Total) $2.60 per 100 Units
Estimated Annual Trustee's Fee . . . . . . . . $.84 per 100 Units
Estimated Annual Sponsor's Supervisory Fee $.25 per 100 Units
Estimated Annual Miscellaneous Expenses. . . . $1.51 per 100 Units
__________
1 The Public Offering Price is the Net Asset Value per Unit of the Trust as of
March 31, 1997 plus the applicable sales charge. See "Public Offering of
Units -- Public Offering Price" and "Valuation."
2 In calculating the Net Asset Value of the Trust, each Stock listed on a
national securities exchange is valued at the closing sale price on
March 31, 1997 or, if no such price existed or if the Stock is not so
listed, at the closing bid price on such date.
3 The Redemption Price per Unit is based on the Net Asset Value per Unit of
the Trust as of March 31, 1997, computed as described under "Valuation."
See "Comparison of Public Offering Price and Redemption Value."
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<PAGE>
SUMMARY
THE TRUST. The objective of the Midwest Equity Trust, Financial Securities
Series 1 (the "Trust") is to provide for long-term capital appreciation
through an investment in publicly traded common stocks of selected commercial
banks, savings associations and bank or savings association holding companies
("financial institutions") with operations in Indiana, Michigan, Ohio,
Kentucky and Illinois (the "Stocks"). The several Stocks in the Trust's
portfolio are listed on the "Schedule of Investments." The Trust seeks to
achieve its objective of long-term capital appreciation through its
investment in the Stocks. The Sponsor did not base its selection of the
Stocks on the payment of dividends by the various issuers; however, many
selected Stocks may pay dividends. The Trust is not a "managed" investment
portfolio, but rather will consist of the same portfolio of Stocks for the
life of the Trust, subject to adjustment or elimination in certain limited
circumstances. See "Administration of the Trust."
SPECIAL RISK CONSIDERATIONS. The Stocks may appreciate or depreciate in
value (or pay dividends) depending on the full range of economic and market
influences affecting corporate profitability, including, but not limited to,
the financial condition of issuers, the prices of equity securities in
general and the financial condition and prices of equity securities in
Midwestern financial institutions, in particular. See "The Trust -- Special
Risk Considerations." The geographic concentration of the Trust's portfolio
of Stocks will expose the Trust to the risk of any significant adverse
developments in the Midwest's economy and real estate markets. The Sponsor
believes, however, that because of the economic diversity of the
manufacturing, service and agricultural sectors of the Midwest economy,
selected financial institutions offer attractive investments. In addition,
financial institutions are subject to extensive regulation by state and
federal regulatory agencies, which, among other things, examine financial
institutions, establish capital and other financial requirements and must
approve acquisitions and other changes of control. Regulatory actions may
adversely affect the earnings potential of the issuers of the Stocks or their
ability to pay dividends. A deterioration in the financial condition of an
issuer, the poor performance of its common stock or its failure to continue
to meet the investment objective of the Trust, will not result directly in
its elimination from the portfolio. See "Administration of the Trust --
Portfolio Supervision." There is no assurance that the Trust's objective
will be achieved. The value of the Stocks and, therefore, the value of
Units, may be expected to fluctuate.
TERMINATION. During the life of the Trust, Stocks will not be sold to take
advantage of market fluctuations. The Trust will terminate on the Mandatory
Termination Date (May 20, 1998) regardless of market conditions at that time.
The Trust may be terminated prior to the Mandatory Termination Date in
certain extraordinary events. See "Termination of the Trust" and "Tax Status
of the Trust." Unless advised to the contrary by the Sponsor, the Trustee
will begin to sell the Stocks held in the Trust on the first business day
following the Mandatory Termination Date. Moneys held upon such sale of
Stocks will be distributed within 30 days thereafter and, until distributed,
will be held in non-interest bearing accounts and will be of benefit to the
Trustee. See "Expenses of the Trust."
PUBLIC OFFERING PRICE. The Public Offering Price per Unit is computed by
dividing the Net Asset Value of the Trust as described under "Valuation," by
the number of Units outstanding, then adding the applicable sales charge.
The maximum sales charge is 6.25% of the Public Offering Price (6.67% of the
net amount invested). The applicable sales charge will be reduced for
specified volume purchases. For purposes of computing Net Asset Value, each
Stock listed on the New York Stock Exchange ("NYSE"), American Stock Exchange
("AMEX") or Nasdaq National Market System is valued at its closing sale price
on the applicable valuation date or, if no such price existed or if the Stock
is not so listed, at its closing bid price on such date. See "Public
Offering of Units --Public Offering Price" and "Valuation."
DISTRIBUTIONS. The Trustee will make pro rata distributions to Unitholders
from both the Income Account and the Capital Account on each applicable
Distribution Date to the extent funds are available for distribution in the
respective accounts. Net proceeds from the sale of Stocks will be
distributed to Unitholders of record on the last day of the month in which
such sale occurs, within 20 days after the end of such month. See
"Distributions." Upon termination of the Trust, the Trustee will distribute
to each Unitholder of record as of the termination date his pro rata share
of the Trust's assets, less expenses. In connection with a termination of
the Trust on the Mandatory Termination Date, holders of at least 2,500 Units,
or of fewer Units having an aggregate current value of at least $25,000, may
request to receive such distribution "in kind." See "Redemption" and
"Termination of the Trust." See "Tax Status of the Trust" for a discussion
of the tax consequences to an investor of an "in kind" redemption. The sale
of Stocks in the Trust upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time due
to termination
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<PAGE>
of the Trust. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the amount paid by such
Unitholder to purchase Units.
SECONDARY MARKET FOR UNITS. The Sponsor, though not obligated to do so,
currently intends to maintain a secondary market for Units during the life of
the Trust. If a secondary market is not maintained, a Unitholder may dispose
of his Units only through redemption. With respect to redemption requests in
excess of $100,000, the Sponsor may, in its sole discretion, direct the
Trustee to redeem Units "in kind" by distributing Stocks to the redeeming
Unitholder. See "Redemption." A Unitholder receiving a redemption "in kind"
generally will incur brokerage or other transaction costs in converting the
Stocks distributed into cash. For information on the tax effects of
receiving a redemption "in kind," see "Tax Status of the Trust."
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<PAGE>
INDEPENDENT AUDITORS' REPORT
The Unitholders, Sponsor and Trustee
Midwest Equity Trust
Financial Securities Series 1
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments, of Midwest Equity Trust, Financial Securities
Series 1 as of March 31, 1997, the related statements of operations and changes
in net assets for each of the years in the three-year period then ended, and the
selected data per unit for each of the years in the three-year period then
ended, and for the period from the Date of Deposit, May 20, 1993, to March 31,
1994. These financial statements and selected data per unit are the
responsibility of the Trust's Trustee. Our responsibility is to express an
opinion on these financial statements and selected data per unit based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected data
per unit 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 the securities owned as of
March 31, 1997 by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Trustee, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected data per unit referred to
above present fairly, in all material respects, the financial position of
Midwest Equity Trust, Financial Securities Series 1 at March 31, 1997 and the
results of its operations and changes in its net assets for each of the years in
the three-year period then ended, and the selected data per unit for each of the
years in the three-year period then ended, and for the period from the Date of
Deposit, May 20, 1993, to March 31, 1994, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
Indianapolis, Indiana
June 27, 1997
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<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
ASSETS
Securities, at value, cost of $3,660,703 (Note 1) $ 7,071,365
Cash . . . . . . . . . . . . . . . . . . . . . 29,663
Dividends receivable . . . . . . . . . . . . . 16,589
------------
$ 7,117,617
LIABILITIES AND NET ASSETS
Accrued liabilities. . . . . . . . . . . . . . $ 801
------------
$ 801
Net assets, applicable to 405,077 outstanding
Units of fractional undivided interest:
Cost of Trust assets (Note 1) . . . . . . $ 3,660,703
Net unrealized appreciation (Note 2). . . 3,410,662
------------
$ 7,071,365
Balance of distributable funds
(applicable to Unitholders) . . . . . . . . . $ 45,451
------------
Net Assets . . . . . . . . . . . . . . . . . . $ 7,116,816
============
Net Asset Value per Unit (405,077 Units) . . . $ 17.57
============
See accompanying notes to financial statements.
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<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
SCHEDULE OF INVESTMENTS
March 31, 1997
NUMBER MARKET
OF SHARES NAME OF ISSUER (LOCATION) VALUE (NOTE 1)
----------- -------------------------------------- -------------
13,135 . 1st Source Corporation (South Bend, IN) $ 302,105
5,188 . AMBANC Corp. (Vincennes, IN) . . . 186,768
15,460 . ANB Corporation (Muncie, IN) . . . 289,871
8,740 . CBT Corporation (Paducah, KY) . . . 185,715
18,489 . CNB Bancshares, Inc. (Evansville, IN) 728,012
5,004 . Chemical Financial Corporation 165,132
(Midland, MI) . . . . . . . . . . .
3,381 . Fifth Third Bancorp (Cincinnati, OH) 262,003
6,721 . Firstmerit Corporation (Akron, OH) 279,780
6,756 . First Chicago Corporation (Chicago, IL) 365,656
4,930 . First Financial Bancorp (Hamilton, OH) 167,620
7,424 . First Financial Corporation (Terre 252,432
Haute, IN) . . . . . . . . . . . .
16,136 . First Indiana Corporation 296,503
(Indianapolis, IN) . . . . . . . .
7,563 . First Merchants Corporation (Muncie, 223,095
IN) . . . . . . . . . . . . . . . .
13,159 . First Michigan Bank Corporation 401,351
(Holland, MI) . . . . . . . . . . .
7,764 . Fort Wayne National Corporation (Fort 331,916
Wayne, IN) . . . . . . . . . . . .
7,415 . Independent Bank Corporation (Ionia, 283,624
MI) . . . . . . . . . . . . . . . .
9,075 . Indiana Federal Corporation 237,072
(Valparaiso, IN) . . . . . . . . .
9,611 . Indiana United Bancorp (Greensburg, IN) 319,561
33,721 . National City Bancshares, Inc. 1,087,502
(Evansville, IN) . . . . . . . . .
6,304 . Old Kent Financial Corporation (Grand 297,061
Rapids, MI) . . . . . . . . . . . .
5,232 . Old National Bancorp (Evansville, IN) 196,854
9,410 . Peoples Bancorp (Auburn, IN) . . . 211,732
----------
Total market value . . . . . . . . $7,071,365
==========
Aggregate cost of securities . . . $3,660,703
==========
See accompanying notes to financial statements.
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<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
STATEMENTS OF OPERATIONS
YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31,1997 MARCH 31, 1996 MARCH 31, 1995
------------- -------------- --------------
Dividends . . . . . . . . . . $ 172,488 $ 152,825 $ 163,689
---------- ---------- ----------
Total investment income . . 172,488 152,825 163,689
Expenses:
Trustee's fees and expenses 10,692 13,187 11,452
---------- ---------- ----------
Investment income - net . . . 161,796 139,638 152,237
---------- ---------- ----------
Net gain on investments:
Net realized gain . . . . . 183,222 198,827 154,060
Change in unrealized
appreciation . . . . . . . 1,151,721 1,197,813 578,483
---------- ---------- ----------
1,334,943 1,396,640 732,543
---------- ---------- ----------
Net increase in net assets
resulting from operations. . $1,496,739 $1,536,278 $ 884,780
========== ========== ==========
See accompanying notes to financial statements.
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<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31,1997 MARCH 31, 1996 MARCH 31, 1995
------------- -------------- --------------
Net increase in net assets
resulting from operations:
Investment income - net. . . . $ 161,796 $ 139,638 $ 152,237
Net realized gain on
investments . . . . . . . . . 183,222 198,827 154,060
Change in unrealized
appreciation on investments . 1,151,721 1,197,813 578,483
---------- ---------- ----------
1,496,739 1,536,278 884,780
Distributions to Unitholders:
Investment income - net . . . (163,281) (129,063) (149,601)
Realized capital gains . . . (228,099) --- ---
Unit transactions:
Redemption of Units
(13,951; 69,160; and 114,486,
respectively) . . . . . . . . (208,429) (861,739) (1,243,877)
---------- ---------- ----------
Total increase (decrease) in
net assets . . . . . . . . . 896,930 545,476 (508,698)
Net assets:
At the beginning of the year 6,219,886 5,674,410 6,183,108
---------- ---------- ----------
At the end of the year
(including distributable
funds applicable to Trust
Units of $45,451 at March 31,
1997, $30,595 at March 31,
1996 and $34,575 at March 31,
1995) . . . . . . . . . . . . $7,116,816 $6,219,886 $5,674,410
========== ========== ==========
Trust Units outstanding at the
end of the year . . . . . . . 405,077 419,028 488,188
See accompanying notes to financial statements.
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<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION: The Stocks are stated at the closing sale price of each
Stock that is listed on a national securities exchange or, if no such price
existed or the Stock is not so listed, the closing bid price thereof, on
March 31, 1997.
INVESTMENT INCOME: Investment income consists of dividends on the Stocks.
Dividends on each Stock are recognized on such Stock's ex-dividend date.
SECURITY COST: Cost of the Stocks is based on the market value of the Stocks
on May 19, 1993, the business day prior to the Date of Deposit. The cost of
Stocks sold is determined using the average cost method.
FEDERAL INCOME TAXES: The Trust is not taxable for federal income tax
purposes. Each Unitholder is considered to be the owner of a pro rata portion
of the Trust and, accordingly, no provision has been made for federal income
taxes.
EXPENSES OF THE TRUST: The Trust pays a fee for Trustee services to Chase
Manhattan Bank, which is based on $0.84 per annum per 100 Units outstanding
based on the largest aggregate number of Units outstanding during the calendar
year. The Trust may pay an annual supervisory fee to the Sponsor of up to $0.25
per annum per 100 Units outstanding based on the largest aggregate number of
Units outstanding during the calendar year. The Trust also pays recurring
financial reporting and other miscellaneous expenses.
USE OF ESTIMATES: The preparation of Financial statements in conformity with
generally accepted accounting principles requires the Trustee to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. UNREALIZED APPRECIATION AND DEPRECIATION
An analysis of net unrealized appreciation at March 31, 1997 follows:
Unrealized appreciation . . . . . . . . . . . . $3,410,662
Unrealized depreciation . . . . . . . . . . . . ---
----------
$3,410,662
3. OTHER INFORMATION
COST TO INVESTORS: The cost to initial investors of Units of the Trust was
based on the aggregate underlying value of the Stocks on the date of an
investor's purchase, plus a sales charge of 6.25% of the public offering price
which is equivalent to approximately 6.67% of the net amount invested. A
reconciliation of the original cost of Units to investors to the net amount
applicable to investors as of March 31, 1997 is set forth below.
Original cost to investors. . . . . . . . . . . $6,029,312
Sales charge. . . . . . . . . . . . . . . . . (376,832)
Cost of securities sold or redeemed
since date of deposit. . . . . . . . . . . (1,991,777)
Net unrealized appreciation of securities . . 3,410,662
----------
Net amount applicable to investors. . . . . . $7,071,365
==========
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<PAGE>
DISTRIBUTIONS TO UNITHOLDERS: Income distributions to Unitholders are made
semi-annually on December 31 and June 30 to Unitholders of record on
December 15 and June 15, respectively. Capital distributions to Unitholders,
if any, are made to Unitholders of record on the last day of any month on which
the distributable balance of the Trust's Capital Account is $1.00 or more per
100 Units, on the 20th day of the following month.
Selected data per Unit of the Trust outstanding throughout the period:
<TABLE>
<CAPTION>
PERIOD FROM THE
DATE OF DEPOSIT,
YEAR ENDED YEAR ENDED YEAR ENDED MAY 20, 1993 TO
MARCH 31, 1997 MARCH 31, 1996 MARCH 31, 1995 MARCH 31, 1994
-------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Investment income . . . . . . . $.42 $.35 $.30 $.23
Expenses . . . . . . . . . . . (.03) (.03) (.02) (.01)
------ ------ ------ ------
Investment income - net . . . . .39 .32 .28 .22
Distributions to Unitholders:
Investment income - net . . . (.39) (.29) (.27) (.14)
Realized capital gains. . . . (.56) --- --- ---
Net gain on investments . . . . 3.29 3.19 1.35 .80
------ ------ ------ ------
Total increase in net assets. . 2.73 3.22 1.36 .88
Net assets:
Beginning of the period . . . 14.84 11.62 10.26 9.38
------ ------ ------ ------
End of the period . . . . . . $17.57 $14.84 $11.62 $10.26
====== ====== ====== ======
</TABLE>
Investment income, Expenses, and Investment income - net per Unit have been
calculated based on the weighted average number of Units outstanding during
the period (410,702; 441,757; 551,025; and 602,674 Units during the periods
ended March 31, 1997, 1996, 1995, and 1994, respectively). Distributions to
Unitholders of Investment income - net per Unit reflects the Trust's actual
distribution of $.14 per Unit to 602,674 Units on December 31, 1993; $.12 per
Unit to 593,330 Units on June 30, 1994; $.15 per Unit to 521,388 Units on
December 31, 1994; $.14 per Unit to 458,188 Units on June 30, 1995; $.15 per
Unit to 425,298 Units on December 31, 1995; $.18 per Unit to 418,528 Units on
June 30, 1996; and $.21 per Unit to 405,077 Units on December 30, 1996.
Distributions to Unitholders of realized capital gains per Unit reflect the
Trust's actual distributions of $.56 per Unit to 405,077 Units on December
30, 1996.
THE TRUST
The Trust is the first of a series of similar, but separate, unit investment
trusts created pursuant to a Trust Agreement dated as of May 20, 1993 (the
"Indenture"), between Raffensperger, Hughes & Co., Inc. ("Raffensperger"), and
United States Trust Company of New York. Reference is made to the Indenture and
any statements contained herein are qualified in their entirety by the
provisions of the Indenture. Effective July 13, 1995, Raffensperger assigned
all of its rights and obligations as Sponsor under the Indenture to NatCity
Investments, Inc. All references to the "Sponsor" herein refer to the Sponsor
acting as such at the time, as applicable in the context. Effective
September 1, 1995, United States Trust Company of New York assigned all of its
rights and obligations as Trustee under the Indenture to Chase Manhattan Bank.
All references to the "Trustee" herein refer to the Trustee acting as such at
the time, as applicable in the context.
The portfolio of the Trust consists of Stocks selected by the Sponsor
(collectively, the "Stocks"). On May 20, 1993 (the "Date of Deposit"), the
Sponsor deposited the Stocks with the Trustee together with cash or an
irrevocable letter or letters of credit of a commercial bank or banks in an
amount at least equal to the aggregate purchase price of any of the Stocks
represented by confirmations of contracts to purchase such securities. The
value of the Stocks on the Date
- 11 -
<PAGE>
of Deposit was determined on the basis of the closing sale price of each
Stock that was listed on a national securities exchange, or, if no such price
existed or the Stock was not so listed, the closing ask price thereof, on the
business day prior to the Date of Deposit. In exchange for the deposit of
the Stocks, including any contracts to purchase Stocks, the Trustee delivered
to the Sponsor a receipt for Units representing the entire ownership of the
Trust.
Each Unit represents a fractional undivided interest in each of the Stocks.
If any Units are redeemed, the aggregate value of the Trust will be reduced, and
the fractional undivided interest represented by each remaining Unit will be
increased proportionately. Units will remain outstanding until redeemed upon
tender to the Trustee by any Unitholder (which may include the Sponsor) or until
the termination of the Trust. See "Termination of the Trust."
Because the Trust is organized as a unit investment trust, rather than a
management investment company, the Trustee and the Sponsor do not have authority
to manage the Trust's assets in an attempt to take advantage of various market
conditions to improve the Trust's Net Asset Value, but rather may dispose of
Stocks only under limited circumstances. The original proportionate
relationship among the Stocks is subject to adjustment only (i) to reflect the
occurrence of a stock split, stock dividend or a similar event which affects the
capital structure of the issuer of a Stock but which does not affect the Trust's
percentage ownership of the common stock equity of such issuer at the time of
such event, (ii) to reflect a sale of a Stock or (iii) to reflect a merger or
reorganization by an issuer of a Stock. See "Administration of the Trust --
Portfolio Supervision."
Stocks contained in the Trust will not be sold to take advantage of market
fluctuations nor will they be sold solely because the Sponsor no longer
considers them to have appreciation potential. Any proceeds from the sale of
Stocks and any dividends and distributions received will be held by the Trustee
in non-interest bearing accounts until used to pay expenses of the Trust or
distributed to Unitholders. Net proceeds from the sale of Stocks during any
month, and any other amounts in the Capital Account, will be distributed to
Unitholders of record as of the last day of such month, within 20 days after the
end of such month, but only if such amounts are sufficient to distribute at
least $.01 per Unit. Distributions from the Income Account will be made on the
semi-annual Income Distribution Dates referred to under "Essential Information
Regarding the Trust." To the extent that funds are held in such non-interest
bearing accounts, such funds will benefit the Trustee.
SPECIAL RISK CONSIDERATIONS. An investment in Units of the Trust should be
made with an understanding of the risks inherent in an investment in common
stocks in general. The general risks are associated with the rights to receive
payments from the issuer which are generally inferior to creditors of, or
holders of debt obligations or preferred stocks issued by, the issuer. Holders
of common stocks have a right to receive dividends only when and if, and in the
amounts, declared by the issuer's board of directors and to participate in
amounts available for distribution by the issuer only after all other claims
against the issuer have been paid or provided for. By contrast, holders of
preferred stocks may have the right to receive dividends on a cumulative basis
that must be paid before any dividends are paid on common stock. Preferred
stocks are also typically entitled to rights on liquidation which are senior to
those of common stocks. For these reasons, preferred stocks generally entail
less risk than common stocks.
Common stocks do not represent an obligation of the issuer. Therefore they
do not offer any assurance of income or provide the degree of protection of debt
securities. The issuance of debt securities or even preferred stock by an
issuer will create prior claims for payment of principal, interest and
dividends, which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. Unlike debt securities, which typically have a stated principal
amount payable at maturity, common stocks do not have a fixed principal amount
or a maturity. Additionally, the value of the Stocks in the Trust will
fluctuate over the life of the Trust.
The Stocks are issued by Midwestern financial institutions. In view of this,
an investment in Units of the Trust should be made with an understanding of the
problems and risks inherent in the financial institution industry in general.
Commercial banks, savings associations and their related holding companies are
especially subject to the adverse effects of economic recession, volatile
interest rates, portfolio concentrations in geographic markets and in commercial
and residential real estate loans, and competition from new entrants in their
fields of business. Financial institutions are
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subject to extensive federal and state regulation. Such regulations impose
minimum capital requirements and limitations on the nature and extent of
business activities that financial institutions and their holding companies
may pursue. Furthermore, regulators have a wide range of discretion in
connection with their supervisory and enforcement authority and may
significantly restrict the permissible activities of a particular financial
institution if deemed to pose significant risks to the soundness of the
institution or the safety of the federal deposit insurance fund. Regulatory
actions, such as increases in minimum capital requirements, and increases in
deposit insurance premiums required to be paid to the FDIC, can negatively
impact earnings and the ability of a company to pay dividends. Neither
federal insurance of deposits nor governmental regulation, however, ensures
the solvency or profitability of financial institutions, or insures against
any risk of investment in the securities issued by such institutions.
There has been much recent attention focused on the financial institution
industry regarding prospects for legislative and regulatory changes which could
have a material impact on investments in that industry. The laws and
regulations affecting financial institutions and their holding companies are in
a state of flux. The rules and the regulatory agencies in this area have
changed significantly over recent years, and there is reason to expect that
additional changes will continue in the future. It is difficult to predict the
outcome of these changes. However, such changes could reduce the profitability
of financial institutions generally, and could affect particular institutions or
types of institutions more materially than others. Currently, Congress is
considering legislation that may consolidate regulation of the banking industry
and reduce competitive barriers between banks, other financial firms, and
nonfinancial firms. If enacted, such legislation may increase volatility in the
market for the Stocks, increase competition for the provision of financial
services, allow banks to enter unfamiliar areas of business, and possibly
restrict banks' activities in particular areas of business, including the
insurance and real estate businesses. Further, the phasing in of provisions of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 will
facilitate the interstate expansion and consolidation of financial institutions,
again potentially resulting in increased competition. The Sponsor makes no
prediction as to what, if any, manner of further financial institution
regulatory reform might ultimately be adopted or what ultimate effect such
reform might have on the Trust's portfolio.
Although the Stocks were publicly traded (i.e., listed or quoted on the NYSE,
the AMEX or Nasdaq) on the Date of Deposit, there can be no assurance that any
Stock will meet the conditions for maintaining that status throughout the term
of the Trust. A Stock that fails to maintain that status during the term of the
Trust may not be sold by the Trust unless such failure is associated with one of
the factors described under "Administration of the Trust -- Portfolio
Supervision."
TAX STATUS OF THE TRUST
The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units under
existing law. 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 advisers in determining the
federal, state, local and any other tax consequences of the purchase,
ownership and disposition of Units of the Trust.
In the opinion of Baker & Daniels, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated under the Code as the
owner of a pro rata portion of each of the assets of the Trust; and the
income of the Trust will be treated under the Code as income of the
Unitholders thereof when such income is received or deemed to be received by
the Trust, without regard to when it is distributed to the Unitholders.
2. Each Unitholder will have a taxable event when the Trust disposes of a
Stock (whether by sale, exchange or redemption) or upon the sale or
redemption of Units by such Unitholder. The price a Unitholder pays for his
Units, including sales charges, will be allocated among his pro rata portion
of each of the Stocks and other assets held by the Trust (in proportion to
the fair market values thereof on the date the Unitholder purchases his
Units) in order to determine his initial cost basis for his pro rata portion
of each of the Stocks held by the Trust. For
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federal income tax purposes, a Unitholder's pro rata portion of dividends
paid with respect to Stock of a particular company held by the Trust is
generally taxable as ordinary income to the extent of such company's current
and accumulated "earnings and profits" as defined by Section 316 of the Code.
A Unitholder's pro rata portion of dividends paid on such Stock which exceed
such company's current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Stock, and, to the extent that such
dividends also exceed a Unitholder's tax basis in such Stock, the excess
will generally be treated as capital gain, except in the case of a Unitholder
that is a dealer or a financial institution (such as a bank). Any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of any of the Stocks held by the Trust will
generally be considered a capital gain except in the case of a Unitholder
that is a dealer or a financial institution and will be long-term if the
Unitholder has held his Units for more than one year. A Unitholder's portion
of loss, if any, upon the sale or redemption of Units or the disposition of a
Stock held by the Trust will generally be considered a capital loss except in
the case of a Unitholder that is a dealer or a financial institution and will
be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions" of an
individual taxpayer, a trust or an estate are allowable only to the extent
that, in the aggregate, they exceed two percent of the adjusted gross income
of the taxpayer and that miscellaneous itemized deductions of individuals
are, like most other itemized deductions of individuals, subject to reduction
for taxpayers with adjusted gross income above certain levels. Miscellaneous
itemized deductions subject to this limitation under present law include a
Unitholder's pro rata portion of expenses paid by the Trust, including fees
paid to the Trustee and the Sponsor.
In addition, in the opinion of Carter, Ledyard & Milburn, special counsel to
the Trust for New York tax matters, under the existing income tax laws of the
City of New York and the State of New York, the Trust is not an association
taxable as a corporation and the income of the Trust will be treated as the
income of the Unitholders thereof.
DIVIDENDS RECEIVED DEDUCTION. A corporation that owns Units generally will
be entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the extent
such dividends are taxable as ordinary income, as discussed above) in the same
manner as if such corporation directly owned the Stocks paying such dividends.
However, a corporation owning Units should be aware that Sections 246 and 246A
of the Code impose additional limitations on the eligibility of dividends for
the 70% dividends received deduction. These limitations include a requirement
that stock (and therefore Units) must generally be held at least 46 days (as
determined under Section 246(c) of the Code). Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. Corporate Unitholders should consult
their tax advisers regarding the availability of the dividends received
deduction.
DISPOSITION OF SECURITIES OR DISPOSITION OF UNITS. As discussed above, a
Unitholder may recognize taxable gain (or loss) when any of the Stocks are
disposed of by the Trust or if the Unitholder disposes of a Unit. In the case
of corporations, under current law long-term capital gains are taxed at the same
rate as ordinary income. Current federal tax law, however, limits tax on long-
term capital gains of individual taxpayers, trusts and estates to a maximum rate
of 28%.
The Omnibus Budget Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income, but left long-term capital gains subject to a maximum rate of
28%. Because capital gains may be taxed at a comparatively lower rate, the Act
includes provisions that characterize as ordinary income a certain portion of
the gain recognized on the termination of a "conversion transaction" entered
into after April 30, 1993. A "conversion transaction" is one in which the
taxpayer is in the economic position of a lender because, for example, the
taxpayer has an expectation of a return from the transaction which in substance
is in the nature of interest and undertakes no significant risks other than
those of a typical
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lender. Prospective investors should consult with their own tax advisors
regarding the potential effect of these provisions on their investments in
Units.
"IN KIND" DISTRIBUTIONS. A Unitholder who owns at least 2,500 Units, or a
lesser number of Units having a then current aggregate value of at least
$25,000, may request an "in kind" distribution upon the termination of the
Trust. In addition, with respect to redemption requests of $100,000 or more
during the term of the Trust, a Unitholder may be required to take an "in kind"
distribution if the Sponsor, in its sole discretion, directs the Trustee to
redeem Units "in kind." As previously discussed, a Unitholder is considered to
own a pro rata portion of each of the Trust assets for federal income tax
purposes. The receipt of an "in kind" distribution would be deemed an exchange
of such Unitholder's pro rata portion of each of the shares of Stock and other
assets held by the Trust in exchange for an undivided interest in a pro rata
number of whole shares of Stock plus, possibly, cash.
There generally are three different potential tax consequences which may
result from an "in kind" distribution with respect to each Stock owned by the
Trust. If the Unitholder receives only whole shares of a Stock in exchange for
his pro rata portion of each share of such Stock held by the Trust, there is,
pursuant to Section 1036 of the Code, no taxable gain or loss recognized upon
such deemed exchange. If the Unitholder receives whole shares of a particular
Stock, plus cash in lieu of a fractional share of such Stock, and if the fair
market value of the Unitholder's pro rata portion of the shares of such Stock
exceeds his tax basis in his pro rata portion of such Stock, pursuant to
Section 1031(b) of the Code, taxable gain will be recognized in an amount not to
exceed the amount of such cash received. Pursuant to Section 1031(c) of the
Code, no taxable loss will be recognized upon such an exchange, whether or not
cash is received in lieu of a fractional share. Under either of these
circumstances, special rules will be applied under Section 1031(d) of the Code
to determine the Unitholder's tax basis in the shares of such particular Stock
which he receives as part of the "in kind" distribution. If a Unitholder's pro
rata interest in a Stock does not equal a whole share, however, he will receive
entirely cash in exchange for his pro rata portion of such Stock. In such case,
taxable gain or loss is measured by comparing the amount of cash received by the
Unitholder with his tax basis in such Stock.
Because the Trust will own several Stocks and since no partial "in kind"
distributions will be made, a Unitholder who receives an "in kind" distribution
will have to analyze the tax consequences with respect to each Stock owned by
the Trust. A Unitholder who requests an "in kind" distribution will receive
shares of each of the Stocks held by the Trust, plus an amount of cash
representing his pro rata share of any other assets of the Trust and cash in
lieu of fractional shares, if any. The total amount of taxable gain (or loss)
recognized upon such a distribution will generally equal the sum of the
respective gains (or losses) recognized under the rules described above by such
Unitholder with respect to each Stock owned by the Trust. Unitholders who
request or receive "in kind" distributions are advised to consult their tax
advisers in this regard.
GENERAL. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee 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 the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to 31% back-up withholding. Distributions by the 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. Such persons should consult their tax
advisers.
Each Unitholder will be notified annually of the amounts of interest income
and income dividends includable in the Unitholder's gross income and the amount
of Trust expenses which may be claimed as deductions.
Dividend income, capital gains and interest income realized through the Trust
may also be subject to state and local taxes. Investors should consult their
tax advisers for specific information on the tax consequences of particular
types of income or distributions.
The foregoing discussion is a general summary relating only to certain
aspects of the current federal income tax treatment of holding Units, of
distributions by the Trust and of disposition of Units. Such holding,
distributions and
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dispositions may also be subject to state and local taxation of other
jurisdictions. Future legislative, judicial or administrative changes could
require modification of the conclusions expressed above and could affect the
tax consequences to Unitholders. Accordingly, Unitholders are advised to
consult their tax advisers concerning the effect of an investment in Units.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units are sold at their Public Offering Price, which
will vary from the amount stated under "Essential Information Regarding the
Trust" based on fluctuations in the value of the Stocks. The Public Offering
Price is the Net Asset Value per Unit next computed as described under
"Valuation," plus the applicable sales charge (up to a maximum of 6.25%). The
Net Asset Value per Unit is based on the pro rata share of the aggregate value
of the Stocks in the Trust. For purposes of computing Net Asset Value, each
Stock listed on the NYSE, the AMEX or the Nasdaq National Market System will be
valued at its closing sale price on the applicable valuation date or, if no such
price existed or if the Stock is not so listed, at its closing bid price on such
date. See "Valuation."
The maximum sales charge of 6.25% will be reduced for volume purchases as
indicated below:
DOLLAR AMOUNT PERCENTAGE OF
OF TRANSACTION SALES CHARGE NET AMOUNT INVESTED
-------------- ------------ -------------------
Up to $99,999 6.25% 6.67%
$100,000 to $249,999 5.50% 5.82%
$250,000 or more 4.50% 4.71%
The reduced sales charge structure will apply on all purchases of Units by the
same purchaser on any one day from the Sponsor or any one dealer. Additionally,
Units purchased in the name of the spouse of a purchaser or in the name of a
child of such purchaser under 21 years of age will be deemed, for purposes of
calculating the applicable sales charge, to be additional purchases by the
purchaser. The reduced sales charges will also be applicable to a trustee or
other fiduciary purchasing securities for a single trust estate or single
fiduciary account. The purchaser must inform the Sponsor or dealer of any such
combined purchase prior to the sale in order to obtain the indicated discount.
DISTRIBUTION OF UNITS. The Units offered by this Prospectus are outstanding
Units that have been purchased by the Sponsor in the secondary market or from
the Trustee after having been tendered for redemption. Only whole Units may be
purchased.
The Sponsor is the sole underwriter of the Units. Sales may, however, be
made to dealers who are members of the National Association of Securities
Dealers, Inc. (the "NASD") at prices which include a concession of $.25 per Unit
subject to change from time to time. The difference between the sales charge
and the dealer concession will be retained by the Sponsor. In the event that
the dealer concession is 90% or more of the sales charge per Unit, dealers
taking advantage of such concession may be deemed to be underwriters under the
Securities Act of 1933, as amended.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units. The Sponsor has qualified the Units for sale in Indiana
and selected other states. Units will be sold only to individuals and other
investors resident in such states and to institutional and other investors in
other states to the extent there are available exemptions from applicable state
securities registration requirements.
SECONDARY MARKET FOR UNITS. While not obligated to do so, the Sponsor
intends to maintain a secondary market for the Units and expects to continuously
offer to purchase Units at the Net Asset Value per Unit next computed after
receipt by the Sponsor of an order from a Unitholder. The Sponsor may cease to
maintain such a market at any time, and from time to time, without notice. In
the event that a secondary market for the Units is not maintained by the
Sponsor, a Unitholder desiring to dispose of Units may tender such Units to the
Trustee for redemption at the Net Asset
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Value per Unit next calculated in the manner set forth under "Valuation."
For redemption requests of $100,000 or more, the Sponsor may, in its sole
discretion, direct the Trustee to redeem Units "in kind" as described under
"Redemption."
The Sponsor may redeem any Units it has purchased in the secondary market if
it determines for any reason that it is undesirable to continue to hold these
Units in its inventory. Factors which the Sponsor may consider in making this
determination will include the number of units of all series of all trusts which
it holds in its inventory, the salability of the Units, its estimate of the time
required to sell the Units and general market conditions.
SPONSOR'S PROFITS. No proceeds from the sale of Units will be received by
the Trust. In addition to the applicable sales charges, the Sponsor realizes a
profit (or sustains a loss) in the amount of any difference between the price at
which it buys Units and the price at which it resells or redeems such Units.
Cash, if any, received from Unitholders prior to the settlement date for the
purchase of Units may be used in the Sponsor's business subject to the
limitations of Rule 15c3-3 under the Securities Exchange Act of 1934, as
amended, and may be of benefit to the Sponsor.
REDEMPTION
Units may be redeemed by tendering a written redemption request in form
satisfactory to the Trustee at its address appearing on the back cover of this
Prospectus, and, in the case of Units represented by a certificate, by tendering
such certificate to the Trustee at such address, properly endorsed or
accompanied by a properly executed stock power. Any such written request, and
any such certificate or stock power, must be signed by the Unitholder exactly as
such Unitholder's name appears on the records of the Trustee and on any such
certificate, and such signature must be guaranteed by a guarantor institution
participating in a signature guarantee program acceptable to the Trustee.
A Unitholder may tender Units for redemption at any time after the
settlement date for purchase and prior to the Evaluation Time (as defined under
"Valuation") on the date the Trust is terminated, at the Net Asset Value per
Unit determined on the day of tender (unless tender is made after the Evaluation
Time on such day, in which case tender shall be deemed to have been made on the
next succeeding Trust Business Day (as hereinafter defined)). There is no sales
charge incurred when a Unitholder tenders Units to the Trustee for redemption.
The amount received by a Unitholder upon redemption may be more or less than the
amount paid by the Unitholder depending on the value of the Stocks in the
portfolio at the time of redemption. Prior to redeeming Units tendered for
redemption, the Trustee will offer such Units for sale to the Sponsor at the Net
Asset Value per Unit. Subject to payment of applicable tax or governmental
charges, if any, the Net Asset Value of Units tendered for redemption will be
paid to the redeeming Unitholder on the seventh calendar day following the day
of tender. If such day of payment is not a Trust Business Day, payment will be
made on the first Trust Business Day prior thereto. See "Valuation."
With respect to cash redemptions, amounts representing income received shall
be withdrawn from the Income Account, and, to the extent the Income Account is
insufficient and for remaining amounts, from the Capital Account. The Trustee
is empowered, to the extent necessary, to sell Stocks to meet redemptions. The
Trustee will sell Stocks in such manner as is directed by the Sponsor. With
respect to redemption requests of $100,000 or more, the Sponsor may, in its sole
discretion, direct the Trustee to redeem Units "in kind" by distributing Stocks
to the redeeming Unitholder. When Stocks are so distributed, the Unitholder
will receive that number of whole shares of each Stock representing the
aggregate of his interest in each of the Stocks, plus cash in lieu of fractional
shares. The Sponsor may direct the Trustee to redeem Units "in kind" even if it
is then maintaining a secondary market in Units of the Trust. Stocks will be
valued for this purpose as set forth under "Valuation." A Unitholder receiving
a redemption "in kind" generally will incur brokerage or other transaction costs
in converting the Stocks distributed into cash. For information on the tax
effects of receiving a redemption "in kind," see "Tax Status of the Trust."
To the extent that shares of Stocks are distributed pursuant to a redemption
"in kind" or sold, the size of the Trust will, and the diversity of the Trust
may, be reduced. Sales may be required at a time when Stocks would not
otherwise be sold and may result in lower proceeds than might otherwise be
realized. In addition, because of the minimum
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amounts in which Stocks are required to be sold, the proceeds of sale may
exceed the amount required at the time to redeem Units; these excess proceeds
will be distributed to the remaining Unitholders on the next Capital
Distribution Date.
The Trustee may in its discretion, and will when so directed by the Sponsor,
suspend the right of redemption, or postpone the date of payment for Units
tendered for redemption to a date more than seven calendar days following the
day of tender, (i) for any period during which the NYSE is closed other than for
weekend and holiday closings; (ii) for any period during which the Securities
and Exchange Commission determines that trading on the NYSE is restricted;
(iii) for any period during which an emergency exists as a result of which
disposal or evaluation of the Stocks is not reasonably practicable; or (iv) for
such other period as the Securities and Exchange Commission may by order permit
for the protection of Unitholders. The Trustee is not liable to any person in
any way for any loss or damages which may result from any such suspension or
postponement, or any failure to suspend or postpone, when done in the Trustee's
discretion.
VALUATION
The Trustee will calculate the Trust's value (the "Net Asset Value") at the
close of business on the NYSE (the "Evaluation Time") (i) on each Trust Business
Day (defined as a day on which the NYSE is open, other than federal or New York
state bank holidays) as long as the Sponsor is maintaining a secondary market,
(ii) on the Trust Business Day on which any Unit is tendered for redemption and
(iii) on any other day desired by the Sponsor or the Trustee, by adding:
(a) The aggregate value of Stocks in the Trust, as determined by the
Trustee; and
(b) The sum of (i) cash on hand in the Trust other than cash credited to
any reserve account established under the Indenture and (ii) dividends
receivable on Stocks trading ex-dividend.
The Trustee will deduct from the resulting figure: amounts representing any
applicable taxes or governmental charges payable by the Trust for the purpose of
making an addition to any reserve account established under the Indenture;
amounts representing estimated accrued fees and expenses of the Trust, including
amounts representing unpaid fees of the Trustee and the Sponsor; and cash held
to redeem tendered Units and for distribution to Unitholders of record as of a
Trust Business Day prior to the evaluation being made on the days set forth
above.
For the purpose of redemption of Units, the Net Asset Value per Unit is
computed by the Trustee by dividing the result of the above computation by the
total number of Units outstanding on the date of such evaluation.
The value of Stocks shall be determined in good faith by the Trustee acting
in its capacity as evaluator of the Trust in the following manner: (i) if the
Stocks are listed on the NYSE, the AMEX or the Nasdaq National Market System,
such evaluation shall be based on the closing sales price on that day (unless
the Trustee deems such price inappropriate as a basis for evaluation) on the
exchange which is the principal market thereof (deemed to be the NYSE if the
Stocks are listed thereon), (ii) if the Stocks are listed but there is no such
appropriate closing sales price on such exchange, and for Stocks that are not so
listed but are quoted on the Nasdaq System, at the closing bid prices on such
exchange or system (unless the Trustee deems such price inappropriate as a basis
for evaluation), (iii) if the Stocks are not listed or quoted or, if so listed
or quoted and the principal market therefor is other than on such exchange or
system or there are no such appropriate closing bid prices available, such
evaluation shall be made by the Trustee in good faith based on the closing sales
price in the over-the-counter market (unless the Trustee deems such price
inappropriate as a basis for evaluation) or (iv) if there is no appropriate
closing price, then (a) on the basis of current bid prices obtained from dealers
or brokers (which may include the Sponsor), (b) if bid prices are not available,
on the basis of current bid prices for comparable securities, (c) by the
Trustee's appraising the value of the Stocks in good faith on the bid side of
the market or (d) by any combination thereof. The tender of a Stock pursuant to
a tender offer will not affect the method of valuing the Stock.
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COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
On any given day, the Public Offering Price per Unit (which figure includes
the sales charge) will exceed the Redemption Price per Unit. See "Essential
Information Regarding the Trust." The Public Offering Price per Unit is based
on the Net Asset Value of the Trust, plus the applicable sales charge. The
redemption value for Unitholders tendering their Units will be based solely on
the Net Asset Value of the Trust. There is no sales charge incurred when a
Unitholder tenders his Units to the Trustee for redemption. In addition, the
value of the Stocks will generally vary. Therefore, for these reasons and
others, the amount realized by a Unitholder upon redemption of Units may be less
than the price paid by the Unitholder for such Units.
EXPENSES OF THE TRUST
The cost of the preparation and printing of the Indenture and this
Prospectus, the initial fees of the Trustee, advertising expenses and expenses
incurred in establishing the Trust, including legal and auditing fees, are paid
by the Sponsor and not by the Trust. The Sponsor receives no fee from the Trust
for its services as Sponsor.
The Sponsor receives a fee, which is earned for performing the portfolio
supervisory services described under "Administration of the Trust -- Portfolio
Supervision," based upon the largest number of Units outstanding during the
calendar year. The Sponsor's fee, which will not exceed $.25 per 100 Units per
annum, may exceed the actual costs of providing portfolio supervisory services
for this particular series of the Trust, but at no time will the total amount it
receives for such services rendered to all series of the Trust in any calendar
year exceed the aggregate cost to it of supplying such services in such year.
Thus, the Sponsor will not profit from fees received from the Trust for
portfolio supervisory services. The Sponsor's fee may be increased without
approval of the Unitholders by an amount not exceeding a proportionate increase
in the category entitled "All Services Less Rent" in the Consumer Price Index
published by the Department of Labor.
For its services as Trustee and evaluator, the Trustee is paid at the rate of
approximately $.84 per annum per 100 Units, but, in any event, not less than
$2,000 per annum. Such compensation will be computed on each Income Record Date
on the basis of the largest number of Units outstanding at any time subsequent
to the preceding Income Record Date (or the Date of Deposit, as appropriate).
The Trustee will also benefit to the extent that it holds funds in non-interest
bearing accounts. In addition, the Trust incurs regular and recurring annual
expenses of the Trust, including without limitation certain mailing, printing,
and other miscellaneous expenses, which are estimated to be approximately the
amount set forth under "Essential Information Regarding the Trust." Actual
expenses payable by the Trust may be more or less than this estimate. See
"Statements of Operations."
The Trustee's fee and the Sponsor's supervisory fee are payable on each
Income Record Date, from the Income Account to the extent funds are available,
and then from the Capital Account.
In addition to the above, the following charges are or may be incurred by the
Trust and paid from the Income Account or, to the extent funds are not available
in such Account, from the Capital Account: (i) fees for the Trustee for
extraordinary services; (ii) reimbursable expenses of the Trustee (including
legal and auditing expenses, but not including any fees and expenses charged by
any agent for custody and safekeeping of Stocks); (iii) various governmental
charges; (iv) expenses and costs of any action taken by the Trustee to protect
the Trust and the rights and interests of the Unitholders; (v) indemnification
of the Trustee for any loss, liabilities or expenses (including reasonable
attorneys' fees) incurred by it in the administration of the Trust without gross
negligence, bad faith or willful misconduct on its part; (vi) indemnification of
the Sponsor for any loss, liability or expenses (including reasonable attorneys'
fees) incurred in acting in such capacity other than by reason of its own gross
negligence, bad faith or willful misconduct; (vii) brokerage commissions in
connection with the sale of Stocks; and (viii) expenses incurred upon
termination of the Trust. In addition, to the extent then permitted by the
Securities and Exchange Commission, the Trust may incur expenses of maintaining
registration or qualification of the Trust or the Units under federal or state
securities laws so long as the Sponsor is maintaining a secondary market
(including, but not limited to, legal, auditing and printing expenses). See
"Administration of the Trust -- Accounts."
- 19 -
<PAGE>
The fees and expenses set forth above are payable out of the Trust and when
unpaid will be secured by a lien on the Trust. Dividends on the Stocks are
expected to be sufficient to pay the estimated expenses of the Trust. To the
extent that dividends paid with respect to the Stocks are not sufficient to meet
the expenses of the Trust, the Trustee is authorized to sell Stocks to meet the
expenses of the Trust.
RIGHTS OF UNITHOLDERS
Each Unit represents a pro rata fractional undivided interest in each of the
Stocks and other assets held in this particular series of the Trust.
Ownership of Units is evidenced by recordation on the books of the Trustee.
In order to avoid additional operating costs and for investor convenience,
certificates will not be issued unless a request, in writing with signature
guaranteed by a member of a signature guarantee program acceptable to the
Trustee. Issued certificates are transferable by presentation and surrender to
the Trustee at its office at the address on the back cover properly endorsed or
accompanied by a written instrument or instruments of transfer. Uncertificated
Units are transferable by presentation to the Trustee of a written instrument of
transfer.
Certificates may be issued in denominations of one Unit or any integral
multiple thereof as deemed appropriate by the Trustee. A Unitholder may be
required to pay a reasonable fee (currently $2.00 per certificate) for each
certificate issued, reissued or transferred, and shall be required to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. For new certificates to be issued to replace destroyed, mutilated,
stolen or lost certificates, the Unitholder must furnish indemnity satisfactory
to the Trustee and must pay such expenses as the Trustee may incur. Mutilated
certificates must be surrendered to the Trustee for replacement.
Unitholders will have no voting rights, except as provided under "Termination
of the Trust" and under "Amendment of the Indenture." The rights the
Unitholders have in distributions from the Income and Capital Accounts are set
forth below under "Distributions."
DISTRIBUTIONS
The Trustee will make distributions from the Income Account on each semi-
annual Income Distribution Date to Unitholders of record on the preceding Income
Record Date. See "Essential Information Regarding the Trust." Net proceeds
from any sale of Stocks during any month, and any other amounts in the Capital
Account, will be distributed to Unitholders of record as of the last day of such
month, within 20 days after the end of such month, but only if such amounts are
sufficient to distribute at least $.01 per Unit. Whenever required for
regulatory or tax purposes, the Trustee will make special distributions on
special distribution dates to Unitholders of record on special record dates when
and as declared by the Trustee.
Upon termination of the Trust, each Unitholder of record on such date will
receive his pro rata share of the amounts realized upon disposition of the
Stocks plus any other assets of the Trust, less liabilities of the Trust. See
"Termination of the Trust."
ADMINISTRATION OF THE TRUST
ACCOUNTS. All dividends received on Stocks, proceeds from the sale of Stocks
or other moneys received by the Trustee on behalf of the Trust will be held in
the Trust in non-interest bearing accounts.
The Trustee will credit on its books to the Income Account dividends and
other income distributions, if any, on Stocks in the Trust. All other receipts
(i.e., return of principal and capital gains) will be credited on its books to
the Capital Account. The pro rata share of the Income Account and the pro rata
share of the Capital Account represented by each Unit will be computed by the
Trustee as set forth under "Valuation."
- 20 -
<PAGE>
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
expenses incurred by the Trust. See "Expenses of the Trust." In addition, the
Trustee may withdraw from the Income Account and the Capital Account such
amounts as may be necessary to cover redemption of Units by the Trustee. See
"Redemption."
The Trustee may establish reserves (the "Reserve Account") within the Trust
for any state and local taxes, any other governmental charges, and any
extraordinary expenses payable out of the Trust.
REPORTS AND RECORDS. With any distributions from the Trust, the Trustee will
furnish each Unitholder a statement setting forth the amount being distributed
from each account. In addition, the Trustee shall notify the Unitholders within
five days of substitute Stocks, if any, which are acquired for the portfolio.
See "The Trust."
The Trustee keeps records and accounts of the Trust at its office (currently
located at the address on the back cover), including records of the names and
addresses of Unitholders, a current list of underlying Stocks in the portfolio
and a copy of the Indenture. Records pertaining to a Unitholder or to the Trust
(but not to other Unitholders) are available to the Unitholder for inspection at
reasonable times during business hours.
Within a reasonable period of time after the end of each calendar year, the
Trustee will furnish each person who was a Unitholder at any time during the
calendar year a report containing the following information, expressed in
reasonable detail both as a dollar amount and as a dollar amount per Unit:
(i) a summary of transactions for the Trust in the Income and Capital Accounts
and any Reserve Account; (ii) Stocks sold or purchased, if any; (iii) the Net
Asset Value per Unit, based upon the last computation thereof made during the
year; and (iv) amounts distributed to Unitholders during such year.
PORTFOLIO SUPERVISION. The Sponsor and the Trustee do not have authority to
alter the Trust's portfolio of Stocks in an attempt to take advantage of various
market conditions to improve the Trust's Net Asset Value. Rather, their
activities described herein are governed solely by the provisions of the
Indenture. The Indenture provides that the Sponsor may (but need not) direct
the Trustee to dispose of a Stock:
(i) upon the failure of the issuer to declare or pay anticipated dividends;
(ii) upon default in the payment of principal or interest of any
outstanding debt obligations of the issuer of such Stock;
(iii) upon the institution of any action or proceeding instituted at law
or in equity seeking to restrain or enjoin the declaration or payment of
dividends or the existence of any other materially adverse legal question or
impediment affecting such Stock or the declaration or payment of dividends on
the same;
(iv) upon the decline in price or the occurrence of any materially
adverse credit factors that, in the opinion of the Sponsor, make the
retention of such Stock detrimental to the interest of the Unitholders;
(v) if sale of such Stock is required due to Units tendered for
redemption; or
(vi) if the sale of such Stock is required in order to prevent the Trust
from being deemed an association taxable as a corporation for federal income
tax purposes.
The Indenture also provides that, in certain events such as the issuance by
the issuer of any of the Stocks or any other party of new securities of the same
or another issuer in exchange for shares of such Stocks, the Sponsor may direct
the Trustee to sell the securities received in exchange therefor based on the
factors enumerated above, and shall direct the Trustee to sell such securities
if the retention thereof would jeopardize the tax status of the Trust. Cash
received in exchange for Stocks together with the cash proceeds from the sale of
any securities received as consideration in such
- 21 -
<PAGE>
an exchange, shall be credited to the Capital Account and distributed to
Unitholders on the next Capital Distribution Date.
Stocks may also be sold in the manner described under "The Trust." The
Trustee may dispose of Stocks where necessary to pay Trust expenses or to
satisfy redemption requests as directed by the Sponsor. The net proceeds of any
such sale during any month may not be reinvested, but will be distributed to
Unitholders of record as of the last day of such month, within 20 days after the
end of such month, but only if such amounts are sufficient to distribute at
least $.01 per Unit.
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders to cure any ambiguity, to correct or
supplement any provision thereof which may be defective or inconsistent, or to
make such other provisions as will not materially adversely affect the interest
of the Unitholders or as required by the Securities and Exchange Commission, so
long as the Trustee provides the Unitholders with notice as required by the
Indenture.
The Indenture may be amended in any respect by the Sponsor and the Trustee
with the consent of the holders of 66-2/3% of the Units then outstanding;
provided that no such amendment shall, among other things, permit the
acquisition of any stocks other than those specified in Schedule A of the
Indenture or reduce the percentage of Unitholders required to consent to any
such amendment, without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of the substance of any
amendment affecting Unitholders' rights or their interest in the Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will terminate upon the following
circumstances: (i) occurrence of the Mandatory Termination Date (as stated in
"Essential Information Regarding the Trust"); (ii) at the discretion of the
Sponsor, if the value of the Trust as shown by any evaluation is less than the
Liquidation Amount (as defined in "Essential Information Regarding the Trust");
or (iii) written consent to termination by the holders of 51% of the Units then
outstanding. In no event will the Trust continue beyond the Mandatory
Termination Date.
Commencing with the first business day following the Mandatory Termination
Date, the Trustee will, pursuant to the Sponsor's direction, begin to sell the
Stocks held in the Trust other than those to be distributed "in kind" as
discussed below. Within seven days after receipt of the last proceeds of such
sales and after deduction of any fees and expenses of the Trust and payment into
the Reserve Account of any amount required for taxes or other governmental
charges that may be payable by the Trust, the Trustee will distribute to each
Unitholder, after due notice of such termination, such Unitholder's pro rata
share in the Income and Capital Accounts. Cash held upon the sale of Stocks
will be held in non-interest bearing accounts created by the Indenture until
distributed and will be of benefit to the Trustee. The sale of Stocks in the
Trust upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time due to termination of the
Trust. For this reason, among others, the amount realized by a Unitholder upon
termination may be less than the amount paid by such Unitholder.
Thirty days prior to the Mandatory Termination Date, the Trustee shall
furnish to eligible Unitholders election forms pursuant to which they will be
permitted to receive an "in kind" distribution upon termination in lieu of cash.
Any Unitholders owning a minimum of 2,500 Units, or such lesser number of Units
then representing an aggregate value of at least $25,000, who properly make
appropriate elections no later than close of business on the Mandatory
Termination Date shall be entitled to receive a distribution "in kind" for all
of their Units. Upon the distribution following termination of the Trust, such
Unitholders will receive that number of whole shares of each Stock representing
the aggregate of their respective interests in each of the Stocks, plus cash
representing their pro rata shares of other Trust assets and cash in lieu of
fractional shares, if any. Unitholders not effectively electing an "in kind"
distribution will
- 22 -
<PAGE>
receive a cash distribution as described above. No partial "in kind"
distributions will be made. See "Tax Status of the Trust" for information
concerning the tax consequences to a Unitholder of a distribution "in kind."
Written notice of termination of the Trust shall be provided to all
Unitholders of record on the date of termination.
SPONSOR
The Sponsor, NatCity Investments, Inc., is the largest investment banking
firm with principal offices in the State of Indiana. The Sponsor serves a wide
range of institutional and individual investors, corporations and fiduciaries,
as well as other securities and commodity dealers. The Sponsor is registered as
a broker dealer with the Securities and Exchange Commission and is a member of
the NASD. The Sponsor is a wholly owned subsidiary of National City
Corporation, a registered bank holding company with principal offices in
Cleveland, Ohio. Services offered by the Sponsor include investment research
and trade execution services for listed and unlisted equity and fixed-income
securities; and investment banking services for corporations and public sector
clients. The Sponsor may, but need not, make a principal market as dealer in
one or more of the Stocks in the Trust.
The Indenture provides that the Sponsor will not be liable to the Trust, the
Trustee or to the Unitholders for taking any action or for refraining from
taking any action made in good faith or for errors in judgment, but will be
liable only for its own gross negligence, bad faith or willful misfeasance in
the performance of its duties or by reason of its reckless disregard of its
obligation and duties. The Sponsor will not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Stocks in the
Trust.
The Indenture further provides that the Sponsor shall be indemnified by the
Trust and held harmless from and against any loss, liability or expense incurred
in acting as Sponsor of the Trust other than by reason of its own gross
negligence, bad faith or willful misfeasance in the performance of its
obligations or by reason of its own reckless disregard of its obligations and
duties under the Indenture.
The Indenture is binding upon any successor to the business of the Sponsor.
The Sponsor may transfer all or substantially all of its assets to a corporation
which carries on the business of the Sponsor and duly assumes all the
obligations of the Sponsor under the Indenture. In such event the Sponsor shall
be relieved of all further liability under the Indenture.
The Indenture provides that the Sponsor may resign its position as Sponsor by
delivering to the Trustee an instrument of resignation. This resignation will
only be effective if prior to or concurrent with the delivery of the instrument
the Trustee has either (i) appointed a successor Sponsor or (ii) agreed to act
as Sponsor thereby succeeding to all the rights and duties of the resigning
Sponsor. The Trustee must notify the Unitholders of any such resignation or
appointment of a successor Sponsor.
If the Sponsor fails to undertake any of its duties under the Indenture,
becomes incapable of acting, becomes bankrupt, or has its affairs taken over by
public authorities, the Trustee may appoint a successor sponsor or sponsors to
serve at rates of compensation determined as provided in the Indenture.
TRUSTEE
The Trustee is Chase Manhattan Bank with its principal unit investment trust
offices at 4 New York Plaza, New York, New York 10004.
The Trustee, whose duties are ministerial in nature, has not participated in
the selection of the Stocks.
The Indenture provides that the Trustee shall be indemnified by the Trust and
held harmless from and against any loss, liability or expense incurred without
gross negligence, bad faith or willful misfeasance in the performance of its
duties or by reason of its reckless disregard of the duties of the Trustee
arising out of or in connection with the administration of this Trust.
- 23 -
<PAGE>
The Trustee may resign and be discharged of its duties with respect to the
Trust pursuant to the Indenture by delivering an instrument of resignation to
the Sponsor and mailing such instrument to the Unitholders then of record not
less than 60 days before the resignation date. The Trustee shall not, however,
resign until either (i) the Trust has been completely liquidated and the
proceeds distributed to the Unitholders, or (ii) a successor Trustee, having the
qualifications prescribed in the governing securities laws, has been designated
and has accepted the duties as Trustee.
The Sponsor may remove the Trustee, upon the occurrence of certain events as
set forth in the Indenture. Upon the resignation or removal of the Trustee as
set forth above and in the Indenture, the Sponsor shall use its best efforts
promptly to appoint a successor Trustee. The Indenture is binding upon any
successor to the business of the Trustee. The Trustee may transfer all or
substantially all of its assets to a corporation which carries on the business
of the Trustee and duly assumes all the obligations of the Trustee under the
Indenture. In such event the Trustee shall be relieved of all further liability
under the Indenture.
EXPERTS
The financial statements of the Trust appearing in this Prospectus and in the
registration statement have been audited by KPMG Peat Marwick LLP, independent
public accountants, as set forth in their report thereon appearing elsewhere
herein and in the registration statement and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the Units offered hereby and certain matters relating to
federal income tax law have been passed upon by Baker & Daniels, 300 North
Meridian Street, Suite 2700, Indianapolis, Indiana 46204, as counsel for the
Sponsor. Carter, Ledyard & Milburn, 2 Wall Street, New York, New York 10005,
acts as special New York tax counsel for the Trust.
- 24 -
<PAGE>
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
SPONSOR: TRUSTEE:
NATCITY INVESTMENTS, INC. CHASE MANHATTAN BANK
251 North Illinois Street, Suite 500 4 New York Plaza
Indianapolis, Indiana 46204 New York, New York 10004
1-800-382-1126 1-800-428-8890
TABLE OF CONTENTS
ESSENTIAL INFORMATION REGARDING THE TRUST . . . . . . . 2
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . 3
The Trust . . . . . . . . . . . . . . . . . . . . . . 3
Special Risk Considerations . . . . . . . . . . . . . 3
Termination . . . . . . . . . . . . . . . . . . . . . 3
Public Offering Price . . . . . . . . . . . . . . . . 3
Distributions . . . . . . . . . . . . . . . . . . . . 3
Secondary Market for Units. . . . . . . . . . . . . . 4
INDEPENDENT AUDITORS' REPORT. . . . . . . . . . . . . . 5
STATEMENT OF ASSETS AND LIABILITIES . . . . . . . . . . 6
SCHEDULE OF INVESTMENTS . . . . . . . . . . . . . . . . 7
STATEMENTS OF OPERATIONS. . . . . . . . . . . . . . . . 8
STATEMENTS OF CHANGES IN NET ASSETS . . . . . . . . . . 9
NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . 10
THE TRUST . . . . . . . . . . . . . . . . . . . . . . . 11
Special Risk Considerations . . . . . . . . . . . . . 12
TAX STATUS OF THE TRUST . . . . . . . . . . . . . . . . 13
Dividends Received Deduction. . . . . . . . . . . . . 14
Disposition of Securities or Disposition of Units . . 14
"In Kind" Distributions . . . . . . . . . . . . . . . 15
General . . . . . . . . . . . . . . . . . . . . . . . 15
PUBLIC OFFERING OF UNITS. . . . . . . . . . . . . . . . 16
Public Offering Price . . . . . . . . . . . . . . . . 16
Distribution of Units . . . . . . . . . . . . . . . . 16
Secondary Market for Units. . . . . . . . . . . . . . 16
Sponsor's Profits . . . . . . . . . . . . . . . . . . 17
REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . 17
VALUATION . . . . . . . . . . . . . . . . . . . . . . . 18
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE 19
EXPENSES OF THE TRUST . . . . . . . . . . . . . . . . . 19
RIGHTS OF UNITHOLDERS . . . . . . . . . . . . . . . . . 20
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 20
ADMINISTRATION OF THE TRUST . . . . . . . . . . . . . . 20
Accounts. . . . . . . . . . . . . . . . . . . . . . . 20
Reports and Records . . . . . . . . . . . . . . . . . 21
Portfolio Supervision . . . . . . . . . . . . . . . . 21
AMENDMENT OF THE INDENTURE. . . . . . . . . . . . . . . 22
TERMINATION OF THE TRUST. . . . . . . . . . . . . . . . 22
SPONSOR . . . . . . . . . . . . . . . . . . . . . . . . 23
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 23
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . 24
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . 24
THIS PROSPECTUS DOES NOT CONTAIN ALL OF 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 MADE.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE TRUST, THE TRUSTEE, OR THE SPONSOR. THE TRUST IS
REGISTERED AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF
1940. SUCH REGISTRATION DOES NOT IMPLY THAT THE TRUST OR THE UNITS HAVE BEEN
GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY
STATE OR ANY AGENCY OR OFFICER THEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES TO, OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES FROM, ANY PERSON IN ANY STATE TO
WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE.
- 25 -
<PAGE>
PART II
CONTENTS OF REGISTRATION STATEMENT
This Amendment to the Registration Statement consists of the following papers
and documents:
The facing sheet.
The Prospectus consisting of 25 pages.
The signatures.
Written consents of the following persons:
KPMG Peat Marwick LLP
(included as Exhibit 6.3)
The following exhibits:
*Exhibit 1.1.1 Trust Agreement, dated May 20, 1993, between
Raffensperger, Hughes & Co., Inc., as Depositor,
and United States Trust Company of New York, as
Trustee, incorporating by reference the Standard
Terms and Conditions of Trust.
*Exhibit 1.1.2 Standard Terms and Conditions of Trust, effective
May 20, 1993, between Raffensperger, Hughes &
Co., Inc., as Depositor, and United States Trust
Company of New York, as Trustee.
**Exhibit 1.1.3 Assignment of Trust Agreement, dated July 11,
1995 (but effective July 13, 1995), by
Raffensperger, Hughes & Co., Inc., as Depositor,
to NatCity Investments, Inc., as successor
Depositor, including a related Assumption of
Trust Agreement by NatCity Investments, Inc. and
a related Acknowledgement by the Trustee.
***Exhibit 1.5 Form of Certificate of Beneficial Ownership.
**Exhibit 1.6.1 Articles of Incorporation, as amended, of NatCity
Investments, Inc.
**Exhibit 1.6.2 By-Laws, as amended, of NatCity Investments, Inc.
(formerly Merchants Investment Services, Inc.)
*Exhibit 2.1 Opinion of Baker & Daniels as to the legality of
securities being registered.
*Exhibit 2.2 Opinion of Baker & Daniels as to federal income
tax status of securities being registered.
*Exhibit 2.3 Opinion of Carter, Ledyard & Milburn as to New
York income tax status of securities being
registered.
Exhibit 6.1 Consent of Baker & Daniels to the use of their
name under the headings "Tax Status of the Trust"
and "Legal Matters" (included in Exhibit 2.1).
Exhibit 6.2 Consent of Carter, Ledyard & Milburn to the use
of their name under the headings "Tax Status of
the Trust" and "Legal Matters" (included in
Exhibit 2.3).
**Exhibit 6.4 Powers of Attorney
****Exhibit 23 Consent of KPMG Peat Marwick LLP.
****Exhibit 27 Financial Data Schedule.
____________
II-1
<PAGE>
* Incorporated herein by reference to the corresponding Exhibit to Pre-
Effective Amendment No. 4 to the Registration Statement.
** Incorporated herein by reference to the corresponding Exhibit to Post-
Effective Amendment No. 2 to the Registration Statement.
*** Incorporated herein by reference to the corresponding Exhibit to the
original Registration Statement.
**** Filed herewith.
INDEX TO FINANCIAL STATEMENTS
I. The following financial statements of the Trust as of March 31, 1997, and
for its fiscal years ended March 31, 1997, 1996 and 1995, are included in
the Prospectus constituting Part I of this Post-Effective Amendment to the
Registration Statement:
Independent Auditors' Report
Statement of Assets and Liabilities
Schedule of Investments
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
All other financial statements, schedules and historical financial
information have been omitted as the subject matter is not required, not
present or not present in amounts sufficient to require submission.
II. The required financial statements of the Sponsor are incorporated herein by
reference to the Focus Report filed with the Securities and Exchange
Commission for the year ended December 31, 1996, and the quarter ended
March 31, 1997, by NatCity Investments, Inc. (File No. 8-16555).
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Midwest Equity Trust, Financial Securities Series 1, certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned thereunto duly authorized, in the City of Indianapolis and
State of Indiana, on the 28th day of July, 1997.
MIDWEST EQUITY TRUST
FINANCIAL SECURITIES SERIES 1
BY: NATCITY INVESTMENTS, INC., SPONSOR
By: *
---------------------------------------------
Herbert R. Martens, Jr.
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed on behalf of NatCity Investments,
Inc., the Sponsor, by the following persons in the capacities and on the date
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
President and Chief Executive Officer)
* (Principal Executive Officer) )
- ----------------------- )
Herbert R. Martens, Jr. )
Director )
* )
- ----------------------- )
David A. Daberko )
Director )
* )
- ----------------------- )
Otis Johnson, Jr. )
Director ) July 28, 1997
* )
- ----------------------- )
William H. Schecter )
Director )
* )
- ----------------------- )
L. Gene Tanner )
Chief Administrative Officer )
/s/ J. Douglas Townsend (Principal Financial and Accounting )
- ----------------------- Officer) )
J. Douglas Townsend )
)
*By: /s/ J. Douglas Townsend )
----------------------- )
J. Douglas Townsend )
Attorney-in-Fact )
II-3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
23 Consent of KPMG Peat Marwick LLP . .
27 Financial Data Schedule . . . . . . .
E-1
<PAGE>
EXHIBIT 23
KPMG PEAT MARWICK LLP
2400 FIRST INDIANA PLAZA, 135 NORTH PENNSYLVANIA STREET
INDIANAPOLIS, IN 46204-2452
The Sponsor and Trustee
Midwest Equity Trust
Financial Securities Series 1:
We consent to the use of our report included herein and to the reference to our
Firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Indianapolis, Indiana
July 28, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 3,660,703
<INVESTMENTS-AT-VALUE> 7,071,365
<RECEIVABLES> 16,589
<ASSETS-OTHER> 29,663
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,117,617
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 801
<TOTAL-LIABILITIES> 801
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,660,703
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 45,451
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,410,662
<NET-ASSETS> 7,116,817
<DIVIDEND-INCOME> 172,488
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 10,692
<NET-INVESTMENT-INCOME> 161,796
<REALIZED-GAINS-CURRENT> 183,222
<APPREC-INCREASE-CURRENT> 1,151,721
<NET-CHANGE-FROM-OPS> 1,496,739
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 163,281
<DISTRIBUTIONS-OF-GAINS> 228,099
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 13,951
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 896,930
<ACCUMULATED-NII-PRIOR> 30,595
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10,692
<AVERAGE-NET-ASSETS> 6,668,351
<PER-SHARE-NAV-BEGIN> 14.84
<PER-SHARE-NII> 0.39
<PER-SHARE-GAIN-APPREC> 3.29
<PER-SHARE-DIVIDEND> 0.39
<PER-SHARE-DISTRIBUTIONS> 0.56
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<PER-SHARE-NAV-END> 17.57
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
