As filed with the Securities and Exchange Commission on April 28, 1994
Registration No. 33-62898
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT No. 1
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
EQUITY SECURITIES TRUST, SERIES 3, SIGNATURE SERIES, GABELLI
COMMUNICATIONS INCOME TRUST
B. Name of depositor: BEAR, STEARNS & CO.
C. Complete address of depositor's principal executive offices:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
D. Name and complete address of agent for service:
Copy of comments to:
PETER J. DEMARCO MICHAEL R. ROSELLA, Esq.
Managing Director Battle Fowler
Bear, Stearns & Co. Inc. 280 Park Avenue
245 Park Avenue New York, New York 10017
New York, New York 10167 (212) 856-6858
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ X / on April 29, 1994 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on ( date ) pursuant to paragraph (a) of
Rule 485
<PAGE>
EQUITY SECURITIES TRUST,
SERIES 3,
SIGNATURE SERIES,
GABELLI COMMUNICATIONS INCOME TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 404 of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction as
to the Prospectus in Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust................... Front Cover of Prospectus
(b) Title of securities issued...... "
2. Name and address of each depositor.. The Sponsor
3. Name and address of trustee......... The Trustee
4. Name and address of principal
underwriters...................... The Sponsor
5. State of organization of trust...... Organization
6. Execution and termination of
trust agreement................... Trust Agreement, Amendment and
Termination
7. Changes of name..................... Not Applicable
8. Fiscal year......................... "
9. Litigation.......................... None
II. General Description of the Trust and Securities of the Trust
10. (a) Registered or bearer
securities...................... Certificates
(b) Cumulative or distributive
securities...................... Interest and Principal
Distributions
(c) Redemption...................... Trustee Redemption
(d) Conversion, transfer, etc....... Certificates, Sponsor
Repurchase, Trustee Redemption,
Exchange Privilege and
Conversion Offer
(e) Periodic payment plan........... Not Applicable
(f) Voting rights................... Trust Agreement, Amendment and
Termination
(g) Notice to certificateholders.... Records, Portfolio, Trust
Agreement, Amendment and
Termination, The Sponsor, The
Trustee
(h) Consents required............... Trust Agreement, Amendment and
Termination
(i) Other provisions................ Tax Status
11. Type of securities comprising
units.................. Objectives, Portfolio,
Description of Portfolio
12. Certain information regarding
periodic payment certificates..... Not Applicable
13. (a) Load, fees, expenses, etc....... Summary of Essential
Information, Offering Price,
Volume and Other Discounts,
Sponsor's and Underwriters'
Profits, Total Reinvestment
Plan, Trust Expenses and Charges
(b) Certain information regarding
periodic payment certificates... Not Applicable
(c) Certain percentages............. Summary of Essential
Information, Offering Price,
Total Reinvestment Plan
(d) Price differences............... Volume and Other Discounts
(e) Other loads, fees, expenses..... Certificates
(f) Certain profits receivable by
depositors, principal
underwriters, trustee or
affiliated persons.............. Sponsor's and Underwriters'
Profits
(g) Ratio of annual charges to
income....................... Not Applicable
14. Issuance of trust's securities...... Organization, Certificates
15. Receipt and handling of payments
from purchasers................... Organization
16. Acquisition and disposition of
underlying securities............. Organization, Objectives,
Portfolio, Portfolio Supervision
17. Withdrawal or redemption............ Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Sponsor Repurchase, Trustee
Redemption
18. (a) Receipt, custody and disposition
of income........... Distribution Elections, Interest
and Principal Distributions,
Records, Total Reinvestment Plan
(b) Reinvestment of distributions... Total Reinvestment Plan
(c) Reserves or special funds....... Interest and Principal
Distributions
(d) Schedule of distributions....... Not Applicable
19. Records, accounts and reports....... Records, Total Reinvestment Plan
20. Certain miscellaneous provisions
of trust agreement................ Trust Agreement, Amendment and
Termination
(a) Amendment....................... "
(b) Termination..................... "
(c) and (d) Trustee, removal and
successor....................... The Trustee
(e) and (f)Depositor, removal and
successor................... The Sponsor
21. Loans to security holders........... Not Applicable
22. Limitations on liability............ The Sponsor, The Trustee, The
Evaluator
23. Bonding arrangements................ Part II--Item A
24. Other material provisions
of trust agreement................ Not Applicable
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of depositor........... The Sponsor
26. Fees received by depositor.......... Not Applicable
27. Business of depositor............... The Sponsor
28. Certain information as to
officials and affiliated
persons of depositor.............. Part II--Item C
29. Voting securities of depositor...... Not Applicable
30. Persons controlling depositor....... "
31. Payments by depositor for certain
services rendered to trust........ "
32. Payment by depositor for certain
other services rendered to trust.. "
33. Remuneration of employees of
depositor for certain services
rendered to trust................... "
34. Remuneration of other persons for
certain services rendered to trust.. "
IV. Distribution and Redemption of Securities
35. Distribution of trust's
securities by states.............. Distribution of Units
36. Suspension of sales of
trust's securities................ Not Applicable
37. Revocation of authority
to distribute..................... "
38. (a) Method of distribution.......... Distribution of Units, Total
Reinvestment Plan
(b) Underwriting agreements......... "
(c) Selling agreements.............. "
39. (a) Organization of principal
underwriters.................... The Sponsor
(b) N.A.S.D. membership of principal
underwriters.......... "
40. Certain fees received by
principal underwriters............ Not Applicable
41. (a) Business of principal
underwriters.................... The Sponsor
(b) Branch offices of principal
underwriters.................... Not Applicable
(c) Salesmen of principal
underwriters.................... "
42. Ownership of trust's
securities by certain persons..... "
43. Certain brokerage commissions
received by principal
underwriters...................... "
44. (a) Method of valuation............. Summary of Essential
Information, Offering Price,
Accrued Interest, Volume and
Other Discounts, Total
Reinvestment Plan, Distribution
of Units
(b) Schedule as to offering price... Not Applicable
(c) Variation in offering price
to certain persons.............. Distribution of Units, Total
Reinvestment Plan, Volume and
Other Discounts
45. Suspension of redemption rights..... Trustee Redemption
46. (a) Redemption valuation............ Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Trustee Redemption
(b) Schedule as to
redemption price................ Not Applicable
47. Maintenance of position in
underlying securities............. Comparison of Public Offering
Price, Sponsor's Repurchase
Price and Redemption Price,
Sponsor Repurchase, Trustee
Redemption
V. Information Concerning the Trustee or Custodian
48. Organization and regulation
of trustee........................ The Trustee
49. Fees and expenses of trustee........ Trust Expenses and Charges
50. Trustee's lien...................... "
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of
trust's securities................ Not Applicable
VII. Policy of Registrant
52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities...................... Objectives, Portfolio, Portfolio
Supervision
(b) Transactions involving
elimination of underlying
securities...................... Not Applicable
(c) Policy regarding substitution
or elimination of underlying
securities...................... Objectives, Portfolio, Portfolio
Supervision, Substitution of
Bonds
(d) Fundamental policy not
otherwise covered............... Not Applicable
53. Tax status of trust................. Tax Status
VIII. Financial and Statistical Information
54. Trust's securities during
last ten years.................... Not Applicable
55. Hypothetical account for issuers
of periodic payment plans......... "
56. Certain information regarding
periodic payment certificates..... "
57. Certain information regarding
periodic payment plans............ "
58. Certain other information
regarding periodic payment plans.. "
59. Financial Statements
(Instruction 1(c) to Form S-6)...... Statement of Financial Condition
<PAGE>
Note: Part A of This Prospectus May Not Be
Distributed Unless Accompanied by Part B.
EQUITY SECURITIES TRUST
SERIES 3
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
The Trust is a unit investment trust designated Equity Securities
Trust, Series 3, Signature Series, Gabelli Communications Income Trust
("Communications Trust" or "Trust"). The Sponsors is Bear, Stearns &
Co. Inc. The objectives of the Communications Trust are to seek to
achieve capital appreciation together with a high level of current
income. In addition, it is the Trust's objective to achieve growth in
income with the growth in capital. Neither the Sponsors nor the
Portfolio Consultant can give assurance that the Trust's objectives can
be achieved. The Trust contains an underlying portfolio consisting
primarily of common stock, convertible securities, preferred stock and
American Depository Receipts ("ADRs") and contracts and funds for the
purchase of such securities (collectively, the "Securities"), which
have been purchased by the Trust based upon the recommendations of the
portfolio consultant, Gabelli Funds, Inc. (the "Portfolio Consultant").
The Trust is concentrated in the equity securities of communications
companies located both within and outside the United States. There are
certain risks inherent in an investment in common stock, convertible
securities and ADRs of companies in the communications industry. See
"Special Risk Considerations" in Part A and Part B of this Prospectus.
Minimum Purchase: 100 Units
This Prospectus consists of two parts. Part A contains the Summary of
Essential Information including descriptive material relating to the
Trust as of December 31, 1993 (the "Evaluation Date"), a summary of
certain specific information regarding the Trust and audited financial
statements of the Trust, including the Portfolio as of the Evaluation
Date. Part B contains general information about the Trust.
Investors should read and retain both parts of 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 COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED APRIL 29, 1994
<PAGE>
THE TRUST
The Trust is a unit investment trust designated Equity Securities
Trust, Series 3, Signature Series, Gabelli Communications Income Trust
("Communications Trust" or "Trust"). The Sponsors are Bear, Stearns & Co.
Inc. The objectives of the Communications Trust are to seek to achieve
capital appreciation together with a high level of current income. In
addition, it is the Trust's objective to achieve growth in income with the
growth in capital. Neither the Sponsors nor the Portfolio Consultant can
give assurance that the Trust's objectives can be achieved. The Trust
contains an underlying portfolio consisting primarily of common stock,
convertible securities, preferred stock, American Depository Receipts
("ADRs") and contracts and funds for the purchase of such securities
(collectively, the "Securities"), which have been purchased by the Trust
based upon the recommendations of the portfolio consultant, Gabelli Funds,
Inc. (the "Portfolio Consultant"). In selecting Securities for the Trust,
the Portfolio Consultant normally will consider the following factors,
among others: (1) the Portfolio Consultant's own evaluations of the
private market value of the underlying assets and business of the issuers
of the Securities; (2) the interest or dividend income generated by the
Securities; (3) the potential for capital appreciation for the Securities;
(4) the prices of the Securities relative to other comparable securities;
(5) whether the Securities are entitled to the benefits of sinking funds
or other protective conditions; (6) the existence of any anti-dilution
protections of the Security; and (7) the diversification of the Trust's
portfolio as to issuers. The Trust is concentrated in the equity
securities of communications companies located both within and outside the
United States. All of the Securities which are issued by foreign issuers
are in the form of ADRs or are listed on a U.S. stock exchange. There are
certain risks inherent in an investment in a portfolio of domestic common
stocks, ADRs and convertible securities of companies in the communications
industry. See "Special Risk Considerations" in this Part A and in Part B.
The Trust will terminate on the earlier of August 17, 1996 (the "Mandatory
Termination Date") or the disposition of the last security in the Trust.
Upon termination, Certificateholders may elect to receive their
terminating distributions in cash, in the form of in-kind distributions of
the Trust's Securities or may utilize their terminating distributions to
purchase units of a future series of the Trust at a reduced sales charge.
See "Termination" in this Part A and "Trust Administration--Trust
Termination" in Part B.
The Portfolio Consultant is not a Sponsor of the Trust. The Portfolio
Consultant has been retained by the Sponsors, at its expense, to utilize
its equity expertise in selecting the Securities deposited in the Trust.
The Portfolio Consultant's only responsibilities with respect to the
Trust, in addition to its role in portfolio selection, is to monitor the
Securities in the Portfolio and make recommendations to the Sponsors in
certain circumstances regarding the disposition of the Securities held by
the Trust. The Sponsors has not obligated to adhere to the
recommendations of the Portfolio Consultant regarding the disposition of
Securities. The Sponsors have the sole authority to direct the Trustee to
dispose of Securities under the Trust Agreement. See "Trust
Administration--The Portfolio Consultant" in Part B for a description of
the Portfolio Consultant's responsibilities.
With the deposit of the Securities in the Trust on the initial Date of
Deposit, the Sponsors established a proportionate relationship among the
aggregate value of the specified Securities in the Trust. Subsequent to
the initial Date of Deposit, the Sponsors may, but is not obligated to,
deposit from time to time additional Securities in the Trust ("Additional
Securities") or contracts to purchase Additional Securities, maintaining
to the extent practicable the original proportionate relationship of the
number of shares of each Security in the Trust portfolio immediately prior
to such deposit, thereby creating additional Units which will be offered
to the public by means of this Prospectus. These additional Units will
each represent, to the extent practicable, an undivided interest in the
same number and type of securities of identical issuers as are represented
by Units issued on the initial Date of Deposit. It may not be possible to
maintain the exact original proportionate relationship among the number of
shares of Securities in the Trust portfolio on the initial Date of Deposit
with the deposit of Additional Securities because of, among other reasons,
purchase requirements, changes in prices, or the unavailability of
Securities. The number and identity of Securities in the Trust will be
adjusted to reflect the disposition of Securities and/or the receipt of a
stock dividend, a stock split or other distribution with respect to such
Securities or the reinvestment of the proceeds distributed to
Certificateholders. The portfolio of the Trust may change slightly based
on such disposition and reinvestment. Securities received in exchange for
shares will be similarly treated. Substitute Securities may be acquired
under specified conditions when Securities originally deposited in the
Trust are unavailable (see "The Trust--Substitution of Securities" in
Part B). As additional Units are issued by the Trust as a result of the
deposit of Additional Securities by the Sponsors, the aggregate value of
the Securities in the Trust will be increased and the fractional undivided
interest in the Trust represented by each Unit will be decreased.
Units in the Trust represent a 1/11353557th undivided interest in the
principal and net income of the Trust. (See "The Trust--Organization" in
Part B) The Units being offered hereby include issued and outstanding
Units which have been purchased by the Sponsors in the secondary market
maintained by the Sponsors. The Sponsor makes a primary over-the-counter
market in the shares of Portfolio No. 22. The Sponsors has not
participated as an underwriter, manager or co-manager of a public offering
of the securities of any of the issuers in the Trust portfolio.
SPECIAL RISK CONSIDERATIONS
An investment in Units of the Trust should be made with an
understanding of the risks inherent in any investment in such Securities
including: (i) for common stocks, the risk that the financial condition
of the issuers of the Securities may become impaired or that the general
condition of the stock market may worsen (both of which may contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units); (ii) for ADRs the risks associated with government,
economic, monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, and global or regional political,
economic or banking crises; and (iii) for convertible securities that are
rated lower than investment grade (i.e., "high yield" or "junk bond"
status) the increased risk as to the timely repayment of principal and
timely payment of interest or dividends on such Securities. (See "Special
Risk Considerations" in Part B of this Prospectus.) The portfolio of the
Trust is fixed and not "managed" by the Sponsor or the Portfolio
Consultant. All the Securities in the Trust are liquidated during a
60-day period prior to the Mandatory Termination Date of the Trust. Since
the Trust will not sell Securities in response to ordinary market
fluctuation, but only at the Trust's termination, the amount realized upon
the sale of the Securities may not be the highest price attained by an
individual Security during the life of the Trust.
PUBLIC OFFERING PRICE
The Public Offering Price per 100 Units of the Trust is equal to the
aggregate value of the underlying Securities (the price at which they
could be directly purchased by the public assuming they were available) in
the Trust divided by the number of Units outstanding times 100 plus a
sales charge of 3.9% of the Public Offering Price per 100 Units (excluding
any transaction fees) or 4.058% of the net amount invested in Securities
per 100 Units during the initial public offering period. (See "Summary of
Essential Information.") In addition, the net amount invested in
Securities will involve a proportionate share of amounts in the Income
Account and Principal Account, if any. For additional information
regarding the Public Offering Price, the descriptions of dividend and
principal distributions, repurchase and redemption of Units and other
essential information regarding the Trust, see the Summary of Essential
Information for the Trust. During the initial offering period orders
involving at least 10,000 Units will be entitled to a volume discount from
the Public Offering Price. The Public Offering Price per Unit may vary on
a daily basis in accordance with fluctuations in the aggregate value of
the underlying Securities. (See "Public Offering" in Part B.) The figures
above assume a purchase of 100 Units. The price of a single Unit, or any
multiple thereof, is calculated by dividing the Public Offering Price per
100 Units by 100 and multiplying by the number of Units. If the
Securities appreciate in value, purchasers of Units after the occurrence
of such appreciation will acquire their Units subject to a contingent
liability for the income tax inherent in the appreciated Securities. (See
"Tax Status" in Part B.)
DISTRIBUTIONS
Distributions of dividends received, less expenses, will be made by the
Trust monthly on the 15th day of every month (the "Monthly Distribution
Date"). Distributions of capital gains realized, if any, will be made to
Certificateholders of record on the record date immediately preceding such
Monthly Distribution Date. (See "Rights of Certificateholders--
Distributions" in Part B).
MARKET FOR UNITS
The Sponsors, although not obligated to do so, presently maintains and
intends to continue to maintain a secondary market for the Units of the
Trust. The secondary market repurchase price will be based on the market
value of the Securities in the Trust portfolio. (See "Liquidity--Sponsors
Repurchase" for a description on how the secondary market repurchase price
will be determined.) If a market is not maintained a Certificateholder
will be able to redeem his Units with the Trustee. (See "Liquidity--
Trustee Redemption" in Part B.) Some of the Securities in the Trust
portfolio have been purchased in ADR form in United States dollars.
However, ADRs are not necessarily listed on a national securities
exchange. The principal trading market for certain other Securities may
be in the over-the-counter market. As a result, the existence of a liquid
trading market for these Securities may depend on whether dealers will
make a market in these Securities. There can be no assurance of the
making or the maintenance of a market for any of the Securities contained
in the Trust portfolio or of the liquidity of the Securities in any
markets made. In addition, the Trust may be restricted under the
Investment Company Act of 1940 from selling Securities to the Sponsors.
The price at which the Securities may be sold to meet redemptions and the
value of the Units will be adversely affected if trading markets for the
Securities are limited or absent.
TOTAL REINVESTMENT PLAN
Distributions from the Trust are made to Certificateholders monthly.
The Certificateholder has the option, however, of either receiving his
dividend check, together with any principal payments, from the Trustee or
participating in a reinvestment program offered by the Sponsors in shares
of GOC Fund, Inc., U.S. Treasury Money Market Portfolio (the "Fund").
Gabelli-O'Connor Fixed Income Mutual Funds Management Co. serves as the
investment adviser of the Fund and GOC Fund Distributors, Inc. serves as
distributor for the Fund. Participation in the reinvestment option is
conditioned on the Fund's lawful qualification for sale in the state in
which the Certificateholder is a resident. The Plan is not designed to be
a complete investment program. See "Total Reinvestment Plan" in Part B
for details on how to enroll in the Total Reinvestment Plan and how to
obtain a Fund prospectus.
TERMINATION
During the 60-day period prior to the Mandatory Termination Date (three
years after the initial Date of Deposit) (the "Liquidation Period"),
Securities will begin to be sold in connection with the termination of the
Trust and all Securities will be sold by the Mandatory Termination Date.
The Trustee may utilize the services of the Sponsors for the sale of all
or a portion of the Securities in the Trust. The Sponsor will receive
brokerage commissions from the Trust in connection with such sales in
accordance with applicable law. The Sponsors will determine the manner,
timing and execution of the sales of the underlying Securities.
Certificateholders may elect one of the three options in receiving their
terminating distributions. Certificateholders may elect: (1) to receive
their pro rata share of the underlying Securities in kind, if they own
units in aggregate value of at least $25,000, (2) to receive cash upon the
liquidation of their pro rata share of the underlying Securities or
(3) subject to the receipt by the Trust of an appropriate exemptive order
from the Securities and Exchange Commission, to invest the amount of cash
they would have received upon the liquidation of their pro rata share of
the underlying Securities in units of a future series of the Trust (if one
is offered) at a reduced sales charge. See "Trust Administration--Trust
Termination" in Part B for a description of how to select a termination
distribution option.
The Sponsors will attempt to sell the Securities as quickly as they can
during the Liquidation Period without, in their judgment, materially
adversely affecting the market price of the Securities, but all of the
Securities will in any event be disposed of by the end of the Liquidation
Period. The Sponsors does not anticipate that the period will be longer
than 60 days, and it could be as short as one day, depending on the
liquidity of the Securities being sold. The liquidity of any Security
depends on the daily trading volume of the Security and the amount that
the Sponsors has available for sale on any particular day.
It is expected (but not required) that the Sponsors will generally
follow the following guidelines in selling the Securities: for highly
liquid Securities, the Sponsors will generally sell Securities on the
first day of the Liquidation Period; for less liquid Securities, on each
of the first two days of the Liquidation Period, the Sponsors will
generally sell any amount of any underlying Securities at a price no less
than 1/2 of one point under the last closing sale price of those
Securities. On each of the following two days, the price limit will
increase to one point under the last closing sale price. After four days,
the Sponsors intend to sell at least a fraction of the remaining
underlying Securities, the numerator of which is one and the denominator
of which is the total number of days remaining (including that day) in the
Liquidation Period, without any price restrictions.
During the Liquidation Period, Certificateholders who have not chosen
to receive distributions-in-kind will be at risk to the extent that
Securities are not sold; for this reason the Sponsors will be inclined to
sell the Securities in as short a period as they can without materially
adversely affecting the price of the Securities. However,
Certificateholders who have chosen to receive distributions-in-kind upon
liquidation of the Trust should be aware that this will be a taxable event
to such Certificateholder, and that the Certificateholder will recognize
taxable gain or loss (equal to the difference between such
Certificateholder's tax basis in his Units and the fair market value of
Securities received upon liquidation), which will be a capital gain or
loss except in the case of a dealer in securities. (See "Tax Status" in
this Part B.) Certificateholders should consult their own tax advisers in
this regard.
<PAGE>
EQUITY SECURITIES TRUST, SERIES 3
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1993
<TABLE>
<S> <C>
DATE OF DEPOSIT*: June 17, 1993 LIQUIDATION PERIOD: Beginning 60
AGGREGATE VALUE OF SECURITIES** $116,492,968 days prior to the Mandatory
AGGREGATE VALUE OF SECURITIES Termination Date.
PER 100 UNITS . . . . . . . . . $1,026.05 MINIMUM VALUE OF TRUST: The Trust
NUMBER OF UNITS . . . . . . . . . 11,353,557 may be terminated if the value of
FRACTIONAL UNDIVIDED INTEREST the Trust is less than 40% of the
IN TRUST . . . . . . . . . . . 1/11353557 aggregate value of the Securities at
SECONDARY MARKET PUBLIC the completion of the Deposit
OFFERING PRICE*** Period.
Aggregate Value of Securities MANDATORY TERMINATION DATE: The
in Trust** . . . . . . . $116,492,968 earlier of August 17, 1996 or the
Divided By 11,353,557 Units disposition of the last Security in
(times 100) . . . . . . . . . . $1,026.05 the Trust.
Plus Sales Charge of 3.9% of Public TRUSTEE****: United States Trust
Offering Price per 100 units . $41.64 Company of New York.
Public Offering Price per TRUSTEE'S ANNUAL FEE: $.90 per 100
100 Units . . . . . . . . . . $1,067.69 Units outstanding.
SPONSORS' REPURCHASE PRICE PORTFOLIO CONSULTANT: Gabelli Funds,
AND REDEMPTION PRICE PER Inc.
100 UNITS . . . . . . . . . . . $1,026.05 OTHER ANNUAL FEES AND EXPENSES: $.63
EXCESS OF SECONDARY MARKET per 100 Units outstanding.
PUBLIC OFFERING PRICE OVER SPONSORS: Bear, Stearns & Co. Inc.
REDEMPTION PRICE PER 100 UNITS $41.64 SPONSORS' ANNUAL SUPERVISORY FEE:
EVALUATION TIME: 4:00 p.m. New York Time. Maximum of $.25 per 100 Units
MINIMUM PRINCIPAL DISTRIBUTION:
$1.00 per 100 Units outstanding (see "Trust Expenses and
Charges" in Part B).
RECORD DATE: First of each month.
DIVIDEND DISTRIBUTION DATE:
Fifteenth of each month.
_____________________________
* The Date of Deposit is the date on which the Trust Agreement was
signed and the initial deposit of Securities with the
Trustee was made.
** Includes accrued income receivable.
*** For information regarding offering price per unit and applicable
sales charges under the Total Reinvestment Plan, see "Total
Reinvestment Plan" in Part B of this Prospectus.
**** The Trustee maintains its corporate trust office at 770 Broadway,
New York, NY 10003 (Tel. No. 1-800-428-8890). For
information regarding redemption by the Trustee, see "Trustee
Redemption" in Part B of this Prospectus.
</TABLE>
<PAGE>
INFORMATION REGARDING THE TRUST AS OF DECEMBER 31, 1993
DESCRIPTION OF PORTFOLIO*
Number of Issues: 41 (41 issuers)
Domestic Issuers: 31 (83.66% of the aggregate market value of
securities)
Foreign Issuers: 10 (16.34% of the aggregate market value of securities)
(NYSE 90.67%; AMEX 1.72%; Over the Counter 7.61%)
Ratings of Convertible Securities: (BBB + .64% Portfolio No. 40; BB +
8.47% Portfolio No. 39; B1 1.02%
Portfolio No. 41; CCC +
2.78% Portfolio No. 36; Caa 2.95% Portfolio Nos. 37, 38 and 42
144A Stock: (1.30% Portfolio No. 40)
Common Stocks 75.64%; Convertible Securities 13.72%;
Preferred Stock 2.07%; ADRs 8.57
Number of Issues by Industry:
Cable, 2 (2.12%); Cellular, 5 (9.60%);
Publishing/Entertainment, 1 (6.41%)
and Telecommunications, 33 (81.87%).
Percentage of Portfolio by Country of Organization or
Principal Place of Business of Issuers:
Brazil .96%
Canada 3.79%
Chile .58%
Hong Kong .71%
Mexico 1.42%
New Zealand 1.21%
Philippines .23%
Spain 2.80%
United Kingdom 4.62%
United States 83.68%
* Changes in the Trust Portfolio: On January 6, 1994, the Trust
received one share for each share of Lincoln Telecommunications
(Portfolio No. 11) held by the Trust for an aggregate of 27,652
shares, to effect a 2 for 1 stock split. On January 18, 1994,
the Trust received one share for each share of Lincoln
Telecommunications (Portfolio No. 11) held by the Trust for an
aggregate of 49 shares, to effect a 2 for 1 stock split. On
January 24, 1994, the Trust received one share for each share
of Ameritech Corp. (Portfolio No. 2) held by the Trust for an
aggregate of 68,089 shares, to effect a 2 for 1 stock split.
<PAGE>
<TABLE>
FINANCIAL AND STATISTICAL INFORMATION
Selected data for each Unit of the Trust outstanding for the periods listed below:
<CAPTION>
Distributions of Distributions of
Net Asset* Interest During Principal During
Value the Period the Period
Period Ended Units Outstanding per 100 Units (per 100 Units) (per 100 Units)
<S> <C> <C> <C> <C>
December 31, 1993 11,353,557 $1,019.55 $77.00 - 0 -
* Net Asset Value per 100 Units is calculated by dividing net assets
as disclosed in the "Statement of Net Assets" by the numbe
units outstanding as of the date of the Statement of Net Assets.
See Note 5 of Notes to Financial Statements for a description
of the components of New Assets.
</TABLE>
<PAGE>
Independent Auditors' Report
The Sponsor, Trustee and Certificateholders
Equity Securities Trust Series 3,
Signature Series, Gabelli Communications Income Trust
We have audited the accompanying statement of net assets, including the
portfolio, of Equity Securities Trust Series 3, Signature Series, Gabelli
Communications Income Trust as of December 31, 1993, and the related
statement of operations, and changes in net assets for the period June 17,
1993 (date of initial deposit) to December 31, 1993. These financial
statements are the responsibility of the Trustee (see note 2). Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993, by correspondence with the
Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Equity
Securities Trust Series 3, Signature Series, Gabelli Communications
Income Trust as of December 31, 1993, and the results of its
operations and the changes in its net assets for the period June 17,
1993 to December 31, 1993 in conformity with generally accepted
accounting principles.
KPMG Peat Marwick
New York, New York
March 31, 1994
<PAGE>
<TABLE>
EQUITY SECURITIES TRUST SERIES 3,
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
Statement of Net Assets
December 31, 1993
<S> <C>
Investments in marketable securities,
at market value (cost $108,720,753) $ 116,224,161
Excess of total liabilities over other assets (468,913)
--------------
Net assets (11,353,557 units of fractional undivided
interest outstanding, $10.20 per unit) $ 115,755,248
==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
EQUITY SECURITIES TRUST SERIES 3,
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
Statement of Operations
<CAPTION>
For the Period
June 17, 1993
(date of initial deposit)
to December 31, 1993
----- ------------ -------
<S> <C>
Investment Income:
Interest Income $ 295,550
Dividend Income 1,155,409
------------
Total Investment Income 1,450,959
Expenses:
Trustee's fees 68,317
------------
Investment income, net 1,382,642
Realized and unrealized gain on investments:
Realized gain on securities sold or called 288,830
Unrealized appreciation
of investments for the period 7,503,408
------------
Net gain on investments 7,792,238
------------
Net increase in net
assets resulting
from operations $ 9,174,880
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
EQUITY SECURITIES TRUST SERIES 3,
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
Statement of Changes in Net Assets
<CAPTION>
For the Period
June 17, 1993
(date of initial deposit)
to December 31, 1993
-----------------------------
<S> <C>
Operations:
Investment income, net $ 1,382,642
Realized gain on securities sold or called 288,830
Unrealized appreciation
of investments for the period 7,503,408
-------------
Net increase in net
assets resulting
from operations 9,174,880
-------------
Distributions:
To Certificateholders:
Investment income 1,811,324
Principal 37,795
Redemptions:
Interest 5,798
Principal 1,737,849
-------------
Total distributions and redemptions 3,592,766
-------------
Total increase 5,582,114
Value of additional units acquired during offering period 109,972,004
Net assets at date of deposit 201,130
-------------
Net assets at end of period (including
distributions in excess of net investment income
of $434,480) $ 115,755,248
=============
See accompanying notes to financial statements.
</TABLE>
EQUITY SECURITIES TRUST SERIES 3
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
Notes to Financial Statements
December 31, 1993
(1) Organization
Equity Securities Trust Series 3, Signature Series, Gabelli Communications
Income Trust (Trust) was organized on June 17, 1993 by Bear, Stearns
& Co. Inc. (Sponsor) under the laws of the State of New York by a Trust
Indenture and Agreement, and is registered under the Investment Company
Act of 1940. On June 17, 1993 (date of initial deposit) the Trust had
20,986 units outstanding. During the period June 17, 1993 to December 31,
1993 (the offering period) the Trust issued an additional 11,444,282
units bringing total units issued to 11,465,268.
(2) Summary of Significant Accounting Policies
United States Trust Company of New York (Trustee) has custody of and
responsibility for the accounting records and financial statements of
the Trust and is responsible for establishing and maintaining a system
of internal control related thereto.
The Trustee is also responsible for all estimates of expenses and
accruals reflected in the Trust's financial statements. The
accompanying financial statements have been adjusted to record the
unrealized appreciation (depreciation) of investments and to record
interest income and expenses on the accrual basis.
Investments are carried at market value which is determined by United
States Trust Company of New York (Evaluator) based upon the closing bid
prices of the securities at the end of the period, except that the
market value on the date of deposit represents the cost to the Trust
based on the offering prices for investments at that date. The
difference between cost and market value is reflected as unrealized
appreciation (depreciation) of investments. Securities transactions
are recorded on the trade date. Realized gains (losses) from securities
transactions are determined on the basis of average cost of the
securities sold or redeemed.
(3) Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the Trust intends to qualify for and elect
the tax treatment applicable to regulated investment companies under
the Internal Revenue Code. Under existing law, if the Trust so
qualifies, it will not be subject to federal income tax on net income
and capital gains that are distributed to unit holders.
(4) Trust Administration
The fees and expenses of the Trust are incurred and paid on the basis
set forth under "Trust Expenses and Charges" in Part B of this
Prospectus. The Trust Indenture and Agreement provides for income
distributions as often as monthly (depending upon the distribution plan
elected by the Certificateholders).
The Trust Indenture and Agreement further requires that principal
received from the disposition of securities, be distributed to
Certificateholders.
See "Financial and Statistical Information" in Part A of this Prospectus
for the amounts of per unit distributions during the period ended
December 31, 1993.
The Trust Indenture and Agreement also requires the Trust to redeem
units tendered. 111,711 units were redeemed during the period ended
December 31, 1993.
(5) Net Assets
At December 31, 1993, the net assets of the Trust represented the
interest of Certificateholders as follows:
Original cost to Certificateholders $ 209,292
Less initial gross underwriting commission (8,162)
201,130
Cost of additional units acquired
during the offering
period to Certificateholders 114,434,968
Less gross underwriting commission (4,462,964)
109,972,004
Cost of securities sold or called (1,452,381)
Net unrealized appreciation 7,503,408
Distributions in excess of net
net investment income (434,480)
Distributions in excess of proceeds
from securities sold or called (34,433)
Total $ 115,755,248
The original cost to Certificateholders, less the initial gross
underwriting commission, represents the aggregate initial public
offering price net of the applicable sales charge on 11,465,268
units of fractional undivided interest of the Trust as of
December 31, 1993 (end of the offering period).
<PAGE>
<TABLE>
EQUITY SECURITIES TRUST SERIES 3,
SIGNATURE SERIES, GABELLI COMMUNICATIONS INCOME TRUST
PORTFOLIO
December 31, 1993
<CAPTION>
Port- Face amount/ Cost
folio Number of
No. of shares Description Securities Market Value
--- ----------------- ---------------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
COMMON STOCK
Telecommunications 1 21,151 shs. ALLTEL Corp. $591,514 $623,955
2 68,462 shs. Ameritech 5,585,458 5,254,459
3 95,179 shs. AT&T 5,836,040 4,996,898
4 126,349 shs. Bell Canada 4,335,423 4,406,421
5 107,982 shs. Bell Atlantic 6,433,450 6,451,925
6 102,972 shs. Bell South Corp. 5,877,040 5,959,505
7 92,953 shs. Cincinnati Bell 2,109,071 1,673,154
8 52,321 shs. Communications 1,600,956 1,556,550
Satellite
9 32,283 shs. Citizens Utilities Co. 544,698 581,094
10 188,133 shs. GTE Corp. 6,874,603 6,584,655
11 27,830 shs. Lincoln 914,237 1,029,710
Telecommunications
12 40,076 shs. MCI Communications 1,130,348 1,132,147
13 125,793 shs. NYNEX Corp. 5,650,560 5,047,444
14 74,028 shs. Pacific Telecom 1,827,143 1,924,728
15 184,236 shs. Pacific Telesis 5,496,784 9,948,744
16 3,340 shs. Philippine Long 206,366 270,958
Distance
17 13,915 shs. Rochester Telephone 604,252 627,914
18 6,679 shs. Scientific-Atlanta 217,887 220,407
19 144,161 shs. Southern New England 5,142,961 5,207,816
Telecom
20 140,264 shs. Southwestern Bell 5,732,389 5,820,956
21 35,623 shs. Sprint Corp. 1,242,916 1,237,899
22 33,396 shs. Telebras-Telecommunications 1,096,111 1,118,766
Brasil, S.A.
23 83,491 shs. Telefonica de Espana, 2,825,988 3,256,149
S.A.
24 150,840 shs. US West 7,008,985 6,919,785
Cellular 25 10,576 shs. LIN Broadcasting 1,119,432 1,168,648
26 38,406 shs. Telephone and Data 1,819,992 2,001,913
Systems
27 31,726 shs. Vodafone Group 2,369,484 2,831,546
Cable 28 1,670 shs. QVC Network 111,319 65,965
-------------- -------------------
Common Stock Sub-Total 84,305,407 87,920,111
-------------- -------------------
PREFERRED STOCK
Cable 29 26,160 shs. Liberty Media 1,846,545 2,406,720
-------------- -------------------
Corporation
ADRs:
Telecommunications 30 42,859 shs. British 2,806,874 3,048,346
Telecommunications
31 96,848 shs. Cable and Wireless plc 1,843,374 2,324,352
32 13,358 shs. Hong Kong 628,673 831,536
Telecommunications
Limited
33 27,830 shs. New Zealand Telecom 1,044,995 1,408,894
Corporation
34 6,679 shs. Telefonos de Chile, 490,615 680,423
S.A.
35 24,491 shs. Telefonos de Mexico, 1,229,556 1,653,143
-------------- -------------------
S.A. de C.V.
-------------- -------------------
ADRS sub-total 8,044,087 9,946,694
-------------- -------------------
CONVERTIBLE
SECURITIES
Cellular 36 2,226,400 Cellular Communications 3,393,194 4,074,312
of Puerto Rico, Inc.
Conv. Sr. Sub. Notes 8
1/4% due 2000
37 1,113,200 Cellular Inc. Conv. 1,061,653 1,090,936
Sub. Deb. 6 3/4% due
2009
Publishing/
Entertainment 38 7,079,700 Time Warner Inc. Conv. 6,885,392 7,460,234
Sub. Deb. 8 3/4% due
2015
Telecommunications 39 556,600 Century Tel. Ent. Conv. 735,614 664,441
Sub. Deb. 6% due 2007
40 1,113,200 General Instruments 1,281,421 1,513,952
Corp. Conv. Jr. Sub.
Notes 5 1/2% due 2000
41 1,113,200 M/A Communications 1,167,440 1,146,761
-------------- -------------------
Conv. Sub. Deb. 9 1/4%
due 2006
Convertible Securities 14,524,714 15,950,636
-------------- -------------------
sub-total
Total Investment in $108,720,753 $116,224,161
============== ===================
Securities
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<PAGE>
Note: PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
Please Read and Retain Both Parts
of this Prospectus for Future Reference
EQUITY SECURITIES TRUST
SERIES 3
SIGNATURE SERIES
GABELLI COMMUNICATIONS INCOME TRUST
PROSPECTUS PART B
Dated: April 29, 1994
THE TRUST
ORGANIZATION
"Equity Securities Trust, Series 3, Signature Series, Gabelli
Communications Income Trust" consists of the "unit investment trusts"
designated as set forth in Part A.* The Trust was created under the laws
of the State of New York pursuant to the Trust Indenture and Agreements**
(the "Trust Agreement"), dated the initial Date of Deposit, among Bear,
Stearns & Co. Inc., as Sponsor, and United States Trust Company of New
York as Trustee.
* This Part B relates to the outstanding series of Equity Securities
Trust, Series 3, Signature Series, Gabelli Communications Income Trust,
reflected in Part A attached hereto.
** References in this Prospectus to the Trust Agreements are qualified in
their entirety by the respective Trust Indentures and Agreements which
are incorporated herein by reference.
<PAGE>
On the initial Date of Deposit, the Sponsor deposited with the Trustee
common stock, convertible securities, preferred stock and American
Depository Receipts ("ADRs") including funds and delivery statements
relating to contracts for the purchase of certain such securities
(collectively, the "Securities") with an aggregate value as set forth in
Part A and cash or an irrevocable letter of credit issued by a major
commercial bank in the amount required for such purchases. Thereafter the
Trustee, in exchange for the Securities so deposited, delivered to the
Sponsor the Certificates evidencing the ownership of all Units of the
Trust. The Sponsor has a limited right to substitute other securities in
the Trust portfolio in the event of a failed contract. See "The Trust--
Substitution of Securities". The Sponsor may also, in certain
circumstances, direct the Trustee to dispose of certain Securities if the
Sponsor believes that, because of market or credit conditions, or for
certain other reasons, retention of the Security would be detrimental to
Certificateholders. (See "Trust Administration--Portfolio Supervision.")
Each "Unit" outstanding on the Evaluation Date represented an undivided
interest or pro rata share in the Securities of the Trust in the ratio of
one hundred Units for the indicated amount of the aggregate market value
of the Securities set forth in the "Summary of Essential Information". To
the extent that any Units are redeemed by the Trustee, the fractional
undivided interest or pro rata share in such Trust represented by each
unredeemed Unit will increase, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by
Certificateholders, which may include the Sponsor or the underwriters (the
"Underwriters"), or until the termination of the Trust Agreement.
With the deposit of the Securities in the Trust on the initial Date of
Deposit, the Sponsor established a proportionate relationship among the
initial aggregate value of specified Securities in the Trust. Subsequent
to the initial Date of Deposit, the Sponsor may deposit additional
Securities in the Trust that are substantially similar to the Securities
already deposited in the Trust ("Additional Securities") or contracts to
purchase Additional Securities, in order to create additional Units,
maintaining to the extent practicable the original proportionate
relationship of the number of shares of each Security in the Trust
portfolio on the initial Date of Deposit. (Securities and Additional
Securities collectively may be hereinafter referred to as "Securities").
These additional Units will each represent, to the extent practicable, an
undivided interest in the same number and type of securities of identical
issuers as are represented by Units issued on the initial Date of Deposit.
It may not be possible to maintain the exact original proportionate
relationship among the Securities deposited on the initial Date of Deposit
because of, among other reasons, purchase requirements, changes in prices,
or unavailability of Securities. The number and identity of Securities in
the Trust will be adjusted to reflect the disposition of Securities and/or
the receipt of a stock dividend, a stock split or other distribution with
respect to shares or the reinvestment of the proceeds distributed to
Certificateholders. The portfolio of the Trust may change slightly based
on such disposition and reinvestment. Securities received in exchange for
shares will be similarly treated. Substitute Securities may be acquired
under specified conditions when Securities originally deposited in the
Trust are unavailable (see "The Trust--Substitution of Securities" below).
Units may be continuously offered to the public by means of this
Prospectus (see "Public Offering--Distribution of Units") resulting in a
potential increase in the number of Units outstanding. As additional
Units are issued by the Trust as a result of the deposit of Additional
Securities, the aggregate value of the Securities in the Trust will be
increased and the fractional undivided interest in the Trust represented
by each Unit will be decreased.
OBJECTIVES
The objectives of the Trust are to seek to achieve capital appreciation
together with a high level of current income. In addition, it is the
Trust's objective to achieve growth in income with the growth in capital.
The Trust seeks to achieve these objectives by investing primarily in a
portfolio of common stocks, preferred stocks and convertible securities of
foreign and domestic issuers, and contracts to purchase such Securities,
selected by the Trust's Portfolio Consultant which the Portfolio
Consultant believes will enable the Trust to achieve these objectives.
All of the Securities in the Trust, except convertible securities and
Securities that are in the form of ADRs, are listed on the New York Stock
Exchange, the American Stock Exchange or the National Association of
Securities Dealers Automated Quotations ("NASDAQ") National Market System
and are generally followed by independent investment research firms.
There is no minimum capitalization or market trading activity requirement
for the selection of Securities for the Trust's portfolio. There can be
no assurance that the Trust's investment objectives can be achieved.
THE SECURITIES
In selecting Securities for the Trust, the Portfolio Consultant
normally will consider the following factors, among others: (1) the
Portfolio Consultant's own evaluations of the private market value of the
underlying assets and business of the issuers of the Securities; (2) the
interest or dividend income generated by the Securities; (3) the potential
for capital appreciation for the Securities; (4) the prices of the
Securities relative to other comparable securities; (5) whether the
Securities are entitled to the benefits of sinking funds or other
protective conditions; (6) the existence of any anti-dilution protections
of the Security; and (7) the diversification of the Trust's portfolio as
to issuers. The Portfolio Consultant's investment philosophy hinges on
identifying assets that are selling in the public market at a discount to
the private market value, which the Portfolio Consultant defines as the
value informed purchasers are willing to pay to acquire assets with
similar characteristics. The Portfolio Consultant also evaluates the
issuers' free cash flow and long-term earnings trends. Finally, the
Portfolio Consultant looks for a catalyst; something in the company's
industry or indigenous to the company itself that will surface value.
Some of the Securities in the Trust may be in the form of ADRs. ADRs
evidence American Depository Receipts which, in turn, represent common
stock of non-U.S. issuers deposited with a custodian in a depository. In
selecting ADRs for deposit into the Trust portfolio, in addition to the
factors associated with the selection of Securities of any issuer, the
Portfolio Consultant considers the following factors, among others: (1)
the location of the issuer of the Securities underlying the ADRs; (2) the
likelihood of favorable market and political conditions in the country in
which such issuer is located; (3) the amount of publicly available
information available from such issuer; and (4) historical and recent
fluctuations in the exchange rate of the currency of such issuer relative
to the United States dollar.
Some of the Securities in the Trust may be convertible securities. A
convertible security is a bond, debenture, corporate note, preferred stock
or other similar security that may be converted into or exchanged for a
prescribed amount of common stock or other equity security of the same or
a different issuer within a particular period of time at a specified price
or formula. Before conversion, convertible securities have
characteristics similar to nonconvertible debt securities in that they
ordinarily provide a stream of income with generally higher yields than
those of common stock of the same or similar issuers. Convertible
securities are senior in rank to common stock in a corporation's capital
structure and, therefore, generally entail less risk than the
corporation's common stock.
In selecting convertible securities for the Trust, in addition to the
factors associated with the selection of Securities of any issuer, the
price of the convertible securities relative to the underlying common
stock and the potential for capital appreciation of the underlying common
stock, will be considered by the Portfolio Consultant. The Trust may
convert a convertible security which it holds only in certain limited
circumstances. (See "Special Risk Considerations--Convertible
Securities.")
The Trust is concentrated in the equity securities of communications
companies. A communications company is a company which derives at least
50% of either of its revenues or earnings from communications activities,
or which devotes at least 50% of its assets to such activities, based on
the company's most recent fiscal year for which audited financial
information is available. The communications industry is comprised of a
variety of sectors, ranging from companies concentrating in established
technologies to those primarily engaged in emerging or developing
technologies. Examples of communications companies include, but are not
limited to, those engaged in providing the following products or services:
regular telephone service throughout the world; wireless communications
services and equipment, including cellular telephone, microwave and
satellite communications, paging, and other emerging wireless
technologies; equipment and services for both data and voice transmission,
including computer equipment; electronic components and communications
equipment; video conferencing; electronic mail; local and wide area
networking, and linkage of data and word processing systems; publishing
and information systems; video text and teletext; emerging technologies
combining television, telephone and computer systems; broadcasting,
including television and radio via VHF, UHF, satellite and microwave
transmission, and cable television.
Communications is an expanding global industry. The Portfolio
Consultant believes that at the present time a portfolio of the securities
of communications companies located throughout the world presents greater
potential for achieving capital appreciation and earning higher income
than a portfolio comprised solely of U.S. communications issuers. While
the Portfolio Consultant expects that a substantial portion of the Trust
portfolio's assets may be invested in the securities of domestic
communications companies, a significant portion of the Trust portfolio may
also be comprised of the securities of communications issuers
headquartered outside the United States. For the percentage of domestic
and foreign companies, see "Description of Portfolio" in Part A of this
Prospectus.
SPECIAL RISK CONSIDERATIONS
Fixed Portfolio. The value of the Units will fluctuate depending on
all the factors that have an impact on the economy and the equity markets.
These factors similarly impact on the ability of an issuer to distribute
dividends. The Trust is not a "managed registered investment company" and
Securities will not be sold by the Trustee as a result of ordinary market
fluctuations. Unlike a managed investment company in which there may be
frequent changes in the portfolio of securities based upon economic,
financial and market analyses, securities of a unit investment trust, such
as the Trust, are not subject to such frequent changes based upon
continuous analysis. However, the Sponsor may direct the disposition by
the Trustee of Securities upon the occurrence of certain events. (See
"Trust Administration--Portfolio Supervision" below.) Potential investors
also should be aware that the Portfolio Consultant may change its views as
to the investment merits of any of the Securities during the life of the
Trust and therefore should consult their own financial advisers with
regard to a purchase of Units. In addition, investors should be aware
that the Portfolio Consultant, and its affiliates, currently act and will
continue to act as investment adviser for managed investment companies and
managed private accounts that may have similar or different investment
objectives from the Trust. Some of the Securities in the Trust may also
be owned by these other clients of the Portfolio Consultant and its
affiliates. However, because these clients have "managed" portfolios and
may have differing investment objectives, the Portfolio Consultant may
sell certain Securities from those accounts in instances where a sale by
the Trust would be impermissible, such as to maximize return by taking
advantage of market fluctuation. Investors should consult with their own
financial advisers prior to investing in the Trust to determine its
suitability. (See "Trust Administration--Portfolio Supervision.") All
the Securities in the Trust are liquidated during a 60-day period prior to
the Mandatory Termination Date of the Trust. Since the Trust will not
sell Securities in response to ordinary market fluctuation, but only at
the Trust's termination, the amount realized upon the sale of the
Securities may not be the highest price attained by an individual Security
during the life of the Trust.
Common Stock. Since the Trust contains common stocks of both foreign
and domestic issuers, an investment in Units of the Trust should be made
with an understanding of the risks inherent in any investment in common
stocks including the risk that the financial condition of the issuers of
the Securities may become impaired or that the general condition of the
stock market may worsen (both of which may contribute directly to a
decrease in the value of the Securities and thus in the value of the
Units). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights
of creditors of, or holders of debt obligations or preferred stock issued
by, the issuer. Holders of common stocks have a right to receive
dividends only when, if, and in the amounts declared by the issuer's board
of directors and to participate in amounts available for distribution by
the issuer only after all other claims on the issuer have been paid or
provided for. By contrast, holders of preferred stocks usually have the
right to receive dividends at a fixed rate when and as declared by the
issuer's board of directors, normally on a cumulative basis. Dividends on
cumulative preferred stock must be paid before any dividends are paid on
common stock and any cumulative preferred stock dividend which has been
omitted is added to future dividends payable to the holders of such
cumulative preferred stock. Preferred stocks are also usually 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.
Moreover, common stocks do not represent an obligation of the issuer
and therefore do not offer any assurance of income or provide the degree
of protection of 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 economic interest of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. Further, unlike debt
securities which typically have a stated principal amount payable at
maturity (which value will be subject to market fluctuations prior
thereto), common stocks have neither fixed principal amount nor a maturity
and have values which are subject to market fluctuations for as long as
the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases
and decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors
including expectations regarding government, economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction,
and global or regional political, economic or banking crises. The value
of the common stocks in the Trust thus may be expected to fluctuate over
the life of the Trust to values higher or lower than those prevailing on
the initial Date of Deposit. (See "Special Risk Considerations--
Communications Issuers" for a discussion of the types of risks that affect
holders of common stock of issuers in the communication industries.)
The Trust may purchase Securities that are not registered ("Restricted
Securities") under the Securities Act of 1933 (the "Securities Act"), but
can be offered and sold to "qualified institutional buyers" as that term
is defined in the Securities Act. See "Liquidity" below for the risks
inherent in the purchase of Restricted Securities.
ADRs. An investment in Units of the Trust should be made with an
understanding of the risks inherent in an investment in foreign equity
securities in the form of American Depository Receipts, including risks
associated with government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and
global or regional political, economic or banking crises. ADRs evidence
American Depository Receipts which, in turn, represent common stock of
non-U.S. issuers deposited with a custodian in a depository.
The characteristics and rights and privileges of equity securities vary
from country to country, and governments may impose restrictions on
foreign ownership of certain classes of equity securities unless a non-
national purchaser acquires a license or unless the particular issuer
receives permission for ownership by non-nationals. The Trust has not
obtained any of these licenses nor does the Sponsor anticipate the need to
obtain them. In general, foreign ownership restrictions are more likely
to be imposed on voting shares than non-voting shares. Equity securities,
in general, trade on the market at a multiple of their issuers' earnings,
which multiple varies from country to country, industry to industry and
company to company and may fluctuate over time based on general
perceptions of the marketplace whether or not related to specific actions
or performance results of a particular issuer. This multiple for any
particular issuer may not be uniform for all classes of the issuer's
equity securities. General perceptions of the marketplace are based on
unpredictable factors including expectations regarding government
economic, monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, the balance of payments (both on
capital and current account) and global or regional political, economic or
banking crises. Moreover, because the market for restricted stocks traded
by non-nationals generally has less volume than the market for
unrestricted stocks, the market for these unrestricted stocks may be more
volatile and less liquid than the market for shares that may be owned only
by nationals of the particular country. Investors should carefully review
the objectives of the Trust and consider their ability to assume the risks
involved before making an investment in the Trust.
The Trust may purchase ADRs that are Restricted Securities and,
therefore, can be offered and sold only to "qualified institutional
buyers" as defined in the Securities Act. See "Liquidity" below for the
risks inherent in the purchase of Restricted Securities.
In addition, for the foreign issuers that are not subject to the
reporting requirements of the Securities Exchange Act of 1934, there may
be less publicly available information than is available from a domestic
issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. However,
the Sponsor anticipates that adequate information will be available to
allow the Sponsor and Portfolio Consultant to supervise and/or monitor the
Trust portfolio.
The ADRs in the Portfolio have been issued by non-U.S. issuers whose
earnings are stated in foreign currencies. Further, ADRs in the Trust
portfolio may pay dividends in foreign currencies, and the securities
underlying the ADRs are principally traded in foreign currencies. Most
foreign currencies have fluctuated widely in value against the United
States dollar for many reasons, including supply and demand of the
respective currency, the soundness of the world economy and the strength
of the respective economy as compared to the economies of the United
States and other countries. Therefore, for those Securities of issuers
whose earnings are stated in foreign currencies, or which pay dividends in
foreign currencies, or which are traded in foreign currencies, there is a
likelihood that their United States dollar value will vary to some degree
with fluctuations in the United States dollar foreign exchange rates for
the relevant currencies. Moreover, ADR currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the
ADRs and consequently the value of the Securities. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that
for the underlying shares.
The following table sets forth end-of-month United States dollar
exchange rates for the currencies of the securities underlying the ADRs
that may be included in the portfolio for the past three years.
Fluctuation of the rates that have occurred in the past are not
necessarily indicative of fluctuations that may occur over the term of the
Trust. This table shows the units of foreign currency received for a U.S.
dollar.
United
Canada Chilean Hong Kong Mexican New Zealand Spain Kingdom
Dollar Peso Dollar Peso* Dollar Peseta Pound
Dec. 1993 1.3240 434.5725 7.7275 3.1060 55.631 142.92 149.13
Nov. 1993 1.3368 414.6698 7.7123 3.0986 54.787 140.78 148.08
Oct. 1993 1.3212 411.7272 7.7228 3.1257 55.260 134.37 150.23
Sept.1993 1.3357 414.3334 7.7342 3.1212 55.157 131.96 152.48
Aug. 1993 1.3216 414.5161 7.7480 3.1130 55.261 134.85 149.14
July 1993 1.2843 409.4836 7.7557 3.1208 54.900 144.95 149.55
June 1993 1.2824 400.9826 7.7436 3.1170 53.949 130.19 150.82
May 1993 1.2717 405.3064 7.7247 3.1205 54.290 125.85 154.77
Apr. 1993 1.2713 406.0867 7.7372 3.1181 53.904 116.18 154.47
Mar. 1993 1.2573 375.8884 7.7305 3.0931 53.026 115.15 146.17
Feb. 1993 1.2497 396.9904 7.7327 3.0992 51.603 117.91 143.95
Jan. 1993 1.2779 259.800 7.7376 3.1135 51.270 114.62 153.25
Dec. 1992 1.2725 262.100 7.7416 3200.0000 51.750 112.95 155.10
Nov. 1992 1.2674 262.300 7.7348 3210.0000 51.996 113.83 152.68
Oct. 1992 1.2453 266.200 7.7298 3200.0000 53.943 105.74 165.29
Sept. 1992 1.2225 266.300 7.7298 3210.0000 54.112 98.19 184.65
Aug. 1992 1.1907 259.940 7.7318 3250.0000 54.057 93.05 194.34
July 1992 1.1924 273.600 7.7341 3210.0000 54.609 94.88 191.77
June 1992 1.1960 278.300 7.7343 3200.0000 54.201 99.02 185.51
May 1992 1.1991 284.300 7.7421 3210.0000 53.514 101.47 180.95
Apr. 1992 1.1874 283.700 7.7404 3200.0000 54.138 103.90 175.66
Mar. 1992 1.1928 350.600 7.7463 3060.7130 54.790 104.88 172.38
Feb. 1992 1.1825 343.840 7.7582 3060.5000 54.177 101.73 177.78
Jan. 1992 1.1571 357.569 7.7612 3066.4990 54.194 100.05 180.90
Dec. 1991 1.1467 374.799 7.7738 3072.6460 55.256 99.70 182.72
Nov. 1991 1.1302 373.807 7.7591 3036.7020 56.352 102.56 177.96
Oct. 1991 1.1279 352.074 7.7542 2991.5230 56.306 106.54 172.31
Sept. 1991 1.1370 353.936 7.7524 3056.3770 57.989 106.28 172.65
Aug. 1991 1.1452 350.836 7.7646 3073.4380 57.353 108.92 168.41
July 1991 1.1493 347.216 7.7610 3016.3790 56.681 111.81 165.13
June 1991 1.1439 368.400 7.7341 3025.6330 57.645 111.18 164.97
May 1991 1.1499 349.485 7.7798 3016.6500 58.647 106.45 172.38
Apr. 1991 1.1535 333.101 7.7939 2973.6460 58.909 105.08 174.97
Mar. 1991 1.1572 342.016 7.7911 2963.3760 59.389 100.21 182.14
Feb. 1991 1.1549 340.685 7.7943 2981.7560 60.120 92.61 196.41
Jan. 1991 1.1560 337.014 7.7950 2961.6630 59.476 95.08 193.46
*As of January 1, 1993 the Mexican Peso became the "new peso" or "nuevo
peso." One new peso equals 1,000 old pesos. The value of the currency did
not change; the conversion was designed to simplify monetary transactions.
<PAGE>
ADRs may be sponsored or unsponsored. In an unsponsored facility, the
depository initiates and arranges the facility at the request of market
makers and acts as agent for the ADR holder, while the company itself is
not involved in the transaction. In a sponsored facility, the issuing
company initiates the facility and agrees to pay certain administrative
and shareholder-related expenses. Sponsored facilities use a single
depository and entail a contractual relationship among the issuer, the
shareholder and the depository; unsponsored facilities involve several
depositaries with no contractual relationship to the company. ADRs
designed for use in United States securities markets may be registered
securities pursuant to the Securities Act of 1933 and/or subject to the
reporting requirements of the Securities Exchange Act of 1934.
Convertible Securities. The Portfolio Consultant believes that the
characteristics of convertible securities make them appropriate
investments for an investment company seeking to achieve capital
appreciation together with a high level of current income. These
characteristics include the potential for capital appreciation if the
value of the underlying common stock increases or interest rates decrease,
the relatively high yield received from dividend or interest payments as
compared to common stock dividends and decreased risks of decline in value
relative to the underlying common stock due to their fixed income nature.
As a result of the conversion feature, however, the interest rate or
dividend preference on a convertible security is generally less than would
be the case if the securities were not convertible. During periods of
rising interest rates, it is possible that the potential for capital gain
on a convertible security may be less than that of a common stock
equivalent if the yield on the convertible security is at a level which
would cause it to sell at a discount.
The Trust may convert a convertible security only (i) when necessary to
permit orderly disposition of the investment when it approaches maturity
or has been called for redemption, or (ii) to facilitate its sale after
the Sponsor determines that such sale is appropriate in accordance with
the guidelines set forth under "Trust Administration--Portfolio
Supervision." Since the Trust is not a "managed" investment company, the
Trust will not be able to exercise its conversion rights for any other
reason. Investors should be aware that the inability of the Trust to
otherwise exercise its conversion rights will prevent the Trust from
taking advantage of market conditions that may make conversion attractive
to other holders of these convertible securities.
Convertible securities are generally not investment grade, that is, not
rated within the four highest categories by Standard & Poor's Corporation
("S&P") and Moody's Investor Service ("Moody"s"). To the extent that such
convertible securities are rated lower than investment grade (i.e., "high
yield" or "junk bond" status) or are not rated, there is a greater risk as
to the timely repayment of the principal of, and timely payment of
interest or dividends on, those securities. Such securities are
considered by the rating agencies to be predominantly speculative and
involve major risk exposures such as increased sensitivity to interest
rate and economic changes and limited liquidity resulting in the
possibility that prices realized upon the sale of such securities will be
less than the prices used in calculating the Trust's net asset value.
Additionally, certain Federal legislation could limit the availability of
such securities and the tax advantages to issuers of the securities. See
"Summary of Essential Information" in Part A for a description of the
ratings of the convertible securities held in the Trust portfolio.
In the absence of adequate anti-dilution provisions in a convertible
security, dilution in the value of the Trust's holdings may occur in the
event the underlying stock is subdivided, additional securities are
issued, a stock dividend is declared, or the issuer enters into another
type of corporate transaction which increases its outstanding equity
securities. Every convertible security may be valued, on a theoretical
basis, as if it did not have a conversion privilege. This theoretical
value is determined by the yield it provides in comparison with the yields
of other securities of comparable character and quality which do not have
a conversion privilege. This theoretical value, which will change with
prevailing interest rates, the credit standing of the issuer and other
pertinent factors, is often referred to as the "investment value", and
represents the security's theoretical price support level.
"Conversion value" is the amount a convertible security would be worth
in market value if it were to be exchanged for the underlying equity
security pursuant to its conversion privilege. Conversion value
fluctuates directly with the price of the underlying equity security,
usually common stock. If, because of low prices for the common stock, the
conversion value is substantially below the investment value, the price of
the convertible security is governed principally by the factors described
in the preceding paragraph. If the conversion value rises near or above
its investment value, the price of the convertible security generally will
rise above its investment value and, in addition, will sell at some
premium over its conversion value. This premium represents the price
investors are willing to pay for the privilege of purchasing a fixed-
income security with a possibility of capital appreciation due to the
conversion privilege. If this appreciation potential is not realized,
this premium may not be recovered. In its selection of convertible
securities for the Trust, the Portfolio Consultant will not emphasize
either investment value or conversion value, but will consider both in
light of the Trust's overall investment objectives.
Some of the convertible securities in the Trust portfolio may be "Pay-
In-Kind" securities. During a designated period from original issuance,
the issuer of such security may pay dividends or interest to the holder by
issuing additional fully paid and nonassessable shares or units of the
same security.
The Trust may purchase convertible securities that are Restricted
Securities and, therefore, can be offered and sold only to "qualified
institutional buyers" as defined in the Securities Act. See "Liquidity"
below for the risks inherent in the purchase of Restricted Securities.
Communications Issuers. The Trust may concentrate its assets in the
communications industry and, as a result, the value of the Units of the
Trust may be susceptible to factors affecting the communications industry.
The communications industry is subject to governmental regulation and the
products and services of communications companies may be subject to rapid
obsolescence. These factors could affect the value of the Trust's Units.
Telephone companies in the United States, for example, are subject to both
state and federal regulations affecting permitted rates of returns and the
kinds of services that may be offered. Congress is currently considering
legislation that would encourage competition in local phone service by
opening the local telephone networks to competition from cable television
companies and others, while permitting phone companies to provide cable TV
service and that would allow the regional telephone companies to enter the
long-distance services and telecommunication equipment manufacturing
markets. Changes in federal and state regulation of the
telecommunications industries could have a material adverse affect on the
communications industry, which includes companies represented in the
Trust's portfolio and, as a result, the value of Units of the Trust could
be adversely impacted. In addition, federal communications laws regarding
the cable television industry have recently been amended to eliminate
government regulation of cable television rates where competition is
present and allow rates to be dictated by market conditions. In the
absence of competition, however, rates shall be regulated by federal and
state governments to protect the interest of subscribers. Certain types
of companies represented in the Trust portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility. While the Trust portfolio will concentrate on the
securities of established suppliers of traditional communication products
and services, the Trust may invest in smaller communications companies
which may benefit from the development of new products and services.
These smaller companies may present greater opportunities for capital
appreciation, and may also involve greater risk than large, established
issuers. Such smaller companies may have limited product lines, market or
financial resources, and their securities may trade less frequently and in
limited volume than the securities of larger, more established companies.
As a result, the prices of the securities of such smaller companies may
fluctuate to a greater degree than the prices of securities of other
issuers.
Liquidity. Some of the Securities in the Trust portfolio have been
purchased in ADR form in United States dollars. However, ADRs are not
necessarily listed on a national securities exchange. Even when ADRs or
other Securities are listed, the principal trading market for such
Securities may be in the over-the-counter market. As a result, the
existence of a liquid trading market for Securities in the Trust portfolio
may depend on whether dealers will make a market in these Securities.
There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of
the liquidity of the Securities in any markets made. In addition, the
Trust may be restricted under the Investment Company Act of 1940 from
selling Securities to the Sponsor. The price at which the Securities may
be sold to meet redemptions and the value of the Units will be adversely
affected if trading markets for the Securities are limited or absent.
The Trust may purchase securities that are not registered ("Restricted
Securities") under the Securities Act, but can be offered and sold to
"qualified institutional buyers" under Rule 144A under the Securities Act.
Since it is not possible to predict with assurance exactly how this market
for Restricted Securities sold and offered under Rule 144A will develop,
the Sponsor will carefully monitor the Trust's investments in these
securities, focusing on such factors, among others, as valuation,
liquidity and availability of information. This investment could have the
effect of increasing the level of illiquidity in the Trust to the extent
that qualified institutional buyers become for a time uninterested in
purchasing these Restricted Securities. See "Summary of Essential
Information" for the percentage of Restricted Securities held in the Trust
portfolio.
There is no assurance that any dividends will be declared or paid in
the future on the Securities. Investors should be aware that there is no
assurance that the Trust's objectives will be achieved.
PORTFOLIO
The Trust consists of the Securities (or contracts to purchase such
Securities together with an irrevocable letter or letters of credit for
the purchase of such contracts) and Additional Securities deposited upon
the creation of additional Units as set forth above and Substitute
Securities acquired by the Trust as long as such Securities may continue
to be held from time to time in the Trust together with uninvested cash
realized from the disposition of Securities. Because certain of the
Securities and Additional Securities from time to time may be sold under
certain circumstances, as described herein, no assurance can be given that
the Trust will retain for any length of time its present size and
composition. The Trustee has not participated and will not participate in
the selection of Securities for the Trust, and neither the Sponsor, the
Portfolio Consultant nor the Trustee will be liable in any way for any
default, failure or defect in any Securities. Some of the Securities are
publicly traded either on a stock exchange or in the over-the-counter
market. The contracts to purchase Securities deposited in the Trust are
expected to settle in five business days, in the ordinary manner for such
Securities. Settlement of the contracts for Securities is thus expected
to take place prior to the settlement of purchase of Units on the Date of
Deposit. Settlement of the contracts for Securities is thus expected to
take place prior to the settlement of purchase of Units on the Date of
Deposit.
SUBSTITUTION OF SECURITIES
Neither the Sponsor, the Portfolio Consultant nor the Trustee shall be
liable in any way for any default, failure or defect in any of the
Securities. In the event of a failure to deliver any Security or
Additional Security that has been purchased for the Trust under a contract
("Failed Securities"), the Sponsor is authorized under the Trust Agreement
to direct the Trustee to acquire other securities ("Substitute
Securities") to make up the original corpus of the Trust. In addition,
the Sponsor, at its option, is authorized under the Trust Agreement to
direct the Trustee to reinvest in Substitute Securities the proceeds of
the sale of any of the Securities only if such sale was due to unusual
circumstances as set forth under "Trust Administration--Portfolio
Supervision."
The Substitute Securities must be purchased within 20 days after the
sale of the portfolio Security or Additional Security or delivery of the
notice of the failed contract. Where the Sponsor purchases Substitute
Securities in order to replace Failed Securities, (i) the purchase price
may not exceed the purchase price of the Failed Securities and (ii) the
Substitute Securities must be substantially similar to the Securities
originally contracted for and not delivered. Where the Sponsor purchases
Substitute Securities in order to replace Securities they sold, the
Sponsor will endeavor to select Securities which are equity securities
that possess characteristics that are consistent with the objectives of
the Trust as set forth above. Such selection may include or be limited to
Securities previously included in the portfolio of the Trust.
Whenever a Substitute Security has been acquired for the Trust, the
Trustee shall, within five days thereafter, notify all Certificateholders
of the Trust of the acquisition of the Substitute Security and the Trustee
shall, on the next Monthly Distribution Date which is more than 30 days
thereafter, make a pro rata distribution of the amount, if any, by which
the cost to the Trust of the Failed Security exceeded the cost of the
Substitute Security plus accrued interest, if any.
In the event no reinvestment is made, the proceeds of the sale of
Securities or Additional Securities will be distributed to
Certificateholders as set forth under "Rights of Certificateholders--
Distributions." In addition, if the right of substitution shall not be
utilized to acquire Substitute Securities in the event of a failed
contract, the Sponsor will cause to be refunded the sales charge
attributable to such Failed Securities to all Certificateholders of the
Trust, and distribute the principal and accrued interest attributable to
such Failed Securities on the next Monthly Distribution Date.
Because certain of the Securities or Additional Securities from time to
time may be substituted (see "Trust Administration--Portfolio
Supervision") or may be sold under certain circumstances, no assurance can
be given that the Trust will retain its present size and composition for
any length of time. The proceeds from the sale of a Security or the
exercise of any redemption or call provision will be distributed to
Certificateholders except to the extent such proceeds are applied to meet
redemptions of Units. (See "Liquidity--Trustee Redemption.")
PUBLIC OFFERING
OFFERING PRICE
The Public Offering Price per 100 Units of the Trust is equal to the
aggregate value of the underlying Securities (the price at which they
could be directly purchased by the public assuming they were available) in
the Trust divided by the number of Units outstanding times 100 plus a
sales charge of 3.9% of the Public Offering Price per 100 Units (excluding
any transaction fees) or 4.058% of the net amount invested in Securities
per 100 Units during the initial public offering period. (See "Summary of
Essential Information.") In addition, the net amount invested in
Securities will involve a proportionate share of amounts in the Income
Account and Principal Account, if any. The Public Offering Price can vary
on a daily basis from the amount stated on the cover of this Prospectus in
accordance with fluctuations in the market value of the Securities and the
price to be paid by each investor will be computed as of the date the
Units are purchased.
The aggregate value of the Securities is determined in good faith by
the Trustee on each "Business Day" as defined in the Indenture in the
following manner: if the Securities are listed on a national securities
exchange or on the NASDAQ National Market System, this evaluation is
generally based on the closing sale prices on that exchange as of the
Evaluation Time (unless the Trustee deems these prices inappropriate as a
basis for valuation). If the Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation generally shall be based on the closing purchase price in
the over-the-counter market (unless the Trustee deems these prices
inappropriate as a basis for evaluation) or if there is no such closing
purchase price, then the Trustee may utilize, at the Trust's expense, an
independent evaluation service or services to ascertain the values of the
Securities. The independent evaluation service shall use any of the
following methods, or a combination thereof, which it deems appropriate:
(a) on the basis of current bid prices for comparable securities, (b) by
appraising the value of the Securities on the bid side of the market or by
such other appraisal deemed appropriate by the Trustee or (c) by any
combination of the above, each as of the Evaluation Time.
VOLUME AND OTHER DISCOUNTS
Units of the Trust are available at a volume discount from the Public
Offering Price during the initial public offering. This volume discount
will result in a reduction of the sales charge applicable to such
purchases. The amount of the volume discount and the approximate reduced
sales charge on the Public Offering Price applicable to such purchases are
as follows:
NUMBER OF UNITS APPROXIMATE REDUCED SALES CHARGE
-----------------------------
-------------------------------------------------------------
10,000 but less than 25,000 3.77%
25,000 but less than 50,000 3.65%
50,000 but less than 75,000 3.40%
75,000 but less than 100,000 3.15%
100,000 or more 2.90%
These discounts will apply to all purchases of Units by the same
purchaser during the initial public offering period. Units purchased by
the same purchasers in separate transactions during the initial public
offering period will be aggregated for purposes of determining if such
purchaser is entitled to a discount provided that such purchaser must own
at least the required number of Units at the time such determination is
made. Units held in the name of the spouse of the purchaser or in the
name of a child of the purchaser under 21 years of age are deemed for the
purposes hereof to be registered in the name of the purchaser. The
discount is also applicable to a trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account.
Employees (and their immediate families) of Bear, Stearns & Co. Inc.,
the Portfolio Consultant, and of any underwriter of the Trust may,
pursuant to employee benefit arrangements, purchase Units of the Trust at
a price equal to the then market value of the underlying securities in the
Trust during the initial offering period, divided by the number of Units
outstanding plus a reduced sales charge of up to a maximum of 1.75% per
Unit. Such arrangements result in less selling effort and selling
expenses than sales to employee groups of other companies. Resales or
transfers of Units purchased under the employee benefit arrangements may
only be made through the Sponsor's secondary market, so long as it is
being maintained.
DISTRIBUTION OF UNITS
During the initial offering period and thereafter to the extent
additional Units continue to be offered by means of this Prospectus, Units
will be distributed by the Sponsor, the Underwriters and dealers at the
Public Offering Price. (See "Underwriting Syndicate" in Part A.) The
initial offering period is thirty days after each deposit of Securities in
the Trust and, unless all Units are sold prior thereto, the Sponsor may
extend the initial offering period up to four additional successive thirty
day periods. Certain banks and thrifts will make Units of the Trust
available to their customers on an agency basis. A portion of the sales
charge paid by their customers is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting
Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have indicated that these
particular agency transactions are permitted under such Act. In addition,
state securities laws on this issue may differ from the interpretations of
federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law.
The Sponsor presently maintains and intends to continue to qualify the
Units for sale in substantially all States through the Underwriters and
through dealers who are members of the National Association of Securities
Dealers, Inc. Units may be sold to dealers at prices which represent a
concession of up to 2% per Unit, subject to the Sponsor's right to change
the dealers' concession from time to time. In addition, for transactions
of $1 million or more, the Sponsor intends to negotiate the applicable
sales charge and such charge will be disclosed to any such purchaser.
Such Units may then be distributed to the public by the dealers at the
Public Offering Price then in effect. The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units. In
addition, any dealer, underwriter or firm who purchases Units on the
initial Date of Deposit will be paid an additional concession of $1.00 per
100 Units purchased that day. The Sponsor reserves the right to reject,
in whole or in part, any order for the purchase of Units. The Sponsor
reserves the right to change the discounts from time to time.
FREQUENT BUYER PROGRAM
Any dealer, underwriter, or firm whose total combined purchases of the
Trust and other unit investment trusts sponsored by Bear, Stearns & Co.
Inc. ("MST/EST Units") from Bear, Stearns & Co. Inc. in a single calendar
month fall in any of the levels listed below, will be paid an additional
concession.
ADDITIONAL
CONCESSION
AGGREGATE MONTHLY AMOUNT OF MST/EST (PER $1,000.00)
UNITS SOLD AT PUBLIC OFFERING PRICE SOLD
$1,000,000 but less than $2,000,000 . . . . . . $0.50
$2,000,000 but less than $4,500,000 . . . . . . $1.00
$4,500,000 but less than $7,000,000 . . . . . . $1.50
$7,000,000 or more . . . . . . . . . . . . . . $2.00
SPONSOR'S AND UNDERWRITERS' PROFITS
The Sponsor and the Underwriters will receive a gross underwriting
commission equal to 3.9% of the Public Offering Price per 100 Units
(equivalent to 4.058% of the net amount invested in the Securities).
Additionally, the Sponsor may realize a profit on the deposit of the
Securities in the Trust representing the difference between the cost of
the Securities to the Sponsor and the cost of the Securities to the Trust
(See "Portfolio.") The Sponsor or any Underwriter may realize profits or
sustain losses with respect to Securities deposited in the Trust which
were acquired from underwriting syndicates of which they were a member.
The Sponsor may have participated as an underwriter or manager,
co-manager or member of underwriting syndicates from which some of the
aggregate principal amount of the Securities were acquired for the Trust
in the amounts set forth in "The Trust" in Part A. All or a portion of
the Securities deposited in the Trust may have been acquired through the
Sponsor.
All or a portion of the Securities deposited in the Trust may have
been acquired through one of the Sponsor. The Sponsor received brokerage
commissions from the Certificateholders in connection with such purchases,
but such fees will not exceed that amount indicated in footnote (+++) to
the "Summary of Essential Information."
During the initial offering period and thereafter to the extent
additional Units continue to be offered by means of this Prospectus, the
underwriting syndicate may also realize profits or sustain losses as a
result of fluctuations after the initial Date of Deposit in the aggregate
value of the Securities and hence in the Public Offering Price received by
the Sponsor and the Underwriters for the Units. Cash, if any, made
available to the Sponsor prior to settlement date for the purchase of
Units may be used in the Sponsor's business subject to the limitations of
17 CFR 240.15c3-3 under the Securities Exchange Act of 1934 and may be of
benefit to the Sponsor.
Upon termination of the Trust, the Trustee may utilize the services
of the Sponsor for the sale of all or a portion of the Securities in the
Trust. The Sponsor will receive brokerage commissions from the Trust in
connection with such sales in accordance with applicable law.
In maintaining a market for the Units (see "Sponsor Repurchase") the
Sponsor will realize profits or sustain losses in the amount of any
difference between the price at which they buy Units and the price at
which they resell such Units.
RIGHTS OF CERTIFICATEHOLDERS
CERTIFICATES
Ownership of Units of the Trust is evidenced by registered
Certificates executed by the Trustee and the Sponsor. Certificates may be
issued in denominations of one hundred or more Units. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed and/or accompanied by a written instrument or instruments of
transfer. Although no such charge is presently made or contemplated, the
Trustee may require a Certificateholder to pay $2.00 for each Certificate
reissued or transferred and any governmental charge that may be imposed in
connection with each such transfer or interchange. Mutilated, destroyed,
stolen or lost Certificates will be replaced upon delivery of satisfactory
indemnity and payment of expenses incurred.
DISTRIBUTIONS
Dividends and interest received by the Trust are credited by the
Trustee to an Income Account for the Trust. Other receipts, including the
proceeds of Securities disposed of, are credited to a Principal Account
for the Trust.
Distributions to each Certificateholder from the Income Account are
computed as of the close of business on each Record Date for the following
Distribution Date. Distributions from the Principal Account of the Trust
(other than amounts representing failed contracts, as previously
discussed) will be computed as of each Record Date, and will be made to
the Certificateholders of the Trust on or shortly after the next Monthly
Distribution Date. Proceeds representing principal received from the
disposition of any of the Securities between a Record Date and a
Distribution Date which are not used for redemptions of Units will be held
in the Principal Account and not distributed until the second succeeding
Monthly Distribution Date. No distributions will be made to
Certificateholders electing to participate in the Total Reinvestment Plan.
Persons who purchase Units between a Record Date and a Distribution Date
will receive their first distribution on the second Monthly Distribution
Date after such purchase.
As of the first day of each month, the Trustee will deduct from the
Income Account of the Trust, and, to the extent funds are not sufficient
therein, from the Principal Account of the Trust, amounts necessary to pay
the expenses of the Trust (as determined on the basis set forth under
"Trust Expenses and Charges"). The Trustee also may withdraw from said
accounts such amounts, if any, as it deems necessary to establish a
reserve for any applicable taxes or other governmental charges that may be
payable out of the Trust. Amounts so withdrawn shall not be considered a
part of such Trust's assets until such time as the Trustee shall return
all or any part of such amounts to the appropriate accounts. In addition,
the Trustee may withdraw from the Income and Principal Accounts such
amounts as may be necessary to cover redemptions of Units by the Trustee.
The monthly dividend distribution per 100 Units cannot be estimated
and will change and may be reduced as Securities are redeemed, exchanged
or sold, or as expenses of the Trust fluctuate. No distribution need be
made from the Principal Account until the balance therein is an amount
sufficient to distribute $1.00 per 100 Units.
RECORDS
The Trustee shall furnish Certificateholders in connection with each
distribution a statement of the amount of dividends and interest, if any,
and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 100 Units. Within a
reasonable time after the end of each calendar year the Trustee will
furnish to each person who at any time during the calendar year was a
Certificateholder of record, a statement showing (a) as to the Income
Account: dividends, interest and other cash amounts received, amounts
paid for purchases of Substitute Securities and redemptions of Units, if
any, deductions for applicable taxes and fees and expenses of the Trust,
and the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each 100 Units outstanding on the last
business day of such calendar year; (b) as to the Principal Account: the
dates of disposition of any Securities and the net proceeds received
therefrom, deductions for payments of applicable taxes and fees and
expenses of the Trust, amounts paid for purchases of Substitute Securities
and redemptions of Units, if any, and the balance remaining after such
distributions and deductions, expressed both as a total dollar amount and
as a dollar amount representing the pro rata share of each 100 Units
outstanding on the last business day of such calendar year; (c) a list of
the Securities held, a list of Securities purchased, sold or otherwise
disposed of during the calendar year and the number of Units outstanding
on the last business day of such calendar year; (d) the Redemption Price
per 100 Units based upon the last computation thereof made during such
calendar year; and (e) amounts actually distributed to Certificateholders
during such calendar year from the Income and Principal Accounts,
separately stated, of the Trust, expressed both as total dollar amounts
and as dollar amounts representing the pro rata share of each 100 Units
outstanding on the last business day of such calendar year.
The Trustee shall keep available for inspection by
Certificateholders, at all reasonable times during usual business hours,
books of record and account of its transactions as Trustee, including
records of the names and addresses of Certificateholders, Certificates
issued or held, a current list of Securities in the portfolio and a copy
of the Trust Agreement.
TAX STATUS
The following is a general discussion of certain of the Federal
income tax consequences of the purchase, ownership and disposition of the
Units. 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"). Certificateholders should consult their tax advisers in
determining the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units.
The Trust intends to qualify for and elect the special tax treatment
applicable to "regulated investment companies" under Sections 851-855 of
the Code. If the Trust qualifies as a "regulated investment company" and
distributes to Certificateholders 90% or more of its investment company
taxable income (without regard to its net capital gain, i.e., the excess
of its net long-term capital gain over its net short-term capital loss),
it will not be subject to Federal income tax on the portion of its
investment company taxable income (including any net capital gain) it
distributes to Certificateholders in a timely manner. In addition, to the
extent the Trust distributes to Certificateholders in a timely manner at
least 98% of its taxable income (including any net capital gain) it will
not be subject to the 4% excise tax on certain undistributed income of
"regulated investment companies." The Indenture requires the distribution
of the Trust's investment company taxable income (including any net
capital gain) in a timely manner. As a result, it is anticipated that the
Trust will not be subject to Federal income tax or the excise tax.
Although all or a portion of the Trust's taxable income (including any net
capital gain) for a calendar year may be distributed shortly after the end
of the calendar year, such a distribution will be treated for Federal
income tax purposes as having been received by Certificateholders during
the calendar year.
Sections 1291-1297 of the Code impose certain additional taxes and
interest on shareholders of a "passive foreign investment company," which
is defined as a foreign corporation more than 75% of the gross income of
which is from passive investments or more than 50% of the average value of
its assets consists of assets that produce passive income. The additional
tax and interest are imposed on the shareholders of the passive foreign
investment company in the event of a distribution of accumulated earnings
or the holder's recognition of gain from the sale of stock of the company.
In the case of a "regulated investment company" that is the shareholder,
this tax and interest will be imposed on the "regulated investment
company," not on the shareholders of the "regulated investment company."
Distributions to Certificateholders of the Trust's taxable income
(other than its net capital gain) for a year will be taxable as ordinary
income to Certificateholders. To the extent that distributions to a
Certificateholder in any year are not taxable as ordinary income, they
will be treated as a return of capital and will reduce the
Certificateholder's basis in his Units and, to the extent that they exceed
his basis, will be treated as a gain from the sale of his Units as
discussed below. It is anticipated that substantially all of the
distributions of the Trust's taxable income (other than net capital gain
distributions) will be taxable as ordinary income to Certificateholders.
Distributions of the Trust's net capital gain (designated as capital
gain dividends by the Trust) will be taxable to Certificateholders as
long-term capital gain, regardless of the length of time the Units have
been held by a Certificateholder. A Certificateholder may recognize a
taxable gain or loss if the Certificateholder sells or redeems his Units.
Any gain or loss arising from (or treated as arising from) the sale or
redemption of Units will generally be a capital gain or loss, except in
the case of a dealer. Although capital gains are generally taxed at the
same rate as ordinary income, the excess of net long-term capital gains
over net short-term capital losses may be taxed at a lower rate than
ordinary income for certain noncorporate taxpayers. A capital gain or
loss is long-term if the asset is held for more than one year and short-
term if held for one year or less. To the extent that a capital gain
dividend with respect to Units is afforded long-term capital gain
treatment, a Certificateholder who realized a capital loss upon the sale
of such Unit that was owned for six months or less must treat the loss as
long-term. The deduction of capital losses is subject to limitations. If
the Securities appreciate in value, purchasers of Units after the
occurrence of such appreciation will acquire their Units subject to a
contingent liability for the income tax inherent in the appreciated
Securities.
A distribution of Securities to a Certificateholder upon liquidation
will be a taxable event to such Certificateholder, and that
Certificateholder will recognize taxable gain or loss (equal to the
difference between such Certificateholder's tax basis in his Units and the
fair market value of Securities received), which will generally be capital
gain or loss except in the case of a dealer in securities.
Certificateholders who, upon liquidation, elect to receive cash or units
in a subsequent series of the Communications Trust will also recognize
taxable gain or loss. Certificateholders receiving Securities or Units in
a subsequent series of the Communications Trust as a liquidating
distribution should be aware that the Trust may not distribute any cash
proceeds with the distribution of such Securities or Units,
notwithstanding that there may be a tax liability resulting from such
distribution. Certificateholders should consult their own tax advisers in
this regard.
Distributions that are taxable as ordinary income to
Certificateholders will constitute dividends for Federal income tax
purposes but will be eligible for the dividends-received deduction for
corporations (other than corporations such as "S" corporations, which are
not eligible for such deduction because of their special characteristics,
and other than for purposes of special taxes such as the accumulated
earnings tax and the personal holding company tax) only to the extent of
dividends received from domestic issuers by the Trust with respect to
stock held by the Trust for more than 45 days and only if the
Certificateholder has held his Units for more than 45 days. The
dividends-received deduction is currently 70%. However, Congress from
time to time considers proposals to reduce the rate, and enactment of such
a proposal would adversely affect the after-tax return to investors who
can take advantage of the deduction. Certificateholders are urged to
consult their own tax advisers. Sections 246 and 246A of the Code contain
limitations on the eligibility of dividends for the corporate dividends-
received deduction (in addition to the limitation discussed above).
Depending upon the corporate Certificateholder's circumstances (including
whether it has a 45-day holding period for its Units and whether its Units
are debt financed), these limitations may be applicable to dividends
received by a Certificateholder from the Trust that would otherwise
qualify for the dividends-received deduction under the principles
discussed above. Accordingly, Certificateholders should consult their own
tax advisers in this regard. A corporate Certificateholder should be
aware that the receipt of dividend income for which the dividends-received
deduction is available may give rise to an alternative minimum tax
liability (or increase an existing liability) because the dividend income
will be included in the corporation's "adjusted current earnings" for
purposes of the adjustment to alternative minimum taxable income required
by Section 56(g) of the Code. Dividends received by the Trust from
foreign issuers will in most cases be subject to foreign withholding
taxes. The Trust expects that it will not qualify to make an election
that will enable Certificateholders to credit foreign withholding taxes
against their Federal income tax liability on distributions by the Trust.
The Federal tax status of each year's distributions will be reported
to Certificateholders and to the Internal Revenue Service. The foregoing
discussion relates only to the Federal income tax status of the Trust and
to the tax treatment of distributions by the Trust to U.S.
Certificateholders. Certificateholders who are not United States citizens
or residents should be aware that distributions from the Trust will
generally be subject to a withholding tax of 30%, or a lower treaty rate,
and should consult their own tax advisers to determine whether an
investment in the Trust is appropriate. Distributions may also be subject
to state and local taxation and Certificateholders should consult their
own tax advisers in this regard.
Entities that generally qualify for an exemption from Federal income
tax, such as many pension trusts, are nevertheless taxed under Section 511
of the Code on "unrelated business taxable income." Unrelated business
taxable income is income from a trade or business regularly carried on by
the tax-exempt entity that is unrelated to the entity's exempt purpose.
Unrelated business taxable income generally does not include dividend or
interest income or gain from the sale of investment property, unless such
income is derived from property that is debt-financed or is dealer
property. A tax-exempt entity's dividend income from the Trust and gain
from the sale of Units in the Trust or the Trust's sale of Securities is
not expected to constitute unrelated business taxable income to such tax-
exempt entity unless the acquisition of the Unit itself is debt-financed
or constitutes dealer property in the hands of the tax-exempt entity.
Before investing in the Trust, the trustee or investment manager of
an employee benefit plan (e.g., a pension or profit sharing retirement
plan) should consider among other things (a) whether the investment is
prudent under the Employee Retirement Income Security Act of 1974
("ERISA"), taking into account the needs of the plan and all of the facts
and circumstances of the investment in the Trust; (b) whether the
investment satisfies the diversification requirement of Section
404(a)(1)(C) of ERISA; and (c) whether the assets of the Trust are deemed
"plan assets" under ERISA and the Department of Labor regulations
regarding the definition of "plan assets."
Prospective tax-exempt investors are urged to consult their own tax
advisers prior to investing in the Trust.
LIQUIDITY
SPONSOR REPURCHASE
The Sponsor, although not obligated to do so, presently maintains a
secondary market for the Units and intends to continue to offer to
repurchase the Units. The Sponsor's secondary market repurchase price
will be based on the aggregate value of the Securities in the Trust
portfolio and will be the same as the redemption price. The aggregate
value of the Securities will be determined by the Trustee on a daily basis
and computed on the basis set forth under "Trustee Redemption." The
Sponsor does not guarantee the enforceability, marketability or price of
any Securities in the Portfolio or of the Units. Certificateholders who
wish to dispose of their Units should inquire of the Sponsor as to current
market prices prior to making a tender for redemption. The Sponsor may
discontinue repurchase of Units if the supply of Units exceeds demand, or
for other business reasons. The date of repurchase is deemed to be the
date on which Certificates representing Units are physically received in
proper form, i.e., properly endorsed, by Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167, on behalf of the Sponsor. Units
received after 4 P.M., New York Time, will be deemed to have been
repurchased on the next business day. In the event a market is not
maintained for the Units, a Certificateholder may be able to dispose of
Units only by tendering them to the Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate value
of the Securities in the Trust plus a 3.9% sales charge (of 4.038% of the
net amount invested) plus a pro rata portion of amounts, if any, in the
Income Account. Any Units that are purchased by the Sponsor in the
secondary market also may be redeemed by the Sponsor if it determines such
redemption to be in its best interest.
The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee
for redemption (see "Trustee Redemption"). Factors which the Sponsor will
consider in making a determination will include the number of Units of all
Trusts which it has in inventory, its estimate of the salability and the
time required to sell such Units and general market conditions. For
example, if in order to meet redemptions of Units the Trustee must dispose
of Securities, and if such disposition cannot be made by the redemption
date (seven calendar days after tender), the Sponsor may elect to purchase
such Units. Such purchase shall be made by payment to the
Certificateholder not later than the close of business on the redemption
date of an amount equal to the Redemption Price on the date of tender.
TRUSTEE REDEMPTION
Units may also be tendered to the Trustee for redemption at its
corporate trust office at 770 Broadway, New York, New York 10003, upon
proper delivery of Certificates representing such Units and payment of any
relevant tax. At the present time there are no specific taxes related to
the redemption of Units. No redemption fee will be charged by the Sponsor
or the Trustee. Units redeemed by the Trustee will be cancelled.
Certificates representing Units to be redeemed must be delivered to
the Trustee and must be properly endorsed or accompanied by proper
instruments of transfer with signature guaranteed (or by providing
satisfactory indemnity, as in the case of lost, stolen or mutilated
Certificates). Thus, redemptions of Units cannot be effected until
Certificates representing such Units have been delivered by the person
seeking redemption. (See "Certificates.") Certificateholders must sign
exactly as their names appear on the faces of their Certificates. In
certain instances the Trustee may require additional documents such as,
but not limited to, trust instruments, certificates of death, appointments
as executor or administrator or certificates of corporate authority.
Within seven calendar days following a tender for redemption, or, if
such seventh day is not a business day, on the first business day prior
thereto, the Certificateholder will be entitled to receive an amount for
each Unit tendered equal to the Redemption Price per Unit computed as of
the Evaluation Time set forth under "Summary of Essential Information" in
Part A on the date of tender. The "date of tender" is deemed to be the
date on which Units are received by the Trustee, except that with respect
to Units received after the close of trading on the New York Stock
Exchange (4:00 p.m. Eastern Time), the date of tender is the next day on
which such Exchange is open for trading, and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.
A Certificateholder will receive his redemption proceeds in cash and
amounts paid on redemption shall be withdrawn from the Income Account, or,
if the balance therein is insufficient, from the Principal Account. All
other amounts paid on redemption shall be withdrawn from the Principal
Account. The Trustee is empowered to sell Securities in order to make
funds available for redemptions. Such sales, if required, could result in
a sale of Securities by the Trustee at a loss. To the extent Securities
are sold, the size and diversity of the Trust will be reduced. The
Securities to be sold will be selected by the Trustee in order to
maintain, to the extent practicable, the proportionate relationship among
the number of shares of each Stock. Provision is made in the Indenture
under which the Sponsor may, but need not, specify minimum amounts in
which blocks of Securities are to be sold in order to obtain the best
price for the Fund. While these minimum amounts may vary from time to
time in accordance with market conditions, the Sponsor believes that the
minimum amounts which would be specified would be approximately 100 shares
for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in
the Trust determined by the Trustee on the basis of (i) the cash on hand
in the Trust or moneys in the process of being collected, (ii) the value
of the Securities in the Trust as determined by the Trustee, less (a)
amounts representing taxes or other governmental charges payable out of
the Trust, (b) the accrued expenses of the Trust and (c) cash allocated
for the distribution to Certificateholders of record as of the business
day prior to the evaluation being made. The Trustee may determine the
value of the Securities in the Trust in the following manner: if the
Securities are listed on a national securities exchange or the NASDAQ
national market system, this evaluation is generally based on the closing
sale prices on that exchange or that system (unless the Trustee deems
these prices inappropriate as a basis for valuation). If the Securities
are not so listed or, if so listed and the principal market therefor is
other than on the exchange, the evaluation shall generally be based on the
closing purchase price in the over-the-counter market (unless the Trustee
deems these prices inappropriate as a basis for evaluation) or if there is
no such closing purchase price, then the Trustee may utilize, at the
Trust's expense, an independent evaluation service or services to
ascertain the values of the Securities. The independent evaluation
service shall use any of the following methods, or a combination thereof,
which it deems appropriate: (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Securities on
the bid side of the market or (c) by any combination of the above.
The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase a Unit tendered for redemption or if
the Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit,
to sell such Unit in the over-the-counter market for the account of the
tendering Certificateholder at prices which will return to the
Certificateholder an amount in cash, net after deducting brokerage
commissions, transfer taxes and other charges, equal to or in excess of
the Redemption Price for such Unit. The Trustee will pay the net proceeds
of any such sale to the Certificateholder on the day he would otherwise be
entitled to receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption and
to postpone the date of payment of the Redemption Price per Unit for any
period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or trading on that Exchange is
restricted or during which (as determined by the Securities and Exchange
Commission) an emergency exists as a result of which disposal or
evaluation of the Bonds is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
The Trustee and the Sponsor are not liable to any person or in any way for
any loss or damage which may result from any such suspension or
postponement.
A Certificateholder who wishes to dispose of his Units should inquire
of his bank or broker in order to determine if there is a current
secondary market price in excess of the Redemption Price.
TOTAL REINVESTMENT PLAN
Distributions of dividend income and capital gain, if any, from the
Trust are made to Certificateholders monthly. The Certificateholder has
the option, however, of either receiving his dividend check, together with
any other payments, from the Trustee or participating in a reinvestment
program offered by the Sponsor in shares of GOC Fund, Inc., U.S. Treasury
Money Market Portfolio (the "Fund"). Participation in the reinvestment
option is conditioned on the Fund's lawful qualification for sale in the
state in which the Certificateholder is a resident.
Upon enrollment in the reinvestment option, the Trustee will direct
dividend and/or other distributions, if any, to the Fund. The Fund seeks
to maximize current income and to maintain liquidity and a stable net
asset value by investing in short term U.S. Treasury Obligations which
have effective maturities of 397 days or less. For more complete
information concerning the Fund, including charges and expenses, the
Certificateholder should fill out and mail the card attached to the inside
back cover of the Prospectus. The prospectus for the Fund will be sent to
Certificateholders. The Certificateholder should read the prospectus for
the Fund carefully before deciding to participate.
TRUST ADMINISTRATION
PORTFOLIO SUPERVISION
The Trust is a unit investment trust and is not a managed fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Portfolio of the Trust,
however, will not be managed and therefore the adverse financial condition
of an issuer will not necessarily require the sale of its Securities from
the Portfolio. However, the Sponsor may direct the disposition of
Securities upon the occurrence of certain events including:
1. default in payment of amounts due on any of the Securities;
2. institution of certain legal proceedings;
3. default under certain documents materially and adversely
affecting future declaration or payment of amounts due or
expected;
4. the determination of the Sponsor that such sale is desirable to
maintain the qualification of the Trust as a "regulated
investment company" under the Internal Revenue Code;
5. if the disposition of these Securities is necessary in order to
enable the Trust to make distributions of the Trust's capital
gain net income; or
6. decline in price as a direct result of serious adverse credit
factors affecting the issuer of a Security which, in the opinion
of the Sponsor, would make the retention of the Security
detrimental to the Trust or the Certificateholders.
If a default in the payment of amounts due on any Security occurs and
if the Sponsor fails to give immediate instructions to sell or hold that
Security, the Trust Agreement provides that the Trustee, within 30 days of
that failure by the Sponsor, may sell the Security.
The Sponsor, at its option, is authorized under the Trust Agreement
to direct the Trustee to reinvest in Substitute Securities the proceeds of
sale of any of the Securities sold pursuant to provisions 1, 2, 3 and 6
above or in order to replace Failed Securities. (See "Substitute
Securities" above.)
The Trust Agreement provides that it is the responsibility of the
Sponsor to instruct the Trustee to reject any offer made by an issuer of
any of the Securities to issue new securities in exchange and substitution
for any Security pursuant to a recapitalization or reorganization, except
that the Sponsor may instruct the Trustee to accept such an offer or to
take any other action with respect thereto as the Sponsor may deem proper
if the issuer failed to declare or pay, or the Sponsor anticipates such
issuer will fail to declare or pay, anticipated dividends with respect
thereto.
The Trust Agreement also authorizes the Sponsor to increase the size
and number of Units of the Trust by the deposit of Additional Securities,
contracts to purchase Additional Securities or cash or a letter of credit
with instructions to purchase Additional Securities in exchange for the
corresponding number of additional Units from time to time subsequent to
the initial Date of Deposit, provided that the original proportionate
relationship among the number of shares of each Security established on
the Initial Date of Deposit is maintained to the extent practicable.
With respect to deposits of Additional Securities (or cash or a
letter of credit with instructions to purchase Additional Securities), in
connection with creating additional Units of the Trust, the Sponsor may
specify the minimum numbers in which Additional Securities will be
deposited or purchased. If a deposit is not sufficient to acquire minimum
amounts of each Security, Additional Securities may be acquired in the
order of the Security most under-represented immediately before the
deposit when compared to the original proportionate relationship. If
Securities of an issue originally deposited are unavailable at the time of
the subsequent deposit, the Sponsor may (1) deposit cash or a letter of
credit with instructions to purchase the Security when it becomes
available, or (2) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a
Substitute Security.
TRUST AGREEMENT AND AMENDMENT
The Trust Agreement may be amended by the Trustee and the Sponsor
without the consent of any of the Certificateholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective
or inconsistent; (2) to change any provision thereof as may be required by
the Securities and Exchange Commission or any successor governmental
agency; or (3) to make such other provisions in regard to matters arising
thereunder as shall not adversely affect the interests of the
Certificateholders.
The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the
consent of the holders of Certificates evidencing 66-2/3% of the Units
then outstanding for the purpose of modifying the rights of
Certificateholders; provided that no such amendment or waiver shall reduce
any Certificateholder's interest in the Trust without his consent or
reduce the percentage of Units required to consent to any such amendment
or waiver without the consent of the holders of all Certificates. The
Trust Agreement may not be amended, without the consent of the holders of
all Certificates in the Trust then outstanding, to increase the number of
Units issuable or to permit the acquisition of any Securities in addition
to or in substitution for those initially deposited in such Trust, except
in accordance with the provisions of the Trust Agreement. The Trustee
shall promptly notify Certificateholders, in writing, of the substance of
any such amendment.
TRUST TERMINATION
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last
of the Securities held in such Trust but in no event is it to continue
beyond the Mandatory Termination Date. If the value of the Trust shall be
less than the minimum amount set forth under "Summary of Essential
Information" in Part A, the Trustee may, in its discretion, and shall,
when so directed by the Sponsor, terminate the Trust. The Trust may also
be terminated at any time with the consent of the holders of Certificates
representing 100% of the Units then outstanding. The Trustee may utilize
the services of the Sponsor for the sale of all or a portion of the
Securities in the Trust. The Sponsor will receive brokerage commissions
from the Trust in connection with such sales in accordance with applicable
law. In the event of termination, written notice thereof will be sent by
the Trustee to all Certificateholders. Such notice will provide
Certificateholders with three options by which to receive their pro rata
share of the net asset value of the Trust.
1. A Certificateholder who owns units in aggregate value of at
least $25,000 and who so elects by notifying the Trustee prior to the
commencement of the Liquidation Period by returning a properly
completed election request (to be supplied to Certificateholders at
least 20 days prior to such date) (see Part A--"Summary of Essential
Information" for the date of the commencement of the Liquidation
Period) and whose interest in the Trust entitles him to receive at
least one share of each underlying Security will have his Units
redeemed on commencement of the Liquidation Period by distribution of
the Certificateholder's pro rata share of the net asset value of the
Trust on such date distributed in kind to the extent represented by
whole shares of underlying Securities and the balance in cash within
7 calendar days next following the commencement of the Liquidation
Period. Certificateholders subsequently selling such distributed
Securities will incur brokerage costs when disposing of such
Securities. An election of this option will not prevent the
Certificateholder from recognizing taxable gain or loss as a result
of the liquidation, even though no cash will be distributed to pay
any taxes. Certificateholders should consult their own tax adviser
in this regard.
A Certificateholder may also elect prior to the Mandatory Termination
Date, by so specifying in a properly completed election request, the
following two options with regard to the termination distribution of such
Certificateholder's interest in the Trust as set forth below:
2. to receive in cash such Certificateholder's pro rata share
of the net asset value of the Trust derived from the sale by the
Sponsor as the agent of the Trustee of the underlying Securities over
a period not to exceed 60 business days immediately following the
commencement of the Liquidation Period. The Certificateholder's
Redemption Price per Unit on the settlement date of the last trade of
a Security in the Trust will be distributed to such Certificateholder
within 7 days of the settlement of the trade of the last Security to
be sold; and/or
3. upon the receipt by the Trust of an appropriate exemptive
order from the Securities and Exchange Commission, to invest such
Certificateholder's pro rata share of the net asset value of the
Trust derived from the sale by the Sponsor as agent of the Trustee of
the underlying Securities over a period not to exceed 60 business
days immediately following the commencement of the Liquidation
Period, in units of a subsequent series of the Communications Trust
(the "New Series"). The Units of a New Series will be purchased by
the Certificateholder within 7 days of the settlement of the trade
for the last Security to be sold. Such purchaser will be entitled to
a reduced sales load of 2.5% of the Public Offering Price upon the
purchase of units of the New Series. It is expected that the terms
of the New Series will be substantially the same as the terms of the
Trust described in this Prospectus, and that similar options with
respect to the termination of such New Series will be available. The
availability of this option does not constitute a solicitation of an
offer to purchase Units of a New Series or any other security. A
Certificateholder's election to participate in this option will be
treated as an indication of interest only. At any time prior to the
purchase by the Certificateholder of units of a New Series such
Certificateholder may change his investment strategy and receive, in
cash, the proceeds of the sale of the Securities. An election of
this option will not prevent the Certificateholder from recognizing
taxable gain or loss (except in the case of a loss, if the New Series
is treated as substantially identical to the Trust) as a result of
the liquidation, even though no cash will be distributed to pay any
taxes.
Certificateholders should consult their own tax advisers in this
regard.
The Sponsor has agreed to effect the sales of underlying securities
for the Trustee in the case of the second and third options over a period
not to exceed 60 business days immediately following the commencement of
the Liquidation Period free of brokerage commissions. The Sponsor, on
behalf of the Trustee, will sell, unless prevented by unusual and
unforeseen circumstances, such as, among other reasons, a suspension in
trading of a Security, the close of a stock exchange, outbreak of
hostilities and collapse of the economy, on each business day during the
60 business day period at least a number of shares of each Security which
then remains in the portfolio (based on the number of shares of each issue
in the portfolio) multiplied by a fraction the numerator of which is one
and the denominator of which is the number of days remaining in the 60
business day sales period. The Redemption Price Per Unit upon the
settlement of the last sale of Securities during the 60 business day
period will be distributed to Certificateholders in redemption of such
Certificateholders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the
New Series and the amount of other orders for Units in the New Series, the
Sponsor may purchase a large amount of securities for the New Series in a
short period of time. The Sponsor's buying of securities may tend to
raise the market prices of these securities. The actual market impact of
the Sponsor'ss purchases, however, is currently unpredictable because the
actual amount of securities to be purchased and the supply and price of
those securities is unknown. A similar problem may occur in connection
with the sale of Securities during the 60 business day period immediately
following the commencement of the Liquidation Period; depending on the
number of sales required, the prices of and demand for Securities, such
sales may tend to depress the market prices and thus reduce the proceeds
of such sales. The Sponsor believes that the sale of underlying
Securities over a 60 business day period as described above is in the best
interest of a Certificateholder and may mitigate the negative market price
consequences stemming from the trading of large amounts of Securities.
The Securities may be sold in fewer than 60 days if, in the Sponsor's
judgment, such sales are in the best interest of Certificateholders. The
Sponsor, in implementing such sales of securities on behalf of the
Trustee, will seek to maximize the sales proceeds and will act in the best
interests of the Certificateholders. There can be no assurance, however,
that any adverse price consequences of heavy trading will be mitigated.
Certificateholders who do not make any election will be deemed to
have elected to receive the Redemption Price per Unit in cash (option
number 2).
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor any subsequent series of the Trust, without penalty or incurring
liability to any Certificateholder. If the Sponsor so decides, the
Sponsor will notify the Trustee of that decision, and the Trustee will
notify the Certificateholders before the Termination Date. All
Certificateholders will then elect either option 1 or option 2.
By electing to reinvest in the New Series, the Certificateholder
indicates his interest in having his terminating distribution from the
Trust invested only in the New Series created following termination of the
Trust; the Sponsor expect, however, that a similar reinvestment program
will be offered with respect to all subsequent series of the Trust, thus
giving Certificateholders a yearly opportunity to elect to "rollover"
their terminating distributions into a New Series. The availability of
the reinvestment privilege does not constitute a solicitation of offers to
purchase units of a New Series or any other security. A
Certificateholder's election to participate in the reinvestment program
will be treated as an indication of interest only. The Sponsor intends to
coordinate the date of deposit of a future series so that the terminating
trust will terminate contemporaneously with the creating of a New Series.
The Sponsor reserves the right to modify, suspend or terminate the
reinvestment privilege at any time.
THE SPONSOR
The Sponsor, Bear, Stearns & Co. Inc., a Delaware corporation, is
engaged in the underwriting, investment banking and brokerage business and
is a member of the National Association of Securities Dealers, Inc. and
all principal securities and commodities exchanges, including the New York
Stock Exchange, the American Stock Exchange, the Midwest Stock Exchange
and the Pacific Stock Exchange. Bear Stearns maintains its principal
business offices at 245 Park Avenue, New York, New York 10167 and, since
its reorganization from a partnership to a corporation in October, 1985
has been a wholly-owned subsidiary of The Bear Stearns Companies Inc.
Bear Stearns, through its predecessor entities, has been engaged in the
investment banking and brokerage business since 1923. Bear Stearns is the
sponsor for numerous series of unit investment trusts, including, A
Corporate Trust, Series 1 (and Subsequent Series), New York Municipal
Trust, Series 1 (and Subsequent Series), New York Discount and Zero Coupon
Fund, 1st Series (and Subsequent Series), Municipal Securities Trust,
Series 1 (and Subsequent Series), 1st Discount Series (and Subsequent
Series), Multi-State Series 1 (and Subsequent Series), High Income Series
1 (and Subsequent Series), Short-Intermediate Term Series 1 (and
Subsequent Series), Mortgage Securities Trust, Series 1 (and Subsequent
Series), Insured Municipal Securities Trust, Series 1 (and Subsequent
Series) and 5th Discount Series (and Subsequent Series) and Equity
Securities Trust, Signature Series, Gabelli Communications Income Trust
(and Subsequent Series).
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its
ability to carry out their contractual obligations.
The Sponsor will be under no liability to Certificateholders for
taking any action, or refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment except in cases
of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of their obligations and duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor.
If at any time the Sponsor shall resign or fail to perform any of its
duties under the Trust Agreement or becomes incapable of acting or becomes
bankrupt or its affairs are taken over by public authorities, then the
Trustee may either (a) appoint a successor Sponsor; (b) terminate the
Trust Agreement and liquidate the Trust; or (c) continue to act as Trustee
without terminating the Trust Agreement. Any successor Sponsor appointed
by the Trustee shall be satisfactory to the Trustee and, at the time of
appointment, shall have a net worth of at least $1,000,000.
THE TRUSTEE
The Trustee is United States Trust Company of New York, with its
principal place of business at 770 Broadway, New York, New York 10003.
United States Trust Company of New York has, since its establishment in
1853, engaged primarily in the management of trust and agency accounts for
individuals and corporations. The Trustee is a member of the New York
Clearing House Association and is subject to supervision and examination
by the Superintendent of Banks of the State of New York, the Federal
Deposit Insurance Corporation and the Board of Governors of the Federal
Reserve System.
The Trustee shall not be liable or responsible in any way for taking
any action, or for refraining from taking any action, in good faith
pursuant to the Trust Agreement, or for errors in judgment; or for any
disposition of any moneys, Securities or Certificates in accordance with
the Trust Agreement, except in cases of its own willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and
duties; provided, however, that the Trustee shall not in any event be
liable or responsible for any evaluation made by any independent
evaluation service employed by it. In addition, the Trustee shall not be
liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or the Trust which it may be required to pay
under current or future law of the United States or any other taxing
authority having jurisdiction. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any
of the Securities pursuant to the Trust Agreement.
For further information relating to the responsibilities of the
Trustee under the Trust Agreement, reference is made to the material set
forth under "Rights of Certificateholders."
The Trustee may resign by executing an instrument in writing and
filing the same with the Sponsor, and mailing a copy of a notice of
resignation to all Certificateholders. In such an event the Sponsor are
obligated to appoint a successor Trustee as soon as possible. In
addition, if the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Trust
Agreement. Notice of such removal and appointment shall be mailed to each
Certificateholder by the Sponsor. If upon resignation of the Trustee no
successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court
of competent jurisdiction for the appointment of a successor. The
resignation or removal of the Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor Trustee. Upon execution of a
written acceptance of such appointment by such successor Trustee, all the
rights, powers, duties and obligations of the original Trustee shall vest
in the successor.
Any corporation into which the Trustee may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, shall be the
successor Trustee. The Trustee must always be a banking corporation
organized under the laws of the United States or any State and have at all
times an aggregate capital, surplus and undivided profits of not less than
$2,500,000.
THE PORTFOLIO CONSULTANT
The Portfolio Consultant is Gabelli Funds, Inc., a New York
corporation, with offices at One Corporate Center at Rye, New York 10580-
1430. The Portfolio Consultant is a registered investment advisor, and
with its affiliates, acts as an investment manager, administrator or
advisor for assets aggregating in excess of $8.0 billion as of
December 31, 1993.
The Portfolio Consultant is not a Sponsor of the Trust. The
Portfolio Consultant has been retained by the Sponsor, at its expense, to
utilize its equity expertise in selecting the Securities deposited in the
Trust. The Portfolio Consultant's only responsibility with respect to the
Trust, in addition to its role in Portfolio selection, is to monitor the
Securities of the Portfolio and make recommendations to the Sponsor
regarding the disposition of the Securities held by the Trust. The
responsibility of monitoring the Securities of the Portfolio means that if
the Portfolio Consultant's views materially change regarding the
appropriateness of an investment in any Security then held in the Trust
based upon the investment objectives, guidelines, term, parameters,
policies and restrictions supplied to the Portfolio Consultant by the
Sponsor, the Portfolio Consultant will notify the Sponsor of such change
to the extent consistent with applicable legal requirements. The Sponsor
are not obligated to adhere to the recommendations of the Portfolio
Consultant regarding the disposition of Securities. The Sponsor have the
sole authority to direct the Trustee to dispose of Securities under the
Trust Agreement. The Portfolio Consultant has no other responsibilities
or obligations to the Trust or the Certificateholders. Investors should
be aware that the Portfolio Consultant, with its affiliates, is an
investment adviser for managed investment companies and managed private
accounts that may have similar or different investment objectives than the
Trust. Some of the Securities in the Trust may also be owned by these
other clients of the Portfolio Consultant and its affiliates. However,
because these clients have "managed" portfolios and may have differing
investment objectives, the Portfolio Consultant may sell certain
Securities for those accounts in instances where a sale of the Trust would
be impermissible, such as to maximize return by taking advantage of market
fluctuations.
The Portfolio Consultant may resign or may be removed by the Sponsor
at any time on sixty days' prior notice. The Sponsor shall use its best
efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon the acceptance of appointment by the successor
Portfolio Consultant. If upon resignation of the Portfolio Consultant no
successor has accepted appointment within sixty days after notice of
resignation, the Sponsor has agreed to perform this function.
EVALUATION OF THE TRUST
The value of the Securities in the Trust portfolio is determined in
good faith by the Trustee on the basis set forth under "Public Offering--
Offering Price." The Sponsor and the Certificateholders may rely on any
evaluation furnished by the Trustee and shall have no responsibility for
the accuracy thereof. Determinations by the Trustee under the Trust
Agreement shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Trustee shall be
under no liability to the Sponsor or Certificateholders for errors in
judgment, except in cases of its own willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties. The
Trustee, the Sponsor and the Certificateholders may rely on any evaluation
furnished to the Trustee by an independent evaluation service and shall
have no responsibility for the accuracy thereof.
TRUST EXPENSES AND CHARGES
At no cost to the Trust, the Sponsor has borne all the expenses of
creating and establishing the Trust, including the cost of initial
preparation and execution of the Trust Agreement, registration of the
Trust and the Units under the Investment Company Act of 1940 and the
Securities Act of 1933, the initial preparation and printing of the
Certificates, legal expenses, advertising and selling expenses, expenses
of the Trustee, initial fees and other out-of-pocket expenses.
The Sponsor will not charge the Trust a fee for their services as
such. (See "Sponsor's and Underwriters' Profits.")
The Sponsor will receive for portfolio supervisory services to the
Trust an Annual Fee in the amount set forth under "Summary of Essential
Information" in Part A. The Sponsor's fee may exceed the actual cost of
providing portfolio supervisory services for the Trust, but at no time
will the total amount received for portfolio supervisory services rendered
to all series of the Equity Securities Trust in any calendar year exceed
the aggregate cost to the Sponsor of supplying such services in such year.
(See "Portfolio Supervision.")
The Trustee will receive, for its ordinary recurring services to the
Trust, an annual fee in the amount set forth under "Summary of Essential
Information" in Part A. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Trust Agreement, see "Trust
Administration" and "Rights of Certificateholders."
The Trustee's fees applicable to a Trust are payable monthly as of
the Record Date from the Income Account of the Trust to the extent funds
are available and then from the Principal Account. Both fees may be
increased without approval of the Certificateholders by amounts not
exceeding proportionate increases in consumer prices for services as
measured by the United States Department of Labor's Consumer Price Index
entitled "All Services Less Rent."
The following additional charges are or may be incurred by the Trust:
all expenses (including counsel fees) of the Trustee incurred and advances
made in connection with its activities under the Trust Agreement,
including the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the
Certificateholders; fees of the Trustee for any extraordinary services
performed under the Trust Agreement; indemnification of the Trustee for
any loss or liability accruing to it without gross negligence, bad faith
or willful misconduct on its part, arising out of or in connection with
its acceptance or administration of the Trust; indemnification of the
Sponsor for any losses, liabilities and expenses incurred in acting as
sponsors of the Trust without gross negligence, bad faith or willful
misconduct on its part; and all taxes and other governmental charges
imposed upon the Securities or any part of the Trust (no such taxes or
charges are being levied, made or, to the knowledge of the Sponsor,
contemplated). The above expenses, including the Trustee's fees, when
paid by or owing to the Trustee are secured by a first lien on the Trust
to which such expenses are charged. In addition, the Trustee is empowered
to sell the Securities in order to make funds available to pay all
expenses.
The accounts of the Trust shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of
the audit shall be an expense of the Trust. So long as the Sponsor
maintains a secondary market, the Sponsor will bear any audit expense
which exceeds $.50 Cents per Unit. Certificateholders covered by the
audit during the year may receive a copy of the audited financials upon
request.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
EXCHANGE PRIVILEGE
Upon receipt by the Trust of an appropriate exemptive order from the
Securities and Exchange Commission, Certificateholders will be able to
elect to exchange any or all of their Units of this Trust for Units of one
or more of any available series of Equity Securities Trust, Mortgage
Securities Trust, Insured Municipal Securities Trust, Municipal Securities
Trust, New York Municipal Trust, Mortgage Securities Trust or A Corporate
Trust (the "Exchange Trusts") at a reduced sales charge as set forth
below. Under the Exchange Privilege, the Sponsor's repurchase price of
the Units being surrendered will be based on the market value of the
Securities in the Trust portfolio or on the aggregate offer price of the
Bonds in the other Exchange Trust Portfolios; and after the initial
offering period has been completed, the repurchase price will be based on
the aggregate bid price of the Bonds in the particular Trust portfolio.
Units in an Exchange Trust then will be sold to the Certificateholder at a
price based on the aggregate offer price of the Bonds in the Exchange
Trust portfolio (or based for units of Equity Securities Trust, based on
the market value of the underlying securities in the Trust Portfolio)
during the initial public offering period of the Exchange Trust; and after
the initial public offering period has been completed, based on the
aggregate bid price of the Bonds in the Exchange Trust Portfolio plus
accrued interest (or based for units of Equity Securities Trust, based on
the market value of the underlying securities in the Trust Portfolio) and
a reduced sales charge as set forth below.
Except for unitholders who wish to exercise the Exchange Privilege
within the first five months of their purchase of Units of the Trust, the
sales charge applicable to the purchase of units of an Exchange Trust
shall be approximately 1.5% of the price of each Exchange Trust unit (or
1,000 Units for the Mortgage Securities Trust or 100 Units for the Equity
Securities Trust). For unitholders who wish to exercise the Exchange
Privilege within the first five months of their purchase of Units of the
Trust, the sales charge applicable to the purchase of units of an Exchange
Trust shall be the greater of (i) approximately 1.5% of the price of each
Exchange Trust unit (or 1,000 Units for the Mortgage Securities Trust or
100 Units for the Equity Securities Trust), or (ii) an amount which when
coupled with the sales charge paid by the unitholder upon his original
purchase of Units of the Trust at least equals the sales charge applicable
in the direct purchase of units of an Exchange Trust. The Exchange
Privilege is subject to the following conditions:
1. The Sponsor must be maintaining a secondary market in both
the Units of the Trust held by the Certificateholder and the Units of
the available Exchange Trust. While the Sponsor has indicated its
intention to maintain a market in the Units of all Trusts sponsored
by it, the Sponsor is under no obligation to continue to maintain a
secondary market and therefore there is no assurance that the
Exchange Privilege will be available to a Certificateholder at any
specific time in the future. At the time of the Certificateholder's
election to participate in the Exchange Privilege, there also must be
Units of the Exchange Trust available for sale, either under the
initial primary distribution or in the Sponsor'ss secondary market.
2. Exchanges will be effected in whole units only. Any excess
proceeds from the Units surrendered for exchange will be remitted and
the selling Certificateholder will not be permitted to advance any
new funds in order to complete an exchange. Units of the Mortgage
Securities Trust may only be acquired in blocks of 1,000 Units.
Units of the Equity Securities Trust may only be acquired in blocks
of 100 Units.
3. The Sponsor reserves the right to suspend, modify or
terminate the Exchange Privilege. The Sponsor will provide
unitholders of the Trust with 60 days prior written notice of any
termination or material amendment to the Exchange Privilege, provided
that, no notice need be given if (i) the only material effect of an
amendment is to reduce or eliminate the sales charge payable at the
time of the exchange, to add one or more series of the Trust eligible
for the Exchange Privilege or to delete a series which has been
terminated from eligibility for the Exchange Privilege, (ii) there is
a suspension of the redemption of units of an Exchange Trust under
Section 22(e) of the Investment Company Act of 1940, or (iii) an
Exchange Trust temporarily delays or ceases the sale of its units
because it is unable to invest amounts effectively in accordance with
its investment objectives, policies and restrictions. During the 60
day notice period prior to the termination or material amendment of
the Exchange Privilege described above, the Sponsor will continue to
maintain a secondary market in the units of all Exchange Trusts that
could be acquired by the affected unitholders. Unitholders may,
during this 60 day period, exercise the Exchange Privilege in
accordance with its terms then in effect. In the event the Exchange
Privilege is not available to a Certificateholder at the time he
wishes to exercise it, the Certificateholder will immediately be
notified and no action will be taken with respect to his Units
without further instructions from the Certificateholder.
To exercise the Exchange Privilege, a Certificateholder should notify
the Sponsor of his desire to exercise his Exchange Privilege. If Units of
a designated, outstanding series of an Exchange Trust are at the time
available for sale and such Units may lawfully be sold in the state in
which the Certificateholder is a resident, the Certificateholder will be
provided with a current prospectus or prospectuses relating to each
Exchange Trust in which he indicates an interest. He may then select the
Trust or Trusts into which he desires to invest the proceeds from his sale
of Units. The exchange transaction will operate in a manner essentially
identical to a secondary market transaction except that units may be
purchased at a reduced sales charge.
EXAMPLE: Assume that after the initial public offering has been
completed, a Certificateholder has five units of a Trust with a current
value of $700 per unit which he has held for more than 5 months and the
Certificateholder wishes to exchange the proceeds for units of a secondary
market Exchange Trust with a current price of $725 per unit. The proceeds
from the Certificateholder's original units will aggregate $3,500. Since
only whole units of an Exchange Trust may be purchased under the Exchange
Privilege, the Certificateholder would be able to acquire four units (or
4,000 Units of the Mortgage Securities Trust or 400 Units of the Equity
Securities Trust) for a total cost of $2,960 ($2,900 for units and $60 for
the sales charge). The remaining $540 would be remitted to the
Certificateholder in cash. If the Certificateholder acquired the same
number of units at the same time in a regular secondary market
transaction, the price would have been $3,068.80 ($2,900 for units and
$168.80 for the sales charge, assuming a 5 1/2% sales charge times the
public offering price).
THE CONVERSION OFFER
Upon receipt by the Trust of an appropriate exemptive order from the
Securities and Exchange Commission, Unit owners of any registered unit
investment trust for which there is no active secondary market in the
units of such trust (a "Redemption Trust") will be able to elect to redeem
such units and apply the proceeds of the redemption to the purchase of
available Units of one or more series of Equity Securities Trust,
Mortgage Securities Trust, A Corporate Trust, Municipal Securities Trust,
Insured Municipal Securities Trust, or New York Municipal Trust sponsored
by Bear, Stearns & Co. Inc. (the "Conversion Trusts") at the Public
Offering Price for units of the Conversion Trust based on a reduced sales
charge as set forth below. Under the Conversion Offer, units of the
Redemption Trust must be tendered to the trustee of such trust for
redemption at the redemption price, which is based upon the market value
of the underlying securities in the Trust portfolio or the aggregate bid
side evaluation of the underlying bonds in other Trust portfolios and is
generally about 1-1/2% to 2% lower than the offering price for such bonds.
The purchase price of the units will be based on the aggregate offer price
of the underlying bonds in the Conversion Trust portfolio during its
initial offering period; or, at a price based on the aggregate bid price
of the underlying bonds if the initial public offering of the Conversion
Trust has been completed, plus accrued interest and a sales charge as set
forth below. If the participant elects to purchase units of the Equity
Series Trust under the Conversion Offer, the purchase price of the Units
will be based, at all times, on the market value of the underlying
securities in the Trust portfolio plus a sales charge.
Except for unitholders who wish to exercise the Conversion Offer
within the first five months of their purchase of units of a Redemption
Trust, the sales charge applicable to the purchase of Units of the
Conversion Trust shall be approximately 1.5% of the price of each Unit (or
per 1,000 Units for the Mortgage Securities Trust or 100 Units for the
Equity Securities Trust). For unitholders who wish to exercise the
Conversion Offer within the first five months of their purchase of units
of a Redemption Trust, the sales charge applicable to the purchase of
Units of a Conversion Trust shall be the greater of (i) approximately 1.5%
of the price of each Unit (or per 1,000 Units for the Mortgage Securities
Trust or 100 Units for the Equity Securities Trust) or (ii) an amount
which when coupled with the sales charge paid by the unitholder upon his
original purchase of units of the Redemption Trust at least equals the
sales charge applicable in the direct purchase of Units of a Conversion
Trust. The Conversion Offer is subject to the following limitations:
1. The Conversion Offer is limited only to unit owners of any
Redemption Trust, defined as a unit investment trust for which there
is no active secondary market at the time the Certificateholder
elects to participate in the Conversion Offer. At the time of the
unit owner's election to participate in the Conversion Offer, there
also must be available units of a Conversion Trust, either under a
primary distribution or in the Sponsor's secondary market.
2. Exchanges under the Conversion Offer will be effected in
whole units only. Unit owners will not be permitted to advance any
new funds in order to complete an exchange under the Conversion
Offer. Any excess proceeds from units being redeemed will be
returned to the unit owner. Units of the Mortgage Securities Trust
may only be acquired in blocks of 1,000 units. Units of the Equity
Securities Trust may only be acquired in blocks of 100 Units.
3. The Sponsor reserves the right to modify, suspend or
terminate the Conversion Offer at any time without notice to unit
owners of Redemption Trusts. In the event the Conversion Offer is
not available to a unit owner at the time he wishes to exercise it,
the unit owner will be notified immediately and no action will be
taken with respect to his units without further instruction from the
unit owner. The Sponsor also reserves the right to raise the sales
charge based on actual increases in the Sponsor's costs and expenses
in connection with administering the program, up to a maximum sales
charge of 2% per unit (or per 1,000 units for the Mortgage Securities
Trust or 100 Units for the Equity Securities Trust).
To exercise the Conversion Offer, a unit owner of a Redemption Trust
should notify his retail broker of his desire to redeem his Redemption
Trust Units and use the proceeds from the redemption to purchase Units of
one or more of the Conversion Trusts. If Units of a designated,
outstanding series of a Conversion Trust are at that time available for
sale and if such Units may lawfully be sold in the state in which the unit
owner is a resident, the unit owner will be provided with a current
prospectus or prospectuses relating to each Conversion Trust in which he
indicates an interest. He then may select the Trust or Trusts into which
he decides to invest the proceeds from the sale of his Units. The
transaction will be handled entirely through the unit owner's retail
broker. The retail broker must tender the units to the trustee of the
Redemption Trust for redemption and then apply the proceeds to the
redemption toward the purchase of units of a Conversion Trust at a price
based on the aggregate offer or bid side evaluation per Unit of the
Conversion Trust, depending on which price is applicable, plus accrued
interest and the applicable sales charge. The certificates must be
surrendered to the broker at the time the redemption order is placed and
the broker must specify to the Sponsor that the purchase of Conversion
Trust Units is being made pursuant to the Conversion Offer. The unit
owner's broker will be entitled to retain $5 of the applicable sales
charge.
EXAMPLE: Assume a unit owner has five units of a Redemption Trust which
has held for more than 5 months with a current redemption price of $675
per unit based on the aggregate bid price of the underlying bonds and the
unit owner wishes to participate in the Conversion Offer and exchange the
proceeds for units of a secondary market Conversion Trust with a current
price of $750 per Unit. The proceeds for the unit owner's redemption of
units will aggregate $3,375. Since only whole units of a Redemption Trust
may be purchased under the Conversion Offer, the unit owner will be able
to acquire four units of the Conversion Trust (or 4,000 units of the
Mortgage Securities Trust or 400 Units of the Equity Securities Trust) for
a total cost of $2,860 ($2,800 for units and $60 for the sales charge).
The remaining $515 would be remitted to the unit owner in cash. If the
unit owner acquired the same number of Conversion Trust units at the same
time in a regular secondary market transaction, the price would have been
$2,962.96 ($2,800 for units and $162.96 sales charge, assuming a 5 1/2%
sales charge times the public offering price).
DESCRIPTION OF THE EXCHANGE TRUSTS AND THE CONVERSION TRUSTS
A Corporate Trust may be an appropriate investment vehicle for
an investor who is more interested in a higher current return on his
investment (although taxable) than a tax-exempt return (resulting from the
fact that the current return from taxable fixed income securities is
normally higher than that available from tax-exempt fixed income
securities). Municipal Securities Trust and New York Municipal Trust may
be appropriate investment vehicles for an investor who is more interested
in tax-exempt income. The interest income from New York Municipal Trust
is, in general, also exempt from New York State and local New York income
taxes, while the interest income from Municipal Securities Trust is
subject to applicable New York State and local New York taxes, except for
that portion of the income which is attributable to New York obligations
in the Trust portfolio, if any. The interest income from each State Trust
of the Municipal Securities Trust, Multi-State Series is, in general,
exempt from state and local taxes when held by residents of the state
where the issuers of bonds in such State Trusts are located. The Insured
Municipal Securities Trust combines the advantages of providing interest
income free from regular federal income tax under existing law with the
added safety of irrevocable insurance. Insured Navigator Series further
combines the advantages of providing interest income free from regular
federal income tax and state and local taxes when held by residents of the
state where issuers of bonds in such State Trusts are located with the
added safety of irrevocable insurance. Mortgage Securities Trust offers
an investment vehicle for investors who are interested in obtaining safety
of capital and a high level of current distribution of interest income
through investment in a fixed portfolio of collateralized mortgage
obligations. Equity Securities Trust offers investors an opportunity to
achieve capital appreciation together with a high level of current income.
TAX CONSEQUENCES OF THE EXCHANGE
PRIVILEGE AND THE CONVERSION OFFER
A surrender of units pursuant to the Exchange Privilege or the
Conversion Offer will constitute a "taxable event" to the
Certificateholder under the Internal Revenue Code. The Certificateholder
will realize a tax gain or loss that will be of a long- or short-term
capital or ordinary income nature depending on the length of time the
units have been held and other factors. (See "Tax Status".) A
Certificateholder's tax basis in the Units acquired pursuant to the
Exchange Privilege or Conversion Offer will be equal to the purchase price
of such Units. Investors should consult their own tax advisors as to the
tax consequences to them of exchanging or redeeming units and
participating in the Exchange Privilege or Conversion Offer.
OTHER MATTERS
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating
to federal tax law have been passed upon by Messrs. Battle Fowler, 280
Park Avenue, New York, New York 10017 as counsel for the Sponsor. Messrs.
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have
acted as counsel for the Trustee.
INDEPENDENT AUDITORS
The Statement of Condition and Portfolio are included herein in
reliance upon the report of KPMG Peat Marwick, independent certified
public accountants, and upon the authority of said firm as experts in
accounting and auditing.
<PAGE>
I am the owner of _______________________ units of Equity
Securities Trust, Series _______ Signature Series, Gabelli
Communications Income Trust.
I would like to learn more about GOC Fund, Inc., U.S. Treasury
Money Market Portfolio including charges and expenses. I understand
that my request for more information about this fund in no way
obligates me to participate in the reinvestment option, and that this
request form is not an offer to sell. Please send me more information,
including a copy of the current prospectus of The Manager's Fund, Inc.,
U.S. Treasury Money Market Portfolio.
Date __________________, 199_
Registered Holder (Print) Registered Holder (Print)
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)
My Brokerage Firm's Name
Street Address
City, State & Zip
Broker's Name
Broker's No.
MAIL TO
GOC FUND, INC.
8 SOUND SHORE DRIVE
GREENWICH, CONNECTICUT 06830
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTA-
TIONS NOT CONTAINED IN PARTS A AND B OF
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 EST SIGNATURE SERIES
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 GABELLI COMMUNICATIONS INCOME
TRUST OR ANY OF ITS UNITS HAVE BEEN TRUST
GUARANTEED, SPONSORED, RECOMMENDED OR SERIES 3
APPROVED BY THE UNITED STATES OR ANY SIGNATURE SERIES
STATE OR ANY AGENCY OR OFFICER THEREOF. GABELLI COMMUNICATIONS INCOME
TRUST
_________________
THIS PROSPECTUS DOES NOT CONSTITUTE (UNIT INVESTMENT TRUST)
AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS NOT LAWFUL TO
MAKE SUCH OFFER IN SUCH STATE. PROSPECTUS
TABLE OF CONTENTS
Title Page DATED: APRIL 29, 1994
PART A
Summary of Essential Information . . A-6 SPONSOR:
Information Regarding the Trust . . A-7
Financial and Statistical Information A-8 BEAR, STEARNS & CO. INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
PART B 212-272-2500
The Trust . . . . . . . . . . . . . 1
Public Offering . . . . . . . . . . 10 PORTFOLIO CONSULTANT:
Rights of Certificateholders . . . 13
Tax Status . . . . . . . . . . . . 14 GABELLI FUNDS, INC.
Liquidity . . . . . . . . . . . . . 16 ONE CORPORATE CENTER
Total Reinvestment Plan . . . . . . 18 RYE, NEW YORK 10580-1430
Trust Administration . . . . . . . 19
Trust Expenses and Charges . . . . 25
Exchange Privilege and Conversion TRUSTEE:
Offer . . . . . . . . . . . . . . 26
Other Matters . . . . . . . . . . . 30 UNITED STATES TRUST COMPANY
OF NEW YORK
PARTS A AND B OF THIS PROSPECTUS DO 770 BROADWAY
NOT CONTAIN ALL OF THE INFORMATION NEW YORK, N.Y. 10003
SET FORTH IN THE REGISTRATION STATEMENT
AND EXHIBITS RELATING THERETO, FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C., UNDER THE
SECURITIES ACT OF 1933, AND THE
INVESTMENT COMPANY ACT OF 1940, AND TO
WHICH REFERENCE IS MADE.
<PAGE>
PART II
ADDITIONAL INFORMATION NOT REQUIRED
IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Signatures.
Written consents of the following persons:
Battle Fowler (included in Exhibit 99.3.1)
KPMG Peat Marwick
Gabelli Funds, Inc. (filed with Amendment No. 1 to Form S-6 Registration
Statement No. 33-62898 on June 17, 1993 and incorporated herein
by reference).
The following exhibits:
99.1.1 -- Reference Trust Agreement including certain amendments to
the Trust Indenture and Agreement (filed as Exhibit 1.1 to
Amendment No. 1 to Form S-6 Registration Statement
No. 33-62898 of Equity Securities Trust, Series 3 on
June 17, 1993 and incorporated herein by reference).
99.1.1.1 -- Form of Trust Indenture and Agreement (filed as
Exhibit 1.1.1 to Amendment No. 2 to Form S-6 Registration
Statement No. 33-45561 on June 3, 1992 and incorporated
herein by reference).
99.1.3.4 -- Certificate of Incorporation of Bear, Stearns & Co. Inc.,
as amended (filed as Exhibit 99.1.3.4 to Form S-6
Registration Statement Nos. 33-50891 and 33-50901 of
Insured Municipal Securities Trust, New York Navigator
Insured Series 15 and New Jersey Navigator Insured
Series 11; and Municipal Securities Trust, Multi-State
Series 44, respectively, on December 9, 1993 and
incorporated herein by reference).
99.1.3.5 -- By-Laws of Bear, Stearns & Co. Inc., as amended (filed as
Exhibit 99.1.3.5 to Form S-6 Registration Statement
Nos. 33-50891 and 33-50901 of Insured Municipal Securities
Trust, New York Navigator Insured Series 15 and New Jersey
Navigator Insured Series 11; and Municipal Securities
Trust, Multi-State Series 44, respectively, on December 9,
1993 and incorporated herein by reference).
99.1.4 -- Form of Agreement Among Underwriters (filed as Exhibit 1.4
to Amendment No. 1 to Form S-6 Registration Statement
No. 33-28384 of Insured Municipal Securities Trust, 47th
Discount Series and Series 20 on June 16, 1989 and
incorporated herein by reference).
99.2.1 -- Form of Certificate (filed as Exhibit 2.1 to Amendment
No. 1 to Form S-6 Registration Statement No. 33-62898 on
June 17, 1993 and incorporated herein by reference).
99.3.1 -- Opinion of Battle Fowler as to the legality of the
securities being registered, including their consent to the
filing thereof and to the use of their name under the
headings "Tax Status" and "Legal Opinions" in the
Prospectus, and to the filing of their opinion regarding
tax status of the Trust (filed as Exhibit 3.1 to Amendment
No. 1 to Form S-6 Registration Statement No. 33-62898 of
Equity Securities Trust, Series 3 on June 17, 1993 and
incorporated herein by reference).
99.4.1 -- Form of Custody Agreement (filed as Exhibit 4.1 to
Amendment No. 1 to Form S-6 Registration Statement
No. 33-36215 of Insured Municipal Securities Trust,
Series 25 and New York Navigator Insured Series 4 and
incorporated herein by reference).
99.4.2 -- Form of First Amendment to Custody Agreement (filed as
Exhibit 4.2 to Amendment No. 1 to Form S-6 Registration
No. 33-36215 of Insured Municipal Securities Trust,
Series 25 and New York Navigator Series 4 and incorporated
herein by reference).
99.6.0 -- Power of Attorney of Bear, Stearns & Co. Inc., the
Depositor, by its officers and a majority of its Directors
(filed as Exhibit 6.0 to Post-Effective Amendment No. 8 to
Form S-6 Registration Statements Nos. 2-92113, 2-92660,
2-93073, 2-93884 and 2-94545 of Municipal Securities Trust,
Multi-State Series 4, 5, 6, 7 and 8, respectively, on
October 30, 1992 and incorporated herein by reference).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Equity Securities Trust, Series 3, Signature Series, Gabelli
Communications Income Trust has duly caused this Post-Effective Amendment
to the Registration Statement to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of New York and State
of New York on the 28th day of April, 1994.
EQUITY SECURITIES TRUST, SERIES 3, SIGNATURE SERIES, GABELLI
COMMUNICATIONS INCOME TRUST
(Registrant)
BEAR, STEARNS & CO. INC.
(Depositor)
By: PETER J. DeMARCO
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed
below by the following persons, who constitute the principal officers and
a majority of the directors of Bear, Stearns & Co. Inc., the Depositor, in
the capacities and on the dates indicated.
Name Title Date
Chairman of the Board, Chief )
ALAN C. GREENBERG Executive Officer, Director and )
Senior Managing Director )
President, Director and Senior )
JAMES E. CAYNE Managing Director )April 28, 1994
Chief Operating Officer, Executive)
ALVIN H. EINBENDER Vice President, Director and )
Senior Managing Director )
Executive Vice President, Director)
JOHN C. SITES, JR. and Senior Managing Director )By:PETER J.DeMARCO
Executive Vice President, Director)
MICHAEL L. TARNOPOL and Senior Managing Director )
Executive Vice President, Director)
VINCENT J. MATTONE and Senior Managing Director )Attorney-in-Fact*
Executive Vice President, Director)
ALAN D. SCHWARTZ and Senior Managing Director )
Director and Senior Managing )
DOUGLAS P.C. NATION Director )
Chief Financial Officer, Senior )
WILLIAM J. MONTGORIS Vice President-Finance and Senior )
Managing Director )
Secretary and Senior Managing )
KENNETH L. EDLOW Director )
Treasurer and Senior Managing )
MICHAEL MINIKES Director )
Controller, Assistant Secretary )
MICHAEL J. ABATEMARCO and Senior Managing Director )
Senior Vice President - General )
MARK E. LEHMAN Counsel and Senior Managing )
Director )
Assistant Treasurer and Senior )
FREDERICK B. CASEY Managing Director )
_______________
* An executed power of attorney was filed as Exhibit 6.0 to Post-
Effective Amendment No. 8 to Registration Statements Nos. 2-92113,
2-92660, 2-93073, 2-93884 and 2-94545 on October 30, 1992.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS'
We consent to the use in the Post-Effective Amendment to the Registration
Statement of our report on the financial statements of Equitiy Securities
Trust Series 3, Signature Series, Gabelli Communications Income Trust included
herein and to the reference to our firm under the heading "Independent
Auditors" in the Prospectus which is part of this Registration Statement.
KPMG PEAT MARWICK
New York, New York
April 15, 1994
