<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 21, 1996
REGISTRATION NO. 333-00407
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
ON
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:
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
B. NAME OF DEPOSITOR:
EVEREN UNIT INVESTMENT TRUSTS
a service of EVEREN Securities, Inc.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ROBERT K. BURKE MARK J. KNEEDY
EVEREN Unit Investment Trusts c/o Chapman and Cutler
77 West Wacker Drive, 29th Floor 111 West Monroe Street
Chicago, Illinois 60601 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE AND AMOUNT OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series 42 An indefinite number of Indefinite $500.00 (previously paid)
Units of Beneficial Inter-
est pursuant to Rule 24f-2
under the Investment Com-
pany Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
[XCheck]box if it is proposed that this filing will become effective at
2:00 P.M. on February 21, 1996 pursuant to paragraph (b) of Rule 487.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
----------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<C> <S> <C>
1. (a)Name of trust................... Prospectus front cover
(b)Title of securities issued...... Essential Information
2. Name and address of each depositor. Administration of the Trust
3. Name and address of trustee........ Administration of the Trust
4. Name and address of principal
underwriters...................... *
5. State of organization of trust..... The Trust Fund
6. Execution and termination of trust The Trust Fund; Administration of the
agreement......................... Trust Fund
7. Changes of name.................... The Trust Fund
8. Fiscal year........................ *
9. Litigation......................... *
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a)Registered or bearer securities. Unitholders
(b)Cumulative or distributive
securities.................... The Trust Fund
(c)Redemption...................... Redemption
(d)Conversion, transfer, etc....... Unitholders; Market for Units
(e)Periodic payment plan........... *
(f)Voting rights................... Unitholders
(g)Notice of certificateholders.... Investment Supervision; Administration
of the Trust; Unitholders
(h)Consents required............... Unitholders; Administration of the
Trust
(i)Other provisions................ Federal Tax Status
11. Type of securities comprising The Trust Fund; The Trust Portfolio;
units............................. Portfolio
12. Certain information regarding
periodic payment certificates..... *
13. (a)Load, fees, expenses, etc....... Essential Information; Public Offering
of Units; Expenses of the Trusts
(b)Certain information regarding
periodic payment certificates. *
(c)Certain percentages............. Essential Information; Public Offering
of Units
(d)Certain other fees, etc. payable
by holders.................... Unitholders
(e)Certain profits receivable by
depositor, principal
underwriters, trustee or Expenses of the Trust; Public Offering
affiliated persons............ of Units
(f)Ratio of annual charges to
income........................ *
14. Issuance of trust's securities..... The Trust Fund; Unitholders
15. Receipt and handling of payments
from purchasers................... *
16. Acquisition and disposition of The Trust Fund; The Trust Portfolio;
underlying securities............. Investment Supervision; Market for
Units
17. Withdrawal or redemption........... Redemption; Public Offering of Units
</TABLE>
- --------
* Inapplicable, answer negative or not required.
i
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<C> <S> <C>
18. (a)Receipt, custody and disposition
of income...................... Unitholders
(b)Reinvestment of distributions.... Unitholders
(c)Reserves or special funds........ Expenses of the Trust
(d)Schedule of distributions........ *
19. Records, accounts and reports....... Unitholders; Redemption;
Administration of the Trust
20. Certain miscellaneous provisions of
trust agreement
(a)Amendment........................ Administration of the Trust
(b)Termination......................
(c)and (d) Trustee, removal and
successor......................
(e) and (f) Depositor, removal and
successor......................
21. Loans to security holders........... *
22. Limitations on liability............ Administration of the Trust
23. Bonding arrangements................ *
24. Other material provisions of trust
agreement.......................... *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor........... Administration of the Trust
26. Fees received by depositor.......... See Items 13(a) and 13(e)
27. Business of depositor............... Administration of the Trust
28. Certain information as to officials
and affiliated persons of
depositor.......................... Administration of the Trust
29. Voting securities of depositor......
30. Persons controlling depositor.......
31. Payment 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
35. Distribution of Trust's securities
by states.......................... Public Offering of Units
36. Suspension of sales of trust's
securities......................... *
37. Revocation of authority to
distribute.........................
38. (a)Method of Distribution........... Public Offering of Units;
(b)Underwriting Agreements.......... Market for Units;
(c)Selling Agreements............... Public Offering of Units
39. (a)Organization of principal
underwriters................... Administration of the Trust
(b)N.A.S.D. membership of principal
underwriters...................
40. Certain fees received by principal
underwriters....................... See Items 13(a) and 13(e)
41. (a)Business of principal
underwriters................... Administration of the Trust
(b)Branch offices of principal
underwriters................... *
(c)Salesmen of principal
underwriters...................
42. Ownership of trust's securities by
certain persons....................
43. Certain brokerage commissions
received by principal underwriters. Public Offering of Units
44. (a)Method of valuation.............. Public Offering of Units
(b)Schedule as to offering price.... *
(c)Variation in offering price to
certain persons................ Public Offering of Units
45. Suspension of redemption rights..... Redemption;
46. (a)Redemption valuation............. Redemption Market for Units; Public
Offering of Units
(b)Schedule as to redemption price.. *
47. Maintenance of position in Market for Units; Public Offering of
underlying securities.............. Units; Redemption
</TABLE>
- --------
* Inapplicable, answer negative or not required.
ii
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
<C> <S> <C>
48. Organization and regulation of
trustee........................... Administration of the Trust
49. Fees and expenses of trustee....... Expenses of the Trust
50. Trustees lien......................
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's
securities........................ Cover Page; Expenses of the Trust
VII. POLICY OF REGISTRANT
52. (a)Provisions of trust agreement
with respect to selection or
elimination of underlying
securities.................... The Trust Fund; Investment Supervision
(b)Transactions involving
elimination of underlying
securities.................... *
(c)Policy regarding substitution or
elimination of underlying
securities.................... Investment Supervision
(d)Fundamental policy not otherwise
covered....................... *
53. Tax status of Trust................ Essential Information Portfolio;
Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten
years............................. *
55.
56. Certain information regarding
periodic payment certificates.....
57.
58.
59. Financial statements (Instruction
1(c) to Form S-6)................. *
</TABLE>
- --------
* Inapplicable, answer negative or not required.
iii
<PAGE>
NASDAQ-100 INDEX TRUST, SERIES 1
SPONSORED BY EVEREN UNIT INVESTMENT TRUSTS
The Nasdaq-100 Index Trust, Series 1 (the "Trust") sponsored by EVEREN Unit
Investment Trusts is the sole unit investment trust included in EVEREN Unit
Investment Trusts, Series 42 (the "Fund"). The Trust was formed with the
investment objective of obtaining capital appreciation through investment in a
portfolio of equity securities of the companies which comprise the Nasdaq-100
Index (the "Index"). By investing in substantially all of the common stocks, in
substantially the same proportions, which comprise the Index, the Trust seeks
to produce investment results that generally correspond to the price and yield
performance of the equity securities represented by the Index over the term of
the Trust. See "The Trust Portfolio." The Trust is not sponsored, endorsed or
promoted by or affiliated with The Nasdaq Stock Market, Inc. or the National
Association of Securities Dealers, Inc. There is, of course, no assurance that
the Trust will achieve its objective.
Units of the Trust are not deposits or obligations of, or guaranteed by, any
bank, and the Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including
loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future
reference.
THE DATE OF THIS PROSPECTUS IS FEBRUARY 21, 1996.
<PAGE>
SUMMARY
THE TRUST. The Nasdaq-100 Index Trust (the "Trust") is a unit investment trust
included in EVEREN Unit Investment Trusts, Series 42 (the "Fund"), an
investment company registered under the Investment Company Act of 1940.
The Trust initially consists of securities and delivery statements (i.e.,
contracts) to purchase common stocks issued by companies selected in
accordance with the selection and weightings of stocks established by the
Index.* The initial deposit of Securities (including contracts) into the Trust
will consist of at least 100 shares of each of the stocks which comprise the
Index. Thereafter, the Sponsor intends to create and maintain a Trust
portfolio which duplicates, to the extent practicable, the weightings of
stocks which comprise the Index. During the initial deposit period of the
Trust the Sponsor will continue to deposit Securities (or contracts for the
purchase thereof) until at the end of such period the Trust comprises
substantially all of the stocks in the Index in substantially the same
weightings as in the Index (the "Initial Adjustment Period"). The Sponsor
estimates that the Initial Adjustment Period will last no longer than 30 days
following the Initial Date of Deposit and could last as little as one day. For
the criteria used by the Sponsor in selecting the Securities, see "The Trust
Portfolio--Securities Selection." The value of all portfolio Securities and,
therefore, the value of the Units may be expected to fluctuate in value
depending on the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular. Capital
appreciation is, of course, dependent upon several factors including, among
other factors, the financial condition of the issuers of the Securities (see
"The Trust Portfolio").
The Trust was formed with the investment objective of obtaining capital
appreciation over the life of the Trust through investment in a portfolio of
equity securities of substantially all of the companies which comprise the
Index. An indexing strategy attempts to mirror the performance of a specific
market index. As part of an overall investment strategy indexing may provide
additional growth potential in an otherwise conservative portfolio and blend
as a companion investment to hedge an aggressive equity strategy. There can be
no assurance that the Trust's objective will be met because it may be
impracticable for the Trust to duplicate or maintain precisely the relative
weightings of the common stocks which comprise the Index or to purchase all of
such stocks. Additionally, an investment in Units of the Trust includes
payment of sales charges, fees and expenses which are not considered in the
total return of the Index.
Additional Units of the Trust may be issued at any time by depositing in the
Trust additional Securities or contracts to purchase additional Securities
together with irrevocable letters of credit or cash. As additional Units are
issued by the Trust as a result of the deposit of additional Securities by the
Sponsor, 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. The Sponsor may continue to make additional deposits of
Securities into the Trust from time to time following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain, as closely as practicable, the proportionate relationship among each
Security in the Index. Thus, although additional Units will be issued, each
Unit will continue to represent approximately the same weighting of the then
current components of the Index. The required percentage relationship among
the Securities in the Trust will be adjusted to reflect the occurrence of a
stock dividend, a stock split or a similar event which affects the capital
structure of the issuer of a Security in the Trust but which does not affect
the Trust's percentage ownership of the common stock equity of such issuer at
the time of such event. Precise duplication of the relationship among the
Securities in the Trust may not be achieved because it may be economically
impracticable as a result of certain economic factors or procedural policies
of the Trust. See "The Trust Fund."
Each Unit of the Trust initially offered represents that undivided interest in
the Trust indicated under "Essential Information" (as may be adjusted pursuant
to footnote 1 thereto). To the extent that any Units
- ----------
*"Nasdaq(R)", "Nasdaq-100(R)" and "Nasdaq-100 Index(R)" are registered
marks of The Nasdaq Stock Market, Inc. and are licensed for use by the
Sponsor.
2
<PAGE>
are redeemed by the Trustee or additional Units are issued as a result of
additional Securities being deposited by the Sponsor, the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase or
decrease accordingly, although the actual interest in the Trust represented by
such fraction will remain unchanged. Units will remain outstanding until
redeemed upon tender to the Trustee by Unitholders, which may include the
Sponsor, or until the termination of the Trust Agreement.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of the Trust during
the initial offering period is based on the aggregate underlying value
(generally determined by the closing sale prices of listed
Securities and the ask prices of over-the-counter traded Securities see "Public
Offering of Units--Public Offering Price") of the Securities in the Trust plus
an initial sales charge of 4.9% of the Public Offering Price (equivalent to
5.152% of the net amount invested). Unitholders will also be assessed an annual
sales charge for the duration of the Trust. The annual sales charge will be
$0.025 per Unit per year and will be assessed on a quarterly basis. The annual
sales charge payments will accrue daily and will be paid from funds in the
Income Account, if sufficient, or from the periodic sale of Securities. If
Units were purchased on the Initial Date of Deposit and held until the
mandatory termination of the Trust in 2001, the total sales charge paid would
be $0.618 per Unit. In no case shall the total sales charges paid by any
Unitholder exceed 6.25% of the Public Offering Price per Unit; the annual sales
charge payments may be decreased or terminated for all Unitholders to ensure
that the total sales charges paid by any Unitholder does not exceed such
percentage. Unitholders disposing of their Units prior to such time as the
entire annual sales charge has been collected will not be assessed any
unaccrued annual sales charge payments remaining after such disposition. After
the initial public offering period, the secondary market Public Offering Price
will be equal to the aggregate underlying value of the Securities in the Trust
(generally determined by the closing sale prices of listed Securities and the
bid prices of over-the-counter traded Securities), plus the sales charge
described above. In addition to the Public Offering Price per Unit, in the
primary and secondary market Unitholders will pay a pro rata portion of the
cash, if any, in the Income and Capital Accounts of the Trust.
DISTRIBUTIONS OF INCOME AND CAPITAL. Dividends, if any, received by the Trust
will be distributed quarterly and any funds in the Capital Account will be made
annually. See "Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder may elect to have distributions of income,
capital gains and/or capital on their Units automatically invested into
additional Units of the Trust without an initial sales charge. In addition, all
Unitholders may elect to have such distributions automatically reinvested into
shares of any Kemper Financial Services, Inc. front-end load mutual fund (other
than those funds sold with a contingent deferred sales charge) registered in
such Unitholder's state of residence at net asset value. Such distributions
will be reinvested without charge to the participant on each applicable
Distribution Date. See "Unitholders--Distribution Reinvestment." A current
prospectus for the reinvestment fund selected, if any, will be furnished to any
investor who desires additional information with respect to reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends to,
and certain dealers may, maintain a market for the Units of the Trust and offer
to repurchase such Units at prices subject to change at any time which are
based on the current underlying bid prices of the Securities in the Trust
(offer prices during the initial offering period). If the supply of Units
exceeds demand or if some other business reason warrants it, the Sponsor and/or
the dealers may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. A Unitholder may also dispose of Units
through redemption at the Redemption Price on the date of tender to the
Trustee. See "Redemption--Computation of Redemption Price."
TERMINATION. No later than the date specified under the Mandatory Termination
Date in "Essential Information," Securities will begin to be sold in connection
with the termination of the Trust and it is expected that all Securities in the
Trust will be sold within a reasonable amount of time after the Mandatory
Termination Date. The Sponsor will determine the manner, timing and execution
of the sale of the underlying Securities. At termination, Unitholders will
receive a cash distribution within a reasonable time after the Trust is
terminated. See "Unitholders--Distributions to Unitholders" and "Administration
of the Trust--Amendment and Termination."
3
<PAGE>
RISK FACTORS. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market. Additionally, it is anticipated that the identity and weighting
of the stocks in the Index will change from time to time and the adverse
financial condition of a company will not result directly in its elimination
from the portfolio unless the company is removed from the Index. For risk
considerations related to the Trust, see "Risk Factors."
NASDAQ-100(R) INDEX LICENSING AGREEMENT
The Sponsor has entered into a license agreement with The Nasdaq Stock Market,
Inc. (the "License Agreement"), under which the Trust (through the Sponsor) is
granted licenses to use the trademark and tradenames "Nasdaq," "Nasdaq-100,"
and "Nasdaq-100 Index" solely in materials relating to the creation and
issuance, marketing and promotion of the Trust and in accordance with any
applicable federal and state securities law to indicate the source of the index
as a basis for determining the composition of the Trust's portfolio. As
consideration for the grant of the license, the Trust will pay to The Nasdaq
Stock Market, Inc. an annual fee equal to that amount described under "Expenses
of the Trust." If the Nasdaq-100 Index ceases to be compiled or made available
or the anticipated correlations between the Trust and the Nasdaq-100 Index is
not maintained, the Sponsor may direct that the Trust continue to be operated
using the Nasdaq-100 Index as it existed on the last date on which it was
available or may direct that the Trust Agreement be terminated (see
"Administration of the Trust--Amendment and Termination").
Neither the Trust nor the Unitholders are entitled to any rights whatsoever
under the foregoing licensing arrangements or to use any of the covered
trademarks or to use the Nasdaq-100 Index, except as specifically described
herein or as may be specified in the Trust Agreement.
The Trust is not sponsored, endorsed, sold or promoted by The Nasdaq Stock
Market, Inc. (including its affiliates) (the "Corporations"). The Corporations
have not passed on the legality or suitability of, or the accuracy or adequacy
of descriptions and disclosures relating to, the Trust or Units of the Trust.
The Corporations make no representation or warranty, express or implied to the
owners of Units of the Trust or any member of the public regarding the
advisability of investing in securities generally or in Units of the Trust
particularly or the ability of the Nasdaq-100 Index to track general stock
market performance. The Corporations' only relationship to the Sponsor
("Licensee") and the Trust is in the licensing of certain trademarks, service
marks, and trade names of the Corporations and the use of the Nasdaq-100 Index
which is determined, composed and calculated by Nasdaq without regard to the
Licensee, the Trust or Unitholders of the Trust. Nasdaq has no obligation to
take the needs of the Licensee or the owners of the Trust into consideration in
determining, composing or calculating the Nasdaq-100 Index. The Corporations
are not responsible for and have not participated in the determination of the
timing of, prices at, or quantities of the Units of the Trust to be issued or
in the determination or calculation of the equation by which the Units of the
Trust are to be converted into cash. The Corporations have no liability in
connection with the administration or operations of the Trust, marketing or
trading of Units of the Trust.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION
OF THE NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS
OF UNITS OF THE TRUST, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS
OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.
4
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
NASDAQ-100 INDEX TRUST, SERIES 1
ESSENTIAL INFORMATION
AS OF FEBRUARY 20, 1996*
SPONSOR AND EVALUATOR: EVEREN UNIT INVESTMENT TRUSTS, A SERVICE OF EVEREN
SECURITIES, INC.
TRUSTEE: THE BANK OF NEW YORK
LICENSOR: THE NASDAQ STOCK MARKET, INC.
<TABLE>
<S> <C>
Number of Units (1).................... 40,779
Fractional Undivided Interest Per Unit
(1)................................... 1/40,779
Public Offering Price:
Aggregate Value of Securities in
Portfolio (2)........................ $387,809
Aggregate Value of Securities per
Unit................................. $9.51
Plus total sales charge (3)........... $0.62
Less annual sales charge per Unit (3). $0.13
Public Offering Price Per Unit (4).... $10.00
Redemption Price Per Unit.............. $9.46
Sponsor's Initial Repurchase Price Per
Unit.................................. $9.51
Excess of Public Offering Price Per
Unit over Redemption Price Per Unit... $0.54
Excess of Public Offering Price Per
Unit over Sponsor's Initial Repurchase
Price Per Unit........................ $0.49
Minimum Value of the Trust under which 40% of aggregate value of Securities at
Trust Agreement may be Terminated..... deposit
Liquidation Period..................... April 1, 2001 through April 30, 2001
Mandatory Termination Date............. March 31, 2001
Evaluator's Annual Evaluation Fee...... Maximum of $0.0029 per Unit
Trustee's Annual Fee................... $0.0090 per Unit
Estimated Annual Organizational
Expenses (5).......................... $0.0049 per Unit
FIRST day of January, April, July and
Record and Computation Dates (6)....... October
FIFTEENTH day of January, April, July
Distribution Dates (6)................. and October
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units of the Trust
are made as of 3:15 p.m. Central Time next following receipt of an order for a
sale or purchase of Units or receipt by the Trustee of Units tendered for
redemption.
* The business day prior to the Initial Date of Deposit
- ---------------------
(1) As of the close of business on the Initial Date of Deposit, the number of
Units of the Trust may be adjusted so that the aggregate value of
Securities per Unit will equal approximately $10. Therefore, to the extent
of any such adjustment the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) Each Security is valued at the closing offer price on the Nasdaq National
Market.
(3) The total sales charge consists of an initial sales charge of 4.9% of the
Public Offering Price per Unit (5.152% of the net amount invested) and an
annual sales charge which will be assessed for the duration of the Trust.
The annual sales charge will be $0.025 per Unit per year and will be
assessed on a quarterly basis. The annual sales charge payments will
accrue daily and will be paid from funds in the Income Account, if
sufficient, or from the periodic sale of Securities. That amount set forth
above represents the total sales charge paid by a person who purchases
Units on the Initial Date of Deposit and holds such Units until the
Mandatory Termination Date. Unitholders disposing of their Units prior to
such time as the entire annual sales charge has been collected will not be
assessed any unaccrued annual sales charge payments remaining after such
disposition.
(4) On the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay his pro
rata share of any accumulated dividends in such Income Account.
(5) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the initial
audit of the portfolio and the initial fees and expenses of the Trustee
but not including the expenses incurred in the preparation and printing of
brochures and other advertising materials and any other selling expenses)
as is common for mutual funds. It is intended that total organizational
expenses will be amortized over a five year period. See "Expenses of the
Trust" and "Statement of Condition." Historically, the sponsors of unit
investment trusts have paid all the costs of establishing such trusts.
(6) Distributions from the Income Account, if any, will be made quarterly.
Distributions from the Capital Account and capital gains distribution will
normally be made in December, as required.
5
<PAGE>
FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in a Trust will bear directly or indirectly. See
"Public Offering of Units" and "Expenses of the Trust." Although the Trust is a
unit investment trust rather than a mutual fund and may have a term of less
than the periods indicated, this information is presented to permit a
comparison of fees.
<TABLE>
<CAPTION>
AMOUNT PER
UNIT
----------
<S> <C> <C>
UNITHOLDER TRANSACTION EXPENSES (AS OF THE INITIAL DATE OF
DEPOSIT)
Initial Sales Charge (as a percentage of offering
price).................................................. 4.90% $0.490
Annual Sales Charge (accumulated over entire term of the
Trust, as a percentage of offering price)............... 1.28% 0.128
------ -------
Total Sales Charge........................................ 6.18%(1) $0.618
====== =======
ESTIMATED ANNUAL FUND OPERATING EXPENSES (AS OF THE
INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee............................................ 0.095% $0.0090
Portfolio Evaluation Fees................................ 0.030% 0.0029
Organizational Expenses.................................. 0.052% 0.0049
Other Operating Expenses................................. 0.066% 0.0063
------ -------
Total.................................................. 0.243% $0.0231
====== =======
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR
PERIOD OF:
-------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment, assuming the applicable
sales charges and an estimated operating
expense ratio of 0.243% on the Trust, a 5%
annual return and redemption at the end of
each time period.............................. $54 $64 $73 $97
</TABLE>
The example utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. The examples should
not be considered representations of past or future expenses or annual rate of
return; the actual expenses and annual rate of return may be more or less than
those assumed for purposes of the examples.
- ---------------------
(1) The total sales charge consists of an initial sales charge of 4.9% of the
Public Offering Price per Unit (5.152% of the net amount invested) and an
annual sales charge which will be assessed for the duration of the Trust.
The annual sales charge will be $0.025 per Unit per year and will be
assessed on a quarterly basis. The annual sales charge payments will accrue
daily and will be paid from funds in the Income Account, if sufficient, or
from the periodic sale of Securities. That amount set forth above
represents the total sales charge paid by a person who purchases Units on
the Initial Date of Deposit and holds such Units until the Mandatory
Termination Date. Unitholders disposing of their Units prior to such time
as the entire annual sales charge has been collected will not be assessed
any unaccrued annual sales charge payments remaining after such
disposition.
6
<PAGE>
THE TRUST FUND
The Nasdaq-100 Index Trust, Series 1 is a unit investment trust included in
EVEREN Unit Investment Trusts, Series 42, which was created under the laws of
the State of New York pursuant to a trust indenture (the "Trust Agreement")
dated the date of this prospectus (the "Initial Date of Deposit") between
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc. (the
"Sponsor") and The Bank of New York (the "Trustee").*
The portfolio contains common stocks issued by substantially all of the
companies which comprise the Nasdaq-100 Index. As used herein, the term
"Securities" means the common stocks (including contracts for the purchase
thereof) initially deposited in the Trust and described in the portfolio and
any additional common stocks acquired and held by the Trust pursuant to the
provisions of the Trust Agreement.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust. This initial
deposit into the Trust consisted of at least 100 shares of each of the stocks
which comprise the Index. During the Initial Adjustment Period, the Sponsor
intends to create and maintain a Trust portfolio which duplicates, to the
extent practicable, the weightings of stocks which comprise the Index. The
Sponsor anticipates that within the Initial Adjustment Period the Trust will
comprise the stocks in the Index in substantially the same weightings as in the
Index. In connection with any deposit of Securities, purchase and sale
transactions will be effected in accordance with computer program output
showing which Securities are under- or over-represented in the Trust portfolio.
Neither the Sponsor nor the Trustee will exercise any investment discretion in
connection with such transactions. Precise duplication of the relationship
among the Securities in the Index may not be achieved because it may be
economically impracticable or impossible to acquire very small numbers of
shares of certain stocks and because of other procedural policies of the Trust,
but correlation between the performance of the Index and the Trust portfolio is
expected to be between .97 and .99.
By investing in substantially all of the common stocks, in substantially the
same proportions, which comprise the Index, the Trust seeks to produce
investment results that generally correspond to the price and yield performance
of the equity securities represented by the Index over the term of the Trust.
Due to various factors discussed below, there, of course, can be no assurance
that this objective will be met. An investment in Units of the Trust should be
made with an understanding that the Trust includes payments of sales charges,
fees and expenses which may not be considered in public statements of the total
return of the Index.
Subsequent to the Initial Date of Deposit, the Sponsor may deposit additional
Securities or contracts to purchase additional Securities along with cash (or a
bank letter of credit in lieu of cash) to pay for such contracted Securities,
maintaining, as closely as practicable the same proportionate relationship
among the Securities in the portfolio as reflected in the Index. Thus, although
additional Units will be issued, each Unit will continue to represent
approximately a weighting of the then current components of the Index at any
such deposit. The required percentage relationship among the Securities in the
Trust will be adjusted to reflect the occurrence of a stock dividend, a stock
split or a similar event which affects the capital structure of the issuer of a
Security in the Trust but which does not affect the Trust's percentage
ownership of the common stock equity of such issuer at the time of such event.
Precise duplication of the relationship among the Securities in the Trust may
not be achieved because it may be economically impracticable as a result of
certain economic factors and procedural policies of the Trust such as (1) price
movements of the various Securities will not duplicate one another, (2) the
Sponsor's current intention is to purchase shares of the Securities in round
lot quantities only, (3) reinvestment of excess proceeds not needed to meet
redemptions of Units may not be sufficient to acquire equal round lots of all
the Securities in the Trust and (4) reinvestment of proceeds received from
Securities which are no longer components of the Index might not result in the
purchase of an equal number of shares in any replacement Security.
- ----------
*Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
7
<PAGE>
The Trust consists of (a) the Securities listed under "Portfolio" as may
continue to be held from time to time in the Trust, (b) any additional
Securities acquired and held by the Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Securities. However, should any contract for the purchase of any
of the Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract to all
Unitholders on the next distribution date.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of the Trust set forth under
"Essential Information."
THE TRUST PORTFOLIO
General. The Trust portfolio will consist of as many of the Index stocks as is
feasible in order to achieve the Trust's objective of attempting to provide
investment results that duplicate substantially the total return of the Index.
Following the Initial Adjustment Period, the Trust is expected to be invested
in no less than 95% of the Index stocks. Although it may be impracticable for
the Trust to own certain of such stocks at any time, the Sponsor expects to
maintain a correlation between the performance of the Trust portfolio and that
of the Index of between .97 and .99. Adjustments to the Trust portfolio will be
made on an ongoing basis in accordance with the computer program output to
match the weightings of the Securities as closely as is feasible with their
weightings in the Index as the Trust invests in new Securities in connection
with the creation of additional Units, as companies are dropped from or added
to the index or as Securities are sold to meet redemptions. These adjustments
will be made on the business day following the relevant transaction in
accordance with computer program output showing which of the Securities are
under- or over-represented in the Trust portfolio. Adjustments may also be made
from time to time to maintain the appropriate correlation between the Trust and
the Index. The proceeds from any sale will be invested in those Securities
which the computer program indicates are most under-represented in the
portfolio. See "Investment Supervision."
Due to changes in the composition of the Index, adjustments to the Trust
portfolio may be made from time to time. It is anticipated that most of such
changes in the index will occur as a result of merger or acquisition activity.
In such cases, the Trust, as a shareholder of an issuer which is the object of
such merger or acquisition activity, will presumably receive various offers
from potential acquirers of the issuer. The Trustee is not permitted to accept
any such offers until such time as the issuer has been removed from the Index.
Since, in most cases, an issuer is removed from the index only after the
consummation of a merger or acquisition, it is anticipated that the Trust will
generally acquire, in exchange for the stock of the deleted issuer, the
consideration that is being offered to shareholders of that issuer who have not
tendered their shares prior to that time. Any cash received as consideration in
such transactions will be reinvested in the most under-represented Securities
as determined by the computer program output. Any securities received as
consideration which are not included in the Index will be sold as soon as
practicable and will also be reinvested in the most under-represented
Securities as determined by the computer program output.
In attempting to duplicate the proportionate relationships represented by the
Index, the Sponsor does not anticipate purchasing or selling stock in
quantities of less than round lots (100 shares). In addition, certain
Securities may not be available in the quantities specified by the computer
program. For these reasons, among others, precise duplication of the
proportionate relationships in the index may not be possible but will continue
to be the goal of the Trust in connection with acquisitions or dispositions of
Securities. See "Investment Supervision." As the holder of the Securities, the
Trustee will have the right to vote all of the
8
<PAGE>
voting stocks in the Trust portfolio and will vote such stocks in accordance
with the instructions of the Sponsor except that, if the Trustee holds any of
the common stock of EVEREN Capital Corporation (the parent company of EVEREN
Securities, Inc.) or any other common stocks of companies which are affiliates
of the Sponsor, the Trustee will vote such stock in the same proportionate
relationship as all other shares of such companies are voted.
Investors should note that the Trust is not sponsored, endorsed or promoted by
or affiliated with The Nasdaq Stock Market, Inc. and The Nasdaq Stock Market,
Inc. makes no representation, express or implied, to the Trust or Unitholders
regarding the advisability of investing in index or unit investment trusts
generally or in the Trust specifically or the ability of the Index to track
general stock market performance.
Although there can be no assurance that such Securities will appreciate in
value over the life of the Trust, over time stock investments have generally
out-performed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can decrease (see "Risk Factors--Certain Investment
Considerations"), and past performance is no guarantee of future results.
THE NASDAQ-100 INDEX. The Nasdaq-100 Index is composed of 100 of the largest
non-financial Nasdaq National Market common stocks. Nasdaq, which represents
the fastest growing stock market in the U.S., is also one of the first fully
electronic stock markets in the world. This modern-day securities market began
operations in 1971 and today lists more companies than any other market in the
U.S. The Index is limited to one issue per company. At the time of inclusion in
the Index, index securities must have a minimum market value of at least $500
million. Only domestic issues are included. In the event a security is deleted
from the Index, the largest non-financial issue not then in the Index which
meets the applicable criteria will be substituted. The Nasdaq Stock Market,
Inc. has established procedures for, and controls over, substitutions of
securities and may periodically, at its discretion, make changes in component
stocks so that the Index will more accurately reflect the overall composition
of the non-financial sector of The Nasdaq Stock Market. Each security in the
Index is represented by its market capitalization in relation to the total
market value of the Index. Companies are selected using criteria that includes
company trading volume, company visibility, continuity of the components in the
Index, and a good mix of industries represented on The Nasdaq Stock Market.
Chicago Board Options Exchange, the largest options exchange in the world,
began trading Nasdaq-100 Index options on February 7, 1994.
9
<PAGE>
As of February 2, 1996, the Index was comprised of the following industry
sectors: Electronic Technology* (38.00%), Technology Services* (24.36%),
Health Technology (8.81%), Telecommunications (8.59%), Consumer Services
(4.86%), Retail Trade (3.79%), Health Services (3.22%) and 8 other categories
(8.37%). The following chart illustrates the composition of the Index.
[PIE CHART APPEARS HERE]
Health Technology 8.81%
Telecommunications 8.59%
Other 8.37%
Consumer Services 4.86%
Retail Trade 3.79%
Health Services 3.22%
Technology Services 24.36%
Electronic Technology 38.00%
- ---------------------
*As used herein Electronic Technology describes companies that manufacture
computer chips and other computer hardware (such as Intel Corporation, Cisco
Systems, Inc. and Apple Computer, Inc.), whereas Technology Services
describes publishers of computer software and operating systems (such as
Microsoft Corporation, Oracle Corporation and America Online, Inc.).
The table below illustrates the characteristics of the average company
included in the Index as of the end of 1995. It is important to note that the
data included in the table encompasses average data, not the total data of all
companies in the Index and is not intended to describe or predict the
financial data, returns or characteristics of any company included or to be
included in the Index.
<TABLE>
<CAPTION>
FINANCIAL CHARACTERISTICS
<S> <C>
Total Assets $2,011,900,000
Shareholders' Equity $ 897,100,000
Total Revenues $2,039,700,000
Net Income $ 135,500,000
Shares Outstanding 105,000,000
Market Value of Shares
Outstanding $4,054,700,000
P/E Ratio for Total
Index/a,b/ 29.62
</TABLE>
<TABLE>
<CAPTION>
TRADING CHARACTERISTICS
<S> <C>
Share Price $ 38.83
Number of Market Makers 27.2
1995 Total Share Volume/b/ 26,273,000,000
Total Percent Block
Volumeb 36.6%
Total Percent of Shares
Held by Institutions/c/ 38.5%
</TABLE>
- ---------------------
a Total market value divided by total earnings
b These figures represent total data for all Index companies.
c Through September 30, 1995.
10
<PAGE>
The average annual growth rate of the Index for the respective periods ending
on December 31, 1995 are as follows: 10 years--15.94%; 5 years--23.51%; 1
year--42.54%; and since inception--15.02%. These figures do not include
compounding of dividends.
The following chart depicts graphically the Year-End Index Value for the Index
from inception (February 1, 1985) through December 31, 1995. The Year-End Index
Values are computed as reflected in the table which follows. The formula used
in calculating the Nasdaq-100 Index Level is described below. The chart uses
data that is adjusted to reflect that the Index level was halved on January 3,
1994, and does not reflect reinvestment of dividends. Investors should note
that the figures below represent past performance of the Index and not the
future performance of the Index or the Trust (which includes certain fees and
expenses). Past performance is, of course, no guarantee of future results.
[GRAPH SHOWING TABLE BELOW APPEARS HERE]
<TABLE>
<CAPTION>
YEAR- ANNUAL
END RETURN
INDEX (EXCLUDING
YEAR VALUE DIVIDENDS)
- ---- ------- ----------
<S> <C> <C>
February 1, 1985............................................. 125.000 --
1985......................................................... 132.295 5.84%
1986......................................................... 141.405 6.89%
1987......................................................... 156.250 10.50%
1988......................................................... 177.410 13.54%
1989......................................................... 223.835 26.17%
1990......................................................... 200.530 (10.41)%
1991......................................................... 330.855 64.99%
1992......................................................... 360.185 8.86%
1993......................................................... 398.280 10.58%
1994......................................................... 404.270 1.50%
1995......................................................... 580.370 43.56%
------
Total Return Since Inception 364.30%
======
</TABLE>
Because the Trust is sold to the public at net asset value plus the applicable
sales charge, and the expenses of the Trust are deducted before making
distributions to Unitholders, investment in the Trust would have resulted in
investment performance to Unitholders somewhat reduced from that reflected in
the above chart and table.
11
<PAGE>
The Index is market value weighted. The representation of each security in the
Index is proportional to its last sale price times the total number of shares
outstanding, in relation to the total market value of the Index. The level of
the Index is calculated as follows:
<TABLE>
<S> <C> <C> <C> <C>
Nasdaq-100 Index Level = Current Market Value X 125
--------------------
Adjusted Base Period
Market Value
Adjusted Base Period = Current Market Value X Previous Base
After Adjustments Period Market Value
--------------------
Current Market Value
Before Adjustments
</TABLE>
The numeric value level of the Index was established at 250 prior to the
opening of the market on February 1, 1985. The index value was halved at the
end of 1993. The level of the Index will only change as a result of the price
changes occurring between the opening and closing of the market. Adjustments
for securities being added to or deleted from the Index, or capitalization
changes of adjustments, will take place during the system maintenance process
which occurs after the market has closed. These adjustments will result in
value changes to the current market value and adjusted base period market
value, but will not in and of themselves alter the level of the Index.
The Index is also adjusted to account for stock splits and stock dividends
during the system maintenance process. The system makes a price adjustment,
however, to account for the increased number of shares outstanding from such an
action with the result being that the current market value does not change.
In case of cash dividends other than extraordinary dividends, no system
adjustment is made. The Index formula relies on market forces to determine the
level of the Index. Neither the current market value nor the adjusted base
period market value are adjusted to reflect ordinary cash dividends. At its
discretion, The Nasdaq Stock Market, Inc. may temporarily suspend Index
securities from the calculation of the Index or adjust the index divisor in
those instances where an unusual cash dividend or spinoff might unduly
influence the level of the Index. The Nasdaq Stock Market, Inc. disseminates
calculations of the Index via Level 2 and Level 3 Nasdaq service and makes the
Index calculation available to information vendors and the print media.
Information on the Index contained in this Prospectus, as further updated, may
also be included from time to time in other prospectuses or in advertising
material. The performance of the Trust or of the Index (provided information is
also given reflecting the performance of the Trust in comparison to that index)
may also be compared to the performance of money managers as reported in SEI
Fund Evaluation Survey (the leading data base of tax-exempt assets consisting
of over 4,000 portfolios with total assets of $250 billion) or of mutual funds
as reported by Lipper Analytical Services Inc. (which calculates total return
using actual dividends on ex-dates accumulated for the quarter and reinvested
at quarter end), Money Magazine Fund Watch (which rates fund performance over a
specified time period after sales charge and assuming all dividends reinvested)
or Wiesenberger Investment Companies Service (which states fund performance
annually on a total return basis) or of the New York Stock Exchange Composite
Index, the American Stock Exchange Index (unmanaged indices of stocks traded on
the New York and American Stock Exchanges, respectively), the Dow Jones
Industrial Average (an index of 30 widely traded industrial common stocks) or
the Standard & Poor's 500 Index (an unmanaged diversified index of 500 stocks)
or similar measurement standards during the same period of time.
RISK FACTORS
General. The Trust may be an appropriate investment vehicle for investors who
desire to participate in a portfolio of equity securities with greater
diversification than they might be able to acquire individually. An
12
<PAGE>
investment in Units of the Trust should be made with an understanding of the
risks inherent in an investment in equity securities, including the risk that
the financial condition of issuers of the Securities may become impaired or
that the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus, in
the value of the Units) or the risk that holders of common stock have a right
to receive payments from the issuers of those stocks that is generally inferior
to that of creditors of, or holders of debt obligations issued by, the issuers
and that the rights of holders of common stock generally rank inferior to the
rights of holders of preferred stock. Common stocks are especially susceptible
to general stock market movements and to volatile increases and decreases in
value as market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations regarding
government, economic, monetary and fiscal policies, inflation and interest
rates, economic expansion or contraction, and global or regional political,
economic or banking crises.
Because the Index generally includes a concentration of technology and
technology-related companies, an investment in Units of the Trust should be
made with an understanding of the characteristics of the technology industry
and the risks which such an investment may entail. Technology companies
generally include companies involved in the development, design, manufacture
and sale of computers, computer related equipment, computer networks,
communications systems, telecommunications products, semiconductors, electronic
products, and other related products, systems and services. The market for
technology products is characterized by rapidly changing technology, rapid
product obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for products based
on a particular technology could have a material adverse affect on an issuer's
operating results. Furthermore, there can be no assurance that the issuers of
the Securities will be able to respond timely to compete in the rapidly
developing marketplace.
Based on trading history of common stock, factors such as announcements of new
products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of technology
common stocks to fluctuate substantially. In addition, technology company
stocks have experienced extreme price and volume fluctuations that often have
been unrelated to the operating performance of such companies. This market
volatility may adversely affect the market price of the Securities and
therefore the ability of a Unitholder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely and
cost effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for,
or an interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require product
vendors to comply with rigorous industry standards. Any failure to comply with
such standards may result in a significant loss or reduction of sales. Because
many products and technologies of technology companies are incorporated into
other related products, such companies are often highly dependent on the
performance of the personal computer, electronics and telecommunications
industries. There can be no assurance that these customers will place
additional orders, or that an issuer of Securities will obtain orders of
similar magnitude as past orders from other customers. Similarly, the success
of certain technology companies is tied to a relatively small concentration of
products or technologies. Accordingly, a decline in
13
<PAGE>
demand of such products, technologies or from such customers could have a
material adverse impact on issuers of the Securities.
Certain issuers of the Securities may derive a significant amount of business
in foreign markets. Many countries, especially emerging market countries, have
regulatory requirements that differ from U.S. requirements and are
characterized by less developed and more volatile economies. International
sales and operations are subject to certain risks, including unexpected changes
in regulatory environments, exchange rates, tariffs and other barriers,
political and economic instability and potentially adverse tax consequences.
All of these factors could have a material adverse impact on the financial
condition of certain issuers.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the Securities to protect their proprietary
rights will be adequate to prevent misappropriation of their technology or that
competitors will not independently develop technologies that are substantially
equivalent or superior to such issuers' technology.
Certain Investment Considerations. Holders of common stock incur more risk than
the holders of preferred stocks and debt obligations because common
stockholders, as owners of the entity, have generally inferior rights to
receive payments from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stock issued by the issuer. Holders
of common stock of the type held by the portfolio have a right to receive
dividends only when and if, and in the amounts, declared by the issuer's Board
of Directors and to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. By contrast, holders of preferred stock have the right to receive
dividends at a fixed rate when and as declared by the issuer's Board of
Directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends
payable to the holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of capital debt securities. Indeed, the issuance of debt securities
or even preferred stock will create prior claims for payment of principal,
interest, liquidation preferences and dividends which could adversely affect
the ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to assets of
the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (whose
value, however, will be subject to market fluctuations prior thereto), common
stocks have neither a fixed principal amount nor a maturity and have values
which are subject to market fluctuations for as long as the stocks remain
outstanding. The value of the Securities in the portfolios thus may be expected
to fluctuate over the entire life of the Trust to values higher or lower than
those prevailing on the Initial Date of Deposit.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the
Securities may depend on whether dealers will make a market in the Securities.
There can be no assurance that a market will be made for any of the Securities,
that any market for the Securities will be maintained or of the liquidity of
the Securities in any markets made. In addition, the Trust is restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemptions and the value of
the Trust will be adversely affected if trading markets for the Securities are
limited or absent.
14
<PAGE>
Investors should note that additional Units may be offered to the public. This
may have an effect upon the value of previously existing Units. To create
additional Units the Sponsor will purchase additional Securities. Brokerage
fees incurred in purchasing such Securities will be an expense of the Trust.
Thus, payment of brokerage fees by the Trust will affect the value of every
Unit and the net income per Unit received by the Trust. In particular,
Unitholders who purchase Units during the primary offering period of the Units
would experience a dilution of their investment as a result of any brokerage
fees paid by the Trust during subsequent deposits of additional Securities.
Litigation and Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time after the Initial Date of
Deposit, litigation may be initiated on a variety of grounds, or legislation
may be enacted with respect to the Securities in the Trust or the issuers of
the Securities. There can be no assurance that future litigation or
legislation will not have a material adverse effect on the Trust or will not
impair the ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). If the Trust so
qualifies and timely distributes to Unitholders 90% or more of its 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 taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to the
extent the Trust timely distributes to Unitholders 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." Because the Trust intends to timely distribute its taxable income
(including any net capital gain), 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 the taxable
year may be distributed to Unitholders shortly after the end of the calendar
year, such a distribution will be treated for federal income tax purposes as
having been received by Unitholders during the calendar year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the extent
that distributions to a Unitholder in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of capital
and will reduce the Unitholder'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.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as long-
term capital gain, regardless of the length of time the Units have been held
by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder 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 or a financial
institution. For taxpayers other than corporations, net capital gains are
presently subject to a maximum stated marginal tax rate of 28%. However, it
should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed. A capital loss is long-term if the asset
is held for more than one year and short-term if held for one year or less. If
a Unitholder holds Units for six months or less and subsequently sells such
Units at a loss, the loss will be
15
<PAGE>
treated as a long-term capital loss to the extent that any long-term capital
gain distribution is made with respect to such Units during the six-month
period or less that the Unitholder owns the Units.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Trust is
deferred. It is possible that for federal income tax purposes a portion of the
annual sales charge may be treated as interest which would be deductible by a
Unitholder subject to limitations on the deduction of investment interest. In
such case, the non-interest portion of the deferred sales charge would be added
to the Unitholder's tax basis in his Units. The annual sales charge could cause
the Unitholder's Units to be considered debt financed under Section 246A of the
Code which would result in a small reduction of the dividends-received
deduction. In any case the income (or proceeds from redemption) a Unitholder
must take into account for federal income tax purposes is not reduced by
amounts deducted to pay the annual sales charge.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on ordinary
income while capital gains remain subject to a 28% maximum stated rate for
taxpayers other than corporations. Because some or all capital gains are taxed
at a comparatively lower rate under the Act, the Act includes a provision that
recharacterizes capital gains as ordinary income in the case of certain
financial transactions that are "conversion transactions" effective for
transactions entered into after April 30, 1993. Unitholders and prospective
investors should consult with their tax advisers regarding the potential effect
of this provision on their investment in Units.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends-
received deduction, subject to the limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable
to dividends received by the Trust from United States corporations (other than
real estate investment trusts) and is designated by the Trust as being eligible
for such deduction. To the extent dividends received by the Trust are
attributable to foreign corporations, a corporation that owns Units will not be
entitled to the dividends received deduction with respect to its pro rata
portion of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations. The
Trust will provide each Unitholder with information annually concerning what
part of Trust distributions are eligible for the dividends received deduction.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received by the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has not
been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust will generally be
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<PAGE>
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-
United States persons. Such persons should consult their tax advisers.
The federal tax status of each year's distributions will be reported to
Unitholders 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 United States Unitholders.
Distributions by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons. Such
persons should consult their tax advisers. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the initial offering period, Units of the Trust
are offered at the Public Offering Price which is based on the aggregate
underlying value of the Securities in the Trust Fund (generally determined by
the closing ask prices of the Securities) and includes that initial sales
charge set forth in the table below. Unitholders will also be assessed an
annual sales charge for the duration of the Trust. The annual sales charge will
be $0.025 per Unit per year and will be assessed on a quarterly basis. The
annual sales charge payments will accrue daily and will be paid from funds in
the Income Account, if sufficient, or from the periodic sale of Securities.
Based on the historical dividend yields of many of the companies in the Nasdaq-
100 Index, it is expected that Securities will be sold to pay the sales charge.
If Units were purchased on the Initial Date of Deposit and held until the
mandatory termination of the Trust in 2001, the total sales charge paid would
be $0.618 per Unit. In no case shall the total sales charges paid by any
Unitholder exceed 6.25% of the Public Offering Price per Unit; the annual sales
charge payments may be decreased or terminated for all Unitholders to ensure
that the total sales charges paid by any Unitholder does not exceed such
percentage. Unitholders disposing of their Units prior to such time as the
entire annual sales charge has been collected will not be assessed any
unaccrued deferred sales charge payments remaining after such disposition. In
the secondary market, Units are offered at the Public Offering Price which is
based on the aggregate underlying value of the Securities in the Trust
(generally determined by the closing bid prices of the Securities) and includes
the initial sales charge described above. In addition to the Public Offering
Price per Unit, in the primary and secondary market Unitholders will pay a pro
rata portion of the cash, if any, in the Income and Capital Accounts of the
Trust.
<TABLE>
<CAPTION>
PRIMARY AND SECONDARY
MARKET INITIAL SALES CHARGE
------------------------------
PERCENT OF PERCENT OF NET
NUMBER OF UNITS* OFFERING PRICE AMOUNT INVESTED
- ---------------- -------------- ---------------
<S> <C> <C>
Less than 10,000................................. 4.9% 5.152%
10,000-24,999.................................... 4.5 4.712
25,000-49,999.................................... 4.3 4.493
50,000-99,999.................................... 3.5 3.627
100,000 or more.................................. 3.0 3.093
</TABLE>
- ---------------------
*The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor.
17
<PAGE>
The Sponsor intends to permit officers, directors and employees of the Sponsor
and its affiliates and registered representatives of selling firms to purchase
Units of the Trust without a sales charge. Investors who purchase Units
through brokers or dealers pursuant to a current management agreement which by
contract or operation of law does not allow such broker or dealer to earn an
additional commission (other than any fee or commission paid for maintenance
of such investor's account under the management agreement) on such
transactions may purchase such Units at the current Public Offering Price net
of the applicable broker or dealer concession. See "Public Offering of Units--
Public Distribution of Units" below.
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by
the number of Units outstanding. Such underlying value shall include the
proportionate share of any cash held in the Capital Account. Such price
determination as of the opening of business on the Initial Date of Deposit was
made on the basis of an evaluation of the Securities in the Trust prepared by
the Trustee. After the opening of business on the Initial Date of Deposit, the
Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of 3:15 P.M. Central time on days The Nasdaq Stock
Market is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on The Nasdaq
Stock Market on each such day. Orders received by the Trustee, Sponsor or any
dealer for purchases, sales or redemptions after that time, or on a day when
The Nasdaq Stock Market is closed, will be held until the next determination
of price.
The value of the Securities is determined on each business day by the
Evaluator based on the closing offer (or bid in the secondary market) prices
on The Nasdaq National Market or by taking into account the same factors
referred to under "Redemption--Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units.
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of the
Trust will be distributed to the public at the Public Offering Price thereof.
Upon the completion of the initial offering, Units which remain unsold or
which may be acquired in the secondary market (see "Market for Units") may be
offered at the Public Offering Price determined in the manner provided above.
The Sponsor intends to qualify Units of the Trust for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made
to or through dealers at prices which represent discounts from the Public
Offering Price as set forth below. Certain commercial banks are making 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
in the amounts shown below. Under the Glass-Steagall Act, banks are prohibited
from underwriting Trust 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 reserves the right to change the discounts set forth below from time
to time. In addition to such discounts, the Sponsor may, from time to time,
pay or allow an additional discount, in the form of cash or other
compensation, to dealers employing registered representatives who sell, during
a specified time period, a minimum dollar amount of Units of the Trust and
other unit investment trusts underwritten by the Sponsor. At various times the
Sponsor may implement programs under which the sales force of a broker or
dealer
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<PAGE>
may be eligible to win nominal awards for certain sales efforts, or under
which the Sponsor will reallow to any such broker or dealer that sponsors
sales contests or recognition programs conforming to criteria established by
the Sponsor, or participates in sales programs sponsored by the Sponsor, an
amount not exceeding the total applicable sales charges on the sales generated
by such person at the public offering price during such programs. Also, the
Sponsor in its discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying brokers or dealers for
certain services or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out of its own
assets, and not out of the assets of the Trust. These programs will not change
the price Unitholders pay for their Units or the amount that the Trust will
receive from the Units sold. The difference between the discount and the sales
charge will be retained by the Sponsor.
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
-----------------------------------------------------
PRIMARY AND PRIMARY MARKET
SECONDARY FIRM SALES OR SALE
MARKET ARRANGEMENTS
SPECIAL REGULAR (VOLUME CONCESSIONS IN
CONCESSION CONCESSION OR $1,000S)**
THROUGH AGENCY ------------------------
NUMBER OF UNITS* MARCH 15, 1996 COMMISSION $500-$999 $1,000 OR MORE
---------------- -------------- ------------- --------- --------------
<S> <C> <C> <C> <C>
Less than 10,000......... 4.0% 3.6% 3.7% 3.8%
10,000 but less than
25,000.................. 3.7 3.3 3.4 3.5
25,000 but less than
50,000.................. 3.6 3.2 3.3 3.4
50,000 but less than
100,000................. 2.8 2.5 2.6 2.7
100,000 or more.......... 2.4 2.0 2.1 2.2
</TABLE>
- ---------------------
*The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
**All sales through March 15, 1996 will earn the Special Concession
described above. Volume concessions of up to the amount shown can be earned
as a marketing allowance at the discretion of the Sponsor during the
initial one month period after the Initial Date of Deposit by firms who
reach cumulative firm sales arrangement levels of at least $500,000. After
a firm has met the minimum $500,000 volume level, volume concessions may be
given on all trades after March 15, 1996 originated from or by that firm,
including those placed prior to reaching the $500,000 level, and may
continue to be given during the entire initial offering period. Firm sales
of any EVEREN equity trust series issued simultaneously can be combined for
the purposes of achieving the volume discount. Only sales through EVEREN
qualify for volume discounts and secondary purchases do not apply. EVEREN
Unit Investment Trusts reserves the right to modify or change those
parameters at any time and make the determination of which firms qualify
for the marketing allowance and the amount paid.
The Sponsor will retain the entire amount of the annual sales charge payments
from the Initial Date of Deposit through March 31, 1997. After March 31, 1997,
the selling broker of record for each Unit will receive the $0.020 per Unit of
the annual sales charge payments (paid quarterly). The Sponsor will retain the
remainder of the annual sales charge payments.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trust as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit
(or sustain a loss) as of the Initial Date of Deposit resulting from the
difference between the purchase prices of the Securities to the Sponsor and
the cost of such Securities to the Trust, which is based on the evaluation of
the Securities on the Initial Date of Deposit. Thereafter, on subsequent
deposits the Sponsor may realize profits or sustain losses from such deposits.
See "Portfolio." The Sponsor may realize additional profits or losses during
the initial offering period on unsold Units as a result of changes in the
daily market value of the Securities in the Trust.
19
<PAGE>
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, subject to change at any time, maintain a market for Units of the
Trust offered hereby and to continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the bid value of the underlying
Securities. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the Trust. The
aggregate bid prices of the underlying Securities are expected to be less than
the related aggregate offering prices (which is the evaluation method used
during the initial public offering period). Accordingly, Unitholders who wish
to dispose of their Units should inquire of their broker as to current market
prices in order to determine whether there is in existence any price in excess
of the Redemption Price and, if so, the amount thereof. The offering price of
any Units resold by the Sponsor will be in accord with that described in the
currently effective prospectus describing such Units. Any profit or loss
resulting from the resale of such Units will belong to the Sponsor. The Sponsor
may suspend or discontinue purchases of Units of the Trust if the supply of
Units exceeds demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Trustee at its corporate trust office in the city of New
York and, in the case of Units evidenced by a certificate, by tendering such
certificate to the Trustee, properly endorsed or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Trustee.
Unitholders must sign the request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the Unitholder(s)
of record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the third business day following the
day on which a tender for redemption is received (the "Redemption Date") by
payment of cash equivalent to the Redemption Price for the Trust, determined as
set forth below under "Computation of Redemption Price," as of the evaluation
time stated under "Essential Information," next following such tender,
multiplied by the number of Units being redeemed. Any Units redeemed shall be
cancelled and any undivided fractional interest in the Trust extinguished. The
price received upon redemption might be more or less than the amount paid by
the Unitholder depending on the value of the Securities in the Trust at the
time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from
20
<PAGE>
the selling broker. However, any time a Unitholder elects to tender Units for
redemption, such Unitholder should make sure that the Trustee has been provided
a certified tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided such
number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the Trust to the extent that funds are available for
such purpose. All other amounts paid on redemption shall be withdrawn from the
Capital Account for the Trust. The Trustee is empowered to sell Securities for
the Trust in order to make funds available for the redemption of Units of the
Trust. Such sale may be required when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized. To the
extent Securities are sold, the size and diversity of the Trust will be
reduced.
To the extent that Securities are sold, the size and diversity of the Trust
will be reduced but each remaining Unit will continue to represent
approximately the same proportional interest in each Security. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder depending
on the value of the Securities in the portfolio at the time of redemption.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result
from any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will generally be determined on the
basis of the last sale price of the Securities in the Trust. On the Initial
Date of Deposit, the Public Offering Price per Unit (which is based on the
underlying offering prices of the Securities and includes the sales charge)
exceeded the value at which Units could have been redeemed by the amount shown
under "Essential Information." While the Trustee has the power to determine the
Redemption Price per Unit when Units are tendered for redemption, such
authority has been delegated to the Evaluator which determines the price per
Unit on a daily basis. The Redemption Price per Unit is the pro rata share of
each Unit in the Trust determined on the basis of (i) the cash on hand in the
Trust or monies in the process of being collected and (ii) the value of the
Securities in the Trust less (a) amounts representing taxes or other
governmental charges payable out of the Trust, (b) any amount owing to the
Trustee for its advances and (c) the accrued expenses of the Trust. The
Evaluator may determine the value of the Securities in the Trust in the
following manner: if the Security is listed on a national securities exchange
or the Nasdaq National Market, the evaluation will generally be based on the
last sale price on the exchange or Nasdaq (unless the Evaluator deems the price
inappropriate as a basis for evaluation). If the Security is not so listed or,
if so listed and the principal market for the Security is other than on the
exchange or system, the evaluation will generally be made by the Evaluator in
good faith based on the last bid price on the over-the-counter market (unless
the Evaluator deems such price inappropriate as a basis for evaluation) or, if
a bid price is not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any
combination thereof. See "Public Offering of Units--Public Offering Price."
21
<PAGE>
RETIREMENT PLANS
The Trust may be well suited for purchase by Individual Retirement Accounts,
Keogh Plans, pension funds and other qualified retirement plans, certain of
which are briefly described below.
Generally, capital gains and income received under each of the foregoing plans
are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The Trust will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-deferred plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under age 70 1/2 may
contribute the lesser of $2,000 or 100% of compensation to an IRA annually.
Such contributions are fully deductible if the individual (and spouse if filing
jointly) are not covered by a retirement plan at work. The deductible amount an
individual may contribute to an IRA will be reduced $10 for each $50 of
adjusted gross income over $25,000 ($40,000 if married, filing jointly or $0 if
married, filing separately), if either an individual or their spouse (if
married, filing jointly) is an active participant in an employer maintained
retirement plan. Thus, if an individual has adjusted gross income over $35,000
($50,000 if married, filing jointly or $0 if married, filing separately) and if
an individual or their spouse is an active participant in an employer
maintained retirement plan, no IRA deduction is permitted. Under the Code, an
individual may make nondeductible contributions to the extent deductible
contributions are not allowed. All distributions from an IRA (other than the
return of certain excess contributions) are treated as ordinary income for
Federal income taxation purposes provided that under the Code an individual
need not pay tax on the return of nondeductible contributions, the amount
includable in income for the taxable year is the portion of the amount
withdrawn for the taxable year as the individual's aggregate nondeductible IRA
contributions bear to the aggregate balance of all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be, distributed to
the participant not later than April 1 of the calendar year following the year
during which the participant attains age 70 1/2. Distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over to another
IRA, or where the distributions are taken as a series of substantially equal
periodic payments over the participant's life or life expectancy (or the joint
lives or life expectancies of the participant and the designated beneficiary)
are generally subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be modified before
the later of five years or attainment of age 59 1/2. Excess contributions are
subject to an annual 6% excise tax.
IRA applications, disclosure statements and trust agreements are available from
the Sponsor upon request.
Qualified Retirement Plans. Units of the Trust may be purchased by qualified
pension or profit sharing plans maintained by corporations, partnerships or
sole proprietors. The maximum annual contribution for a participant in a money
purchase pension plan or to paired profit sharing and pension plans is the
lesser of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the Sponsor upon
request.
Excess Distributions Tax. In addition to the other taxes due by reason of a
plan distribution, a tax of 15% may apply to certain aggregate distributions
from IRAs, Keogh plans, and corporate retirement plans to the
22
<PAGE>
extent such aggregate taxable distributions exceed specified amounts (generally
$150,000, as adjusted) during a tax year. This 15% tax will not apply to
distributions on account of death, qualified domestic relations orders or
amounts rolled over to an eligible plan. In general, for lump sum distributions
the excess distribution over $750,000 (as adjusted) will be subject to the 15%
tax.
The Trustee has agreed to act as custodian for certain retirement plan
accounts. An annual fee of $12.00 per account, if not paid separately, will be
assessed by the Trustee and paid through the liquidation of shares of the
reinvestment account. An individual wishing the Trustee to act as custodian
must complete an EVEREN UIT/IRA application and forward it along with a check
made payable to The Bank of New York. Certificates for Individual Retirement
Accounts can not be issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed as stated under
"Redemption--General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to the Trust's
minimum investment requirement of 100 Units or $1,000. Fractions of Units, if
any, will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer
or interchange. The Trustee at the present time does not intend to charge for
the normal transfer or interchange of certificates. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee of
satisfactory indemnity (generally amounting to 3% of the market value of the
Units), affidavit of loss, evidence of ownership and payment of expenses
incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by the Trust is credited by the
Trustee to the Income Account of the Trust. Other receipts are credited to the
Capital Account of the Trust. Income received by the Trust will be distributed
on or shortly after the 15th day of January, April, July and October of each
year on a pro rata basis to Unitholders of record as of the preceding record
date (which will be the first day of
the related month). All distributions will be net of applicable expenses. There
is no assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, amounts from the Capital
Account of the Trust, if any, will be distributed at least annually to the
Unitholders then of record. Proceeds received from the disposition of any of
the Securities after a record date and prior to the following distribution date
will be held in the Capital Account and not distributed until the next
distribution date applicable to the Capital Account. The Trustee shall be
required to make a distribution from the Capital Account as described under
"Essential Information." The Trustee is not required to pay interest on funds
held in the Capital or Income Accounts (but may itself earn interest thereon
and therefore benefits from the use of such funds). The Trustee is authorized
to reinvest any funds held in the Capital or Income Accounts,
23
<PAGE>
pending distribution, in U.S. Treasury obligations which mature on or before
the next applicable distribution date. Any obligations so acquired must be held
until they mature and proceeds therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share
of the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate. Persons who purchase Units will commence receiving
distributions only after such person becomes a record owner. A person will
become the owner of Units, and thereby a Unitholder of record, on the date of
settlement provided payment has been received. Notification to the Trustee of
the transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
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 Capital Account of the Trust amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Expenses of the Trust"). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of
the Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of the Trust such amounts as may be necessary
to cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional Units of the Trust without an initial sales charge. In
addition, Unitholders may elect to have distributions of capital (including
capital gains, if any) or dividends or both automatically invested without
charge in shares of any one of several front-end load mutual funds underwritten
or advised by Kemper Financial Services, Inc. at net asset value if such funds
are registered in such Unitholder's state of residence, other than those mutual
funds sold with a contingent deferred sales charge. Since the portfolio
securities and investment objectives of such Kemper-advised mutual funds
generally will differ significantly from those of the Trust, Unitholders should
carefully consider the consequences before selecting such mutual funds for
reinvestment. Detailed information with respect to the investment objectives
and the management of such mutual funds is contained in their respective
prospectuses, which can be obtained from the Sponsor upon request. An investor
should read the prospectus of the reinvestment fund selected prior to making
the election to reinvest. Unitholders who desire to have such distributions
automatically reinvested should inform their broker at the time of purchase or
should file with the Program Agent referred to below a written notice of
election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See "Unitholders--Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of
New York at its corporate trust office.
24
<PAGE>
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income
and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit.
The accounts of the Trust are required to be audited annually, at the Trust's
expense, by independent public accountants designated by the Sponsor, unless
the Sponsor determines that such an audit would not be in the best interest of
the Unitholders of the Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of the Trust upon written request. Within a
reasonable period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar year was a
Unitholder of the Trust a statement, covering the calendar year, setting forth
for the Trust:
A. As to the Income Account:
1. Income received;
2. Deductions for applicable taxes and for fees and expenses of the Trust and
for redemptions of Units, if any; and
3. The balance remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; and
B. As to the Capital Account:
1. The dates of disposition of any Securities and the net proceeds received
therefrom;
2. Deductions for payment of applicable taxes and fees and expenses of the
Trust held for distribution to Unitholders of record as of a date prior to the
determination; and
3. The balance remaining after such distributions and deductions expressed both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of such calendar year;
2. The number of Units outstanding on the last business day of such calendar
year;
3. The Redemption Price based on the last evaluation made during such calendar
year;
4. The amount actually distributed during such calendar year from the Income
and Capital Accounts separately stated, expressed both as total dollar amounts
and as dollar amounts per Unit outstanding on the Record Dates for each such
distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate the Trust nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of the Trust.
25
<PAGE>
No Unitholder shall have the right to control the operation and management of
the Trust in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of the Trust.
INVESTMENT SUPERVISION
The Trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolio of the Trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its securities from the portfolio.
As a general rule, the only purchases and sales that will be made with respect
to the Trust's portfolio will be those necessary to maintain, to the extent
feasible, a portfolio which reflects the current components of the Index,
taking into consideration redemptions, sales of additional Units and the other
adjustments referred to elsewhere in this prospectus. See "Trust Portfolio--
General." Such purchases and sales will be made in accordance with the computer
program utilized to maintain the portfolio, the Trust Agreement and procedures
to be specified by the Sponsor. The Sponsor may direct the Trustee to dispose
of Securities and either to acquire other Securities through the use of the
proceeds of such disposition in order to make changes in the portfolio or to
distribute the proceeds of such disposition to Unitholders (i) as necessary to
reflect any additions to or deletions from the Index, (ii) as may be necessary
to establish a closer correlation between the Trust portfolio and the Index or
(iii) as may be required for purposes of distributing to Unitholders, when
required, their pro rata share of any net realized capital gains or as the
Sponsor may otherwise determine. As a policy matter, the Sponsor currently
intends to direct the Trustee to acquire round lots of shares of the Securities
rather than odd lot amounts. Any funds not used to acquire round lots will be
held for future purchases of shares, for redemptions of Units or for
distributions to Unitholders. In the event the Trustee receives any securities
or other properties relating to the Securities (other than normal dividends)
acquired in exchange for Securities such as those acquired in connection with a
reorganization, recapitalization, merger or other transaction, the Trustee will
be directed to sell such securities or other property and reinvest the proceeds
in the manner described above under (i)-(iii). In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that the Trust continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code, and as may be needed from time to time to avoid the imposition of
any excise tax on the Trust as a regulated investment company.
Proceeds from the sale of Securities (or any securities or other property
received by the Trust in exchange for Securities) are credited to the Capital
Account for distribution to Unitholders or to meet redemptions. Except as
stated under "The Trust Fund" for failed securities and as provided herein, the
acquisition by the Trust of any securities other than the Securities is
prohibited. The Trustee may sell Securities, designated by the Sponsor, from
the Trust for the purpose of redeeming Units of the Trust tendered for
redemption and the payment of expenses.
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286, telephone 1-800-701-8178. The Bank of New
York is subject to supervision and examination by the Superintendent of Banks
of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
26
<PAGE>
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of the Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of the Trust. Such books and
records shall be open to inspection by any Unitholder of the Trust at all
reasonable times during usual business hours. The Trustee shall make such
annual or other reports as may from time to time be required under any
applicable state or federal statute, rule or regulation. The Trustee shall keep
a certified copy or duplicate original of the Trust Agreement on file in its
office available for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the Securities held in
the Trust. Pursuant to the Trust Agreement, the Trustee may employ one or more
agents for the purpose of custody and safeguarding of Securities comprising the
Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The Sponsor may at any time
remove the Trustee, with or without cause, and appoint a successor trustee as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. The Sponsor, EVEREN Unit Investment Trusts, with an office at 77
West Wacker Drive, 29th Floor, Chicago, Illinois 60601, (800) 621-5024, is a
service of EVEREN Securities, Inc. EVEREN Securities, Inc. was formerly known
as Kemper Securities, Inc. The Sponsor acts as underwriter of a number of other
EVEREN unit investment trusts and will act as underwriter of any other unit
investment trust products developed by the Sponsor in the future. As of
December 31, 1995, the total stockholder's equity of EVEREN Securities, Inc.
was $261,286,862.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust. More comprehensive financial information
can be obtained upon request from the Sponsor.
27
<PAGE>
THE EVALUATOR. EVEREN Unit Investment Trusts, the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which event
the Trustee is to use its best efforts to appoint a satisfactory successor.
Such resignation or removal shall become effective upon acceptance of
appointment by the successor evaluator. If upon resignation of the Evaluator no
successor has accepted appointment within thirty days after notice of
resignation, the Evaluator may apply to a court of competent jurisdiction for
the appointment of a successor. Notice of such registration or removal and
appointment shall be mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreement with respect to the Trust may also be amended
in any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the holders of Units representing 66 2/3% of
the Units then outstanding of the Trust, provided that no such amendment or
waiver will reduce the interest of any Unitholder thereof without the consent
of such Unitholder or reduce the percentage of Units required to consent to any
such amendment or waiver without the consent of all Unitholders of the Trust.
In no event shall the Trust Agreement be amended to increase the number of
Units of the Trust issuable thereunder or to permit the acquisition of any
Securities in addition to or in substitution for those initially deposited in
the Trust, except in accordance with the provisions of the Trust Agreement. The
Trustee shall promptly notify Unitholders of the substance of any such
amendment.
The Trust Agreement provides that the Trust shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in the Trust but in no event is it to continue beyond the Mandatory Termination
Date set forth under "Essential Information." If the value of the Trust shall
be less than the applicable minimum value stated under "Essential Information"
(40% of the aggregate value of the Securities--based on the value at the date
of deposit of such Securities into the Trust), the Trustee may, in its
discretion, and shall, when so directed by the Sponsor, terminate the Trust.
The Trust may be terminated at any time by the holders of Units representing
66 2/3% of the Units thereof then outstanding. In addition, the Sponsor may
terminate the Trust if the Index is no longer maintained.
No later than the Mandatory Termination Date set forth under "Essential
Information," the Trustee will begin to sell all of the remaining underlying
Securities on behalf of Unitholders in connection with the termination of the
Trust. The Sponsor has agreed to assist the Trustee in these sales. The sale
proceeds will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it can during the
termination proceedings without in its judgment materially adversely affecting
the market price of the Securities, but it is expected that all of the
Securities will in any event be disposed of within a reasonable time after the
Trust's termination. The Sponsor does not anticipate that the period will be
longer than one month, and it could be as short as one day, depending on the
liquidity of the Securities being sold. The liquidity of any Security depends
on the daily trading volume of the Security and the amount that the Sponsor has
available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsor 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
termination proceedings,
28
<PAGE>
the Sponsor 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. Thereafter, the price limit will increase to one point under the
last closing sale price. After four days, the Sponsor currently intends 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 termination proceedings without any price
restrictions. Of course, no assurances can be given that the market value of
the Securities will not be adversely affected during the termination
proceedings.
In the event of termination of the Trust, written notice thereof will be sent
by the Trustee to all Unitholders of the Trust. Within a reasonable period
after termination, the Trustee will sell any Securities remaining in the Trust
and, after paying all expenses and charges incurred by the Trust, will
distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of the Trust.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the
Trust Agreement, but will be under no liability to the Unitholders for taking
any action or refraining from any action in good faith pursuant to the Trust
Agreement or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct or its reckless disregard for its
duties thereunder. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the sale by the Trustee of any Securities. In the
event that the Sponsor shall fail to act, the Trustee may act and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or upon the interest thereof. In addition, the
Trust Agreement contains other customary provisions limiting the liability of
the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee or Unitholders for errors in judgment, but shall be liable for its
gross negligence, bad faith or willful misconduct or its reckless disregard for
its obligations under the Trust Agreement.
EXPENSES OF THE TRUST
The Sponsor will not charge the Trust any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any,
related to the deposit of Securities in the Trust.
The Trustee receives for its services that fee set forth under "Essential
Information." However, in no event shall such fee amount to less than $2,000 in
any single calendar year. The Trustee's fee which is calculated monthly is
based on the largest number of Units outstanding during the calendar year for
which such compensation relates. The Trustee's fees are payable monthly on or
before the fifteenth day of the month
29
<PAGE>
from the Income Account to the extent funds are available and then from the
Capital Account. The Trustee benefits to the extent there are funds for future
distributions, payment of expenses and redemptions in the Capital and Income
Accounts since these Accounts are non-interest bearing and the amounts earned
by the Trustee are retained by the Trustee. Part of the Trustee's compensation
for its services to the Trust is expected to result from the use of these
funds.
For evaluation of the Securities in the Trust, the Evaluator shall receive that
fee set forth under "Essential Information", payable monthly, based upon the
largest number of Units outstanding during the calendar year for which such
compensation relates.
The Trustee's fees and the Evaluator's fees are deducted from the Income
Account of the Trust to the extent funds are available and then from the
Capital Account. Each such fee may be increased without approval of Unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index
or any equivalent index substituted therefor.
The Licensor receives an annual fee from the Trust equal to the greater of (a)
.02% of the average net asset value of the Trust computed quarterly or (b) a
minimum of $7,000 during 1996, $8,000 during 1997 and $9,000 thereafter. This
fee covers the license to the Fund of the use of various trademarks and trade
names as described under "Trust Portfolio--The Nasdaq-100 Index."
Expenses incurred in establishing the Trust, including the cost of the initial
preparation of documents relating to the Trust (including the Prospectus, Trust
Agreement and certificates), federal and state registration fees, the initial
fees and expenses of the Trustee, legal and accounting expenses, payment of
closing fees and any other out-of-pocket expenses, will be paid by the Trust
(out of the Capital Account) and it is intended that such expenses be amortized
over a five year period. The following additional charges are or may be
incurred by the Trust: (a) fees for the Trustee's extraordinary services; (b)
expenses of the Trustee (including legal and auditing expenses, but not
including any fees and expenses charged by an agent for custody and
safeguarding of Securities) and of counsel, if any; (c) various governmental
charges; (d) expenses and costs of any action taken by the Trustee to protect
the Trust or the rights and interests of the Unitholders; (e) indemnification
of the Trustee for any loss, liability or expense incurred by it in the
administration of the Trust not resulting from gross negligence, bad faith or
willful misconduct on its part or its reckless disregard for its obligations
under the Trust Agreement; (f) indemnification of the Sponsor for any loss,
liability or expense incurred in acting in that capacity without gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement; and (g) expenditures incurred in
contacting Unitholders upon termination of the Trust. The fees and expenses set
forth herein are payable out of the Trust and, when owing to the Trustee, are
secured by a lien on the Trust. Since the Securities are all common stocks, and
the income stream produced by dividend payments, if any, is unpredictable, the
Sponsor cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of the Trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by the Trust, the
Trustee has the power to sell Securities to pay such amounts. These sales may
result in capital gains or losses to Unitholders. See "Federal Tax Status." It
is expected that the income stream produced by dividend payments will be
insufficient to meet the expenses of the Trust and, accordingly, it is expected
that Securities will be sold to pay all of the fees and expenses of the Trust.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
federal tax law have been passed upon by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, as counsel for the Sponsor. Emmet, Marvin &
Martin, 120 Broadway, New York, New York 10271, acts as counsel to the Trustee.
30
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statement of condition and the related portfolio at the Initial Date of
Deposit included in this Prospectus have been audited by Grant Thornton LLP,
independent certified public accountants, as set forth in their report in the
Prospectus, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing.
------------
31
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
(NASDAQ-100 INDEX TRUST, SERIES 1)
We have audited the accompanying statement of condition and the related
portfolio of EVEREN Unit Investment Trusts, Series 42 (Nasdaq-100 Index Trust,
Series 1), as of February 21, 1996. The statement of condition and portfolio
are the responsibility of the Sponsor. Our responsibility is to express an
opinion on such 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 a letter of credit deposited to purchase
Securities by correspondence with the Trustee. An audit also includes assessing
the accounting principles used and significant estimates made by the Sponsor,
as well as evaluating the overall financial statement presentation. We believe
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 EVEREN Unit Investment Trusts,
Series 42 (Nasdaq-100 Index Trust, Series 1) as of February 21, 1996, in
conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
February 21, 1996
32
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
NASDAQ-100 INDEX TRUST, SERIES 1
STATEMENT OF CONDITION
AT THE OPENING OF BUSINESS ON FEBRUARY 21, 1996, THE INITIAL DATE OF DEPOSIT
TRUST PROPERTY
<TABLE>
<S> <C>
Contracts to purchase Securities (1) (2).............................. $387,809
Organizational costs (3).............................................. 64,500
--------
Total............................................................. $452,309
========
NUMBER OF UNITS....................................................... 40,779
========
</TABLE>
LIABILITY AND INTEREST OF UNITHOLDERS
<TABLE>
<S> <C>
Liability--
Accrued organizational costs (3).................................... $ 64,500
Interest of Unitholders--
Cost to investors (4)............................................... 407,791
Less: Gross underwriting commission (4)............................. 19,982
--------
Net interest to Unitholders (1) (2) (4)............................. 387,809
--------
Total............................................................. $452,309
========
</TABLE>
- ----------
NOTES:
(1) Aggregate cost of the Securities is based on the last sale price
evaluations as determined by the Trustee.
(2) An irrevocable letter of credit issued by The Bank of New York has been
deposited with the Trustee covering the funds (aggregating $387,809)
necessary for the purchase of the Securities in the Trust represented by
purchase contracts.
(3) The Trust will bear all or a portion of its organizational costs, which
the Sponsor intends to defer and amortize over five years. Organizational
costs have been estimated based on a projected Trust size of $25,000,000.
To the extent the Trust is larger or smaller, the estimate will vary.
(4) The aggregate cost to investors includes the applicable sales charge
assuming no reduction of sales charges for quantity purchases.
33
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
NASDAQ-100 INDEX TRUST, SERIES 1
PORTFOLIO AS OF FEBRUARY 21, 1996
<TABLE>
<CAPTION>
THEORETICAL
PERCENTAGE (%)
PORTFOLIO OF TOTAL
NO. SYMBOL COMPANY NAME (1) SHARES COST ($) (1) MARKET VALUE (2)
--------- ------ ---------------- ------ ------------ ----------------
<C> <C> <S> <C> <C> <C>
1 MSFT Microsoft Corporation 100 9,787.50 13.46%
2 INTC Intel Corporation 100 5,775.00 11.01%
3 ORCL Oracle Corporation 100 5,187.50 5.24%
4 MCIC MCI Communications Cor-
poration 100 2,912.50 4.61%
5 AMGN Amgen 100 6,050.00 3.74%
6 CSCO Cisco Systems Incorpo-
rated 100 4,525.00 2.90%
7 TCOMA Telecommunications In-
corporated New Com TCI
Grp 100 2,137.50 2.84%
8 SUNW Sun Microsystems Incor-
porated 100 4,675.00 2.06%
9 BNET Bay Networks Incorpo-
rated 100 4,500.00 1.90%
10 WCOM Worldcom Incorporated Ga 100 4,112.50 1.84%
11 COMS 3COM Corporation 100 4,825.00 1.82%
12 USHC U S Healthcare Incorpo-
rated 100 4,700.00 1.68%
13 AMAT Applied Materials Incor-
porated 100 3,950.00 1.64%
14 NOVL Novell Incorporated 100 1,287.50 1.10%
15 CHIR Chiron Corporation 100 10,950.00 1.06%
16 USRX U S Robotics Corporation 100 10,575.00 1.04%
17 PMTC Parametric Technology 100 7,125.00 1.04%
18 AMER America Online Incorpo-
rated Del 100 5,175.00 0.99%
19 IFMX Informix Corporation 100 3,087.50 0.96%
20 TLAB Tellabs Incorporated 100 4,637.50 0.95%
21 DIGI DSC Communications Cor-
poration 100 3,475.00 0.93%
22 MFST MFS Communications In-
corporated 100 6,000.00 0.86%
23 CMCSK Comcast Corporation Cl A
Cl A Spl 100 1,937.50 0.86%
24 HBOC HBO & Company 100 9,000.00 0.83%
25 AAPL Apple Computer Incorpo-
rated 100 2,900.00 0.83%
26 NWAC Northwest Airls Corpora-
tion Cl A 100 4,462.50 0.83%
27 LLTC Linear Technology Corpo-
ration 100 4,775.00 0.82%
28 PCCW Price/Costco Incorpo-
rated 100 1,800.00 0.82%
29 NOBE Nordstrom Incorporated 100 4,187.50 0.79%
30 CALL Nextel Communications
Incorporated Cl A 100 1,512.50 0.75%
31 ALTR Altera Corporation 100 7,000.00 0.71%
32 XLNX Xilinx Incorporated 100 4,275.00 0.70%
33 DELL Dell Computer Corpora-
tion 100 3,237.50 0.70%
34 WMTT Willamette Industries
Incorporated 100 5,350.00 0.69%
35 QCOM Qualcomm Incorporated 100 4,487.50 0.67%
36 STRM Stratacom Incorporated 100 3,950.00 0.67%
37 ATML Atmel Corporation 100 2,825.00 0.64%
38 SIAL Sigma Aldrich Corpora-
tion 100 5,498.40 0.64%
39 INTU Intuit 100 6,075.00 0.63%
</TABLE>
34
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
NASDAQ-100 INDEX TRUST, SERIES 1--CONTINUED
<TABLE>
<CAPTION>
THEORETICAL
PERCENTAGE (%)
PORTFOLIO OF TOTAL
NO. SYMBOL COMPANY NAME (1) SHARES COST ($) (1) MARKET VALUE (2)
--------- ------ ---------------- ------ ------------ ----------------
<C> <C> <S> <C> <C> <C>
40 BMCS BMC Software Incorpo-
rated 100 5,300.00 0.62%
41 ADBE Adobe Systems Incorpo-
rated 100 3,700.00 0.62%
42 GEMS Glenayre Technologies
Incorporated 100 4,425.00 0.62%
43 PAGE Paging Network Incorpo-
rated 100 2,575.00 0.61%
44 SPLS Staples Incorporated 100 2,500.00 0.61%
45 STJM St Jude Medical Incorpo-
rated 100 3,700.00 0.60%
46 PAYX Paychex Incorporated 100 5,675.00 0.60%
47 ADPT Adaptec Incorporated 100 4,800.00 0.58%
48 PSFT Peoplesoft Incorporated 100 5,075.00 0.58%
49 STRY Stryker Corporation 100 5,087.50 0.57%
50 BGEN Biogen Incorporated 100 6,950.00 0.57%
51 GART Gartner Group Incorpo-
rated New 100 5,675.00 0.56%
52 ADCT A D C Telecommunications 100 3,750.00 0.55%
53 MXIM Maxim Integrated Prod-
ucts Incorporated 100 3,900.00 0.54%
54 SYBS Sybase Incorporated 100 3,212.50 0.54%
55 CTAS Cintas Corporation 100 4,825.00 0.53%
56 BMET Biomet Incorporated 100 1,887.50 0.51%
57 VKNG Viking Office Products 100 5,162.50 0.49%
58 GATE Gateway 2000 Incorpo-
rated 100 2,812.50 0.47%
59 PCAR Paccar Incorporated 100 5,225.00 0.47%
60 GENZ Genzyme Corporation Com
Genl Div 100 6,875.00 0.47%
61 ANDW Andrew Corporation 100 5,025.00 0.46%
62 TYSNA Tyson Foods Incorporated
Cl A 100 2,562.50 0.45%
63 WTHG Worthington Industries
Incorporated 100 2,125.00 0.45%
64 GNCI General Nutrition Compa-
nies Incorporated 100 2,150.00 0.44%
65 AGREA American Greetings Cor-
poration Cl A 100 2,687.50 0.44%
66 MCCRK McCormick & Company In-
corporated Non Vtg 100 2,312.50 0.44%
67 CNTO Centocor Incorporated 100 3,212.50 0.44%
68 BOST Boston Chicken Incorpo-
rated 100 3,162.50 0.42%
69 MOLX Molex Incorporated 100 3,450.00 0.40%
70 AESC AES Corporation 100 2,237.50 0.39%
71 IDXX Idexx Labs Corporation 100 4,600.00 0.39%
72 HCCC Healthcare Compare Cor-
poration 100 4,837.50 0.39%
73 PETM Petsmart Incorporated 100 3,212.50 0.38%
74 PHSYB Pacificare Health Sys
Incorporated Cl B 100 8,750.00 0.38%
75 ACAD Autodesk Incorporated 100 3,550.00 0.36%
76 OSSI Outback Steakhouse In-
corporated 100 3,500.00 0.36%
77 KLAC KLA Instrs Corporation 100 2,850.00 0.33%
78 ERTS Electronic Arts Incorpo-
rated 100 2,637.50 0.32%
79 FDLNB Food Lion Incorporated
Cl B 100 562.50 0.31%
80 CBRL Cracker Barrel Old Coun-
try Store 100 2,050.00 0.29%
</TABLE>
35
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42
NASDAQ-100 INDEX TRUST, SERIES 1--CONTINUED
<TABLE>
<CAPTION>
THEORETICAL
PERCENTAGE (%)
PORTFOLIO OF TOTAL
NO. SYMBOL COMPANY NAME (1) SHARES COST ($) (1) MARKET VALUE (2)
--------- ------ ---------------- ------ ------------ ----------------
<C> <C> <S> <C> <C> <C>
81 CRUS Cirrus Logic Corporation 100 1,950.00 0.29%
82 RPOW RPM Incorporated Ohio 100 1,575.00 0.28%
83 LRCX Lam Resh Corporation 100 4,198.40 0.27%
84 MUEI Micron Electronics In-
corporated 100 1,150.00 0.24%
85 KELYA Kelly Services Incorpo-
rated Cl A 100 2,900.00 0.23%
86 APCC American Power Conver-
sion Corporation 100 1,050.00 0.23%
87 PRGO Perrigo Company 100 1,262.50 0.22%
88 CPWR Compuware Corporation 100 2,250.00 0.22%
89 VCELA Vanguard Cellular System
Incorporated Cl A 100 2,237.50 0.21%
90 MTEL Mobile Telecommunication
Technology 100 1,687.50 0.21%
91 QNTM Quantum Corporation 100 1,712.50 0.21%
92 SHLM Schulman A Incorporated 100 2,325.00 0.20%
93 MLHR Miller Herman Incorpo-
rated 100 3,312.50 0.19%
94 SSSS Stewart & Stevenson
Services Incorporated 100 2,475.00 0.19%
95 RDRT Read-Rite Corporation 100 1,712.50 0.19%
96 ASAI Atlantic Southeast Airls
Incorporated 100 2,387.50 0.18%
97 JBHT J B Hunt Transport Serv-
ices 100 1,837.50 0.17%
98 BOBE Bob Evans Farms Incorpo-
rated 100 1,612.50 0.16%
99 AKLM Acclaim Entertainment
Incorporated Par $0.02 100 1,262.50 0.15%
100 GIDL Giddings & Lewis Incor-
porated Wis 100 1,600.00 0.13%
-----------
$387,809.30
===========
</TABLE>
NOTES TO PORTFOLIO
(1) All or a portion of the Securities may have been deposited in the Trust.
Any undelivered Securities are represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been deposited
with the Trustee. At the Initial Date of Deposit, the Sponsor has assigned
to the Trustee all of its rights, title and interest in and to such
undelivered Securities. Contracts to purchase Securities were entered into
on February 20, 1996 and all have expected settlement dates of February 23,
1996 (see "The Trust Fund"). The cost of the Securities to the Sponsor and
the cost of the Securities to the Trust are the same; accordingly, the
Sponsor's profit or (loss) on the deposit of Securities is $0.00.
(2) The percentage listed under this heading represents each Security's
proportionate relationship of all Index stocks based on market value as of
the date set forth above. Because the stocks included in the Index and the
value of such stocks may change from time to time, and because the Trust
may not be able to duplicate the Index exactly, the percentages set forth
above do not represent the actual weighting of each Security in the Trust
portfolio on the Initial Date of Deposit or on any subsequent date. See
"The Trust Portfolio."
----------------
The Sponsor may have participated as issuer, sole underwriter, managing
underwriter or member of an underwriting syndicate in a public offering of one
or more of the stocks in the Index. The Sponsor may serve as a specialist in
the stocks in the Index on one or more stock exchanges and may have a long or
short position in any of these stocks or in options on any of these stocks, and
may be on the opposite side of public orders executed on the floor of an
exchange where such stocks are listed. An officer, director or employee of the
Sponsor may be an officer or director of one or more of the issuers of the
stocks in the Index. The Sponsor may trade for its own account as an odd-lot
dealer, market maker, block positioner and/or arbitrageur in any stocks or
options relating thereto. The Sponsor, its affiliates, directors, elected
officers and employee benefit programs may have either a long or short position
in any stock or option of the issuers.
36
<PAGE>
<TABLE>
<CAPTION>
CONTENTS Page
----
<S> <C>
SUMMARY........................................................... 2
NASDAQ-100(R) INDEX LICENSING AGREEMENT........................... 4
ESSENTIAL INFORMATION............................................. 5
FEE TABLE......................................................... 6
THE TRUST FUND.................................................... 7
THE TRUST PORTFOLIO............................................... 8
RISK FACTORS...................................................... 12
FEDERAL TAX STATUS................................................ 15
PUBLIC OFFERING OF UNITS.......................................... 17
Public Offering Price............................................ 17
Public Distribution of Units..................................... 18
Sponsor Profits.................................................. 19
MARKET FOR UNITS.................................................. 20
REDEMPTION........................................................ 20
General.......................................................... 20
Computation of Redemption Price.................................. 21
RETIREMENT PLANS.................................................. 22
UNITHOLDERS....................................................... 23
Ownership of Units............................................... 23
Distributions to Unitholders..................................... 23
Distribution Reinvestment........................................ 24
Statements to Unitholders........................................ 25
Rights of Unitholders............................................ 25
INVESTMENT SUPERVISION............................................ 26
ADMINISTRATION OF THE TRUST....................................... 26
The Trustee...................................................... 26
The Sponsor...................................................... 27
The Evaluator.................................................... 28
Amendment and Termination........................................ 28
Limitations on Liability......................................... 29
EXPENSES OF THE TRUST............................................. 29
LEGAL OPINIONS.................................................... 30
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.......................... 31
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS................ 32
STATEMENT OF CONDITION............................................ 33
PORTFOLIO......................................................... 34
</TABLE>
--------------------
This Prospectus does not contain all of the information with respect to the
investment company set forth in its registration statement and exhibits relating
thereto which have been 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 hereby made.
--------------------
No person is authorized to give any information or to make any representations
with respect to this investment company not contained in this Prospectus, and
any information or representation not contained herein must not be relied upon
as having been authorized by the Trust, the Trustee, or the Sponsor. Such
registration does not imply that the Trust or the Units have been guaranteed,
sponsored, recommended or approved by the United States or any state or any
agency or officer thereof.
--------------------
This Prospectus does not constitute an offer to sell, 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 or country.
EVEREN Unit Investment Trusts
77 West Wacker Drive, 29th Floor
Chicago, IL 60601-1994
NASDAQ-100
Index
Trust
Sponsored by:
EVEREN
Unit
Investment
Trusts
Prospectus February 21, 1996
Equity Index Portfolio
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents.
<TABLE>
<C> <S>
The facing sheet
The Cross-Reference Sheet
The Prospectus
The Signatures
The following exhibits.
1.1. Trust Agreement.
1.1.1. Standard Terms and Conditions of Trust. Reference is made to Exhibit
1.1.1 to the Registration Statement on Form S-6 with respect to EVEREN
Unit Investment Trusts, Series 39 (Registration No. 33-63111) as filed
on November 7, 1995.
2.1. Form of Certificate of Ownership (pages three and four of the Standard
Terms and Conditions of Trust included as Exhibit 1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the securities
being registered including a consent to the use of its name under
"Legal Opinions" in the Prospectus.
4.1. Consent of Grant Thornton LLP.
Financial Data Schedule.
</TABLE>
S-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
EVEREN UNIT INVESTMENT TRUSTS, SERIES 42 HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 20TH DAY OF
FEBRUARY, 1996.
EVEREN Unit Investment Trusts,
Series 42
Registrant
By: EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
Depositor
/s/ Michael J. Thoms
By: _________________________________
Michael J. Thoms
S-2
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW ON FEBRUARY 20, 1996 BY THE FOLLOWING PERSONS,
WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF EVEREN SECURITIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ James R. Boris
- -------------------------------------------
James R. Boris Chairman and Chief Executive Officer
/s/ Daniel D. Williams
- -------------------------------------------
Daniel D. Williams Senior Executive Vice President, Chief
Financial Officer and Treasurer
/s/ Frank V. Geremia
- -------------------------------------------
Frank V. Geremia Senior Executive Vice President
/s/ Stephen G. McConahey
- -------------------------------------------
Stephen G. McConahey President and Chief Operating Officer
/s/ Stanley R. Fallis
- -------------------------------------------
Stanley R. Fallis Senior Executive Vice President and Chief
Administrative Officer
/s/ David M. Greene
- -------------------------------------------
David M. Greene Senior Executive Vice President and
Director of Client Services
/s/ Thomas R. Reedy
- -------------------------------------------
Thomas R. Reedy Senior Executive Vice President and
Director of Capital Markets
/s/ Janet L. Reali
- -------------------------------------------
Janet L. Reali Executive Vice President, Corporate Counsel
and Corporate Secretary
</TABLE>
/s/ Michael J. Thoms
_____________________________________
Michael J. Thoms
MICHAEL J. THOMS SIGNS THESE DOCUMENTS PURSUANT TO POWERS OF ATTORNEY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WITH AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT ON FORM S-6 FOR EVEREN UNIT INVESTMENT TRUSTS, SERIES 39
(FILE NO. 33-63111).
S-3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> EVEREN UNIT INVESTMENT TRUSTS
<NUMBER> 42
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> FEB-21-1996
<PERIOD-END> FEB-21-1996
<INVESTMENTS-AT-COST> 387,309
<INVESTMENTS-AT-VALUE> 387,309
<RECEIVABLES> 64,500
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 452,309
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64,500
<TOTAL-LIABILITIES> 64,500
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 387,309
<SHARES-COMMON-STOCK> 40,779
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 387,309
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 1.1
EVEREN Unit Investment Trusts
Series 42
TRUST AGREEMENT
This Trust Agreement dated as of February 21, 1996 between EVEREN
Securities, Inc., as Depositor, and The Bank of New York, as Trustee, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust For EVEREN Unit
Investment Trusts, Equity Trusts, Effective November 7, 1995" (herein called the
"Standard Terms and Conditions of Trust"), and such provisions as are set forth
in full and such provisions as are incorporated by reference constitute a single
instrument.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
this instrument.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(1) The equity securities listed in the Schedule hereto have been
deposited in trust under this Trust Agreement as indicated in each Trust
named on the attached Schedule.
(2) For the purposes of the definition of the term "Unit" in Article
I, it is hereby specified that the fractional undivided interest in and
ownership of a Trust is the amount set forth in the section captioned
"Essential Information" in the final Prospectus of the Trust (the
"Prospectus") contained in Amendment No. 2 to the Trust's Registration
Statement (Registration No. 333-00407) as filed with the Securities and
Exchange Commission on February 21, 1996. The fractional undivided interest
may (a) increase by the number of any additional Units issued pursuant to
<PAGE>
Section 2.03, (b) increase or decrease in connection with an adjustment to
the number of Units pursuant to Section 2.03, or (c) decrease by the number
of Units redeemed pursuant to Section 5.02.
(3) The term "Deferred Sales Charge" shall mean the "deferred sales
charge" as described in the Prospectus.
(4) The terms "Income Account Record Date" and "Capital Account Record
Date" shall mean the dates set forth under "Essential Information--Record
and Computation Dates" in the Prospectus.
(5) The terms "Income Account Distribution Date" and "Capital Account
Distribution Date" shall mean the dates set forth under "Essential
Information--Distribution Dates" in the Prospectus.
(6) The term "Initial Date of Deposit" shall mean the date of this
Trust Agreement as set forth above.
(7) Section 1.01(20) is hereby stricken and replaced by the following:
" "Percentage Ratio" shall mean, for each Trust which will issue additional
Units pursuant to Section 2.03 hereof, the actual number of shares of each
Equity Security as a percent of all shares of Equity Securities necessary
to cause the Trust portfolio to replicate, to the extent practicable, the
Nasdaq-100 Index immediately prior to any subsequent deposit of Securities
as determined by computer program output operated independent of the
Depositor which tracks such index."
(8) Section 2.01(b) is hereby amended by adding the following
immediately after the first sentence of the second paragraph of such
Section the following: "Such additional Securities may be deposited or
purchased in round lots; if the amount of the deposit is insufficient to
acquire round lots of each Security to be acquired, the additional
Securities shall be deposited or purchased in the order of the Securities
in the Trust most under-represented in the Trust's portfolio in comparison
to their percentage weighting in the Nasdaq-100 Index as determined by
computer program output operated independent of the Depositor which tracks
such index."
(9) The first sentence of Section 2.01(e) is hereby stricken and
replaced with the following:
"If Securities in the Trust are sold pursuant to Sections 3.07 or 8.02
hereof or if there are excess proceeds remaining after meeting
redemption requests pursuant to Section 5.02, and the net proceeds of
any such sale are not otherwise reinvested as provided in such
Sections, the net proceeds of any such sale may be reinvested, if in
the opinion of the Depositor it is in the best interests of the
Unitholders to do so, in short term U.S. Treasury obligations maturing
on or
-2-
<PAGE>
prior to the next succeeding Capital Distribution Date or, if earlier,
December 31 of the year of purchase (the "Reinvestment Securities")."
(10) The number of Units of a Trust referred to in Section 2.03 is as set
forth under "Essential Information--Number of Units" in the Prospectus.
(11) Section 3.07(a) is hereby amended by adding the following subsections
immediately after Section 3.07(a)(ix):
" (x) that the Security has been removed from the Nasdaq-100 Index;
or
(xi) that computer program output operated independent of the
Depositor which tracks the Nasdaq-100 Index indicates that the Security
is over-represented in the Trust's portfolio in comparison to such
Security's percentage weighting in such index."
(12) Section 3.07 is hereby amended by changing the current subsection (c)
to subsection (d) and adding the following as a new subsection (c):
" (c) In the event a Security is sold pursuant to Section 3.07(a)(x),
the Depositor may direct the reinvestment of the proceeds of the sale of
such Security, to the extent practicable, into any security which
replaces such Security as a component of the Nasdaq-100 Index or, if no
security so replaces such Security, into any other Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index. In the event a Security is sold pursuant to Section 3.07(a)(xi),
the Depositor may direct the reinvestment of the proceeds of the sale
of such Security, to the extent practicable, into any other Securities
which are under-represented in the Trust's portfolio in comparison to
their percentage weighting in the Nasdaq-100 Index as determined by
computer program output operated independent of the Depositor which
tracks such index. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor may,
but is not obligated to, specifically consider the ability of the Trust
to reinvest such proceeds into round lots of a Security."
(13) The second paragraph of Section 3.10 is hereby stricken and replaced
with the following:
" In the event that an offer by the issuer of any of the Securities or
any other party shall be made to issue new securities, or to exchange
securities, for Trust Securities, the Trustee shall reject such offer.
However, should any issuance, exchange or substitution be effected
notwithstanding such rejection or
-3-
<PAGE>
without an initial offer, any securities, cash and/or property received
shall be deposited hereunder and shall be promptly sold, if securities
or property, by the Trustee; provided, however, if such securities are
components of the Nasdaq-100 Index, the Depositor may advise the Trustee
to keep such securities. The cash received in such exchange and cash
proceeds of any such sales shall, in the following priority, be
(1) reinvested, to the extent practicable, into any Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index or (2) distributed to Unitholders on the next Distribution Date in
the manner set forth in Section 3.04(b) regarding distributions from the
Capital Account. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor may,
but is not obligated to, specifically consider the ability of the Trust
to reinvest such proceeds into round lots of a Security. Except as
provided in Article VIII, the Trustee shall not be liable or responsible
in any way for depreciation or loss incurred by reason of any such
rejection or sale."
(14) Notwithstanding anything to the contrary in Section 3.10, if at any
time equity securities of EVEREN Capital Corporation or any of its affiliates
are included as Securities in the portfolio of the Trust and the Trustee shall
have been notified of any action to be taken or proposed to be taken by holders
of such Securities, then the Trustee shall take such action or refrain from
taking any action so as to insure that such Securities are voted as closely as
possible in the same manner and the same general proportion, with respect to
all issues, as are the Securities held by owners other than the Trust.
(15) Section 5.02 is hereby amended by adding the following immediately
after the last sentence of the second paragraph of such Section:
"If Securities in the Trust are sold for the payment of the
Redemption Value and there are excess proceeds remaining after meeting
redemption requests, the Depositor may, but is not obligated to,
instruct the Trustee to reinvest such excess proceeds into any
Securities which are under-represented in the Trust's portfolio in
comparison to their percentage weighting in the Nasdaq-100 Index as
determined by computer program output operated independent of the
Depositor which tracks such index."
(16) For the purposes of Section 6.01(g), the liquidation amount is the
amount set forth under "Essential Information--Minimum Value of Trust under
which Trust Agreement may be Terminated" in the Prospectus.
(17) Notwithstanding anything to the contrary herein, if at any time the
Nasdaq-100 Index shall no longer be compiled, maintained or made available, the
Depositor
-4-
<PAGE>
may (a) direct that the Trust created hereby continue to be operated hereunder
utilizing the components of the Nasdaq-100 Index, and the percentage weightings
of such components, as existed on the last date on which the Nasdaq-100 Index
components and weightings were available to the Trust or (b) direct the Trustee
to terminate this Indenture and the Trust created hereby and liquidate the
Trust in such manner as the Depositor shall direct.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN Securities, Inc.,
Depositor
By Robert K. Burke
---------------------------
Senior Vice President
THE BANK OF NEW YORK,
Trustee
By Ted Rudish
---------------------------
Vice President
<PAGE>
SCHEDULE A
Securities Initially Deposited
EVEREN Unit Investment Trusts
Series 42
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
February 21, 1996
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts Series 42
---------------------------------------
Gentlemen:
We have served as counsel for EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., as Sponsor and Depositor of EVEREN Unit Investment
Trusts Series 42 (the "Fund"), in connection with the preparation, execution and
delivery of the Trust Agreement dated the date of this opinion between EVEREN
Unit Investment Trusts, a service of EVEREN Securities, Inc., as Depositor, and
The Bank of New York, as Trustee, pursuant to which the Depositor has delivered
to and deposited the Securities listed in the Schedule to the Trust Agreement
with the Trustee and pursuant to which the Trustee has issued to or on the order
of the Depositor a certificate or certificates representing all the Units of
fractional undivided interest in, and ownership of, the Fund, created under said
Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the execution
and issuance of certificates evidencing the Units of the Fund have been
duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly
executed and delivered by the Depositor and the Trustee in accordance with
the aforementioned Trust Agreement, will constitute valid and binding
obligations of the Fund and the Depositor in accordance with the terms
thereof.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-00407) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE>
Exhibit 4.1
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
-------------------------------------------------
We have issued our report dated February 21, 1996 on the statement of
condition and related portfolio of EVEREN Unit Investment Trusts Series 42 as of
February 21, 1996 contained in the Registration Statement on Form S-6 and in the
Prospectus. We consent to the use of our report in the Registration Statement
and in the Prospectus and to the use of our name as it appears under the caption
"Independent Certified Public Accountants".
GRANT THORNTON LLP
Chicago, Illinois
February 21, 1996
<PAGE>
EXHIBIT 4.2
[CANTOR FITZGERALD LOGO AND LETTERHEAD]
EVEREN Securities, Inc.
Unit Trust Department 29th Floor
77 West Wacker Drive
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts, Series 42
Gentlemen:
You have provided to us and we have examined Registration Statement File No.
333-00407 for the above captioned trust. We hereby acknowledge that Cantor
Fitzgerald & Co. ("Cantor") will act as the evaluator for the trust pursuant to
the terms and conditions of the Information Evaluation Service Agreement between
Cantor and EVEREN Securities, Inc. ("EVEREN") dated as of January 10, 1996 (the
"IES Agreement"). We hereby consent to the use in the Registration Statement of
the reference to Cantor Fitzgerald & Co. as evaluator.
You acknowledge that this letter shall not confer upon you any rights or impose
on Cantor any obligations, other than those expressly set forth in the IES
Agreement.
You are hereby authorized to file a copy of this letter with the Securities and
Exchange Commission.
Very truly yours,
CANTOR FITZGERALD & CO.,
By: /s/ Debra Walton
Debra Walton
Managing Director
Acknowledged and Agreed:
EVEREN SECURITIES, INC.
By:
[CANTOR FITZGERALD LETTERHEAD]
