<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1996
REGISTRATION NO. 333-01425
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 44
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 44 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.
[X]Check box if it is proposed that this filing will become effective at 2:00
P.M. on April 1, 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 44
----------------
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 Trusts
3. Name and address of trustee........ Administration of the Trusts
4. Name and address of principal
underwriters...................... *
5. State of organization of trust..... The Fund
6. Execution and termination of trust
agreement......................... The Fund; Administration of the Trusts
7. Changes of name.................... The 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 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 Trusts; Unitholders
(h)Consents required............... Unitholders; Administration of the
Trusts
(i)Other provisions................ Federal Tax Status
11. Type of securities comprising The Fund; The Trust Portfolios;
units............................. Portfolios
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 Fund; Unitholders
15. Receipt and handling of payments
from purchasers................... *
16. Acquisition and disposition of The Fund; The Trust Portfolios;
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 Trusts
(d)Schedule of distributions........ *
19. Records, accounts and reports....... Unitholders; Redemption;
Administration of the Trusts
20. Certain miscellaneous provisions of
trust agreement
(a)Amendment........................ Administration of the Trusts
(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 Trusts
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 Trusts
26. Fees received by depositor.......... See Items 13(a) and 13(e)
27. Business of depositor............... Administration of the Trusts
28. Certain information as to officials
and affiliated persons of
depositor.......................... Administration of the Trusts
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 Trusts
(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 Trusts
(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 Trusts
49. Fees and expenses of trustee........... Expenses of the Trusts
50. Trustees lien..........................
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's
securities............................ Cover Page; Expenses of the Trusts
VII. POLICY OF REGISTRANT
52. (a)Provisions of trust agreement with
respect to selection or
elimination of underlying
securities........................ The 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; Portfolios;
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>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
DEFINED GROWTH STRATEGY 5, SERIES 1
DEFINED GROWTH STRATEGY 10, SERIES 1
Defined Growth Strategy 5, Series 1 ("The 5") was formed with the investment
objective of obtaining an above-average total return through a combination of
capital appreciation and dividend income by investing in a portfolio of the
five companies with the lowest per share stock price of the ten companies in
the Dow Jones Industrial Average that have the highest dividend yield as of the
close of business on the day prior to the Initial Date of Deposit.
Defined Growth Strategy 10, Series 1 ("The 10") was formed with the investment
objective of obtaining above-average total return through a combination of
capital appreciation and dividend income by investing in a portfolio of the ten
companies in the Dow Jones Industrial Average that have the highest dividend
yield as of the close of business on the day prior to the Initial Date of
Deposit.
The Dow Jones Industrial Average ("DJIA") is the property of Dow Jones &
Company, Inc. Dow Jones & Company, Inc. has not granted to the Trusts or the
Sponsor a license to use the DJIA. Dow Jones & Company, Inc. has not
participated in any way in the creation of the Trusts or in the selection of
stocks included in the Trust and has not approved any information herein
relating thereto. Units are not designed so that their prices will parallel or
correlate with movements in the DJIA, and it is expected that their prices will
not parallel or correlate with such movements. There is, of course, no
assurance that the Trusts will achieve their objectives.
Units of the Trusts 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 APRIL 1, 1996.
<PAGE>
SUMMARY
THE FUND. Defined Growth Strategy 5, Series 1 and Defined Growth Strategy 10,
Series 1 are separate underlying unit investment trusts included in EVEREN Unit
Investment Trusts, Series 44 (the "Fund"), an investment company registered
under the Investment Company Act of 1940.
Each Trust initially consists of securities and delivery statements (i.e.,
contracts) to purchase common stocks issued by companies selected in accordance
with the investment strategy of such Trust. For the criteria used by the
Sponsor in selecting the Securities, see "The Trust Portfolios--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 and dividend income are, of
course, dependent upon several factors including, among other factors, the
financial condition of the issuers of the Securities (see "The Trust
Portfolios").
Additional Units of a 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 provided under "The
Fund."
Each Unit of a Trust initially offered represents that undivided interest in
such Trust indicated under "Essential Information" (as may be adjusted pursuant
to footnote 1 thereto). To the extent that any Units 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
related Trust represented by each unredeemed Unit will increase or decrease
accordingly, although the actual interest in such Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of each Trust is
based on the underlying value of the Securities in such Trust plus the
applicable initial sales charge described under "Public Offering Of Units--
Public Offering Price." Unitholders will also be assessed a deferred sales
charge as set forth under "Public Offering Of Units--Public Offering Price." If
Units were purchased on the Initial Date of Deposit and held until the
mandatory termination of a Trust, the total sales charge paid would be that
amount set forth under "Fee Table."
DISTRIBUTIONS OF INCOME AND CAPITAL. Dividends, if any, received by the Trust
will be distributed semi-annually and any funds in the Capital Account will
generally 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 related 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 Trusts and
offer to repurchase such Units at prices subject to change
2
<PAGE>
at any time which are based on the current underlying closing bid prices of the
Securities in the Trusts. 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."
INTERIM REDEMPTION AND ROLLOVER IN NEW TRUSTS. Unitholders of The 5 and The 10
Trusts will have the option of specifying by the end of the Interim Redemption
and Rollover Period stated in "Essential Information" to have all of their
Units redeemed and the distributed Securities sold by the Trustee, in its
capacity as Distribution Agent, during the Interim Redemption and Rollover
Period. (Unitholders so electing are referred to herein as "Interim Rollover
Unitholders".) Unitholders who redeem their Units on or before the end of the
Interim Redemption and Rollover Period will not be assessed the deferred sales
charge accumulated subsequent to the Interim Redemption and Rollover Period.
The Distribution Agent will appoint the Sponsor as its agent to determine the
manner, timing and execution of sales of underlying Securities. The proceeds of
the redemption will then be invested in Units of a new Series of The 5 and The
10 Trusts (the "1997 Fund"), if one is offered, at a reduced sales charge
(anticipated to be 1.95% of the Public Offering Price of the 1997 Fund per unit
per year). The Sponsor may, however, stop offering units of the 1997 Fund at
any time in its sole discretion without regard to whether all the proceeds to
be invested have been invested. Cash which has not been invested on behalf of
the Interim Rollover Unitholders in the 1997 Fund will be distributed shortly
after the Interim Redemption and Rollover Period. However, the Sponsor
anticipates that sufficient units will be available, although moneys in this
Fund may not be fully invested on the next business day. The portfolios of the
1997 Fund are expected to contain the ten common stocks in the Dow Jones
Industrial Average having the highest dividend yield as of a day shortly prior
to the initial date of deposit of the 1997 Fund, and the five companies with
the lowest per share stock price of the ten companies in the Dow Jones
Industrial Average having the highest dividend yield as of the close of
business a day shortly prior to the initial date of deposit of the 1997 Fund.
Interim Rollover Unitholders will receive the amount of dividends in the
applicable Income Account of each Trust which will be included in the
reinvestment in units of the 1997 Fund.
FINAL REDEMPTION AND ROLLOVER IN NEW TRUSTS. Unitholders of The 5 and The 10
Trusts will have the option of specifying by the Final Redemption and Rollover
Date stated in "Essential Information" to have all of their Units redeemed and
the distributed Securities sold by the Trustee, in its capacity as Distribution
Agent, on the Final Redemption and Rollover Date. (Unitholders so electing are
referred to herein as "Final Rollover Unitholders".) The Distribution Agent
will appoint the Sponsor as its agent to determine the manner, timing and
execution of sales of underlying Securities. The proceeds of the redemption
will then be invested in Units of a new Series of The 5 and The 10 Trusts (the
"1998 Fund"), if one is offered, at a reduced sales charge (anticipated to be
1.95% of the Public Offering Price of the 1998 Fund per unit per year). The
Sponsor may, however, stop offering units of the 1998 Fund at any time in its
sole discretion without regard to whether all the proceeds to be invested have
been invested. Cash which has not been invested on behalf of the Final Rollover
Unitholders in the 1998 Fund will be distributed shortly after the Final
Redemption and Rollover Date. However, the Sponsor anticipates that sufficient
units will be available, although moneys in this Fund may not be fully invested
on the next business day. The portfolios of the 1998 Fund are expected to
contain the ten common stocks in the Dow Jones Industrial Average having the
highest dividend yield as of a day shortly prior to the initial date of deposit
of the 1998 Fund, and the five companies with the lowest per share stock price
of the ten companies in the Dow Jones Industrial Average having the highest
dividend yield as of a day shortly prior to the initial date of deposit of the
1998 Fund. Final Rollover Unitholders will receive the amount of dividends in
the applicable Income Account of each Trust which will be included in the
reinvestment in units of the 1998 Fund.
3
<PAGE>
REDEMPTION IN KIND. Upon redemption of Units a Unitholder may request to
receive in lieu of cash his share of each of the Securities then held by the
related Trust, if (1) he would be entitled to receive at least $25,000 of
proceed or if he paid at least $25,000 to acquire the Units being tendered and
(2) he has tendered for redemption prior to May 20, 1998 (see "Redemption" and
"Administration of the Trusts--Amendment and Termination").
TERMINATION. No later than the date specified for each Trust under Mandatory
Termination Date in "Essential Information," Securities will begin to be sold
in connection with the termination of the related Trust and it is expected that
all Securities in such 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 not electing an in kind distribution of Securities will receive a
cash distribution within a reasonable time after the related Trust is
terminated. See "Unitholders--Distributions to Unitholders" and "Administration
of the Trusts--Amendment and Termination."
RISK FACTORS. An investment in a 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. An investment in The 5 may subject a Unitholder to additional risk due
to the relative lack of diversity in its portfolio since the portfolio contains
only five stocks. Units of the The 5 may be subject to greater market risk than
other trusts which contain a more diversified portfolio of securities. For risk
considerations related to the Trusts, see "Risk Factors."
4
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
ESSENTIAL INFORMATION
AS OF MARCH 29, 1996*
SPONSOR AND EVALUATOR: EVEREN UNIT INVESTMENT TRUSTS, A SERVICE OF EVEREN
SECURITIES, INC.
TRUSTEE: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
THE 5 THE 10
----- ------
<S> <C> <C>
Number of Units (1)............................. 48,262 56,451
Fractional Undivided Interest Per Unit (1)...... 1/48,262 1/56,451
Public Offering Price:
Aggregate Value of Securities in Portfolio (2).. $478,754.50 $559,147.75
Aggregate Value of Securities per Unit.......... $ 9.920 $ 9.905
Plus total sales charge (3)..................... $ 0.470 $ 0.485
Less deferred sales charge per Unit (3)......... $ 0.390 $ 0.390
Public Offering Price Per Unit (4)(5)........... $ 10.000 $ 10.000
Redemption Price Per Unit....................... $ 9.682 $ 9.677
Sponsor's Initial Repurchase Price Per Unit..... $ 9.725 $ 9.710
Excess of Public Offering Price Per Unit over
Redemption Price Per Unit...................... $ 0.318 $ 0.323
Excess of Public Offering Price Per Unit over
Sponsor's Initial Repurchase Price Per Unit.... $ 0.275 $ 0.290
Calculation of Estimated Net Annual Dividends
Per Unit: (6)
Estimated Gross Annual Dividends per Unit....... $ 0.28449 $ 0.32022
Less: Estimated Annual Fund Operating Expense
per Unit....................................... $ 0.03228 $ 0.03228
Estimated Net Annual Dividends per Unit......... $ 0.25221 $ 0.28794
</TABLE>
<TABLE>
<S> <C> <C>
Minimum Value of Trust under which Trust 40% of aggregate
Agreement may be Terminated.................... value of Securities
at deposit
Interim Redemption and Rollover Period (5)...... April 30, 1997
through May 15,
1997
Final Redemption and Rollover Date.............. June 1, 1998
Liquidation Period.............................. June 1, 1998
through June 30,
1998
Mandatory Termination Date...................... May 31, 1998
Evaluator's Annual Evaluation Fee............... Maximum of $0.0020
per Unit
Trustee's Annual Fee............................ $0.08 per Unit
Estimated Annual Organizational Expenses per
Unit (7)....................................... $0.01928 per Unit
Record and Computation Dates (8)................ FIRST day of April
and October
Distribution Dates (8).......................... FIFTEENTH day of
April and October
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units 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 each 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 New York Stock
Exchange.
(3) The total sales charge consists of an initial sales charge and a deferred
sales charge. For The 5 and The 10, the initial sales charge is equal to
0.80% and 0.95% of the Public Offering Price, respectively. Based on the
Public Offering Price on the business day prior to the Initial Date of
Deposit the total sales charges for The 5 and The 10 are 4.7% and 4.85%,
respectively (equivalent to 4.932% and 5.097%, respectively, of the net
amount invested). The deferred sales charge is equal to $0.195 per Unit
per year for The 5 and The 10. To the extent the Public Offering Price
increases or decreases, the total sales charge percentage will decrease or
increase, respectively, from those amounts indicated.
(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) Unitholders who redeem their Units on or before June 15, 1997 will not be
assessed the deferred sales charge accumulated subsequent to such date.
(6) The estimated annual dividends per Unit is based primarily on the most
recent dividend declarations. The actual net annual dividends per Unit may
be greater than or less than the amount shown depending on the actual
dividends collected and expenses incurred by the applicable Trust.
(7) Each 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 the first 12 months of the trust's life.
See "Expenses of the Trusts" and "Statements of Condition." Historically,
the sponsors of unit investment trusts have paid all the costs of
establishing such trusts.
(8) Distributions from the Income Account, if any, will be made semi-annually
commencing on October 15, 1996. Distributions from the Capital Account,
whenever the balance exceeds 1% of Trust net assets, will normally be made
in the subsequent month.
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 Trusts." Although each 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.
THE 5
<TABLE>
<CAPTION>
AMOUNT PER
UNIT
----------
<S> <C> <C>
UNITHOLDER TRANSACTION EXPENSES (AS OF THE INITIAL DATE OF
DEPOSIT)
(AS A PERCENTAGE OF OFFERING PRICE)
Initial Sales Charge..................................... 0.80%(1) $0.080
Deferred Sales Charge (accumulated prior to Interim
Redemption and Rollover Period)......................... 1.95%(2) 0.195
Deferred Sales Charge (accumulated subsequent to Interim
Redemption and Rollover Date) (3)....................... 1.95%(2) 0.195
------ -------
Total Sales Charge........................................ 4.70%(4) $0.470
====== =======
ESTIMATED ANNUAL FUND OPERATING EXPENSES (AS OF THE
INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee............................................ 0.080% $0.0080
Portfolio Evaluation Fees................................ 0.020% 0.0020
Organizational Expenses.................................. 0.193% 0.0193
Other Operating Expenses................................. 0.030% 0.0030
------ -------
Total.................................................. 0.323% $0.0323
====== =======
</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 initial
estimated operating expense ratio of 0.323%
on the Trust, a 5% annual return and
redemption at the end of each time period... $31 $76 NA NA
</TABLE>
THE 10
<TABLE>
<CAPTION>
AMOUNT PER
UNIT
----------
<S> <C> <C>
UNITHOLDER TRANSACTION EXPENSES (AS OF THE INITIAL DATE OF
DEPOSIT)
(AS A PERCENTAGE OF OFFERING PRICE)
Initial Sales Charge..................................... 0.95%(1) $0.095
Deferred Sales Charge (accumulated prior to Interim
Redemption and Rollover Period)......................... 1.95%(2) 0.195
Deferred Sales Charge (accumulated subsequent to Interim
Redemption and Rollover Date) (3)....................... 1.95%(2) 0.195
------ -------
Total Sales Charge........................................ 4.85%(4) $0.485
====== =======
ESTIMATED ANNUAL FUND OPERATING EXPENSES (AS OF THE
INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee............................................ 0.080% $0.0080
Portfolio Evaluation Fees................................ 0.020% 0.0020
Organizational Expenses.................................. 0.193% 0.0193
Other Operating Expenses................................. 0.030% 0.0030
------ -------
Total.................................................. 0.323% $0.0323
====== =======
</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 0.323% on the Trust, a 5%
annual return and redemption at the end of
each time period.............................. $32 $78 NA NA
</TABLE>
6
<PAGE>
The examples utilize 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 Initial Sales Charge for these Trusts would exceed the dollar value
set forth above if the Public Offering Price exceeds $10.00 per Unit.
(2) The actual Deferred Sales Charge for these Trusts is $0.195 per Unit per
year, irrespective of purchase or redemption price deducted on a monthly
basis over the fourth through thirteenth months and the seventeenth
through twenty-sixth months of each Trust. If the Unit price exceeds
$10.00 per Unit, the Deferred Sales Charge will be less than the
percentage set forth above. If the Unit price is less than $10.00 per
Unit, the Deferred Sales Charge will exceed the percentage set forth
above. Units purchased subsequent to the initial deferred sales charge
payment will also be subject to the remaining deferred sales charge
payments.
(3) Unitholders who redeem their Units on or before the end of the Interim
Redemption and Rollover Period will not be assessed the deferred sales
charge accumulated subsequent to the Interim Redemption and Rollover
Period.
(4) The Total Sales Charge consists of the Initial Sales Charge, which is a
fixed percentage of the Public Offering Price, and the Deferred Sales
Charge, which is a fixed dollar amount (but which will vary as a
percentage of the Public Offering Price). Due to this structure the Total
Sales Charge will vary from the percentages and dollar amounts set forth
above as a result of variations in the market value of the Securities in a
Trust. Regardless of any variations in market value of the Securities, in
no case will the Total Sales Charge paid by any Unitholder exceed 6.25% of
the Public Offering Price.
THE FUND
Defined Growth Strategy 5, Series 1 and Defined Growth Strategy 10, Series 1
are separate underlying unit investment trusts included in EVEREN Unit
Investment Trusts, Series 44, 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 portfolios contain common stocks issued by companies which are components
of the Dow Jones Industrial Average (the "DJIA"). Defined Growth Strategy 5,
Series 1 ("The 5") consists of a portfolio of the five companies with the
lowest per share stock price of the ten companies in the DJIA that have the
highest dividend yield as of the close of business on the day prior to the
Initial Date of Deposit. Defined Growth Strategy 10, Series 1 ("The 10")
consists of a portfolio of the ten companies in the DJIA that have the highest
dividend yield as of the close of business on the day prior to the Initial
Date of Deposit. Investors should be aware that at the present time each Trust
may not invest invest more than 5% of its assets in the stocks of any issuer
that derives more than 15% of its revenues from securities-related activities
and that, therefore, the Trusts may not be able to invest an equal amount in
each of the selected stocks. This restriction is imposed on all registered
investment companies by Section 12(d)(3) of the Investment Company Act of
1940. The Sponsor is currently seeking an exemptive order under Section
12(d)(3) which would permit The 5 and The 10 Trusts to invest up to 20.5% and
10.5%, respectively, of their assets in such issuers. No assurance can be
given that the Securities and Exchange Commission will issue such an order. As
of the Initial Date of Deposit, this restriction imposed by Section 12(d)(3)
affects Securities in the portfolio of The 10 only. As used herein, the term
"Securities" means the common stocks (including contracts for the purchase
thereof) initially deposited in the Trusts and described in the portfolios and
any additional common stocks acquired and held by the Trusts 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 each Trust.
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
- ----------
*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>
in lieu of cash) to pay for such contracted Securities provided that such
additional deposits will be made as follows. Such additional deposits into The
5 and The 10 Trusts will be in amounts which will maintain, for the first 90
days, as closely as possible the same original percentage relationship among
the number of shares of each Security in the related Trust established by the
initial deposit of Securities and, thereafter, the same percentage relationship
that existed on such 90th day. Notwithstanding the foregoing, in the event that
prior to such 90th day the Securities and Exchange Commission grants the
exemptive order described in the preceding paragraph relating to Section
12(d)(3) of the Investment Company Act of 1940, such additional deposits made
through such 90th day will be made in amounts which will cause each affected
Trust portfolio to maintain, as closely as practicable, an equal percentage
relationship among each Security in the related Trust. Although additional
Units will be issued, each Unit in The 5 and The 10 Trusts will continue to
represent approximately the same number of shares of each Security and the
percentage relationship among the shares of each Security in each Trust will
remain the same (except that if the exemptive order is granted within the first
90 days, each Unit will continue to represent approximately the same number of
shares of each Security and the percentage relationship among the number of
shares of each Security will remain the same after the day on which the
exemptive order is granted). There can be no assurance that such exemptive
order will be granted. The required percentage relationship among the
Securities in a 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 a 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.
Each Trust consists of (a) the Securities listed under the related "Portfolio"
as may continue to be held from time to time in the Trust, (b) any additional
Securities acquired and held by such 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 a 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 each Trust. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of each Trust set forth under
"Essential Information."
THE TRUST PORTFOLIOS
GENERAL. The Trusts seek to provide capital appreciation and dividend income
through two indexing strategies based on the Dow Jones Industrial Average. The
5 seeks to provide an above-average total return over the two year life of the
Trust through a combination of capital appreciation and dividend income by
investing in a portfolio of the five companies with the lowest per share stock
price of the ten companies in the DJIA that have the highest dividend yield as
of the close of business on the day prior to the Initial Date of Deposit. The
10 seeks to provide an above-average total return over the two year life of the
Trust through a combination of capital appreciation and dividend income by
investing in a portfolio of the ten companies in the DJIA that have the highest
dividend yield as of the close of business on the day prior to the Initial Date
of Deposit. All of the Securities in the Trusts are actively traded, blue-chip
securities issued by some of the largest, most widely held, well-established
corporations in the world.
8
<PAGE>
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. As
the holder of the Securities, the Trustee will have the right to vote all of
the voting stocks in each 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.
THE DOW JONES INDUSTRIAL AVERAGE. The Dow Jones Industrial Average was first
published in The Wall Street Journal in 1896. Initially consisting of just 12
stocks, the DJIA expanded to 20 stocks in 1916 and its present size of 30
stocks on October 1, 1928. The companies which make up the DJIA have remained
relatively constant over the life of the DJIA. Taking into account name
changes, 9 of the original DJIA companies are still in the DJIA today. For two
periods of 17 consecutive years, March 14, 1939-July 1956 and June 1, 1959-
August 6, 1976, there were no changes to the list.
The Dow Jones Industrial Average is composed of 30 common stocks chosen by
the editors of The Wall Street Journal, a publication of Dow Jones & Company,
Inc. The companies are major factors in their industries and their stocks are
widely held by individuals and institutional investors. Changes in the
components are made entirely by the editors of The Wall Street Journal without
consultation with the companies, the stock exchange or any official agency. Dow
Jones & Company, Inc. expressly reserves the right to change the components of
the Dow Jones Industrial Average at any time for any reason. Any changes in the
components of the Dow Jones Industrial Average after the Initial Date of
Deposit will not cause a change in the identity of the common stocks included
in a Trust. The following is the list as it currently appears:
Allied Signal Goodyear Tire & Rubber Company
Aluminum Company of America International Business Machines
American Express Company Corporation
American Telephone & Telegraph Company International Paper Company
Bethlehem Steel Corporation McDonald's Corporation
Boeing Company Merck & Company, Inc.
Caterpillar Inc. Minnesota Mining & Manufacturing
Chevron Corporation Company
Coca-Cola Company J.P. Morgan & Company, Inc.
Walt Disney Company Philip Morris Companies, Inc.
E.I. du Pont de Nemours & Company Procter & Gamble Company
Eastman Kodak Company Sears, Roebuck and Company
Exxon Corporation Texaco, Inc.
General Electric Company Union Carbide Corporation
General Motors United Technologies Corporation
Westinghouse Electric Corporation
Woolworth Corporation
9
<PAGE>
The following table compares the actual performance of the DJIA, and
approximately equal values of the five lowest priced stocks of the ten stocks
in the DJIA having the highest dividend yield (the "Five Lowest Priced Stocks
of the Ten Highest Yielding DJIA Stocks") in each of the 20 years listed
below, as of December 31, in each of these years.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
<TABLE>
<CAPTION>
FIVE LOWEST PRICED STOCKS OF THE
TEN HIGHEST YIELDING DJIA STOCKS (1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
------------------------------------- -------------------------------------
ACTUAL ACTUAL
DIVIDEND TOTAL DIVIDEND TOTAL
YEAR APPRECIATION (2) YIELD (3) RETURN (4) APPRECIATION (2) YIELD (3) RETURN (4)
- ---- ---------------- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
1976 33.30% 7.47% 40.77% 17.86% 4.86% 22.72%
1977 -2.65 6.11 3.46 -17.27 4.56 -12.71
1978 -5.72 7.22 1.50 -3.15 5.84 2.69
1979 3.89 8.16 12.05 .19 6.33 10.52
1980 31.87 8.65 40.52 14.93 6.48 21.41
1981 -4.23 8.03 3.80 -9.23 5.83 -3.40
1982 34.58 7.30 41.88 19.60 6.19 25.79
1983 27.33 8.78 36.11 20.30 5.38 25.68
1984 3.30 7.77 11.07 -3.76 4.82 1.06
1985 30.23 7.61 37.84 27.66 5.12 32.78
1986 24.12 6.19 30.31 22.58 4.33 26.91
1987 4.83 6.23 11.06 2.26 3.76 6.02
1988 16.74 5.89 22.63 11.85 4.10 15.95
1990 5.53 5.00 10.53 26.96 4.75 31.71
1989 -20.60 5.33 -15.27 -4.34 3.77 -0.57
1991 56.40 5.54 61.94 20.32 3.61 23.93
1992 17.84 5.43 23.27 4.17 3.18 7.35
1993 30.53 4.00 34.53 13.72 3.02 16.74
1994 4.20 3.88 8.08 2.14 2.85 4.99
1995 27.27 3.14 30.41 33.45 3.04 36.49
</TABLE>
- ---------------------
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks (the
'"Stocks") for any given period were selected by ranking the dividend
yields for each of the stocks in the DJIA as of the beginning of the
period, based upon an annualization of the last quarterly or semi-annual
ordinary dividend distribution (which would have been declared in the
preceding year) divided by that stock's market value on the first trading
day on the New York Stock Exchange in the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market value
of the Stocks as of the first trading day on the New York Stock Exchange
in a given period from the market value of the Stocks as of the last
trading day in that period and dividing the result by the market value of
the Stocks as of the first trading day in that period. Appreciation for
the DJIA is calculated by subtracting the opening value of the DJIA as of
the first trading day in a given period from the closing value of the DJIA
as of the last trading day in that period, and dividing the result by the
opening value of the DJIA as of the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding the total
dividends received on the Stocks in a given period and dividing the result
by the market value of the Stocks as of the first trading day in that
period. Actual Dividend Yield for the DJIA is calculated by taking the
total dividends credited to the DJIA and dividing the result by the
opening value of the DJIA as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 20 years above, the Stocks
achieved an average annual total return of 21.09%, as compared to the
average annual total return of the DJIA which was 14%. The Stocks also had
a higher average dividend yield in each of the above 20 years and
outperformed the DJIA in 16 of these years. Although the Trust seeks to
achieve a better performance than the DJIA, there can be no assurance that
the Trust will outperform the DJIA over its two-year life or over
consecutive rollover periods, if available.
10
<PAGE>
IF YOU HAD INVESTED $10,000 ON JANUARY 1, 1976
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Five Lowest Priced
of the Ten Highest
Yielding DJIA Stocks DJIA Stocks
- -----------------------------------------------
<S> <C> <C>
1/1/76 $ 10,000.00 $ 10,000.00
1976 14,077.00 12,272.00
1977 14,564.06 10,712.23
1978 14,782.53 11,000.39
1979 16,563.82 12,157.63
1980 23,275.48 14,760.58
1981 24,159.95 14,258.72
1982 34,278.13 17,936.04
1983 46,655.97 22,542.02
1984 51,820.78 22,780.96
1985 71,429.77 30,248.56
1986 93,080.13 38,388.45
1987 103,374.79 40,699.43
1988 126,768.51 47,190.99
1989 140,117.23 62,155.25
1990 118,721.33 61,800.97
1991 192,257.32 76,589.94
1992 236,995.60 82,211.64
1993 318,830.18 95,957.43
1994 344,591.66 100,688.13
1995 449,382.00 137,369.00
- -----------------------------------------------
</TABLE>
YEAR ENDED DECEMBER 31
The chart above represents past performance of the DJIA, and the Five Lowest
Priced Stocks of the Ten Highest Yielding DJIA Stocks (but not the Trust) and
should not be considered indicative of future results. Further, these results
are hypothetical. The chart assumes that all dividends during a year are
reinvested at the end of that year and does not reflect sales charges,
commissions, expenses or taxes. There can be no assurance that the Trust will
outperform the DJIA over its two-year life or over consecutive rollover
periods, if available.
11
<PAGE>
The following table compares the actual performance of the DJIA, and
approximately equal values of the ten stocks in the DJIA having the highest
dividend yield (the "Ten Highest Yielding DJIA Stocks") in each of the 20
years listed below, as of December 31, in each of these years.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
<TABLE>
<CAPTION>
TEN HIGHEST YIELDING DJIA STOCKS (1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
------------------------------------- -------------------------------------
ACTUAL ACTUAL
DIVIDEND TOTAL DIVIDEND TOTAL
PERIOD APPRECIATION (2) YIELD (3) RETURN (4) APPRECIATION (2) YIELD (3) RETURN (4)
- ------ ---------------- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
1976 27.80% 7.17% 34.97% 17.86 4.86 22.72
1977 -6.28 5.72 -0.56 -17.27 4.56 -12.71
1978 -6.57 7.36 0.79 -3.15 5.84 2.69
1979 5.62 8.41 14.03 4.19 6.33 10.52
1980 18.69 8.56 27.25 14.93 6.48 21.41
1981 -0.80 8.40 7.60 -9.23 5.83 -3.40
1982 17.17 8.19 25.35 19.60 6.19 25.79
1983 30.52 8.23 38.75 20.30 5.38 25.68
1984 -0.47 6.43 5.96 -3.76 4.82 1.06
1985 22.21 7.24 29.45 27.66 5.12 32.78
1986 26.66 5.71 34.37 22.58 4.33 26.91
1987 0.95 5.08 6.03 2.26 3.76 6.02
1988 18.51 5.82 24.33 11.85 4.10 15.95
1989 17.95 6.83 24.78 26.96 4.75 31.71
1990 -12.61 5.04 -7.57 -4.34 3.77 -0.57
1991 29.16 6.57 35.73 20.32 3.61 23.93
1992 2.84 5.14 7.98 4.17 3.18 7.35
1993 23.06 4.20 27.26 13.72 3.02 16.74
1994 0.04 4.08 4.12 2.14 2.85 4.99
1995 32.44 4.14 36.58 33.45 3.04 36.49
</TABLE>
- ---------------------
(1) The Ten Highest Yielding DJIA Stocks (the '"Stocks") for any given period
were selected by ranking the dividend yields for each of the stocks in the
DJIA as of the beginning of the period, based upon an annualization of the
last quarterly or semi-annual ordinary dividend distribution (which would
have been declared in the preceding year) divided by that stock's market
value on the first trading day on the New York Stock Exchange in the given
period.
(2) Appreciation for the Stocks is calculated by subtracting the market value
of the Stocks as of the first trading day on the New York Stock Exchange
in a given period from the market value of the Stocks as of the last
trading day in that period, and dividing the result by the market value of
the Stocks as of the first trading day in that period. Appreciation for
the DJIA is calculated by subtracting the opening value of the DJIA as of
the first trading day in a given period from the closing value of the DJIA
as of the last trading day in that period, and dividing the result by the
opening value of the DJIA as of the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding the total
dividends received on the Stocks in a given period and dividing the result
by the market value of the Stocks as of the first trading day in that
period. Actual Dividend Yield for the DJIA is calculated by taking the
total dividends credited to the DJIA and dividing the result by the
opening value of the DJIA as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table over the 20 years listed above, the
Stocks achieved an average annual total return of 18.19%, as compared to
the average annual total return of all of the stocks in the DJIA, which
was 14%. The Stocks also had a higher average dividend yield in each of
the above 20 years and outperformed the DJIA in 14 of these years.
Although the Trust seeks to achieve a better performance than the DJIA,
there can be no assurance that the Trust will outperform the DJIA over its
two-year life or over consecutive rollover periods, if available.
12
<PAGE>
IF YOU HAD INVESTED $10,000 ON JANUARY 1, 1976
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Ten Highest Yielding
DJIA Stocks DJIA Stocks
- ---------------------------------------------------
<S> <C> <C>
1/1/76 $ 10,000.00 $ 10,000.00
1976 12,272.00 13,497.00
1977 10,712.23 13,421.42
1978 11,000.39 13,527.45
1979 12,157.63 15,425.35
1980 14,760.58 19,628.75
1981 14,258.72 21,120.54
1982 17,936.04 26,476.71
1983 22,542.02 36,736.43
1984 22,780.96 38,925.92
1985 30,248.56 50,389.61
1986 38,388.45 67,708.52
1987 40,699.43 71,791.34
1988 47,190.99 89,258.17
1989 62,155.25 111,376.35
1990 61,800.97 102,945.16
1991 76,589.94 139,727.46
1992 82,211.64 150,877.71
1993 95,957.43 192,006.98
1994 100,688.13 199,917.67
1995 137,369.00 273,048.00
- -----------------------------------------------
</TABLE>
YEAR ENDED DECEMBER 31
The chart above represents past performance of the DJIA and the Ten Highest
Yielding DJIA Stocks (but not the Trust) and should not be considered
indicative of future results. Further, these results are hypothetical. The
chart assumes that all dividends during a year are reinvested at the end of
that year and does not reflect sales charges, commissions, expenses or taxes.
There can be no assurance that the Trust will outperform the DJIA over its two-
year life or over consecutive rollover periods, if available.
The returns shown above are not guarantees of future performance and should not
be used as a predictor of returns to be expected in connection with a Trust
portfolio. It is important to note that the returns shown above are based on
the Five Lowest Priced of the Ten Highest Yielding DJIA Stocks and the Ten
Highest Yielding DJIA Stocks computed for each year during the periods
involved; however, because the Trusts have a term of approximately two years,
the portfolios of the Trusts will not be adjusted each year to reflect the then
current five lowest priced of the ten highest yielding stocks in the DJIA or
the then current ten highest yielding stocks in the DJIA. Both stock prices
(which may appreciate or depreciate) and dividends (which may be increased,
reduced or eliminated) will affect the returns. As indicated in the previous
tables, the Ten Highest Yielding DJIA Stocks, including the Five Lowest Priced
Stocks of the Ten Highest Yielding DJIA Stocks, underperformed the DJIA in
certain years, and there can be no assurance that a Trust's Portfolio will
outperform the DJIA over the life of a Trust or over consecutive rollover
periods, if available. A Unitholder in a Trust would not necessarily realize as
high a Total Return on an investment in the stocks upon which the returns shown
above are based. The Total Return figures shown above do not reflect sales
charges, commissions, Trust expenses or taxes, and a Trust may not be fully
invested at all times.
13
<PAGE>
The following table compares the actual performance of the DJIA, and
approximately equal values of the five lowest priced stocks of the ten stocks
in the DJIA having the highest dividend yield (the "Five Lowest Priced Stocks
of the Ten Highest Yielding DJIA Stocks") for annual periods beginning April 1
of each year.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
<TABLE>
<CAPTION>
FIVE LOWEST PRICED STOCKS OF THE
TEN HIGHEST YIELDING DJIA STOCKS (1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
------------------------------------- -------------------------------------
ACTUAL ACTUAL
DIVIDEND TOTAL DIVIDEND TOTAL
PERIOD APPRECIATION (2) YIELD (3) RETURN (4) APPRECIATION (2) YIELD (3) RETURN (4)
- ------ ---------------- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
April 1, 1976--
March 31, 1977 11.79% 6.32% 18.11% -8.04% 4.27% -3.77%
April 1, 1977--
March 31, 1978 -17.57 5.75 -11.82 -17.60 5.06 -12.54
April 1, 1978--
March 31, 1979 12.08 7.47 19.55 13.84 6.53 20.37
April 1, 1979--
March 31, 1980 -9.24 7.72 -1.52 -8.86 6.04 -2.82
April 1, 1980--
March 31, 1981 37.55 9.06 46.61 27.76 7.00 34.76
April 1, 1981--
March 31, 1982 -12.89 7.11 -5.78 -18.04 5.61 -12.43
April 1, 1982--
March 31, 1983 21.03 7.89 28.92 37.34 6.58 43.92
April 1, 1983--
March 31, 1984 12.29 7.92 20.21 3.09 4.99 8.08
April 1, 1984--
March 31, 1985 15.80 7.11 22.91 8.75 5.28 14.03
April 1, 1985--
March 31, 1986 18.64 7.26 26.10 43.56 5.00 48.56
April 1, 1986--
March 31, 1987 33.12 6.37 39.49 26.73 3.75 30.48
April 1, 1987--
March 31, 1988 -12.07 3.38 -8.69 -13.74 3.12 -10.62
April 1, 1988--
March 31, 1989 13.92 5.05 18.97 15.37 4.23 19.60
April 1, 1989--
March 31, 1990 12.48 5.19 17.67 18.03 4.65 22.68
April 1, 1990--
March 31, 1991 -14.77 4.75 -10.02 7.63 3.78 11.41
April 1, 1991--
March 31, 1992 17.19 3.33 20.42 11.04 3.20 14.24
April 1, 1992--
March 31, 1993 23.87 4.05 27.92 6.17 3.16 9.33
April 1, 1993--
March 31, 1994 13.94 3.91 17.85 5.85 2.93 8.78
April 1, 1994--
March 31, 1995 27.01 3.92 30.93 14.35 2.23 16.58
April 1, 1995--
March 31, 1996 18.02 2.71 20.73 34.38 2.84 37.22
</TABLE>
- ---------------------
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks (the
'"Stocks") for any given period were selected by ranking the dividend
yields for each of the stocks in the DJIA as of the beginning of the
period, based upon an annualization of the last quarterly or semi-annual
ordinary dividend distribution (which would have been declared in the
preceding year) divided by that stock's market value on the first trading
day on the New York Stock Exchange in the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market value
of the Stocks as of the first trading day on the New York Stock Exchange
in a given period from the market value of the Stocks as of the last
trading day in that period and dividing the result by the market value of
the Stocks as of the first trading day in that period. Appreciation for
the DJIA is calculated by subtracting the opening value of the DJIA as of
the first trading day in a given period from the closing value of the DJIA
as of the last trading day in that period, and dividing the result by the
opening value of the DJIA as of the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding the total
dividends received on the Stocks in a given period and dividing the result
by the market value of the Stocks as of the first trading day in that
period. Actual Dividend Yield for the DJIA is calculated by taking the
total dividends credited to the DJIA and dividing the result by the
opening value of the DJIA as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 20 years above, the Stocks
achieved an average annual total return of 16.15%, as compared to the
average annual total return of the DJIA which was 13.54%. The Stocks also
had a higher average dividend yield in each of the above 20 years and
outperformed the DJIA in 13 of these years. Although the Trust seeks to
achieve a better performance than the DJIA, there can be no assurance that
the Trust will outperform the DJIA over its two-year life or over
consecutive rollover periods, if available.
14
<PAGE>
IF YOU HAD INVESTED $10,000 ON APRIL 1, 1976
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Five Lowest Priced
of the Ten Highest
Yielding DJIA Stocks DJIA Stocks
- ------------------------------------------------
<S> <C> <C>
4/1/76 $ 10,000.00 $ 10,000.00
3/31/77 11,811.00 9,623.00
3/31/78 10,414.94 8,416.28
3/31/79 12,451.06 10,130.67
3/31/80 12,261.80 9,844.99
3/31/81 17,977.03 13,267.10
3/31/82 16,937.96 11,618.00
3/31/83 21,836.42 16,720.63
3/31/84 26,249.56 18,071.66
3/31/85 32,263.33 20,607.11
3/31/86 40,684.06 30,613.92
3/31/87 56,750.19 39,945.05
3/31/88 51,818.60 35,702.88
3/31/89 61,648.59 42,700.65
3/31/90 72,541.90 52,385.15
3/31/91 65,273.20 58,362.30
3/31/92 78,601.99 66,673.09
3/31/93 100,547.66 72,893.69
3/31/94 118,495.42 79,293.75
3/31/95 155,146.05 92,440.66
3/31/96 187,307.83 126,847.07
</TABLE>
YEAR ENDED MARCH 31
The chart above represents past performance of the DJIA, and the Five Lowest
Priced Stocks of the Ten Highest Yielding DJIA Stocks (but not the Trust) and
should not be considered indicative of future results. Further, these results
are hypothetical. The chart assumes that all dividends during a year are
reinvested at the end of that year and does not reflect sales charges,
commissions, expenses or taxes. There can be no assurance that the Trust will
outperform the DJIA over its two-year life or over consecutive rollover
periods, if available.
15
<PAGE>
The following table compares the actual performance of the DJIA, and
approximately equal values of the ten stocks in the DJIA having the highest
dividend yield (the "Ten Highest Yielding DJIA Stocks") for annual periods
beginning April 1 of each year.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
<TABLE>
<CAPTION>
TEN HIGHEST YIELDING DJIA STOCKS (1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
------------------------------------ -----------------------------------
ACTUAL ACTUAL
DIVIDEND TOTAL DIVIDEND TOTAL
PERIOD APPRECIATION (2) YIELD (3) RETURN (4) APPRECIATION (2) YIELD (3) RETURN (4)
------ ---------------- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
April 1, 1976--
March 31, 1977 7.56% 6.45% 14.01% -8.04% 4.27% -3.77%
April 1, 1977--
March 31, 1978 -10.30 6.08 -4.22 -17.60 5.06 -12.54
April 1, 1978--
March 31, 1979 9.98 7.51 17.49 13.84 6.53 20.37
April 1, 1979--
March 31, 1980 -6.93 8.10 1.17 -8.86 6.04 -2.82
April 1, 1980--
March 31, 1981 28.75 9.10 37.85 27.76 7.00 34.76
April 1, 1981--
March 31, 1982 -11.55 7.88 -3.67 -18.04 5.61 -12.43
April 1, 1982--
March 31, 1983 20.13 8.36 28.49 37.34 6.58 43.92
April 1, 1983--
March 31, 1984 10.16 7.13 17.29 3.09 4.99 8.08
April 1, 1984--
March 31, 1985 10.74 6.44 17.18 8.75 5.28 14.03
April 1, 1985--
March 31, 1986 23.64 6.97 30.61 43.56 5.00 48.56
April 1, 1986--
March 31, 1987 31.82 5.80 37.62 26.73 3.75 30.48
April 1, 1987--
March 31, 1988 -10.37 3.88 -6.49 -13.74 3.12 -10.62
April 1, 1988--
March 31, 1989 16.12 5.20 21.32 15.37 4.23 19.60
April 1, 1989--
March 31, 1990 13.23 6.29 19.52 18.03 4.65 22.68
April 1, 1990--
March 31, 1991 -5.19 4.92 -0.27 7.63 3.78 11.41
April 1, 1991--
March 31, 1992 6.38 3.87 10.25 11.04 3.20 14.24
April 1, 1992--
March 31, 1993 13.21 4.47 17.68 6.17 3.16 9.33
April 1, 1993--
March 31, 1994 5.10 4.09 9.19 5.85 2.93 8.78
April 1, 1994--
March 31, 1995 17.73 4.45 22.18 14.35 2.23 16.58
April 1, 1995--
March 31, 1996 24.90 3.73 28.63 34.38 2.84 37.22
</TABLE>
- -------------------
(1) The Ten Highest Yielding DJIA Stocks (the '"Stocks") for any given period
were selected by ranking the dividend yields for each of the stocks in the
DJIA as of the beginning of the period, based upon an annualization of the
last quarterly or semi-annual ordinary dividend distribution (which would
have been declared in the preceding year) divided by that stock's market
value on the first trading day on the New York Stock Exchange in the given
period.
(2) Appreciation for the Stocks is calculated by subtracting the market value
of the Stocks as of the first trading day on the New York Stock Exchange
in a given period from the market value of the Stocks as of the last
trading day in that period, and dividing the result by the market value of
the Stocks as of the first trading day in that period. Appreciation for
the DJIA is calculated by subtracting the opening value of the DJIA as of
the first trading day in a given period from the closing value of the DJIA
as of the last trading day in that period, and dividing the result by the
opening value of the DJIA as of the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding the total
dividends received on the Stocks in a given period and dividing the result
by the market value of the Stocks as of the first trading day in that
period. Actual Dividend Yield for the DJIA is calculated by taking the
total dividends credited to the DJIA and dividing the result by the
opening value of the DJIA as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table over the 20 years listed above, the
Stocks achieved an average annual total return of 14.67%, as compared to
the average annual total return of all of the stocks in the DJIA, which
was 13.54%. The Stocks also had a higher average dividend yield in each of
the above 20 years and outperformed the DJIA in 13 of these years.
Although the Trust seeks to achieve a better performance than the DJIA,
there can be no assurance that the Trust will outperform the DJIA over its
two-year life or over consecutive rollover periods, if available.
16
<PAGE>
IF YOU HAD INVESTED $10,000 ON APRIL 1, 1976
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Five Lowest Priced
of the Ten Highest
Yielding DJIA Stocks DJIA Stocks
- ------------------------------------------------
<S> <C> <C>
4/1/76 $ 10,000.00 $ 10,000.00
3/31/77 11,401.00 9,623.00
3/31/78 10,919.88 8,416.28
3/31/79 12,829.76 10,130.67
3/31/80 12,979.87 9,844.99
3/31/81 17,892.75 13,267.10
3/31/82 17,236.09 11,618.00
3/31/83 22,146.65 16,720.63
3/31/84 25,975.81 18,071.66
3/31/85 30,438.45 20,607.11
3/31/86 39,755.66 30,613.92
3/31/87 54,711.74 39,945.05
3/31/88 51,160.95 35,702.88
3/31/89 62,068.47 42,700.65
3/31/90 74,184.23 52,385.15
3/31/91 73,983.93 58,362.30
3/31/92 81,567.29 66,673.09
3/31/93 95,988.38 72,893.69
3/31/94 104,809.72 79,293.75
3/31/95 128,056.51 92,440.66
3/31/96 164,719.09 126,847.07
</TABLE>
YEAR ENDED MARCH 31
The chart above represents past performance of the DJIA and the Ten Highest
Yielding DJIA Stocks (but not the Trust) and should not be considered
indicative of future results. Further, these results are hypothetical. The
chart assumes that all dividends during a year are reinvested at the end of
that year and does not reflect sales charges, commissions, expenses or taxes.
There can be no assurance that the Trust will outperform the DJIA over its two-
year life or over consecutive rollover periods, if available.
The returns shown above are not guarantees of future performance and should not
be used as a predictor of returns to be expected in connection with a Trust
portfolio. It is important to note that the returns shown above are based on
the Five Lowest Priced of the Ten Highest Yielding DJIA Stocks and the Ten
Highest Yielding DJIA Stocks computed for each year during the periods
involved; however, because the Trusts have a term of approximately two years,
the portfolios of the Trusts will not be adjusted each year to reflect the then
current five lowest priced of the ten highest yielding stocks in the DJIA or
the then current ten highest yielding stocks in the DJIA. Both stock prices
(which may appreciate or depreciate) and dividends (which may be increased,
reduced or eliminated) will affect the returns. As indicated in the previous
tables, the Ten Highest Yielding DJIA Stocks, including the Five Lowest Priced
Stocks of the Ten Highest Yielding DJIA Stocks, underperformed the DJIA in
certain years, and there can be no assurance that a Trust's Portfolio will
outperform the DJIA over the life of a Trust or over consecutive rollover
periods, if available. A Unitholder in a Trust would not necessarily realize as
high a Total Return on an investment in the stocks upon which the returns shown
above are based. The Total Return figures shown above do not reflect sales
charges, commissions, Trust expenses or taxes, and a Trust may not be fully
invested at all times.
17
<PAGE>
Information on the DJIA 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 Trusts or of the DJIA (provided information is
also given reflecting the performance of the Trusts 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 Trusts may be appropriate investment vehicles for investors who
desire to participate in a portfolio of equity securities with greater
diversification than they might be able to acquire individually. An investment
in Units of a 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.
PETROLEUM COMPANIES. The Trusts may include securities which are issued by
companies engaged in refining and marketing oil and related products. According
to the U.S. Department of Commerce, the factors which will most likely shape
the industry to 1996 and beyond include the price and availability of oil from
the Middle East, changes in United States environmental policies and the
continued decline in U.S. production of crude oil. Possible effects of these
factors may be increased U.S. and world dependence on oil from the Organization
of Petroleum Exporting Countries ("OPEC") and highly uncertain and potentially
more volatile oil prices. Factors which the Sponsor believes may increase the
profitability of oil and petroleum operations include increasing demand for oil
and petroleum products as a result of the continued increases in annual miles
driven and the improvement in refinery operating margins caused by increases in
average domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the two
principal requirements for stable crude oil markets. Without excess capacity,
supply disruptions in some countries cannot be compensated for by others.
Surplus capacity in Saudi Arabia and a few other countries and the utilization
of that capacity prevented during the
18
<PAGE>
Persian Gulf crisis, and continue to prevent, severe market disruption.
Although unused capacity contributed to market stability in 1990 and 1991, it
ordinarily creates pressure to overproduce and contributes to market
uncertainty. The likely restoration of a large portion of Kuwait and Iraq's
production and export capacity over the next few years could lead to such a
development in the absence of substantial growth in world oil demand. Formerly,
OPEC members attempted to exercise control over production levels in each
country through a system of mandatory production quotas. Because of the crisis
in the Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be curtailed on at
least one occasion as a result of weak prices, even in the absence of supplies
from Kuwait and Iraq. The pressure to deviate from mandatory quotas, if they
are reimposed, is likely to be substantial and could lead to a weakening of
prices. In the longer term, additional capacity and production will be required
to accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and exports
from the Soviet Union. Only a few OPEC countries, particularly Saudi Arabia,
have the petroleum reserves that will allow the required increase in production
capacity to be attained. Given the large-scale financing that is required, the
prospect that such expansion will occur enough to meet the increased demand is
uncertain.
Declining U.S. crude oil production will likely lead to increased dependence on
OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments to the Clean Air Act. If the cost of these changes is substantial
enough to cut deeply into profits, smaller refiners may be forced out of the
industry entirely. Moreover, lower consumer demand due to increases in energy
efficiency and conservation, due to gasoline reformulations that call for less
crude oil, due to warmer winters or due to a general slowdown in economic
growth in this country and abroad could negatively affect the price of oil and
the profitability of oil companies. No assurance can be given that the demand
for or prices of oil will increase or that any increases will not be marked by
great volatility. Some oil companies may incur large cleanup and litigation
costs relating to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the disposal of
hazardous materials. Increasingly stringent environmental laws and regulations
are expected to require companies with oil production and refining operations
to devote significant financial and managerial resources to pollution control.
General problems of the oil and petroleum products industry include the ability
of a few influential producers significantly to affect production, the
concomitant volatility of crude oil prices and increasing public and
governmental concern over air emissions, waste product disposal, fuel quality
and the environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of energy
and fuels or legislative changes relating to the energy industry or the
environment could have a negative impact on the petroleum products industry.
While legislation has been enacted to deregulate certain aspects of the oil
industry, no assurances can be given that new or additional regulations will
not be adopted. Each of the problems referred to could adversely affect the
financial stability of the issuers of any petroleum industry stocks in the
Trusts. The Trusts may also include securities which are issued by companies
engaged in the exploration for and mining of various minerals, including coal,
and/or the manufacture, transportation, or marketing of chemical products and
plastics. The problems faced by such companies are similar to those discussed
with regard to petroleum companies.
19
<PAGE>
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 Trusts 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, a 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
a Trust will be adversely affected if trading markets for the Securities are
limited or absent.
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 Trusts.
Thus, payment of brokerage fees by the Trusts will affect the value of every
Unit and the net income per Unit received by the Trusts. 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 a 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 Trusts or the issuers of
the Securities. There can be no assurance that future litigation or legislation
will not have a material adverse effect on a Trust or will not impair the
ability of issuers to achieve their business goals.
20
<PAGE>
FEDERAL TAX STATUS
General. The following is a general discussion of certain of the federal income
tax consequences of the purchase, ownership and disposition of the Units of
each Trust. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Each Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro
rata portion of each of the assets of a Trust under the Code; and the income
of such Trust will be treated as income of the Unitholders thereof under the
Code. Each Unitholder will be considered to have received his pro rata share
of income derived from each Security when such income is received by such
Trust.
2. Each Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Security when such dividends are
received by a Trust regardless of whether such dividends are used to pay a
portion of the deferred sales charge. Unitholders will be taxed in this
manner regardless of whether distributions from such Trust are actually
received by the Unitholder or are automatically reinvested (see
"Unitholders--Distribution Reinvestment").
3. Each Unitholder will have a taxable event when a Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise)
or upon the sale or redemption of Units by such Unitholder (except to the
extent an in kind distribution of stocks is received by such Unitholder as
described below). The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of each
Security held by such Trust (in proportion to the fair market values thereof
on the valuation date closest to the date the Unitholder purchases his
Units) in order to determine his initial tax basis for his pro rata portion
of each Security held by such Trust. For federal income tax purposes, a
Unitholders pro rata portion of dividends as defined by Section 316 of the
Code paid with respect to a Security held by a Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings
and profits." A Unitholders's pro rata portion of dividends paid on such
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Security, and to the extent
that such dividends exceed a Unitholder's tax basis in such Security shall
generally be treated as capital gain. In general, any such capital gain will
be short-term unless a Unitholder has held his Units for more than one year.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by a Trust will generally be
considered a capital gain except in the case of a dealer or a financial
institution and, will be long-term if the Unitholder has held his Units for
more than one year (the date on which the Units are acquired (i.e., the
"trade date") is excluded for purposes of determining whether the Units have
been held for more than one year). A Unitholder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of Securities held
by a Trust will generally be considered a capital loss (except in the case
of a dealer or a financial institution) and, in general, will be long-term
if the Unitholder has held his Units for more than one year. Unitholders
should consult their tax advisors regarding the recognition of gains and
losses for federal income tax purposes. In particular, a Rollover Unitholder
should be aware that a Rollover Unitholder's loss, if any, incurred in
21
<PAGE>
connection with the exchange of Units for units in either new series of a
Trust (the "1997 Fund" and the "1998 Fund") will generally be disallowed
with respect to the disposition of any Securities pursuant to such exchange
to the extent that such Unitholder is considered the owner of substantially
identical securities under the wash sale provisions of the Code taking into
account such Unitholder's deemed ownership of the securities underlying the
Units in the 1997 or 1998 Fund in the manner described above, if such
substantially identical securities were acquired within a period beginning
30 days before and ending 30 days after such disposition. However, any gains
incurred in connection with such an exchange by a Rollover Unitholder would
be recognized.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge for
a Trust is deferred. It is possible that for federal income tax purposes a
portion of the deferred 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 a case, the non-interest portion of the deferred
sales charge would be added to the Unitholder's tax basis in his Units. The
deferred sales charge could cause the Unitholder's Units to be considered to be
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 deferred
sales charge. Unitholders should consult their own tax advisers as to the
income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by a Trust (to the extent
such dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such
corporation directly owned the Securities paying such dividends (other than
corporate shareholders, such as "S" corporations, which are not eligible for
the deduction because of their special characteristics and other than for
purposes of special taxes such as the accumulated earnings tax and the personal
holding corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on the
eligibility of dividends for the 70% dividends received deduction. These
limitations include a requirement that stock (and therefore Units) must
generally be held at least 46 days (as determined under Section 246(c) of the
Code). Final regulations have been issued which address special rules that must
be considered in determining whether the 46 day holding period requirement is
met. Moreover, the allowable percentage of the deduction will be reduced from
70% if a corporate Unitholder owns certain stock (or Units) the financing of
which is directly attributable to indebtedness incurred by such corporation. It
should be noted that various legislative proposals that would affect the
dividends received deduction have been introduced. Unitholders should consult
with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by a Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him, subject to the following limitation. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of such Trust as
miscellaneous itemized deductions subject to this limitation.
22
<PAGE>
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust
or Disposition of Units. As discussed above, a Unitholder may recognize taxable
gain (or loss) when a Security is disposed of by a Trust or if the Unitholder
disposes of a Unit (although losses incurred by Rollover Unitholders may be
subject to disallowance, as discussed above). For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated 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.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates on
ordinary income while capital gains remained 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 Tax Act, the Tax 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.
If a Unitholder disposes of a Unit, he is deemed thereby to dispose of his
entire pro rata interest in all assets of the Trust involved including his pro
rata portion of all Securities represented by a Unit.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of a Trust. As discussed in "Redemption," under certain
circumstances a Unitholder tendering Units for redemption may request an In
Kind Distribution. A Unitholder may also under certain circumstances request an
In Kind Distribution upon termination of a Trust. See "Administration of the
Trusts--Amendment and Termination." The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such In Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Redemption." As previously discussed,
prior to the redemption of Units or the termination of a Trust, a Unitholder is
considered as owning a pro rata portion of each of such Trust's assets for
federal income tax purposes. The receipt of an In Kind Distribution will result
in a Unitholder receiving an undivided interest in whole shares of stock plus,
possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to
Securities. A "Security" for this purpose is a particular class of stock issued
by a particular corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Securities in exchange for his or her pro rata portion
in the Securities held by a Trust. However, if a Unitholder also receives cash
in exchange for a fractional share of a Security held by a Trust, such
Unitholder will generally recognize gain or loss based on the difference
between the amount of cash received by the Unitholder and his tax basis in such
fractional share of a Security held by such Trust.
Because a Trust will own many Securities, a Unitholder who requests an In Kind
Distribution will have to analyze the tax consequences with respect to each
Security owned by such Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Security owned by such Trust. Unitholders who request an In Kind
Distribution are advised to consult their tax advisers in this regard.
As discussed in "Interim and Final Redemption and Rollover in New Trusts," a
Unitholder may elect to become a Rollover Unitholder. To the extent a Rollover
Unitholder exchanges his Units for Units of the 1997 or 1998 Fund in a taxable
transaction, such Unitholder will recognize gains, if any, but generally will
23
<PAGE>
not be entitled to a deduction for any losses recognized upon the disposition
of any Securities pursuant to such exchange to the extent that such Unitholder
is considered the owner of substantially identical securities under the wash
sale provisions of the Code taking into account such Unitholder's deemed
ownership of the securities underlying the Units in the 1997 or 1998 Fund in
the manner described above, if such substantially identical securities were
acquired within a period beginning 30 days before and ending 30 days after such
disposition under the wash sale provisions contained in Section 1091 of the
Code. In the event a loss is disallowed under the wash sale provisions, special
rules contained in Section 1091 (d) of the Code apply to determine the
Unitholder's tax basis in the securities acquired. Rollover Unitholders are
advised to consult their tax advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in a Trust
in accordance with the proportion of the fair market values of such Securities
on the valuation date nearest the date the Units are purchased in order to
determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by a Trust will be reduced to the extent dividends paid with respect to
such Security are received by such Trust which are not taxable as ordinary
income as described above.
Other Matters. 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 by the Internal Revenue Service that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by a Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust (other than those that are not treated as United
States source income, if any) 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. On December 7, 1995, the U.S.
Treasury Department released proposed legislation that, if adopted, could
affect the United States federal income taxation of non-United States
Unitholders and the portion of a Trust's income allocable to non-United States
Unitholders.
At the termination of a Trust, the Trustee will furnish to each Unitholder of
such Trust a statement containing information relating to the dividends
received by such Trust on the Securities, the gross proceeds received by such
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by such Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Foreign investors may be subject to different Federal income tax
consequences than those described above. Investors should consult their tax
advisers for specific information on the tax consequences of particular types
of distributions.
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.
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<PAGE>
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of each Trust is
based on the aggregate underlying value of the Securities in such Trust plus
the initial sales charge described below. The initial sales charge is equal to
0.80% and 0.95% of the Public Offering Price for The 5 and The 10,
respectively. Based on the Public Offering Price on the business day prior to
the Initial Date of Deposit the maximum sales charges for The 5 and The 10 are
4.7% and 4.85% of the Public Offering Price, respectively (equivalent to 4.932%
and 5.097%, respectively, of the net amount invested). To the extent the Public
Offering Price increases or decreases, the total sales charge percentage will
decrease or increase, respectively, from those amounts indicated. On the first
day of the 4th through the 13th months and again on the 17th through the 26th
months a deferred sales charge of $0.0195 per Unit will also be assessed for
The 5 and The 10. The total amount of the deferred sales charge payments for
The 5 and The 10 will be $0.39 per Unit. Unitholders who redeem their Units on
or before June 15, 1997 will not be assessed the deferred sales charge for the
17th through 26th months. The total amount of deferred sales charge payments
for The 5 and The 10 will be $0.195 per Unit per year. Units purchased
subsequent to the initial deferred sales charge payment will be subject to the
initial sales charge and the remaining deferred sales charge payments. Units
sold or redeemed prior to such time as the entire applicable deferred sales
charge has been collected will be assessed the remaining deferred sales charge
at the time of such sale or redemption.
Subsequent to the Initial Date of Deposit, the initial sales charge for each
Trust will vary with changes in the aggregate value of the Securities. The
deferred sales charge payments for each Trust will be paid from funds in the
Capital Account of such Trust, if sufficient, or from the periodic sale of
Securities from such Trust. In addition, a pro rata portion of the cash, if
any, in the Income and Capital Accounts of a Trust will be added to the Public
Offering Price per Unit of such Trust. If Units of a Trust were purchased on
the Initial Date of Deposit and held until the mandatory termination of such
Trust, the total sales charge paid would be that amount set forth below.
The sales charges for the Trusts will be reduced on a graduated basis as set
forth in the following table:
<TABLE>
<CAPTION>
DEFERRED DEFERRED
SALES CHARGE SALES CHARGE
PRIOR TO INTERIM AFTER INTERIM
INITIAL REDEMPTION REDEMPTION
SALES AND ROLLOVER AND ROLLOVER MAXIMUM
CHARGE PERIOD PERIOD TOTAL SALES CHARGE**
---------- ---------------- ------------- ---------------------
PERCENT OF DOLLAR PERCENT OF PERCENT OF
OFFERING DOLLAR AMOUNT OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE AMOUNT PER UNIT PER UNIT PRICE INVESTED
- ---------------- ---------- ---------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
THE 5
Less than 5,000......... 0.80% $0.195 $0.195 4.70% 4.932%
5,000-9,999............. 0.50% $0.195 $0.195 4.40% 4.603%
10,000-14,999........... 0.20% $0.195 $0.195 4.10% 4.275%
15,000 or more.......... None $0.195 $0.195 3.90% 4.058%
THE 10
Less than 5,000......... 0.95% $0.195 $0.195 4.85% 5.097%
5,000-9,999............. 0.60% $0.195 $0.195 4.50% 4.712%
10,000-14,999........... 0.30% $0.195 $0.195 4.20% 4.384%
15,000 or more.......... None $0.195 $0.195 3.90% 4.058%
</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.
**Because the deferred sales charge for each Trust is actually a fixed dollar
amount equal to $0.195 per Unit per year, the maximum total sales charge
will exceed the percentage stated above if the price of Units is less than
$10 and will be less than the percentage stated above if the price of Units
is greater than $10.
25
<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 Trusts without an initial 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 initial sales charge. 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 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 each 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 New York Stock Exchange 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
3:15 p.m. Central Time 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 New York Stock Exchange 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 sale prices on the New York Stock Exchange 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 each
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 Trusts 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 Trusts 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 Trusts 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 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
26
<PAGE>
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 Trusts. Such payments
are made by the Sponsor out of its own assets, and not out of the assets of
the Trusts. These programs will not change the price Unitholders pay for their
Units or the amount that the Trusts will receive from the Units sold. The
difference between the discount and the sales charge will be retained by the
Sponsor.
<TABLE>
<CAPTION>
COMMISSION PRIOR TO COMMISSION AFTER INTERIM
INTERIM REDEMPTION AND REDEMPTION AND ROLLOVER
ROLLOVER PERIOD PERIOD
------------------------- ------------------------
PRIMARY PRIMARY
MARKET FIRM MARKET FIRM
SALES OR SALES OR
ARRANGEMENTS ARRANGEMENTS
(VOLUME (VOLUME
CONCESSIONS CONCESSIONS
NUMBER OF UNITS* IN $1000)** IN $1000)**
---------------- REGULAR -------------- REGULAR -------------
CONCESSION CONCESSION $1,000
OR AGENCY $500- $1,000 OR AGENCY $500- OR
COMMISSION $999 OR MORE COMMISSION $999 MORE
---------- ----- ------- ---------- ------ ------
THE 5
<S> <C> <C> <C> <C> <C> <C>
Less than 5,000............... 1.80% 1.85% 1.90% $0.110 $0.115 $0.120
5,000 but less than 10,000.... 1.65 1.70 1.75 0.110 0.115 0.120
10,000 but less than 15,000... 1.30 1.35 1.40 0.110 0.115 0.120
15,000 or more................ 1.10 1.15 1.20 0.110 0.115 0.120
Rollover Sales................ 1.10 1.15 1.20 0.110 0.115 0.120
THE 10
Less than 5,000............... 2.00% 2.05% 2.10% $0.110 $0.115 $0.120
5,000 but less than 10,000.... 1.75 1.80 1.85 0.110 0.115 0.120
10,000 but less than 15,000... 1.50 1.55 1.60 0.110 0.115 0.120
15,000 or more................ 1.20 1.25 1.30 0.110 0.115 0.120
Rollover Sales................ 1.10 1.15 1.20 0.110 0.115 0.120
</TABLE>
- ---------------------
*The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
**Volume concessions of up to the amount shown can be earned as a marketing
allowance at the discretion of the Sponsor through April 30, 1996 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 April 30, 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.
A special additional payment of 0.25%, 0.30% or 0.35% in lieu of the volume
concessions noted above will be made to firms whose sales of The 5 and The 10
combined, including future series of The 5 or The 10, exceed $3.5 million,
$5.0 million or $7.0 million, respectively, during any calendar month. A firm
may also earn the above special payment for all sales of The 5 or The 10 to
the extent that it was not otherwise earned, by achieving monthly average
sales of The 5 and The 10, including future series of The 5 and The 10, equal
to the above sales amounts during the period April 1996 through December 1996.
Rollover sales will count toward a firm achieving the aforementioned total
sales, however, such rollover sales will not be eligible for the special
additional payment.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units.
27
<PAGE>
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trusts 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 a 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
"Portfolios." 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 Trusts.
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
Trusts offered hereby and to continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the closing bid prices of the
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 closing offer prices of the Securities in the Trusts. The
bid prices are expected to be less than the related ask 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.
Unitholders who sell or redeem Units prior to such time as the entire
applicable deferred sales charge on such Units has been collected will be
assessed the amount of the remaining deferred sales charge at the time of such
sale or redemption. 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 Trusts 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 unit investment 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 a 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 each 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
28
<PAGE>
of Units being redeemed. Any Units redeemed shall be cancelled and any
undivided fractional interest in a 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 a Trust at the time of redemption.
Unitholders who sell or redeem Units prior to such time as the entire
applicable deferred sales charge on such Units has been collected will be
assessed the amount of the remaining deferred sales charge at the time of such
sale or 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 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 appropriate 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 appropriate Trust. The Trustee is
empowered to sell Securities for a Trust in order to make funds available for
the redemption of Units of such Trust. Such sale may be required when
Securities would not otherwise be sold and might result in lower prices than
might otherwise be realized.
Unitholders tendering Units for redemption may request a distribution in kind
(a "Distribution In Kind") from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is (1) entitled to receive at least $25,000 of proceeds as part of
his or her distribution or if he paid at least $25,000 to acquire the units
being tendered and (2) the Unitholder has elected to redeem prior to the date
specified under "Redemption In Kind" on page 4 of this Prospectus. If the
Unitholder meets these requirements, a Distribution In Kind will be made by the
Trustee through the distribution of each of the Securities of a Trust in book
entry form to the account of the Unitholder's bank or broker-dealer at
Depositary Trust Company. The tendering Unitholder shall be entitled to receive
whole shares of each of the Securities comprising the portfolio of such Trust
and cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. Unitholders who redeem Units prior to such
time as the entire applicable deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales charge at
the time of such redemption. The Trustee shall make any adjustments necessary
to reflect differences between the Redemption Price of the Units and the value
of the Securities distributed in kind as of the date of tender. If funds in the
Capital Account are insufficient to cover the required cash distribution to the
tendering Unitholder, the Trustee may sell Securities. The in kind redemption
option may be terminated by the Sponsor on a date other than that specified
under "Redemption In Kind" on page 4 of this Prospectus upon notice to the
Unitholders prior to the specified date.
To the extent that Securities are redeemed in kind or sold, the size (and
possibly the diversity) of a 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.
29
<PAGE>
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 closing bid price of the Securities in a Trust. On the Initial
Date of Deposit, the Public Offering Price per Unit (which is based on the
closing ask 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 a 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 a 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 bid
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. Any such evaluation made during the initial offering
period will be made based on the ask price of any applicable Securities. See
"Public Offering of Units--Public Offering Price."
INTERIM AND FINAL REDEMPTION AND ROLLOVER IN NEW TRUSTS
It is expected that a special redemption will be made of all Units of the
Trusts held by any Unitholder (a "Rollover Unitholder") who affirmatively
notifies the Trustee in writing that he desires to rollover his Units in the
Trusts by the end of the Interim Redemption and Rollover Period or by the Final
Redemption and Rollover Date specified in "Essential Information". Rollover
Unitholders who rollover Units in connection with the Interim Redemption and
Rollover Period are referred to herein as "Interim Rollover Unitholders," while
Rollover Unitholders who rollover Units in connection with the Final Redemption
and Rollover Date are referred to herein as "Final Rollover Unitholders."
All Units of Interim and Final Rollover Unitholders will be redeemed on the
Interim Redemption and Rollover Period or the Final Redemption and Rollover
Date, respectively, and the underlying Securities will be distributed to the
Distribution Agent on behalf of such Rollover Unitholders. During the Interim
Redemption and Rollover Period and on the Final Redemption and Rollover Date
the Distribution Agent will be required to sell all of the underlying
Securities on behalf of Interim and Final Rollover Unitholders as applicable.
The sales proceeds will be net of brokerage fees, governmental charges or any
expenses involved in the sales.
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The Distribution Agent will attempt to sell the Securities as quickly as is
practicable during the Interim Redemption and Rollover Period and on the Final
Redemption and Rollover Date. The Sponsor does not anticipate that the Interim
Redemption and Rollover Period will be longer than the period set forth under
"Essential Information" or that the Final Redemption and Rollover selling
period will be longer than one day given that the Securities are usually highly
liquid. 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.
The Interim Rollover Unitholders' proceeds will be invested in the next
subsequent series of the Trusts (the "1997 Fund"), if then being offered, the
portfolios of which will contain either the five lowest priced stocks of the
ten highest yielding stocks in the Dow Jones Industrial Average or the ten
highest yielding stocks in the Dow Jones Industrial Average, as the case may
be, as of the close of business on the day prior to the initial date of deposit
of the 1997 Fund. The proceeds of redemption will be used to buy 1997 Fund
units in the appropriate portfolio as the proceeds become available. Interim
Rollover Unitholders will not be assessed the deferred sales charge payments
remaining after the Interim Redemption and Rollover Period.
The Final Rollover Unitholders' proceeds will be invested in the following
subsequent series of the Trusts (the "1998 Fund"), if then being offered, the
portfolios of which will contain either the five lowest priced stocks of the
ten highest yielding stocks in the Dow Jones Industrial Average or the ten
highest yielding stocks in the Dow Jones Industrial Average, as the case may
be, as of the close of business on the day prior to the initial date of deposit
of the 1998 Fund. The proceeds of redemption will be used to buy 1998 Fund
units in the appropriate portfolio as the proceeds become available.
The Sponsor intends to create the 1997 and 1998 Funds shortly prior to the
Interim Redemption and Rollover Period and the Final Redemption Date, dependent
upon the availability and reasonably favorable prices of the Securities
included in the 1997 and 1998 Fund portfolios, and it is intended that Rollover
Unitholders will be given first priority to purchase the 1997 and 1998 Fund
units. There can be no assurance, however, as to the exact timing of the
creation of the 1997 and 1998 Funds or the aggregate number of units in each
trust portfolio which the Sponsor will create. The Sponsor may, in its sole
discretion, stop creating new units in each trust portfolio at any time it
chooses, regardless of whether all proceeds of the Interim or Final Redemption
and Rollover have been invested on behalf of Rollover Unitholders. Cash which
has not been invested on behalf of the Rollover Unitholders in 1997 and 1998
Fund units will be distributed shortly after the Interim Redemption and
Rollover Period or the Final Redemption and Rollover Date.
Any Rollover Unitholder may thus be redeemed out of the Fund and become a
holder of an entirely different unit investment trust in the 1997 or 1998 Fund
with a different portfolio of Securities. The Rollover Unitholders' Units will
be redeemed and the distributed Securities shall be sold during the Interim
Redemption and Rollover Period or on the Final Redemption and Rollover Date. In
accordance with the Rollover Unitholders' offer to purchase the 1997 or 1998
Fund units, the proceeds of the sales (and any other cash distributed upon
redemption) will be invested in the 1997 or 1998 Fund in the appropriate
portfolio at the public offering price, including the applicable sales charge
per Unit (which for Rollover Unitholders is currently expected to be 1.95% of
the Public Offering Price of the 1997 or 1998 Fund units per unit per year).
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolios selected by the Sponsor are chosen on the
basis of growth and income potential only for the near term, at which point a
new portfolio is chosen. It is contemplated that a similar process of
redemption and rollover in new unit investment trusts will be available for the
1997 and 1998 Funds and each subsequent series of the Fund, approximately a
year after that Series' creation.
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There can be no assurance that the redemption and rollover in a new trust will
avoid any negative market price consequences stemming from the trading of large
volumes of securities and of the underlying Securities. The above procedures
may be insufficient or unsuccessful in avoiding such price consequences. In
fact, market price trends may make it advantageous to sell or buy more quickly
or more slowly than permitted by these procedures.
It should also be noted that Rollover Unitholders may realize taxable capital
gains on the Interim or Final Redemption and Rollover but, in certain
circumstances, will not be entitled to a deduction for certain capital losses
and, due to the procedures for investing in the subsequent Trust, no cash would
be distributed at that time to pay any taxes. Included in the cash for the
Interim and Final Redemption and Rollover will be any amount of cash
attributable to the last distribution of dividend income; accordingly, Rollover
Unitholders also will not have such cash distributed to pay any taxes. See
"Federal Tax Status". Unitholders who do not inform the Distribution Agent that
they wish to have their Units so redeemed and liquidated will not realize
capital gains or losses due to the Interim and Final Redemption and Rollover
and will not be charged any additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
the 1997 or 1998 Fund or any subsequent series of the Fund, without penalty or
incurring liability to any Unitholder. If the Sponsor so decides, the Sponsor
shall notify the Unitholders before the Interim Redemption and Rollover Period
or the Final Redemption and Rollover Date would have commenced. The Sponsor may
modify the terms of the 1997 or 1998 Fund or any subsequent series of the Fund.
The Sponsor may also modify the terms of the Interim and Final Redemption and
Rollover in the 1997 and 1998 Fund upon notice to the Unitholders.
RETIREMENT PLANS
The Trusts 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 Trusts 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
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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 a 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 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 Trusts 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 each Trust's
minimum investment requirement of 100 Units or $1,000. Fractions
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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. Dividend income received by a Trust is credited
by the Trustee to the Income Account of such Trust. Other receipts are credited
to the Capital Account of the Trust. Income received by a Trust will be
distributed on or shortly after the 15th day of April 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, if the balance of the Capital Account of a Trust exceeds 1% of the
net assets of such Trust, the balance of such Account will be distributed on
the fifteenth day of the subsequent month to Unitholders of record on the first
day of such month. 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, 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 Trusts 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 each Trust and, to the extent funds are not sufficient therein, from
the Capital Account of such Trust amounts necessary to pay the expenses of such
Trust (as determined on the basis set forth under "Expenses of the Trusts").
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 a Trust. Amounts so withdrawn shall not be considered a part of a Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of a Trust such amounts as may be necessary to
cover redemptions of Units.
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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 related 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 Trusts, 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 unit investment trust division office.
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 a 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 such Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of a 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 a
Trust a statement, covering the calendar year, setting forth for such 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;
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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 a 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 a Trust.
No Unitholder shall have the right to control the operation and management of a
Trust in any manner, except to vote with respect to the amendment of the Trust
Agreement or termination of such Trust.
INVESTMENT SUPERVISION
The Trusts are unit investment trusts and are not "actively managed" funds.
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 portfolios of the Trusts, 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 portfolios.
The Trust Agreement provides that the Sponsor may (but need not) direct the
Trustee to dispose of a Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
a Security has declined to such an extent or other such credit factors exist so
that in the opinion of the Sponsor the retention of such Securities would be
detrimental to a Trust. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Securities such as those acquired in connection with a merger or
other transaction. If offered such new or exchanged securities or property, the
Trustee shall reject the offer. However, in the event such securities or
property are nonetheless acquired by a Trust, they may be accepted for deposit
in such Trust and either sold by the Trustee or held in such Trust pursuant to
the direction of the Sponsor. As described under "The Fund," if the exemptive
order discussed therein is granted by the Securities and Exchange Commission,
the Sponsor may instruct the Trustee to adjust the percentage relationship
among the Securities within the first 90 days of the Trust's life so that each
Security represents approximately an equal percentage of the Trust's portfolio.
There can be no assurance that the exemptive relief requested will be granted.
Proceeds from the sale of Securities (or any securities or other property
received by a Trust in exchange for
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Securities) are credited to the Capital Account for distribution to Unitholders
or to meet redemptions. Except as stated under "The Fund" for failed securities
or under "Unitholders--Distributions to Unitholders" for short term investment
in U.S. Treasury obligations and as provided herein, the acquisition by a Trust
of any securities other than the Securities is prohibited. The Trustee may sell
Securities, designated by the Sponsor, from a Trust for the purpose of
redeeming Units of such Trust tendered for redemption and the payment of
expenses.
ADMINISTRATION OF THE TRUSTS
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.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolios of the Trusts. 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 each Trust. Such books and
records shall be open to inspection by any Unitholder of each 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
each 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
Trusts.
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. The Sponsor acts as underwriter of a number
of other EVEREN unit investment trusts and will act as underwriter of any other
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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 Trusts 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 Trusts. 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 Trusts. More comprehensive financial
information can be obtained upon request from the Sponsor.
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 a 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 such 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 such Trust.
In no event shall the Trust Agreement be amended to increase the number of
Units of a Trust issuable thereunder or to permit the acquisition of any
Securities in addition to or in substitution for those initially deposited in a
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 each Trust shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in such Trust but in no event is it to continue beyond the Mandatory
Termination Date set forth under "Essential Information." If the value of a
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 a Trust), the Trustee may, in
its discretion, and shall, when so directed by the Sponsor, terminate such
Trust. A Trust may be terminated at any time by the holders of Units
representing 66 2/3% of the Units thereof then outstanding.
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
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of each 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 a
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, 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 a Trust, written notice thereof will be sent by
the Trustee to all Unitholders of such Trust. Within a reasonable period after
termination of a Trust the Trustee will sell any Securities remaining in such
Trust and, after paying all expenses and charges incurred by such 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 such 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,
39
<PAGE>
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 TRUSTS
The Sponsor will not charge the Trusts 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 Trusts.
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 for any Trust. The Trustee's fee which is calculated
monthly is based on the largest number of Units in each Trust 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 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 each Trust is expected to result from the use of these
funds.
For evaluation of the Securities in each 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.
Expenses incurred in establishing each 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 such Trust
(out of the Income Account) and it is intended that such expenses be amortized
over a five year period or over the life of such Trust if less than five years.
The following additional charges are or may be incurred by each 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 Trusts. If the balances
in the Income and Capital Accounts are insufficient to provide for amounts
payable by a 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."
40
<PAGE>
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.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statements of condition and the related portfolios 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.
------------
41
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
We have audited the accompanying statements of condition and the related
portfolios of EVEREN Unit Investment Trusts, Series 44, as of April 1, 1996.
The statements of condition and portfolios 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 44 as of April 1, 1996, in conformity with generally accepted accounting
principles.
GRANT THORNTON LLP
Chicago, Illinois
April 1, 1996
42
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
STATEMENTS OF CONDITION
AT THE OPENING OF BUSINESS ON APRIL 1, 1996, THE INITIAL DATE OF DEPOSIT
TRUST PROPERTY
<TABLE>
<CAPTION>
THE 5 THE 10
----------- -----------
<S> <C> <C>
Contracts to purchase Securities (1) (2)............... $478,754.50 $559,147.75
Organizational costs (3)............................... 28,922.00 28,922.00
----------- -----------
Total.............................................. $507,676.50 $588,069.75
=========== ===========
NUMBER OF UNITS........................................ 48,262 56,451
=========== ===========
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Accrued organizational costs (3)..................... $ 28,922.00 $ 28,922.00
Interest of Unitholders--
Cost to investors (4)................................ 501,437.64 586,526.49
Less: Gross underwriting commission (4).............. 22,683.14 27,378.74
----------- -----------
Net interest to Unitholders (1) (2) (4).............. 478,754.50 559,147.75
----------- -----------
Total.............................................. $507,676.50 $588,069.75
=========== ===========
</TABLE>
- ----------
NOTES:
(1) Aggregate cost of the Securities is based on the last offer 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 $1,037,902)
necessary for the purchase of the Securities in the Trust represented by
purchase contracts.
(3) Each Trust will bear all or a portion of its organizational costs, which
the Sponsor intends to defer and amortize over five years or over the life
of such Trust if less than five years. Organizational costs have been
estimated based on a projected Trust size of $15 million and $15 million
for The 5 and The 10, respectively. To the extent a 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.
43
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
DEFINED GROWTH STRATEGY 5, SERIES 1
PORTFOLIO AS OF APRIL 1, 1996
SCHEDULE OF INVESTMENTS AT THE OPENING OF
BUSINESS ON APRIL 1, 1996, THE INITIAL DATE OF DEPOSIT
<TABLE>
<CAPTION>
AGGREGATE ANNUALIZED
NAME OF ISSUER NUMBER COST OF CURRENT
OF SECURITIES DEPOSITED OF PRICE PER SECURITIES DIVIDEND
SYMBOL OR CONTRACTED FOR (1) SHARES SHARE TO TRUST (2) PER SHARE(3)
- ------ ----------------------- ------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
IP International Paper Company 2,413 $39.500 $ 95,313.50 $1.000
GM General Motors Corporation 1,784 53.375 95,221.00 1.600
CHV Chevron Corporation 1,700 56.250 95,625.00 2.000
MMM Minnesota Mining & Manufacturing Company 1,499 65.000 97,435.00 1.880
GE General Electric Company 1,220 78.000 95,160.00 1.840
-----------
$478,754.50
===========
</TABLE>
44
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44
DEFINED GROWTH STRATEGY 10, SERIES 1
PORTFOLIO AS OF APRIL 1, 1996
SCHEDULE OF INVESTMENTS AT THE OPENING OF
BUSINESS ON APRIL 1, 1996, THE INITIAL DATE OF DEPOSIT
<TABLE>
<CAPTION>
AGGREGATE
COST OF ANNUALIZE
NAME OF ISSUER NUMBER PRICE SECURITIES CURRENT
OF SECURITIES DEPOSITED OF PER TO TRUST DIVIDEND
SYMBOL OR CONTRACTED FOR (1) SHARES SHARE (2) PER SHARE
- ------ ----------------------- ------ ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
MO Philip Morris Companies, Inc. 673 $87.750 $ 59,055.75 4.000
JPM J.P. Morgan & Company, Inc. 330 83.125 27,431.25(4) 3.240
TX Texaco, Inc. 687 86.000 59,082.00 3.200
XON Exxon Corporation 723 81.750 59,105.25 3.000
CHV Chevron Corporation 1,050 56.250 59,062.50 2.000
GM General Motors Corporation 1,107 53.375 59,086.13 1.600
MMM Minnesota Mining & Manufacturing Company 909 65.000 59,085.00 1.880
IP International Paper Company 1,496 39.500 59,092.00 1.000
DD E.I. du Pont de Nemours & Company 711 83.125 59,101.88 2.080
GE General Electric Company 757 78.000 59.046.00 1.840
-----------
$559,147.75
===========
</TABLE>
45
<PAGE>
NOTES TO PORTFOLIOS
(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 March 29, 1996 and all have an expected settlement date of
April 3, 1996 (see "The Fund"). Percentages are based on the cost of
Securities to the Trust.
(2) The market value of each Security is based on the closing offer price on a
national securities exchange if the Security is listed thereon or, if not
so listed, then on the over-the-counter market, in each case, on the day
prior to the Initial Date of Deposit. As of the Initial Date of Deposit
other information regarding the Securities in each Trust is as follows:
<TABLE>
<CAPTION>
BID SIDE
COST TO PROFIT (LOSS) VALUE OF
SPONSOR TO SPONSOR SECURITIES
-------- ------------- ----------
<S> <C> <C> <C>
The 5................................... $477,678 $1,077 $476,696
The 10.................................. $558,262 $ 885 $557,278
</TABLE>
(3) The Annualized Current Dividend per Share for each Security was calculated
by annualizing the latest quarterly or semi-annual common stock dividend
declaration on that Security. There can be no assurance that the future
dividend payments, if any, will be maintained in an amount equal to the
dividend listed above.
(4) Because this Security is of a securities-related issuer, initial purchases
do not exceed 5% of the Trust's total assets; purchases of each of the
other Securities have been increased accordingly. See "The Fund." As
described under "The Fund," the Sponsor may increase the percentage of the
Trust's portfolio represented by this Security (and consequently reduce
the percentage represented by all other Securities) within the first 90
days of the Trust's life so that each Security represents approximately an
equal percentage of the Trust's 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 Trusts. The Sponsor may serve as a specialist in
the stocks in the Trusts 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 Trusts. 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.
46
<PAGE>
<TABLE>
<CAPTION>
CONTENTS Page
----
<S> <C>
SUMMARY.................................. 2
ESSENTIAL INFORMATION.................... 5
FEE TABLE................................ 6
THE FUND................................. 7
THE TRUST PORTFOLIOS..................... 8
RISK FACTORS............................. 18
FEDERAL TAX STATUS....................... 21
PUBLIC OFFERING OF UNITS................. 25
Public Offering Price................... 25
Public Distribution of Units............ 26
Sponsor Profits......................... 28
MARKET FOR UNITS......................... 28
REDEMPTION............................... 28
General................................. 28
Computation of Redemption Price......... 30
INTERIM AND FINAL REDEMPTION AND
ROLLOVER IN NEW TRUSTS.................. 30
RETIREMENT PLANS......................... 32
UNITHOLDERS.............................. 33
Ownership of Units...................... 33
Distributions to Unitholders............ 34
Distribution Reinvestment............... 35
Statements to Unitholders............... 35
Rights of Unitholders................... 36
INVESTMENT SUPERVISION................... 36
ADMINISTRATION OF THE TRUSTS............. 37
The Trustee............................. 37
The Sponsor............................. 37
The Evaluator........................... 38
Amendment and Termination............... 38
Limitations on Liability................ 39
EXPENSES OF THE TRUSTS................... 40
LEGAL OPINIONS........................... 41
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS............................. 41
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS............................. 42
STATEMENTS OF CONDITION.................. 43
PORTFOLIOS............................... 44
</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 Trusts, the Trustee, or the Sponsor. Such
registration does not imply that the Trusts 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
Defined
Growth
Strategy
5 & 10
Sponsored by:
EVEREN
Unit
Investment
Trusts
Prospectus April 1, 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.
4.2. Consent of Cantor Fitzgerald & Co.
Ex-27. Financial Data Schedule.
</TABLE>
S-1
<PAGE>
SIGNATURES
The Registrant, Everen Unit Investment Trusts, Series 44 hereby identifies
Kemper Equity Portfolio Trusts Series 1 and Everen Unit Investment Trusts
Series 39 for purposes of the representations required by Rule 487 and
represents the following:
(1) That the Portfolio Securities deposited in the Series as to the
Securities of which this Registration Statement is being filed do not
differ materially in type or quality from those deposited in such previous
series;
(2) That, except to the extent necessary to identify the specific
Portfolio Securities deposited in, and to provide essential financial
information for, the Series with respect to the Securities of which this
Registration Statement is being filed, this Registration Statement does not
contain disclosures that differ in any material respect from those
contained in the Registration Statements for such previous series as to
which the effective date was determined by the Commission or the Staff; and
(3) That it has complied with Rule 460 under the Securities Act of 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
EVEREN UNIT INVESTMENT TRUSTS, SERIES 44 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 1ST DAY OF
APRIL, 1996.
EVEREN Unit Investment Trusts,
Series 44
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 APRIL 1, 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 Chairman and Chief Executive Officer
- -------------------------------------------
James R. Boris
/s/ Daniel D. Williams Senior Executive Vice President, Chief
- ------------------------------------------- Financial Officer and Treasurer
Daniel D. Williams
/s/ Frank V. Geremia Senior Executive Vice President
- -------------------------------------------
Frank V. Geremia
/s/ Stephen G. McConahey President and Chief Operating Officer
- -------------------------------------------
Stephen G. McConahey
/s/ Stanley R. Fallis Senior Executive Vice President and Chief
- ------------------------------------------- Administrative Officer
Stanley R. Fallis
/s/ David M. Greene Senior Executive Vice President and
- ------------------------------------------- Director of Client Services
David M. Greene
/s/ Thomas R. Reedy Senior Executive Vice President and
- ------------------------------------------- Director of Capital Markets
Thomas R. Reedy
/s/ Janet L. Reali Executive Vice President, Corporate Counsel
- ------------------------------------------- and Corporate Secretary
Janet L. Reali
</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> DEFINED GROWTH STRATEGY 5
<NUMBER> 01
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> APR-01-1996
<INVESTMENTS-AT-COST> 478,754
<INVESTMENTS-AT-VALUE> 478,754
<RECEIVABLES> 0
<ASSETS-OTHER> 28,922
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 507,676
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,922
<TOTAL-LIABILITIES> 28,922
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 478,754
<SHARES-COMMON-STOCK> 48,262
<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> 478,754
<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>
<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> DEFINED GROWTH STRATEGY 10
<NUMBER> 02
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> APR-01-1996
<INVESTMENTS-AT-COST> 559,147
<INVESTMENTS-AT-VALUE> 559,147
<RECEIVABLES> 28,922
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 588,069
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,922
<TOTAL-LIABILITIES> 28,922
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 559,147
<SHARES-COMMON-STOCK> 56,451
<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> 559,147
<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 44
TRUST AGREEMENT
This Trust Agreement dated as of April 1, 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. 333-01425) as filed with the Securities and
Exchange Commission on April 1, 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 existing on
the Initial Date of Deposit; provided, however, that after a Trust has been
in existence for ninety days the Percentage Ratio for such Trust shall mean
the actual number of shares of each Equity Security as a percent of all
shares of Equity Securities existing on the ninetieth day of such Trust's
existence. The Percentage Ratio shall be adjusted to the extent necessary,
and may be rounded, to reflect the occurrence of a stock dividend, a stock
split or a similar event which affects the capital structure of the issuer
of an Equity Security.
At the date hereof an application seeking exemptive relief for the Trusts
from Section 12(d)(3) of the Investment Company Act of 1940 is currently
pending before the United States Securities and Exchange Commission (filed
as of March 1, 1996). If Depositor receives notice prior to June 29, 1996
that such application for exemptive relief has been or will be granted by
the Securities and Exchange Commission, the Percentage Ratio shall mean,
from the date the Depositor receives such notice through June 29, 1996, the
number of shares of each Equity Security as a percent of all shares of
Equity Securities necessary to cause the Trust portfolio to hold, as nearly
as practicable, equal amounts of each Equity Security based on dollar
value. Notwithstanding any of the foregoing, after June 29, 1996, the
Percentage Ration shall mean the actual number of shares of each Equity
Security as a percent of all shares of Equity Securities existing on June
29, 1996.
-2-
<PAGE>
(8) Section 1.01 shall be amended by adding the following at the end of
such Section:
"(32) "Rollover Unitholder" shall have the meaning assigned to it in
Section 5.05.
(33) "Rollover Distribution" shall have the meaning assigned to it in
Section 5.05.
(34) "Distribution Agent" shall mean the Trustee acting in its
capacity as distribution agent pursuant to Section 5.05.
(35) "Special Redemption Period" shall mean the "Interim Redemption
and Rollover Period" and the "Final Redemption and Rollover Date"
described in the Prospectus under "Essential Information.""
(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 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) Notwithstanding anything to the contrary in Section 3.10, if at any
time equity securities of EVEREN Capital Corporation or any if 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.
22. The following Section 5.05 shall be added:
-3-
<PAGE>
"Section 5.05. Rollover of Units. (a) If the Depositor shall offer a
subsequent series of the Trusts (the "New Series"), the Trustee shall, at
the Depositor's sole cost and expense, include in the notice sent to
Unitholders specified in Section 8.02 a form of election whereby
Unitholders, whose redemption distribution would be in an amount sufficient
to purchase at least one Unit of the New Series, may elect to have their
Units(s) redeemed in kind in the manner provided in Section 5.02, the
Securities included in the redemption distribution sold, and the cash
proceeds applied by the Distribution Agent to purchase Units of the New
Series, all as hereinafter provided. The Trustee shall honor properly
completed election forms returned to the Trustee, accompanied by any
Certificate evidencing Units tendered for redemption or a properly
completed redemption request with respect to uncertificated Units, by its
close of business on the last day of any Special Redemption Period.
All Units so tendered by a Unitholder (a "Rollover Unitholder") shall be
redeemed and cancelled during the applicable Special Redemption Period.
Subject to payment by such Rollover Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption is to be
made in kind pursuant to Section 5.02 by distribution of cash and/or
Securities to the Distribution Agent during the applicable Special
Redemption Period of the net asset value (determined on the basis of the
Trust Fund Evaluation as of the day on which such redemption is made in
accordance with Section 4.01) multiplied by the number of Units being
redeemed (herein called the "Rollover Distribution"). Any Securities that
are made part of the Rollover Distribution shall be valued for purposes of
the redemption distribution as the day on which such redemption is made.
All Securities included in a Unitholder's Rollover Distribution shall be
sold by the Distribution Agent during the applicable Special Redemption
Period specified in the Prospectus pursuant to the Depositor's direction,
and the Distribution Agent shall employ the Depositor as broker in
connection with such sales. For such brokerage services, the Depositor
shall be entitled to compensation at its customary rates, provided however,
that its compensation shall not exceed the amount authorized by applicable
Securities laws and regulations. The Depositor shall direct that sales be
made in accordance with the guidelines set forth in the Prospectus under
the heading "Interim and Final Redemption and Rollover in New Trusts."
Should the Depositor fail to provide direction, the Distribution Agent
shall sell the Securities in the manner provided in the prospectus for
"less liquid Equity Securities." The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by reason of any sale
made pursuant to this Section.
Upon each trade date for sales of Securities included in the Rollover
Unitholder's Rollover Distribution, the Distribution Agent shall, as agent
for such Rollover Unitholder, enter into a contract with the Depositor to
purchase from the Depositor Units of the New Series (if any), at the
Depositor's public offering price for such Units on such day, and at such
reduced sales charge as shall be described in the
-4-
<PAGE>
prospectus for the Trusts. Such contract shall provide for purchase of the
maximum number of Units of the New Series whose purchase price is equal to
or less than the cash proceeds held by the Distribution Agent for the
Unitholder on such day (including therein the proceeds anticipated to be
received in respect of Securities traded on such day net of all brokerage
fees, governmental charges and any other expenses incurred in connection
with such sale), to the extent Units are available for purchase from the
Depositor. In the event a sale of Securities included in the Rollover
Unitholder's redemption distribution shall not be consummated in accordance
with its terms, the Distribution Agent shall apply the cash proceeds held
for such Unitholder as of the settlement date for the purchase of Units of
the New Series to purchase the maximum number of units which such cash
balance will permit, and the Depositor agrees that the settlement date for
Units whose purchase was not consummated as a result of insufficient funds
will be extended until cash proceeds from the Rollover Distribution are
available in a sufficient amount to settle such purchase. If the
Unitholder's Rollover Distribution will produce insufficient cash proceeds
to purchase all of the Units of the New Series contracted for, the
Depositor agrees that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any liability to the
Rollover Unitholder or the Distribution Agent. Any cash balance remaining
after such purchase shall be distributed within a reasonable time to the
Rollover Unitholder by check mailed to the address of such Unitholder on
the registration books of the Trustee. Units of the New Series will be
uncertificated unless and until the Rollover Unitholder requests a
certificate. Any cash held by the Distribution Agent shall be held in a
non-interest bearing account which will be of benefit to the Distribution
Agent in accordance with normal banking procedures. Neither the Trustee
nor the Distribution Agent shall have any responsibility or liability for
loss or depreciation resulting from any reinvestment made in accordance
with this paragraph, or for any failure to make such reinvestment in the
event the Depositor does not make Units available for purchase.
(b) Notwithstanding the foregoing, the Depositor may, in its
discretion at any time, decide not to offer a New Series in the
future, and if so, this Section 5.05 concerning the Rollover of Units
shall be inoperative.
(c) The Distribution Agent shall receive no fees for performing its
duties hereunder. The Distribution Agent shall, however, be entitled
to receive reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
(d) Notwithstanding the foregoing, in lieu of selling Securities
through the Depositor on the open market the Distribution Agent may
sell Securities from a terminating Trust into the corresponding New
Series if those Securities continue to meet the New Series' strategy.
The price for those Securities will be the closing sale price on the
sale date on the exchange where the Securities are principally traded,
as certified by the Sponsor.
-5-
<PAGE>
(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.
-6-
<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 44
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
<PAGE>
EXHIBIT 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
April 1, 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 44
---------------------------------------
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 44 (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. 333-01425) 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>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
April 1, 1996
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: EVEREN Unit Investment Trusts, Series 44
----------------------------------------
Gentlemen:
We have acted as counsel for EVEREN Unit Investment Trusts, a service
of EVEREN Securities, Inc., as Sponsor and Depositor of EVEREN Unit Investment
Trusts Series 44 (the "Fund"), in connection with the issuance of Units of
fractional undivided interest in the Fund, under a Trust Agreement dated April
1, 1996 (the "Indenture") between EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., as Depositor and Evaluator, and The Bank of New York,
as Trustee. The Fund is comprised of two separate unit investment trusts,
Defined Growth Strategy 5, Series 1 and Defined Growth Strategy 10, Series 1.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of each Trust will consist of a portfolio of equity
securities (the "Equity Securities") as set forth in the Prospectus.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
United States Federal income tax law:
(i) Each Trust is not an association taxable as a corporation but
will be governed by the provisions of subchapter J (relating to Trusts) of
chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata share of
each asset of the particular Trust in the proportion that the number of
Units held by
<PAGE>
him bears to the total number of Units outstanding. Under subpart E,
subchapter J of chapter 1 of the Code, income of a Trust will be treated as
income of each Unitholder in the proportion described, and an item of Trust
income will have the same character in the hands of a Unitholder as it
would have in the hands of the Trustee. Each Unitholder will be considered
to have received his pro rata share of income derived from each Trust asset
when such income is considered to be received by a Trust. A Unitholder's
pro rata portion of distributions of cash or property by a corporation with
respect to an Equity Security ("dividends" as defined by Section 316 of the
Code ) are taxable as ordinary income to the extent of such corporation's
current and accumulated "earnings and profits." A Unitholder's pro rata
portion of dividends which exceed such current and accumulated earnings and
profits will first reduce the Unitholder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unitholder's tax
basis in such Equity Security, shall be treated as gain from the sale or
exchange of property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of each
Security held by a Trust (in the proportion to the fair market values
thereof on the valuation date closest to the date the Unitholder purchases
his Units), in order to determine his tax basis for his pro rata portion of
each Security held by a Trust.
(iv) Gain or loss will be recognized to a Unitholder (subject to
various nonrecognition provisions under the code) upon redemption or sale
of his Units, except to the extent an in kind distribution of stock is
received by such Unitholder from a Trust as discussed below. Such gain or
loss is measured by comparing the proceeds of such redemption or sale with
the adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unitholder had acquired his units by purchase.
Such basis will be reduced, but not below zero, by the Unitholder's pro
rata portion of dividends with respect to each Equity Security which are
not taxable as ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by sale,
exchange, liquidation redemption, payment on maturity or otherwise) gain or
loss will be recognized to the Unitholder (subject to various
nonrecognition provisions under the code) and the amount thereof will be
measured by comparing the Unitholder's aliquot share of the total proceeds
from the transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning the tax basis
for his Units (as of the date on which his Units were acquired) among each
of the Trust assets of such Trust (as of the date on which his Units were
acquired) ratably according to their values as of the valuation date
nearest the date on which he purchased such Units. A Unitholder's basis in
his Units and of his fractional interest in each Trust asset must be
reduced, but not below zero, by the Unitholder's pro rata portion of
<PAGE>
dividends with respect to each Security which are not taxable as ordinary
income.
(vi) Under the Indenture, under certain circumstances, a Unitholder
tendering Units for redemption may request an in kind distribution of
Securities upon the redemption of Units or upon the termination of the
Trust. As previously discussed, prior to the redemption of Units or the
termination of a Trust, a Unitholder is considered as owning a pro rata
portion of each of the particular Trust's assets. The receipt of an in
kind distribution will result in a United States Unitholder receiving an
undivided interest in whole shares of stock and possibly cash. The
potential federal income tax consequences which may occur under an in kind
distribution with respect to each Security owned by the Trust will depend
upon whether or not a United States Uniholder receives cash in addition to
Securities. A "Security" for this purpose is a particular class of stock
issued by a particular corporation. A Unitholder will not recognize gain
or loss if a Unitholder only receives Securities in exchange for his or her
pro rata portion in the Securities held by the Trust. However, if a
Unitholder also receives cash in exchange for a fractional share of a
Security held by the Trust, such Unitholder will generally recognize gain
or loss based upon the difference between the amount of cash received by
the Unitholder and his tax basis in such fractional share of a Security
held by the Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of the gain
(or loss) recognized under the rules described above by the redeeming
Unitholder with respect to each Security owned by a Trust.
Dividends received by a Trust which are attributable to a corporation
owning Units in a Trust and which are taxable as ordinary income may be eligible
for the 70% dividends received deduction pursuant to Section 243(a) of the Code,
subject to the limitations imposed by Sections 246 and 246A of the Code. It
should be noted that various legislative proposals that would affect the
dividend received deduction have been introduced.
Section 67 of the Code provides that certain 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 such
individual's adjusted gross income. Temporary regulations have been issued
which require Unitholders to treat certain expenses of a Trust as miscellaneous
itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of the
pro rata interest in a Security is either sold by the Trust or redeemed or when
a Unitholder disposes of his Units in a taxable transaction, in each case for an
amount greater (or less) than his tax basis therefor.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
<PAGE>
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
Very truly yours
Chapman and Cutler
MJK/cjw
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
-------------------------------------------------
We have issued our report dated April 1, 1996 on the statements of condition
and related portfolios of EVEREN Unit Investment Trusts Series 44 as of April 1,
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
April 1, 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 44
Gentlemen:
You have provided to us and we have examined Registration Statement File No.
333-00065 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 October 13, 1995 (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]
