===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------------
AMENDMENT NO. 1
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:
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
250 North Rock Road, Suite 150
Wichita, Kansas 37206-2241
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ALEX R. MEITZNER MARK J. KNEEDY
Ranson & Associates, Inc. c/o Chapman and Cutler
250 North Rock Road, Suite 150 111 West Monroe Street
Wichita, Kansas 67206-2241 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
TITLE AND AMOUNT
OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series 53 An indefinite number of Units of Indefinite Not Applicable
Beneficial Interest pursuant to
Rule 24f-2 under the Investment
Company Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date
of the Registration Statement.
_
|_| Check box if it is proposed that this filing will become effective at
2:00 P.M. on ________, 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>
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
------------------------
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
<S> <C>
I. ORGANIZATION AND GENERAL INFORMATION
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 units ) The Fund; The Trust Portfolios; 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 affiliated persons ) Expenses of the Trust; Public Offering of Units
(f) Ratio of annual charges to income ) *
14. Issuance of trust's securities ) The Fund; Unitholders
<PAGE>
15. Receipt and handling of payments from purchasers ) *
16. Acquisition and disposition of underlying securities ) The Fund; The Trust Portfolios; Investment Supervision;
) Market for Units
17. Withdrawal or redemption ) Redemption; Public Offering of Units
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)
-ii-
<PAGE>
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 underlying securities ) Market for Units; Public Offering of Units; Redemption
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of trustee ) Administration of the Trusts
49. Fees and expenses of trustee ) Expenses of the Trusts
50. Trustee's 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) ) *
<FN>
* Inapplicable, answer negative or not required
</FN>
</TABLE>
-iii-
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
DEFINED GROWTH STRATEGY 5, SERIES 4 (JANUARY 1997 SERIES)
DEFINED GROWTH STRATEGY 10, SERIES 4 (JANUARY 1997 SERIES)
Defined Growth Strategy 5, Series 4 (January 1997 Series) ("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 4 (January 1997 Series) ("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 January 7, 1997.
<PAGE>
SUMMARY
THE FUND. Defined Growth Strategy 5, Series 4 (January 1997 Series) and
Defined Growth Strategy 10, Series 4 (January 1997 Series) are separate
underlying unit investment trusts included in Ranson Unit Investment Trusts,
Series 53 (the "Fund"), an investment company registered under the Investment
Company Act of 1940. Ranson & Associates, Inc. is the Sponsor of the Fund
and is successor sponsor of all unit investment trusts formerly sponsored by
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc.,
including EVEREN Unit Investment Trusts, Series 52 and previous Series.
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-
General." 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 semiannually 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 Zurich Kemper Investments, Inc. front-end load
mutual fund (other than those funds sold with a contingent deferred sales
2
<PAGE>
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 at any time
which are based on the current underlying closing sale 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 "1998 Fund"), if one is offered,
at a reduced sales charge (anticipated to be 1.75% 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 interim Rollover Unitholders in
the 1998 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 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 the close of business a day shortly prior to the initial
date of deposit of the 1998 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 1998 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 "l999 Fund"), if one is offered,
at a reduced sales charge (anticipated to be 1.75% of the Public Offering
Price of the 1999 Fund per unit per year). The Sponsor may, however, stop
offering units of the 1999 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
3
<PAGE>
the 1999 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 1999 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 1999 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 1999 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 1999 Fund.
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 February 28, 1999 (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 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>
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
ESSENTIAL INFORMATION
AS OF JANUARY 6, 1997*
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
THE 5 THE 10
--------- ----------
<S> <C> <C>
Number of Units (1) 25,561 25,461
Fractional Undivided Interest Per Unit(1) 1/25,561 1/25,461
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ 253,054 $ 252,067
Aggregate Value of Securities per Unit $ 9.90 $ 9.90
Plus total sales charge (3) $ 0.450 $ 0.450
Less deferred sales charge per Unit $ 0.350 $ 0.350
Public Offering Price Per Unit (4) $ 10.000 $ 10.000
Redemption Price Per Unit $ 9.725 $ 9.725
Sponsor's Initial Repurchase Price Per Unit $ 9.725 $ 9.725
Excess of Public Offering Price Per Unit over Redemption Price
Per Unit and Sponsor's Initial Repurchase Price Per Unit $ .275 $ .275
Calculation of Estimated Net Annual Dividends Per Unit: (5)
Estimated Gross Annual Dividends per Unit $ .27385 $ .30080
Less: Estimated Annual Operating Expense per Unit $ .03500 $ .03500
Estimated Net Annual Dividends per Unit $ .23885 $ .26580
Estimated Annual Organizational Expenses per Unit (6) $ .02200 $ .02200
Minimum Value of Trust under which Trust Agreement may be Terminated 40% of aggregate value of Securities at deposit
Interim Redemption and Rollover Period (7) January 31, 1998 through February 15, 1998
Final Redemption and Rollover Date March 31, 1999
Liquidation Period March 31, 1999 through April 30, 1999
Mandatory Termination Date March 31, 1999
Evaluator's Annual Evaluation Fee Maximum of $0.0020 per Unit
Trustee's Annual Fee $0.008 per Unit
Record and Computation Dates (8) December 15 and July 1
Distribution Dates (8) December 31 and July 15
</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 sale price on the New York Stock
Exchange.
(3) The total sales charge consists of an initial sales charge and a deferred
sales charge. For both The 5 and The 10, the initial sales charge is
equal to 1.00% of the Public Offering Price. Based on the Public
Offering Price on the business day prior to the Initial Date of Deposit
the total sales charge for both The 5 and The 10 is 4.5% (equivalent to
4.712% of the net amount invested). The deferred sales charge is equal
to $0.175 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) 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.
(6) 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 life of each Trust.
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.
(7) Unitholders who redeem their Units on or before February 15, 1998 will
not be assessed the deferred sales charge accumulated subsequent to such
date.
(8) Distributions from the Income Account, if any, will be made commencing on
July 15, 1997. Distributions from the Capital Account will be made
whenever the balance exceeds 1% of Trust net assets and 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 1.00% $0.100(1)
Deferred Sales Charge (accumulated prior to Interim
Redemption and Rollover Period) 1.75%(2) 0.175
Deferred Sales Charge (accumulated subsequent to Interim
Redemption and Rollover Period) (3) 1.75%(2) 0.175
-------- -------
Total Sales Charge 4.50%(4) $0.450
======== =======
ESTIMATED ANNUAL 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
Other Operating Expenses 0.030% 0.0030
-------- -------
Total 0.130%(5) $0.0130
======== =======
</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 0.130% on
the Trust, a 5% annual return and redemption at the end
of each time period $29 $69 $112 $230
</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 1.00% $0.100(1)
Deferred Sales Charge (accumulated prior to Interim
Redemption and Rollover Period) 1.75%(2) 0.175
Deferred Sales Charge (accumulated subsequent to Interim
Redemption and Rollover Period) (3) 1.75%(2) 0.175
-------- -------
Total Sales Charge 4.50%(4) $0.450
======== =======
Estimated Annual 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
Other Operating Expenses 0.030% 0.0030
-------- -------
Total 0.130%(5) $0.0130
======== =======
</TABLE>
6
<PAGE>
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 0.130% on the Trust,
a 5% annual return and redemption at the end of each
time period $29 $69 $112 $230
</TABLE>
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 $0.175 per Unit per
year, irrespective of purchase or redemption price deducted on a monthly
basis commencing February 28, 1997 through November 30, 1997 and March
31, 1998 through December 31, 1998 for 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 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.
(5) Actual annual operating expenses borne by a Trust plus organizational and
offering costs shall not exceed $0.035 per Unit. Actual annual expenses
exceeding such amount will be borne by the Sponsor. See "Expenses of the
Trusts."
THE FUND
Defined Growth Strategy 5, Series 4 and Defined Growth Strategy 10, Series 4
are separate underlying unit investment trusts included in Ranson Unit
Investment Trusts, Series 53, 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 Ranson &
Associates, Inc. (the "Sponsor") and The Bank of New York (the "Trustee").*
Ranson & Associates, Inc. is the successor sponsor of unit investment trusts
formerly sponsored by EVEREN Unit Investment Trusts, a service of EVEREN
Securities, Inc. Accordingly, Ranson Unit Investment Trusts, Series 53 is
the successor to EVEREN Unit Investment Trusts, Series 52 and previous
Series.
The portfolios contain common stocks issued by companies which are components
of the Dow Jones Industrial Average (the "DJIA"). Defined Growth Strategy 5,
Series 4 ("The 5") consists of a portfolio of the five companies with the
7
<PAGE>
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 4 ("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. 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 in lieu of cash) to pay for such contracted
Securities or cash (including a letter of credit) with instructions to
purchase additional Securities. Such additional deposits into The 5 and The
10 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. Although additional Units will be issued, each
Unit in The 5 and The 10 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. 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. If the Sponsor
deposits cash, existing and new investors may experience a dilution of their
investments and a reduction in their anticipated income because of
fluctuations in the prices of the Securities between the time of the cash
deposit and the purchase of the Securities and because the Trust will pay the
associated brokerage fees. To minimize this effect, the Trust will attempt
to purchase the Securities as close to the evaluation time or as close to the
evaluation prices as possible.
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
8
<PAGE>
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.
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.
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
Aluminum Company of America
American Express Company
American Telephone & Telegraph Company
Bethlehem Steel Corporation
Boeing Company
Caterpillar Inc.
Chevron Corporation
Coca-Cola Company
Walt Disney Company
E. I. du Pont de Nemours & Company
Eastman Kodak Company
Exxon Corporation
General Electric Company
General Motors
Goodyear Tire & Rubber Company
International Business Machines Corporation
International Paper Company
McDonald's Corporation
Merck & Company, Inc.
Minnesota Mining & Manufacturing Company
J.P. Morgan & Company, Inc.
Philip Morris Companies, Inc.
Procter & Gamble Company
Sears, Roebuck and Company
Texaco, Inc.
Union Carbide Corporation
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 both 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") and 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.
<TABLE>
COMPARISON OF TOTAL RETURN (2)
<CAPTION>
Five Lowest Priced Stocks
of the Ten Highest Ten Highest Yielding Dow Jones Industrial
Year Yielding DJIA Stocks (1) DJIA Stocks (1) Average (DJIA)
------ ------------------------- -------------------- --------------------
<S> <C> <C> <C>
1977 3.46% -0.56% -12.71%
1978 1.50 0.79 2.69
1979 12.05 14.03 10.52
1980 40.52 27.25 21.41
1981 3.80 7.60 -3.40
1982 41.88 25.35 25.79
1983 36.11 38.75 25.68
1984 11.07 5.96 1.06
1985 37.84 29.45 32.78
1986 30.31 34.37 26.91
1987 11.06 6.03 6.02
1988 22.63 24.33 15.95
1989 10.53 24.78 31.71
1990 -15.27 -7.57 -0.58
1991 61.94 35.73 23.93
1992 23.27 7.98 7.35
1993 34.53 27.26 16.74
1994 8.08 4.12 4.99
1995 30.41 36.58 36.49
1996 26.12 28.18 28.58
</TABLE>
- --------------------
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks
and the Ten Highest Yielding DJIA 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) Total Return represents the sum of the percentage change in market
value of each group of stocks between the first trading day of a period
and the total dividends paid on each group of stocks during the period
divided by the opening market value of each group of stocks as of the
first trading day of a period. 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 Five Lowest Priced Stocks of the Ten Highest
Yielding DJIA Stocks and the Ten Highest Yielding DJIA Stocks achieved an
average annual total return of 21.59% and 18.52%, respectively, as
compared to the average annual total return of the DJIA which was 15.10%.
Although the Trusts seek to achieve a better performance than the DJIA,
there can be no assurance that either Trust will outperform the DJIA over
its two year life or over consecutive rollover periods, if available.
10
<PAGE>
<TABLE>
[This table represent the plot points of a graph in the Prospectus]
IF YOU HAD INVESTED $10,000 ON JANUARY 1, 1977
VALUE = YEAR ENDED DECEMBER 31
<CAPTION>
Five Lowest Priced Stocks
of the Ten Highest Ten Highest Yielding Dow Jones Industrial
Year Yielding DJIA Stocks DJIA Stocks Average (DJIA)
-------- ------------------------- -------------------- --------------------
<S> <C> <C> <C>
1/1/77 10,000 10,000 10,000
1977 10,346 9,944 8,729
1978 10,501 10,022 8,963
1979 11,766 11,428 9,906
1980 16,534 14,543 12,027
1981 17,162 15,648 11,618
1982 24,350 19,616 14,615
1983 33,143 27,218 18,368
1984 36,812 28,840 18,563
1985 50,742 37,333 24,648
1986 66,122 49,418 31,281
1987 73,435 52,398 33,164
1988 90,053 65,147 38,454
1989 99,536 81,291 50,648
1990 84,337 75,137 50,359
1991 136,575 101,983 62,410
1992 168,356 110,122 66,997
1993 226,490 140,141 78,212
1994 244,790 145,915 82,115
1995 319,231 199,291 112,079
1996 402,614 256,248 143,663
</TABLE>
The chart above represents past performance of the DJIA, the Five Lowest
Priced Stocks of the Ten Highest Yielding DJIA Stocks and the Ten Highest
Yielding DJIA Stocks (but not the Trusts) 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 either Trust will outperform the DJIA over its
two year life or over consecutive rollover periods, if available.
The returns in the "Comparison of Total Return" table and the related chart
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,
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<PAGE>
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 table, both the Ten Highest Yielding DJIA Stocks and 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.
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 affect the industry include the price and availability of oil from the
12
<PAGE>
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
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's 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.
13
<PAGE>
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.
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.
The Trust Agreement authorizes the Sponsor to increase the size of the Trusts
and the number of Units thereof by the deposit of additional Securities, or
cash (including a letter of credit) with instructions to purchase additional
14
<PAGE>
Securities, in the Trusts and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the cash deposit and the purchase of the Securities and
because the Trusts will pay the associated brokerage fees. To minimize this
effect, the Trusts will attempt to purchase the Securities as close to the
evaluation time or as close to the evaluation prices as possible.
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.
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 the Trust asset when
such income is considered to be 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, taxable 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 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 tax basis for his pro rata
portion of each Security held by such Trust. For federal income tax
15
<PAGE>
purposes, a Unitholder's pro rata portion of dividends as defined by
Section 316 of the Code, paid by a corporation 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
Unitholder'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 such capital 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 connection
with the exchange of Units for units in either new series of a Trust (the
"1998 Fund" and the "1999 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 Unitholders deemed ownership of the securities
underlying the Units in the 1998 or 1999 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
16
<PAGE>
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. 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.
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 (which is defined as net
long-term capital gain over net short-term capital loss for a taxable year)
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
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<PAGE>
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 1998 or 1999 Fund in
a taxable transaction, such Unitholder will recognize gains, if any, but
generally will 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 1998 or 1999 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 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 will
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<PAGE>
generally be subject to United States income taxation and withholding in the
case of Units held by nonresident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax
advisers.
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.
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.
The foregoing discussion relates only to the tax treatment of United States
Unitholders with regard to United States federal income taxes; Unitholders
may be subject to foreign, state and local taxation. Unitholders should
consult their tax advisers regarding potential foreign, state or local
taxation with respect to the Units.
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 for each
Trust is equal to 1.00% of the Public Offering Price. Based on the Public
Offering Price on the business day prior to the Initial Date of Deposit the
maximum sales charge for both The 5 and The 10 is 4.5% of the Public Offering
Price (equivalent to 4.712% 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 February, 1997 through November 30, 1997 and
again on the first day of March, 1998 through December 31, 1998 a deferred
sales charge of $0.0175 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 $0.35 per Unit. Unitholders who redeem their Units on or before
February 15, 1998 will not be assessed the deferred sales charge commencing
March 1, 1998. The total amount of deferred sales charge payments for The 5
and The 10 will be $0.175 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.
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<PAGE>
The sales charges for each Trust 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 DOLLAR PERCENT OF PERCENT OF
OFFERING AMOUNT AMOUNT OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE PER UNIT PER UNIT PRICE INVESTED
- ------------------- ------------ -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Less than 5,000 1.00% $0.175 $0.175 4.50% 4.712%
5,000-9,999 0.75% $0.175 $0.175 4.25% 4.439%
10,000-14,999 0.50% $0.175 $0.175 4.00% 4.167%
15,000 or more 0.20% $0.175 $0.175 3.70% 3.842%
</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 $0.175 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.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to dealers
and other selling agents for purchases (see "Public Distribution of Units")
by officers, directors and employees of the Sponsor and its affiliates and
registered representatives of selling firms and by investors who purchase
Units through registered investment advisers, certified financial planners or
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management services, or
provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed.
Unitholders of any Kemper Equity Portfolio Trust series and unitholders of
any Ranson or EVEREN common stock unit investment trust series (including
Defined Growth Strategy 5 and Defined Growth Strategy 10 series) may utilize
their redemption or termination proceeds to purchase Units of the Trusts
subject only to the deferred sales charge described herein.
Unitholders of unaffiliated unit investment trusts having an investment
strategy similar to the investment strategy of the Trusts may utilize
proceeds received upon termination or upon redemption immediately preceding
termination of such unaffiliated trust to purchase Units of the Trusts
subject only to the deferred sales charge described herein.
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
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<PAGE>
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 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.
21
<PAGE>
<TABLE>
<CAPTION>
COMMISSION PRIOR TO INTERIM
REDEMPTION AND ROLLOVER COMMISSION AFTER INTERIM
PERIOD REDEMPTION AND ROLLOVER PERIOD
-------------------------------------- --------------------------------------
PRIMARY MARKET FIRM PRIMARY MARKET FIRM
SALES OR SALES OR
ARRANGEMENTS ARRANGEMENTS
(VOLUME (VOLUME
CONCESSIONS IN CONCESSIONS IN
REGULAR $1000)** REGULAR $1000)**
CONCESSION --------------------- CONCESSION ---------------------
OR AGENCY $500- $1,000 OR AGENCY $500- $1,000
NUMBER OF UNITS* COMMISSION $999 OR MORE COMMISSION $999 OR MORE
- ----------------- ------------ --------- ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
Less than 5,000 2.00% 2.05% 2.10% $0.110 $0.115 $0.120
5,000 but less than 10,000 1.80 1.85 1.90 0.110 0.115 0.120
10,000 but less than 15,000 1.60 1.65 1.70 0.110 0.115 0.120
15,000 or more 1.40 1.45 1.45 0.110 0.115 0.120
Rollover Sales 1.10 1.20 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 January 31, 1997 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 January 31, 1997 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 Ranson equity trust series issued
simultaneously can be combined for the purposes of achieving the volume
discount. Only sales through Ranson qualify for volume discounts and
secondary purchases do not apply. The Sponsor 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 January 1997 through June 1997.
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.
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
22
<PAGE>
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 sale 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 sale prices of the Securities in the Trusts.
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 no later than the seventh calendar
day following the day on which a tender for redemption is received (the
"Redemption Date"), or if the seventh calendar day is not a business day, on
the first business day prior thereto, 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
23
<PAGE>
"Essential Information," next following such tender, multiplied by the number
of Units being redeemed. Any Units redeemed shall be canceled 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" under "Summary" in 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 Depository 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" under
"Summary" in this Prospectus upon notice to the Unitholders prior to the
specified date.
24
<PAGE>
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.
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 sale 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 sale 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 moneys 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 sale price on the exchange or Nasdaq
(unless the Evaluator deems the price inappropriate as a basis for
evaluation). If the Security is not so listed or, if so listed and the
principal market for the Security is other than on the exchange or system,
the evaluation will generally be made by the Evaluator in good faith based on
the last bid price on the over-the-counter market (unless the Evaluator deems
such price inappropriate as a basis for evaluation) or, if a bid price is not
available, (1) on the basis of the current bid price for comparable
securities, (2) by the Evaluator's appraising the value of the Securities in
good faith at the bid side of the market or (3) by any combination thereof.
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
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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.
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.
Pursuant to an exemptive order from the Securities and Exchange Commission,
each terminating Trust (and the Distribution Agent on behalf of Rollover
Unitholders) may sell Securities to the 1998 Fund or the 1999 Fund if those
Securities continue to meet the individual Trust's strategy as set forth
under "The Fund." The exemption will enable each Trust to eliminate
commission costs on these transactions. 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 and confirmed
by the Trustee of each Trust.
The Interim Rollover Unitholders' proceeds will be invested in the next
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. 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 "1999 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 1999 Fund. The proceeds of redemption will be used to buy
1999 Fund units in the appropriate portfolio as the proceeds become
available.
The Sponsor intends to create the 1998 and 1999 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 1998 and 1999 Fund portfolios, and it is intended
that Rollover Unitholders will be given first priority to purchase the 1998
and 1999 Fund units. There can be no assurance, however, as to the exact
timing of the creation of the 1998 and 1999 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
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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 1998 and 1999 Fund units will be distributed shortly after the
Interim Redemption and Rollover Period or the Final Redemption and Rollover
Date.
Any Rollover Unitholder may then be redeemed out of the Fund and become a
holder of an entirely different unit investment trust in the 1998 or 1999
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 1998 or 1999 Fund units, the proceeds of the sales (and any
other cash distributed upon redemption) will be invested in the 1998 or 1999
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 1.90% of the Public Offering Price of the 1998 or 1999 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 1998 and 1999 Funds and each subsequent series of the Fund, approximately
a year after that Series' creation.
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 1998 or 1999 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 1998 or 1999 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 1998 and 1999 Fund upon
notice to the Unitholders.
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RETIREMENT PLANS
The Trusts may be well suited for purchase by individual Retirement Accounts,
Keogh Plans, pension funds and other qualified retirement plans. 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.
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 a Ranson 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 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 Record and Computation Dates of
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each year on a pro rata basis to Unitholders of record as of the preceding
Record and Computation Date. 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 and Computation 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.
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 Zurich Kemper Investments, 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 Zurich 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.
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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 and
Computation 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;
B. As to the Capital Account: (1) the dates of disposition of any
Securities and the net proceeds received therefrom; (2) deductions for
payment of applicable taxes and fees and expenses of the Trust held for
distribution to Unitholders of record as of a date prior to the
determination; and (3) the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; and
C. The following information: (1) a list of the Securities as of the last
business day of such calendar year; (2) the number of Units outstanding
on the last business day of such calendar year; (3) the Redemption Price
based on the last evaluation made during such calendar year; and (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.
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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. Proceeds from the sale
of Securities (or any securities or other property received by a Trust in
exchange for 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 unit investment
trust division 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
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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. Ranson & Associates, Inc., the Sponsor of the Trusts, is an
investment banking firm created in 1995 by a number of former owners and
employees of Ranson Capital Corporation. On November 26, 1996, Ranson &
Associates, Inc. purchased all existing unit investment trusts sponsored by
EVEREN Securities, Inc. Accordingly, Ranson & Associates is the successor
sponsor to unit investment trusts formerly sponsored by EVEREN Unit
Investment Trusts, a service of EVEREN Securities, Inc. Ranson & Associates,
is also the sponsor and successor sponsor of Series of The Kansas Tax-Exempt
Trust and Multi-State Series of The Ranson Municipal Trust. Ranson &
Associates, Inc. is the successor to a series of companies, of first of which
was originally organized in Kansas in 1935. During its history, Ranson &
Associates, Inc. and its predecessors have been active in public and
corporate finance and have sold bonds and unit investment trusts and
maintained secondary market activities relating thereto. At present, Ranson
& Associates, Inc., which is a member of the National Association of
Securities Dealers, Inc., is the Sponsor to each of the above-named unit
investment trusts and serves as the financial advisor and as an underwriter
for issuers in the Midwest and Southwest, especially in Kansas, Missouri and
Texas. The Sponsor's offices are located at 250 North Rock Road, Suite 150,
Wichita, Kansas 67206-2241.
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 EVALUATOR. Ranson & Associates, Inc., 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
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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 662/3% 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 662/3% 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 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.
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.
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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 moneys, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust
Agreement, nor shall the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the Trustee of any
Securities. In the event that the Sponsor shall fail to act, the Trustee may
act and shall not be liable for any such action taken by it in good faith.
The Trustee shall not be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Securities or upon the
interest thereof. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The Trust Agreement provides that the determinations made by the
Evaluator shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee or Unitholders for errors in judgment, but shall be
liable for its gross negligence, bad faith or willful misconduct or its
reckless disregard for its obligations under the Trust Agreement.
EXPENSES OF THE 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 the life of such Trust. 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
34
<PAGE>
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."
Notwithstanding anything to the contrary herein, the total annual expenses
paid by a Trust shall not exceed $0.035 per Unit of such Trust; to the extent
that the annual expenses to be charged to a Trust exceed such amount, the
Sponsor will pay such excess amount at its own expense.
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.
35
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
We have audited the accompanying statements of condition and the related
portfolios of Ranson Unit Investment Trusts, Series 53, as of January 7,
1997. 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 Ranson Unit Investment
Trusts, Series 53 as of January 7, 1997, in conformity with generally
accepted accounting principles,
GRANT THORNTON LLP
Chicago, Illinois
January 7, 1997
36
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
STATEMENTS OF CONDITION
AT THE OPENING OF BUSINESS ON JANUARY 7, 1997, THE INITIAL DATE OF DEPOSIT
<TABLE>
<CAPTION>
TRUST PROPERTY
THE 5 THE 10
----- ------
<S> <C> <C>
Contracts to purchase Securities (1) (2) $253,054 $252,067
Organizational costs (3) 11,000 11,000
-------- --------
Total $264,054 $263,067
======== ========
Number of Units 25,561 25,461
======== ========
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-
Accrued organizational costs (3) $11,000 $11,000
Interest of Unitholders-
Cost to investors (4). 255,610 254,613
Less: Gross underwriting commission (4) 2,556 2,546
-------- --------
Net interest to Unitholders (1) (2) (4) 253,054 252,067
-------- --------
Total $264,054 $263,067
======== ========
</TABLE>
- --------------------
(1) Aggregate cost of the Securities is based on the closing sale price
evaluations as determined by the Trustee.
(2) Cash in the amount of $504,803 has been deposited with the Trustee
covering the funds 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 the life of such Trust.
Organizational costs have been estimated based on a projected Trust size
of $5,000,000 and $5,000,000 for The 5 and The 10, respectively. The
Sponsor has agreed to rebate to the Trusts operating expenses including
organizational costs in excess of $0.035 per Unit. Organizational costs
may be more or less than this estimate based upon the actual size of each
Trust.
(4) The aggregate cost to investors includes the applicable sales charge
assuming no reduction of sales charges for quantity purchases.
37
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 53
PORTFOLIOS AS OF JANUARY 7, 1997
DEFINED GROWTH STRATEGY 5, SERIES 4 (JANUARY 1997 SERIES)
<TABLE>
<CAPTION>
AGGREGATE ANNUALIZED
NAME OF ISSUER NUMBER COSTS 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>
T AT&T Corp. 1299 39.500 $ 51,311.00 $1.256
CHV Chevron Corp. 756 66.875 50,558.00 2.160
GM General Motors Corp. 849 59.125 50,197.00 1.600
IP International Paper Co. 1205 41.625 50,158.00 1.000
MMM Minnesota Mining & Manufacturing Co. 598 85.000 50,830.00 1.960
-----------
$253,054.00
===========
</TABLE>
DEFINED GROWTH STRATEGY 10, SERIES 4 (JANUARY 1997 SERIES)
<TABLE>
<CAPTION>
AGGREGATE ANNUALIZED
NAME OF ISSUER NUMBER COSTS 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>
T AT&T Corp. 649 39.500 $ 25,636.00 $1.256
CHV Chevron Corp. 378 66.875 25,279.00 2.160
DD Du Pont (E.I.) De Nemours & Co. 252 99.375 25,043.00 2.280
XON Exxon Corp. 251 100.000 25,100.00 3.160
GM General Motors Corp. 425 59.125 25,128.00 1.600
IP International Paper Co. 602 41.625 25,058.00 1.000
MMM Minnesota Mining & Manufacturing Co. 299 85.000 25,415.00 1.960
JPM Morgan, J. P. & Co., Inc. 254 99.000 25,146.00 3.520
MO Philip Morris Cos., Inc. 221 113.750 25,139.00 4.800
TX Texaco, Inc. 246 102.125 25,123.00 3.400
-----------
$252,067.00
===========
</TABLE>
38
<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 January 6, 1997 and all have an expected settlement date
of January 9, 1997 (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 sale 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:
COST TO PROFIT (LOSS)
SPONSOR TO SPONSOR
---------- -------------
The 5 $252,903 $151
The 10 $251,900 $167
(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.
39
<PAGE>
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.
-------------------------
CONTENTS PAGE
SUMMARY 2
ESSENTIAL INFORMATION 5
THE FUND 7
THE TRUST PORTFOLIOS 8
RISK FACTORS 12
FEDERAL TAX STATUS 15
PUBLIC OFFERING OF UNITS 19
MARKET FOR UNITS 23
REDEMPTION 23
INTERIM AND FINAL REDEMPTION AND
ROLLOVER IN NEW TRUSTS 25
RETIREMENT PLANS 28
UNITHOLDERS 28
INVESTMENT SUPERVISION 31
ADMINISTRATION OF THE TRUSTS 31
EXPENSES OF THE TRUSTS 34
LEGAL OPINIONS 35
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 35
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS 36
STATEMENTS OF CONDITION 37
PORTFOLIOS 38
NOTES TO PORTFOLIOS 39
-------------------------
When Units of the Trusts are no longer available, or for investors who will
reinvest into subsequent series of the Trusts, this Prospectus may be used as
a preliminary prospectus for a future series; in which case investors should
note the following:
Information contained herein is subject to completion or amendment. A
registration statement relating to securities of a future series has been
filed with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. The Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
Ranson & Associates, Inc.
250 N. Rock Road, Suite 150
Wichita, KS 67206-2241
<PAGE>
DEFINED
GROWTH
STRATEGY
5 & 10
January 1997 Series
Ranson
Unit
Investment
Trusts
PROSPECTUS JANUARY 7, 1997
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents.
The facing sheet
The Cross-Reference sheets
The Prospectus
The Signatures
The following exhibits.
1.1. Trust Agreement.
1.1.1. Standard Terms and Conditions of Trust.
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.
3.2. Opinion of counsel to the Sponsor as to the tax status of the
securities being registered.
4.1. Consent of Independent Certified Public Accountants.
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Ranson Unit Investment Trusts, Series 53 has duly caused this
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in the City of Wichita, and State of Kansas, on
the 7th day of January, 1997.
RANSON UNIT INVESTMENT TRUSTS, SERIES 53,
Registrant
By: RANSON & ASSOCIATES, INC.,
Depositor
By: ALEX R. MEITZNER
---------------------------------------
Alex R. Meitzner
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on January 7, 1997 by the following
persons, who constitute a majority of the Board of Directors of Ranson &
Associates, Inc.
SIGNATURE TITLE
- --------------------- --------------------
DOUGLAS K. ROGERS Executive Vice )
- --------------------- President and Director )
Douglas K. Rogers
ALEX R. MEITZNER Chairman of the Board )
- --------------------- of Directors )
Alex R. Meitzner
ROBIN K. PINKERTON President, Secretary, )
- --------------------- Treasurer and Director ) ALEX R. MEITZNER
Robin K. Pinkerton -----------------------
Alex R. Meitzner
- ------------------------------------------------------------------------------
An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of The Kansas Tax-Exempt Trust, Series 51 (File No. 33-
46376) and Series 52 (File No. 33-47687) and the same are hereby incorporated
herein by this reference.
S-2
EXHIBIT 1.1
RANSON UNIT INVESTMENT TRUSTS
SERIES 53
TRUST AGREEMENT
This Trust Agreement dated as of January 7, 1997 between Ranson &
Associates, 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 Equity Trusts Sponsored by Ranson & Associates, Inc., Effective January
7, 1997" (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. 1 to the
Trust's Registration Statement (Registration No. 333-17811) as filed
with the Securities and Exchange Commission on January 7, 1997. The
fractional undivided interest may (a) increase by the number of any
<PAGE>
additional Units issued pursuant to 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) 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.
(8) 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.
(9) Notwithstanding anything to the contrary herein, the total
annual expenses paid by a Trust in accordance with Section 3.05(a),
excluding amounts specified by Section 3.05(a)(v) with respect to a
deferred sales charge, shall not exceed $0.035 per Unit of such Trust
then outstanding; to the extent such annual expenses to be charged to a
Trust exceed such amount, the excess shall be paid by the Depositor at
its own expense and not by the Trust.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed.
RANSON & ASSOCIATES, INC.,
Depositor
By /s/ ROBIN K. PINKERTON
___________________________
Robin K. Pinkerton
THE BANK OF NEW YORK,
Trustee
By /s/ Ted Rudich
___________________________
Vice President
<PAGE>
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS
SERIES 53
(Note: Incorporated herein and made a part hereof are the "Portfolios"
as set forth in the Prospectus.)
EXHIBIT 1.1.1
STANDARD TERMS AND CONDITIONS OF TRUST
For
EQUITY TRUSTS
Sponsored by
RANSON & ASSOCIATES, INC.
Effective: January 7, 1997
Among
RANSON & ASSOCIATES, INC.
Depositor, Evaluator and Supervisor
and
THE BANK OF NEW YORK
Trustee
-----------------------------------
Applicable to Ranson Unit Investment Trusts, Series 53
and certain subsequent Series
-----------------------------------
TABLE OF CONTENTS
Page
Preambles 1
ARTICLE I DEFINITIONS 1
Section 1.01. Definitions 1
ARTICLE II DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST; FORM
AND ISSUANCE OF CERTIFICATES; SEPARATE TRUSTS 7
Section 2.01. Deposit of Securities 7
Section 2.02. Acceptance of Trust 9
Section 2.03. Issuance of Units 9
Section 2.04. Form of Certificates 10
Section 2.05. Separate Trusts 10
ARTICLE III ADMINISTRATION OF FUND 11
Section 3.01. Initial Costs 11
Section 3.02. Income Account 11
Section 3.03. Capital Account 12
Section 3.04. Reserve Account 12
Section 3.05. Deductions and Distributions 12
Section 3.06. Distribution Statements 14
Section 3.07. Sale of Securities 16
Section 3.08. Counsel 17
Section 3.09. Liability of Depositor 17
Section 3.10. Notice to Depositor 18
Section 3.11. Replacement Securities 18
Section 3.12. Supervisor 19
Section 3.13. Deferred Sales Charge 20
Section 3.14. Foreign Exchange Transactions; Reclaiming
Foreign Taxes 21
Section 3.15. Foreign Exchange Transactions; Foreign Currency
Exchange 21
ARTICLE IV EVALUATION OF SECURITIES; EVALUATOR 21
Section 4.01. Evaluation by Evaluator 21
Section 4.02. Information for Unitholders 22
Section 4.03. Compensation of Evaluator 22
Section 4.04. Liability of Evaluator 23
Section 4.05. Resignation and Removal of Evaluator; Successor 23
ARTICLE V EVALUATION, REDEMPTION, PURCHASE, TRANSFER,
INTERCHANGE OR REPLACEMENT OF UNITS 24
-i-
<PAGE>
Section 5.01. Trust Evaluation 24
Section 5.02. Redemptions by Trustee; Purchases by Depositor 25
Section 5.03. Transfer or Interchange of Units 27
Section 5.04. Certificates Mutilated, Destroyed, Stolen or
Lost 28
Section 5.05. Rollover of Units 29
ARTICLE VI TRUSTEE 31
Section 6.01. General Definition of Trustee's Liabilities,
Rights and Duties 31
Section 6.02. Books, Records and Reports 37
Section 6.03. Indenture and List of Securities on File 38
Section 6.04. Compensation 38
Section 6.05. Removal and Resignation of Trustee; Successor 39
Section 6.06. Qualifications of Trustee 40
ARTICLE VII RIGHTS OF UNITHOLDERS 40
Section 7.01. Beneficiaries of Trust 40
Section 7.02. Rights, Terms and Conditions 41
ARTICLE VIII ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS 41
Section 8.01. Amendments 41
Section 8.02. Termination 42
Section 8.03. Construction 45
Section 8.04. Registration of Units 45
Section 8.05. Written Notice 45
Section 8.06. Severability 45
Section 8.07. Dissolution of Depositor Not to Terminate 45
-ii-
<PAGE>
EXHIBIT 1.1.1
STANDARD TERMS AND CONDITIONS OF TRUST
EFFECTIVE: JANUARY 7, 1997
These Standard Terms and Conditions of Trust effective January 7,
1997 are executed by Ranson & Associates, Inc., as Depositor, Evaluator
and Supervisor and The Bank of New York, as Trustee.Preambles
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisor and the Trustee agree as
follows:
INTRODUCTION
These Standard Terms and Conditions of Trust, effective January 7,
1997, shall be applicable to certain Ranson Unit Investment Trusts Series
established after the date of effectiveness hereof containing Equity
Securities, as provided in this paragraph. For all Series established
after the date of effectiveness hereof to which these Standard Terms and
Conditions of Trust effective January 7, 1997 are to be applicable, the
Depositor, Evaluator and Supervisor and the Trustee shall execute a Trust
Agreement incorporating by reference these Standard Terms and Conditions
of Trust effective January 7, 1997 and designating any exclusions from or
additions or exceptions to such incorporation by reference for the
purposes of that Series or variation of the terms hereof for the purposes
of that Series.
Now, Therefore, in consideration of the premises and of the mutual
agreements herein contained, the Depositor, Evaluator, Supervisor and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Indenture the
following words and phrases, unless the context clearly indicates
otherwise, shall have the following meanings:
(1) "Depositor" shall mean Ranson & Associates, Inc. and its
successors in interest, or any successor depositor appointed as
hereinafter provided.
(2) "Trustee" shall mean The Bank of New York, or any
successor trustee appointed as hereinafter provided.
(3) "Evaluator" shall mean Ranson & Associates, Inc. and its
successors in interest, or any successor evaluator appointed as
hereinafter provided.
<PAGE>
(4) "Supervisor" shall mean Ranson & Associates, Inc. and its
successors in interest, or any successor portfolio supervisor
appointed as hereinafter provided.
(5) "Business Day" shall mean any day on which the New York
Stock Exchange is open.
(6) "Capital Account Distribution Date" shall have the meaning
assigned to it in the Trust Agreement.
(7) "Capital Account Record Date" shall have the meaning
assigned to it in the Trust Agreement.
(8) "Certificate" shall mean any one of the certificates
executed by the Trustee and the Depositor in substantially the
following form with the blanks appropriately filled in:
-2-
<PAGE>
Face of Certificate
NUMBER RANSON UNIT INVESTMENT TRUSTS UNITS
CERTIFICATE OF BENEFICIAL OWNERSHIP
This certifies that _______________________________________ is the
registered owner of ____ units(s) of fractional undivided interest in
Ranson Unit Investment Trusts of the above-named Series (herein referred
to as the "Trust") created under the laws of the State of New York
pursuant to the Agreement and the related Trust Agreement, a copy of
which is available at the office of the Trustee. This Certificate is
issued under and is subject to the terms, provisions and conditions of
the aforesaid Agreement and the related Trust Agreement to which the
holder of this Certificate by virtue of the acceptance hereof assents and
is bound. This Certificate is transferable and interchangeable by the
registered owner in person or by his duly authorized attorney at the
office of the Trustee upon surrender of this Certificate properly
endorsed or accompanied by a written instrument of transfer and any other
documents that the Trustee may require for transfer, in form satisfactory
to the Trustee, and payment of the fees and expenses provided in the
Agreement.
WITNESS the facsimile signature of the Depositor and the manual
signature of an authorized signatory of the Trustee.
Dated
RANSON & ASSOCIATES, INC., THE BANK OF NEW YORK,
Depositor Trustee,
By By
---------------------------- -----------------------------
Authorized Signature Authorized Signature
-3-
<PAGE>
Reverse of Certificate
FORM OF ASSIGNMENT
For Value Received, the undersigned hereby sells, assigns and
transfers _________ Units represented by this Certificate unto
-------------------------------------
-------------------------------------
Please Insert Social Security
or Other
Identifying Number of Assignee
------------------------------
------------------------------
and does hereby irrevocably constitute and appoint attorney, to transfer
said Units on the books of the Trustee, with full power of substitution
in the premises.
Dated:
------------------------ -------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the Certificate in every particular, without
alteration or enlargement or any change whatever, and
must be guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee program in addition to, or
in substitution for, STAMP, as may be accepted by the
Trustee.
Signature Guaranteed
By
-----------------------------------
-4-
<PAGE>
(9) "Contract Securities" shall mean Securities which are to
be acquired by a Trust pursuant to purchase contracts which have
been assigned to the Trustee.
(10) "Deferred Sales Charge" shall have the meaning assigned to
it in the Trust Agreement.
(11) "Distribution Agent" shall mean the Trustee acting in its
capacity as distribution agent pursuant to Section 5.05.
(12) "Equity Securities" shall mean any equity securities of
corporations or other entities deposited in a Trust as specified in
the Trust Agreement thereof.
(13) "Fund" shall mean the collective Trusts created by the
Trust Agreement, which shall consist of Securities held pursuant and
subject to the Indenture, together with all undistributed income or
other amounts received or accrued thereon, any undistributed cash
held in the Income and Capital Accounts or otherwise realized from
the sale, redemption, liquidation or maturity thereof. Such amounts
as may be on deposit in the Reserve Account as hereinafter
established shall be excluded from the Fund.
(14) "In Kind Distribution" shall have the meaning set forth in
Section 5.02 hereof.
(15) "Income Account Distribution Date" shall have the meaning
assigned to it in the Trust Agreement.
(16) "Income Account Record Date" shall have the meaning
assigned to it in the Trust Agreement.
(17) "Indenture" shall mean these Standard Terms and Conditions
of Trust as originally executed or, if amended as hereinafter
provided, as so amended, together with the Trust Agreement creating
a particular series of the Fund.
(18) "Initial Date of Deposit" shall have the meaning assigned
to it in the Trust Agreement.
(19) "Letter of Credit" shall mean the letter of credit or
letters of credit provided to the Trustee by a financial institution
for the purchase of any Contract Securities deposited in the Fund.
(20) "Mandatory Termination Date" shall be the date so
specified in the Prospectus.
(21) "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
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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.
(22) "Prospectus" shall mean (a) the prospectus relating to a
Trust filed with the Securities and Exchange Commission pursuant to
Rule 497(b) under the Securities Act of 1933, as amended, and dated
the date of the Trust Agreement or (b) if any post-effective
amendment to such prospectus shall have been subsequently made
effective under the Securities Act of 1933, as amended, such post
effective amendment thereto.
(23) "Reinvestment Securities" shall have the meaning assigned
to it in Section 2.01 hereof.
(24) "Replacement Security" shall have the meaning assigned to
it in Section 3.11 hereof.
(25) "Rollover Distribution" shall have the meaning assigned to
it in Section 5.05 hereof.
(26) "Rollover Unitholder" shall have the meaning assigned to
it in Section 5.05 hereof.
(27) "Securities" shall mean (a) Equity Securities deposited in
a Trust, which Securities are listed in the various Schedules to the
Trust Agreement or are deposited in the Trust pursuant to
Section 2.01(b) hereof, (b) Replacement Securities acquired pursuant
to Section 3.11 hereof, as may from time to time to be construed to
be held as part of the Trust and (c) distributions of the same
securities.
(28) "Special Redemption Period" shall have the meaning
assigned to it in the Trust Agreement.
(29) "Supplemental Indenture" shall mean an amendment or
supplement to the Indenture pursuant to Section 2.01(b) for the
purpose of depositing additional Securities in a Trust and issuing
additional Units.
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(30) "Trust" or "Trusts" shall mean the separate trust or
trusts created by this Indenture, the Securities constituting the
portfolios of which are listed in the various separate Schedules
attached to the related Trust Agreement.
(31) "Trust Agreement" shall mean the Trust Agreement for the
particular series of the Fund into which these Standard Terms and
Conditions are incorporated.
(32) "Unit" in respect of any Trust shall mean the fractional
undivided interest in and ownership of the Trust which shall be
initially equal to the fraction specified in the Trust Agreement,
the numerator of which is one and the denominator of which fraction
shall be (1) increased by the number of any additional Units issued
pursuant to Section 2.03 hereof, (2) increased or decreased in
connection with an adjustment to the number of Units pursuant to
Section 2.03, and (3) decreased by the number of any Units redeemed
as provided in Section 5.02 hereof. Whenever reference is made
herein to the "interest" of a Unitholder in the Trust or in the
Income and Capital Accounts, it shall mean such fractional undivided
interest represented by the number of Units held of record by such
Unitholder.
(33) "Unitholder" shall mean the registered holder of any Unit,
whether or not in certificated form, as recorded on the registration
books of the Trustee.
(34) Words importing singular number shall include the plural
number in each case and vice versa, and words importing persons
shall include corporations and associations, as well as natural
persons.
(35) The words "herein," "hereby," "herewith," "hereof,"
"hereinafter," "hereunder," "hereinabove," "hereafter," "heretofore"
and similar words or phrases of reference and association shall
refer to this Indenture in its entirety.
ARTICLE II
DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST;
FORM AND ISSUANCE OF CERTIFICATES;
SEPARATE TRUSTS
Section 2.01. Deposit of Securities. (a) The Depositor, on the date of
the Trust Agreement, has deposited with the Trustee in trust the
Securities listed in the Schedules to the Trust Agreement in bearer form
or duly endorsed in blank or accompanied by all necessary instruments of
assignment and transfer in proper form or Contract Securities relating to
such Securities to be held, managed and applied by the Trustee as herein
provided. The Depositor shall deliver the Securities listed on said
Schedules which were not actually delivered concurrently with the
execution and delivery of the Trust Agreement and which were represented
by Contract Securities to the Trustee within 10 calendar days after said
execution and delivery (the "Delivery Period"). If a contract to buy
such Securities between the Depositor and seller is terminated by the
seller thereof for any reason beyond the control of the Depositor or if
for any other reason the Securities are not delivered to the Trust by the
end of the Delivery Period, the Trustee shall immediately draw on the
Letter of Credit, if any, in its entirety, apply the moneys in accordance
with Section 2.01(d), and the Depositor shall forthwith take the remedial
action specified in Section 3.11. If the Depositor does not take the
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action specified in Section 3.11 within 10 calendar days of the end of
the Delivery Period, the Trustee shall forthwith take the action
specified in Section 3.11.
(b) From time to time following the Initial Date of Deposit, the
Depositor is hereby authorized, in its discretion, to assign, convey to
and deposit with the Trustee (i) additional Securities, duly endorsed in
blank or accompanied by all necessary instruments of assignment and
transfer in proper form (or Contract Securities relating to such
Securities), and/or (ii) cash (or a Letter of Credit in lieu of cash)
with instructions to purchase additional Securities, in an amount equal
to the portion of the Unit Value of the Units created by such deposit
attributable to the Securities to be purchased pursuant to such
instructions. Such deposit of additional Securities or cash with
instructions to purchase additional Securities shall be made, in each
case, pursuant to a Supplemental Indenture accompanied by a legal opinion
issued by legal counsel satisfactory to the Depositor. Instructions to
purchase additional Securities shall be in writing, and shall specify the
name of the Security, CUSIP number, if any, aggregate amount, price or
price range and date to be purchased. When requested by the Trustee, the
Depositor shall act as broker to execute purchases in accordance with
such instructions; the Depositor shall be entitled to compensation
therefor in accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation resulting from any
purchase made pursuant to the Depositor's instructions or made by the
Depositor as broker, except by reason of its own negligence, lack of good
faith or willful misconduct.
The Depositor, in each case, shall ensure that each deposit of
additional Securities pursuant to this Section shall be, as nearly as is
practicable, in the identical ratio as the Percentage Ratio for such
Securities. The Depositor shall deliver the additional Securities which
were not delivered concurrently with the deposit of additional Securities
and which were represented by Contract Securities within 10 calendar days
after such deposit of additional Securities (the "Additional Securities
Delivery Period"). If a contract to buy such Securities between the
Depositor and seller is terminated by the seller thereof for any reason
beyond the control of the Depositor or if for any other reason the
Securities are not delivered to the Trust by the end of the Additional
Securities Delivery Period for such deposit, the Trustee shall
immediately draw on the Letter of Credit, if any, in its entirety, apply
the moneys in accordance with Section 2.01(d), and the Depositor shall
forthwith take the remedial action specified in Section 3.11. If the
Depositor does not take the action specified in Section 3.11 within 10
calendar days of the end of the Additional Securities Delivery Period,
the Trustee shall forthwith take the action specified in Section 3.11.
(c) In connection with the deposits described in Section 2.01 (a)
and (b), the Depositor has, in the case of Section 2.01(a) deposits, and,
prior to the Trustee accepting a Section 2.01(b) deposit, will, deposit
cash and/or Letter(s) of Credit in an amount sufficient to purchase the
Contract Securities relating to Securities which are not actually
delivered to the Trustee at the time of such deposit. The terms of any
Letter of Credit must unconditionally allow the Trustee to draw on the
full amount of the available Letter of Credit. The Trustee may deposit
such cash or cash drawn on the Letter of Credit in a non-interest bearing
account for the Fund. If any Contract Securities requires settlement in
a foreign currency, in connection with the deposit of such Contract
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Security the Depositor will deposit with the Trustee either an amount of
such currency sufficient to settle the contract or a foreign exchange
contract in such amount which settles concurrently with the settlement of
the Contract Security and cash or a Letter of Credit in U.S. dollars
sufficient to perform such foreign exchange contract.
(d) In the event that the purchase of Contract Securities pursuant
to any contract shall not be consummated in accordance with said contract
or if the Securities represented by Contract Securities are not delivered
to a Trust in accordance with Section 2.01(a) or 2.01(b) and the moneys,
or, if applicable, the moneys drawn on the Letter of Credit, deposited by
the Depositor are not utilized for Section 3.11 purchases of Replacement
Securities, such funds, to the extent of the purchase price of Failed
Contract Securities for which no Replacement Security were acquired
pursuant to Section 3.11, plus all amounts described in the next
succeeding sentence, shall be credited to the Capital Account and
distributed pursuant to Section 3.05 to Unitholders of record as of the
Income Account Record Date next following the failure of consummation of
such purchase. The Depositor shall cause to be refunded to each
Unitholder his pro rata portion of the sales charge levied on the sale of
Units to such Unitholder attributable to such Failed Contract Security.
Any amounts remaining from moneys drawn on the Letter of Credit which are
not used to purchase Replacement Securities or are not used to provide
refunds to Unitholders shall be paid to the Depositor.
(e) 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, 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"). Proceeds from the maturity of the
Reinvestment Securities shall be distributed to Unitholders of record on
the next applicable Capital Distribution Date. Dividends, if any,
received on Securities will not be reinvested pending distribution.
Brokerage commissions with respect to the purchase of Reinvestment
Securities shall be an expense borne by the Trust.
(f) The Trustee is hereby irrevocably authorized to effect
registration or transfer of the Securities in fully registered form to
the name of the Trustee or to the name of its nominee or to hold the
Securities in a clearing agency registered with the Securities and
Exchange Commission or in a book entry system operated by the Federal
Reserve Board.
Section 2.02. Acceptance of Trust. The Trustee hereby declares it
holds and will hold each Trust as Trustee in trust upon the trusts herein
created for the use and benefit of the Unitholders, subject to the terms
and conditions of this Indenture.
Section 2.03. Issuance of Units. (a) The Trustee hereby acknowledges
receipt of the deposit of the Securities listed in the Schedules to the
Trust Agreement and referred to in Section 2.01 hereof and,
simultaneously with the receipt of said deposit, has recorded on its
books the ownership, by the Depositor or such other person or persons as
may be indicated by the Depositor, of the aggregate number of Units
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specified in the Trust Agreement and has delivered, or on the order of
the Depositor will deliver, in exchange for such Securities,
documentation evidencing the ownership of the number of Units specified
and, if such Units are represented by a Certificate, such Certificate
substantially in the form above recited, representing the ownership of
those Units. The number of Units in a Trust may be increased through a
split of the Units or decreased through a reverse split thereof, as
directed by the Depositor, on any day on which the Depositor is the only
Unitholder of such Trust, which revised number of Units shall be recorded
by the Trustee on its books. The Trustee hereby agrees that on the date
of any Supplemental Indenture it shall acknowledge that the additional
Securities identified therein have been deposited with it by recording on
its books the ownership, by the Depositor or such other person or persons
as may be indicated by the Depositor, of the aggregate number of Units to
be issued in respect of such additional Securities so deposited, and
shall, if so requested, execute a Certificate or Certificates
substantially in the form above recited representing the ownership of an
aggregate number of those Units.
(b) Under the terms and conditions of the Indenture and the Trust
Agreement and at such times as are permitted by the Trustee, Units may
also be held in uncertificated form. Units will be held in
uncertificated form unless a Unitholder requests a Certificate
representing his or her Units. The Trustee shall, at the request of the
holder of any Units held in uncertificated form, issue a new Certificate
to evidence such Units and at such time make an appropriate notation in
the registration books of the Trustee. Certificates, if requested, will
be issued in denominations of one Unit, or any whole multiple thereof,
subject to any minimum investment requirements. Thereafter, Units may
again be held in uncertificated form by surrendering such Certificate to
the Trustee for cancellation. At such time, an appropriate notation will
be made in the registration book of the Trustee to indicate that the
Units formerly evidenced by such canceled Certificate are Units held in
uncertificated form. The rights set forth in this Indenture of any
holder of Units held in uncertificated form or of Units represented by a
Certificate shall be the same of those of any other Unitholder.
Section 2.04. Form of Certificates. Each Certificate referred to in
Section 2.03 is, and each Certificate hereafter issued shall be, in
substantially the form hereinabove recited, numbered serially for
identification, in fully registered form, transferable only on the books
of the Trustee as herein provided, executed manually by an authorized
officer of the Trustee and in facsimile by the Chairman, President or one
of the Vice Presidents of the Depositor and dated the date of execution
and delivery by the Trustee.
Section 2.05. Separate Trusts. The Trusts created by this Indenture
are separate and distinct trusts for all purposes and the assets of one
Trust may not be commingled with the assets of any other nor shall the
expenses of any Trust be charged against the other. Units representing
the ownership of an undivided fractional interest in one Trust shall not
be exchangeable for Units representing the ownership of an undivided
fractional interest in any other.
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ARTICLE III
ADMINISTRATION OF FUND
Section 3.01. Initial Costs. To the extent not borne by the Depositor
the expenses incurred in establishing a Trust shall be borne by the
Trust, including the cost of the initial preparation and typesetting of
the registration statement, prospectuses (including preliminary
prospectuses), the Indenture, and other documents relating to a Trust,
printing of Certificates, Securities and Exchange Commission and state
blue sky registration fees, the costs of the initial valuation of the
portfolio and audit of a Trust, the initial fees and expenses of the
Trustee, and legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of prospectuses
(including preliminary prospectuses), expenses incurred in the
preparation and printing of brochures and other advertising materials and
any other selling expenses. To the extent the funds in the Interest and
Capital Accounts of the Trust shall be insufficient to pay the expenses
borne by the Trust specified in this Section 3.01, the Trustee shall
advance out of its own funds and cause to be deposited and credited to
the Interest or Capital Accounts such amount as may be required to permit
payment of such expenses. The Trustee shall be reimbursed for such
advance in the manner provided in the related Prospectus; provided,
however, that nothing herein shall be deemed to prevent, and the Trustee
shall be entitled to, full reimbursement for any advances made pursuant
to this Section no later than the termination of the Trust.
Section 3.02. Income Account. The Trustee shall collect the dividends
or other like cash distributions on the Securities in each Trust as such
becomes payable (including all moneys representing penalties for the
failure to make timely payments on the Securities, or as liquidated
damages for default or breach of any condition or term of the Securities
or of the underlying instrument relating to any Securities and other
income attributable to a Failed Contract Security for which no
Replacement Security has been obtained pursuant to Section 3.11 hereof)
and credit such income to a separate account for each Trust to be known
as the "Income Account."
Any distributions received by the Trustee in a form other than cash
(other than a non-taxable distribution of the shares of the distributing
corporation) shall be sold in the manner directed by the Depositor and
the proceeds of sale credited to the Income Account of the Trust. The
Trustee shall not be liable or responsible in any way for depreciation or
loss incurred by reason of any such sale.
If, as the result of the deposit of Securities subsequent to the
Initial Date of Deposit, distributions with respect to any issue of
Securities are received on some, but not all, Securities of such issue,
the Depositor shall pay to the Trustee for distribution to Unitholders
such amount as will equal the difference between the total of the
distribution on such issue received by the Trust and the amount which
would have been received had distributions been received on all
Securities of such issue. The payment of such amount by the Depositor
shall be made on the fifth business day following such supplemental
deposit, and shall be secured by any cash and/or Letter of Credit
deposited pursuant to Section 2.01(c) hereof.
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Section 3.03. Capital Account. All moneys received by the Trustee in
respect of the Securities, other than amounts credited to the Income
Account, shall be credited to a separate account to be known as the
"Capital Account" (except for moneys deposited by the Depositor or moneys
pursuant to draws on the Letter of Credit for purchase of Contract
Securities pursuant to Section 2.01, which shall be separately held in
trust by the Trustee for such purpose and shall not be credited to the
Capital Account except as provided in Section 2.01(d)).
Section 3.04. Reserve Account. From time to time, the Trustee shall
withdraw from the cash on deposit in the Income Account or the Capital
Account of the appropriate Trust such amounts as it, in its sole
discretion, shall deem requisite to establish a reserve for any
applicable taxes or other governmental charges that may be payable out of
such Trust. Such amounts so withdrawn shall be credited to a separate
account for each Trust which shall be known as the "Reserve Account."
The Trustee shall not be required to distribute to the Unitholders any of
the amounts in the Reserve Account; provided, however, that if it shall,
in its sole discretion, determine that such amounts are no longer
necessary for the payment of any applicable taxes or other governmental
charges, then it shall promptly deposit such amounts in the account from
which withdrawn, or if such Trust shall have terminated or shall be in
the process of termination, the Trustee shall distribute same in
accordance with Section 8.02(d) to each Unitholder such holder's interest
in the Reserve Account.
Section 3.05. Deductions and Distributions. (a) On or immediately
after the fifteenth the day of each month, the Trustee shall satisfy
itself as to the adequacy of the Reserve Account, making any further
credits thereto as may appear appropriate in accordance with Section 3.04
and shall then with respect to each Trust:
(i) deduct from the Income Account or, to the extent funds are
not available in such Account, from the Capital Account and pay to
itself individually the amounts that it is at the time entitled to
receive pursuant to Section 6.04;
(ii) deduct from the Income Account or, to the extent funds are
not available in such Account, from the Capital Account and pay to,
or reserve for, the Evaluator the amount that it is at the time
entitled to receive pursuant to Section 4.03;
(iii) deduct from the Income Account or, to the extent funds are
not available in such Account, from the Capital Account and pay to
counsel, as hereinafter provided for, an amount equal to unpaid fees
and expenses, if any, of such counsel pursuant to Section 3.08, as
certified to by the Depositor;
(iv) deduct from the Income Account or to the extent funds are
not available in such Account, from the Capital Account and pay to,
or reserve for, the Supervisor the amount that it is entitled to
receive pursuant to Section 3.12;
(v) deduct from the Income Account (as provided in
Section 3.13) and pay to the Depositor that amount it is entitled to
receive pursuant to Section 3.13; and
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(vi) deduct from the Income Account or, to the extent funds are
not available in such Account, from the Capital Account, and
reimburse itself for any other fees, charges and expenses arising
from time to time out of the Trust operations that the Trustee has
paid.
(b) (i) On each Income Account Distribution Date, the Trustee shall
distribute an amount per Unit equal to such Unitholder's Income
Distribution (as defined below) computed as of the close of business on
the Income Account Record Date immediately preceding such Income Account
Distribution Date plus, if such Income Account Distribution Date is also
a Capital Account Distribution Date for the distribution of capital, such
Unitholder's pro rata share of the balance of the Capital Account (except
for moneys on deposit therein required to purchase Contract Securities)
to each Unitholder of record at the close of business on the Record Date;
provided, however, that if the balance of the Capital Account of a Trust
on the first day of any month equals at least $1.00 per 100 Units, such
distribution from the Capital Account shall be made on the fifteenth day
of such month computed as of the close of business on the first day of
such month. The Trust shall provide the following distribution
elections: (1) distributions to be made by mail addressed to the post
office address of the Unitholder as it appears on the registration books
of the Trustee or (2) distributions to be made to the designated agent
for any reinvestment program when, as and if available to the Unitholder
through the Depositor. If no election is offered by the Depositor or if
no election is specified by the Unitholder at the time of purchase of any
Unit, distribution of principal and income and capital gains, if any,
shall be distributed as provided in (1) above. Any election other than a
deemed election as described in the preceding sentence shall be by
written notice to, and in form satisfactory to, the Trustee. Once a
distribution election has been chosen by the Unitholder, such election
shall remain in effect until changed by the Unitholder. Such change of
election may be made by notification thereof to the Trustee at any time
in form satisfactory to the Trustee. A transferee of any Unit may make
his distribution election in the manner as set forth above. The Trustee
shall be entitled to receive in writing a notification from the
Unitholder as to his or her change of address.
(ii) For the purposes of this Section 3.05, the Unitholder's
"Income Distribution" shall be equal to such Unitholder's pro rata
share of the cash balance (other than any amortized discount) in the
Income Account computed as of the close of business on the Income
Account Record Date immediately preceding such Income Distribution
after deduction of (1) the fees and expenses then deductible
pursuant to Section 3.05(a) and (2) the Trustee's estimate of other
expenses properly chargeable to the Income Account pursuant to the
Indenture which have accrued, as of such Income Account Record Date
or are otherwise properly attributable to the period to which such
Income Distribution relates.
(iii) The amount to be so distributed to each Unitholder shall
be that pro rata share of the balance of the Income and Capital
Accounts, computed as set forth herein, as shall be represented by
the Units registered in the name of such Unitholder. In the
computation of each such pro rata share, fractions of less than one
cent shall be omitted. After any such distribution provided for
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above, any cash balance remaining in the Income Account or the
Capital Account shall be held in the same manner as other amounts
subsequently deposited in each of such accounts, respectively.
(iv) Income attributable to Contract Securities which the
Depositor shall have declared by written notice to the Trustee to be
Failed Contract Securities for which Replacement Securities are not
to be substituted pursuant to Section 3.11 hereof shall be
distributed to Unitholders of record as of the close of business on
the Income Account Record Date next following the failure of
consummation of such purchase and shall be distributed not more than
120 days after the receipt of such notice by the Trustee or at such
earlier time in such manner as the Trustee in its sole discretion
deems to be in the best interest of Unitholders.
(v) For the purpose of distributions as herein provided, the
Unitholders of record on the registration books of the Trustee at
the close of business on each Income Account Record Date shall be
conclusively entitled to such distribution, and no liability shall
attach to the Trustee by reason of payment to any Unitholder of
record. Nothing herein shall be construed to prevent the payment of
amounts from the Income Account and the Capital Account to
individual Unitholders by means of one check, draft or other
instrument or device provided that the appropriate statement of such
distribution shall be furnished therewith as provided in
Section 3.06 hereof.
(c) Notwithstanding the foregoing, if a Trust has elected to be
taxed as a "regulated investment company" as defined in the United States
Internal Revenue Code of 1986, as amended, the Trustee may make such
distributions to Unitholders as may be necessary at any time to avoid
imposition of any excise tax on such Trust.
Section 3.06. Distribution Statements. With each distribution from the
Income or Capital Accounts of a Trust, the Trustee shall set forth,
either in the instrument by means of which payment of such distribution
is made or in an accompanying statement, the amount being distributed
from each such account, expressed as a dollar amount per Unit of such
Trust. The Trustee shall also furnish each Unitholder with a change of
address form as part of each statement.
Within a reasonable period of time after the last business day of
each calendar year, the Trustee shall furnish to each person who at any
time during such calendar year was a Unitholder of a Trust a statement
setting forth, with respect to such calendar year and with respect to
such Trust:
(A) as to the Income Account:
(1) the amount of income received on the Securities
(including amounts received as a portion of the proceeds of any
disposition of Securities);
(2) the amounts paid from the Income Account for
purchases of Securities pursuant to Section 3.11 and for
redemptions pursuant to Section 5.02;
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(3) the deductions from the Income Account for payment
into the Reserve Account;
(4) the deductions for applicable taxes and fees and
expenses of the Trustee, the Evaluator, the Supervisor,
counsel, auditors and any expenses paid by the Trust pursuant
to Section 3.05; and
(5) the amounts reserved for purchases of Contract
Securities or for purchases made pursuant to Section 3.11; and
(6) the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a
dollar amount per Unit outstanding on the last Business Day of
such calendar year;
(B) as to the Capital Account;
(1) the dates of sale, liquidation or disposition of any
of the Securities and the net proceeds received therefrom,
excluding any portion thereof credited to the Income Account;
(2) the deductions from the Capital Account, if any, for
payment of applicable taxes and fees and expenses of the
Trustee, the Evaluator, the Supervisor, counsel, auditors and
any expenses paid by the Trust under Section 3.05;
(3) the amount paid for purchases of Securities pursuant
to Section 3.11 and for redemptions pursuant to Section 5.02;
(4) the deductions from the Capital Account for payments
into the Reserve Account;
(5) the amounts reserved for purchases of Contract
Securities or for purchases made pursuant to Section 3.11;
(6) the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a
dollar amount per Unit outstanding on the last Business Day of
such calendar year;and
(C) the following information:
(1) a list of Securities as of the last Business Day of
such calendar year and a list which identifies all Securities
sold or other Securities acquired during such calendar year, if
any;
(2) the number of Units outstanding on the last Business
Day of such calendar year;
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(3) the Unit Value as defined in Section 5.01 based on
the last Trust Fund Evaluation pursuant to Section 5.01 made
during such calendar year; and
(4) the amounts actually distributed or which are
otherwise attributable to Unitholders during such calendar year
from the Income and Capital Accounts, separately stated,
expressed as total dollar amounts for such distributions and
the status of such distributions for federal income tax
purposes.
Section 3.07. Sale of Securities. (a) If necessary, in order to
maintain the sound investment character of a Trust, the Depositor may
direct the Trustee to sell or liquidate Securities (other than
Reinvestment Securities) in such Trust at such price and time and in such
manner as shall be determined by the Depositor, provided that the
Depositor has determined that any one or more of the following conditions
exist:
(i) that there has been a default on any of the Securities in
the payment of dividends, after declared and when due and payable;
(ii) that any action or proceeding has been instituted at law
or equity seeking to restrain or enjoin the payment of dividends on
any such Securities, or that there exists any legal question or
impediment affecting such Securities or the payment of dividends
from the same;
(iii) that there has occurred any breach of covenant or warranty
in any document relating to the issuer of the Securities which would
adversely affect either immediately or contingently the payment of
dividends from the Securities, or the general credit standing of the
issuer or otherwise impair the sound investment character of such
Securities;
(iv) that there has been a default in the payment of dividends,
principal of or income or premium, if any, on any other outstanding
securities or obligations of the issuer of such Securities;
(v) that the price of any such Securities has declined to such
an extent or other such credit factors exist so that in the opinion
of the Depositor the retention of such Securities would be
detrimental to the Trust and to the interest of the Unitholders;
(vi) that all of the Securities in the Trust will be sold
pursuant to termination of the Trust pursuant to Section 8.02
hereof;
(vii) that such sale is required due to Units tendered for
redemption;
(viii) if the Trust has not elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue
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Code of 1986, as amended, that the sale of such Securities is
required in order to prevent the Trust from being deemed an
association taxable as a corporation for federal income tax
purposes; or
(ix) if the Trust has elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue
Code of 1986, as amended, that such sale is necessary or advisable
(i) to maintain the qualification of the Trust as a regulated
investment company or (ii) to provide funds to make any distribution
for a taxable year in order to avoid imposition of any excise taxes
on the Trust.
(b) In the event a Security is sold pursuant to Section 3.07(a)(v)
as a direct result of serious adverse credit factors affecting the issuer
of such Security and the Trust has elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended, then the Depositor may, but is not obligated to,
direct the reinvestment of the proceeds of the sale of such Security in
any other securities which meet the criteria necessary for inclusion in
such Trust on the Initial Date of Deposit.
(c) Upon receipt of such direction from the Depositor, upon
which the Trustee shall rely, the Trustee shall proceed to sell or
liquidate the specified Securities in accordance with such direction, and
upon the receipt of the proceeds of any such sale or liquidation, after
deducting therefrom any fees and expenses of the Trustee connected with
such sale or liquidation and any brokerage charges, taxes or other
governmental charges shall deposit such net proceeds in the applicable
Capital Account. The Trustee shall not be liable or responsible in any
way for depreciation or loss incurred by reason of any sale made pursuant
to any such direction or by reason of the failure of the Depositor to
give any such direction, and in the absence of such direction the Trustee
shall have no duty to sell or liquidate any Securities under this
Section 3.07.
Section 3.08. Counsel. The Depositor may employ from time to time, as
it deems necessary or desirable, a firm of attorneys for any legal
services which may be required in connection with the Securities,
including any legal matters relating to the possible disposition or
acquisition of any Securities pursuant to any provisions hereof or for
any other reasons deemed advisable by the Depositor or the Trustee, in
their discretion. The fees and expenses of such counsel may, at the
discretion of the Depositor, be paid by the Trustee from the Income
Account and Capital Account as provided for in Section 3.05(a)(iii)
hereof.
Section 3.09. Liability of Depositor. The Depositor shall be under no
liability to the Unitholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Indenture or for
errors in judgment, but shall be liable only for its own willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder. The Depositor may rely in good faith on any paper,
order, notice, list, affidavit, receipt, opinion, endorsement,
assignment, draft or any other document of any kind prima facie properly
executed and submitted to it by the Trustee, bond counsel or any other
persons pursuant to this Indenture and in furtherance of its duties.
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Section 3.10. Notice to Depositor. In the event that the Trustee shall
have been notified at any time of any action to be taken or proposed to
be taken with respect to the Securities (including but not limited to the
making of any demand, direction, request, giving of any notice, consent
or waiver or the voting with respect to any amendment or supplement to
any indenture, resolution, agreement or other instrument under or
pursuant to which the Securities have been issued) the Trustee shall
promptly notify the Depositor and shall thereupon take such action or
refrain from taking any action as the Depositor shall direct; provided,
however, that if the Depositor shall not within five Business Days of the
giving of such notice to the Depositor direct the Trustee to take or
refrain from taking any action, the Trustee shall take such action or
refrain from taking any action so as to insure that the 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.
In the event that an offer by the issuer of any of the Securities or
any other party shall be made to issue new securities, or to exchange
securities, for Trust Securities, the Trustee shall reject such offer.
However, should any issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer, any
securities, cash and/or property received shall be deposited hereunder
and shall be promptly sold, if securities or property, by the Trustee,
unless the Depositor advises the Trustee to keep such securities or
property. The cash received in such exchange and cash proceeds of any
such sales shall be distributed to Unitholders on the next Income
Distribution Date in the manner set forth in Section 3.05 regarding
distributions from the Capital Account. Except as provided in Article
VI, the Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be liable to any person
for any action or failure to take action pursuant to the terms of this
Section 3.10 other than failure to notify the Depositor.
Section 3.11. Replacement Securities. In the event that any contract
to purchase any Contract Security is not consummated in accordance with
its terms (a "Failed Contract Security"), the Depositor may instruct the
Trustee in writing either to effect a buy-in in accordance with the rules
of the market place where the Failed Contract Securities were purchased
or its clearing house or to purchase a replacement security (the
"Replacement Security") which has been selected by the Depositor or if
the Depositor does not provide such an instruction, the Trustee is hereby
directed either to effect a buy-in in accordance with the rules of the
market place where the Failed Contract Securities were purchased or its
clearing house or to purchase a Replacement Security out of funds held by
the Trustee pursuant to Section 3.03. Purchases of Replacement Securities
will be made subject to the conditions set forth below:
(a) The Replacement Securities shall be Equity Securities as
originally selected for deposit in that series of the Trust;
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(b) The purchase of the Replacement Securities shall not
adversely affect the federal income tax status of the Trust;
(c) The purchase price of the Replacement Securities shall not
exceed the total amount of cash deposited, or the amount available
under the Letter of Credit deposited, by the Depositor at the time
of the deposit of the Failed Contract Security;
(d) The written instructions of the Depositor shall (i)
identify the Replacement Securities to be purchased, (ii) state that
the contract to purchase, if any, to be entered into by the Trustee
is satisfactory in form and substance and (iii) state that the
foregoing conditions of clauses (a) through (d) have been satisfied
with respect to the Replacement Securities; and
(e) The Replacement Securities shall be purchased within 30
days after the deposit of the Failed Contract Security.
Upon satisfaction of the foregoing conditions with respect to any
Replacement Securities which shall be certified by the Depositor in the
written instruction to the Trustee identifying the Replacement
Securities, the Trustee shall enter into the contract to purchase such
Replacement Securities and take all steps reasonably necessary to
complete the purchase thereof. Whenever a Replacement Security is
acquired by the Trustee pursuant to the provisions of this Section, the
Trustee will, as agent for the Depositor, not later than five days after
such acquisition, mail to each Unitholder a notice of such acquisition,
including an identification of the Securities eliminated and the
Securities acquired. Amounts in respect of the purchase price thereof on
account of principal shall be paid out of and charged against the cash
deposited, or the amounts available under the Letter of Credit deposited,
by the Depositor at the time of the deposit of the Failed Contract
Security. In the event the Trustee shall not consummate any purchase of
Replacement Securities pursuant to this Section 3.11, funds held for such
purchase shall be distributed in accordance with Section 2.01(d). Any
excess of the purchase price of a Failed Contract Security over the
purchase price of its corresponding Replacement Security shall be
refunded to the Depositor. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any
purchase made pursuant to, or any failure to make any purchase authorized
by, this Section 3.11. The Depositor shall not be liable for any failure
to instruct the Trustee to purchase any Replacement Securities, nor shall
the Trustee or Depositor be liable for errors of judgment in respect to
this Section 3.11; provided, however, that this provision shall not
protect the Depositor or the Trustee against any liability to which it
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence (negligence in the case of the Trustee) in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
Section 3.12. Supervisor. As compensation for providing supervisory
portfolio services under this Indenture, the Supervisor shall receive, in
arrears, against a statement or statements therefor submitted to the
Trustee monthly or annually an aggregate annual fee in that amount
specified as compensation for supervisory services in the Prospectus for
the Trust, but in no event shall such compensation when combined with all
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compensation received from other series of the Fund for providing such
supervisory services in any calendar year exceed the aggregate cost to
the Supervisor for providing such services. Such compensation may, from
time to time, be adjusted provided that the total adjustment upward does
not, at the time of such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for services as
measured by the United States Department of Labor Consumer Price Index
entitled "All Services Less Rent of Shelter" or similar index, if such
index should no longer be published. The consent or concurrence of any
Unitholder hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee, upon receipt
of invoice therefor from the Supervisor, upon which, as to the cost
incurred by the Supervisor of providing services hereunder the Trustee
may rely, and shall be charged against the Income and/or Capital
Accounts, in accordance with Section 3.05.
If the cash balance in the Income and Capital Accounts shall be
insufficient to provide for amounts payable pursuant to this
Section 3.12, the Trustee shall have the power to sell (a) Securities
from the current list of Securities designated to be sold pursuant to
Section 5.02 hereof, or (b) if no such Securities have been so
designated, such Securities as the Trustee may see fit to sell in its own
discretion, and to apply the proceeds of any such sale in payment of the
amounts payable pursuant to this Section 3.12.
Any moneys payable to the Supervisor pursuant to this Section 3.12
shall be secured by a lien on the related Trust prior to the interest of
Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 6.04 herein.
Except as the context otherwise requires the Supervisor shall be
subject to the provisions of Section 4.05 herein in the same manner as it
would if it were the Evaluator.
Section 3.13. Deferred Sales Charge. If the Trust Agreement related to
a Trust specifies a Deferred Sales Charge, the Trustee shall, on the
dates specified and as provided in such Prospectus, withdraw from the
Income Account or Capital Account (as specified in the such Prospectus),
an amount per Unit specified in such Prospectus and credit such amount to
a special non-Trust account designated by the Depositor out of which the
deferred sales charge will be distributed to the Depositor (the "Deferred
Sales Charge Account"). If the balance in the applicable Account is
insufficient to make such withdrawal, the Trustee shall, as directed by
the Depositor, advance funds in an amount required to fund the proposed
withdrawal and be entitled to reimbursement of such advance upon the
deposit of additional moneys in the applicable Account, and/or sell
Securities and credit the proceeds thereof to the Deferred Sales Charge
Account. Such direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include instructions as to
the execution of such sale. If a Unitholder redeems Units prior to full
payment of the deferred sales charge, the Trustee shall, if so provided
in the related Prospectus, on the Redemption Date, withhold from the
Redemption Price payable to such Unitholder an amount equal to the unpaid
portion of the deferred sales charge and distribute such amount to the
Deferred Sales Charge Account. If pursuant to Section 5.02 hereof, the
Depositor shall purchase a Unit tendered for redemption prior to the
payment in full of the deferred sales charge due on the tendered Unit,
the Depositor shall pay to the Unitholder the amount specified under
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Section 5.02 less the unpaid portion of the deferred sales charge. All
advances made by the Trustee pursuant to this Section shall be secured by
a lien on the Trust prior to the interest of the Unitholders.
Section 3.14. Foreign Exchange Transactions; Reclaiming Foreign Taxes'.
The Trustee shall use reasonable efforts to reclaim or recoup any amounts
of non-U.S. tax paid by a Trust or withheld from income received by a
Trust to which such Trust may be entitled as a refund.
Section 3.15. Foreign Exchange Transactions; Foreign Currency
Exchange'. Unless the Depositor shall otherwise direct, whenever funds
are received by the Trustee in foreign currency, upon the receipt thereof
or, if such funds are to be received in respect of a sale of Securities,
concurrently with the contract of the sale for the Security (in the
latter case the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the Security), the
Trustee, pursuant to the direction of the Depositor, shall enter into a
foreign exchange contract for the conversion of such funds to U.S.
dollars. Neither the Trustee nor the Depositor shall be liable for any
loss or depreciation resulting from such action taken.
ARTICLE IV
EVALUATION OF SECURITIES; EVALUATOR
Section 4.01. Evaluation by Evaluator. (a) The Evaluator shall
determine separately, and shall promptly furnish to the Trustee and the
Depositor upon request, the value of each issue of Securities (including
Contract Securities) ("Evaluation") as of the time stated in the
Prospectus relating to a Trust (the "Evaluation Time") (i) on each
Business Day during the period which the Units are being offered for sale
to the public and (ii) on any other day on which a Trust Fund Evaluation
is to be made pursuant to Section 5.01 or which is requested by the
Depositor or the Trustee. As part of the Evaluation, the Evaluator shall
determine separately and promptly furnish to the Trustee and the
Depositor upon request the Evaluation of each issue of Securities
initially deposited in a Trust on the Initial Date of Deposit. The
Evaluator's determination of the offering prices of the Securities on the
Initial Date of Deposit shall be included in the Schedules attached to
the Trust Agreement.
(b) During the initial offering period such Evaluation shall be
made in the following manner: if the Securities are listed on a national
securities exchange or foreign securities exchange, such Evaluation shall
generally be based on the last available sale price on or immediately
prior to the Evaluation Time on the exchange which is the principal
market therefor, which shall be deemed to be the New York Stock Exchange
if the Securities are listed thereon (unless the Evaluator deems such
price inappropriate as a basis for evaluation) or, if there is no such
available sale price on such exchange, at the last available offer prices
of the Securities. If the Securities are not so listed or, if so listed,
the principal market therefor is other than on such exchange or there is
no such available sale price on such exchange, such Evaluation shall
generally be based on the following methods or any combination thereof
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whichever the Evaluator deems appropriate: (i) on the basis of the
current offer price for comparable securities (unless the Evaluator deems
such price inappropriate as a basis for evaluation), (ii) by determining
the valuation of the Securities on the offer side of the market by
appraisal or (iii) by any combination of the above. If the Trust holds
Securities denominated in a currency other than U.S. dollars, the
Evaluation of such Security shall be converted to U.S. dollars based on
current offering side exchange rates (unless the Evaluator deems such
prices inappropriate as a basis for valuation). The Evaluator shall add
to the Evaluation of each Security which is traded principally on a
foreign securities exchange the amount of any commissions and relevant
taxes associated with the acquisition of the Security. As used herein,
the closing sale price is deemed to mean the most recent closing sale
price on the relevant securities exchange immediately prior to the
Evaluation Time. For each Evaluation, the Evaluator shall also confirm
and furnish to the Trustee and the Depositor, on the basis of the
information furnished to the Evaluator by the Trustee as to the value of
all Trust assets other than Securities, the calculation of the Trust Fund
Evaluation to be computed pursuant to Section 5.01.
(c) For purposes of the Trust Fund Evaluations required by
Section 5.01 in determining Redemption Value and Unit Value, Evaluation
of the Securities shall be made in the manner described in 4.01(b), on
the basis of the last available bid prices of the Securities, except in
those cases in which the Securities are listed on a national securities
exchange or a foreign securities exchange and the last available sale
prices are utilized. In addition, with respect to each Security which is
traded principally on a foreign securities exchange, the Evaluator shall
(i) not make the addition specified in the fourth sentence of
Section 4.01(b) and (ii) shall reduce the Evaluation of each Security by
the amount of any liquidation costs (other than brokerage costs incurred
on any national securities exchange) and any capital gains or other taxes
which would be incurred by the Trust upon the sale of such Security, such
taxes being computed as if the Security were sold on the date of the
Evaluation.
Section 4.02. Information for Unitholders. For the purpose of
permitting Unitholders to satisfy any reporting requirements of
applicable federal or state tax law, the Evaluator shall make available
to the Trustee and the Trustee shall transmit to any Unitholder upon
request any determinations made by it pursuant to Section 4.01.
Section 4.03. Compensation of Evaluator. As compensation for its
services hereunder, the Evaluator shall receive against a statement or
statements therefor submitted to the Trustee monthly or annually, an
amount equal to the amount specified as compensation for the Evaluator in
the Prospectus. Such compensation may, from time to time, be adjusted
provided that the total adjustment upward does not, at the time of such
adjustment, exceed the percentage of the total increase, after the date
hereof, in consumer prices for services as measured by the United States
Department of Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index shall not longer be
published. The consent or concurrence of any Unitholder hereunder shall
no be required for any such adjustment or increase. Such compensation
shall be charged by the Trustee, upon receipt of invoice therefor from
the Evaluator, against the Income and Capital Accounts. If the cash
balance in the Income and Capital Accounts shall be insufficient to
provide for amounts payable pursuant to this Section 4.03, the Trustee
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shall have the power to sell (a) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02 hereof or (b)
if no such Securities have been so designated, such Securities as the
Trustee may see fit to sell in its own discretion, and to apply the
proceeds of any such sale in payment of the amounts payable pursuant to
this Section 4.03.
Section 4.04. Liability of Evaluator. The Trustee, the Depositor and
the Unitholders may rely on any Evaluation furnished by the Evaluator and
shall have no responsibility for the accuracy thereof. The
determinations made by the Evaluator hereunder shall be made in good
faith upon the basis of the best information available to it. The
Evaluator shall be under no liability to the Trustee, the Depositor or
the Unitholders for errors in judgment; provided, however, that this
provision shall not protect the Evaluator against any liability to which
it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder.
Section 4.05. Resignation and Removal of Evaluator; Successor'. (a)
The Evaluator may resign and be discharged hereunder, by executing an
instrument in writing resigning as Evaluator and filing the same with the
Depositor and the Trustee, not less than 60 days before the date
specified in such instrument when, subject to Section 4.05(e), such
resignation is to take effect. Upon receiving such notice of
resignation, the Depositor and the Trustee shall use their best efforts
to appoint a successor evaluator having qualifications and at a rate of
compensation satisfactory to the Depositor and the Trustee. Such
appointment shall be made by written instrument executed by the Depositor
and the Trustee, in duplicate, one copy of which shall be delivered to
the resigning Evaluator and one copy to the successor evaluator. The
Depositor or the Trustee may remove the Evaluator at any time upon 30
days' written notice and appoint a successor evaluator having
qualifications and at a rate of compensation satisfactory to the
Depositor and the Trustee. Such appointment shall be made by written
instrument executed by the Depositor and the Trustee, in duplicate, one
copy of which shall be delivered to the Evaluator so removed and one copy
to the successor evaluator. Notice of such resignation or removal and
appointment of a successor evaluator shall be mailed by the Trustee to
each Unitholder then of record.
(b) Any successor evaluator appointed hereunder shall execute,
acknowledge and deliver to the Depositor and the Trustee an instrument
accepting such appointment hereunder, and such successor evaluator
without any further act, deed or conveyance shall become vested with all
the rights, powers, duties and obligations of its predecessor hereunder
with like effect as if originally named Evaluator herein and shall be
bound by all the terms and conditions of this Indenture.
(c) In case at any time the Evaluator shall resign and no successor
evaluator shall have been appointed and have accepted appointment within
30 days after notice of resignation has been received by the Depositor
and the Trustee, the Evaluator may forthwith apply to a court of
competent jurisdiction for the appointment of a successor evaluator.
Such court may thereupon after such notice, if any, as it may deem proper
and prescribe, appoint a successor evaluator.
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(d) Any corporation into which the Evaluator hereunder may be
merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Evaluator hereunder shall
be a party, shall be the successor evaluator under this Indenture without
the execution or filing of any paper, instrument or further act to be
done on the part of the parties hereto, anything herein, or in any
agreement relating to such merger or consolidation, by which the
Evaluator may seek to retain certain powers, rights and privileges
theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
(e) Any resignation or removal of the Evaluator and appointment of
a successor evaluator pursuant to this Section shall become effective
upon acceptance of appointment by the successor evaluator as provided in
subsection (b) hereof.
ARTICLE V
EVALUATION, REDEMPTION, PURCHASE, TRANSFER, INTERCHANGE OR
REPLACEMENT OF UNITS
Section 5.01. Trust Evaluation. As of the Evaluation Time (a) on the
last Business Day of each year, (b) on the day on which any Unit is
tendered for redemption and (c) on any other day desired by the Trustee
or requested by the Depositor, the Trustee shall: Add (i) all moneys on
deposit in a Trust (excluding (1) cash, cash equivalents or Letters of
Credit deposited pursuant to Section 2.01 hereof for the purchase of
Contract Securities, unless such cash or Letters of Credit have been
deposited in the Income and Capital Accounts because of failure to apply
such moneys to the purchase of Contract Securities pursuant to the
provisions of Sections 2.01, 3.02 and 3.03 hereof and (2) moneys credited
to the Reserve Account pursuant to Section 3.04 hereof), plus (ii) the
aggregate Evaluation of all Securities (including Contract Securities and
Reinvestment Securities) on deposit in such Trust as is determined by the
Evaluator (such Evaluation to be made on the basis of the aggregate
underlying value of the Equity Securities as determined in
Section 4.01(b) for the purpose of computing redemption value of Units as
set forth in Section 5.02 hereof), plus (iii) all other income from the
Securities (including dividends receivable on the Equity Securities
trading ex-dividend as of the date of such valuation) as of the
Evaluation Time on the date of such Evaluation together with all other
assets of such Trust. For each such Evaluation there shall be deducted
from the sum of the above (i) amounts representing any applicable taxes
or governmental charges payable out of the respective Trust and for which
no deductions shall have previously been made for the purpose of addition
to the Reserve Account, (ii) amounts representing estimated accrued
expenses of such Trust including but not limited to unpaid fees and
expenses of the Trustee, the Evaluator, the Supervisor, the Depositor and
counsel, in each case as reported by the Trustee to the Depositor on or
prior to the date of evaluation, and (iii) any moneys identified by the
Trustee, as of the date of the Evaluation, as held for distribution to
Unitholders of record as of an Income or Capital Account Distribution
Record Date or for payment of the Redemption Value of Units tendered
prior to such date. The resulting figure is herein called a "Trust Fund
Evaluation." The value of the pro rata share of each Unit of the
respective Trust determined on the basis of any such evaluation shall be
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referred to herein as the "Unit Value." Amounts receivable by the Trust
in foreign currency shall be converted by the Trustee to U.S. dollars
based on current exchange rates, in the same manner as provided in
Section 4.01(b) or 4.01(c), as applicable, for the conversion of the
valuation of foreign Equity Securities, and the Evaluator shall report
such conversion with each Evaluation made pursuant to Section 4.01.
For each day on which the Trustee shall make a Trust Fund Evaluation
it shall also determine "Unit Value" for such day. Such "Unit Value"
shall be determined by dividing said Trust Fund Evaluation by the number
of Units outstanding on such day.
Section 5.02. Redemptions by Trustee; Purchases by Depositor'. Any
Certificate tendered for redemption by a Unitholder or his duly
authorized attorney to the Trustee at its unit investment trust division
office, or any Unit in uncertificated form tendered by means of an
appropriate request for redemption in form approved by the Trustee shall
be paid by the Trustee no later than the seventh calendar day following
the day on which tender for redemption is made in proper form, provided
that if such day of payment is not a Business Day, then such payment
shall be made no later than the first Business Day prior thereto (herein
referred to as the "Settlement Date"). Subject to (a) the next
succeeding paragraph, (b) payment by such Unitholder of any tax or other
governmental charges which may be imposed thereon and (c) payments in the
form of In Kind Distributions (as defined below), such redemption is to
be made by payment of cash equivalent to the Unit Value determined on the
basis of a Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee as of the Evaluation Time on the Redemption
Date, multiplied by the number of Units tendered for redemption (herein
called the "Redemption Value"), or if the Unitholder wishes to redeem a
number of Units less than all those so tendered, multiplied by the number
of Units so designated by such Unitholder for redemption. Units received
for redemption by the Trustee on any day after the Evaluation Time will
be held by the Trustee until the next day on which the New York Stock
Exchange is open for trading and will be deemed to have been tendered on
such day for redemption at the Redemption Value computed on that day.
The portion of the Redemption Value which represents income shall be
withdrawn from the Income Account to the extent available. The balance
paid on any Redemption Value, including income not paid from the Income
Account, if any, shall be withdrawn from the Capital Account to the
extent that funds are available for such purpose. If such available
funds shall be insufficient, the Trustee shall sell such Securities as
have been designated on the current list for such purpose by the
Supervisor (or by the Evaluator), as hereinafter in this Section 5.02
provided, in amounts as the Trustee in its discretion shall deem
advisable or necessary in order to fund the Capital Account for purposes
of such redemption. Sale of Securities by the Trustee shall be made in
such manner as the Trustee shall determine will bring the best price
obtainable for a Trust, subject to any limitations as to the minimum
amount of Equity Securities to be sold specified in the Trust Agreement.
In the event that either (i) funds are withdrawn from the Capital Account
and are applied to the payment of income upon any redemption of Units or
(ii) Securities are sold for the payment of the Redemption Value and any
portion of the proceeds of such sale is applied to the payment of income
upon such redemption, then, in either such event, the Capital Account
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shall be reimbursed therefor at such time as sufficient funds may be next
available in the Income Account for such purpose.
The Trustee may in its discretion, and shall when so directed by the
Depositor in writing, suspend the right of redemption for Units of a
Trust or postpone the date of payment of the Redemption Value for more
than seven calendar days following the day on which tender for redemption
is made (i) for any period during which the New York Stock Exchange is
closed other than customary weekend and holiday closings or during which
trading on the New York Stock Exchange is restricted; (ii) for any period
during which an emergency exists as a result of which disposal by such
Trust of the Securities is not reasonably practicable or it is not
reasonably practicable fairly to determine in accordance herewith the
value of the Securities; or (iii) for such other period as the Securities
and Exchange Commission may by order permit, and shall not be liable to
any person or in any way for any loss or damage which may result from any
such suspension or postponement.
Not later than the close of business on the day of tender of any
Certificate or Unit for redemption by a Unitholder other than the
Depositor, the Trustee shall notify the Depositor of such tender. The
Depositor shall have the right to purchase such Certificate or Unit by
notifying the Trustee of its election to make such purchase as soon as
practicable thereafter but in no event subsequent to the close of
business on the first Business Day after the day on which such
Certificate or Unit was tendered for redemption. Such purchase shall be
made by payment by the Depositor to the Unitholder on the Redemption Date
of an amount not less than the Redemption Value which would otherwise be
payable by the Trustee to such Unitholder. So long as the Depositor
maintains a bid in the secondary market, the Depositor may repurchase the
Units tendered to the Trustee for redemption by the Depositor but shall
be under no obligation to maintain any bids and may, at any time while so
maintaining such bids, cease to do so immediately at any time or from
time to time without notice.
Any Units so purchased by the Depositor may at the option of the
Depositor be tendered to the Trustee for redemption at the corporate
trust office of the Trustee in the manner provided in the first paragraph
of this Section 5.02.
Notwithstanding the foregoing provisions of this Section 5.02, until
the close of business on the second Business Day after the day on which
such Certificate or Unit was tendered for redemption the Trustee is
hereby irrevocably authorized in its discretion, in the event that the
Depositor does not purchase any Units tendered to the Trustee for
redemption, or in the event that a Unit is being tendered by the
Depositor for redemption, in lieu of redeeming Units, to sell Units in
the over-the-counter market through any broker-dealer of its choice for
the account of the tendering Unitholder at prices which will return to
the Unitholder an amount in cash, net after deducting brokerage
commissions, transfer taxes and other charges, equal to or in excess of
the Redemption Value which such Unitholder would otherwise be entitled to
receive on redemption pursuant to this Section 5.02. The Trustee shall
pay to the Unitholder the net proceeds of any such sale on the day on
which such Unitholder would otherwise be entitled to receive payment of
the Redemption Value hereunder.
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Notwithstanding anything to the contrary in this Section 5.02, any
Unitholder may, if such Unitholder tenders at least that minimum amount
of Units for redemption specified in the Prospectus, request at the time
of tender to receive from the Trustee in lieu of cash such Unitholder's
pro rata share of each Equity Security then held by such Trust; provided,
however, if a Unitholder tenders for redemption Units having an aggregate
value of at least the amount specified in the Prospectus, if any, the
Depositor reserves the right to direct the Trustee to make an In Kind
Distribution rather than make a cash payment. Such tendering Unitholder
will receive his pro rata number of whole shares of each of the Equity
Securities comprising the portfolio of such Trust and cash from the
Capital Account equal to the value of the fractional shares to which such
tendering Unitholder is entitled. Such pro rata share of each Equity
Security and the related cash to which such tendering Unitholder is
entitled is referred to herein as an "In Kind Distribution." An In Kind
Distribution will be made by the Trustee through the distribution of each
of the Equity Securities in book-entry form to the account of the
Unitholder's bank or broker-dealer at Depository Trust Company. If funds
in the Capital Account are insufficient to cover the required cash
distribution to the tendering Unitholder, the Trustee shall sell
Securities according to the criteria discussed herein.
The Supervisor shall maintain with the Trustee a current list of
Securities designated to be sold for the purpose of funding the Capital
Account for redemption of Units tendered for redemption and, to the
extent necessary, for payment of expenses under this Indenture. In
connection therewith, the Depositor may specify in the Trust Agreement
the minimum amounts of any Securities to be sold at any one time. If the
Supervisor shall for any reason fail to maintain such a list, the Trustee
may in its sole discretion designate a current list of Securities for
such purposes. The net proceeds of any sale of such Securities
representing income shall be credited to the Income Account and then
disbursed therefrom for payment of expenses and payments to Unitholders
required to be paid under this Indenture. Any balance remaining after
such disbursements shall remain credited to the Capital Account.
Neither the Depositor nor the Trustee shall be liable or responsible
in any way for depreciation or loss incurred by reason of any sale of
Securities made pursuant to this Section 5.02.
Certificates evidencing Units redeemed pursuant to this Section 5.02
shall be canceled by the Trustee and the Unit or Units evidenced by such
Certificates shall be terminated by such redemptions. In the event that
a Certificate shall be tendered representing a number of Units greater
than those requested to be redeemed by the Unitholder, the Trustee shall
issue to such Unitholder, unless such Unitholder requests such Units be
uncertificated, upon payment of any tax or charges of the character
referred to in the second paragraph of Section 5.03, a new Certificate
evidencing the Units representing the balance of the Certificate so
tendered and not redeemed.
Section 5.03. Transfer or Interchange of Units. Units will be held in
uncertificated form unless the Unitholder requests in writing to have a
Certificate or Certificates representing such Units be issued. Units may
be transferred by the registered holder thereof by presentation and
surrender of such Units and Certificates, if issued, at the corporate
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trust office of the Trustee, properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Trustee and executed by the Unitholder or his authorized attorney,
whereupon new Units or, if requested, a new registered Certificate or
Certificates for the same number of Units of the same Trust executed by
the Trustee and the Depositor will be issued in exchange and substitution
therefor and Units surrendered shall be canceled by the Trustee. The
registered holder of any Unit may transfer such Unit by the presentation
of transfer instructions and Certificates, if issued, to the Trustee at
the corporate trust office of the Trustee accompanied by such documents
as the Trustee deems necessary to evidence the authority of the person
making such transfer and executed by the registered holder or his
authorized attorney, whereupon the Trustee shall make proper notification
of such transfer on the registration books of the Trustee. Unitholders
holding their Units in uncertificated form may at any time request the
Trustee to issue Certificates for such Units and Unitholders holding
Certificates may at any time request that their Units be held in
uncertificated form. The Trustee shall, upon receipt of such request in
form satisfactory to it, accompanied by Certificates, if any, issue such
Certificates, or cancel such Certificate and make such appropriate
notations on its books, as may be requested by such Unitholder; provided
that the Trustee is entitled to specify the minimum denomination of any
Certificate issued. Certificates issued pursuant to this Indenture are
interchangeable for one or more other Certificates in an equal aggregate
number of Units of the same Trust and all Certificates issued shall be
issued in denominations of one Unit or any whole multiple thereof as may
be requested by the Unitholder. The Trustee may deem and treat the
registered Unitholder as the owner of the Units whether or not held in
certificated form for all purposes hereunder and in either case the
Trustee shall not be affected by any notice to the contrary, nor be
liable to any person or in any way for so deeming and treating the person
in whose name any Certificate shall be so registered.
A sum sufficient to pay any tax or other governmental charge that
may be imposed in connection with any such transfer or interchange shall
be paid by the Unitholder to the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee for each new Certificate issued on any
such transfer or interchange.
All Certificates canceled pursuant to this Indenture shall be
disposed of by the Trustee without liability on its part.
Section 5.04. Certificates Mutilated, Destroyed, Stolen or Lost. In
case any Certificate shall become mutilated, destroyed, stolen or lost,
the Trustee shall execute and deliver a new Certificate, if requested, in
exchange and substitution therefor upon the Unitholder's furnishing the
Trustee with proper identification and satisfactory indemnity, complying
with such other reasonable regulations and conditions as the Trustee may
prescribe and paying such expenses as the Trustee may incur. Any
mutilated Certificate shall be duly surrendered and canceled before any
new Certificate shall be issued in exchange and substitution therefor.
Upon the issuance of any new Certificate, a sum sufficient to pay any tax
or other governmental charge and the fees and expenses of the Trustee may
be imposed. Any such new Certificate issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership
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in the related Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
In the event the related Trust has terminated or is in the process
of termination, the Trustee may, instead of issuing a new Certificate in
exchange and substitution for any Certificate which shall have become
mutilated or shall have been destroyed, stolen or lost, make the
distributions in respect of such mutilated, destroyed, stolen or lost
Certificate (without surrender thereof except in the case of a mutilated
Certificate) as provided in Section 8.02 hereof if the Trustee is
furnished with such security or indemnity as it may require to save it
harmless, and in the case of destruction, loss or theft of a Certificate,
evidence to the satisfaction of the Trustee of the destruction, loss or
theft of such Certificate and of the ownership thereof.
Section 5.05. Rollover of Units. (a) If the Depositor shall offer a
subsequent series of a Trust (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 Unit(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 canceled 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 referred to as 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 pursuant to the direction of the Depositor, 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. Should the Depositor fail to provide
direction, the Distribution Agent shall sell the Securities in such
manner as may be provided in the Prospectus or, if the Prospectus does
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not so provide, as it in its sole discretion shall determine. 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 a 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
Prospectus for the New Series. 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, this Section 5.05 shall not
create any obligation or duty of the Depositor to offer a New Series and
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 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.
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(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 investment strategy of such New
Series. 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 Depositor.
ARTICLE VI
TRUSTEE
Section 6.01. General Definition of Trustee's Liabilities, Rights and
Duties. The Trustee shall in its discretion undertake such action as it
may deem necessary at any and all times to protect each Trust and the
rights and interests of the Unitholders pursuant to the terms of this
Indenture; provided, however, that the expenses and costs of such
actions, undertakings or proceedings shall be reimbursable to the Trustee
from the Income and Capital Accounts of such Trust, and the payment of
such costs and expenses shall be secured by a lien on such Trust prior to
the interest of Unitholders.
In addition to and notwithstanding the other duties, rights,
privileges and liabilities of the Trustee as otherwise set forth, the
liabilities of the Trustee are further defined as follows:
(a) All moneys deposited with or received by the Trustee
hereunder related to a Trust shall be held by it without interest in
trust within the meaning of the Investment Company Act of 1940, as
part of such Trust or the Reserve Account of such Trust until
required to be disbursed in accordance with the provisions of this
Indenture, and such moneys will be segregated by separate
recordation on the trust ledger of the Trustee so long as such
practice preserves a valid preference under applicable law, or if
such preference is not so preserved the Trustee shall handle such
moneys in such other manner as shall constitute the segregation and
holding thereof in trust within the meaning of the Investment
Company Act of 1940.
(b) The Trustee shall be under no liability for any action
taken in good faith on any appraisal, paper, order list, demand,
request, consent, affidavit, notice, opinion, direction, evaluation,
endorsement, assignment, resolution, draft or other document,
whether or not of the same kind, prima facie properly executed, or
for the disposition of moneys, Securities, Units, or Certificates,
pursuant to this Indenture, or in respect of any evaluation which it
is required to make or is required or permitted to have made by
others under this Indenture or otherwise, except by reason of its
own negligence, lack of good faith or willful misconduct, provided
that the Trustee shall not in any event be liable or responsible for
any evaluation made by the Evaluator. The Trustee may construe any
of the provisions of this Indenture, insofar as the same may appear
to be ambiguous or inconsistent with any other provisions hereof,
and any construction of any such provisions hereof by the Trustee in
good faith shall be binding upon the parties hereto.
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(c) The Trustee shall not be responsible for or in respect of
the recitals herein, the validity or sufficiency of this Indenture
or for the due execution hereof by the Depositor, the Supervisor, or
the Evaluator, or for the form, character, genuineness, sufficiency,
value or validity of any of the Securities (except that the Trustee
shall be responsible for the exercise of due care in determining the
genuineness of Securities delivered to it pursuant to contracts for
the purchase of such Securities) or for or in respect of the
validity or sufficiency of the Units or of the Certificates (except
for the due execution thereof by the Trustee) or for the due
execution thereof by the Depositor, and the Trustee shall in no
event assume or incur any liability, duty or obligation to any
Unitholder or the Depositor other than as expressly provided for
herein. The Trustee shall not be responsible for or in respect of
the validity of any signature by or on behalf of the Depositor, the
Supervisor or the Evaluator.
(d) The Trustee shall be under no obligation to appear in,
prosecute or defend any action which in its opinion may involve it
in expense or liability, unless as often as required by the Trustee
it shall be furnished with reasonable security and indemnity against
such expense or liability, and any pecuniary cost of the Trustee
from such actions shall be deductible from and a charge against the
Income and Capital Accounts of the affected Trust or Trusts. The
Trustee shall, in its discretion, undertake such action as it may
deem necessary at any and all times to protect the Fund and the
rights and interests of the Unitholders pursuant to the terms of
this Indenture, provided however, that the expenses and costs of
such actions, undertakings or proceedings shall be reimbursable to
the Trustee from the Income and Capital Accounts and the payment of
such amounts shall be secured by a prior lien on such Trust.
(e) (I) Subject to the provisions of subparagraphs (II)
and (III) of this paragraph, the Trustee may employ agents, sub-
custodians, attorneys, accountants and auditors and shall not
be answerable for the default or misconduct of any such agents,
sub-custodians, attorneys, accountants or auditors if such
agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee
shall be fully protected in respect of any action under this
Indenture taken or suffered in good faith by the Trustee in
accordance with the opinion of counsel, which may be counsel to
the Depositor acceptable to the Trustee, provided, however,
that this disclaimer of liability shall not (i) excuse the
Trustee from the responsibilities specified in subparagraph II
below or (ii) limit the obligation of the Trustee to indemnify
the Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys, accountants
or auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the
affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of an
eligible foreign custodian (which is employed by the Trustee as
a sub-custodian as contemplated by subparagraph (I) of this
paragraph (e) and which may be an affiliate or subsidiary of
the Trustee or any other entity in which the Trustee may have
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an ownership interest) the Trust's foreign securities, cash and
cash equivalents in amounts reasonably necessary to effect the
Trust's foreign securities transactions, provided that:
(1) The Trustee shall have:
(i) determined that maintaining the Trust's assets
in a particular country or countries is consistent with
the best interests of the Trust and the Unitholders;
(ii) determined that maintaining the Trust's assets
with such eligible foreign custodian is consistent with
the best interests of the Trust and the Unitholders; and
(iii) entered into a written contract which is
consistent with the best interests of the Trust and the
Unitholders and which will govern the manner in which such
eligible foreign custodian will maintain the Trust's
assets and which provides that:
(A) The Trust will be adequately indemnified
and its assets adequately insured in the event of
loss (without regard to the indemnity provided by the
Trustee under Section III hereof);
(B) The Trust's assets will not be subject to
any right, charge, security interest, lien or claim
of any kind in favor of the eligible foreign
custodian or its creditors except a claim for payment
for their safe custody or administration;
(C) Beneficial ownership of the Trust's assets
will be freely transferable without the payment of
money or value other than for safe custody or
administration;
(D) Adequate records will be maintained
identifying the assets as belonging to the Trust;
(E) The Trust's independent public accountants
will be given access to records identifying assets of
the Trust or confirmation of the contents of those
records; and
(F) The Trustee will receive periodic reports
with respect to safekeeping of the Trust's assets,
including, but not necessarily limited to,
notification of any transfer to or from the Trustee's
account.
(2) The Trustee shall establish a system to monitor such
foreign custody arrangements to ensure compliance with the
conditions of this subparagraph.
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(3) The Trustee, at least annually, shall review and
approve the continuing maintenance of Trust assets in a
particular country or countries with a particular eligible
foreign custodian or particular eligible foreign custodians as
consistent with the best interests of the Trust and the
Unitholders.
(4) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of
a particular eligible foreign custodian pursuant to this
subparagraph, and such records shall be available for
inspection by Unitholders and the Securities and Exchange
Commission at the Trustee's offices at all reasonable times
during its usual business hours.
(5) Where the Trustee has determined that a foreign
custodian may no longer be considered eligible under this
subparagraph or that, pursuant to clause (3) above, continuance
of the arrangement would not be consistent with the best
interests of the Trust and the Unitholders, the Trust must
withdraw its assets from the care of that custodian as soon as
reasonably practicable, and in any event within 180 days of the
date when the Trustee made the determination.
As used in this subparagraph (II),
(1) "foreign securities" include: securities issued
and sold primarily outside the United States by a foreign
government, a national of any foreign country or a corporation
or other organization incorporated or organized under the laws
of any foreign country and securities issued or guaranteed by
the government of the United States or by any state or any
political subdivision thereof or by any agency thereof or by
any entity organized under the laws of the United States or of
any state thereof which have been issued and sold primarily
outside the United States.
(2) "eligible foreign custodian" means:
(a) The following securities depositories and
clearing agencies which operate transnational systems for the
central handling of securities or equivalent book entries
which, by appropriate exemptive order issued by the Securities
and Exchange Commission, have been qualified as eligible
foreign custodians for the Trust but only for so long as such
exemptive order continues in effect: Morgan Guaranty Trust
Company of New York, Brussels, Belgium, in its capacity as
operator of the Euroclear System ("Euroclear"), and Central de
Livraison de Valeurs Mobili_res, S.A. ("CEDEL").
(b) Any other entity that shall have been qualified
as an eligible foreign custodian for the foreign securities of
the Trust by the Securities and Exchange Commission by
exemptive order, rule or other appropriate action, commencing
on such date as it shall have been so qualified but only for so
long as such exemptive order, rule or other appropriate action
continues in effect.
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The determinations set forth above to be made by the
Trustee should be made only after consideration of all matters
which the Trustee, in carrying out its fiduciary duties, finds
relevant, including, but not necessarily limited to,
consideration of the following:
1. With respect to the selection of the country
where the Trust's assets will be maintained, the Trustee should
consider:
a. Whether applicable foreign law would restrict
the access afforded the Trust's independent public accountants
to books and records kept by an eligible foreign custodian
located in that country;
b. Whether applicable foreign law would restrict
the Trust's ability to recover its assets in the event of the
bankruptcy of an eligible foreign custodian located in that
country;
c. Whether applicable foreign law would restrict
the Trust's ability to recover assets that are lost while under
the control of an eligible foreign custodian located in that
country;
d. The likelihood of expropriation,
nationalization, freezes, or confiscation of the Trust's
assets; and
e. Whether difficulties in converting the Trust's
cash and cash equivalents to U.S. dollars are reasonably
foreseeable.
2. With respect to the selection of an eligible
foreign custodian, the Trustee should consider:
a. The financial strength of the eligible foreign
custodian, its general reputation and standing in the country
in which it is located, its ability to provide efficiently the
custodial services required and the relative cost for those
services;
b. Whether the eligible foreign custodian would
provide a level of safeguards for maintaining the Trust's
assets not materially different from that provided by the
Trustee in maintaining the Trust's securities in the United
States;
c. Whether the eligible foreign custodian has
branch offices in the United States in order to facilitate the
assertion of jurisdiction over and enforcement of judgments
against such custodian; and
d. In the case of an eligible foreign custodian
that is a foreign securities depository, the number of
participants in, and operating history of, the depository.
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3. The Trustee should consider the extent of the
Trust's exposure to loss because of the use of an eligible
foreign custodian. The potential effect of such exposure upon
Unitholders shall be disclosed, if material, by the Depositor
in the prospectus relating to the Trust.
(III) The Trustee will indemnify and hold the Trust harmless
from and against any loss that shall occur as the result of the
failure of an eligible foreign custodian holding the foreign
securities of the Trust to exercise reasonable care with respect to
the safekeeping of such foreign securities to the same extent that
the Trustee would be required to indemnify and hold the Trust
harmless if the Trustee were holding such foreign securities in the
jurisdiction of the United States whose laws govern the indenture,
provided, however, that the Trustee will not be liable for loss
except by reason of the gross negligence, bad faith or willful
misconduct of the Trustee or the eligible foreign custodian.
(f) If at any time the Depositor shall fail to undertake or
perform any of the duties which by the terms of this Indenture are
required by it to be undertaken or performed, or such Depositor
shall become incapable of acting or shall be adjudged a bankrupt or
insolvent, or a receiver of such Depositor or of its property shall
be appointed, or any public officer shall take charge or control of
such Depositor or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then in any such case,
the Trustee may: (1) appoint a successor depositor, which may be
the Trustee or an affiliate, who shall act hereunder in all respects
in place of such Depositor, which successor shall be satisfactory to
the Trustee, and which may be compensated at rates deemed by the
Trustee to be reasonable under the circumstances, by deduction
ratably from the Income Account of the affected Trusts or, to the
extent funds are not available in such Account, from the Capital
Account of the affected Trusts, but no such deduction shall be made
exceeding such reasonable amount as the Securities and Exchange
Commission may prescribe in accordance with Section 26(a)(2)(C) of
the Investment Company Act of 1940, or (2) terminate this Indenture
and the trust created hereby and liquidate the Trust in the manner
provided in Section 8.02.
(g) If (i) the value of a Trust as shown by any evaluation by
the Trustee pursuant to Section 5.01 hereof shall be less than that
amount indicated in the Prospectus relating to such Trust or (ii) by
reason of the Depositor's redemption of Units of a Trust not
theretofore sold constituting more than 60% of the number of Units
initially authorized, the net worth of such Trust is reduced to less
than 40% of the aggregate value of Securities deposited in such
Trust at the termination of the initial offering period, the Trustee
may in its discretion, and shall when so directed by the Depositor,
terminate this Indenture and the trust created hereby and liquidate
such Trust, in such manner as the Depositor shall direct.
(h) In no event shall the Trustee be liable for any taxes or
other governmental charges imposed upon or in respect of the
Securities or upon the income or interest thereon or upon it as
Trustee hereunder or upon or in respect of any Trust which it may be
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required to pay under any present or future law of the United States
of America or of any other taxing authority having jurisdiction in
the premises. For all such taxes and charges and for any expenses,
including counsel fees, which the Trustee may sustain or incur with
respect to such taxes or charges, the Trustee shall be reimbursed
and indemnified out of the Income and Capital Accounts of the
affected Trust, and the payment of such amounts so paid by the
Trustee shall be secured by a prior lien on such Trust.
(i) Except as provided in Sections 3.01 and 3.05, no payment
to a Depositor or to any principal underwriter (as defined in the
Investment Company Act of 1940) for any Trust or to any affiliated
person (as so defined) or agent of a Depositor or such underwriter
shall be allowed the Trustee as an expense except for payment of
such reasonable amounts as the Securities and Exchange Commission
may prescribe as compensation for performing bookkeeping and other
administrative services of a character normally performed by the
Trustee.
(j) The Trustee, except by reason of its own negligence or
willful misconduct, shall not be liable for any action taken or
suffered to be taken by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Indenture.
(k) The Trustee in its individual or any other capacity may
become an owner or pledgee of, or be an underwriter or dealer in
respect of, Securities issued by the same issuer (or an affiliate of
such issuer) of any Securities at any time held as part of any Trust
and may deal in any manner with the same or with the issuer (or an
affiliate of the issuer) with the rights and powers as if it were
not the Trustee hereunder.
(1) Each Trust may include a Letter or Letters of Credit for
the purchase of Contract Securities issued by the Trustee in its
individual capacity for the account of the Depositor and the Trustee
may otherwise deal with the Depositor and each Trust with the same
rights and powers as if it were not the Trustee hereunder.
(m) The Trustee is authorized to appoint as co-trustee of any
Trust a trust company affiliated with the Trustee to perform the
functions of custodian and receiving and paying agent.
Section 6.02. Books, Records and Reports. The Trustee shall keep
proper books of record and account of all the transactions of each Trust
under this Indenture at its corporate trust office, including a record of
the name and address of, and the Units issued by each Trust and held by,
every Unitholder, and such books and records of each Trust shall be open
to inspection by any Unitholder of such Trust at all reasonable times
during the 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 or rule or regulation thereunder.
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Unless the Depositor determines that such an audit is not required,
the accounts of each Trust shall be audited not less than annually by
independent public accountants designated from time to time by the
Depositor and reports of such accountants shall be furnished by the
Trustee, upon request, to Unitholders. The Trustee, however, in
connection with any such audits shall not be obligated to use Trust
assets to pay for such audits in excess of the amounts, if any, indicated
in the Prospectus relating to such Trust.
To the extent permitted under the Investment Company Act of 1940 as
evidenced by an opinion of independent counsel to the Depositor
satisfactory to the Trustee or "no-action" letters issued by the staff of
the Securities and Exchange Commission, the Trustee shall pay, or
reimburse to the Depositor or others, from the Income or Capital Account
the costs of the preparation of documents and information with respect to
each Trust required by law or regulation in connection with the
maintenance of a secondary market in units of each Trust. Such costs may
include but are not limited to accounting and legal fees, blue sky
registration and filing fees, printing expenses and other reasonable
expenses related to documents required under federal and state securities
laws.
Section 6.03. Indenture and List of Securities on File. The Trustee
shall keep a certified copy or duplicate original of this Indenture on
file at its corporate trust office available for inspection at all
reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities in each Trust.
Section 6.04. Compensation. Subject to the provisions of Section 3.14
hereof, the Trustee shall receive at the times set forth in Section 3.05,
as compensation for performing ordinary normal recurring services under
this Indenture, an amount calculated at the annual compensation rate
stated in the Prospectus. The Trustee shall charge a pro rated portion
of its annual fee at the times specified in Section 3.05, which pro rated
portion shall be calculated on the basis of the largest number of Units
in such Trust at any time during the period subsequent to the Initial
Date of Deposit. The Trustee may from time to time adjust its
compensation as set forth above, provided that total adjustment upward
does not, at the time of such adjustment, exceed the percentage of the
total increase, after the date hereof, in consumer prices for services as
measured by the United States Department of Labor Consumer Price Index
entitled "All Services Less Rent." The consent or concurrence of any
Unitholder hereunder shall not be required for any such adjustment or
increase. Such compensation shall be charged by the Trustee against the
Income and Capital Accounts of each Trust; provided, however, that such
compensation shall be deemed to provide only for the usual, normal and
proper functions undertaken as Trustee pursuant to this Indenture.
The Trustee shall charge the Income and Capital Accounts for any and
all expenses and disbursements incurred hereunder, including legal and
auditing expenses, and for any extraordinary services performed
hereunder, which extraordinary services shall include but not be limited
to all costs and expenses incurred by the Trustee in making any annual or
other reports or other documents referred to in Sections 6.01 and 6.02;
provided, however, that the amount of any such charge which has not been
finally determined as of any calculation time may be estimated and any
necessary adjustments shall be made. Provided, further, that if the
balances in the Income and Capital Accounts shall be insufficient to
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provide for amounts payable pursuant to this Section 6.04, the Trustee
shall have the power to sell Securities in the manner provided in
Section 5.02. The Trustee shall not be liable or responsible in any way
for depreciation or loss incurred by reason of any such sale.
The Trustee shall be indemnified ratably by the affected Trust and
held harmless against any loss or liability accruing to it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this Fund,
including the costs and expenses (including counsel fees) of defending
itself against any claim of liability in the premises, including any
loss, liability or expense incurred in acting pursuant to written
directions to the Trustee given by the Depositor from time to time in
accordance with the provisions of this Indenture or in undertaking
actions from time to time which the Trustee deems necessary in its
discretion to protect the Fund and the rights and interests of the
Unitholders pursuant to the terms of this Indenture. Any moneys payable
to the Trustee under this Section 6.04 shall be secured by a lien on the
Trust prior to the interest of Unitholders.
Section 6.05. Removal and Resignation of Trustee; Successor'. The
following provisions shall provide for the removal and resignation of the
Trustee and the appointment of any successor trustee:
(a) The Trustee or any trustee or trustees hereafter appointed
may resign and be discharged of the Trusts created by this
Indenture, by executing an instrument in writing resigning as
Trustee of such Trusts and filing same with the Depositor and
mailing a copy of a notice of resignation to all Unitholders then of
record, not less than 60 days before the date specified in such
instrument when, subject to Section 6.05(e), such resignation is to
take effect. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee as hereinafter
provided, by written instrument, in duplicate, one copy of which
shall be delivered to the resigning Trustee and one copy to the
successor trustee. The Depositor may at any time remove the
Trustee, with or without cause, and appoint a successor trustee by
written instrument, in duplicate, one copy of which shall be
delivered to the Trustee so removed and one copy to the successor
trustee. Notice of such resignation or removal of a trustee and
appointment of a successor trustee shall be mailed by the successor
trustee, promptly after its acceptance of such appointment, to each
Unitholder then of record.
(b) Any successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor and to the resigning or
removed Trustee an instrument accepting such appointment hereunder,
and such successor trustee without any further act, deed or
conveyance shall become vested with all the rights, powers and
duties and obligations of its predecessor hereunder with like effect
as if originally named Trustee herein and shall be bound by all the
terms and conditions of this Indenture. Upon the request of such
successor trustee, the Depositor and the resigning or removed
Trustee shall, upon payment of any amounts due the resigning or
removed Trustee, or provision therefor to the satisfaction of such
resigning or removed Trustee, execute and deliver an instrument
acknowledged by it transferring to such successor trustee all the
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rights and powers of the resigning or removed Trustee; and the
resigning or removed Trustee shall transfer, deliver and pay over to
the successor trustee all Securities and moneys at the time held by
it hereunder, together with all necessary instruments of transfer
and assignment or other documents properly executed necessary to
effect such transfer and such of the records or copies thereof
maintained by the resigning or removed Trustee in the administration
hereof as may be requested by the successor trustee, and shall
thereupon be discharged from all duties and responsibilities under
this Indenture.
(c) In case at any time the Trustee shall resign and no
successor trustee shall have been appointed and have accepted
appointment within 30 days after notice of resignation has been
received by the Depositor, the retiring Trustee may forthwith apply
to a court of competent jurisdiction for the appointment of a
successor trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor
trustee.
(d) Any corporation into which any trustee hereunder may be
merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which any trustee
hereunder shall be a party, shall be the successor trustee under
this Indenture without the execution or filing of any paper,
instrument or further act to be done on the part of the parties
hereto, anything herein, or in any agreement relating to such merger
or consolidation, by which any such trustee may seek to retain
certain powers, rights and privileges theretofore obtaining for any
period of time following such merger or consolidation, to the
contrary notwithstanding.
(e) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to this Section shall become
effective upon acceptance of appointment by the successor trustee as
provided in subsection (b) hereof.
Section 6.06. Qualifications of Trustee. The Trustee shall be a
corporation organized and doing business under the laws of the United
States or any state thereof, which is authorized under such laws to
exercise corporate trust powers and having at all times aggregate
capital, surplus and undivided profits of not less than $5,000,000.
ARTICLE VII
RIGHTS OF UNITHOLDERS
Section 7.01. Beneficiaries of Trust. By the purchase and acceptance
or other lawful delivery and acceptance of any Unit, whether certificated
or not, the Unitholder shall be deemed to be a beneficiary of the related
Trust created by this Indenture and vested with all right, title and
interest in such Trust to the extent of the Unit or Units set forth and
whether evidenced by such Certificate or held in uncertificated form,
subject to the terms and conditions of this Indenture.
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Section 7.02. Rights, Terms and Conditions. In addition to the other
rights and powers set forth in the other provisions and conditions of
this Indenture, the Unitholders shall have the following rights and
powers and shall be subject to the following terms and conditions:
(a) A Unitholder may at any time prior to the Trustee's close
of business as of the date on which the Trust is terminated tender
his Units or his Certificate(s) if held in certificated form
(including any temporary Certificate or other evidence of ownership
of Units of such Trust, issued by the Trustee or the Depositor) to
the Trustee for redemption, subject to and in accordance with
Section 5.02.
(b) The death or incapacity of any Unitholder shall not
operate to terminate this Indenture or a related Trust, nor entitle
his legal representatives or heirs to claim an accounting or to take
any action or proceeding in any court of competent jurisdiction for
a partition or winding up of the Fund or a related Trust, nor
otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Each Unitholder expressly waives any
right he may have under any rule of law, of the provisions of any
statute, or otherwise, to require the Trustee at any time to
account, in any manner other than as expressly provided in this
Indenture, in respect of the Securities or moneys from time to time
received, held and applied by the Trustee hereunder.
(c) No Unitholder shall have any right to vote or in any
manner otherwise control the operation and management of the Fund, a
related Trust, or the Securities and management of the Fund, or the
Securities of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Certificates which may have
been issued, be construed so as to constitute the Unitholders from
time to time as partners or members of an association; nor shall any
Unitholder ever be under any liability to any third persons by
reason of any action taken by the parties to this Indenture, or any
other cause whatsoever.
ARTICLE VIII
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
Section 8.01. Amendments. (a) This Indenture may be amended from time
to time by the Depositor and Trustee hereto or their respective
successors, without the consent of any of the Unitholders (i) to cure any
ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision contained
herein or (ii) to make such other provision regarding matters or
questions arising hereunder as shall not adversely affect the interests
of the Unitholders; provided, however, that in no event may any amendment
be made which would adversely affect the status of a Trust for federal
income tax purposes. This Indenture may not be amended, however, without
the consent of all Unitholders then outstanding, so as (1) to permit,
except in accordance with the terms and conditions hereof, the
acquisition hereunder of any Securities other than those specified in the
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Schedules to the Trust Agreement or (2) to reduce the aforesaid
percentage of Units the holders of which are required to consent to
certain of such amendments. This Indenture may not be amended so as to
reduce the interest in a Trust represented by Units (whether evidenced by
Certificates or held in uncertificated form) without the consent of all
affected Unitholders.
(b) Except for the amendments, changes or modification as provided
in Section 8.01(a) hereof, neither the parties hereto nor their
respective successors shall consent to any other amendment, change or
modification of this Indenture without the giving of notice and the
obtaining of the approval or consent of Unitholders representing at least
66-2/3% of the Units then outstanding of the affected Trust. Nothing
contained in this Section 8.01(b) shall permit, or be construed as
permitting, a reduction of the aggregate percentage of Units the holders
of which are required to consent to any amendment, change or modification
of this Indenture without the consent of the Unitholders of all of the
Units then outstanding of the affected Trust and in no event may any
amendment be made which would (1) alter the rights to the Unitholders as
against each other, (2) provide the Trustee with the power to engage in
business or investment activities other than as specifically provided in
this Indenture or (3) adversely affect the status of the Trust for
federal income tax purposes.
(c) Promptly after the execution of any such amendment the Trustee
shall furnish written notification to all then outstanding Unitholders of
the substance of such amendment.
Section 8.02. Termination. This Indenture and each Trust created
hereby shall terminate upon the maturity, redemption, sale or other
disposition as the case may be of the last Security held in such Trust
hereunder unless sooner terminated as hereinbefore specified, and may be
terminated at any time by the written consent of Unitholders representing
at least 66-2/3% of the Units then outstanding; provided that in no event
shall any Trust continue beyond the Mandatory Termination Date. Upon the
date of termination the registration books of the Trustee shall be
closed.
In the event of a termination, the Trustee shall proceed to
liquidate the Securities then held and make the payments and
distributions provided for hereinafter in this Section 8.02 based on such
Unitholder's pro rata interest in the balance of the Capital and Income
Accounts after the deductions herein provided. Written notice shall be
given by the Trustee in connection with any termination to each
Unitholder at his address appearing on the registration books of the
Trustee and in connection with a Mandatory Termination Date such notice
shall be given no later than 30 days before the Mandatory Termination
Date. Included with such notice shall be a form to enable Unitholders
owning that number of Units referred to in the Prospectus (if such option
is available for the particular Trust involved) to request an In Kind
Distribution rather than payment totally in cash upon termination. Such
request must be returned to the Trustee at least five Business Days prior
to the Mandatory Termination Date. Unitholders who do not effectively
request an In Kind Distribution shall receive their distribution upon
termination in cash.
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If the Prospectus for a Trust so provides, Unitholders who tender
the required amount of Units specified in the Prospectus for a Trust may
request an In Kind Distribution upon termination of such Trust; provided,
however, the Depositor reserves the right to direct the Trustee to make
an In Kind Distribution rather than make a cash payment if a Unitholder
tenders for redemption that aggregate value of Units, if any, set forth
in the Prospectus. Any Unitholder who receives an In Kind Distribution
shall receive such distribution in the same manner as is provided in
connection with redemptions in Section 5.02.
In connection with any such termination, the Trustee shall segregate
(i) such number of Equity Securities as the Trustee, in its
sole discretion, determines shall be necessary to liquidate to
provide for fees and expenses of such Trust and
(ii) such number of the remaining Equity Securities as shall be
necessary to satisfy distributions to Unitholders electing an In
Kind Distribution.
The Trustee will liquidate the Equity Securities not segregated for
In Kind Distributions during such period and in such daily amounts as the
Depositor shall direct. The Depositor shall direct the liquidation of the
Equity Securities in such manner as to effectuate orderly sales and a
minimal market impact. In the event the Depositor does not so direct,
the Securities shall be sold within a reasonable period and in such
manner as the Trustee, in its sole discretion, shall determine. The
Trustee shall not be liable for or responsible in any way for
depreciation or loss incurred by reason of any sale or sales made in
accordance with the Depositor's direction or, in the absence of such
direction, in the exercise of the discretion granted by this
Section 8.02. The Trustee shall deduct from the proceeds of these sales
and pay any tax or governmental charges and any brokerage commissions in
connection with such sales. Amounts received by the Trustee representing
the proceeds from the sales of Securities shall be credited to the
related Capital Account.
On the fifth Business Day following receipt of all proceeds of sale
of the Securities, the Trustee shall:
(a) deduct from the Income Account of such Trust or, to the
extent that funds are not available in such Account of such Trust,
from the Capital Account of such Trust, and pay to itself
individually an amount equal to the sum of (i) its accrued
compensation for its ordinary recurring services, (ii) any
compensation due it for its extraordinary services in connection
with such Trust, and (iii) any costs, expenses or indemnities in
connection with such Trust as provided herein;
(b) deduct from the Income Account of such Trust or, to the
extent that funds are not available in such Account, from the
Capital Account of such Trust, and pay accrued and unpaid fees of
the Evaluator, the Supervisor and counsel in connection with such
Trust, if any;
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(c) deduct from the Income Account of such Trust or the
Capital Account of such Trust any amounts which may be required to
be deposited in the Reserve Account to provide for payment of any
applicable taxes or other governmental charges and any other amounts
which may be required to meet expenses incurred under this Indenture
in connection with such Trust;
(d) make final distributions from such Trust, against
surrender for cancellation of all of each Unitholder's Certificate
or Certificates, if issued, as follows:
(i) to each Unitholder requesting an In Kind Distribution
(y) such holder's pro rata portion of each of the Equity
Securities segregated for distribution in kind, in whole
shares, and (z) cash equal to such Unitholder's pro rata
portion of the Income and Capital Accounts as follows: (1) a
pro rata portion of the net proceeds of sale of the Equity
Securities representing any fractional shares included in such
Unitholder's pro rata share of the Equity Securities not
segregated for liquidation to provide for Trust expenses and
(2) cash equal to such Unitholder's pro rata share of the sum
of the cash balances of the Income and Capital Accounts as of
the Mandatory Termination Date plus, in either case, the net
proceeds of sale of the Equity Securities segregated for
liquidation to provide for Trust expenses less deduction of the
fees and expenses specified in this Section 8.02 and less
deduction of the Trustee's cost of registration and delivery of
such Unitholder's Equity Securities;
(ii) to each Unitholder receiving distribution in cash,
such holder's pro rata share of the cash balances of the Income
and Capital Accounts; and
(iii) on the conditions set forth in Section 3.04 hereof,
to all Unitholders, their pro rata share of the balance of the
Reserve Account.
In Kind Distributions of Equity Securities shall be made by the
Trustee through the distribution of each of the Equity Securities in
book-entry form to the account of the Unitholder's bank or broker-
dealer at the Depository Trust Company; and
(e) within 60 days after the distribution to each Unitholder
as provided for in (d), furnish to each such Unitholder a final
distribution statement, setting forth the data and information in
substantially the form and manner provided for in Section 3.06
hereof.
The Trustee shall be under no liability with respect to moneys held
by it in the Income, Reserve and Capital Accounts of a Trust upon
termination except to hold the same in trust within the meaning of the
Investment Company Act of 1940, without interest until disposed of in
accordance with the terms of this Indenture.
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Section 8.03. Construction. This Indenture is executed and delivered
in the state of New York, and all laws or rules of construction of such
state shall govern the rights of the parties hereto and the Unitholders
and the interpretation of the provisions hereof.
Section 8.04. Registration of Units. Except as provided in Section
3.01 and 3.05, the Depositor agrees and undertakes on its own part to
register the Units with the Securities and Exchange Commission or other
applicable governmental agency, federal or state, pursuant to applicable
federal or state statutes, if such registration shall be required, and to
do all things that may be necessary or required to comply with this
provision during the term of any Trust created hereunder, and the Trustee
shall incur no liability, obligation or expenses in connection therewith.
Section 8.05. Written Notice. Any notice, demand, direction or
instruction to be given to the Depositor, Evaluator or Supervisor
hereunder shall be in writing and shall be duly given if mailed or
delivered to the Depositor, 250 North Rock Road, Suite 150, Wichita,
Kansas 67206-2241, or at such other address as shall be specified by the
Depositor to the other parties hereto in writing.
Any notice, demand, direction or instruction to be given to the
Trustee shall be in writing and shall be duly given if delivered to the
unit investment trust division office of the Trustee at 101 Barclay
Street, 17th Floor, New York, New York 10286, Attention: Unit Trust
Division, or to such other address as shall be specified by the Trustee
to the other parties in writing.
Any notice to be given to the Unitholders shall be duly given if
mailed by first class mail with postage prepaid or delivered to each
Unitholder at the address of such holder appearing on the registration
books of the Trustee.
Section 8.06. Severability. If any one or more of the covenants,
agreements, provisions or terms of this Indenture shall be held contrary
to any express provision of law or contrary to policy of express law,
though not expressly prohibited, or against public policy, or shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Indenture and shall in
no way affect the validity or enforceability of the other provisions of
this Indenture or of the Certificates or the rights of the holders
thereof.
Section 8.07. Dissolution of Depositor Not to Terminate. The
dissolution of the Depositor for any cause whatsoever shall not operate
to terminate this Indenture or any Trust insofar as the duties and
obligations of the Trustee are concerned.
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EXHIBIT 1.1.1
IN WITNESS WHEREOF, Ranson & Associates, Inc. and The Bank of New
York have each caused these Standard Terms and Conditions of Trust to be
executed by authorized officers; all as of the day, month and year first
above written.
RANSON & ASSOCIATES, INC.,
Depositor, Evaluator and
Supervisor
By ROBIN K. PINKERTON
------------------------------------
President
THE BANK OF NEW YORK,
Trustee
By TED RUDICH
------------------------------------
Vice President
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 West Monroe Street
Chicago, Illinois 60603
January 7, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts Series 53
---------------------------------------
Gentlemen:
We have served as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts Series 53 (the "Fund"), in
connection with the preparation, execution and delivery of the Trust
Agreement dated the date of this opinion between Ranson & Associates, 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. 333-17811) 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
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 West Monroe Street
Chicago, Illinois 60603
January 7, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Ranson Unit Investment Trusts, Series 53
----------------------------------------
Gentlemen:
We have acted as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts Series 53 (the "Fund"), in
connection with the issuance of Units of fractional undivided interest in the
Fund, under a Trust Agreement dated January 7, 1997 (the "Indenture") between
Ranson & Associates, Inc., as Depositor, and The Bank of New York, as
Trustee. The Fund is comprised of two separate unit investment trusts,
Defined Growth Strategy 5, Series 4 and Defined Growth Strategy 10, Series 4
(each a "Trust").
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 him bears to the total number of Units outstanding.
Under subpart E, subchapter J of chapter 1 of the Code, income of a
<PAGE>
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 Equity 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 Equity 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 dividends with respect to
each Security which are not taxable as ordinary income.
<PAGE>
(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.
A corporation owning Units in a Trust may be eligible for the 70%
dividends received deduction pursuant to Section 243(a) of the Code 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 and are
attributable to domestic corporations), 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 dividends 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. Unitholders may be required to
treat some or all of the 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 an Equity 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
(subject to various non-recognition provisions of the Code).
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 foreign, 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
EXHIBIT 4.1
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
-------------------------------------------------
We have issued our report dated January 7, 1997 on the statements of
condition and related portfolios of Ranson Unit Investment Trusts Series 53
as of January 7, 1997 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
January 7, 1997
<TABLE> <S> <C>
<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>
<NUMBER> 01
<NAME> DEFINED GROWTH STRATEGY 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-07-1997
<PERIOD-END> JAN-07-1997
<INVESTMENTS-AT-COST> 253,054
<INVESTMENTS-AT-VALUE> 253,054
<RECEIVABLES> 0
<ASSETS-OTHER> 11,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 264,054
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,000
<TOTAL-LIABILITIES> 11,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 253,054
<SHARES-COMMON-STOCK> 25,561
<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> 253,054
<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>
<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>
<NUMBER> 02
<NAME> DEFINED GROWTH STRATEGY 10
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-07-1997
<PERIOD-END> JAN-07-1997
<INVESTMENTS-AT-COST> 252,067
<INVESTMENTS-AT-VALUE> 252,067
<RECEIVABLES> 0
<ASSETS-OTHER> 11,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 263,067
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,000
<TOTAL-LIABILITIES> 11,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 252,067
<SHARES-COMMON-STOCK> 25,461
<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> 252,067
<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>
