AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 3, 1997
REGISTRATION NO. 333-_____
CIK #910923
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------------
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 55
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
RANSON & ASSOCIATES, INC.
250 North Rock Road, Suite 150
Wichita, Kansas 67206-2241
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 55 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.
===============================================================================
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 55
------------------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a)Name of trust................... ) Prospectus front cover
(b)Title of securities issued...... ) Essential Information
2. Name and address of each depositor. ) Administration of the Trusts
3. Name and address of trustee........ ) Administration of the Trusts
4. Name and address of principal
underwriters...................... ) *
5. State of organization of trust..... ) The Fund
6. Execution and termination of trust ) The Fund; Administration of the Trusts
agreement......................... )
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
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
(g)Notice of certificateholders.... ) Investment Supervision
) Administration of the Trusts;
) Unitholders
(h)Consents required............... ) Unitholders;
) Administration of
) the Trusts
(i)Other provisions................ ) Federal Tax Status
11. Type of securities comprising ) The Fund; The Trust Portfolios;
units............................. ) Portfolios
12. Certain information regarding peri-
odic payment certificates......... ) *
13. (a) Load, fees, expenses, etc...... ) Essential Information; Public Offering
) of Units; Expenses of the Trusts
(b)Certain information regarding
periodic payment certifi-
cates....................... ) *
(c)Certain percentages........... ) Essential Information; Public Offering
) of Units
(d)Certain other fees, etc. pay-
able by holders............. ) Unitholders
(e)Certain profits receivable by
depositor, principal under-
writers, trustee or affili- ) Expenses of the
ated persons................ ) Trusts; Public Offering of Units
(f)Ratio of annual charges to in-
come........................ ) *
14. Issuance of trust's securities... ) The Fund;
) Unitholders
15. Receipt and handling of payments ) *
from purchasers.................
16. Acquisition and disposition of ) The Fund; The Trust Portfolios;
underlying securities........... ) Investment Supervision;
) Market for Units
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
17. Withdrawal or redemption......... ) Redemption; Public Offering of Units
18. (a)Receipt, custody and disposi-
tion 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 offi-
cials and affiliated persons of ) Administration of
depositor....................... ) the Trusts
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
29. Voting securities of depos- )
itor...................... )
30. Persons controlling deposi-
tor....................... )
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 per-
sons for certain services
rendered to trust......... ) *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's se- ) Public Offering of Units
curities by states........
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 princi- ) Administration
pal underwriters.......... ) of the Trusts
(b)N.A.S.D. membership of
principal underwriters.... )
40. Certain fees received by
principal underwriters.... ) See Items 13(a) and 13(e)
41. (a)Business of principal ) Administration
underwriters.............. ) of the Trusts
(b)Branch offices of prin-
cipal underwriters........ ) *
(c)Salesmen of principal
underwriters.............. )
42. Ownership of trust's secu-
rities by certain persons. )
43. Certain brokerage commis-
sions received by princi-
pal underwriters.......... ) Public Offering of Units
44. (a)Method of valuation..... ) Public Offering of Units
(b)Schedule as to offering
price..................... ) *
(c)Variation in offering ) Public Offering of Units
price to certain persons..
45. Suspension of redemption
rights.................... ) Redemption
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
46. (a)Redemption valuation.... ) Redemption;
) Market for Units;
) Public Offering of Units
(b)Schedule as to redemp-
tion price................ ) *
47. Maintenance of position in ) Market for Units;
underlying securities..... ) Public Offering of Units;
) Redemption
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation ) Administration
of trustee................ ) of the Trusts
49. Fees and expenses of trust- ) Expenses of the Trusts
ee........................
50. Trustee's lien............. ) *
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Insurance of holders of trust's ) Cover Page;
securities.................. ) Expenses of the Trusts
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement
with respect to selection or ) The Fund; Investment Supervision
elimination of underlying se- )
curities..................... )
(b) Transactions involving elimi-
nation of underlying securi-
ties......................... )
(c) Policy regarding substitution
or elimination of underlying ) Investment
securities................... ) Supervision;
(d) Fundamental policy not other-
wise covered................. ) *
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
53. Tax status of Trust.............. ) Essential Information;
) Portfolios;
) Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
Trust's securities during last
54. ten years........................ ) *
55. )
56. Certain information regarding pe-
riodic payment certificates..... )
57. )
58. )
59. Financial statements (Instruction
1(c) to Form S-6)............... ) *
</TABLE>
- - --------
* Inapplicable, answer negative or not required.
-7-
<PAGE>
Preliminary Prospectus Dated February 18, 1997
Subject to Completion
RANSON UNIT INVESTMENT TRUSTS, SERIES 55
Nasdaq-100 Index Trust, Series 2 (a "Trust" or the "Nasdaq-100 Trust") was
formed with the investment objective of obtaining capital appreciation
through investment in a portfolio of equity securities of the companies which
comprise the Nasdaq-100 Index. By investing in substantially all of the
common stocks, in substantially the same proportions, which comprise the
Nasdaq-100 Index, the Trust seeks to produce investment results that
generally correspond to the price and yield performance of the equity
securities represented by the Nasdaq-100 Index over the term of the Trust.
See "The Trust Portfolios." The Trust is not sponsored, endorsed or promoted
by or affiliated with The Nasdaq Stock Market, Inc. or the National
Association of Securities Dealers, Inc. There is, of course, no assurance
that the Trust will achieve its objective.
S&P 500 Index Trust, Series 2 (a "Trust" or the "S&P 500 Trust") was formed
with the investment objective of obtaining capital appreciation through
investment in a portfolio of equity securities of companies which comprise
the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index").
By investing in substantially all of the common stocks, in substantially the
same proportions, which comprise the S&P 500 Index, the Trust seeks to
produce investment results that generally correspond to the price and yield
performance of the equity securities represented by the S&P 500 Index over
the term of the Trust. See "The Trust Portfolios." The Trust is not
sponsored by or affiliated with Standard and Poor's. There is no assurance
that the Trust will achieve its objective.
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 _________, 1997.
<PAGE>
SUMMARY
THE TRUST. Nasdaq-100 Index Trust, Series 2 and S&P 500 Index Trust, Series
2 (the "Trusts") are each separate unit investment trusts included in Ranson
Unit Investment Trusts, Series 55 (the "Fund"), an investment company
registered under the Investment Company Act of 1940. Each Trust initially
consists of securities and delivery statements (i.e., contracts) to purchase
common stocks issued by companies selected in accordance with the selection
and weightings of stocks established by the related stock index.* The
initial deposit of Securities (including contracts) into each Trust will
consist of at least 100 shares of each of the stocks which comprise the
related stock index. Thereafter, the Sponsor intends to create and maintain
a Trust portfolio which duplicates, to the extent practicable, the weightings
of stocks which comprise the related stock index. During the initial deposit
period of each Trust the Sponsor will continue to deposit Securities
(contracts for the purchase thereof), or cash with instructions to purchase
such Securities, until at the end of such period such Trust comprises
substantially all of the stocks in the related stock index, in substantially
the same weightings as in such index (the "Initial Adjustment Period"). The
Sponsor estimates that the Initial Adjustment Period will last no longer than
30 days following the Initial Date of Deposit and could last as little as one
day. For the criteria used by the Sponsor in selecting the Securities, see
"The Trust Portfolios-Securities Selection." The value of all portfolio
Securities and, therefore, the value of the Units may be expected to
fluctuate in value depending on the full range of economic and market
influences affecting corporate profitability, the financial condition of
issuers and the prices of equity securities in general and the Securities in
particular. Capital appreciation is, of course, dependent upon several
factors including, among other factors, the financial condition of the
issuers of the Securities (see "The Trust Portfolios").
The Nasdaq-100 Trust was formed with the investment objective of obtaining
capital appreciation over the life of such Trust through investment in a
portfolio of equity securities of substantially all of the companies which
comprise the Nasdaq-100 Index. The S&P 500 Trust was formed with the
investment objective of obtaining capital appreciation over the life of such
Trust through investment in a portfolio of equity securities of substantially
all of the companies which comprise the S&P 500 Index. An indexing strategy
attempts to track the performance of a specific market index. As part of an
overall investment strategy, indexing may provide additional growth potential
in an otherwise conservative portfolio and blend as a companion investment to
hedge an aggressive equity strategy. There can be no assurance that a
Trust's objective will be met because it may be impracticable for the Trust
to duplicate or maintain precisely the relative weightings of the common
stocks which comprise the related stock index or to purchase all of such
stocks. Additionally, an investment in Units of the Trusts includes payment
of sales charges, fees and expenses which are not considered in the total
return of the related stock index.
Additional Units of each Trust may be issued at any time by depositing in
such Trust additional Securities, contracts to purchase additional Securities
together with cash or irrevocable letters of credit, or cash (with
instructions to purchase additional Securities). As additional Units are
issued by a Trust as a result of the deposit of additional Securities, the
aggregate value of the Securities in such Trust will be increased and the
fractional undivided interest in such Trust represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits of
Securities into a Trust from time to time following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
- -----------------------
* "Nasdaq(R)", "Nasdaq-100(R)" and "Nasdaq-100 Index(R)" are registered marks
of The Nasdaq Stock Market, Inc. and are licensed for use by the Sponsor.
"S&P(R)", "Standard & Poor's(R)", "S&P 500" and "Standard & Poor's 500" are
trademarks of The McGraw-Hill Companies, Inc.
#
<PAGE>
maintain, as closely as practicable, the proportionate relationship among
each Security in the related stock index. Thus, although additional Units
will be issued, each Unit will continue to represent approximately the same
weighting of the then current components of the related stock index. Precise
duplication of the relationship among the Securities in a Trust may not be
achieved because it may be economically impracticable as a result of certain
economic factors or procedural policies of a Trust. 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 each Trust will pay
the associated brokerage fees. To minimize this effect, each Trust will
attempt to purchase the Securities as close to the Evaluation Time or as
close to the evaluation prices as possible. See "The Trust Funds."
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 a 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
during the initial offering period is based on the aggregate underlying value
of the Securities in such Trust, plus or minus a pro rata portion of the
cash, if any, in the Income and Capital Accounts held or owned by such Trust,
plus a sales charge of 4.9% of the Public Offering Price (equivalent to
5.152% of the net amount invested). The secondary market Public Offering
Price will be equal to the aggregate underlying value of the Securities in
each Trust, plus or minus a pro rata portion of the cash, if any, in the
Income and Capital Accounts held or owned by such Trust, plus the sales
charge indicated under "Public Offering of Units-Public Offering Price." The
sales charge is reduced on a graduated scale for certain sales. The minimum
purchase for each Trust is $1,000.
DISTRIBUTIONS OF INCOME AND CAPITAL. Dividends, if any, received by a Trust
will be distributed quarterly and any funds in the Capital Account will be
distributed annually. See "Unitholders-Distributions to Unitholders."
REINVESTMENT. Each Unitholder may elect to have distributions of income,
capital gains and/or capital on their Units automatically invested into
additional Units of the Trust without an initial sales charge. In addition,
all Unitholders may elect to have such distributions automatically reinvested
into shares of any Zurich Kemper Investments, Inc. front-end load mutual fund
(other than those funds sold with a contingent deferred sales charge)
registered in such Unitholder's state of residence at net asset value. Such
distributions will be reinvested without charge to the participant on each
applicable Distribution Date. See "Unitholders-Distribution Reinvestment." A
current prospectus for the reinvestment fund selected, if any, will be
furnished to any investor who desires additional information with respect to
reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends
to, and certain dealers may, maintain a market for the Units of the Trusts
and offer to repurchase such Units at prices subject to change at any time
which are based on the current underlying value 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
#
<PAGE>
Unitholder may also dispose of Units through redemption at the Redemption
Price on the date of tender to the Trustee. See "Redemption-Computation of
Redemption Price."
TERMINATION. No later than the date specified under the Mandatory
Termination Date in "Essential Information," Securities will begin to be sold
in connection with the termination of the Trusts and it is expected that all
Securities in the Trusts will be sold within a reasonable amount of time
after the Mandatory Termination Date. The Sponsor will determine the manner,
timing and execution of the sale of the underlying Securities. At
termination, Unitholders will receive a cash distribution within a reasonable
time after a 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. Additionally, it is anticipated that the identity and
weighting of the stocks in each stock index will change from time to time and
the adverse financial condition of a company will not result directly in its
elimination from the portfolio unless the company is removed from the related
stock index. For risk considerations related to the Trusts, see "Risk
Factors."
NASDAQ-100(R) INDEX LICENSING AGREEMENT
The Sponsor has entered into a license agreement with The Nasdaq Stock
Market, Inc. (the "License Agreement"), under which the Nasdaq-100 Trust
(through the Sponsor) is granted licenses to use the trademark and tradenames
"Nasdaq," "Nasdaq-100," and "Nasdaq-100 Index" solely in materials relating
to the creation and issuance, marketing and promotion of such Trust and in
accordance with any applicable federal and state securities law to indicate
the source of the Nasdaq-100 Index as a basis for determining the
composition of such Trust's portfolio. As consideration for the grant of the
license, the Nasdaq-100 Trust will pay to The Nasdaq Stock Market, Inc. an
annual fee equal to that amount described under "Expenses of the Trusts." If
the Nasdaq-100 Index ceases to be compiled or made available or the
anticipated correlation between Nasdaq-100 Trust and the Nasdaq-100 Index is
not maintained, the Sponsor may direct that such Trust continue to be
operated using the Nasdaq-100 Index as it existed on the last date on which
it was available or may direct that the Trust Agreement be terminated (see
"Administration of the Trusts-Amendment and Termination").
Neither Nasdaq-100 Trust nor the Unitholders are entitled to any rights
whatsoever under the foregoing licensing arrangements or to use any of the
covered trademarks or to use the Nasdaq-1 00 Index, except as specifically
described herein or as may be specified in the Trust Agreement.
The Nasdaq-100 Trust is not sponsored, endorsed, sold or promoted by The
Nasdaq Stock Market, Inc. (including its affiliates) (the "Corporations").
The Corporations have not passed on the legality or suitability of, or the
accuracy or adequacy of descriptions and disclosures relating to, the Trust
or Units of the Nasdaq-100 Trust. The Corporations make no representation or
warranty, express or implied to the owners of Units of the Nasdaq-100 Trust
or any member of the public regarding the advisability of investing in
securities generally or in Units of such Trust particularly or the ability of
the Nasdaq-100 Index to track general stock market performance. The
Corporations' only relationship to the Sponsor ("Licensee") and the Nasdaq-
100 Trust is in the licensing of certain trademarks, service marks, and trade
names of the Corporations and the use of the Nasdaq- 100 Index which is
determined, composed and calculated by Nasdaq without regard to the Licensee,
#
<PAGE>
the Nasdaq-100 Trust or Unitholders of such Trust. Nasdaq has no obligation
to take the needs of the Licensee or the owners of the Trust into
consideration in determining, composing or calculating the Nasdaq-100 Index.
The Corporations are not responsible for and have not participated in the
determination of the timing of, prices at, or quantities of the Units of the
Nasdaq-100 Trust to be issued or in the determination or calculation of the
equation by which the Units of such Trust are to be converted into cash. The
Corporations have no liability in connection with the administration or
operations of the Nasdaq-100 Trust, marketing or trading of Units of such
Trust.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE
CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY LICENSEE, OWNERS OF UNITS OF THE NASDAQ-100 TRUST, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
THE CORPORATIONS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
5
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 55
ESSENTIAL INFORMATION AS OF ___________, 1997*
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
NASDAQ-100 TRUST LICENSOR: THE NASDAQ STOCK MARKET, INC.
S&P 500 TRUST LICENSOR: STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL
COMPANIES, INC.
<TABLE>
Nasdaq-10 S&P 500
Trust Trust
--------------- ----------------
<S> <C> <C>
Number of Units (1)
Fractional Undivided Interest Per Unit (1) 1/ _________ 1/ _________
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ _________ $ _________
Aggregate Value of Securities per Unit $ _________ $ _________
Plus Sales Charge of 4.9% (5.152% of net amount invested) $ _________ $ _________
Public Offering Price Per Unit (3) $ _________ $ _________
Redemption Price Per Unit $ _________ $ _________
Sponsor's Initial Repurchase Price Per Unit $ _________ $ _________
Excess of Public Offering Price Per Unit over Redemption
Price Per Unit $ _________ $ _________
Excess of Public Offering Price Per Unit over Sponsor's
Initial Repurchase Price Per Unit $ _________ $ _________
Estimated Annual Organizational Expense per Unit (4) $ _________ $ _________
Calculation of Estimated Net Annual Dividends per Unit: (5)
Estimated Gross Annual Dividends per Unit $ _________ $ _________
Less: Estimated Annual Expense per Unit $ _________ $ _________
Estimated Net Annual Dividends per Unit $ _________ $ _________
Minimum Value of a Trust under which Trust Agreement
may be Terminated 40% of aggregate value of
Securities at deposit
Liquidation Period
Mandatory Termination Date
Evaluator's Annual Evaluation Fee Maximum of $_______ per Unit
Trustee's Annual Fee $_______ per Unit
Record and Computation Dates (5) FIRST day of January, April, July
and October
Distribution Dates (5) FIFTEENTH day of January, April,
July and October
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units of the
Trusts 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
6
<PAGE>
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 a national
securities exchange or the Nasdaq National Market.
(3) 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.
(4) 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 this total organizational
expenses will be amortized over a five year period, 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.
(5) The estimated annual dividends per Unit is based primarily on the most
recent dividend declared for all of the stocks in the related stock index.
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 a Trust.
(6) Distributions from the Capital Account will be made monthly payable on
the fifteenth day of the month to Unitholders of record on the first day
of such month if the amount available for distribution equals at least
$1.00 per 100 Units. Notwithstanding, distributions of funds in the
Capital Account, if any, will be distributed annually.
7
<PAGE>
THE TRUST FUNDS
Ranson Unit Investment Trusts, Series 55 (the "Fund") includes separate
underlying unit investment trusts designated as Nasdaq-100 Index Trust,
Series 2 and S&P 500 Index Trust, Series 2 (the "Trusts"). The Fund 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").*
The Nasdaq-100 Trust contains common stocks issued by substantially all of
the companies which comprise the Nasdaq-100 Index. The S&P 500 Trust
contains common stocks issued by substantially all of the companies which
comprise the S&P 500 Index. As used herein, the term "Securities" means the
common stocks (including contracts for the purchase thereof) initially
deposited in each Trust and described in the related portfolio and any
additional common stocks acquired and held by each Trust pursuant to the
provisions of the Trust Agreement.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee
Securities or contracts for the purchase thereof for deposit in the Trusts.
This initial deposit into each Trust consisted of at least 100 shares of each
of the stocks which comprise the related stock index. During the Initial
Adjustment Period, the Sponsor intends to create and maintain a Trust
portfolio which duplicates, to the extent practicable, the weightings of
stocks which comprise the related stock index. The Sponsor anticipates that
within the Initial Adjustment Period, each Trust will comprise the stocks in
the related stock index in substantially the same weightings as in such
index. In connection with any deposit of Securities, purchase and sale
transactions will be effected in accordance with computer program output
showing which Securities are under- or over- represented in each Trust
portfolio. Neither the Sponsor nor the Trustee will exercise any investment
discretion in connection with such transactions. Precise duplication of the
relationship among the Securities in the related stock index may not be
achieved because it may be economically impracticable or impossible to
acquire very small numbers of shares of certain stocks and because of other
procedural policies of the Trusts, but correlation between the performance of
the related stock index and each Trust portfolio is expected to be between
.97 and .99.
By investing in substantially all of the common stocks, in substantially the
same proportions, which comprise the related stock index, each Trust seeks to
produce investment results that generally correspond to the price and yield
performance of the equity securities represented by such index over the term
of such Trust. Due to various factors discussed below, there can be no
assurance that this objective will be met. An investment in Units of a Trust
should be made with an understanding that each Trust includes payments of
sales charges, fees and expenses which may not be considered in public
statements of the total return of the related stock index.
Subsequent to the Initial Date of Deposit, the Sponsor may deposit additional
Securities in a Trust, 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, maintaining, as closely as practicable the
same proportionate relationship among the Securities in the portfolio as
reflected in the related stock index. Thus, although additional Units will
be issued, each Unit of a Trust will continue to represent approximately a
weighting of the then current components of the related stock index at any
such deposit. Precise duplication of the relationship among the Securities
- -----------------
* Reference is made to the Trust Agreement and any statement contained
herein is qualified in its entirety by the provisions of the
Trust Agreement.
8
<PAGE>
in a Trust may not be achieved because it may be economically impracticable
as a result of certain economic factors and procedural policies of a Trust
such as (1) price movements of the various Securities will not duplicate one
another, (2) the Sponsor's current intention is to purchase shares of the
Securities in round lot quantities only, (3) reinvestment of excess proceeds
not needed to meet redemptions of Units may not be sufficient to acquire
equal round lots of all the Securities in a Trust and (4) reinvestment of
proceeds received from Securities which are no longer components of the
related stock index might not result in the purchase of an equal number of
shares in any replacement Security. 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 each Trust will pay the associated brokerage fees.
To minimize this effect, each 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 such 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 of such Trust. 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. Each Trust portfolio will consist of as many of the Nasdaq-100 or
S&P 500 Index stocks as is feasible in order to achieve the respective
Trust's objective of attempting to provide investment results that duplicate
substantially the total return of the Nasdaq-100 or S&P 500 Index. Following
the Initial Adjustment Period, each Trust is expected to be invested in no
less than 95% of the stocks comprising the related index. Although it may be
impracticable for a Trust to own certain of such stocks at any time, the
Sponsor expects to maintain a correlation between the performance of each
Trust portfolio and that of the related index of between .97 and .99.
Adjustments to a Trust portfolio will be made on an ongoing basis in
accordance with the computer program output to match the weightings of the
Securities as closely as is feasible with their weightings in the related
index as such Trust invests in new Securities in connection with the creation
of additional Units, as companies are dropped from or added to such index or
as Securities are sold to meet redemptions. These adjustments will be made
on the business day following the relevant transaction in accordance with
computer program output showing which of the Securities are under- or over-
represented in a Trust portfolio. Adjustments may also be made from time to
time to maintain the appropriate correlation between a Trust and the related
index. The proceeds from any sale will be invested in those Securities which
the computer program indicates are most under- represented in the related
portfolio. See "Investment Supervision."
9
<PAGE>
Due to changes in the composition of the Nasdaq-100 Index and the S&P 500
Index, adjustments to a Trust portfolio may be made from time to time. It is
anticipated that most of such changes in the Nasdaq-100 Index and the S&P 500
Index will occur as a result of merger or acquisition activity. In such
cases, a Trust, as a shareholder of an issuer which is the object of such
merger or acquisition activity, will presumably receive various offers from
potential acquirers of the issuer. The Trustee is not permitted to accept
any such offers until such time as the issuer has been removed from the
related index. Since, in most cases, an issuer is removed from an index only
after the consummation of a merger or acquisition, it is anticipated that the
Trusts will generally acquire, in exchange for the stock of the deleted
issuer, the consideration that is being offered to shareholders of that
issuer who have not tendered their shares prior to that time. Any cash
received as consideration in such transactions will be reinvested in the most
under-represented Securities as determined by the computer program output.
Any securities received as consideration which are not included in the
related index will be sold as soon as practicable and will also be reinvested
in the most under-represented Securities as determined by the computer
program output.
In attempting to duplicate the proportionate relationships represented by
each index, the Sponsor does not anticipate purchasing or selling stock in
quantities of less than round lots (100 shares). In addition, certain
Securities may not be available in the quantities specified by the computer
program. For these reasons, among others, precise duplication of the
proportionate relationships in the related index may not be possible but will
continue to be the goal of each Trust in connection with acquisitions or
dispositions of Securities. See "Investment Supervision." As the holder of
the Securities, the Trustee will have the right to vote all of the voting
stocks in a Trust portfolio and will vote such stocks in accordance with the
instructions of the Sponsor.
Investors should note that the Trusts are not sponsored, endorsed or promoted
by or affiliated with either The Nasdaq Stock Market, Inc. or Standard &
Poor's and The Nasdaq Stock Market, Inc. and Standard & Poor's make no
representation, express or implied, to the Trusts or Unitholders regarding
the advisability of investing in an index investment or unit investment
trusts generally or in the Trusts specifically or the ability of the indexes
to track general stock market performance.
Although there can be no assurance that such Securities will appreciate in
value over the life of a Trust, over time stock investments have generally
out-performed most other asset classes. However, it should be remembered
that common stocks carry greater risks, including the risk that the value of
an investment can decrease (see "Risk Factors-Certain Investment
Considerations"), and past performance is no guarantee of future results.
THE NASDAQ-100 INDEX
The Nasdaq-100 Index is composed of 100 of the largest non-financial Nasdaq
National Market common stocks. Nasdaq, which represents the fastest growing
stock market in the U.S., is also one of the first fully electronic stock
markets in the world. This modern-day securities market began operations in
1971 and today lists more companies than any other market in the U.S. The
Nasdaq-100 Index is limited to one issue per company. At the time of
inclusion in the Nasdaq-100 Index, index securities must have a minimum
market value of at least $500 million. Only domestic issues are included.
In the event a security is deleted from the Nasdaq-100 Index, the largest
non-financial issue not then in the Nasdaq-100 Index which meets the
applicable criteria will be substituted. The Nasdaq Stock Market, Inc. has
established procedures for, and controls over, substitutions of securities
10
<PAGE>
and may periodically, at its discretion, make changes in component stocks so
that the Index will more accurately reflect the overall composition of the
non-financial sector of The Nasdaq Stock Market. Each security in the
Nasdaq-100 Index is represented by its market capitalization in relation to
the total market value of the Nasdaq-100 Index. Companies are selected using
criteria that includes company trading volume, company visibility, continuity
of the components in the Nasdaq-100 Index, and a good mix of industries
represented on The Nasdaq Stock Market. Chicago Board Options Exchange, the
largest options exchange in the world, began trading Nasdaq- 100 Index
options on February 7, 1994. As of January 3, 1996, the Nasdaq-100 Index was
comprised of the following industry sectors: Electronic Technology* (37.71%),
Technology Services* (24.14%), Health Technology (8.88%), Telecommunications
(8.61%), Consumer Services (5.19%), Retail Trade (3.79%), Health Services
(3.16%), Process Industries (1.87%), Consumer Non-Durables (1.43%),
Transportation (1.37%), Commercial Services (1.30%), Producer Manufacturing
(1.20%), Consumer Durables (0.50%), Non-Energy Minerals (0.46%) and
Industrial Services (0.40%). The following chart illustrates the composition
of the Nasdaq-100 Index.
[GRAPHIC APPEARS HERE]
_______________
* As used herein Electronic Technology describes companies that manufacture
computer chips and other computer hardware (such as lntel Corporation,
Cisco Systems, Inc. and Apple Computer, Inc.), whereas Technology Services
describes publishers of computer software and operating systems (such as
Microsoft Corporation, Oracle Corporation and America Online, Inc.).
11
<PAGE>
The table below illustrates the characteristics of the average company
included in the Nasdaq-100 Index as of the end of 1995. It is important to
note that the data included in the table encompasses average data, not the
total data of all companies in the Nasdaq-100 Index and is not intended to
describe or predict the financial data, returns or characteristics of any
company included or to be included in the Nasdaq-100 Index.
<TABLE>
CAPTION>
FINANCIAL CHARACTERISTICS TRADING CHARACTERISTICS
<S> <C> <C> <C>
Total Assets $ 2,011,900,000 Share Price $ 38.83
Shareholders' Equity $ 897,100,000 Number of Market Makers 27.2
Total Revenues $ 2,039,700,000 1995 Total Share Volume(b) 26,273,000,000
Net Income $ 135,500,000 Total Percent Block Volume(b) 36.6%
Shares Outstanding 105,000,000 Total Percent of Shares Held by
Market Value of Shares Outstanding $ 4,054,700,000 Institutions(c) 38.5%
P/E Ratio for Total Index(a,b) 29.62
</TABLE>
- ----------------------------
(a) Total market value divided by total earnings
(b) These figures represent total data for all index companies.
(c) Through September 30, 1995.
The following chart depicts graphically the Year-End Index Value for the
Nasdaq-100 Index from inception (February 1, 1985) through December 31, 1995.
The Year-End Index Values are computed as reflected in the table which
follows. The formula used in calculating the Nasdaq-100 Index Level is
described below. The chart uses data that is adjusted to reflect that the
Index level was halved on January 3, 1994, and does not reflect reinvestment
of dividends. Investors should note that the figures below represent past
performance of the Index and not the future performance of the Nasdaq-100
Index or the Nasdaq-100 Trust (which includes certain fees and expenses).
Past performance is, of course, no guarantee of future results.
<TABLE>
<CAPTION>
YEAR-END ANNUAL RETURN
INDEX (EXCLUDING
YEAR VALUE DIVIDENDS)
- ---------------------------- --------- --------------
<S> <C> <C>
February 1, 1985 125.000 -
1985 132.295 5.84%
1986 141.405 6.89%
1987 156.250 10.50%
1988 177.410 13.54%
1989 223.835 26.17%
1990 200.530 (10.41)%
1991 330.855 64.99%
1992 360.185 8.86%
1993 398.280 10.58%
1994 404.270 1.50%
1995 580.370 43.56%
Total Return Since Inception 364.30%
</TABLE>
Because the Nasdaq-100 Trust is sold to the public at net asset value plus
the applicable sales charge, and the expenses of such Trust are deducted
before making distributions to Unitholders, investment in such Trust would
have resulted in investment performance to Unitholders somewhat reduced from
that reflected in the above chart and table.
12
<PAGE>
The Nasdaq-100 Index is market value weighted. The representation of each
security in the Nasdaq-100 Index is proportional to its last sale price times
the total number of shares outstanding, in relation to the total market value
of the Nasdaq-100 Index. The level of the Nasdaq-100 Index is calculated as
follows:
Nasdaq-100 Index Level = Current Market Value X 125
--------------------
Adjusted Base Period
Market Value
Adjusted Base Period = Current Market Value X Previous Base
After Adjustments Period Market Value
--------------------
Current Market Value
Before Adjustments
The numeric value level of the Nasdaq-100 Index was established at 250 prior
to the opening of the market on February 1, 1985. The Nasdaq-100 Index value
was halved at the end of 1993. The level of the Nasdaq-100 Index will only
change as a result of the price changes occurring between the opening and
closing of the market. Adjustments for securities being added to or deleted
from the Nasdaq-100 Index, or capitalization changes of adjustments, will
take place during the system maintenance process which occurs after the
market has closed. These adjustments will result in value changes to the
current market value and adjusted base period market value, but will not in
and of themselves alter the level of the Index.
The Nasdaq-100 Index is also adjusted to account for stock splits and stock
dividends during the system maintenance process. The system makes a price
adjustment, however, to account for the increased number of shares
outstanding from such an action with the result being that the current market
value does not change.
In case of cash dividends other than extraordinary dividends, no system
adjustment is made. The Nasdaq-100 Index formula relies on market forces to
determine the level of the Nasdaq-100 Index. Neither the current market
value nor the adjusted base period market value are adjusted to reflect
ordinary cash dividends. At its discretion, The Nasdaq Stock Market, Inc.
may temporarily suspend Nasdaq-100 Index securities from the calculation of
the Nasdaq-100 Index or adjust the Nasdaq-100 Index divisor in those
instances where an unusual cash dividend or spin-off might unduly influence
the level of the Nasdaq-100 Index. The Nasdaq Stock Market, Inc.
disseminates calculations of the Nasdaq-100 Index via Level 2 and Level 3
Nasdaq service and makes the Index calculation available to information
vendors and the print media.
THE S&P 500 INDEX
The S&P 500 Index is composed of 500 selected common stocks, most of which
are listed on the New York Stock Exchange. This well-known index, originally
consisting of 233 stocks in 1923, was expanded to 500 stocks in 1957 and was
restructured in 1976 to a composite consisting of industrial, utility,
financial and transportation market sectors. It contains a variety of
companies with diverse capitalization, market-value weighted to represent the
overall market. The index represents over 70% of U.S. stock market
capitalization. The index is often used as a benchmark of general market
activity and is currently one of the U.S. Commerce Department's leading
economic indicators. As of September 29, 1995, the S&P 500 Index was
comprised of the following industry sectors: industrials (75.7%), Utilities
(9.7%), Financials (2.9%) and Transportation (1.7%). As of September 29,
1995, the companies in the S&P 500 index were listed on the following stock
13
<PAGE>
exchanges in the amounts indicated: New York Stock Exchange-455 companies
(93%), NASDAQ-39 companies (6%) and American Stock Exchange-6 companies (1%).
Additionally, the S&P 500 Index represents approximately 74% of the aggregate
market value of common stocks traded on the New York Stock Exchange. At
present, the mean market capitalization of the companies in the S&P 500 Index
is approximately $5.6 billion. As of September 30, 1995, the S&P 500 Index
had a total market value of $4.309 trillion.
The following chart graphically depicts the Year-End Index Value for the S&P
500 Index for the period shown. The Year-End Index Values are computed as
described in the table which follows. Investors should note that the chart
represents past performance of the S&P 500 Index and not the past or future
performance of the S&P 500 Trust (which includes certain fees and expenses).
Past performance is, of course, no guarantee of future results.
[GRAPHIC APPEARS HERE]
Source: Standard & Poor's
14
<PAGE>
The following table shows the performance of the S&P 500 Index for 1960
through November 3, 1995. Stock prices fluctuated widely during the period
and were higher at the end than at the beginning. The results shown should
not be considered as a representation of the income yield or capital gain or
loss which may be generated by the S&P 500 Index in the future.
<TABLE>
<CAPTION>
Year-End
Index Value
Year-End Change in Average Dividends
Year-End Index Value Index Yield Reinvested
Year Index Value* 1960=100 For Year For Year* 1960=100**
- -------------------------- ------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
1960 58.11 100.00 - % 3.47% 100.00
1961 71.55 123.13 23.13 2.98 126.79
1962 63.10 108.59 11.81 3.37 115.71
1963 75.02 129.10 18.89 3.17 141.93
1964 84.75 145.84 12.97 3.01 165.09
1965 92.43 159.06 9.06 3.00 185.48
1966 80.33 138.24 13.09 3.40 165.11
1967 96.47 166.01 20.09 3.20 204.54
1968 103.86 178.73 7.66 3.07 227.00
1969 92.06 158.42 11.36 3.24 207.89
1970 92.15 158.58 0.10 3.83 216.06
1971 102.09 110.79 10.79 3.33 247.52
1972 118.05 128.11 15.63 3.09 294.30
1973 97.55 105.86 -17.37 2.86 250.83
1974 68.56 74.40 -29.72 3.69 184.64
1975 90.19 97.87 31.55 5.37 253.25
1976 107.46 116.61 19.15 4.49 312.94
1977 95.10 103.20 -11.50 4.35 289.72
1978 96.11 104.30 1.06 5.33 308.20
1979 107.94 117.14 12.31 5.88 364.29
1980 135.76 147.33 25.77 5.74 481.86
1981 122.55 132.99 - 9.73 4.88 457.72
1982 140.64 152.62 14.76 5.61 555.84
1983 164.93 178.98 17.27 5.04 680.24
1984 167.24 181.49 1.40 4.49 721.73
1985 211.28 229.28 26.33 4.72 949.59
1986 242.17 262.80 14.62 3.92 1,125.83
1987 247.08 278.97 2.03 3.64 1,183.25
1988 277.72 301.38 12.40 3.79 1,379.78
1989 353.40 383.51 27.25 3.98 1,617.04
1990 330.22 358.35 - 6.56 3.42 1,760.71
1991 417.09 452.62 26.31 3.70 2,297.20
1992 435.71 749.79 4.46 2.97 2,472.25
1993 466.45 802.70 7.06 2.78 2,721.45
1994 459.27 790.53 - 1.54 2.42 2,757.25
1995 through November 3, 1995 590.57 1,016.53 28.59 N/A N/A
</TABLE>
- -----------------------
* Source: Standard & Poor's. The Year-End Index Value for 1959 was $59.89.
Yields are obtained by dividing the aggregate cash dividends by the
aggregate market value of the stocks in the index at the beginning of the
period, assuming no reinvestment of dividends.
** Assumes that cash distributions on the securities which comprise the
S&P 500 Index are treated as reinvested in the S&P 500 Index as of the end
of each month following the payment of the dividend. Because the S&P 500
Trust is sold to the public at net asset value plus the applicable sales
charge and the expenses of such Trust are deducted before making
distributions to Unitholders, investment in such Trust would have resulted
in investment performance to Unitholders somewhat reduced from that
reflected in the above table. In addition certain Unitholders may not
elect to purchase additional Units pursuant to the S&P 500 Trust's
reinvestment plan, and to that extent cash distributions representing
dividends on the index stocks may not be reinvested in other index stocks.
The weightings of stocks in the S&P 500 Index are primarily based on each
stock's relative total market value; that is, its market price per share
times the number of shares outstanding. The S&P 500 Index currently
represents over 70% of the total market capitalization of stocks traded
in the United States. Stocks are generally selected for the portfolio in
the order of their weightings in the S&P 500 Index, beginning with the
heaviest-weighted stocks. It is anticipated that at the end of the
Initial Adjustment Period, the percentage of the S&P 500 Trust's assets
invested in each stock will be approximately the same as the percentage it
represents in the S&P 500 Index.
15
<PAGE>
The S&P 500 Trust has entered into a license agreement with Standard & Poor's
(the "License Agreement"), under which such Trust is granted licenses to use
the trademark and tradename "S&P 500" and other trademarks and tradenames, to
the extent the Sponsor deems appropriate and desirable under federal and
state securities laws to indicate the source of the index as a basis for
determining the composition of such Trust's portfolio. As consideration for
the grant of the license, the S&P 500 Trust will pay to Standard & Poor's an
annual fee equal to .02% of the average net asset value of such Trust (or, if
greater, $10,000). The License Agreement permits the S&P 500 Trust to
substitute another index for the S&P 500 Index in the event that Standard &
Poor's ceases to compile and publish that index. In addition, if the index
ceases to be compiled or made available or the anticipated correlation
between the S&P 500 Trust and the index is not maintained, the Sponsor may
direct that such Trust continue to be operated using the S&P 500 Index as it
existed on the last date on which it was available or may direct that the
Trust Agreement be terminated (see "Administration of the Trusts-Amendment
and Termination").
Neither the S&P 500 Trust nor the Unitholders are entitled to any rights
whatsoever under the foregoing licensing arrangements or to use any of the
covered trademarks or to use the S&P 500 Index, except as specifically
described herein or as may be specified in the Trust Agreement.
The S&P 500 Trust is not sponsored, endorsed, sold or promoted by Standard &
Poor's ("S&P"). S&P makes no representation or warranty, express or implied,
to the owners of such Trust or any member of the public regarding the
advisability of investing in securities generally or in such Trust
particularly or the ability of the S&P 500 Index to track general stock
market performance. S&P's only relationship to the Licensee is the licensing
of certain trademarks and trade names of S&P and of the S&P 500 Index which
is determined, composed and calculated by S&P without regard to the Licensee
or the S&P 500 Trust. S&P has no obligation to take the needs of the
Licensee or the owners of the S&P 500 Trust into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not
responsible for and has not participated in the determination of the prices
and amount of the S&P 500 Trust or the timing of the issuance or sale of such
Trust or in the determination or calculation of the equation by which such
Trust is to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the S&P 500
Trust.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express
or implied, as to results to be obtained by the Sponsor, the S&P 500 Trust,
any person or any entity from the use of the S&P 500 Index or any data
included therein. S&P makes no express or implied warranties, and expressly
disclaims all warranties of merchantability or fitness for a particular
purpose or use, with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have
any liability for any special, punitive, indirect, or consequential damages
(Including lost profits), even if notified of the possibility of such
damages. "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard &
Poor's 500",
16
<PAGE>
and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by the S&P 500 Trust. The S&P 500 Trust is not sponsored,
endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes
no representation regarding the advisability of investing in such Trust.
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.
Because the Nasdaq-100 Index generally includes a concentration of technology
and technology-related companies, an investment in Units of the Nasdaq-100
Trust should be made with an understanding of the characteristics of the
technology industry and the risks which such an investment may entail.
Technology companies generally include companies involved in the development,
design, manufacture and sale of computers, computer related equipment,
computer networks, communications systems, telecommunications products,
semiconductors, electronic products, and other related products, systems and
services. The market for technology products is characterized by rapidly
changing technology, rapid product obsolescence, cyclical market patterns,
evolving industry standards and frequent new product introductions. The
success of the issuers of the Securities depends in substantial part on the
timely and successful introduction of new products. An unexpected change in
one or more of the technologies affecting an issuer's products or in the
market for products based on a particular technology could have a material
adverse affect on an issuer's operating results. Furthermore, there can be
no assurance that the issuers of the Securities will be able to respond
timely to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements of
new products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of technology
common stocks to fluctuate substantially. In addition, technology company
stocks have experienced extreme price and volume fluctuations that often have
been unrelated to the operating performance of such companies. This market
volatility may adversely affect the market price of the Securities and
therefore the ability of a Unitholder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely
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and cost effective manner. Accordingly, an issuer's operating results and
customer relationships could be adversely affected by either an increase in
price for, or an interruption or reduction in supply of, any key components.
Additionally, many technology issuers are characterized by a highly
concentrated customer base consisting of a limited number of large customers
who may require product vendors to comply with rigorous industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies are
often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from other
customers. Similarly, the success of certain technology companies is tied to
a relatively small concentration of products or technologies. Accordingly, a
decline in demand of such products, technologies or from such customers could
have a material adverse impact on issuers of the Securities.
Certain issuers of the Securities may derive a significant amount of business
in foreign markets. Many countries, especially emerging market countries,
have regulatory requirements that differ from U.S. requirements and are
characterized by less developed and more volatile economies. International
sales and operations are subject to certain risks, including unexpected
changes in regulatory environments, exchange rates, tariffs and other
barriers, political and economic instability and potentially adverse tax
consequences. All of these factors could have a material adverse impact on
the financial condition of certain issuers.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that
the steps taken by the issuers of the Securities to protect their proprietary
rights will be adequate to prevent misappropriation of their technology or
that competitors will not independently develop technologies that are
substantially equivalent or superior to such issuers' technology.
Certain Investment Considerations. Holders of common stock incur more risk
than the holders of preferred stocks and debt obligations because common
stockholders, as owners of the entity, have generally inferior rights to
receive payments from the issuer in comparison with the rights of creditors
of, or holders of debt obligations or preferred stock issued by the issuer.
Holders of common stock of the type held by the portfolio have a right to
receive dividends only when and if, and in the amounts, declared by the
issuer's Board of Directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have
been paid or provided for. By contrast, holders of preferred stock have the
right to receive dividends at a fixed rate when and as declared by the
issuer's Board of Directors, normally on a cumulative basis, but do not
participate in other amounts available for distribution by the issuing
corporation. Cumulative preferred stock dividends must be paid before common
stock dividends and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred stock.
Preferred stocks are also entitled to rights on liquidation which are senior
to those of common stocks. Moreover, common stocks do not represent an
obligation of the issuer and therefore do not offer any assurance of income
or provide the degree of protection of capital debt securities. Indeed, the
issuance of debt securities or even preferred stock will create prior claims
for payment of principal, interest, liquidation preferences and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (whose value, however, will be subject
to market fluctuations prior thereto), common stocks have neither a fixed
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<PAGE>
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 a Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the
Securities may depend on whether dealers will make a market in the
Securities. There can be no assurance that a market will be made for any of
the Securities, that any market for the Securities will be maintained or of
the liquidity of the Securities in any markets made. In addition, 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 a Trust
and the number of Units thereof by the deposit of additional Securities, or
cash (including a letter of credit) with instructions to purchase additional
Securities, in such Trust 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 a Trust 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 a Trust or the
issuers of the Securities. There can be no assurance that future litigation
or legislation will not have a material adverse effect on the Trust or will
not impair the ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
Each Trust has elected and intends to qualify on a continuing basis for
special federal income tax treatment as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). If a Trust
so qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard to its net capital gain, i. e., the excess of its net
long-term capital gain over its net short-term capital loss), it will not be
subject to federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to
the extent a Trust timely distributes to Unitholders at least 98% of its
taxable income (including any net capital gain), it will not be subject to
the 4% excise tax on certain undistributed income of "regulated investment
companies." Because the Trusts intend to timely distribute its taxable
income (including any net capital gain), it is anticipated that the Trusts
will not be subject to federal income tax or the excise tax. Although all or
a portion of a Trust's taxable income (including any net capital gain) for
the taxable year may be distributed to Unitholders shortly after the end of
the calendar year, such a distribution will be treated for federal income tax
purposes as having been received by Unitholders during the calendar year just
ended.
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Distributions to Unitholders of a Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the
extent that distributions to a Unitholder in any year exceed a Trust's
current and accumulated earnings and profits, they will be treated as a
return of capital and will reduce the Unitholder's basis in his Units and, to
the extent that they exceed his basis, will be treated as a gain from the
sale of his Units as discussed below.
Distributions of a Trust's net capital gain which are properly designated as
capital gain dividends by such Trust will be taxable to Unitholders as long-
term capital gain, regardless of the length of time the Units have been held
by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will generally be a
capital gain or loss, except in the case of a dealer or a financial
institution. For taxpayers other than corporations, net capital gains are
presently subject to a maximum stated marginal tax rate of 28%. However, it
should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed. A capital loss is long-term if the asset
is held for more than one year and short-term if held for one year or less.
If a Unitholder holds Units for six months or less and subsequently sells
such Units at a loss, the loss will be treated as a long-term capital loss to
the extent that any long-term capital gain distribution is made with respect
to such Units during the six-month period or less that the Unitholder owns
the Units.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for each 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 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
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.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital
gains are taxed at a comparatively lower rate under the Act, the Act includes
a provision that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders
and prospective investors should consult with their tax advisers regarding
the potential effect of this provision on their investment in Units.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends-
received deduction, subject to the limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable
to dividends received by a Trust from United States corporations (other than
real estate investment trusts) and is designated by such Trust as being
eligible for such deduction. To the extent dividends received by a Trust are
attributable to foreign corporations, a corporation that owns Units will not
be entitled to the dividends-received deduction with respect to its pro rata
portion of such dividends, since the dividends-received deduction is
generally available only with respect to dividends paid by domestic
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<PAGE>
corporations. Each Trust will provide each Unitholder with information
annually concerning what part of Trust distributions are eligible for the
dividends-received deduction.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by a Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year
or another exception is met. In the event the Units are held by fewer than
500 persons, additional taxable income may be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions received by a
Trust.
Distributions reinvested into additional Units of a Trust will be taxed to a
Unitholder in the manner described above (i. e., as ordinary income, long-
term capital gain or as a return of capital).
Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has
not been notified that payments to the Unitholder are subject to back- up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by 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
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax
advisers.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trusts and to the tax
treatment of distributions by the Trusts to United States Unitholders.
Distributions by a Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons. Such
persons should consult their tax advisers. Units in a Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed plans
established.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the initial offering period, Units of the
Trusts are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Securities in a Trust and includes a sales
charge of 4.9% of the Public Offering Price which charge is equivalent to
5.152% of the net amount invested) plus a pro rata share of any accumulated
dividends in the Income Account of a Trust. In the secondary market, Units
are offered at the Public Offering Price (which is based on the aggregate
underlying value of the Securities in a Trust and includes a sales charge of
4.9% of the Public Offering Price which charge is equivalent to 5.152% of the
net amount invested) plus a pro rata share of any accumulated dividends in
the Income Account of a Trust. Such underlying value shall also include the
proportionate share of any undistributed cash held in the Capital Account of
the related Trust.
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The sales charge per Unit of a Trust in both the primary and secondary market
will be reduced pursuant to the following graduated schedule:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF NET
NUMBER OF UNITS* OFFERING PRICE AMOUNT INVESTED
- ----------------- -------------- ---------------
<S> <C> <C>
Less than 10,000 4.9% 5.152%
10,000-24,999
25,000-49,999
50,000-99,999
100,000 or more
</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.
The Sponsor intends to permit officers, directors and employees of the
Sponsor and its affiliates and registered representatives of selling firms to
purchase Units of a Trust without a sales charge.
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"
below) 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.
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by
the number of Units outstanding. Such underlying value shall include the
proportionate share of any cash held in the Capital Account. Such price
determination as of the opening of business on the Initial Date of Deposit
was made on the basis of an evaluation of the Securities in a 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 the close of trading on the
New York Stock Exchange 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 a national securities exchange
or The Nasdaq National Market or by taking into account the same factors
referred to under "Redemption-Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units.
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of
the Trusts will be distributed to the public at the Public Offering Price
thereof. Upon the completion of the initial offering, Units which remain
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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 Trust.
These programs will not change the price Unitholders pay for their Units or
the amount that a Trust will receive from the Units sold. The difference
between the discount and the sales charge will be retained by the Sponsor.
<TABLE>
<CAPTION>
PRIMARY MARKET
FIRM SALES OR SALE
REGULAR ARRANGEMENTS
CONCESSION OR (VOLUME CONCESSIONS IN
AGENCY $1,000$)**
NUMBER OF UNITS* COMMISSION $500-$999 $1,000 OR MORE
- ---------------------------- ------------- ---------- --------------
<S> <C> <C> <C>
Less than 10,000 3.60% 3.80% 4.00%
10,000 but less than 25,000
25,000 but less than 50,000
50,000 but less than 100,000
100,000 or more
</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 during the initial one month
period after the Initial Date of Deposit by firms who reach cumulative
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<PAGE>
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 originated from or by that firm, including those placed prior to
reaching the $100,000 level, and may continue to be given during the
entire initial offering period. Firm sales of any combination of the
Trusts issued may be combined for the purposes of achieving the volume
discount. Only sales through Ranson qualify for volume discounts and
secondary purchases do not apply. Ranson & Associates reserves the right
to modify or change those parameters at any time and make the
determination of which firms qualify for the marketing allowance and the
amount paid.
The Sponsor 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 each Trust as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit
(or sustain a loss) as of the Initial Date of Deposit resulting from the
difference between the purchase prices of the Securities to the Sponsor and
the cost of such Securities to each 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 a Trust.
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 value of the underlying
Securities. Unitholders who wish to dispose of their Units should inquire of
their broker as to current market prices in order to determine whether there
is in existence any price in excess of the Redemption Price and, if so, the
amount thereof. The offering price of any Units resold by the Sponsor will
be in accord with that described in the currently effective prospectus
describing such Units. Any profit or loss resulting from the resale of such
Units will belong to the Sponsor. The Sponsor may suspend or discontinue
purchases of Units of a Trust if the supply of Units exceeds demand, or for
other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Trustee at its Unit Investment Trust Division office
in the city of New York and, in the case of Units evidenced by a certificate,
by tendering such certificate to the Trustee properly endorsed or accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Trustee. Unitholders must sign the request, and such certificate or
transfer instrument, exactly as their names appear on the records of the
Trustee and on any certificate representing the Units to be redeemed. If the
amount of the redemption is $25,000 or less and the proceeds are payable to
the Unitholder(s) of record at the address of record, no signature guarantee
is necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature
guarantee is always required, from corporations, executors, administrators,
trustees, guardians or associations. The signatures must be guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("STAMP") or
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<PAGE>
such other signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. A certificate should only be sent
by registered or certified mail for the protection of the Unitholder. Since
tender of the certificate is required for redemption when one has been
issued, Units represented by a certificate cannot be redeemed until the
certificate representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the third business day following
the day on which a tender for redemption is received (the "Redemption Date")
by payment of cash equivalent to the Redemption Price for a Trust, determined
as set forth below under "Computation of Redemption Price," as of the
evaluation time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be canceled and any undivided fractional interest in the related 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.
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 a 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 such 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.
To the extent that Securities are sold, the size and 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.
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<PAGE>
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as
the secondary market Public Offering Price) will generally be determined on
the basis of the last sale price of the Securities in a Trust. On the
Initial Date of Deposit, the Public Offering Price per Unit (which 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 such Trust or moneys in the process of being
collected and (ii) the value of the Securities in such Trust less (a) amounts
representing taxes or other governmental charges payable out of such Trust,
(b) any amount owing to the Trustee for its advances and (c) the accrued
expenses of such 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.
See "Public Offering of Units-Public Offering Price."
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 an 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
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Unitholder. Unitholders must sign such written request, and such certificate
or transfer instrument, exactly as their names appear on the records of the
Trustee and on any certificate representing the Units to be transferred.
Such signatures must be guaranteed as stated under "Redemption General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to the minimum
investment requirement of 100 Units or $1,000. Fractions of Units, if any,
will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and
will be transferable only on the books of the Trustee. The Trustee may
require a Unitholder to pay a reasonable fee, to be determined in the sole
discretion of the Trustee, for each certificate re- issued or transferred and
to pay any governmental charge that may be imposed in connection with each
such transfer or interchange. The Trustee at the present time does not
intend to charge for the normal transfer or interchange of certificates.
Destroyed, stolen, mutilated or lost certificates will be replaced upon
delivery to the Trustee of satisfactory indemnity (generally amounting to 3%
of the market value of the Units), affidavit of loss, evidence of ownership
and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by a Trust is credited by the
Trustee to the Income Account of such Trust. Other receipts are credited to
the Capital Account of a Trust. Income received by a Trust will be
distributed on or shortly after the 15th day of January, April, July and
October of each year on a pro rata basis to Unitholders of record as of the
preceding record date (which will be the first day of the related month).
All distributions will be net of applicable expenses. There is no assurance
that any actual distributions will be made since all dividends received may
be used to pay expenses. In addition, amounts from the Capital Account of a
Trust, if any, will be distributed at least annually to the Unitholders then
of record. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account and not distributed until the next distribution date
applicable to the Capital Account. The Trustee shall be required to make a
distribution from the Capital Account as described under "Essential
Information" if the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 Units.
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 Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate. Persons who purchase Units will commence receiving
distributions only after such person becomes a record owner. A person will
become the owner of Units, and thereby a Unitholder of record, on the date of
settlement provided payment has been received. Notification to the Trustee
of the transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling broker-
dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of a Trust and, to the extent funds are not sufficient therein, from
the Capital Account of such Trust amounts necessary to pay the expenses of
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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 a 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.
Unitholders who desire to have such distributions automatically reinvested
should inform their broker at the time of purchase or should file with the
Program Agent referred to below a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate
in distribution reinvestment by filing with the Program Agent an election to
have such distributions reinvested without charge. Such election must be
received by the Program Agent at least ten days prior to the Record Date
applicable to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice is
received by the Program Agent. See "Unitholders-Distributions to
Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of
New York at its Unit Investment Trust Division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish
or cause to be furnished to each Unitholder a statement of the amount of
income and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit.
The accounts of each Trust are required to be audited annually, at the
related 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;
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(2) Deductions for applicable taxes and for fees and expenses of such
Trust and for redemptions of Units, if any; and
(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any Securities and the net proceeds
received therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses
of such Trust held for distribution to Unitholders of record as of
a date prior to the determination; and
(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; and
(C) The following information:
(1) A list of the Securities as of the last business day of such
calendar year;
(2) The number of Units outstanding on the last business day of such
calendar year;
(3) The Redemption Price based on the last evaluation made during such
calendar year;
(4) The amount actually distributed during such calendar year from the
Income and Capital Accounts separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit outstanding on
the Record Dates for each such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the
Trustee for redemption. The death or incapacity of any Unitholder will not
operate to terminate a Trust nor entitle legal representatives or heirs to
claim an accounting or to bring any action or proceeding in any court for
partition or winding up of such Trust.
No Unitholder shall have the right to control the operation and management of
a Trust in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of such Trust.
INVESTMENT SUPERVISION
Each Trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The portfolio of a Trust, however,
will not be actively managed and therefore the adverse financial condition of
an issuer will not necessarily require the sale of its securities from the
portfolio.
As a general rule, the only purchases and sales that will be made with
respect to a Trust's portfolio will be those necessary to maintain, to the
extent feasible, a portfolio which reflects the current components of the
related stock index, taking into consideration redemptions, sales of
additional Units and the other adjustments referred to elsewhere in this
prospectus. See "Trust Portfolios-General." Such purchases and sales will be
made in accordance with the computer program utilized to maintain the related
portfolio, the Trust Agreement and procedures to be specified by the Sponsor.
The Sponsor may direct the Trustee to dispose of Securities and either to
acquire other Securities through the use of the proceeds of such disposition
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in order to make changes in the portfolio or to distribute the proceeds of
such disposition to Unitholders (i) as necessary to reflect any additions to
or deletions from the related stock index, (ii) as may be necessary to
establish a closer correlation between a Trust portfolio and the related
stock index or (iii) as may be required for purposes of distributing to
Unitholders, when required, their pro rata share of any net realized capital
gains or as the Sponsor may otherwise determine. As a policy matter, the
Sponsor currently intends to direct the Trustee to acquire round lots of
shares of the Securities rather than odd lot amounts. Any funds not used to
acquire round lots will be held for future purchases of shares, for
redemptions of Units or for distributions to Unitholders. In the event the
Trustee receives any securities or other properties relating to the
Securities (other than normal dividends) acquired in exchange for Securities
such as those acquired in connection with a reorganization, recapitalization,
merger or other transaction, the Trustee is directed to sell such securities
or other property and reinvest the proceeds in shares of the Security for
which such securities or other property relates, or if such Security is
thereafter removed from the related stock index, in any new security which is
added as a component of such index. In addition, the Sponsor will instruct
the Trustee to dispose of certain Securities and to take such further action
as may be needed from time to time to ensure that a Trust continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the
Internal Revenue Code, and as may be needed from time to time to avoid the
imposition of any excise tax on such Trust as a regulated investment company.
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 Trust Funds" for failed securities 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 a Trust. Such books
and records shall be open to inspection by any Unitholder at all reasonable
times during usual business hours. The Trustee shall make such annual or
other reports as may from time to time be required under any applicable state
or federal statute, rule or regulation. The Trustee shall keep a certified
copy or duplicate original of the Trust Agreement on file in its office
available for inspection at all reasonable times during usual business hours
by any Unitholder, together with a current list of the Securities held in
each Trust. Pursuant to the Trust Agreement, the Trustee may employ one or
more agents for the purpose of custody and safeguarding of Securities
comprising a Trust.
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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 foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trusts. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trusts. More comprehensive financial
information can be obtained upon request from the Sponsor.
THE EVALUATOR. 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
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successor. Such resignation or removal shall become effective upon
acceptance of appointment by the successor evaluator. If upon resignation of
the Evaluator no successor has accepted appointment within thirty days after
notice of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor. Notice of such registration
or removal and appointment shall be mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure
any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor
governmental agency; or (3) to make such provisions as shall not adversely
affect the interests of the Unitholders. The Trust Agreement with respect to
a Trust may also be amended in any respect by the Sponsor and the Trustee, or
any of the provisions thereof may be waived, with the consent of the holders
of Units representing 66 2/3% of the Units then outstanding of such Trust,
provided that no such amendment or waiver will reduce the interest of any
Unitholder thereof without the consent of such Unitholder or reduce the
percentage of Units required to consent to any such amendment or waiver
without the consent of all Unitholders of such Trust. In no event shall the
Trust Agreement be amended to increase the number of Units of a Trust
issuable thereunder or to permit the acquisition of any Securities in
addition to or in substitution for those initially deposited in such 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 a 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 such Trust), the Trustee may,
in its discretion, and shall, when so directed by the Sponsor, terminate such
Trust. A Trust may be terminated at any time by the holders of Units
representing 66 2/3% of the Units thereof then outstanding. In addition, the
Sponsor may terminate a Trust if the related stock index is no longer
maintained.
No later than the Mandatory Termination Date set forth under "Essential
Information," the Trustee will begin to sell all of the remaining underlying
Securities on behalf of Unitholders in connection with the termination of the
Trusts. The Sponsor has agreed to assist the Trustee in these sales. The
sale proceeds will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it can during
the termination proceedings without in its judgment materially adversely
affecting the market price of the Securities, but it is expected that all of
the Securities will in any event be disposed of within a reasonable time
after a Trust's termination. The Sponsor does not anticipate that the period
will be longer than one month, and it could be as short as one day, depending
on the liquidity of the Securities being sold. The liquidity of any Security
depends on the daily trading volume of the Security and the amount that the
Sponsor has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid
Securities, the Sponsor will generally sell Securities on the first day of
the Liquidation Period; for less liquid Securities, on each of the first two
days of the termination proceedings, the Sponsor will generally sell any
amount of any underlying Securities at a price no less than 1/2 of one point
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under the last closing sale price of those Securities. Thereafter, the price
limit will increase to one point under the last closing sale price. After
four days, the Sponsor currently intends to sell at least a fraction of the
remaining underlying Securities, the numerator of which is one and the
denominator of which is the total number of days remaining (including that
day) in the termination proceedings without any price restrictions. Of
course, no assurances can be given that the market value of the Securities
will not be adversely affected during the termination proceedings.
In the event of termination of a Trust, written notice thereof will be sent
by the Trustee to all Unitholders of such Trust. Within a reasonable period
after termination, the Trustee will sell any Securities remaining in a Trust
and, after paying all expenses and charges incurred by such Trust, will
distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of such Trust.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the
Trust Agreement, but will be under no liability to the Unitholders for taking
any action or refraining from any action in good faith pursuant to the Trust
Agreement or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct or its reckless disregard for its
duties thereunder. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of 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 a Trust.
The Trustee receives for its services that fee set forth under "Essential
Information." However, in no event shall such fee amount to less than $2,000
in any single calendar year. The Trustee's fee which is calculated monthly
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is based on the largest number of Units of a 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 the Trusts is expected to result from the use of these funds.
For evaluation of the Securities in a Trust, the Evaluator shall receive that
fee set forth under "Essential Information", payable monthly, based upon the
largest number of Units of a Trust 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 related Trust to the extent funds are available and then from
the Capital Account. Each such fee may be increased without approval of
Unitholders by amounts not exceeding a proportionate increase in the Consumer
Price Index or any equivalent index substituted therefor.
The Nasdaq-100 Trust Licensor receives an annual fee from the Nasdaq-100
Trust equal to the greater of (a) .02% of the average net asset value of such
Trust computed quarterly or (b) a minimum of $7,000 during the first year of
such Trust's life, $8,000 during the second year of such Trust's life and
$9,000 thereafter. This fee covers the license to the Nasdaq- 100 Trust of
the use of various trademarks and trade names as described under "The Nasdaq-
100 Index."
The S&P 500 Trust Licensor receives an annual fee from the S&P 500 Trust
equal to the greater of .02% of the average net asset value of such Trust or
$10,000. This fee covers the license to the S&P 500 Trust of the use of
various trademarks and trade names as described under "The S&P 500 Index."
In addition, the S&P 500 Trust will pay approximately $45,000 per year for
access to independent computer services that track the S&P 500 Index.
Expenses incurred in establishing each Trust, including the cost of the
initial preparation of documents relating to such 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 Capital Account) and it is intended that
such expenses be amortized over a five year period. The following additional
charges are or may be incurred by a Trust: (a) fees for the Trustee's
extraordinary services; (b) expenses of the Trustee (including legal and
auditing expenses, but not including any fees and expenses charged by an
agent for custody and safeguarding of Securities) and of counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by
the Trustee to protect the Trust or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss, liability or
expense incurred by it in the administration of the Trust not resulting from
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 such
Trust. The fees and expenses set forth herein are payable out of a Trust
and, when owing to the Trustee, are secured by a lien on such Trust. Since
the Securities are all common stocks, and the income stream produced by
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dividend payments, if any, is unpredictable, the Sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all expenses of a
Trust. 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." It is expected that the
income stream produced by dividend payments will be insufficient to meet the
expenses of the Nasdaq- 100 Trust and, accordingly, it is expected that
Securities will be sold to pay all of the fees and expenses of such Trust.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
federal tax law have been passed upon by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, as counsel for the Sponsor.
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.
---------------------
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 55
We have audited the accompanying statements of condition and the related
portfolios of Ranson Unit Investment Trusts, Series 55, as of ____________,
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 55 as of ________, 1997, In conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
___________, 1997
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RANSON UNIT INVESTMENT TRUSTS, SERIES 55
STATEMENTS OF CONDITION
AT THE OPENING OF BUSINESS ON ____________ , 1997, THE INITIAL DATE OF
DEPOSIT
<TABLE>
<CAPTION>
TRUST PROPERTY
Nasdaq-100 S&P 500
Trust Trust
------------- -------------
<S> <C> <C>
Contracts to purchase Securities (1) (2) $ __________ $ __________
Organizational costs (3) __________ __________
Total $ __________ $ __________
NUMBER OF UNITS __________ __________
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-
Accrued organizational costs (3) $ __________ $ __________
Interest of Unitholders-
Cost to investors (4) __________ __________
Less: Gross underwriting commission (4) __________ __________
Net interest to Unitholders (1) (2) (4) __________ __________
Total $ __________ $ __________
</TABLE>
- --------------------
Notes:
(1) Aggregate cost of the Securities is based on the last sale price
evaluations as determined by the Trustee.
(2) An irrevocable letter of credit issued by The Bank of New York has been
deposited with the Trustee covering the funds (aggregating $_______)
necessary for the purchase of the Securities in the Trusts represented by
purchase contracts.
(3) Each Trust will bear all or a portion of its organizational costs,
which the Sponsor intends to defer and amortize over five years.
Organizational costs have been estimated based on a projected Trust size
of $__________. To the extent a Trust is larger or smaller, the estimate
will vary.
(4) The aggregate cost to investors includes the applicable sales charge
assuming no reduction of sales charges for quantity purchases.
37
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 55
NASDAQ-100 INDEX TRUST, SERIES 2
PORTFOLIO AS OF ____________, 1997
<TABLE>
<CAPTION>
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
--------- -------- ------------------ ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
</TABLE>
38
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 55
S&P 500 INDEX TRUST, SERIES 2
PORTFOLIO AS OF ____________, 1997
<TABLE>
<CAPTION>
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
--------- -------- ------------------ ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
</TABLE>
NOTES TO PORTFOLIOS
(1) All or a portion of the Securities may have been deposited in each
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 ________, 1997 and all have expected settlement
dates of ___________, 1997 (see "The Trust Funds"). The cost of the
Securities to the Sponsor and the cost of the Securities to each Trust
are the same; accordingly, the Sponsor's profit or (loss) on the deposit
of Securities is $_______.
(2) The percentage listed under this heading represents each Security's
proportionate relationship of all stocks based on market value as of the
date set forth above. Because the stocks included in each stock index
and the value of such stocks may change from time to time, and because
each Trust may not be able to duplicate the related stock index exactly,
the percentages set forth above do not represent the actual weighting of
each Security in each Trust portfolio on the Initial Date of Deposit or
on any subsequent date. See "The Trust Portfolios.
39
<PAGE>
<TABLE>
<CAPTION>
Contents Page
- -------------------------------------- ----
<S> <C>
SUMMARY 2
NASDAQ-100(R) INDEX LICENSING AGREEMENT 4
ESSENTIAL INFORMATION 6
THE TRUST FUNDS 7
THE TRUST PORTFOLIOS 8
THE NASDAQ-100 INDEX 9
THE S&P 500 INDEX 12
RISK FACTORS 16
FEDERAL TAX STATUS 18
PUBLIC OFFERING OF UNITS 20
Public Offering Price 20
Public Distribution of Units 21
Sponsor Profits 22
MARKET FOR UNITS 23
REDEMPTION 23
General 23
Computation of Redemption Price 24
RETIREMENT PLANS 25
UNITHOLDERS 25
Ownership of Units 25
Distributions to Unitholders 26
Distribution Reinvestment 26
Statements to Unitholders 27
Rights of Unitholders 27
INVESTMENT SUPERVISION 28
ADMINISTRATION OF THE TRUSTS 28
The Trustee 28
The Sponsor 29
The Evaluator 30
Amendment and Termination 30
Limitations on Liability 31
EXPENSES OF THE TRUSTS 32
LEGAL OPINIONS 33
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS 33
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS 34
STATEMENTS OF CONDITION 35
PORTFOLIOS 36
NOTES TO PORTFOLIOS 37
</TABLE>
-----------------------------------------
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the
Securities and Exchange Commission, Washington, D.C. under the Securities
Act of 1933 and the Investment Company Act of 1940, and to which reference
is made.
-----------------------------------------
No person is authorized to give any information or to make any representations
not contained in this Prospectus and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trusts, the Trustee, or the Sponsor. The Trusts are registered as unit
investment trusts under the Investment Company Act of 1940. 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.
- ------------------
PROSPECTUS
- ------------------
------------------
RANSON
UNIT
INVESTMENT
TRUSTS
------------------
Nasdaq-100 Index Trust, Series 2
S&P 500 Index Trust, Series 2
PROSPECTUS MARCH 6, 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 (to be filed by amendment).
1.1.1. Standard Terms and Conditions of Trust (to be filed by amendment).
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)
(to be filed by amendment).
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 (to be filed by amendment).
4.1. Consent of Independent Evaluators (to be filed by amendment).
4.2. Consent of Independent Certified Public Accountants (to be filed by
amendment).
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Ranson Unit Investment Trusts, Series 54 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 3rd day of March, 1997.
RANSON UNIT INVESTMENT TRUSTS, SERIES 55,
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 March 3, 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
