RANSON UNIT INVESTMENT TRUSTS, SERIES 67
DEFINED GROWTH STRATEGY 5, SERIES 9 (APRIL 1998 SERIES)
DEFINED GROWTH STRATEGY 10, SERIES 9 (APRIL 1998 SERIES)
Defined Growth Strategy 5, Series 9 (April 1998 Series) ("The 5") was formed
with the investment objective of obtaining an above-average total return through
a combination of capital appreciation and dividend income by investing in a
portfolio of the five companies with the lowest per share stock price of the ten
companies in the Dow Jones Industrial Average that have the highest dividend
yield as of the close of business on the day prior to the Initial Date of
Deposit.
Defined Growth Strategy 10, Series 9 (April 1998 Series) ("The 10") was formed
with the investment objective of obtaining above-average total return through a
combination of capital appreciation and dividend income by investing in a
portfolio of the ten companies in the Dow Jones Industrial Average that have the
highest dividend yield as of the close of business on the day prior to the
Initial Date of Deposit.
The Dow Jones Industrial Average ("DJIA") is the property of Dow Jones &
Company, Inc. Dow Jones & Company, Inc. has not granted to the Trusts or the
Sponsor a license to use the DJIA. Dow Jones & Company, Inc. has not
participated in any way in the creation of the Trusts or in the selection of
stocks included in the Trust and has not approved any information herein
relating thereto. Units are not designed so that their prices will parallel or
correlate with movements in the DJIA, and it is expected that their prices will
not parallel or correlate with such movements. There is, of course, no
assurance that the Trusts will achieve their objectives.
Units of the Trusts are not deposits or obligations of, or guaranteed by, any
bank and the Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including loss
of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future reference.
The date of this Prospectus is April 1, 1998.
<PAGE>
SUMMARY
THE FUND. Defined Growth Strategy 5, Series 9 (April 1998 Series) and Defined
Growth Strategy 10, Series 9 (April 1998 Series) are separate underlying unit
investment trusts included in Ranson Unit Investment Trusts, Series 67 (the
"Fund"), an investment company registered under the Investment Company Act of
1940. Ranson & Associates, Inc. is the Sponsor of the Fund.
Each Trust initially consists of securities and delivery statements (i.e.,
contracts) to purchase common stocks issued by companies selected in accordance
with the investment strategy of such Trust. For the criteria used by the
Sponsor in selecting the Securities, see "The Trust Portfolios-General." The
value of all portfolio Securities and, therefore, the value of the Units may be
expected to fluctuate in value depending on the full range of economic and
market influences affecting corporate profitability, the financial condition of
issuers and the prices of equity securities in general and the Securities in
particular. Capital appreciation and dividend income are, of course, dependent
upon several factors including, among other factors, the financial condition of
the issuers of the Securities (see "The Trust Portfolios").
Additional Units of a Trust may be issued at any time by depositing in the Trust
additional Securities or contracts to purchase additional Securities together
with irrevocable letters of credit or cash as provided under "The Fund."
Each Unit of a Trust initially offered represents that undivided interest in
such Trust indicated under "Essential Information" (as may be adjusted pursuant
to footnote 1 thereto). To the extent that any Units are redeemed by the
Trustee or additional Units are issued as a result of additional Securities
being deposited by the Sponsor, the fractional undivided interest in the related
Trust represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in such Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of each Trust is
based on the underlying value of the Securities in such Trust plus the
applicable initial sales charge described under "Public Offering Of Units-Public
Offering Price." Unitholders will also be assessed a deferred sales charge as
set forth under "Public Offering Of Units-Public Offering Price." If Units were
purchased on the Initial Date of Deposit and held until the mandatory
termination of a Trust, the total sales charge paid would be that amount set
forth under "Fee Table."
DISTRIBUTIONS OF INCOME AND CAPITAL. Dividends, if any, received by the Trust
will be distributed semiannually and any funds in the Capital Account will
generally be made annually. See "Unitholders-Distributions to Unitholders."
REINVESTMENT. Each Unitholder may elect to have distributions of income,
capital gains and/or capital on their Units automatically invested into
additional Units of the related Trust without an initial sales charge. In
addition, all Unitholders may elect to have such distributions automatically
reinvested into shares of any Zurich Kemper Investments, Inc. front-end load
mutual fund (other than those funds sold with a contingent deferred sales
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-
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Distribution Reinvestment." A current prospectus for the reinvestment fund
selected, if any, will be furnished to any investor who desires additional
information with respect to reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends to,
and certain dealers may, maintain a market for the Units of the Trusts and offer
to repurchase such Units at prices subject to change at any time which are based
on the current underlying closing sale prices of the Securities in the Trusts.
If the supply of Units exceeds demand or if some other business reason warrants
it, the Sponsor and/or the dealers may either discontinue all purchases of Units
or discontinue purchases of Units at such prices. A Unitholder may also dispose
of Units through redemption at the Redemption Price on the date of tender to the
Trustee. See "Redemption-Computation of Redemption Price."
INTERIM REDEMPTION AND ROLLOVER IN NEW TRUSTS. Unitholders of The 5 and The 10
Trusts will have the option of specifying by the end of the Interim Redemption
and Rollover Period stated in "Essential Information" to have all of their Units
redeemed and the distributed Securities sold by the Trustee, in its capacity as
Distribution Agent, during the Interim Redemption and Rollover Period.
(Unitholders so electing are referred to herein as "Interim Rollover
Unitholders".) Unitholders who redeem their Units on or before the end of the
Interim Redemption and Rollover Period will not be assessed the deferred sales
charge accumulated subsequent to the Interim Redemption and Rollover Period.
The Distribution Agent will appoint the Sponsor as its agent to determine the
manner, timing and execution of sales of underlying Securities. The proceeds of
the redemption will then be invested in Units of a new Series of The 5 and The
10 Trusts (the "1999 Fund"), if one is offered, at a reduced sales charge
(anticipated to be 1.75% of the Public Offering Price of the 1999 Fund per unit
per year). The Sponsor may, however, stop offering units of the 1999 Fund at
any time in its sole discretion without regard to whether all the proceeds to be
invested have been invested. Cash which has not been invested on behalf of the
interim Rollover Unitholders in the 1999 Fund will be distributed shortly after
the Interim Redemption and Rollover Period. However, the Sponsor anticipates
that sufficient units will be available, although moneys in this Fund may not be
fully invested on the next business day. The portfolios of the 1999 Fund are
expected to contain the ten common stocks in the Dow Jones Industrial Average
having the highest dividend yield as of a day shortly prior to the initial date
of deposit of the 1999 Fund, and the five companies with the lowest per share
stock price of the ten companies in the Dow Jones Industrial Average having the
highest dividend yield as of the close of business a day shortly prior to the
initial date of deposit of the 1999 Fund. Interim Rollover Unitholders will
receive the amount of dividends in the applicable Income Account of each Trust
which will be included in the reinvestment in units of the 1999 Fund.
FINAL REDEMPTION AND ROLLOVER IN NEW TRUSTS. Unitholders of The 5 and The 10
Trusts will have the option of specifying by the Final Redemption and Rollover
Date stated in "Essential Information" to have all of their Units redeemed and
the distributed Securities sold by the Trustee, in its capacity as Distribution
Agent, on the Final Redemption and Rollover Date. (Unitholders so electing are
referred to herein as "Final Rollover Unitholders".) The Distribution Agent will
appoint the Sponsor as its agent to determine the manner, timing and execution
of sales of underlying Securities. The proceeds of the redemption will then be
invested in Units of a new Series of The 5 and The 10 Trusts (the "2000 Fund"),
if one is offered, at a reduced sales charge (anticipated to be 1.75% of the
Public Offering Price of the 2000 Fund per unit per year). The Sponsor may,
however, stop offering units of the 2000 Fund at any time in its sole discretion
without regard to whether all the proceeds to be invested have been invested.
Cash which has not been invested on behalf of the Final Rollover Unitholders in
the 2000 Fund will be distributed shortly after the Final Redemption and
Rollover Date. However, the Sponsor anticipates that sufficient units will be
available, although moneys in this Fund may not
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be fully invested on the next business day. The portfolios of the 2000 Fund are
expected to contain the ten common stocks in the Dow Jones Industrial Average
having the highest dividend yield as of a day shortly prior to the initial date
of deposit of the 2000 Fund, and the five companies with the lowest per share
stock price of the ten companies in the Dow Jones Industrial Average having the
highest dividend yield as of a day shortly prior to the initial date of deposit
of the 2000 Fund. Final Rollover Unitholders will receive the amount of
dividends in the applicable Income Account of each Trust which will be included
in the reinvestment in units of the 2000 Fund.
REDEMPTION IN KIND. Upon redemption of Units a Unitholder may request to
receive in lieu of cash his share of each of the Securities then held by the
related Trust, if (1) he would be entitled to receive at least $25,000 of
proceed or if he paid at least $25,000 to acquire the Units being tendered and
(2) he has tendered for redemption prior to May 31, 2000 (see "Redemption" and
"Administration of the Trusts-Amendment and Termination").
TERMINATION. No later than the date specified for each Trust under Mandatory
Termination Date in "Essential Information," Securities will begin to be sold in
connection with the termination of the related Trust and it is expected that all
Securities in such Trust will be sold within a reasonable amount of time after
the Mandatory Termination Date. The Sponsor will determine the manner, timing
and execution of the sale of the underlying Securities. At termination,
Unitholders not electing an in kind distribution of Securities will receive a
cash distribution within a reasonable time after the related Trust is
terminated. See "Unitholders-Distributions to Unitholders" and "Administration
of the Trusts-Amendment and Termination."
RISK FACTORS. An investment in a Trust should be made with an understanding of
the risks associated therewith, including the possible deterioration of either
the financial condition of the issuers or the general condition of the stock
market. An investment in The 5 may subject a Unitholder to additional risk due
to the relative lack of diversity in its portfolio since the portfolio contains
only five stocks. Units of The 5 may be subject to greater market risk than
other trusts which contain a more diversified portfolio of securities. For risk
considerations related to the Trusts, see "Risk Factors."
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<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 67
ESSENTIAL INFORMATION
AS OF MARCH 31, 1998*
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
THE 5 THE 10
--------- ---------
<S> <C> <C>
Cusip (Cash) 753268523 753268549
Cusip (Reinvest) 753268531 753268556
Number of Units (1) 25,307 25,173
Fractional Undivided Interest Per Unit(1) 1/25,307 1/25,173
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ 250,540 $ 249,209
Aggregate Value of Securities per Unit $ 9.90 $ 9.90
Plus total sales charge (3) $ .45 $ .45
Less deferred sales charge per Unit $ .35 $ .35
Public Offering Price Per Unit (4) $ 10.00 $ 10.00
Redemption Price Per Unit $ 9.725 $ 9.725
Sponsor's Initial Repurchase Price Per Unit $ 9.725 $ 9.725
Excess of Public Offering Price Per Unit over Redemption Price Per Unit and
Sponsor's Initial Repurchase Price Per Unit $ .275 $ .275
Calculation of Estimated Net Annual Dividends Per Unit: (5)
Estimated Gross Annual Dividends per Unit $ .25982 $ .25949
Less: Estimated Annual Operating Expense per Unit $ .03500 $ .03500
Estimated Net Annual Dividends per Unit $ .22482 $ .22449
Estimated Annual Organizational Expenses per Unit (6) $ .02200 $ .02200
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Minimum Value of Trust under which Trust Agreement
may be Terminated 40% of aggregate value of Securities at deposit
Interim Redemption and Rollover Period (7) May 1, 1999 through May 15, 1999
Final Redemption and Rollover Date June 30, 2000
Mandatory Termination Date June 30, 2000
Evaluator's Annual Evaluation Fee Maximum of $0.002 per Unit
Trustee's Annual Fee $0.008 per Unit
Record and Computation Dates (8) July 1 and December 15
Distribution Dates (8) July 15 and December 31
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are made as of
3:15 p.m. Central Time next following receipt of an order for a sale or purchase
of Units or receipt by the Trustee of Units tendered for redemption.
* The business day prior to the Initial Date of Deposit
- --------------------
(1) As of the close of business on the Initial Date of Deposit, the number
of Units of each Trust may be adjusted so that the aggregate value of
Securities per Unit will equal approximately $10. Therefore, to the
extent of any such adjustment the fractional undivided interest per Unit
will increase or decrease accordingly from the amounts indicated above.
(2) Each Security is valued at the closing sale price on the New York Stock
Exchange.
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(3) The total sales charge consists of an initial sales charge and a
deferred sales charge. For both The 5 and The 10, the initial sales
charge is equal to 1.00% of the Public Offering Price. Based on the
Public Offering Price on the business day prior to the Initial Date
of Deposit the total sales charge for both The 5 and The 10 is 4.5%
(equivalent to 4.712% of the net amount invested). The deferred sales
charge is equal to $0.175 per Unit per year for The 5 and The 10. To
the extent the Public Offering Price increases or decreases, the total
sales charge percentage will decrease or increase, respectively, from
those amounts indicated.
(4) On the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay his
pro rata share of any accumulated dividends in such Income Account.
(5) The estimated annual dividends per Unit is based primarily on the most
recent dividend declarations. The actual net annual dividends per Unit
may be greater than or less than the amount shown depending on the
actual dividends collected and expenses incurred by the applicable Trust.
(6) Each Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the initial
audit of the portfolio and the initial fees and expenses of the Trustee
but not including the expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. It is intended that total
organizational expenses will be amortized over the life of each Trust.
See "Expenses Of the Trusts" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid all the
costs of establishing such trusts.
(7) Unitholders who redeem their Units on or before May 15, 1999 will not be
assessed the deferred sales charge accumulated subsequent to such date.
(8) Distributions from the Income Account, if any, will be made commencing
on July 15, 1998. Distributions from the Capital Account will be made
whenever the balance exceeds 1% of Trust net assets and will normally
be made in the subsequent month.
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FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in a Trust will bear directly or indirectly. See
"Public Offering of Units" and "Expenses of the Trusts." Although each Trust is
a unit investment trust rather than a mutual fund and may have a term of less
than the periods indicated, this information is presented to permit a comparison
of fees.
<TABLE>
<CAPTION>
THE 5
Amount Per
Unit
----------
<S> <C> <C>
UNITHOLDER TRANSACTION EXPENSES (AS OF THE INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF OFFERING PRICE)
Initial Sales Charge 1.00% $0.100(1)
Deferred Sales Charge (accumulated prior to Interim Redemption and Rollover Period) 1.75%(2) 0.175
---------- ---------
Deferred Sales Charge (accumulated subsequent to Interim Redemption and Rollover Period) (3) 1.75%(2) 0.175
========== =========
Total Sales Charge 4.50%(4) $ 0.450
ESTIMATED ANNUAL OPERATING EXPENSES (AS OF THE INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee .08% $ .008
Portfolio Evaluation Fees .02% .002
Other Operating Expenses .03% .003
Organizational Expenses .22% .022
---------- ---------
Total .35% $ .035
========== =========
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Cumulative Expenses Paid for Period of:
----------------------------------------
1 Year 3 Years 5 Years 10 Years
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment
assuming the applicable sales charges and an initial estimated operating
expense ratio of .35% on the Trust, a 5% annual return and redemption
at the end of each time period $ 31 $ 76 $ 123 $ 253
</TABLE>
<TABLE>
<CAPTION>
THE 10
Amount Per
Unit
----------
<S> <C> <C>
UNITHOLDER TRANSACTION EXPENSES (AS OF THE INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF OFFERING PRICE)
Initial Sales Charge 1.00% $0.100(1)
Deferred Sales Charge (accumulated prior to Interim Redemption and Rollover Period) 1.75%(2) 0.175
Deferred Sales Charge (accumulated subsequent to Interim Redemption and Rollover Period) (3) 1.75%(2) 0.175
---------- ---------
Total Sales Charge 4.50%(4) $ 0.450
========== =========
ESTIMATED ANNUAL OPERATING EXPENSES (AS OF THE INITIAL DATE OF DEPOSIT)
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee .08% $ .008
Portfolio Evaluation Fees .02% .002
Other Operating Expenses .03% .003
Organizational Expenses .22% .022
---------- ---------
Total .35% $ .035
========== =========
</TABLE>
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<TABLE>
<CAPTION>
EXAMPLE
Cumulative Expenses Paid for Period of:
----------------------------------------
1 Year 3 Years 5 Years 10 Years
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the applicable sales charges and an estimated operating
expense ratio of .35% on the Trust, a 5% annual return and redemption
at the end of each time period $ 31 $ 76 $ 123 $ 253
</TABLE>
The examples utilize a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. The examples should
not be considered representations of past or future expenses or annual rate of
return; the actual expenses and annual rate of return may be more or less than
those assumed for purposes of the examples.
- --------------------
(1) The Initial Sales Charge for these Trusts would exceed the dollar value
set forth above if the Public Offering Price exceeds $10.00 per Unit.
(2) The actual Deferred Sales Charge for these Trusts is $0.175 per Unit
per year, irrespective of purchase or redemption price deducted on a
monthly basis commencing July 1, 1998 through April 30, 1999 and
June 1, 1999 through March 31, 2000 for each Trust. If the Unit price
exceeds $10.00 per Unit, the Deferred Sales Charge will be less than
the percentage set forth above. If the Unit price is less than $10.00
per Unit, the Deferred Sales Charge will exceed the percentage set forth
above. Units purchased subsequent to the initial deferred sales charge
payment will be subject to the remaining deferred sales charge payments.
(3) Unitholders who redeem their Units on or before the end of the Interim
Redemption and Rollover Period will not be assessed the deferred sales
charge accumulated subsequent to the Interim Redemption and Rollover
Period.
(4) The Total Sales Charge consists of the Initial Sales Charge, which is a
fixed percentage of the Public Offering Price, and the Deferred Sales
Charge, which is a fixed dollar amount (but which will vary as a
percentage of the Public Offering Price). Due to this structure the
Total Sales Charge will vary from the percentages and dollar amounts set
forth above as a result of variations in the market value of the
Securities in a Trust.
THE FUND
Defined Growth Strategy 5, Series 9 and Defined Growth Strategy 10, Series 9 are
separate underlying unit investment trusts included in Ranson Unit Investment
Trusts, Series 67, which was created under the laws of the State of New York
pursuant to a trust indenture (the "Trust Agreement") dated the date of this
Prospectus (the "Initial Date of Deposit") between Ranson & Associates, Inc.
(the "Sponsor") and The Bank of New York (the "Trustee").
The portfolios contain common stocks issued by companies which are components of
the Dow Jones Industrial Average (the "DJIA"). Defined Growth Strategy 5,
Series 9 ("The 5") consists of a portfolio of the five companies with the lowest
per share stock price of the ten companies in the DJIA that have the highest
dividend yield as of the close of business on the day prior to the Initial Date
of Deposit. Defined Growth Strategy 10, Series 9 ("The 10") consists of a
portfolio of the ten companies in the DJIA that have the highest dividend yield
as of the close of business on the day prior to the Initial Date of Deposit. As
used herein, the term "Securities" means the common stocks (including contracts
for the purchase thereof) initially deposited in the Trusts and described in the
portfolios and any additional common stocks acquired and held by the Trusts
pursuant to the provisions of the Trust Agreement.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in each Trust. Subsequent to
the Initial Date of Deposit, the Sponsor may deposit additional Securities or
contracts to purchase additional Securities along with cash (or a bank letter of
credit in lieu of
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cash) to pay for such contracted Securities or cash (including a letter of
credit) with instructions to purchase additional Securities. Such additional
deposits into The 5 and The 10 will be in amounts which will maintain, for the
first 90 days, as closely as possible the same original percentage relationship
among the number of shares of each Security in the related Trust established by
the initial deposit of Securities and, thereafter, the same percentage
relationship that existed on such 90th day. Although additional Units will be
issued, each Unit in The 5 and The 10 will continue to represent approximately
the same number of shares of each Security and the percentage relationship among
the shares of each Security in each Trust will remain the same. The required
percentage relationship among the Securities in a Trust will be adjusted to
reflect the occurrence of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of a Security in a Trust but
which does not affect the Trust's percentage ownership of the common stock
equity of such issuer at the time of such event. If the Sponsor deposits cash,
existing and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the Securities between the time of the cash deposit and the purchase of the
Securities and because the Trust will pay the associated brokerage fees. To
minimize this effect, the Trust will attempt to purchase the Securities as close
to the evaluation time or as close to the evaluation prices as possible.
Each Trust consists of (a) the Securities listed under the related "Portfolio"
as may continue to be held from time to time in the Trust, (b) any additional
Securities acquired and held by such Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Securities. However, should any contract for the purchase of any
of the Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in a Trust to cover such purchase are
reinvested in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract to all
Unitholders on the next distribution date.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in each Trust. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of each Trust set forth under
"Essential Information."
THE TRUST PORTFOLIOS
GENERAL. The Trusts seek to provide capital appreciation and dividend income
through two indexing strategies based on the Dow Jones Industrial Average. The
5 seeks to provide an above-average total return over the two year life of the
Trust through a combination of capital appreciation and dividend income by
investing in a portfolio of the five companies with the lowest per share stock
price of the ten companies in the DJIA that have the highest dividend yield as
of the close of business on the day prior to the Initial Date of Deposit. The
10 seeks to provide an above-average total return over the two year life of the
Trust through a combination of capital appreciation and dividend income by
investing in a portfolio of the ten companies in the DJIA that have the highest
dividend yield as of the close of business on the day prior to the Initial Date
of Deposit. All of the Securities in the Trusts are actively traded, blue-chip
securities issued by some of the largest, most widely held, well-established
corporations in the world.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trust, over time stock investments have generally
out-performed most other asset classes. However, it should be
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remembered that common stocks carry greater risks, including the risk that the
value of an investment can decrease (see "Risk Factors-Certain Investment
Considerations"), and past performance is no guarantee of future results. As
the holder of the Securities, the Trustee will have the right to vote all of the
voting stocks in each Trust portfolio and will vote such stocks in accordance
with the instructions of the Sponsor.
THE DOW JONES INDUSTRIAL AVERAGE. The Dow Jones Industrial Average was first
published in The Wall Street Journal in 1896. Initially consisting of just 12
stocks, the DJIA expanded to 20 stocks in 1916 and its present size of 30 stocks
on October 1, 1928. The companies which make up the DJIA have remained
relatively constant over the life of the DJIA. Taking into account name
changes, 9 of the original DJIA companies are still in the DJIA today. For two
periods of 17 consecutive years, March 14, 1939-July 1956 and June 1,
1959-August 6, 1976, there were no changes to the list. On March 17, 1997, four
companies were added to the DJIA replacing Bethlehem Steel Corporation, Texaco,
Inc., Westinghouse Electric Corporation and Woolworth Corporation. The
companies added to the DJIA were Hewlett-Packard Co., Johnson & Johnson,
Travelers Group, Inc. and Wal-Mart Stores, Inc.
The Dow Jones Industrial Average is composed of 30 common stocks chosen by the
editors of The Wall Street Journal, a publication of Dow Jones & Company, Inc.
The companies are major factors in their industries and their stocks are widely
held by individuals and institutional investors. Changes in the components are
made entirely by the editors of The Wall Street Journal without consultation
with the companies, the stock exchange or any official agency. Dow Jones &
Company, Inc. expressly reserves the right to change the components of the Dow
Jones Industrial Average at any time for any reason. Any changes in the
components of the Dow Jones Industrial Average after the Initial Date of Deposit
will not cause a change in the identity of the common stocks included in a
Trust. The following is the list as it currently appears:
Allied Signal
Aluminum Company of America
American Express Company
American Telephone & Telegraph Company
Boeing Company
Caterpillar Inc.
Chevron Corporation
Coca-Cola Company
Walt Disney Company
E. I. du Pont de Nemours & Company
Eastman Kodak Company
Exxon Corporation
General Electric Company
General Motors
Goodyear Tire & Rubber Company
Hewlett-Packard Co.
International Business Machines Corporation
International Paper Company
Johnson & Johnson
McDonald's Corporation
Merck & Company, Inc.
Minnesota Mining & Manufacturing Company
J.P. Morgan & Company, Inc.
Philip Morris Companies, Inc.
Procter & Gamble Company
Sears, Roebuck and Company
Travelers Group, Inc.
Union Carbide Corporation
United Technologies Corporation
Wal-Mart Stores, Inc.
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The following table compares the actual performance of the DJIA with the
hypothetical performance of approximately equal values of both the five lowest
priced stocks of the ten stocks in the DJIA having the highest dividend yield
(the "Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks") and
the ten stocks in the DJIA having the highest dividend yield (the "Ten Highest
Yielding DJIA Stocks") in each of the 21 years listed below (and as of the most
recent quarter), as of the business day prior to the beginning of each year for
the returns provided under the "One Year Strategy" columns and as of the
business day prior to the beginning of every other year for the returns provided
under the "Two Year Strategy" columns. Accordingly, the hypothetical One Year
Strategy columns apply the Trusts' strategies on an annual basis and the
hypothetical Two Year Strategy columns apply the Trusts' strategies on a
biennial basis beginning on December 31, 1976.
<TABLE>
COMPARISON OF TOTAL RETURN (2)
<CAPTION>
Five Lowest Priced Stocks
of the Ten Highest Ten Highest Yielding
Yielding DJIA Stocks (1) DJIA Stocks (1) Dow Jones
One Year Two Year One Year Two Year Industrial
Year Strategy Strategy Strategy Strategy Average (DJIA)
------ ------------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C>
1977 3.46% 3.46% -.56% -.56% -12.70%
1978 1.50 8.93 0.79 7.55 2.69
1979 12.05 12.05 14.03 14.03 10.52
1980 40.52 35.46 27.25 22.04 21.41
1981 3.80 3.80 7.60 7.60 -3.40
1982 41.88 34.41 25.36 19.35 25.79
1983 36.11 36.11 38.75 38.75 25.68
1984 11.07 12.75 5.96 7.18 1.05
1985 37.84 37.84 29.45 29.45 32.78
1986 30.31 21.77 34.37 21.99 26.92
1987 11.06 11.06 6.02 6.03 6.02
1988 22.63 22.03 24.33 24.18 15.95
1989 10.53 10.53 24.78 24.78 31.71
1990 -15.27 23.17 -7.57 16.00 -0.58
1991 61.94 61.94 35.73 35.73 23.93
1992 23.27 13.24 7.98 10.38 7.35
1993 34.53 34.53 27.26 27.26 16.74
1994 8.08 2.90 4.12 5.89 4.99
1995 30.41 30.41 36.58 36.58 36.49
1996 26.12 33.20 28.58 32.07 28.18
1997 17.22 17.22 18.41 18.41 22.93
1998 thru 3/31 9.09 11.50 10.44 12.01 11.74
</TABLE>
- --------------------
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks
and the Ten Highest Yielding DJIA Stocks for any given period were
selected by ranking the dividend yields for each of the stocks in the
DJIA as of the beginning of the period (each year for the One Year
Strategy columns and every other year for the Two Year Strategy columns
commencing December 31, 1976), based upon an annualization of the last
quarterly or semi-annual ordinary dividend distribution (which would have
been declared in the preceding year) divided by that stock's market value
on the first trading day on the New York Stock Exchange in the given
period.
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<PAGE>
(2) Total Return represents the sum of the percentage change in market value
of each group of stocks between the first trading day of a period and the
total dividends paid on each group of stocks during the period divided by
the opening market value of each group of stocks as of the first trading
day of a period. Total Return does not take into consideration any sales
charges, commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the
hypothetical returns contained in the table, over the 21 calendar years
above, the Five Lowest Priced Stocks of the Ten Highest Yielding DJIA
Stocks One Year Strategy and the Ten Highest Yielding DJIA Stocks One
Year Strategy achieved an average annual total return of 20.38% and
18.05%, respectively, as compared to the average annual total return of
the DJIA which was 15.07%. Based on the hypothetical returns contained
in the table, over the 21 calendar years above, the Five Lowest priced
Stocks of the Ten Highest Yielding DJIA Stocks Two Year Strategy and the
Ten Highest Yielding DJIA Stocks Two Year Strategy achieved an average
annual total return of 21.74% and 19.14%, respectively. Although the
Trusts seek to achieve a better performance than the DJIA, there can be
no assurance that either Trust will outperform the DJIA over its two year
life or over consecutive rollover periods, if available.
<TABLE>
[This table represent the plot points of a graph in the Prospectus]
IF YOU HAD INVESTED $10,000 ON JANUARY 1, 1977
(ANNUAL ROLLOVERS)
<CAPTION>
Five Lowest Priced Stocks
of the Ten Highest Ten Highest Yielding
Yielding DJIA Stocks DJIA Stocks Dow Jones Industrial
Year One Year Strategy One Year Strategy Average (DJIA)
-------- ------------------------- -------------------- --------------------
<S> <C> <C> <C>
1/1/77 $ 10,000 $ 10,000 $ 10,000
1977 10,346 9,944 8,730
1978 10,501 10,023 8,965
1979 11,767 11,429 9,908
1980 16,534 14,543 12,029
1981 17,163 15,648 11,620
1982 24,350 19,617 14,617
1983 33,143 27,218 18,371
1984 36,812 28,840 18,564
1985 50,742 37,334 24,649
1986 66,122 50,166 31,284
1987 73,435 53,186 33,168
1988 90,054 66,126 38,458
1989 99,536 82,512 50,653
1990 84,337 76,265 50,359
1991 136,575 103,515 62,410
1992 168,357 111,776 66,997
1993 226,490 142,246 78,212
1994 244,791 148,106 82,115
1995 319,231 202,283 112,079
1996 402,615 260,096 143,663
1997 471,945 307,980 176,605
1998 thru 3/31 514,845 340,133 197,338
</TABLE>
12
<PAGE>
<TABLE>
[This table represent the plot points of a graph in the Prospectus]
IF YOU HAD INVESTED $10,000 ON JANUARY 1, 1977
(BIENNIAL ROLLOVERS)
<CAPTION>
Five Lowest Priced Stocks
of the Ten Highest Ten Highest Yielding
Yielding DJIA Stocks DJIA Stocks Dow Jones Industrial
Year Two Year Strategy Two Year Strategy Average (DJIA)
-------- ------------------------- -------------------- --------------------
<S> <C> <C> <C>
1/1/77 $ 10,000 $ 10,000 $ 10,000
1977 10,346 9,944 8,730
1978 11,270 10,695 8,965
1979 12,628 12,195 9,908
1980 17,106 14,883 12,029
1981 17,756 16,014 11,620
1982 23,866 19,113 14,617
1983 32,483 26,519 18,371
1984 36,625 28,423 18,564
1985 50,484 36,794 24,649
1986 61,474 44,885 31,284
1987 68,273 47,591 33,168
1988 83,314 59,099 38,458
1989 92,087 73,744 50,653
1990 113,424 85,543 50,359
1991 183,678 116,107 62,410
1992 207,997 128,159 66,997
1993 279,819 163,096 78,212
1994 287,933 172,702 82,115
1995 375,494 235,876 112,079
1996 500,158 311,522 143,663
1997 586,285 368,873 176,605
1998 thru 3/31 653,708 413,175 197,338
</TABLE>
The charts above represent past performance of the DJIA and the hypothetical
past performance of the Five Lowest Priced Stocks of the Ten Highest Yielding
DJIA Stocks and the Ten Highest Yielding DJIA Stocks (but not the Trusts) and
should not be considered indicative of future results. Further, these results
are hypothetical. The charts assume that all dividends during a year are
reinvested at the end of that year and do not reflect sales charges,
commissions, expenses or taxes. There can be no assurance that either Trust
will outperform the DJIA over its two year life or over consecutive rollover
periods, if available.
The hypothetical returns in the "Comparison of Total Return" table and the
charts shown above are not guarantees of future performance and should not be
used as a predictor of returns to be expected in connection with a Trust
portfolio. It is important to note that the returns shown above are based on
the Five Lowest Priced of the Ten Highest Yielding DJIA Stocks and the Ten
Highest Yielding DJIA Stocks computed for each of the periods involved; however,
because the Trusts have a term of approximately two years, the portfolios of the
13
<PAGE>
Trusts will not be adjusted each year to reflect the then current five lowest
priced of the ten highest yielding stocks in the DJIA or the then current ten
highest yielding stocks in the DJIA. Both stock prices (which may appreciate or
depreciate) and dividends (which may be increased, reduced or eliminated) will
affect the returns. As indicated in the previous table, both the Ten Highest
Yielding DJIA Stocks and the Five Lowest Priced Stocks of the Ten Highest
Yielding DJIA Stocks underperformed the DJIA in certain periods, and there can
be no assurance that a Trust's portfolio will outperform the DJIA over the life
of a Trust or over consecutive rollover periods, if available. A Unitholder in
a Trust would not necessarily realize as high a total return on an investment in
the stocks upon which the returns shown above are based for the following
reasons among others: the total return figures do not reflect sales charges,
commissions, Trust expenses or taxes; the Trusts are established at different
times of the year; the Trusts may not be fully invested at all times or equally
weighted in all stocks; past performance is not indicative of future results;
and Securities are often purchased or sold at prices different from the closing
prices used in buying and selling Units.
Information on the DJIA contained in this Prospectus, as further updated, may
also be included from time to time in other prospectuses or in advertising
material. Information on the performance of the Trust strategies may be
included from time to time in other prospectuses or advertising material and may
reflect sales charges and expenses of the Trusts. The performance of the Trusts
or of the DJIA (provided information is also given reflecting the performance of
the Trusts in comparison to that index) may also be compared to the performance
of money managers as reported in SEI Fund Evaluation Survey (the leading data
base of tax-exempt assets consisting of over 4,000 portfolios with total assets
of $250 billion) or of mutual funds as reported by Lipper Analytical Services
Inc. (which calculates total return using actual dividends on ex-dates
accumulated for the quarter and reinvested at quarter end), Money Magazine Fund
Watch (which rates fund performance over a specified time period after sales
charge and assuming all dividends reinvested) or Wiesenberger Investment
Companies Service (which states fund performance annually on a total return
basis) or of the New York Stock Exchange Composite Index, the American Stock
Exchange Index (unmanaged indices of stocks traded on the New York and American
Stock Exchanges, respectively), the Dow Jones Industrial Average (an index of 30
widely traded industrial common stocks) or the Standard & Poor's 500 Index (an
unmanaged diversified index of 500 stocks) or similar measurement standards
during the same period of time.
RISK FACTORS
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.
14
<PAGE>
Holders of common stock incur more risk than the holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of, debt obligations or preferred stock
issued by the issuer. Holders of common stock of the type held by the portfolio
have a right to receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stock have the right to
receive dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends payable
to the holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of capital debt securities. Indeed, the issuance of debt securities
or even preferred stock will create prior claims for payment of principal,
interest, liquidation preferences and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its common
stock or the rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. Further, unlike debt securities which
typically have a stated principal amount payable at maturity (whose value,
however, will be subject to market fluctuations prior thereto), common stocks
have neither a fixed principal amount nor a maturity and have values which are
subject to market fluctuations for as long as the stocks remain outstanding.
The value of the Securities in the portfolios thus may be expected to fluctuate
over the entire life of the Trusts to values higher or lower than those
prevailing on the Initial Date of Deposit.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the
Securities may depend on whether dealers will make a market in the Securities.
There can be no assurance that a market will be made for any of the Securities,
that any market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, a Trust is restricted under the
Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemptions and the value of a
Trust will be adversely affected if trading markets for the Securities are
limited or absent.
The Trust Agreement authorizes the Sponsor to increase the size of the Trusts
and the number of Units thereof by the deposit of additional Securities, or cash
(including a letter of credit) with instructions to purchase additional
Securities, in the Trusts and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their anticipated
income because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the Trusts
will pay the associated brokerage fees. To minimize this effect, the Trusts
will attempt to purchase the Securities as close to the evaluation time or as
close to the evaluation prices as possible.
From time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. Enactment into law of a proposal to reduce the
rate would adversely affect the after-tax return to investors who can take
advantage of the deduction. Unitholders are urged to consult their own tax
advisers. Further, at any time after the Initial Date of Deposit, litigation
may be initiated on a variety of grounds, or legislation may be enacted with
respect to the Securities in the Trusts or the issuers of the Securities. There
can be no assurance
15
<PAGE>
that future litigation or legislation will not have a material adverse effect on
a Trust or will not impair the ability of issuers to achieve their business
goals.
Like other investment companies, financial and business organizations and
individuals around the world, the Trust could be adversely affected if the
computer systems used by the Sponsor, Evaluator or Trustee or other service
providers to the Trust do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Problem." The Sponsor, Evaluator and Trustee are taking steps
that they believe are reasonably designed to address the Year 2000 Problem with
respect to computer systems that they use and to obtain reasonable assurances
that comparable steps are being taken by the Trust's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Trust.
The Year 2000 Problem is expected to impact corporations, which may include
issuers of Securities contained in the Trust, to varying degrees based upon
various factors, including, but not limited to, their industry sector and degree
of technological sophistication. The Sponsor is unable to predict what impact,
if any, the Year 2000 Problem will have on issuers of the Securities contained
in the Trust.
FEDERAL TAX STATUS
General. The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the Units of each
Trust. The summary is limited to investors who hold the Units as capital assets
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986 (the "Code"). Unitholders should consult
their tax advisers in determining the Federal, state, local and any other tax
consequences of the purchase, ownership and disposition of Units in the Trust.
For purposes of the following discussion and opinion, it is assumed that each
Security is equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unitholder will be treated as the owner
of a pro rata portion of each of the assets of a Trust under the Code;
and the income of such Trust will be treated as income of the Unitholders
thereof under the Code. Each Unitholder will be considered to have
received his pro rata share of income derived from each Trust asset when
such income is considered to be received by such Trust.
2. Each Unitholder will be considered to have received all of the
dividends paid on his pro rata portion of each Security when such
dividends are considered to be received by a Trust regardless of whether
such dividends are used to pay a portion of the deferred sales charge.
Unitholders will be taxed in this manner regardless of whether
distributions from such Trust are actually received by the Unitholder or
are automatically reinvested (see "Unitholders-Distribution Reinvestment").
3. Each Unitholder will have a taxable event when a Trust disposes
of a Security (whether by sale, taxable exchange, liquidation, redemption,
or otherwise) or upon the sale or redemption of Units by such Unitholder
(except to the extent an in kind distribution of stocks is received by
such Unitholder as described below). The price a Unitholder pays for his
Units, generally including sales charges, is
16
<PAGE>
allocated among each Security held by a Trust (in proportion to the fair
market values thereof on the valuation date nearest the date the
Unitholder purchased his Units) in order to determine his tax basis for
his pro rata portion of each Security held by a Trust. Unitholders
should consult their own tax advisers with regard to the calculation of
basis. For Federal income tax purposes, a Unitholder's pro rata portion
of dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to a Security held by a Trust is taxable as
ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unitholder's pro rata portion of
dividends paid on such Security which exceed such current and
accumulated earnings and profits will first reduce a Unitholder's tax
basis in such Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, the holding period for such capital gain will
be determined by the period of time a Unitholder has held his Units.
4. A Unitholder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by a Trust
will generally be considered a capital gain (except in the case of a
dealer or a financial institution). A Unitholder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of
Securities held by a Trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution).
Unitholders should consult their tax advisers regarding the recognition
of such capital gains and losses for Federal income tax purposes. In
particular, a Rollover Unitholder should be aware that a Rollover
Unitholder's loss, if any, incurred in connection with the exchange of
Units for units in either new series of a Trust (the "1999 Fund" and
the "2000 Fund") will generally be disallowed with respect to the
disposition of any Securities pursuant to such exchange to the extent
that such Unitholder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into
account such Unitholder's deemed ownership of the securities underlying
the Units in the 1999 or 2000 Fund in the manner described above, if
such substantially identical securities were acquired within a period
beginning 30 days before and ending 30 days after such disposition.
However, any gains incurred in connection with such an exchange by a
Rollover Unitholder would be recognized. Unitholders should consult
their tax advisers regarding the recognition of gains and losses for
federal income tax purposes.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge for
each Trust is deferred. The income (or proceeds from redemption) a Unitholder
must take into account for Federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge. Unitholders should consult their own
tax advisers as to the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by a Trust (to the extent such dividends
are taxable as ordinary income, as discussed above, and are attributable to
domestic corporations) in the same manner as if such corporation directly owned
the Securities paying such dividends (other than corporate shareholders, such as
"S" corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax). However, a
corporation owning Units should be aware that Sections 246 and 246A of the Code
impose additional limitations on the eligibility of dividends for the 70%
dividends received deduction. These limitations include a requirement that
stock (and therefore Units) must generally be held at least 46 days (as
determined under Section 246(c) of the Code). Final regulations have been
issued
17
<PAGE>
which address special rules that must be considered in determining whether the
46 day holding period requirement is met. Moreover, the allowable percentage of
the deduction will be reduced from 70% if a corporate Unitholder owns certain
stock (or Units) the financing of which is directly attributable to indebtedness
incurred by such corporation. It should be noted that various legislative
proposals that would affect the dividends received deduction have been
introduced. Unitholders should consult with their tax advisers with respect to
the limitations on and possible modifications to the dividends received
deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by a Trust is deductible by the
Unitholder to the same extent as though the expense had been paid directly by
him. It should be noted that as a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of
such Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust or
Disposition of Units. As discussed above, a Unitholder may recognize taxable
gain (or loss) when a Security is disposed of by a Trust or if the Unitholder
disposes of a Unit. For taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) is subject to a maximum marginal stated tax rate of either
28% or 20%, depending upon the holding periods of the capital assets. Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
Generally, capital gains realized from assets held for more than one year but
not more than 18 months are taxed at a maximum marginal stated tax rate of 28%
and capital gains realized from assets (with certain exclusions) held for more
than 18 months are taxed at a maximum marginal stated tax rate of 20% (10% in
the case of certain taxpayers in the lowest tax bracket). Further, capital
gains realized from assets held for one year or less are taxed at the same rates
as ordinary income. Legislation is currently pending that provides the
appropriate methodology that should be applied in netting the realized capital
gains and losses. Such legislation is proposed to be effective retroactively
for tax years ending after May 6, 1997. Note that the date on which a Unit is
acquired (i.e., the "trade date") is excluded for purposes of determining the
holding period of the Unit. 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.
In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment in
Units.
If a Unitholder disposes of a Unit, he is deemed thereby to dispose of his
entire pro rata interest in all assets of the Trust involved including his pro
rata portion of all Securities represented by a Unit. The Taxpayer Relief Act
of 1997 (the "1997 Tax Act") includes provisions that treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain (e.g.,
short sales, off-setting notional principal contracts, futures or forward
contracts, or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. Unitholders should consult their own tax advisers with regard to any
constructive sale rules.
18
<PAGE>
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of a Trust. As discussed in "Redemption," under certain
circumstances a Unitholder tendering Units for redemption may request an In Kind
Distribution. A Unitholder may also under certain circumstances request an In
Kind Distribution upon termination of a Trust. See "Administration of the
Trusts-Amendment and Termination." The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such In Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Redemption." As previously
discussed, prior to the redemption of Units or the termination of a Trust, a
Unitholder is considered as owning a pro rata portion of each of such Trust's
assets for federal income tax purposes. The receipt of an In Kind Distribution
will result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution with
respect to each Security held by a Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
a Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by a Trust, such Unitholder will generally
recognize gain or loss based on the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by such Trust.
Because a Trust will own many Securities, a Unitholder who requests an In Kind
Distribution will have to analyze the tax consequences with respect to each
Security owned by such Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss) recognized
under the rules described above by such Unitholder with respect to each Security
owned by such Trust. Unitholders who request an In Kind Distribution are
advised to consult their tax advisers in this regard.
As discussed in "Interim and Final Redemption and Rollover in New Trusts," a
Unitholder may elect to become a Rollover Unitholder. To the extent a Rollover
Unitholder exchanges his Units for Units of the 1999 or 2000 Fund in a taxable
transaction, such Unitholder will recognize gains, if any, but generally will
not be entitled to a deduction for any losses recognized upon the disposition of
any Securities pursuant to such exchange to the extent that such Unitholder is
considered the owner of substantially identical securities under the wash sale
provisions of the Code taking into account such Unitholder's deemed ownership of
the securities underlying the Units in the 1999 or 2000 Fund in the manner
described above, if such substantially identical securities were acquired within
a period beginning 30 days before and ending 30 days after such disposition
under the wash sale provisions contained in Section 1091 of the Code. In the
event a loss is disallowed under the wash sale provisions, special rules
contained in Section 1091 (d) of the Code apply to determine the Unitholder's
tax basis in the securities acquired. Rollover Unitholders are advised to
consult their tax advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in a Trust
in accordance with the proportion of the fair market values of such Securities
on the valuation date nearest the date the Units are purchased in order to
determine such Unitholder's tax basis for his pro rata portion of each Security.
19
<PAGE>
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by a Trust will be reduced to the extent dividends paid with respect to
such Security are received by such Trust which are not taxable as ordinary
income as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by a Trust to such
Unitholder (including amounts received upon the redemption of Units) will be
subject to back-up withholding. Distributions by a Trust (other than those that
are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by nonresident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
At the termination of a Trust, the Trustee will furnish to each Unitholder of
such Trust a statement containing information relating to the dividends received
by such Trust on the Securities, the gross proceeds received by such Trust from
the disposition of any Security (resulting from redemption or the sale of any
Security), and the fees and expenses paid by such Trust. The Trustee will also
furnish annual information returns to Unitholders and to the Internal Revenue
Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
with regard to Federal income tax. Unitholders may be subject to foreign, state
and local taxation and should consult their own tax advisers in this regard. As
used herein, the term "U.S. Unitholder" means an owner of a Unit of a Trust that
(a) is (i) for United States federal income tax purposes of citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to United
States federal income taxation regardless of its source or (b) does not qualify
as a U.S. Unitholder in paragraph (a) but whose income from a Unit is
effectively connected with such Unitholder's conduct of a United States trade or
business. The term also includes certain former citizens of the United States
whose income and gain on the Units will be taxable.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of each Trust is
based on the aggregate underlying value of the Securities in such Trust plus the
initial sales charge described below. The initial sales charge for each Trust
is equal to 1.00% of the Public Offering Price. Based on the Public Offering
Price on the business day prior to the Initial Date of Deposit the maximum sales
charge for both The 5 and The 10 is 4.5% of the Public Offering Price
(equivalent to 4.712% of the net amount invested). To the extent the Public
Offering Price increases or decreases, the total sales charge percentage will
decrease or increase, respectively, from those amounts indicated. On the first
day of July 1998 through April 30, 1999 and again on the first day of June 1999
through March 31, 2000 a deferred sales charge of $0.0175 per Unit will also be
assessed for The 5 and The 10. The total amount of the deferred sales charge
payments for The 5 and The 10 will be $0.35 per Unit.
20
<PAGE>
Unitholders who redeem their Units on or before May 15, 1999 will not be
assessed the deferred sales charge commencing June 1, 1999. The total amount of
deferred sales charge payments for The 5 and The 10 will be $0.175 per Unit per
year. Units purchased subsequent to the initial deferred sales charge payment
will be subject to the initial sales charge and the remaining deferred sales
charge payments. Units sold or redeemed prior to such time as the entire
applicable deferred sales charge has been collected will be assessed the
remaining deferred sales charge at the time of such sale or redemption.
Subsequent to the Initial Date of Deposit, the initial sales charge for each
Trust will vary with changes in the aggregate value of the Securities. The
deferred sales charge payments for each Trust will be paid from funds in the
Capital Account of such Trust, if sufficient, or from the periodic sale of
Securities from such Trust. In addition, a pro rata portion of the cash, if
any, in the Income and Capital Accounts of a Trust will be added to the Public
Offering Price per Unit of such Trust. If Units of a Trust were purchased on
the Initial Date of Deposit and held until the mandatory termination of such
Trust, the total sales charge paid would be that amount set forth below.
The sales charges for each Trust will be reduced on a graduated basis as set
forth in the following table:
<TABLE>
<CAPTION>
Deferred Deferred
Sales Charge Sales Charge
prior to Interim after interim
Initial Redemption Redemption
Sales and Rollover and Rollover Maximum
Charge Period Period Total Sales Charge**
---------- ---------------- ------------- -------------------------
Percent of Dollar Dollar Percent of Percent of
Offering Amount Amount Offering Net Amount
Number of Units* Price Per Unit Per Unit Price Invested
- ------------------ ---------- ---------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Less than 5,000. 1.00% $ 0.175 $ 0.175 4.50% 4.712%
5,000-9,999 0.75% $ 0.175 $ 0.175 4.25% 4.439%
10,000-14,999 0.50% $ 0.175 $ 0.175 4.00% 4.167%
15,000 or more . 0.20% $ 0.175 $ 0.175 3.70% 3.842%
<FN>
- --------------------
* The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on whichever
basis is more favorable to the investor.
** Because the deferred sales charge for each Trust is actually a fixed dollar amount
equal to $0.175 per Unit per year, the maximum total sales charge will exceed the
percentage stated above if the price of Units is less than $10 and will be less than the
percentage stated above if the price of Units is greater than $10.
</TABLE>
Units may be purchased in the primary or secondary market at the Public Offering
Price less the concession the Sponsor typically allows to dealers and other
selling agents for purchases (see "Public Distribution of Units") by officers,
directors and employees of the Sponsor and its affiliates and registered
representatives of selling firms and by investors who purchase Units through
registered investment advisers, certified financial planners or registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment
21
<PAGE>
advisory or asset management services, or provide such services in connection
with the establishment of an investment account for which a comprehensive "wrap
fee" charge is imposed.
Unitholders of any Kemper Equity Portfolio Trust series and unitholders of any
Ranson or EVEREN common stock unit investment trust series (including Defined
Growth Strategy 5 and Defined Growth Strategy 10 series) may utilize their
redemption or termination proceeds to purchase Units of the Trusts subject only
to the deferred sales charge described herein.
Unitholders of unaffiliated unit investment trusts having an investment strategy
similar to the investment strategy of the Trusts may utilize proceeds received
upon termination or upon redemption immediately preceding termination of such
unaffiliated trust to purchase Units of the Trusts subject only to the deferred
sales charge described herein.
A purchaser desiring to purchase during a 13 month period $500,000 or more of
any combination of series of Ranson Unit Investment Trusts may qualify for a
reduced sales charge by signing a nonbinding Letter of Intent with any single
broker-dealer. After signing a Letter of Intent, at the date total purchases,
less redemptions, of units of any combination of series of Ranson Unit
Investment Trusts by a purchaser (including units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser under 21 years
of age) exceed $500,000, the selling broker-dealer, bank or other will credit
the unitholder with cash as a retroactive reduction of the sales charge on such
units equal to the amount which would have been paid for the total aggregated
sale amount. If a purchaser does not complete the required purchases under the
Letter of Intent within the 13 month period, no such retroactive sales charge
reduction shall be made. To qualify as a purchase under a Letter of Intent each
purchase of units of Ranson Unit Investment Trusts must equal or exceed
$100,000.
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by the
number of Units outstanding. Such price determination as of the opening of
business on the Initial Date of Deposit was made on the basis of an evaluation
of the Securities in each Trust prepared by the Trustee. After the opening of
business on the Initial Date of Deposit, the Evaluator will appraise or cause to
be appraised daily the value of the underlying Securities as of 3:15 P.M.
Central time on days the New York Stock Exchange is open and will adjust the
Public Offering Price of the Units commensurate with such valuation. Such
Public Offering Price will be effective for all orders received at or prior to
3:15 p.m. Central Time on each such day. Orders received by the Trustee,
Sponsor or any dealer for purchases, sales or redemptions after that time, or on
a day when the New York Stock Exchange is closed, will be held until the next
determination of price.
The value of the Securities is determined on each business day by the Evaluator
based on the closing sale prices on the New York Stock Exchange or by taking
into account the same factors referred to under "Redemption-Computation of
Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units.
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of each
Trust will be distributed to the public at the Public Offering Price thereof.
Upon the completion of the initial offering, Units which remain unsold or which
may be acquired in the secondary market (see "Market for Units") may be offered
at the Public Offering Price determined in the manner provided above.
22
<PAGE>
The Sponsor intends to qualify Units of the Trusts for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made
to or through dealers at prices which represent discounts from the Public
Offering Price as set forth below. Certain commercial banks are making Units of
the Trusts available to their customers on an agency basis. A portion of the
sales charge paid by their customers is retained by or remitted to the banks in
the amounts shown below. Under the Glass-Steagall Act, banks are prohibited
from underwriting Trust Units; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have indicated that these
particular agency transactions are permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. The Sponsor reserves the right to
change the discounts set forth below from time to time. In addition to such
discounts, the Sponsor may, from time to time, pay or allow an additional
discount, in the form of cash or other compensation, to dealers employing
registered representatives who sell, during a specified time period, a minimum
dollar amount of Units of the Trusts and other unit investment trusts
underwritten by the Sponsor. At various times the Sponsor may implement
programs under which the sales force of a broker or dealer may be eligible to
win nominal awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the total
applicable sales charges on the sales generated by such person at the public
offering price during such programs. Also, the Sponsor in its discretion may
from time to time pursuant to objective criteria established by the Sponsor pay
fees to qualifying brokers or dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trusts. Such payments
are made by the Sponsor out of its own assets, and not out of the assets of the
Trusts. These programs will not change the price Unitholders pay for their
Units or the amount that the Trusts will receive from the Units sold. The
difference between the discount and the sales charge will be retained by the
Sponsor.
<TABLE>
<CAPTION>
COMMISSION PRIOR TO INTERIM
REDEMPTION AND ROLLOVER COMMISSION AFTER INTERIM
PERIOD REDEMPTION AND ROLLOVER PERIOD
-------------------------------------- --------------------------------------
PRIMARY MARKET FIRM PRIMARY MARKET FIRM
SALES OR SALES OR
ARRANGEMENTS ARRANGEMENTS
(VOLUME (VOLUME
CONCESSIONS IN CONCESSIONS IN
REGULAR $1000)** REGULAR $1000)**
CONCESSION --------------------- CONCESSION ---------------------
OR AGENCY $500- $1,000 OR AGENCY $500- $1,000
NUMBER OF UNITS* COMMISSION $999 OR MORE COMMISSION $999 OR MORE
- ----------------- ------------ --------- ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
Less than 5,000 2.00% 2.05% 2.10% $0.110 $0.115 $0.120
5,000 but less than 10,000 1.80 1.85 1.90 0.110 0.115 0.120
10,000 but less than 15,000 1.60 1.65 1.70 0.110 0.115 0.120
15,000 or more 1.40 1.45 1.45 0.110 0.115 0.120
Rollover Sales 1.10 1.20 1.20 0.110 0.115 0.120
<FN>
* The breakpoint discounts are also applied on a dollar basis utilizing a breakpoint equivalent in the
above table of $10 per Unit.
23
<PAGE>
** Volume concessions of up to the amount shown can be earned as a marketing allowance at the discretion of
the Sponsor through April 30, 1998 by firms who reach cumulative firm sales arrangement levels of at least
$500,000. After a firm has met the minimum $500,000 volume level, volume concessions may be given on all trades
after April 30, 1998 originated from or by that firm, including those placed prior to reaching the $500,000
level, and may continue to be given during the entire initial offering period. Firm sales of any Ranson equity
trust series issued simultaneously can be combined for the purposes of achieving the volume discount. Only
sales through Ranson qualify for volume discounts and secondary purchases do not apply. The Sponsor reserves
the right to modify or change those parameters at any time and make the determination of which firms qualify for
the marketing allowance and the amount paid.
</TABLE>
A special additional payment of 0.25%, 0.30% or 0.35% in lieu of the volume
concessions noted above will be made to firms whose sales of The 5 and The 10
combined, including future series of The 5 or The 10, exceed $3.5 million, $5.0
million or $7.0 million, respectively, during any calendar month. A firm may
also earn the above special payment for all sales of The 5 or The 10 to the
extent that it was not otherwise earned, by achieving monthly average sales of
The 5 and The 10, including future series of The 5 and The 10, equal to the
above sales amounts during the period April 1998 through September 1998.
Rollover sales will count toward a firm achieving the aforementioned total
sales, however, such rollover sales will not be eligible for the special
additional payment.
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trusts as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit (or
sustain a loss) as of the Initial Date of Deposit resulting from the difference
between the purchase prices of the Securities to the Sponsor and the cost of
such Securities to a Trust, which is based on the evaluation of the Securities
on the Initial Date of Deposit. Thereafter, on subsequent deposits the Sponsor
may realize profits or sustain losses from such deposits. See "Portfolios." The
Sponsor may realize additional profits or losses during the initial offering
period on unsold Units as a result of changes in the daily market value of the
Securities in the Trusts.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, subject to change at any time, maintain a market for Units of the
Trusts offered hereby and to continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the closing sale prices of the
Securities. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate closing sale prices of the Securities in the Trusts.
Accordingly, Unitholders who wish to dispose of their Units should inquire of
their broker as to current market prices in order to determine whether there is
in existence any price in excess of the Redemption Price and, if so, the amount
thereof. Unitholders who sell or redeem Units prior to such time as the entire
applicable deferred sales charge on such Units has been collected will be
assessed the amount of the remaining deferred sales charge at the time of such
sale or redemption. The offering price of any Units resold by the Sponsor will
be in accord with that described in the currently effective prospectus
describing such Units. Any profit or loss resulting from the resale of such
Units will belong to the Sponsor. The Sponsor may suspend or discontinue
purchases of Units of the Trusts if the supply of Units exceeds demand, or for
other business reasons.
24
<PAGE>
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Trustee at its unit investment trust office in the city
of New York and, in the case of Units evidenced by a certificate, by tendering
such certificate to the Trustee, properly endorsed or accompanied by a written
instrument or instruments of transfer in a form satisfactory to the Trustee.
Unitholders must sign the request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount of the
redemption is $500 or less and the proceeds are payable to the Unitholder(s) of
record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee no later than the seventh calendar day
following the day on which a tender for redemption is received (the "Redemption
Date"), or if the seventh calendar day is not a business day, on the first
business day prior thereto, by payment of cash equivalent to the Redemption
Price for each Trust, determined as set forth below under "Computation of
Redemption Price," as of the evaluation time stated under "Essential
Information," next following such tender, multiplied by the number of Units
being redeemed. Any Units redeemed shall be canceled and any undivided
fractional interest in a Trust extinguished. The price received upon redemption
might be more or less than the amount paid by the Unitholder depending on the
value of the Securities in a Trust at the time of redemption. Unitholders who
sell or redeem Units prior to such time as the entire applicable deferred sales
charge on such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of such sale or redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the appropriate Trust to the extent that funds are
available for such purpose. All other amounts paid on redemption shall be
withdrawn from the Capital Account for the appropriate Trust. The Trustee is
empowered to sell Securities for a Trust in order to make funds available for
the redemption of Units of such Trust. Such sale may be required when
Securities would not otherwise be sold and might result in lower prices than
might otherwise be realized.
25
<PAGE>
Unitholders tendering Units for redemption may request a distribution in kind (a
"Distribution In Kind") from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is (1) entitled to receive at least $25,000 of proceeds as part of
his or her distribution or if he paid at least $25,000 to acquire the Units
being tendered and (2) the Unitholder has elected to redeem prior to the date
specified under "Redemption In Kind" under "Summary" in this Prospectus. If the
Unitholder meets these requirements, a Distribution In Kind will be made by the
Trustee through the distribution of each of the Securities of a Trust in book
entry form to the account of the Unitholder's bank or broker-dealer at
Depository Trust Company. The tendering Unitholder shall be entitled to receive
whole shares of each of the Securities comprising the portfolio of such Trust
and cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. Unitholders who redeem Units prior to such
time as the entire applicable deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales charge at
the time of such redemption. The Trustee shall make any adjustments necessary
to reflect differences between the Redemption Price of the Units and the value
of the Securities distributed in kind as of the date of tender. If funds in the
Capital Account are insufficient to cover the required cash distribution to the
tendering Unitholder, the Trustee may sell Securities. The in kind redemption
option may be terminated by the Sponsor on a date other than that specified
under "Redemption In Kind" under "Summary" in this Prospectus upon notice to the
Unitholders prior to the specified date.
To the extent that Securities are redeemed in kind or sold, the size (and
possibly the diversity) of a Trust will be reduced but each remaining Unit will
continue to represent approximately the same proportional interest in each
Security. Sales may be required at a time when Securities would not otherwise
be sold and may result in lower prices than might otherwise be realized. The
price received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities in the portfolio at the time
of redemption.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will generally be determined on the
basis of the closing sale price of the Securities in a Trust. On the Initial
Date of Deposit, the Public Offering Price per Unit (which is based on the
closing sale prices of the Securities and includes the sales charge) exceeded
the value at which Units could have been redeemed by the amount shown under
"Essential Information." While the Trustee has the power to determine the
Redemption Price per Unit when Units are tendered for redemption, such authority
has been delegated to the Evaluator which determines the price per Unit on a
daily basis. The Redemption Price per Unit is the pro rata share of each Unit
in a Trust determined on the basis of (i) the cash on hand in the Trust or
moneys in the process of being collected and (ii) the value of the Securities in
the Trust less (a) amounts representing taxes or
26
<PAGE>
other governmental charges payable out of the Trust, (b) any amount owing to the
Trustee for its advances and (c) the accrued expenses of the Trust. The
Evaluator may determine the value of the Securities in a Trust in the following
manner: if the Security is listed on a national securities exchange or the
Nasdaq National Market, the evaluation will generally be based on the last sale
price on the exchange or Nasdaq (unless the Evaluator deems the price
inappropriate as a basis for evaluation). If the Security is not so listed or,
if so listed and the principal market for the Security is other than on the
exchange or system, the evaluation will generally be made by the Evaluator in
good faith based on the last bid price on the over-the-counter market (unless
the Evaluator deems such price inappropriate as a basis for evaluation) or, if a
bid price is not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any combination
thereof. Any such evaluation made during the initial offering period will be
made based on the ask price of any applicable Securities. See "Public Offering
of Units-Public Offering Price."
INTERIM AND FINAL REDEMPTION AND ROLLOVER IN NEW TRUSTS
It is expected that a special redemption will be made of all Units of the Trusts
held by any Unitholder (a "Rollover Unitholder") who affirmatively notifies the
Trustee in writing that he desires to rollover his Units in the Trusts by the
end of the Interim Redemption and Rollover Period or by the Final Redemption and
Rollover Date specified in "Essential Information". Rollover Unitholders who
rollover Units in connection with the Interim Redemption and Rollover Period are
referred to herein as "Interim Rollover Unitholders," while Rollover Unitholders
who rollover Units in connection with the Final Redemption and Rollover Date are
referred to herein as "Final Rollover Unitholders."
All Units of Interim and Final Rollover Unitholders will be redeemed on the
Interim Redemption and Rollover Period or the Final Redemption and Rollover
Date, respectively, and the underlying Securities will be distributed to the
Distribution Agent on behalf of such Rollover Unitholders. During the Interim
Redemption and Rollover Period and on the Final Redemption and Rollover Date the
Distribution Agent will be required to sell all of the underlying Securities on
behalf of Interim and Final Rollover Unitholders as applicable. The sales
proceeds will be net of brokerage fees, governmental charges or any expenses
involved in the sales.
The Distribution Agent will attempt to sell the Securities as quickly as is
practicable during the Interim Redemption and Rollover Period and on the Final
Redemption and Rollover Date. The Sponsor does not anticipate that the Interim
Redemption and Rollover Period will be longer than the period set forth under
"Essential Information" or that the Final Redemption and Rollover selling period
will be longer than one day given that the Securities are usually highly liquid.
The liquidity of any Security depends on the daily trading volume of the
Security and the amount that the Sponsor has available for sale on any
particular day.
Pursuant to an exemptive order from the Securities and Exchange Commission, each
terminating Trust (and the Distribution Agent on behalf of Rollover Unitholders)
may sell Securities to the 1999 Fund or the 2000 Fund if those Securities
continue to meet the individual Trust's strategy as set forth under "The Fund."
The exemption will enable each Trust to eliminate commission costs on these
transactions. The price for those Securities will be the closing sale price on
the sale date on the exchange where the Securities are principally traded, as
certified by the Sponsor and confirmed by the Trustee of each Trust.
27
<PAGE>
The Interim Rollover Unitholders' proceeds will be invested in the next
subsequent series of the Trusts (the "1999 Fund"), if then being offered, the
portfolios of which will contain either the five lowest priced stocks of the ten
highest yielding stocks in the Dow Jones Industrial Average or the ten highest
yielding stocks in the Dow Jones Industrial Average, as the case may be, as of
the close of business on the day prior to the initial date of deposit of the
1999 Fund. The proceeds of redemption will be used to buy 1999 Fund units in
the appropriate portfolio as the proceeds become available. Interim Rollover
Unitholders will not be assessed the deferred sales charge payments remaining
after the Interim Redemption and Rollover Period.
The Final Rollover Unitholders' proceeds will be invested in the following
subsequent series of the Trusts (the "2000 Fund"), if then being offered, the
portfolios of which will contain either the five lowest priced stocks of the ten
highest yielding stocks in the Dow Jones Industrial Average or the ten highest
yielding stocks in the Dow Jones Industrial Average, as the case may be, as of
the close of business on the day prior to the initial date of deposit of the
2000 Fund. The proceeds of redemption will be used to buy 2000 Fund units in
the appropriate portfolio as the proceeds become available.
The Sponsor intends to create the 1999 and 2000 Funds shortly prior to the
Interim Redemption and Rollover Period and the Final Redemption Date, dependent
upon the availability and reasonably favorable prices of the Securities included
in the 1999 and 2000 Fund portfolios, and it is intended that Rollover
Unitholders will be given first priority to purchase the 1999 and 2000 Fund
units. There can be no assurance, however, as to the exact timing of the
creation of the 1999 and 2000 Funds or the aggregate number of units in each
trust portfolio which the Sponsor will create. The Sponsor may, in its sole
discretion, stop creating new units in each trust portfolio at any time it
chooses, regardless of whether all proceeds of the Interim or Final Redemption
and Rollover have been invested on behalf of Rollover Unitholders. Cash which
has not been invested on behalf of the Rollover Unitholders in 1999 and 2000
Fund units will be distributed shortly after the Interim Redemption and Rollover
Period or the Final Redemption and Rollover Date.
Any Rollover Unitholder may then be redeemed out of the Fund and become a holder
of an entirely different unit investment trust in the 1999 or 2000 Fund with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold during the Interim
Redemption and Rollover Period or on the Final Redemption and Rollover Date. In
accordance with the Rollover Unitholders' offer to purchase the 1999 or 2000
Fund units, the proceeds of the sales (and any other cash distributed upon
redemption) will be invested in the 1999 or 2000 Fund in the appropriate
portfolio at the public offering price, including the applicable sales charge
per Unit (which for Rollover Unitholders is currently expected to be 1.75% of
the Public Offering Price of the 1999 or 2000 Fund units per unit per year).
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolios selected by the Sponsor are chosen on the basis
of growth and income potential only for the near term, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption
and rollover in new unit investment trusts will be available for the 1999 and
2000 Funds and each subsequent series of the Fund, approximately a year after
that Series' creation.
There can be no assurance that the redemption and rollover in a new trust will
avoid any negative market price consequences stemming from the trading of large
volumes of securities and of the underlying Securities. The above procedures
may be insufficient or unsuccessful in avoiding such price consequences. In
fact, market
28
<PAGE>
price trends may make it advantageous to sell or buy more quickly or more slowly
than permitted by these procedures.
It should also be noted that Rollover Unitholders may realize taxable capital
gains on the Interim or Final Redemption and Rollover but, in certain
circumstances, will not be entitled to a deduction for certain capital losses
and, due to the procedures for investing in the subsequent Trust, no cash would
be distributed at that time to pay any taxes. Included in the cash for the
Interim and Final Redemption and Rollover will be any amount of cash
attributable to the last distribution of dividend income; accordingly, Rollover
Unitholders also will not have such cash distributed to pay any taxes. See
"Federal Tax Status". Unitholders who do not inform the Distribution Agent that
they wish to have their Units so redeemed and liquidated will not realize
capital gains or losses due to the Interim and Final Redemption and Rollover and
will not be charged any additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
the 1999 or 2000 Fund or any subsequent series of the Fund, without penalty or
incurring liability to any Unitholder. If the Sponsor so decides, the Sponsor
shall notify the Unitholders before the Interim Redemption and Rollover Period
or the Final Redemption and Rollover Date would have commenced. The Sponsor may
modify the terms of the 1999 or 2000 Fund or any subsequent series of the Fund.
The Sponsor may also modify the terms of the Interim and Final Redemption and
Rollover in the 1999 and 2000 Fund upon notice to the Unitholders.
RETIREMENT PLANS
The Trusts may be well suited for purchase by individual Retirement Accounts,
Keogh Plans, pension funds and other qualified retirement plans. Generally,
capital gains and income received under each of the foregoing plans are deferred
from federal taxation. All distributions from such plans are generally treated
as ordinary income but may, in some cases, be eligible for special income
averaging or tax-deferred rollover treatment. Investors considering
participation in any such plan should review specific tax laws related thereto
and should consult their attorneys or tax advisers with respect to the
establishment and maintenance of any such plan. Such plans are offered by
brokerage firms and other financial institutions. The Trusts will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-deferred plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
The Trustee has agreed to act as custodian for certain retirement plan accounts.
An annual fee of $12.00 per account, if not paid separately, will be assessed by
the Trustee and paid through the liquidation of shares of the reinvestment
account. An individual wishing the Trustee to act as custodian must complete a
Ranson UIT/IRA application and forward it along with a check made payable to The
Bank of New York. Certificates for Individual Retirement Accounts can not be
issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trusts will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered
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or certified mail for the protection of the Unitholder. Unitholders must sign
such written request, and such certificate or transfer instrument, exactly as
their names appear on the records of the Trustee and on any certificate
representing the Units to be transferred. Such signatures must be guaranteed as
stated under "Redemption-General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to each Trust's
minimum investment requirement of 100 Units or $1,000. Fractions of Units, if
any, will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Dividend income received by a Trust is credited
by the Trustee to the Income Account of such Trust. Other receipts are credited
to the Capital Account of the Trust. Income received by a Trust will be
distributed on or shortly after the Record and Computation Dates of each year on
a pro rata basis to Unitholders of record as of the preceding Record and
Computation Date. All distributions will be net of applicable expenses. There
is no assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. in addition, if the balance of the Capital
Account of a Trust exceeds 1% of the net assets of such Trust, the balance of
such Account will be distributed on the fifteenth day of the subsequent month to
Unitholders of record on the first day of such month. Proceeds received from
the disposition of any of the Securities after a Record and Computation Date and
prior to the following Distribution Date will be held in the Capital Account and
not distributed until the next Distribution Date applicable to the Capital
Account. The Trustee shall be required to make a distribution from the Capital
Account as described under "Essential Information." The Trustee is not required
to pay interest on funds held in the Capital or income Accounts (but may itself
earn interest thereon and therefore benefits from the use of such funds). The
Trustee is authorized to reinvest any funds held in the Capital or Income
Accounts, pending distribution, in U.S. Treasury obligations which mature on or
before the next applicable Distribution Date. Any obligations so acquired must
be held until they mature and proceeds therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following Distribution Date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by the Trusts at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner
of Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the transfer of Units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of each Trust and, to the extent funds are not sufficient therein, from
the Capital Account of such Trust amounts necessary to pay the
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expenses of such Trust (as determined on the basis set forth under "Expenses of
the Trusts"). The Trustee also may withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any governmental charges
payable out of a Trust. Amounts so withdrawn shall not be considered a part of
a Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. In addition, the Trustee may withdraw
from the Income and Capital Accounts of a Trust such amounts as may be necessary
to cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional Units of the related Trust without an initial sales
charge. In addition, Unitholders may elect to have distributions of capital
(including capital gains, if any) or dividends or both automatically invested
without charge in shares of any one of several front-end load mutual funds
underwritten or advised by Zurich Kemper Investments, Inc. at net asset value if
such funds are registered in such Unitholder's state of residence, other than
those mutual funds sold with a contingent deferred sales charge. Since the
portfolio securities and investment objectives of such Zurich Kemper-advised
mutual funds generally will differ significantly from those of the Trusts,
Unitholders should carefully consider the consequences before selecting such
mutual funds for reinvestment. Detailed information with respect to the
investment objectives and the management of such mutual funds is contained in
their respective prospectuses, which can be obtained from the Sponsor upon
request. An investor should read the prospectus of the reinvestment fund
selected prior to making the election to reinvest. Unitholders who desire to
have such distributions automatically reinvested should inform their broker at
the time of purchase or should file with the Program Agent referred to below a
written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record and Computation Date
applicable to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice is received
by the Program Agent. See "Unitholders-Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its unit investment trust division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of a Trust are required to be audited annually, at the Trust's
expense, by independent public accountants designated by the Sponsor, unless the
Sponsor determines that such an audit would not be in the best interest of the
Unitholders of such Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of a Trust upon written request. Within a reasonable
period of time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unitholder of a Trust
a statement, covering the calendar year, setting forth for such Trust:
A. As to the Income Account: (1) income received; (2) deductions for
applicable taxes and for fees and expenses of the Trust and for
redemptions of Units, if any; and (3) the balance remaining after such
distributions and deductions, expressed in each case both as a total
dollar amount and as a dollar amount representing the pro rata share of
each Unit outstanding on the last business day of such calendar year;
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B. As to the Capital Account: (1) the dates of disposition of any Securities
and the net proceeds received therefrom; (2) deductions for payment of
applicable taxes and fees and expenses of the Trust held for distribution
to Unitholders of record as of a date prior to the determination; and (3)
the balance remaining after such distributions and deductions expressed
both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such
calendar year; and
C. The following information: (1) a list of the Securities as of the last
business day of such calendar year; (2) the number of Units outstanding on
the last business day of such calendar year; (3) the Redemption Price
based on the last evaluation made during such calendar year; and (4) the
amount actually distributed during such calendar year from the Income and
Capital Accounts separately stated, expressed both as total dollar amounts
and as dollar amounts per Unit outstanding on the Record Dates for each
such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate a Trust nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of a Trust.
No Unitholder shall have the right to control the operation and management of a
Trust in any manner, except to vote with respect to the amendment of the Trust
Agreement or termination of such Trust.
INVESTMENT SUPERVISION
The Trusts are unit investment trusts and are not "actively managed" funds.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolios of the Trusts, however, will not
be actively managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its securities from the portfolios.
The Trust Agreement provides that the Sponsor may (but need not) direct the
Trustee to dispose of a Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of a
Security has declined to such an extent or other such credit factors exist so
that in the opinion of the Sponsor the retention of such Securities would be
detrimental to a Trust. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Securities such as those acquired in connection with a merger or
other transaction. If offered such new or exchanged securities or property, the
Trustee shall reject the offer. However, in the event such securities or
property are nonetheless acquired by a Trust, they may be accepted for deposit
in such Trust and either sold by the Trustee or held in such Trust pursuant to
the direction of the Sponsor. Proceeds from the sale of Securities (or any
securities or other property received by a Trust in exchange for Securities) are
credited to the Capital Account for distribution to Unitholders or to meet
redemptions. Except as stated under "The Fund" for failed securities or under
"Unitholders-Distributions to Unitholders" for short term investment in U.S.
Treasury obligations and as provided herein, the acquisition by a Trust of any
securities other than the Securities is prohibited. The Trustee may sell
Securities, designated by the Sponsor, from a Trust for the purpose of redeeming
Units of such Trust tendered for redemption and the payment of expenses.
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ADMINISTRATION OF THE TRUSTS
THE TRUSTEE. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286, telephone
1-800-701-8178. The Bank of New York is subject to supervision and examination
by the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolios of the Trusts. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of each Trust. Such books and
records shall be open to inspection by any Unitholder of each Trust at all
reasonable times during usual business hours. The Trustee shall make such
annual or other reports as may from time to time be required under any
applicable state or federal statute, rule or regulation. The Trustee shall keep
a certified copy or duplicate original of the Trust Agreement on file in its
office available for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the Securities held in
each Trust. Pursuant to the Trust Agreement, the Trustee may employ one or more
agents for the purpose of custody and safeguarding of Securities comprising the
Trusts.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. If the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each 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, Inc. is the
successor sponsor to unit investment trusts formerly sponsored by EVEREN Unit
Investment Trusts, a service of EVEREN Securities, Inc. Ranson & Associates,
Inc. is also the sponsor and successor sponsor of Series of The Kansas
Tax-Exempt Trust and Multi-State Series of The
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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
Kansas municipalities. The Sponsor's offices are located at 250 North Rock
Road, Suite 150, Wichita, Kansas 67206-2241.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trusts as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
THE EVALUATOR. Ranson & Associates, Inc., the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which event
the Trustee is to use its best efforts to appoint a satisfactory successor.
Such resignation or removal shall become effective upon acceptance of
appointment by the successor evaluator. If upon resignation of the Evaluator no
successor has accepted appointment within thirty days after notice of
resignation, the Evaluator may apply to a court of competent jurisdiction for
the appointment of a successor. Notice of such registration or removal and
appointment shall be mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreement with respect to a Trust may also be amended in
any respect by the Sponsor and the Trustee, or any of the provisions thereof may
be waived, with the consent of the holders of Units representing 66 2/3% of the
Units then outstanding of such Trust, provided that no such amendment or waiver
will reduce the interest of any Unitholder thereof without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders of such Trust. In no
event shall the Trust Agreement be amended to increase the number of Units of a
Trust issuable thereunder or to permit the acquisition of any Securities in
addition to or in substitution for those initially deposited in a Trust, except
in accordance with the provisions of the Trust Agreement. The Trustee shall
promptly notify Unitholders of the substance of any such amendment.
The Trust Agreement provides that each Trust shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in such Trust but in no event is it to continue beyond the Mandatory Termination
Date set forth under "Essential Information." If the value of a Trust shall be
less than the applicable minimum value stated under "Essential Information" (40%
of the aggregate value of the Securities based on the value at the date of
deposit of such Securities into a Trust), the Trustee may, in its discretion,
and shall, when so directed by the Sponsor, terminate such Trust. A Trust may
be terminated at any time by the holders of Units representing 66 2/3% of the
Units thereof then outstanding.
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No later than the Mandatory Termination Date set forth under "Essential
Information," the Trustee will begin to sell all of the remaining underlying
Securities on behalf of Unitholders in connection with the termination of each
Trust. The Sponsor has agreed to assist the Trustee in these sales. The sale
proceeds will be net of any incidental expenses involved in the sales.
In the event of termination of a Trust, written notice thereof will be sent by
the Trustee to all Unitholders of such Trust. Within a reasonable period after
termination of a Trust the Trustee will sell any Securities remaining in such
Trust and, after paying all expenses and charges incurred by such Trust, will
distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of such Trust.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the Trust
Agreement, but will be under no liability to the Unitholders for taking any
action or refraining from any action in good faith pursuant to the Trust
Agreement or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct or its reckless disregard for its
duties thereunder. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of moneys, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the sale by the Trustee of any Securities. In the
event that the Sponsor shall fail to act, the Trustee may act and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or upon the interest thereof. In addition, the Trust
Agreement contains other customary provisions limiting the liability of the
Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement.
EXPENSES OF THE TRUSTS
The Sponsor will not charge the Trusts any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any, related
to the deposit of Securities in the Trusts.
The Trustee receives for its services that fee set forth under "Essential
Information." However, in no event shall such fee amount to less than $2,000 in
any single calendar year for any Trust. The Trustee's fee which is calculated
monthly is based on the largest number of Units in each Trust outstanding during
the calendar year for which such compensation relates. The Trustee's fees are
payable monthly on or before the fifteenth day of the month from the Income
Account to the extent funds are available and then from the Capital Account.
The
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Trustee benefits to the extent there are funds for future distributions, payment
of expenses and redemptions in the Capital and Income Accounts since these
Accounts are non-interest bearing and the amounts earned by the Trustee are
retained by the Trustee. Part of the Trustee's compensation for its services to
each Trust is expected to result from the use of these funds. For evaluation of
the Securities in each Trust, the Evaluator shall receive that fee set forth
under "Essential Information", payable monthly, based upon the largest number of
Units outstanding during the calendar year for which such compensation relates.
The Trustee's fees and the Evaluator's fees are deducted from the Income Account
of the Trust to the extent funds are available and then from the Capital
Account. Each such fee may be increased without approval of Unitholders by
amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.
Expenses incurred in establishing each Trust, including the cost of the initial
preparation of documents relating to the Trust (including the Prospectus, Trust
Agreement and certificates), federal and state registration fees, the initial
fees and expenses of the Trustee, legal and accounting expenses, payment of
closing fees and any other out-of-pocket expenses, will be paid by such Trust
(out of the Income Account) and it is intended that such expenses be amortized
over the life of such Trust. The following additional charges are or may be
incurred by each Trust: (a) fees for the Trustee's extraordinary services; (b)
expenses of the Trustee (including legal and auditing expenses, but not
including any fees and expenses charged by an agent for custody and safeguarding
of Securities) and of counsel, if any; (c) various governmental charges; (d)
expenses and costs of any action taken by the Trustee to protect the Trust or
the rights and interests of the Unitholders; (e) indemnification of the Trustee
for any loss, liability or expense incurred by it in the administration of the
Trust not resulting from gross negligence, bad faith or willful misconduct on
its part or its reckless disregard for its obligations under the Trust
Agreement; (f) indemnification of the Sponsor for any loss, liability or expense
incurred in acting in that capacity without gross negligence, bad faith or
willful misconduct or its reckless disregard for its obligations under the Trust
Agreement; and (g) expenditures incurred in contacting Unitholders upon
termination of the Trust. The fees and expenses set forth herein are payable
out of the Trust and, when owing to the Trustee, are secured by a lien on the
Trust. Since the Securities are all common stocks, and the income stream
produced by dividend payments, if any, is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or all
expenses of the Trusts. If the balances in the Income and Capital Accounts are
insufficient to provide for amounts payable by a Trust, the Trustee has the
power to sell Securities to pay such amounts. These sales may result in capital
gains or losses to Unitholders. See "Federal Tax Status." Notwithstanding
anything to the contrary herein, the total annual expenses paid by a Trust shall
not exceed $0.035 per Unit of such Trust; to the extent that the annual expenses
to be charged to a Trust exceed such amount, the Sponsor will pay such excess
amount at its own expense.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statements of net assets, including the Trust portfolios, of the Trusts at
the Initial Date of Deposit, appearing in this Prospectus and Registration
Statement have been audited by Allen, Gibbs & Houlik, L.C., independent
auditors, as set forth in their report appearing elsewhere herein, and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 67
We have audited the accompanying statements of net assets, including the Trust
portfolios, of Ranson Unit Investment Trusts, Series 67, as of the opening of
business on April 1, 1998, the Initial Date of Deposit. The statements of net
assets are the responsibility of the Sponsor. Our responsibility is to express
an opinion on the statements of net assets 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 statements of net assets are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements of net assets. 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 statements of net assets presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present fairly,
in all material respects, the financial position of Ranson Unit Investment
Trusts, Series 67 as of April 1, 1998, in conformity with generally accepted
accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
April 1, 1998
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<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 67
STATEMENTS OF NET ASSETS
AT THE OPENING OF BUSINESS ON APRIL 1, 1998, THE INITIAL DATE OF DEPOSIT
TRUST PROPERTY
THE 5 THE 10
-------- --------
<S> <C> <C>
Contracts to purchase Securities (1) (2) $250,540 $249,209
Organizational costs (3) 11,000 11,000
-------- --------
Total 261,540 260,209
======== ========
Number of Units 25,307 25,173
======== ========
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-
Accrued organizational costs (3) $ 11,000 $ 11,000
-------- --------
Interest of Unitholders-
Cost to investors (4). 253,071 251,726
Less: Gross underwriting commission (4) 2,531 2,517
-------- --------
Net interest to Unitholders (1) (2) (4) 250,540 249,209
-------- --------
Total $261,540 $260,209
======== ========
<FN>
- --------------------
(1) Aggregate cost of the Securities is based on the closing sale price
evaluations as determined by the Trustee.
(2) An irrevocable letter of credit issued by Intrust Bank, N.A., Wichita,
Kansas has been deposited with the Trustee covering the funds (aggregating
$499,858) necessary for the purchase of the Securities in the Trust
represented by purchase contracts.
(3) Each Trust will bear all or a portion of its organizational costs,
which the Sponsor intends to defer and amortize over the life of such
Trust. Organizational costs have been estimated based on a projected
Trust size of $5,000,000 and $5,000,000 for The 5 and The 10,
respectively. Organizational costs may be more or less than this
estimate based upon the actual size of each Trust.
(4) The aggregate cost to investors includes the applicable sales charge
assuming no reduction of sales charges for quantity purchases.
</TABLE>
38
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 67
PORTFOLIOS AS OF APRIL 1, 1998
<TABLE>
<CAPTION>
DEFINED GROWTH STRATEGY 5, SERIES 9 (APRIL 1998 SERIES)
AGGREGATE ANNUALIZED
NAME OF ISSUER NUMBER COSTS OF CURRENT
OF SECURITIES DEPOSITED OF PRICE PER SECURITIES DIVIDEND
SYMBOL OR CONTRACTED FOR (1) SHARES SHARE TO TRUST (2) PER SHARE(3)
- ------- ----------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
MO Philip Morris Cos., Inc. 1,205 $ 41.688 $ 50,233 $ 1.60
EK Eastman Kodak Co. 776 64.875 50,343 1.76
XON Exxon Corp. 736 67.625 49,772 1.64
IP International Paper Co. 1,070 46.875 50,156 1.00
T AT&T Corp. 761 65.750 50,036 1.32
-------------
$ 250,540
=============
</TABLE>
<TABLE>
<CAPTION>
DEFINED GROWTH STRATEGY 10, SERIES 9 (APRIL 1998 SERIES)
AGGREGATE ANNUALIZED
NAME OF ISSUER NUMBER COSTS OF CURRENT
OF SECURITIES DEPOSITED OF PRICE PER SECURITIES DIVIDEND
SYMBOL OR CONTRACTED FOR (1) SHARES SHARE TO TRUST (2) PER SHARE(3)
- ------- ----------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
MO Philip Morris Cos., Inc. 602 $ 41.688 $ 25,096 $ 1.60
CHV Chevron Corp. 306 80.313 24,576 2.44
GM General Motors Corp. 367 67.750 24,864 2.00
JPM Morgan, J. P. & Co., Inc. 186 134.313 24,982 3.80
EK Eastman Kodak Co. 388 64.875 25,172 1.76
XON Exxon Corp. 368 67.625 24,886 1.64
MMM Minnesota Mining & Manufacturing Co. 272 91.000 24,752 2.20
IP International Paper Co. 535 46.875 25,078 1.00
T AT&T Corp. 381 65.750 25,051 1.32
DD Du Pont (E.I.) De Nemours 364 68.000 24,752 1.26
-------------
$ 249,209
=============
</TABLE>
39
<PAGE>
NOTES TO PORTFOLIOS
(1) All or a portion of the Securities may have been deposited in the Trust.
Any undelivered Securities are represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been
deposited with the Trustee. At the Initial Date of Deposit, the Sponsor
has assigned to the Trustee all of its rights, title and interest in and
to such undelivered Securities. Contracts to purchase Securities were
entered into on March 31, 1998 and all have an expected settlement date
of April 3, 1998 (see "The Fund").
(2) The market value of each Security is based on the closing sale price on
a national securities exchange if the Security is listed thereon or, if
not so listed, then on the over-the-counter market, in each case, on
the day prior to the Initial Date of Deposit. As of the Initial Date
of Deposit other information regarding the Securities in each Trust is
as follows:
COST TO PROFIT (LOSS)
SPONSOR TO SPONSOR
---------- -------------
The 5 $250,606 $(66)
The 10 $249,252 $(43)
(3) The Annualized Current Dividend per Share for each Security was
calculated by annualizing the latest quarterly or semi-annual common stock
dividend declaration on that Security. There can be no assurance that the
future dividend payments, if any, will be maintained in an amount equal
to the dividend listed above.
40
<PAGE>
This Prospectus does not contain all of the information with respect to the
investment company set forth in its registration statement and exhibits relating
thereto which have been filed with the Securities and Exchange Commission,
Washington, D.C. under the Securities Act of 1933 and the Investment Company Act
of 1940, and to which reference is hereby made.
-------------------------
No person is authorized to give any information or to make any representations
with respect to this investment company not contained in this Prospectus, and
any information or representation not contained herein must not be relied upon
as having been authorized by the Trusts, the Trustee, or the Sponsor. Such
registration does not imply that the Trusts or the Units have been guaranteed,
sponsored, recommended or approved by the United States or any state or any
agency or officer thereof. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such state or country.
-------------------------
CONTENTS PAGE
----
SUMMARY 2
ESSENTIAL INFORMATION 5
THE FUND 8
THE TRUST PORTFOLIOS 9
RISK FACTORS 14
FEDERAL TAX STATUS 16
PUBLIC OFFERING OF UNITS 20
MARKET FOR UNITS 24
REDEMPTION 25
INTERIM AND FINAL REDEMPTION AND
ROLLOVER IN NEW TRUSTS 27
RETIREMENT PLANS 29
UNITHOLDERS 29
INVESTMENT SUPERVISION 32
ADMINISTRATION OF THE TRUSTS 33
EXPENSES OF THE TRUSTS 35
LEGAL OPINIONS 36
INDEPENDENT AUDITORS 36
REPORT OF INDEPENDENT AUDITORS 37
STATEMENTS OF NET ASSETS 38
PORTFOLIOS 39
NOTES TO PORTFOLIOS 40
-------------------------
When Units of the Trusts are no longer available, or for investors who will
reinvest into subsequent series of the Trusts, this Prospectus may be used as a
preliminary prospectus for a future series; in which case investors should note
the following:
Information contained herein is subject to completion or amendment. A
registration statement relating to securities of a future series has been filed
with the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. The Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Ranson & Associates, Inc.
250 N. Rock Road, Suite 150
Wichita, KS 67206-2241
<PAGE>
- ------------------
RANSON
UNIT
INVESTMENT
TRUSTS
- ------------------
-------------------
DEFINED
GROWTH
STRATEGY
5 & 10
April 1998 Series
-------------------
PROSPECTUS APRIL 1, 1998
