REGISTRATION NO. 333-72605
CIK# 910945
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206-2241
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ALEX R. MEITZNER MARK J. KNEEDY
Ranson & Associates, Inc. c/o Chapman and Cutler
250 North Rock Road, Suite 150 111 West Monroe Street
Wichita, Kansas 67206-2241 Chicago, Illinois 60603
E. TITLE OF SECURITIES BEING REGISTERED: Units of Beneficial Interest
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date
of the Registration Statement.
_
|X| Check box if it is proposed that this filing will become effective at
2:00 P.M. on March 4, 1999 pursuant to paragraph (b) of Rule 487.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
Nasdaq-100 Index Trust, Series 5 seeks to increase the value of your investment
by investing in a portfolio of stocks included in the Nasdaq-100 Index. Of
course, we cannot guarantee that the Trust will achieve its objectives.
Units are not deposits or obligations of any bank
or government agency and are not guaranteed.
You should read this prospectus and retain it for future reference.
March 4, 1999
The Securities and Exchange Commission has not approved
or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus.
Any contrary representation is a criminal offense.
<PAGE>
NASDAQ-100(Registered Trademark) INDEX LICENSING AGREEMENT
The Sponsor has entered into a license agreement with The Nasdaq Stock Market,
Inc. (the "License Agreement"), under which the Nasdaq-100 Trust (through the
Sponsor) is granted licenses to use the trademark and tradenames "Nasdaq,"
"Nasdaq-100," and "Nasdaq-100 Index" solely in materials relating to the
creation and issuance, marketing and promotion of the Trust and in accordance
with any applicable federal and state securities law to indicate the source of
the Nasdaq-100 Index as a basis for determining the composition of the Trust's
portfolio. As consideration for the grant of the license, the Trust will pay to
The Nasdaq Stock Market, Inc. an annual fee equal to that amount described under
"Expenses of the Trust." If the Nasdaq-100 Index ceases to be compiled or made
available or the anticipated correlation between the Trust and the Nasdaq-100
Index is not maintained, the Sponsor may direct that the Trust continue to be
operated using the Nasdaq-100 Index as it existed on the last date on which it
was available or may direct that the Trust Agreement be terminated (see
"Administration of the Trust-Amendment and Termination").
Neither the Trust nor the Unitholders are entitled to any rights whatsoever
under the foregoing licensing arrangements or to use any of the covered
trademarks or to use the Nasdaq-100 Index, except as specifically described
herein or as may be specified in the Trust Agreement.
The Trust is not sponsored, endorsed, sold or promoted by The Nasdaq Stock
Market, Inc. (including its affiliates) (the "Corporations"). The Corporations
have not passed on the legality or suitability of, or the accuracy or adequacy
of descriptions and disclosures relating to, the Trust or Units of the Trust.
The Corporations make no representation or warranty, express or implied to the
owners of Units of the Trust or any member of the public regarding the
advisability of investing in securities generally or in Units of the Trust
particularly or the ability of the Nasdaq-100 Index to track general stock
market performance. The Corporations' only relationship to the Sponsor
("Licensee") and the Trust is in the licensing of certain trademarks, service
marks, and trade names of the Corporations and the use of the Nasdaq-100 Index
which is determined, composed and calculated by Nasdaq without regard to the
Licensee, the Trust or Unitholders of the Trust. Nasdaq has no obligation to
take the needs of the Licensee or the owners of the Trust into consideration in
determining, composing or calculating the Nasdaq-100 Index. The Corporations
are not responsible for and have not participated in the determination of the
timing of, prices at, or quantities of the Units of the Trust to be issued or in
the determination or calculation of the equation by which the Units of the Trust
are to be converted into cash. The Corporations have no liability in connection
with the administration or operations of the Trust, marketing or trading of
Units of the Trust.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION
OF THE NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS
OF UNITS OF THE NASDAQ-100 TRUST, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO
EXPRESS OR IMPLIED WARRANTIES, AND
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EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE
CORPORATIONS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
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<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
ESSENTIAL INFORMATION
AS OF MARCH 3, 1999*
SPONSOR, SUPERVISOR AND EVALUATOR:RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
NASDAQ-100 TRUST LICENSOR:THE NASDAQ STOCK MARKET, INC.
Nasdaq-100
Trust
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<S> <C>
Cusip (Cash) 753268796
Cusip (Reinvest) 753268804
Number of Units (1) 50,536
Fractional Undivided Interest Per Unit(1) 1/50,536
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ 480,597
Aggregate Value of Securities per Unit $ 9.51
Plus sales charge of 4.9% (5.152% of net amount invested) $ .49
Public Offering Price Per Unit (3) $ 10.00
Redemption Price Per Unit (4) $ 9.51
Estimated Organizational Expenses per Unit (2) $ .0086
<S> <C>
Minimum Value of Trust under which Trust Agreement
may be Terminated The Trust may be terminated if the value thereof is
less than the lower of $2,000,000 or 20% of the total value of
Securities deposited in the Trust during the initial offering period.
Mandatory Termination Date April 30, 2005
Supervisor's Annual Surveillance Fee Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee Maximum of $.0025 per Unit
Trustee's Annual Fee $.0095 per Unit
Record and Computation Dates (5) FIRST day of January, April, July and October
Distribution Dates (5) FIFTEENTH day of January, April, July and October
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units 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
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(1) As of the close of business on the Initial Date of Deposit, the number of
Units of the Trust may be adjusted so that the aggregate value of Securities
per Unit will equal approximately $10. Therefore, to the extent of
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any such adjustment the fractional undivided interest per Unit will
increase or decrease accordingly from the amounts indicated above.
(2) Each Security is valued at the closing sale price on a national securities
exchange or the Nasdaq Stock Market. Unitholders will bear all or a portion
of the expenses incurred in organizing and offering the Trust. The Public
Offering Price includes the estimated amount of these costs. The Trustee
will deduct these expenses from the Trust at the end of the initial offering
period or six months after the Initial Date of Deposit (whichever is
earlier).
(3) On the Initial Date of Deposit there will be no accumulated dividends in the
Income Account. Anyone ordering Units after such date will pay his pro rata
share of any accumulated dividends in such Income Account.
(4) The redemption price includes the estimated organizational costs. The
redemption price will not include these costs after the initial offering
period.
(5) Distributions from the Capital Account and capital gains distributions, if
any, will normally be made in December, as required.
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THE TRUST FUND
Ranson Unit Investment Trusts, Series 77 (the "Fund") includes an underlying
unit investment trust designated as Nasdaq-100 Index Trust, Series 5 (the
"Trust"). The Fund was created under the laws of the State of New York pursuant
to the 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 Trust contains common stocks issued by substantially all of the companies
which comprise the Nasdaq-100 Index. As used herein, the term "Securities"
means the common stocks (including contracts for the purchase thereof) initially
deposited in the Trust and described in the related portfolio and any additional
common stocks acquired and held by the Trust pursuant to the provisions of the
Trust Agreement.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust. The Sponsor
will seek to create an initial portfolio that substantially replicates the
index, however, this initial deposit into the Trust may consist of 100 shares of
each of the stocks which comprise the stock index. See "Portfolio." In either
case, during the first 30 days of the Trust's life (the "Initial Adjustment
Period"), the Sponsor intends to create and maintain a Trust portfolio which
duplicates, to the extent practicable, the weightings of stocks which comprise
the stock index. The Sponsor anticipates that within the Initial Adjustment
Period, the Trust will comprise the stocks in the stock index in substantially
the same weightings as in such index. Of course, there is no guarantee that
this will occur during the first 30 days of the Trust's life. In connection
with any deposit of Securities, purchase and sale transactions will be effected
in accordance with computer program output showing which Securities are under-
or over-represented in the Trust portfolio. Neither the Sponsor nor the Trustee
will exercise any investment discretion in connection with such transactions.
Precise duplication of the relationship among the Securities in the stock index
may not be achieved because it may be economically impracticable or impossible
to acquire very small numbers of shares of certain stocks and because of other
procedural policies of the Trust, but correlation between the performance of the
stock index and the Trust portfolio is expected to be between .97 and .99 over
the term of the Trust.
By investing in substantially all of the common stocks, in substantially the
same proportions, which comprise the stock index, the Trust seeks to produce
investment results that generally correspond to the price and yield performance
of the equity securities represented by such index over the term of the Trust.
Due to various factors discussed below, there can be no assurance that this
objective will be met. An investment in Units of the Trust should be made with
an understanding that the Trust includes payments of sales charges, fees and
expenses which may not be considered in public statements of the total return of
the stock index.
Subsequent to the Initial Date of Deposit, the Sponsor may deposit additional
Securities in the Trust, contracts to purchase additional Securities along with
cash (or a bank letter of credit in lieu of cash) to pay for such contracted
Securities or cash (including a letter of credit) with instructions to purchase
additional Securities,
- --------------------
*Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
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maintaining, as closely as practicable the same proportionate relationship among
the Securities in the portfolio as reflected in the stock index. Thus, although
additional Units will be issued, each Unit of the Trust will continue to
represent approximately a weighting of the then current components of the stock
index at any such deposit. Precise duplication of the relationship among the
Securities in the Trust may not be achieved because it may be economically
impracticable as a result of certain economic factors and procedural policies of
the Trust such as (1) price movements of the various Securities will not
duplicate one another, (2) the Sponsor may purchase shares of the Securities in
round lot quantities, (3) reinvestment of excess proceeds not needed to meet
redemptions of Units may not be sufficient to acquire equal round lots of all
the Securities in the Trust and (4) reinvestment of proceeds received from
Securities which are no longer components of the stock index might not result in
the purchase of an equal number of shares in any replacement Security. If the
Sponsor deposits cash, existing and new investors may experience a dilution of
their investments and a reduction in their anticipated income because of
fluctuations in the prices of the Securities between the time of the cash
deposit and the purchase of the Securities and because 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.
The Trust consists of (a) the Securities listed under the "Portfolio" as may
continue to be held from time to time in the Trust (b) any additional Securities
acquired and held by the Trust pursuant to the provisions of the Trust Agreement
and (c) any cash held in the Income and Capital Accounts of the Trust. Neither
the Sponsor nor the Trustee shall be liable in any way for any failure in any of
the Securities. However, should any contract for the purchase of any of the
Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract to all
Unitholders on the next distribution date.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of the Trust set forth under
"Essential Information."
THE TRUST PORTFOLIO
The Trust portfolio will consist of as many of the Nasdaq-100 Index stocks as is
feasible in order to achieve the Trust's objective of attempting to provide
investment results that duplicate substantially the total return of the Nasdaq-
100 Index. Following the Initial Adjustment Period, the Trust is expected to be
invested in no less than 95% of the stocks comprising the index. Although it
may be impracticable for the Trust to own certain of such stocks at any time,
the Sponsor expects to maintain a correlation between the performance of the
Trust portfolio and that of the index of between .97 and .99 over the term of
the Trust. Adjustments to the Trust portfolio will be made on an ongoing basis
in accordance with the computer program output to match the weightings of the
Securities as closely as is feasible with their weightings in the index as the
Trust invests in new Securities in connection with the creation of additional
Units, as companies are dropped from or added to such index or as Securities are
sold to meet redemptions. The Trustee will generally seek to make these
adjustments on the
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business day following the relevant transaction in accordance with computer
program output showing which of the Securities are under- or over-represented in
the Trust portfolio. Of course, there is no guarantee that this will always be
practicable. Adjustments may also be made from time to time to maintain the
appropriate correlation between the Trust and the index. The proceeds from any
sale will be invested in those Securities which the computer program indicates
are most under-represented in the portfolio. See "Investment Supervision."
Due to changes in the composition of the Nasdaq-100 Index, adjustments to the
Trust portfolio may be made from time to time. It is anticipated that most of
such changes in the Nasdaq-100 Index will occur as a result of merger or
acquisition activity. In such cases, the Trust, as a shareholder of an issuer
which is the object of such merger or acquisition activity, will presumably
receive various offers from potential acquirers of the issuer. The Trustee is
not permitted to accept any such offers until such time as the issuer has been
removed from the index. Since, in most cases, an issuer is removed from an
index only after the consummation of a merger or acquisition, it is anticipated
that the Trust will generally acquire, in exchange for the stock of the deleted
issuer, the consideration that is being offered to shareholders of that issuer
who have not tendered their shares prior to that time. Any cash received as
consideration in such transactions will be reinvested in the most under-
represented Securities as determined by the computer program output. Any
securities received as consideration which are not included in the index will be
sold as soon as practicable and will generally be reinvested in the most under-
represented Securities as determined by the computer program output.
In attempting to duplicate the proportionate relationships represented by the
index, the Sponsor may purchase or sell stock in round lots (100 shares). In
addition, certain Securities may not be available in the quantities specified by
the computer program. For these reasons, among others, precise duplication of
the proportionate relationships in the index may not be possible but will
continue to be the goal of the Trust in connection with acquisitions or
dispositions of Securities. See "Investment Supervision." As the holder of the
Securities, the Trustee will have the right to vote all of the voting stocks in
the Trust portfolio and will vote such stocks in accordance with the
instructions of the Sponsor.
Investors should note that the Trust is not sponsored, endorsed or promoted by
or affiliated with The Nasdaq Stock Market, Inc. and The Nasdaq Stock Market,
Inc. makes no representation, express or implied, to the Trust or Unitholders
regarding the advisability of investing in an index investment or unit
investment trust generally or in the Trust specifically or the ability of the
index to track general stock market performance.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trust, over time stock investments have generally out-
performed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can decrease, and past performance is no guarantee of future results.
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THE NASDAQ-100 INDEX
The Nasdaq-100 Index is composed of 100 of the largest non-financial Nasdaq
National Market common stocks. Nasdaq, which represents the fastest growing
stock market in the U.S., is also one of the first fully electronic stock
markets in the world. This modern-day securities market began operations in
1971 and today lists more companies than any other market in the U.S. The
Nasdaq-100 Index is limited to one issue per company. At the time of inclusion
in the Nasdaq-100 Index, index securities must have a minimum market value of at
least $500 million. In the event a security is deleted from the Nasdaq-100
Index, the largest non-financial issue not then in the Nasdaq-100 Index which
meets the applicable criteria will be substituted. The Nasdaq Stock Market,
Inc. has established procedures for, and controls over, substitutions of
securities and may periodically, at its discretion, make changes in component
stocks so that the Index will more accurately reflect the overall composition of
the non-financial sector of The Nasdaq Stock Market. Each security in the
Nasdaq-100 Index is represented by its market capitalization in relation to the
total market value of the Nasdaq-100 Index. Companies are selected using
criteria that includes company trading volume, company visibility, continuity of
the components in the Nasdaq-100 Index, and a good mix of industries represented
on The Nasdaq Stock Market. Chicago Board Options Exchange, the largest options
exchange in the world, began trading Nasdaq-100 Index options on February 7,
1994. As of March 3, 1999, the Nasdaq-100 Index was comprised of the following
industry sectors: Software (29.3%), Computers (20.4%), Telecommunications
(16.6%), Semiconductors (13.5%), Media (5.3%), Biotechnology (3.9%), Retail
(3.5%), Internet (3.5%), Commercial Services (2.4%) and Electronics (1.6%).
The table below illustrates the characteristics of the average company included
in the Nasdaq-100 Index as of the end of 1998. It is important to note that,
unless provided otherwise, the data included in the table encompasses average
data, not the total data of all companies in the Nasdaq-100 Index and is not
intended to describe or predict the financial data, returns or characteristics
of any company included or to be included in the Nasdaq-100 Index.
<TABLE>
<CAPTION>
FINANCIAL CHARACTERISTICS (MILLIONS) TRADING CHARACTERISTICS (AVERAGES)
- ------------------------------------ ----------------------------------
<S> <C> <S> <C>
Total Assets $ 4,228.5 Share Price $68.5
Shareholders' Equity $ 1,989.3 Number of Market Makers 36.8
Total Revenues $ 2,938.8
Net Income $ 239.5
Shares Outstanding 224.8
Market Value of Shares Outstanding $15,407.7
P/E Ratio for Total Index(a,b) 64.3
<FN>
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(a) Total market value divided by total earnings
(b) These figures represent total data for all index companies.
</FN>
</TABLE>
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The following table depicts the Year-End Index Value for the Nasdaq-100 Index
from inception (February 1, 1985) through December 31, 1998. The formula used
in calculating the Nasdaq-100 Index Level is described below. The table uses
data that is adjusted to reflect that the Nasdaq-100 Index level was halved on
January 3, 1994, and does not reflect reinvestment of dividends. Investors
should note that the figures below represent past performance of the Nasdaq-100
Index and not the future performance of the Nasdaq-100 Index or the Nasdaq-100
Trust (which includes certain fees and expenses). Past performance is, of
course, no guarantee of future results.
<TABLE>
<CAPTION>
YEAR-END ANNUAL RETURN
INDEX (EXCLUDING
YEAR VALUE DIVIDENDS)
- ---- -------- -------------
<S> <C> <C>
February 1, 1985 125.00 -
1985 132.30 5.84%
1986 141.41 6.89%
1987 156.25 10.50%
1988 177.41 13.54%
1989 223.84 26.17%
1990 200.53 (10.41)%
1991 330.86 64.99%
1992 360.19 8.86%
1993 398.28 10.58%
1994 404.27 1.50%
1995 576.23 42.54%
1996 821.36 42.54%
1997 990.80 20.63%
1998 1,836.01 85.31%
Total Return Since Inception 1,368.81%
</TABLE>
Because the Nasdaq-100 Trust is sold to the public at net asset value plus the
applicable sales charge, and the expenses of the Trust are deducted before
making distributions to Unitholders, investment in the Trust would have resulted
in investment performance to Unitholders somewhat reduced from that reflected in
the above table.
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The Nasdaq-100 Index is market value weighted. The representation of each
security in the Nasdaq-100 Index is proportional to its last sale price times
the total number of shares outstanding, in relation to the total market value of
the Nasdaq-100 Index. The level of the Nasdaq-100 Index is calculated as
follows:
Nasdaq-100 Index Level = Current Market Value X 125
--------------------
Adjusted Base Period
Market Value
Adjusted Base Period = Current Market Value X Previous Base
After Adjustments Period Market Value
--------------------
Current Market Value
Before Adjustments
The numeric value level of the Nasdaq-100 Index was established at 250 prior to
the opening of the market on February 1, 1985. The Nasdaq-100 Index value was
halved at the end of 1993. The level of the Nasdaq-100 Index will only change
as a result of the price changes occurring between the opening and closing of
the market. Adjustments for securities being added to or deleted from the
Nasdaq-100 Index, or capitalization changes of adjustments, will take place
during the system maintenance process which occurs after the market has closed.
These adjustments will result in value changes to the current market value and
adjusted base period market value, but will not in and of themselves alter the
level of the Nasdaq-100 Index.
The Nasdaq-100 Index is also adjusted to account for stock splits and stock
dividends during the system maintenance process. The system makes a price
adjustment, however, to account for the increased number of shares outstanding
from such an action with the result being that the current market value does not
change.
In case of cash dividends other than extraordinary dividends, no system
adjustment is made. The Nasdaq-100 Index formula relies on market forces to
determine the level of the Nasdaq-100 Index. Neither the current market value
nor the adjusted base period market value are adjusted to reflect ordinary cash
dividends. At its discretion, The Nasdaq Stock Market, Inc. may temporarily
suspend Nasdaq-100 Index securities from the calculation of the Nasdaq-100 Index
or adjust the Nasdaq-100 Index divisor in those instances where an unusual cash
dividend or spin-off might unduly influence the level of the Nasdaq-100 Index.
The Nasdaq Stock Market, Inc. disseminates calculations of the Nasdaq-100 Index
via Level 2 and Level 3 Nasdaq service and makes the Index calculation available
to information vendors and the print media.
RISK FACTORS
PRICE VOLATILITY. Because the Trust invests in common stocks, you should
understand the risks of investing in common stocks before purchasing Units.
These risks include the risk that the financial condition of the company or the
general condition of the stock market may worsen and the value of the stocks
(and therefore Units) will fall. Common stocks are especially susceptible to
general stock market movements. The value of
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common stocks often rises or falls rapidly and unpredictably as market
confidence and perceptions of companies change. These perceptions are based on
factors including expectations regarding government economic policies,
inflation, interest rates, economic expansion or contraction, political climates
and economic or banking crises. The value of Units will fluctuate with the
value of the stocks in the Trust and may be more or less than the price you
originally paid for your Units. As with any investment, we cannot guarantee
that the performance of the Trust will be positive over any period of time.
Because the Trust is unmanaged, the Trustee will not sell stocks in response to
market fluctuations as is common in managed investments.
DIVIDENDS. Common stocks represent ownership interests in a company and are not
obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means
that common stockholders have a right to receive dividends only if a company's
board of directors declares a dividend and the company has provided for payment
of all of its creditors, bondholders and preferred stockholders. If a company
issues additional debt securities or preferred stock, the owners of these
securities will have a claim against the company's assets before common
stockholders if the company declares bankruptcy or liquidates its assets even
though the common stock was issued first. As a result, the company may be less
willing or able to declare or pay dividends on its common stock.
ADDITIONAL UNITS. The Sponsor may create additional Units of the Trust by
depositing into the Trust additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Trust will pay brokerage fees.
VOTING. Only the Trustee may sell or vote the stocks in the Trust. While you
may sell or redeem your Units, you may not sell or vote the stocks in your
Trust. The Sponsor will instruct the Trustee how to vote the stocks. The
Trustee will vote the stocks in the same general proportion as shares held by
other shareholders if the Sponsor fails to provide instructions.
YEAR 2000. The Trust could be negatively impacted if computer systems used by
the Sponsor, Evaluator, Supervisor or Trustee or other service providers to the
Trust do not properly process date-related information after January 1, 2000.
This is commonly known as the "Year 2000 Problem". The Sponsor, Evaluator,
Supervisor and Trustee are taking steps to address this problem and to obtain
reasonable assurances that other service providers to the Trust are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trust. This problem is expected to impact
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. We cannot predict what impact, if any,
this problem will have on the issuers of stocks in the Trust.
TECHNOLOGY ISSUERS. The Nasdaq-100 Index includes a concentration of issuers
within the technology industry. Accordingly, you should understand the
characteristics of the technology industry and the risks involved before you
invest. Technology companies face risks related to rapidly changing technology,
rapid product
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obsolescence, cyclical market patterns, evolving industry standards and frequent
new product introductions. An unexpected change in technology can have a
significant negative impact on a company. The failure of a company to introduce
new products or technologies or keep pace with rapidly changing technology, can
have a negative impact on the company's results. Technology stocks tend to
experience substantial price volatility and speculative trading. Announcements
about new products, technologies, operating results or marketing alliances can
cause stock prices to fluctuate dramatically. At times, however, extreme price
and volume fluctuations are unrelated to the operating performance of a company.
This can impact your ability to redeem your Units at a price equal to or greater
than what you paid.
The market for certain products may have only recently begun to develop, is
rapidly evolving or is characterized by increasing suppliers. Key components of
some technology products are available only from limited sources. This can
impact the cost of and ability to acquire these components. Some technology
companies serve highly concentrated customer bases with a limited number of
large customers. Any failure to meet the standard of these customers can result
in a significant loss or reduction in sales. Many products and technologies are
incorporated into other products. As a result, some companies are highly
dependent on the performance of other technology companies. We cannot guarantee
that these customers will continue to place additional orders or will place
orders in similar quantities as in the past.
FEDERAL TAX STATUS
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). If the Trust so
qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard to its net capital gain, i. e., the excess of its net
long-term capital gain over its net short-term capital loss), it will not be
subject to Federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to the
extent the Trust timely distributes to Unitholders at least 98% of its taxable
income (including any net capital gain), it will not be subject to the 4% excise
tax on certain undistributed income of "regulated investment companies."
Because the Trust intends to timely distribute its taxable income (including any
net capital gain), it is anticipated that the Trust will not be subject to
Federal income tax or the excise tax.
Distributions to Unitholders of the Trust's income, other than distributions
which are designated as capital gain dividends, will be taxable as ordinary
income to Unitholders, except that to the extent that distributions to a
Unitholder in any year exceed the Trust's current and accumulated earnings and
profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December, payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholders) on December 31 of the year such distributions are
declared.
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<PAGE>
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as long-term
capital gain, regardless of the length of time the Units have been held by a
Unitholder. A Unitholder may recognize a taxable gain or loss if the Unitholder
sells or redeems his Units. Any gain or loss arising from (or treated as
arising from) the sale or redemption of Units will generally be a capital gain
or loss, except in the case of a dealer or a financial institution. The
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that 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) realized from property (with certain exclusions) is
generally subject to a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). 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. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes for
determining the holding period of the Unit. Capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary income. Note
that if a Unitholder holds Units for six months or less and subsequently sells
such Units at a loss, the loss will be treated as a long-term capital loss to
the extent that any long-term capital gain distribution is made with respect to
such Units during the six-month period or less that the Unitholder owns the
Units.
The Taxpayer Relief Act of 1997 includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g., short sales, offsetting 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
such constructive sales rules.
In addition, it should be noted 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.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends-
received deduction, subject to the limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than real
estate investment trusts) and is designated by the Trust as being eligible for
such deduction. To the extent dividends received by the Trust are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends-received deduction with respect to its pro rata portion of such
dividends, since the dividends-received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they
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exceed 2% of adjusted gross income. Miscellaneous itemized deductions subject
to this limitation under present law do not include expenses incurred by the
Trust so long as the Units of the Trust are held by or for 500 or more persons
at all times during the taxable year or another exception is met. In the event
the Units of the Trust are held by fewer than 500 persons, additional taxable
income may be realized by the individual (and other noncorporate) Unitholders in
excess of the distributions received from the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i. e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon termination of the Trust. See "Amendment and Termination."
Unitholders electing an in kind distribution of shares of Securities should be
aware that the exchange is subject to taxation and Unitholders will recognize
gain or loss (subject to various non-recognition provisions under the Code)
based on the value of the Securities received. Investors electing an in kind
distribution should consult their own tax advisers with regard to such
transaction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back- up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from the Trust
that are designated by the Trust as capital gain dividends should not be subject
to United States Federal income taxes, including withholding taxes, if all of
the following conditions are met: (i) the capital gain dividend is not
effectively connected with the conduct by the foreign investor of a trade or
business within the United States, (ii) the foreign investor (if an individual)
is not present in the United States for 183 days or more during his or her
taxable year, and (iii) the foreign investor provides all certification which
may be required of his status (foreign investors may contact the Sponsor to
obtain a Form W-8 which must be filed with the Trustee and refiled every three
calendar years thereafter). Foreign investors should consult their tax advisors
with respect to United States tax consequences of ownership of Units. Units in
the Trust and Trust distributions may also be subject to state and local
taxation and Unitholders should consult their tax advisors in this regard.
The foregoing discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to United States
Unitholders.
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<PAGE>
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the initial offering period, Units of the Trust
are offered at the Public Offering Price (which is based on the aggregate
underlying value of the Securities in the Trust and includes the sales charge
plus a pro rata share of any accumulated dividends in the Income Account of the
Trust). The maximum sales charge is equal to 4.90% of the Public Offering Price
per Unit (5.152% of the net amount invested). The underlying value shall also
include the proportionate share of any undistributed cash held in the Capital
Account of the Trust. A portion of the Public Offering Price includes an amount
of Securities to pay for all or a portion of the costs incurred in establishing
the Trust. These costs include the cost 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
Trust portfolio, legal fees and the initial fees and expenses of the Trustee.
These costs will be deducted from the Trust as of the end of the initial
offering period or after six months (whichever is earlier).
The sales charge per Unit of the Trust in both the primary and secondary market
will be reduced pursuant to the following graduated schedule:
<TABLE>
<CAPTION>
Sales Charge
----------------------
Percent of Percent of
Offering Net Amount
Number of Units* Price Invested
---------------- ---------- ----------
<S> <C> <C>
Less than 10,000 4.9% 5.152%
10,000 - 24,999 4.5% 4.712%
25,000 - 49,999 4.3% 4.493%
50,000 - 99,999 3.5% 3.627%
100,000 or more 3.0% 3.093%
<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.
</TABLE>
An investor may aggregate purchases of Units of the Trust for purposes of
qualifying for the volume purchase discounts listed above. The reduced sales
charge structure will apply on all purchases of Units in the Trust by the same
person on any one day from any one dealer. Additionally, 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 will be deemed, for purposes of
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<PAGE>
calculating the applicable sales charge, to be additional purchases by the
purchaser. The reduced sales charges will also be applicable to a trustee or
other fiduciary purchasing securities for a single trust estate or single
fiduciary account.
Units may be purchased in the primary or secondary market by officers, directors
and employees of the Sponsor and its affiliates and registered representatives
of selling firms and members of their immediate family (including spouse,
children and parents) without a sales charge. Investors may purchase Units at
the Public Offering Price less the concession the Sponsor allows to broker-
dealers through registered investment advisers, certified financial planners or
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management services, or provide
such services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed.
For purposes of calculating the applicable sales charge, purchasers who have
indicated their intent to purchase a specified amount of Units of any Ranson
sponsored unit investment trust in the primary offering period by executing and
delivering a letter of intent to the Sponsor, which letter of intent must be in
a form acceptable to the Sponsor and shall have a maximum duration of thirteen
months, will be eligible to receive a reduced sales charge according to the
following tables based on the amount of intended aggregate purchases as
expressed in the letter of intent. A Unitholder who purchases Units during the
letter of intent period in excess of the number of Units specified in a
Unitholders letter of intent, the amount of which would cause the Unitholder to
be eligible to receive an additional sales charge reduction, will be allowed
such additional sales charge reduction on the purchase of Units which caused the
Unitholder to reach such new breakpoint level on all additional purchases of
Units during the letter of intent period. If the total purchases are less than
the amount specified, the Unitholder involved must pay the Sponsor an amount
equal to the difference between the amount paid for these purchases and the
amounts which would have been paid if the higher sales charge had been applied;
the Unitholder will, however, be entitled to any reduced sales charge qualified
for by reaching any lower breakpoint level.
Unitholders of any series of the Trust or any series of any other Ranson equity
unit investment trust may utilize their redemption or termination proceeds to
purchase Units of the Trust subject to a reduced sales charge of 3% of the
Public Offering Price (3.093% of the net amount invested).
Unitholders of unaffiliated unit investment trusts having an investment strategy
similar to the investment strategy of the Trust may utilize proceeds received
upon termination or upon redemption immediately preceding termination of such
unaffiliated trust to purchase Units of the Trust subject to a reduced sales
charge of 3% of the Public Offering Price (3.093% of the net amount invested).
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by the
number of Units outstanding. Such underlying value shall include the
proportionate share of any cash held in the Capital Account. Such price
determination as of the opening of business on the Initial Date of Deposit was
made on the basis of an evaluation of the Securities in the Trust
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<PAGE>
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 the Evaluation Time on days the New York Stock
Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day. Orders received by the Trustee, Sponsor or any
dealer for purchases, sales or redemptions after that time, or on a day when the
New York Stock Exchange is closed, will be held until the next determination of
price.
The value of the Securities is determined on each business day by the Evaluator
based on the closing sale prices on a national securities exchange or The Nasdaq
National Market or by taking into account the same factors referred to under
"Redemption-Computation of Redemption Price."
The minimum purchase is 100 Units (25 Units for retirement plans and Uniform
Gifts to Minors Act purchases).
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of the
Trust will be distributed to the public at the Public Offering Price thereof.
Upon the completion of the initial offering, Units which remain unsold or which
may be acquired in the secondary market (see "Market for Units") may be offered
at the Public Offering Price determined in the manner provided above.
The Sponsor intends to qualify Units of the Trust for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Broker-dealers and
others will be allowed a concession or agency commission in connection with the
distribution of Units during the initial offering period as set forth below.
<TABLE>
<CAPTION>
Regular Concession or
Number of Units* Agency Commission
---------------- ---------------------
<S> <C>
Less than 10,000 4.00%
10,000 but less than 25,000 3.60
25,000 but less than 50,000 3.50
50,000 but less than 100,000 2.70
100,000 or more 2.20
<FN>
- --------------------
* The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
</FN>
</TABLE>
In addition, volume concessions will be allowed as described in the table below.
These volume concessions will be paid to a selling firm based on aggregate sales
of all Ranson indexed equity unit investment trusts by the firm during a single
calendar month.
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<PAGE>
<TABLE>
<CAPTION>
Aggregate Unit Sales Additional Volume Concession
-------------------- ----------------------------
<S> <C>
$500,000 - $999,999 .10%
$1,000,000 - $1,999,999 .15%
$2,000,000 - $3,999,999 .20%
$4,000,000 - $5,999,999 .25%
$6,000,000 - $9,999,999 .30%
$10,000,000 - $14,999,999 .35%
$15,000,000 - $19,999,999 .40%
$20,000,000 - $49,999,999 .45%
$50,000,000 or more .50%
</TABLE>
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge paid by their
customers is retained by or remitted to the banks in the amounts shown above.
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
concessions or agency commissions set forth above from time to time. In
addition to such concessions or agency commissions, the Sponsor may, from time
to time, pay or allow additional concessions or agency commissions, in the form
of cash or other compensation, to dealers employing registered representatives
who sell, during a specified time period, a minimum dollar amount of Units of
the Trust and other unit investment trusts underwritten by the Sponsor. At
various times the Sponsor may implement programs under which the sales force of
a broker or dealer may be eligible to win nominal awards for certain sales
efforts, or under which the Sponsor will reallow to any such broker or dealer
that sponsors sales contests or recognition programs conforming to criteria
established by the Sponsor, or participates in sales programs sponsored by the
Sponsor, an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such programs.
Also, the Sponsor in its discretion may from time to time pursuant to objective
criteria established by the Sponsor pay fees to qualifying brokers or dealers
for certain services or activities which are primarily intended to result in
sales of Units of the Trust. Such payments are made by the Sponsor out of its
own assets, and not out of the assets of the Trust. These programs will not
change the price Unitholders pay for their Units or the amount that the Trust
will receive from the Units sold. The difference between the discount and the
sales charge will be retained by the Sponsor.
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trust as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit (or
sustain a loss) as of the Initial Date of Deposit resulting from the difference
between the purchase
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<PAGE>
prices of the Securities to the Sponsor and the cost of such Securities to the
Trust, which is based on the evaluation of the Securities on the Initial Date of
Deposit. Thereafter, on subsequent deposits the Sponsor may realize profits or
sustain losses from such deposits. See "Portfolio." The Sponsor may realize
additional profits or losses during the initial offering period on unsold Units
as a result of changes in the daily market value of the Securities in the Trust.
MARKET FOR UNITS
After the initial offering period, the Sponsor may maintain a market for Units
of the Trust offered hereby and continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the value of the underlying
Securities. While the Sponsor may repurchase Units from time to time, it does
not currently intend to maintain an active secondary market for Units.
Unitholders who wish to dispose of their Units should inquire of their broker as
to current market prices in order to determine whether there is in existence any
price in excess of the Redemption Price and, if so, the amount thereof. The
offering price of any Units resold by the Sponsor will be in accord with that
described in the currently effective prospectus describing such Units. Any
profit or loss resulting from the resale of such Units will belong to the
Sponsor. If the Sponsor decides to maintain a secondary market, it may suspend
or discontinue purchases of Units of the Trust if the supply of Units exceeds
demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Trustee at its Unit Investment Trust Division office in
the city of New York and, in the case of Units evidenced by a certificate, by
tendering such certificate to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Trustee. Unitholders must sign the request, and such certificate or transfer
instrument, exactly as their names appear on the records of the Trustee and on
any certificate representing the Units to be redeemed. If the amount of the
redemption is $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 on the third business day following the
day on which a tender for redemption is received (the "Redemption Date") by
payment of cash equivalent to the Redemption Price for the
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<PAGE>
Trust, determined as set forth below under "Computation of Redemption Price," as
of the Evaluation Time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be canceled and any undivided fractional interest in the related Trust
extinguished. The price received upon redemption might be more or less than the
amount paid by the Unitholder depending on the value of the Securities in the
Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the Trust to the extent that funds are available for
such purpose. All other amounts paid on redemption shall be withdrawn from the
Capital Account for the Trust. The Trustee is empowered to sell Securities for
the Trust in order to make funds available for the redemption of Units of the
Trust. Such sale may be required when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
To the extent that Securities are sold, the size and diversity of the Trust will
be reduced but each remaining Unit will continue to represent approximately the
same proportional interest in each Security. Sales may be required at a time
when Securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the Unitholder depending on the value of the
Securities in the portfolio at the time of redemption.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will generally be determined on the
basis of the last sale price of the Securities in the Trust. On the Initial
Date of Deposit, the Public Offering Price per Unit (which includes the sales
charge) exceeded the
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<PAGE>
value at which Units could have been redeemed. The Redemption Price per Unit is
the pro rata share of each Unit in the Trust determined on the basis of (i) the
cash on hand in the Trust or moneys in the process of being collected and (ii)
the value of the Securities in the Trust less (a) amounts representing taxes or
other governmental charges payable out of the Trust, (b) any amount owing to the
Trustee for its advances and (c) the accrued expenses of the Trust. During the
initial offering period, the redemption price and the secondary market
repurchase price will also include estimated organizational and offering costs.
The Evaluator may determine the value of the Securities in the Trust in the
following manner: if the Security is listed on a national securities exchange
or The Nasdaq Stock 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 Nasdaq, the evaluation will generally be made by the Evaluator in
good faith based on the last bid price on the over-the-counter market (unless
the Evaluator deems such price inappropriate as a basis for evaluation) or, if a
bid price is not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any combination
thereof. See "Public Offering of Units-Public Offering Price."
RETIREMENT PLANS
The Trust 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 Trust will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-deferred plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
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 cannot be
issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered
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<PAGE>
or certified mail for the protection of the Unitholder. Unitholders must sign
such written request, and such certificate or transfer instrument, exactly as
their names appear on the records of the Trustee and on any certificate
representing the Units to be transferred. Such signatures must be guaranteed as
stated under "Redemption-General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to the minimum
investment requirement of 100 Units or $1,000. Fractions of Units, if any, will
be computed to three decimal places. Any certificate issued will be numbered
serially for identification, issued in fully registered form and will be
transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by the Trust is credited by the
Trustee to the Income Account of the Trust. Other receipts are credited to the
Capital Account of the Trust. Income received by the Trust will be distributed
on or shortly after the 15th day of January, April, July and October of each
year on a pro rata basis to Unitholders of record as of the preceding record
date (which will be the first day of the related month). All distributions will
be net of applicable expenses. There is no assurance that any actual
distributions will be made since all dividends received may be used to pay
expenses. In addition, amounts from the Capital Account of the Trust, if any,
will be distributed at least annually to the Unitholders then of record.
Proceeds received from the disposition of any of the Securities after a record
date and prior to the following distribution date will be held in the Capital
Account and not distributed until the next distribution date applicable to the
Capital Account. The Trustee shall be required to make a distribution from the
Capital Account if the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 Units.
The Trustee is not required to pay interest on funds held in the Capital or
Income Accounts (but may itself earn interest thereon and therefore benefits
from the use of such funds). The Trustee is authorized to reinvest any funds
held in the Capital or Income Accounts, pending distribution, in U.S. Treasury
obligations which mature on or before the next applicable distribution date.
Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by the Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner
of Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the
23
<PAGE>
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of the Trust and, to the extent funds are not sufficient therein, from
the Capital Account of the Trust amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Expenses of the Trust"). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of the
Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of the Trust such amounts as may be necessary to
cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional Units of the Trust without a 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 certain mutual funds underwritten or advised by Scudder
Kemper Investments, Inc. at net asset value if such funds are registered in such
Unitholder's state of residence. Since the portfolio securities and investment
objectives of such mutual funds generally will differ significantly from those
of the Trust, Unitholders should carefully consider the consequences before
selecting such mutual funds for reinvestment. Detailed information with respect
to the investment objectives and the management of such mutual funds is
contained in the prospectus, which can be obtained from the Sponsor upon
request. An investor should read the prospectus of the reinvestment fund
selected prior to making the election to reinvest. Unitholders who desire to
have such distributions automatically reinvested should inform their broker at
the time of purchase or should file with the Program Agent referred to below a
written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record Date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See "Unitholders-Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its Unit Investment Trust Division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of the Trust are required to be audited annually, at the related
Trust's expense, by independent public accountants designated by the Sponsor,
unless the Sponsor determines that such an audit would not be in
24
<PAGE>
the best interest of the Unitholders of the Trust. The accountants' report will
be furnished by the Trustee to any Unitholder of the Trust upon written request.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each person who at any time during the calendar year
was a Unitholder of the Trust a statement, covering the calendar year, setting
forth for the Trust:
(A) As to the Income Account:
(1) Income received;
(2) Deductions for applicable taxes and for fees and expenses of the Trust and
for redemptions of Units, if any; and
(3) The balance remaining after such distributions and deductions, expressed
in each case both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any Securities and the net proceeds received
therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses of the
Trust held for distribution to Unitholders of record as of a date prior to
the determination; and
(3) The balance remaining after such distributions and deductions expressed
both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such
calendar year; and
(C) The following information:
(1) A list of the Securities as of the last business day of such calendar
year;
(2) The number of Units outstanding on the last business day of such calendar
year;
(3) The Redemption Price based on the last evaluation made during such
calendar year;
(4) The amount actually distributed during such calendar year from the Income
and Capital Accounts separately stated, expressed both as total dollar
amounts and as dollar amounts per Unit outstanding on the Record Dates for
each such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate the Trust nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of the Trust.
No Unitholder shall have the right to control the operation and management of
the Trust in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of the Trust.
25
<PAGE>
INVESTMENT SUPERVISION
The Trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolio of the Trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its securities from the portfolio.
As a general rule, the only purchases and sales that will be made with respect
to the Trust's portfolio will be those necessary to maintain, to the extent
feasible, a portfolio which reflects the current components of the stock index,
taking into consideration redemptions, sales of additional Units and the other
adjustments referred to elsewhere in this prospectus. See "Trust Portfolio."
Such purchases and sales will generally be made in accordance with the computer
program utilized to maintain the portfolio, the Trust Agreement and procedures
to be specified by the Sponsor. The Sponsor may direct the Trustee to dispose
of Securities and either to acquire other Securities through the use of the
proceeds of such disposition in order to make changes in a portfolio or to
distribute the proceeds of such disposition to Unitholders (i) as necessary to
reflect any additions to or deletions from the stock index, (ii) as may be
necessary to establish a closer correlation between the Trust portfolio and the
stock index or (iii) as may be required for purposes of distributing to
Unitholders, when required, their pro rata share of any net realized capital
gains or as the Sponsor may otherwise determine. The Sponsor may direct the
Trustee to acquire round lots of shares of the Securities rather than odd lot
amounts. Any funds not used to acquire round lots will be held for future
purchases of shares, for redemptions of Units or for distributions to
Unitholders. In the event the Trustee receives any securities or other
properties relating to the Securities (other than normal dividends) acquired in
exchange for Securities such as those acquired in connection with a
reorganization, recapitalization, merger or other transaction, the Trustee is
directed to sell such securities or other property and reinvest the proceeds in
shares of the Security for which such securities or other property relates, or
if such Security is thereafter removed from the stock index, in any new security
which is added as a component of such index. In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that the Trust continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code, and as may be needed from time to time to avoid the imposition of
any excise tax on the Trust as a regulated investment company.
Proceeds from the sale of Securities (or any securities or other property
received by the Trust in exchange for Securities) are credited to the Capital
Account for distribution to Unitholders or to meet redemptions. Except as
stated under "The Trust Fund" for failed securities and as provided herein, the
acquisition by the Trust of any securities other than the Securities is
prohibited. The Trustee may sell Securities, designated by the Sponsor, from
the Trust for the purpose of redeeming Units of the Trust tendered for
redemption and the payment of expenses.
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<PAGE>
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its 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 portfolio of the Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of the Trust. Such books and
records shall be open to inspection by any Unitholder at all reasonable times
during usual business hours. The Trustee shall make such annual or other
reports as may from time to time be required under any applicable state or
federal statute, rule or regulation. The Trustee shall keep a certified copy or
duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder, together with a current list of the Securities held in the Trust.
Pursuant to the Trust Agreement, the Trustee may employ one or more agents for
the purpose of custody and safeguarding of Securities comprising the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The Sponsor may at any time
remove the Trustee, with or without cause, and appoint a successor trustee as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. Ranson & Associates, Inc., the Sponsor of the Trust, is an
investment banking firm created in 1995 by a number of former owners and
employees of Ranson Capital Corporation. On November 26, 1996,
27
<PAGE>
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 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 Trust as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust. More comprehensive financial information
can be obtained upon request from the Sponsor.
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 the Trust may also be amended
in any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the holders of Units representing 66 2/3% of
the Units then outstanding of the Trust, provided that no such amendment or
waiver will reduce the interest of any Unitholder thereof without the consent of
such
28
<PAGE>
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders of the Trust. In no
event shall the Trust Agreement be amended to increase the number of Units of
the Trust issuable thereunder or to permit the acquisition of any Securities in
addition to or in substitution for those initially deposited in the Trust,
except in accordance with the provisions of the Trust Agreement. The Trustee
shall promptly notify Unitholders of the substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in the Trust but in no event is it to continue beyond the Mandatory Termination
Date set forth under "Essential Information." If the value of the Trust shall be
less than the applicable minimum value stated under "Essential Information" (20%
of the total value of Securities deposited in the Trust during the initial
offering period), the Trustee may, in its discretion, and shall, when so
directed by the Sponsor, terminate the Trust. The Trust may be terminated at
any time by the holders of Units representing 66 2/3% of the Units thereof then
outstanding. In addition, the Sponsor may terminate the Trust if the stock
index is no longer maintained.
No later than the Mandatory Termination Date set forth under "Essential
Information," the Trustee will begin to sell all of the remaining underlying
Securities on behalf of Unitholders in connection with the termination of the
Trust. The Sponsor has agreed to assist the Trustee in these sales. The sale
proceeds will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it can during the
termination proceedings without in its judgment materially adversely affecting
the market price of the Securities, but it is expected that all of the
Securities will in any event be disposed of within a reasonable time after the
Trust's termination. The Sponsor does not anticipate that the period will be
longer than one month, and it could be as short as one day, depending on the
liquidity of the Securities being sold. The liquidity of any Security depends
on the daily trading volume of the Security and the amount that the Sponsor has
available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsor will generally sell Securities on the first day of the termination
proceedings; for less liquid Securities, on each of the first two days of the
termination proceedings, the Sponsor will generally sell any amount of any
underlying Securities at a price no less than 1/2 of one point under the last
closing sale price of those Securities. Thereafter, the price limit will
increase to one point under the last closing sale price. After four days, the
Sponsor currently intends to sell at least a fraction of the remaining
underlying Securities, the numerator of which is one and the denominator of
which is the total number of days remaining (including that day) in the
termination proceedings without any price restrictions. Of course, no
assurances can be given that the market value of the Securities will not be
adversely affected during the termination proceedings.
Approximately thirty days prior to termination of the Trust, the Trustee will
notify Unitholders of the termination and provide a form allowing qualifying
Unitholders to elect an in kind distribution. A Unitholder
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<PAGE>
who owns at least $1,000,000 in Units may request an in kind distribution from
the Trustee instead of cash. The Trustee will make an in kind distribution
through the distribution of each of the Securities of the Trust in book entry
form to the account of the Unitholder's bank or broker-dealer at Depository
Trust Company. The Unitholder will be entitled to receive whole shares of each
of the Securities comprising the portfolio of the Trust and cash from the
Capital Account equal to the fractional shares to which the Unitholder is
entitled. The Trustee may adjust the number of shares of any Security included
in a Unitholder's in kind distribution to facilitate the distribution of whole
shares. The Sponsor may terminate the in kind distribution option at any time
upon notice to the Unitholders. Special federal income tax consequences will
result if a Unitholder requests an in kind distribution. See "Federal Tax
Status."
Within a reasonable period after termination, the Trustee will sell any
Securities remaining in the Trust and, after paying all expenses and charges
incurred by the Trust, will distribute to Unitholders thereof (upon surrender
for cancellation of certificates for Units, if issued) their pro rata share of
the balances remaining in the Income and Capital Accounts of the Trust.
The Sponsor currently intends, but is not obligated, to offer for sale units of
a subsequent series of the Trust at approximately the time of the Mandatory
Termination Date. If the Sponsor does offer such units for sale, Unitholders
may be given the opportunity to purchase such units at a public offering price
which includes a reduced sales charge. There is, however, no assurance that
units of any new series of the Trust will be offered for sale at that time, or
if offered, that there will be sufficient units available for sale to meet the
requests of any or all Unitholders.
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
30
<PAGE>
the Evaluator shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee or Unitholders for errors in judgment, but shall be
liable for its gross negligence, bad faith or willful misconduct or its reckless
disregard for its obligations under the Trust Agreement.
EXPENSES OF THE TRUST
The Sponsor will not charge the Trust any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any, related
to the deposit of Securities in the Trust.
The Trustee receives for its services that fee set forth under "Essential
Information." However, in no event shall such fee amount to less than $2,000 in
any single calendar year. The Trustee's fee which is calculated monthly is
based on the largest number of Units of the Trust outstanding during the
calendar year for which such compensation relates. The Trustee's fees are
payable monthly on or before the fifteenth day of the month from the Income
Account to the extent funds are available and then from the Capital Account.
The Trustee benefits to the extent there are funds for future distributions,
payment of expenses and redemptions in the Capital and Income Accounts since
these Accounts are non-interest bearing and the amounts earned by the Trustee
are retained by the Trustee. Part of the Trustee's compensation for its
services to the Trust is expected to result from the use of these funds.
In its capacity as Supervisor, the Sponsor will charge the Trust a surveillance
fee for services performed for the Trust in an amount not to exceed that amount
set forth in "Essential Information" but in no event will such compensation,
when combined with all compensation received from other unit investment trusts
for which the Sponsor both acts as sponsor and provides portfolio surveillance,
exceed the aggregate cost to the Sponsor for providing such services. Such fee
shall be based on the total number of Units of the related Trust outstanding as
of the January record date for any annual period.
For evaluation of the Securities in the Trust, the Evaluator shall receive that
fee set forth under "Essential Information", payable monthly, based upon the
largest number of Units of the Trust outstanding during the calendar year for
which such compensation relates.
The Trustee's fee, Supervisor's fee and Evaluator's fee are deducted from the
Income Account of the related Trust to the extent funds are available and then
from the Capital Account. Each such fee may be increased without approval of
Unitholders by amounts not exceeding a proportionate increase in the Consumer
Price Index or any equivalent index substituted therefor.
The Nasdaq-100 Trust Licensor receives an annual fee from the Trust equal to the
greater of (a) .02% of the average net asset value of the Trust computed
quarterly or (b) a minimum of $7,000 during the first year of the Trust's life,
$8,000 during the second year of the Trust's life and $9,000 thereafter. This
fee covers the license to the Trust of the use of various trademarks and trade
names as described under "The Nasdaq-100 Index."
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<PAGE>
This fee may be increased annually by the amount of the increase, if any, in the
Consumer Price Index for Urban Consumers, All Items, as issued by the Bureau of
Labor Statistics, U.S. Department of Labor, over the prior twelve-month period.
The following additional charges are or may be incurred by the Trust: (a) fees
for the Trustee's extraordinary services; (b) expenses of the Trustee (including
legal and auditing expenses, but not including any fees and expenses charged by
an agent for custody and safeguarding of Securities) and of counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by the
Trustee to protect the Trust or the rights and interests of the Unitholders; (e)
indemnification of the Trustee for any loss, liability or expense incurred by it
in the administration of the Trust not resulting from negligence, bad faith or
willful misconduct on its part or its reckless disregard for its obligations
under the Trust Agreement; (f) indemnification of the Sponsor for any loss,
liability or expense incurred in acting in that capacity without gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement; and (g) expenditures incurred in
contacting Unitholders upon termination of the Trust. The fees and expenses set
forth herein are payable out of the Trust and, when owing to the Trustee, are
secured by a lien on the Trust. Since the Securities are all common stocks, and
the income stream produced by dividend payments, if any, is unpredictable, the
Sponsor cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of the Trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by the Trust, the
Trustee has the power to sell Securities to pay such amounts. These sales may
result in capital gains or losses to Unitholders. See "Federal Tax Status." It
is expected that the income stream produced by dividend payments will be
insufficient to meet the expenses of the Trust and, accordingly, it is expected
that Securities will be sold to pay all of the fees and expenses of the Trust.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of financial condition, including the Trust portfolio, of the
Trust 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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<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
We have audited the accompanying statement of financial condition, including the
Trust portfolio, of Ranson Unit Investment Trusts, Series 77, as of the opening
of business on March 4, 1999, the Initial Date of Deposit. The statement of
financial condition is the responsibility of the Sponsor. Our responsibility is
to express an opinion on the statement of financial condition 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 statement of financial condition are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of financial condition.
Our procedures included confirmation of the purchases of Securities to be
deposited in the Trust 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 statement of financial
condition presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statement of financial condition referred to above presents
fairly, in all material respects, the financial position of Ranson Unit
Investment Trusts, Series 77 as of March 4, 1999, in conformity with generally
accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
March 4, 1999
33
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
STATEMENT OF FINANCIAL CONDITION
AT THE OPENING OF BUSINESS ON MARCH 4, 1999, THE INITIAL DATE OF DEPOSIT
<S> <C>
TRUST PROPERTY
Nasdaq-100
Trust
----------
Contracts to purchase Securities (1) (2) $480,597
----------
Total $480,597
==========
NUMBER OF UNITS 50,536
==========
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-
Organizational costs (3) $ 434
----------
Interest of Unitholders-
Cost to investors (4) 505,360
Less: Gross underwriting commission and organizational costs (4) 25,197
----------
Net interest to Unitholders (1) (2) (4) 480,163
----------
Total $480,597
==========
<FN>
- --------------------
Notes:
(1) Aggregate cost of the Securities is based on the last sale price evaluations
as determined by the Trustee.
(2) An irrevocable letter of credit or cash has been deposited with the Trustee
covering the funds (aggregating $480,028) necessary for the purchase of the
Securities in the Trust represented by purchase contracts.
(3) A portion of the Public Offering Price represents an amount sufficient to pay
for all or a portion of the costs incurred in establishing and offering the
Trust. The amount of these costs is set forth under "Essential Information."
A distribution will be made as of the close of the initial offering period to
an account maintained by the Trustee from which this obligation of the
investors will be satisfied.
(4) The aggregate cost to investors includes the applicable sales charge assuming
no reduction of sales charges for quantity purchases.
</FN>
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
NASDAQ-100 INDEX TRUST, SERIES 5
PORTFOLIO AS OF MARCH 4, 1999
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
- --------- ------ ---------------- ------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
1 MSFT Microsoft Corporation 100 14,962.50 15.14
2 INTC Intel Corporation 100 11,468.75 7.90
3 CSCO Cisco Systems, Inc. 100 9,512.50 6.33
4 WCOM MCI WORLDCOM, Inc. 100 8,106.25 6.31
5 DELL Dell Computer Corporation 100 8,093.75 4.48
6 ORCL Oracle Corporation 100 3,500.00 2.51
7 SUNW Sun Microsystems, Inc. 100 10,231.25 2.00
8 AMGN Amgen Inc. 100 6,256.25 1.75
9 YHOO Yahoo! Inc. 100 15,343.75 1.72
10 TCOMA Tele-Communications, Inc. 100 6,400.00 1.63
11 AMZN Amazon.com, Inc. 100 12,350.00 1.53
12 LVLT Level 3 Communications, Inc. 100 5,500.00 1.38
13 AMAT Applied Materials, Inc. 100 5,825.00 1.31
14 CMCSK Comcast Corporation 100 6,843.75 1.30
15 QWST Qwest Communications International Inc. 100 5,943.75 1.23
16 NXTL Nextel Communications, Inc. 100 2,843.75 1.17
17 COST Costco Companies, Inc. 100 8,362.50 1.13
18 BGEN Biogen, Inc. 100 10,506.25 1.12
19 NSCP Netscape Communications Corporation 100 7,618.75 1.12
20 ASND Ascend Communications, Inc. 100 7,775.00 1.11
21 NOBE Nordstrom, Inc. 100 4,206.25 1.08
22 CTAS Cintas Corporation 100 7,112.50 1.06
23 LLTC Linear Technology Corporation 100 4,406.25 1.04
24 SPLS Staples, Inc. 100 2,800.00 1.02
25 NOVL Novell, Inc. 100 2,000.00 1.00
26 TLAB Tellabs, Inc. 100 7,650.00 1.00
27 AMFM Chancellor Media Corporation 100 4,793.75 0.98
(t)28 ERICY LM Ericsson Telephone Company 100 2,556.25 0.93
29 MXIM Maxim Integrated Products, Inc. 100 4,300.00 0.93
30 IMNX Immunex Corporation 100 13,937.50 0.90
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
NASDAQ-100 INDEX TRUST, SERIES 5-CONTINUED
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
- --------- ------ ---------------- ------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
31 ALTR Altera Corporation 100 5,262.50 0.85
32 XLNX Xilinx, Inc. 100 6,918.75 0.84
33 SBUX Starbucks Corporation 100 5,462.50 0.80
34 SPOT PanAmSat Corporation 100 3,375.00 0.80
35 BMCS BMC Software, Inc. 100 4,006.25 0.78
36 INTU Intuit Inc. 100 8,800.00 0.78
37 AAPL Apple Computer, Inc. 100 3,418.75 0.76
38 ADCT ADC Telecommunications, Inc. 100 3,718.75 0.74
39 QCOM QUALCOMM Incorporated 100 7,312.50 0.74
40 NETA Network Associates, Inc. 100 4,312.50 0.71
41 PAYX Paychex, Inc. 100 3,856.25 0.71
42 PSFT PeopleSoft, Inc. 100 1,806.25 0.70
43 BBBY Bed Bath & Beyond Inc. 100 3,050.00 0.67
44 CPWR Compuware Corporation 100 2,506.25 0.67
45 BMET Biomet, Inc. 100 3,631.25 0.65
46 KLAC KLA-Tencor Corporation 100 5,037.50 0.63
47 USAI USA Networks, Inc. 100 3,750.00 0.63
48 CHIR Chiron Corporation 100 2,106.25 0.62
49 PMTC Parametric Technology Corporation 100 1,412.50 0.62
50 FISV Fiserv, Inc. 100 4,925.00 0.60
51 NTLI NTL Incorporated 100 7,687.50 0.57
52 QTRN Quintiles Transnational Corp. 100 4,306.25 0.55
53 GENZ Genzyme General 100 4,543.75 0.54
54 COMS 3Com Corporation 100 2,456.25 0.53
55 CTXS Citrix Systems, Inc. 100 7,912.50 0.47
56 QNTM Quantum Corporation 100 1,950.00 0.47
57 APCC American Power Conversion Corporation 100 2,931.25 0.44
58 CEFT Concord EFS, Inc. 100 3,350.00 0.44
59 JCOR Jacor Communications, Inc. 100 6,918.75 0.44
60 SNPS Synopsys, Inc. 100 4,600.00 0.44
61 PCAR PACCAR Inc 100 4,156.25 0.43
62 SSCC Smurfit-Stone Container Corporation 100 1,737.50 0.43
63 VRTS VERITAS Software Corporation 100 7,575.00 0.43
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
NASDAQ-100 INDEX TRUST, SERIES 5-CONTINUED
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
- --------- ------ ---------------- ------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
64 VTSS Vitesse Semiconductor Corporation 100 4,487.50 0.42
65 CMVT Comverse Technology, Inc. 100 6,987.50 0.38
66 SANM Sanmina Corporation 100 5,018.75 0.35
67 CNTO Centocor, Inc. 100 4,175.00 0.34
68 SIAL Sigma-Aldrich Corporation 100 2,606.25 0.33
(t)69 RTRSY Reuters Group PLC 100 8,450.00 0.29
70 ADBE Adobe Systems Incorporated 100 4,018.75 0.28
71 ERTS Electronic Arts Inc. 100 3,825.00 0.28
72 APOL Apollo Group, Inc. 100 3,000.00 0.26
73 DLTR Dollar Tree Stores, Inc. 100 3,931.25 0.25
74 PHSYB PacifiCare Health Systems, Inc. 100 7,550.00 0.25
75 COMR Comair Holdings, Inc. 100 3,850.00 0.24
76 FDLNB Food Lion, Inc. 100 975.00 0.24
77 MCLD McLeodUSA Incorporated 100 3,962.50 0.24
78 MOLX Molex Incorporated 100 2,725.00 0.24
79 ADPT Adaptec, Inc. 100 2,100.00 0.22
80 LNCR Lincare Holdings Inc. 100 3,443.75 0.20
81 NWAC Northwest Airlines Corporation 100 2,468.75 0.20
82 ADSK Autodesk, Inc. 100 4,112.50 0.19
83 ROST Ross Stores, Inc. 100 4,581.25 0.19
84 MCCRK McCormick & Company, Incorporated 100 2,800.00 0.18
85 EFII Electronics for Imaging, Inc. 100 3,487.50 0.17
86 FORE FORE Systems, Inc. 100 1,443.75 0.16
87 STEI Stewart Enterprises, Inc. 100 1,456.25 0.16
88 ATML Atmel Corporation 100 1,600.00 0.14
89 MCHP Microchip Technology Incorporated 100 2,718.75 0.14
90 MLHR Herman Miller, Inc. 100 1,650.00 0.13
91 ANDW Andrew Corporation 100 1,506.25 0.12
92 CATP Cambridge Technology Partners, Inc. 100 2,418.75 0.12
93 FAST Fastenal Company 100 3,718.75 0.12
94 MUEI Micron Electronics, Inc. 100 1,193.75 0.11
95 CBRL CBRL Group Inc. 100 1,806.25 0.10
96 TECD Tech Data Corporation 100 1,737.50 0.09
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 77
NASDAQ-100 INDEX TRUST, SERIES 5-CONTINUED
Theoretical
Percentage (%)
Portfolio of Total
No. Symbol Company Name (1) Shares Cost ($) (1) Market Value (2)
- --------- ------ ---------------- ------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
97 WTHG Worthington Industries, Inc. 100 1,243.75 0.09
98 FHCC First Health Group Corp. 100 1,612.50 0.08
99 RXSD Rexall Sundown, Inc. 100 1,406.25 0.07
100 CEXP Corporate Express, Inc. 100 528.13 0.04
-----------
$480,596.88
===========
</TABLE>
NOTES TO PORTFOLIO
(1) All or a portion of the Securities may have been deposited in the Trust.
Any undelivered Securities are represented by "regular way" contracts for
the performance of which cash or 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 3, 1999 and have an expected settlement date of March 8, 1999 (see
"The Trust Fund"). The market value of each Security is based on the last
sale price on the day prior to the Initial Date of Deposit. As of the
Initial Date of Deposit, other information regarding the Securities is as
follows:
<TABLE>
<CAPTION>
Cost to Profit (Loss)
Sponsor to Sponsor
-------- -------------
<S> <C> <C>
Nasdaq-100 Trust $480,028 $(569)
</TABLE>
(2) The percentage listed under this heading represents each Security's
proportionate relationship of all stocks in the index based on market value
as of the date set forth above. Because the stocks included in the index
and the value of such stocks may change from time to time, and because the
Trust may not be able to duplicate the stock index exactly, the percentages
set forth above do not necessarily represent the actual weighting of each
Security in the Trust portfolio on the Initial Date of Deposit or on any
subsequent date. See "The Trust Portfolio."
(t) Indicates that the stock is held in American Depository Receipt form.
38
<PAGE>
<TABLE>
<CAPTION>
CONTENTS PAGE
- -------- ----
<S> <C>
Nasdaq-100(Registered Trademark) Index Licensing Agreement 2
Essential Information 4
The Trust Fund 6
The Trust Portfolio 7
The Nasdaq-100 Index 9
Risk Factors 11
Federal Tax Status 13
Public Offering of Units 16
Market for Units 20
Redemption 20
Retirement Plans 22
Unitholders 22
Investment Supervision 26
Administration of the Trust 27
Expenses of the Trust 31
Legal Opinions 32
Independent Auditors 32
Report of Independent Auditors 33
Statement of Financial Condition 34
Portfolio 35
Notes to Portfolio 38
</TABLE>
<PAGE>
- ---------------------
RANSON
UNIT
INVESTMENT
TRUSTS
- ---------------------
NASDAQ-100
INDEX TRUST
SERIES 5
----------------------------
PROSPECTUS MARCH 4, 1999
----------------------------
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents.
The facing sheet
The Prospectus
The Signatures
The following exhibits.
1.1. Trust Agreement.
1.1.1. Standard Terms and Conditions of Trust. Reference is made to Exhibit
1.1.1 to the Registration Statement Form S-6 for Ranson Unit Investment
Trust, Series 53 (File No. 333-17811) as filed on January 7, 1997.
2.1. Form of Certificate of Ownership (pages three and four of the Standard
Terms and Conditions of Trust included as Exhibit 1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under "Legal
Opinions" in the Prospectus.
4.1. Consent of Independent Auditors.
S-1
<PAGE>
SIGNATURES
The Registrant, Ranson Unit Investment Trust, Series 77, hereby identifies
Ranson Unit Investment Trusts, Series 53 EVEREN Unit Investment Trusts Series
39, Kemper Defined Funds Series 45 and Kemper Equity Portfolio Trusts, Series 1
for purposes of the representations required by Rule 487 and represents the
following: (1) that the portfolio securities deposited in the series as to the
securities of which this Registration Statement is being filed do not differ
materially in type or quality from those deposited in such previous series; (2)
that, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential financial information for, the
series with respect to the securities of which this Registration Statement is
being filed, this Registration Statement does not contain disclosures that
differ in any material respect from those contained in the registration
statements for such previous series as to which the effective date was
determined by the Commission or the staff; and (3) that it has complied with
Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Ranson Unit Investment Trusts, Series 77 has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Wichita, and State of Kansas, on the 4th day of
March, 1999.
RANSON UNIT INVESTMENT TRUSTS, SERIES 77,
Registrant
By: RANSON & ASSOCIATES, INC.,
Depositor
By: ALEX R. MEITZNER
---------------------------------------
Alex R. Meitzner
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on March 4, 1999 by the following persons,
who constitute a majority of the Board of Directors of Ranson & Associates, Inc.
SIGNATURE TITLE
- - --------------------- --------------------
DOUGLAS K. ROGERS Executive Vice )
- - --------------------- President and Director )
Douglas K. Rogers
ALEX R. MEITZNER Chairman of the Board )
- - --------------------- of Directors )
Alex R. Meitzner
ROBIN K. PINKERTON President, Secretary, )
- - --------------------- Treasurer and Director ) ALEX R. MEITZNER
Robin K. Pinkerton -----------------------
Alex R. Meitzner
- - ------------------------------------------------------------------------------
An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration Statement
on Form S-6 of The Kansas Tax-Exempt Trust, Series 51 (File No. 33-46376) and
Series 52 (File No. 33-47687) and the same are hereby incorporated herein by
this reference.
S-2
EXHIBIT 1.1
RANSON UNIT INVESTMENT TRUSTS
SERIES 77
TRUST AGREEMENT
This Trust Agreement dated as of March 4, 1999 between Ranson &
Associates, Inc., as Depositor, and The Bank of New York, as Trustee, sets
forth certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions of Trust
For Equity Trusts Sponsored by Ranson & Associates, Inc., Effective
January 7, 1997" (herein called the "Standard Terms and Conditions of
Trust"), and such provisions as are set forth in full and such provisions
as are incorporated by reference constitute a single instrument.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had
been set forth in this instrument.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(1) The equity securities listed in the Schedule hereto have been
deposited in trust under this Trust Agreement as indicated in each Trust
named on the attached Schedule.
(2) For the purposes of the definition of the term "Unit" in
Article I, it is hereby specified that the fractional undivided interest
in and ownership of a Trust is the amount set forth in the section
captioned "Essential Information" in the final Prospectus of the Trust
(the "Prospectus") contained in Amendment No. 1 to the Trust's
Registration Statement (Registration No. 333-72605) as filed with the
-1-
<PAGE>
Securities and Exchange Commission on March 4, 1999. The fractional
undivided interest may (a) increase by the number of any additional
Units issued pursuant to Section 2.03, (b) increase or decrease in
connection with an adjustment to the number of Units pursuant to
Section 2.03, or (c) decrease by the number of Units redeemed pursuant
to Section 5.02.
(3) The terms "Income Account Record Date" and "Capital Account
Record Date" shall mean the dates set forth under "Essential Information
Record and Computation Dates" in the Prospectus.
(4) The terms "Income Account Distribution Date" and "Capital
Account Distribution Date" shall mean the dates set forth under
"Essential Information Distribution Dates" in the Prospectus.
(5) The term "Initial Date of Deposit" shall mean the date of this
Trust Agreement as set forth above.
(6) The number of Units of a Trust referred to in Section 2.03 is
as set forth under "Essential Information Number of Units" in the
Prospectus.
(7) For the purposes of Section 6.01(g), the liquidation amount
is the amount set forth under "Essential Information Minimum Value of
Trust under which Trust Agreement may be Terminated" in the Prospectus.
(8) Notwithstanding anything to the contrary in the Standard Terms
and Conditions of Trust, the requisite amount of Units needed to be
tendered to exercise an in kind distribution shall be that amount set
forth in the Prospectus.
(9) Section 1.01(21) is hereby stricken and replaced by the
following: "Percentage Ratio" shall mean, for each Trust which will
issue additional Units pursuant to Section 2.03 hereof, the actual
number of shares of each Equity Security as a percent of all shares of
Equity Securities necessary to cause the Trust portfolio to replicate,
to the extent practicable, the Nasdaq-100 Index immediately prior to
any subsequent deposit of Securities as determined by computer program
output operated independent of the Depositor which tracks such index."
(10) Section 2.01(b) is hereby amended by adding the following
immediately after the first sentence of the second paragraph of such
Section the following: "Such additional Securities may be deposited or
purchased in round lots; if the amount of the deposit is insufficient
to acquire round lots of each Security to be acquired, the additional
Securities shall be deposited or purchased in the order of the Securities
in the Trust most under-represented in the Trust's portfolio in
comparison to their percentage weighting in the Nasdaq-100 Index as
determined by computer program output operated independent of the
Depositor which tracks such index."
-2-
<PAGE>
(11) The first sentence of Section 2.01(e) is hereby stricken and
replaced with the following:
"If Securities in the Trust are sold pursuant to Sections 3.07 or 8.02
hereof or if there are excess proceeds remaining after meeting redemption
requests pursuant to Section 5.02, and the net proceeds of any such sale
are not otherwise reinvested as provided in such Sections, the net
proceeds of any such sale may be reinvested, if in the opinion of the
Depositor it is in the best interests of the Unitholders to do so, in
short term U.S. Treasury obligations maturing on or prior to the next
succeeding Capital Distribution Date or, if earlier, December 31 of the
year of purchase (the "Reinvestment Securities")."
(12) Section 3.07(a) is hereby amended by adding the following
subsections immediately after Section 3.07(a)(ix):
(x) "that the Security has been removed from the Nasdaq-100 Index; or
(xi) that computer program output operated independent of the Depositor
which tracks the Nasdaq-100 Index indicates that the Security is over-
represented in the Trust's portfolio in comparison to such Security's
percentage weighting in such index."
(13) Section 3.07 is hereby amended by changing the current
subsection (c) to subsection (d) and adding the following as a new
subsection (c):
(c) "In the event a Security is sold pursuant to Section 3.07(a)(x),
the Depositor may direct the reinvestment of the proceeds of the sale of
such Security, to the extent practicable, into any security which
replaces such Security as a component of the Nasdaq-100 Index or, if no
security so replaces such Security, into any other Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index. In the event a Security is sold pursuant to Section 3.07(a)(xi),
the Depositor may direct the reinvestment of the proceeds of the sale of
such Security, to the extent practicable, into any other Securities which
are under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index. Without limiting the generality of the foregoing, in determining
whether such reinvestment is practicable, the Depositor may, but is not
obligated to, specifically consider the ability of the Trust to reinvest
such proceeds into round lots of a Security."
-3-
<PAGE>
(14) The second paragraph of Section 3.10 is hereby stricken and
replaced with the following:
"In the event that an offer by the issuer of any of the Securities or any
other party shall be made to issue new securities, or to exchange
securities, for Trust Securities, the Trustee shall reject such offer.
However, should any issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer, any
securities, cash and/or property received shall be deposited hereunder
and shall be promptly sold, if securities or property, by the Trustee;
provided, however, if such securities are components of the Nasdaq-100
Index, the Depositor may advise the Trustee to keep such securities.
The cash received in such exchange and cash proceeds of any such sales
shall, in the following priority, be (1) reinvested, to the extent
practicable, into any Securities which are under-represented in the
Trust's portfolio in comparison to their percentage weighting in the
Nasdaq-100 Index as determined by computer program output operated
independent of the Depositor which tracks such index or (2) distributed
to Unitholders on the next Distribution Date in the manner set forth in
Section 3.04(b) regarding distributions from the Capital Account.
Without limiting the generality of the foregoing, in determining whether
such reinvestment is practicable, the Depositor may, but is not obligated
to, specifically consider the ability of the Trust to reinvest such
proceeds into round lots of a Security. Except as provided in
Article VIII, the Trustee shall not be liable or responsible in any way
for depreciation or loss incurred by reason of any such rejection or
sale."
(15) Section 5.02 is hereby amended by adding the following
immediately after the last sentence of the second paragraph of such
Section:
"If Securities in the Trust are sold for the payment of the Redemption
Value and there are excess proceeds remaining after meeting redemption
requests, the Depositor may, but is not obligated to, instruct the
Trustee to reinvest such excess proceeds into any Securities which are
under-represented in the Trust's portfolio in comparison to their
percentage weighting in the Nasdaq-100 Index as determined by computer
program output operated independent of the Depositor which tracks such
index."
-4-
<PAGE>
(16) Notwithstanding anything to the contrary herein, if at any
time the Nasdaq-100 Index shall no longer be compiled, maintained or made
available, the Depositor may (a) direct that the Trust created hereby
continue to be operated hereunder utilizing the components of the
Nasdaq-100 Index, and the percentage weightings of such components, as
existed on the last date on which the Nasdaq-100 Index components and
weightings were available to the Trust or (b) direct the Trustee to
terminate this Indenture and the Trust created hereby and liquidate the
Trust in such manner as the Depositor shall direct.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed.
RANSON & ASSOCIATES, INC.,
Depositor
By /s/ ROBIN K. PINKERTON
___________________________
President
THE BANK OF NEW YORK,
Trustee
By /s/ Jeffrey Bieselin
___________________________
Vice President
<PAGE>
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS
SERIES 77
(Note: Incorporated herein and made a part hereof are the "Portfolios" as
set forth in the Prospectus.)
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 4, 1999
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts Series 77; File No. 333-72605
-----------------------------------------------------------
Gentlemen:
We have served as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts Series 77 (the "Fund"), in
connection with the preparation, execution and delivery of Trust Agreements
dated the date of this opinion between Ranson & Associates, Inc., as
Depositor, and The Bank of New York, as Trustee, pursuant to which the
Depositor has delivered to and deposited the Securities listed in the
Schedules to the Trust Agreement with the Trustee and pursuant to which
the Trustee has issued to or on the order of the Depositor a certificate or
certificates representing all the Units of fractional undivided interest in,
and ownership of, the Fund, created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable
us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units of the Fund
have been duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly
executed and delivered by the Depositor and the Trustee in accordance
with the aforementioned Trust Agreement, will constitute valid and
binding obligations of the Fund and the Depositor in accordance with
the terms thereof.
<PAGE>
-2-
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-72605) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 4.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
"Independent Auditors" and to the use of our report dated March 4, 1999 in
Amendment No. 1 to the Registration Statement (File No. 333-72605) and
related Prospectus of Ranson Unit Investment Trusts, Series 77.
Allen, Gibbs & Houlik, L.C.
Wichita, Kansas
March 4, 1999
