REGISTRATION NO. 333-90171
CIK# 910961
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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 89
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
10:00 A.M. on November 12, 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 89
VALUE LINE #1 STRATEGY TRUST, SERIES 6 (NOVEMBER 1999 SERIES)
Value Line #1 Strategy Trust, Series 6 (November 1999 Series) seeks to increase
the value of your investment. The Trust invests in a portfolio of the 100
stocks ranked #1 for Timeliness(TM) by The Value Line Investment Survey. Of
course, we cannot guarantee that the Trust will achieve its objective.
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.
November 12, 1999
The Securities and Exchange Commission has not approved
or disapproved of the Units or passed upon the adequacy of this prospectus.
Any contrary representation is a criminal offense.
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 89
ESSENTIAL INFORMATION
AS OF NOVEMBER 11, 1999*
SPONSOR, SUPERVISOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
<S> <C>
Cusip (Cash) 753269265
Cusip (Reinvest) 753269273
Number of Units (1) 50,516
Fractional Undivided Interest Per Unit(1) 1/50,516
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ 500,111
Aggregate Value of Securities per Unit $ 9.900
Plus total sales charge (3) $ .290
Less deferred sales charge per Unit $ (.190)
Public Offering Price Per Unit (4) $ 10.000
Redemption Price Per Unit (5) $ 9.710
Excess of Public Offering Price Per Unit over Redemption Price Per Unit $ .290
<S> <C>
Minimum Value of Trust under which Trust Agreement
may be Terminated 40% of aggregate value of Securities at deposit
Rollover Date January 12, 2001
Mandatory Termination Date January 12, 2001
Evaluator's Annual Evaluation Fee Maximum of $.002 per Unit
Supervisor's Annual Supervisory Fee Maximum of $.003 per Unit
Trustee's Annual Fee $.008 per Unit
Record and Computation Dates FIRST day of January, April, July and October
Distribution Dates FIFTEENTH day of January, April, July and October
Evaluations for purposes of sale, purchase or redemption of Units are made as of
3:00 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.
<FN>
* The business day prior to the Initial Date of Deposit
- --------------------
(1) As of the close of business on the Initial Date of Deposit, the number of
Units of the Trust may be adjusted so that the aggregate value of Securities
per Unit will equal approximately $10. Therefore, to the extent of any such
adjustment the fractional undivided interest per Unit will increase or
decrease accordingly from the amounts indicated above.
(2) Each Security is valued at the closing sale price on a national securities
exchange or the Nasdaq National 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) The total sales charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is equal to the difference between
the total sales charge and the deferred sales charge. The total sales charge
is 2.90% (equivalent to 2.929% of the net amount invested). The deferred
sales charge is equal to $0.19 per Unit.
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<PAGE>
(4) On the Initial Date of Deposit there will be no accumulated dividends in the
Income Account. Anyone ordering Units after such date will pay his pro rata
share of any accumulated dividends in such Income Account.
(5) This amount is reduced by any unpaid deferred sales charge payments. The
redemption price and secondary market repurchase price include the estimated
organization costs. These costs are set forth in the "Fee Table". The
redemption price and secondary market repurchase price will not include these
costs after the initial offering period or six months after the Initial Date
of Deposit (whichever is earlier).
</TABLE>
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FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in the Trust will bear directly or indirectly. See
"Public Offering of Units" and "Expenses of the Trust." Although the Trust is a
unit investment trust rather than a mutual fund and may have a term of less than
the periods indicated, this information is presented to permit a comparison of
fees.
<TABLE>
<CAPTION>
Amount Per
Unit
----------
<S> <C>
UNITHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
Initial Sales Charge (1) 1.00% $0.10
Deferred Sales Charge (2) 1.90% 0.19
----- -----
Total Sales Charge 2.90% $0.29
===== =====
ESTIMATED ORGANIZATION EXPENSE PER UNIT .500% $.050
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ESTIMATED ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
Trustee's Fee .080% $.008
Portfolio Evaluation Fees .020% .002
Portfolio Surveillance Fees .030% .003
Licensing Fee .200% .020
----- -----
Total .330% $.033
===== =====
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Cumulative Expenses Paid for Period of:
-------------------------------------------
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment
assuming the applicable sales charges and estimated expenses
on the Trust, a 5% annual return and redemption at the end of
each time period $38 $95 $154 $316
</TABLE>
The example utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. The example assumes
that you roll your investment into a new trust at the termination of each series
of the Trust. The example should not be considered a representation of past or
future expenses or annual rate of return; the actual expenses and annual rate of
return may be more or less than those assumed for purposes of the example.
(1) The Initial Sales Charge is equal to the difference between the Total Sales
Charge and the Deferred Sales Charge.
(2) The actual Deferred Sales Charge for this Trust is $0.19 per Unit,
irrespective of purchase or redemption price deducted on a monthly basis
commencing January 13, 2000 through May 13, 2000 (and is paid to the Sponsor
on a monthly basis commencing February, 2000). If the Unit price exceeds
$10.00 per Unit, the Deferred Sales Charge will be less than the percentage
set forth above. If the Unit price is less than $10.00 per Unit, the
Deferred Sales Charge will exceed the percentage set forth above. Units
purchased subsequent to the initial deferred sales charge payment will be
subject to the remaining deferred sales charge payments.
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<PAGE>
THE FUND
Value Line #1 Strategy Trust, Series 6 is an underlying unit investment trust
included in Ranson Unit Investment Trusts, Series 89, which was created under
the laws of the State of New York pursuant to a trust indenture (the "Trust
Agreement") dated the date of this Prospectus (the "Initial Date of Deposit")
between Ranson & Associates, Inc. (the "Sponsor") and The Bank of New York (the
"Trustee").
Value Line #1 Strategy Trust, Series 6 consists of a portfolio of the 100 stocks
ranked #1 for Timeliness(TM) by The Value Line Investment Survey as of October
29, 1999. 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 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. Subsequent to
the Initial Date of Deposit, the Sponsor may deposit additional Securities or
contracts to purchase additional Securities along with cash (or a bank letter of
credit in lieu of cash) to pay for such contracted Securities or cash (including
a letter of credit) with instructions to purchase additional Securities. Such
additional deposits will be in amounts which will maintain, for the first 90
days, as closely as possible the same original percentage relationship among the
number of shares of each Security in the related Trust established by the
initial deposit of Securities and, thereafter, the same percentage relationship
that existed on such 90th day. Although additional Units will be issued, each
Unit will continue to represent approximately the same number of shares of each
Security and the percentage relationship among the shares of each Security in
the Trust will remain the same. The required percentage relationship among the
Securities in the Trust will be adjusted to reflect the occurrence of a stock
dividend, a stock split or a similar event which affects the capital structure
of the issuer of a Security in the Trust but which does not affect the Trust's
percentage ownership of the common stock equity of such issuer at the time of
such event. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their anticipated
income because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the Trust
will pay the associated brokerage fees. To minimize this effect, the Trust will
attempt to purchase the Securities as close to the evaluation time or as close
to the evaluation prices as possible.
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.
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."
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<PAGE>
THE TRUST PORTFOLIO
The Trust seeks to provide capital appreciation by investing in the 100 stocks
ranked #1 for Timeliness(TM) by The Value Line Investment Survey on October 29,
1999. The Value Line Investment Survey was created in 1931. The Value Line
ranking system has been operating essentially in its present form since 1965.
It is backed by disciplined, objective, quantitative analytical methodologies
that have proven themselves over the last 60 years. The Value Line
Timeliness(TM) Rank measures potential price performance during the next six to
twelve months relative to approximately 1700 stocks covered by The Value Line
Investment Survey. These stocks represent 95 industries and approximately 94%
of the trading volume on all United States stock exchanges.
The Value Line Timeliness(TM) Rank uses a ranking scale of 1 (Highest) to 5
(Lowest). The components of the ranking system are the long-term trend of
earnings, prices, recent earnings and price momentum and earnings surprises. A
computer program combines these elements into a forecast of relative price
behavior of each stock for the six to twelve months ahead relative to all other
stocks in the coverage universe. The Value Line Investment Survey describes its
ranking system as follows:
RANK 1 (HIGHEST): Value Line anticipates this stock to be one of the
best relative price performers during the next six to twelve months
(100 stocks).
RANK 2 (ABOVE AVERAGE): Value Line anticipates better-than-average
price performance (300 stocks).
RANK 3 (AVERAGE): Value Line anticipates price performance in line
with the market (900 stocks).
RANK 4 (BELOW AVERAGE): Value Line anticipates below-average price
performance (300 stocks).
RANK 5 (LOWEST): Value Line anticipates the poorest relative price
performance (100 stocks).
Value Line changes the Timeliness(TM) rank from time to time based on new
earnings reports, changes in the price movement of a stock relative to the
market, a combination of the earnings and price factors, or shifts in the
relative positions of other stocks. The Trust portfolio will not change as a
result of any change in Timeliness(TM) rank during the Trust's life. The
portfolio will remain fixed until termination except as otherwise described in
this prospectus and as provided in the Trust Agreement.
The Timeliness(TM) rank is the view of The Value Line Investment Survey. It is
not the view of the Sponsor. The rank cannot predict future performance and
does not guarantee future performance. The value of Units will fluctuate and
may fall below the price you paid for your Units.
In each year since 1965, stocks ranked 1 or 2 for Timeliness(TM) as a group have
outperformed stocks in groups 3, 4 and 5 combined. The table below shows the
annual total return of the stocks ranked #1 for Timeliness(TM) by The Value Line
Investment Survey at the beginning of each year for 1965 through June 30, 1999.
The table also shows the annual total return for the stocks in the Dow Jones
Industrial Average and the Standard & Poor's 500 Index for each of these years.
These figures do not show the past performance of any unit investment trust and
do not reflect the sales charge and expenses you will pay in connection with
your Units.
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<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURNS
DOW JONES INDUSTRIAL STANDARD & POOR'S VALUE LINE #1
YEAR AVERAGE (DJIA) 500 INDEX (S&P 500) STRATEGY RETURN
---- -------------------- ------------------- ---------------
<S> <C> <C> <C>
1965 10.88% 9.06% 33.60%
1966 -18.94 -13.09 3.10
1967 15.20 20.09 39.20
1968 4.27 7.66 31.20
1969 -15.19 -11.36 -17.70
1970 4.82 0.10 -8.90
1971 6.11 10.79 26.50
1972 14.58 15.63 10.10
1973 -13.20 -17.37 -17.10
1974 -23.64 -29.72 -23.10
1975 44.46 31.55 51.60
1976 22.80 1.15 35.30
1977 -12.91 -11.50 15.80
1978 2.66 1.06 19.80
1979 10.60 12.31 25.60
1980 21.90 29.77 50.20
1981 -3.61 -9.73 -1.90
1982 26.85 14.76 33.70
1983 25.82 17.27 25.20
1984 1.29 1.40 -8.60
1985 33.28 26.33 38.60
1986 27.00 14.62 23.50
1987 5.66 2.03 -1.20
1988 16.03 12.40 16.00
1989 32.09 27.25 28.70
1990 -0.73 -6.56 -6.60
1991 24.19 26.31 56.70
1992 7.39 4.46 10.10
1993 16.87 7.06 18.50
1994 5.03 -1.54 4.60
1995 36.67 34.11 31.30
1996 28.71 20.60 27.00
1997 24.78 31.01 25.80
1998 16.10 26.67 9.30
June 30, 1999 20.45 12.38 10.40
</TABLE>
The table above represents the hypothetical past performance of the Value Line
#1 ranking for Timeliness(TM) group (but not the Trust) and should not be
considered indicative of future results. Further, these results are
hypothetical.
7
<PAGE>
The table assumes that all dividends during a year are reinvested at the end of
that year and do not reflect sales charges, commissions, expenses or taxes.
There can be no assurance that the Trust will perform in a similar manner over
its life or over consecutive rollover periods, if available.
The hypothetical returns shown above are not guarantees of future performance
and should not be used as a predictor of returns to be expected in connection
with the Trust portfolio. It is important to note that the returns shown above
are based on the Value Line #1 ranking for Timeliness(TM) group for each of the
periods involved; however, because the Trust has a term of approximately
fourteen months, the portfolio of the Trust will not be adjusted each year to
reflect the then current stocks ranked #1 for Timeliness(TM) by The Value Line
Investment Survey. Both stock prices (which may appreciate or depreciate) and
dividends (which may be increased, reduced or eliminated) will affect the
returns. A Unitholder in the Trust would not necessarily realize as high a
total return on an investment in the stocks upon which the returns shown above
are based for the following reasons among others: the total return figures do
not reflect sales charges, commissions, Trust expenses or taxes; the Trust is
established at different times of the year; past performance is not indicative
of future results; and Securities are often purchased or sold at prices
different from the closing prices used in buying and selling Units.
As of November 11, 1999, the Value Line #1 Timeliness Strategy was comprised of
the following industry sectors: Technology (45%), Consumer Cyclical (20%),
Consumer Non-Cyclical (19%), Industrial (13%) and Basic Materials (3%).
Information contained in this Prospectus, as further updated, may also be
included from time to time in other prospectuses or in advertising material.
Information on the performance of the Trust strategy may be included from time
to time in other prospectuses or advertising material and may reflect sales
charges and expenses of the Trust. The performance of the Trust may also be
compared to the performance of money managers as reported in SEI Fund Evaluation
Survey (the leading data base of tax-exempt assets consisting of over 4,000
portfolios with total assets of $250 billion) or of mutual funds as reported by
Lipper Analytical Services Inc. (which calculates total return using actual
dividends on ex-dates accumulated for the quarter and reinvested at quarter
end), Money Magazine Fund Watch (which rates fund performance over a specified
time period after sales charge and assuming all dividends reinvested) or
Wiesenberger Investment Companies Service (which states fund performance
annually on a total return basis) or of the New York Stock Exchange Composite
Index, the American Stock Exchange Index (unmanaged indices of stocks traded on
the New York and American Stock Exchanges, respectively), the Dow Jones
Industrial Average (an index of 30 widely traded industrial common stocks) or
the Standard & Poor's 500 Index (an unmanaged diversified index of 500 stocks)
or similar measurement standards during the same period of time.
VALUE LINE PUBLISHING, INC. LICENSING AGREEMENT
The Sponsor has entered into a license agreement with Value Line Publishing, Inc
. (the "License Agreement"), under which the Trust (through the Sponsor) is
granted licenses to use the trademark and tradenames "Value Line", "The Value
Line Investment Survey", or other applicable marks solely in materials relating
to the creation and issuance, marketing and promotion of such Trust and in
accordance with any applicable federal and state securities law to indicate the
source of the Value Line Timeliness Ranking System ("System") 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 Value Line Publishing, Inc. a
quarterly fee equal to that amount described under "Expenses of the Trust." If
the System ceases to be compiled or made available or the anticipated
correlation between Value Line #1 Strategy Trust and the System is not
maintained, the Sponsor may direct that the Trust continue to be operated using
the System as it existed on the last date on which it was available.
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<PAGE>
Value Line Publishing, Inc.'s ("VLPI") only relationship to Ranson is VLPI's
licensing to Ranson of certain VLPI trademarks and trade names and the Value
Line Timeliness Ranking System (the "System"), which is composed by VLPI without
regard to Ranson, this Product or any investor. VLPI has no obligation to take
the needs of Ranson or any investor in the Product into consideration in
composing the System. The Product results may differ from the hypothetical or
published results of the Value Line Timeliness Ranking System. VLPI is not
responsible for and has not participated in the determination of the prices and
composition of the Product or the timing of the issuance for sale of the Product
or in the calculation of the equations by which the Product is to be converted
into cash. VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM USAGE OF
TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND VLPI MAKES NO WARRANTY AS
TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS THAT MAY BE ACHIEVED BY USING THE
SYSTEM OR ANY INFORMATION OR MATERIALS GENERATED THEREFROM. VLPI DOES NOT
WARRANT THAT THE SYSTEM WILL MEET ANY REQUIREMENTS OR THAT IT WILL BE ACCURATE
OR ERROR-FREE. VLPI ALSO DOES NOT GUARANTEE ANY USES, INFORMATION, DATA OR
OTHER RESULTS GENERATED FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY
(I) IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT;
OR (II) FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY
INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND IN NO
EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL,
PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES IN CONNECTION WITH THE
PRODUCT.
"VALUE LINE," "THE VALUE LINE INVESTMENT SURVEY" OR OTHER APPLICABLE MARKS ARE
REGISTERED TRADEMARKS OF VALUE LINE, INC. OR VALUE LINE PUBLISHING, INC. THAT
ARE LICENSED TO RANSON & ASSOCIATES, INC. THIS PRODUCT IS NOT SPONSORED,
ENDORSED, SOLD OR PROMOTED BY VALUE LINE PUBLISHING, INC., VALUE LINE, INC. OR
VALUE LINE SECURITIES, INC. RANSON & ASSOCIATES, INC. IS NOT AFFILIATED WITH
ANY VALUE LINE COMPANY.
RISK FACTORS
Risk is inherent in all investing. Investing in a unit trust involves risk,
including the risk that you may receive little or no return on your investment
or even that you may lose part or all of your investment. You should carefully
consider the following principal risks before you invest. This Trust may offer
a growth component to compliment a diversified investment portfolio-it should
not be your only investment. The Trust is part of a long-term investment
strategy. You may be able to achieve more consistent overall results if you
follow the strategy over a number of years. No one can guarantee that the Trust
will achieve its objective.
PRICE VOLATILITY. The Trust invests in common stocks of corporations. The
value of Units will fluctuate with the value of these stocks and may be more or
less than the price you originally paid for your Units. The market value of
stocks sometimes moves up or down rapidly and unpredictably. A variety of
factors affect market value. These include factors such as changes in the
financial condition or perceptions of a company or an industry, changes in
interest rates or inflation, or changes in government policy or regulations.
Stock markets have experienced increasing volatility recently. Because the
Trust is unmanaged, the Trustee will not sell stocks in response to market
fluctuations as is common in managed investments. As with any investment, we
cannot guarantee that the performance of the Trust will be positive over any
period of time.
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<PAGE>
DIVIDENDS. Stocks represent ownership interests in the issuers and are not
obligations of the issuers. Common stockholders have a right to receive
dividends only after the company has provided for payment of its creditors,
bondholders and preferred stockholders. Common stocks do not assure dividend
payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
YEAR 2000. If computer systems used by the Sponsor, Evaluator, Supervisor,
Trustee or other service providers to the Trust do not properly process date-
related information after December 31, 1999, the resulting difficulties could
adversely impact the Trust. 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 may 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 the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual
issuers. These costs could be substantial. Issuers may report these costs
inconsistently in U.S. and foreign financial markets. All of these issues could
adversely affect the Securities and the Trust.
TECHNOLOGY ISSUERS. The Trust 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
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.
CONSUMER PRODUCTS COMPANIES. The Trust invests in a significant number of
issuers within the consumer goods industry. Any negative impact on this
industry will have a greater impact on the value of Units than on a portfolio
diversified over several industries. These companies generally include
companies in the consumer cyclicals and consumer non-cyclicals sectors. You
should understand the risks of these companies before you invest. These
companies face risks due to cyclicality of revenues and earnings, changing
consumer demands, regulatory
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<PAGE>
restrictions, products liability litigation, extensive competition, foreign
tariffs, foreign exchange rates, transportation costs, the cost of raw
materials, unfunded pension fund liabilities and employee and retiree benefit
costs and financial deterioration resulting from leveraged buy-outs, takeovers
or acquisitions. Because the economic health of consumers greatly impacts these
companies, recession or tightening of consumer credit or spending could
adversely affect these issuers. Pharmaceutical companies face additional risks
such as extensive governmental regulation, lengthy governmental drug review
processes and substantial research and development costs. The failure to obtain
government approval or successful test results for a drug could have a
substantial negative impact on a company. All of these factors can have a
negative impact on the value of your Units.
FEDERAL TAX STATUS
General. The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the Units of the
Trust. The summary is limited to investors who hold the Units as capital assets
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986 (the "Code"). Unitholders should consult
their tax advisers in determining the Federal, state, local and any other tax
consequences of the purchase, ownership and disposition of Units in the Trust.
For purposes of the following discussion and opinion, it is assumed that each
Security is equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1.The Trust is not an association taxable as a corporation for Federal
income tax purposes; each Unitholder will be treated as the owner of a pro
rata portion of each of the assets of the Trust under the Code; and the
income of a Trust will be treated as income of the Unitholders thereof under
the Code. Each Unitholder will be considered to have received his pro rata
share of income derived from the Trust asset when such income is considered
to be received by a Trust regardless of whether such dividends are used to
pay deferred sales charges.
2.Each Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Security when such dividends are
considered to be received by the Trust regardless of whether such dividends
are used to pay a portion of the deferred sales charge. Unitholders will be
taxed in this manner regardless of whether distributions from the Trust are
actually received by the Unitholder or are automatically reinvested (see
"Unitholders-Distribution Reinvestment").
3.Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, taxable exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stocks is received by such
Unitholder as described below). The price a Unitholder pays for his Units,
generally including sales charges, is allocated among each Security held by
the Trust (in proportion to the fair market values thereof on the valuation
date nearest the date the Unitholder purchased his Units) in order to
determine his tax basis for his pro rata portion of each Security held by the
Trust. Unitholders should consult their own tax advisers with regard to the
calculation of basis. For Federal income tax purposes, a Unitholder's pro
rata portion of dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to a Security held by the Trust is taxable as
ordinary income to the extent of such corporation's current and accumulated
"earnings and profits." A Unitholder's pro rata portion of dividends paid on
such Security which exceed such current and accumulated earnings and profits
will first reduce a Unitholder's tax basis in such Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Security
shall generally be treated as capital gain. In general, the holding period
for such capital gain will be determined by the period of time a Unitholder
has held his Units.
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<PAGE>
4.A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss (except in the case of a dealer or a
financial institution). Unitholders should consult their tax advisers
regarding the recognition of such capital gains and losses for Federal income
tax purposes. In particular, a Rollover Unitholder should be aware that a
Rollover Unitholder's loss, if any, incurred in connection with the exchange
of Units for units in the new series of the Trust (the "New Fund") will
generally be disallowed with respect to the disposition of any Securities
pursuant to such exchange to the extent that such Unitholder is considered
the owner of substantially identical securities under the wash sale
provisions of the Code taking into account such Unitholder's deemed ownership
of the securities underlying the Units in the New Fund in the manner
described above, if such substantially identical securities were acquired
within a period beginning 30 days before and ending 30 days after such
disposition. However, any gains incurred in connection with such an exchange
by a Rollover Unitholder would be recognized. Unitholders should consult
their own tax advisers regarding the recognition of gains or losses for
Federal income tax purposes.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge for
the Trust is deferred. The income (or proceeds from redemption) a Unitholder
must take into account for Federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge. Unitholders should consult their own
tax advisers as to the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends (other than corporate
shareholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Final regulations have
been issued which address special rules that must be considered in determining
whether the 46 day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. It should be noted that various
legislative proposals that would affect the dividends received deduction have
been introduced. Unitholders should consult with their tax advisers with
respect to the limitations on and possible modifications to the dividends
received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of a
Trust as miscellaneous itemized deductions subject to this limitation.
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<PAGE>
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the Trust
or Disposition of Units. As discussed above, a Unitholder may recognize taxable
gain (or loss) when a Security is disposed of by the Trust or if the Unitholder
disposes of a Unit (although losses incurred by Rollover Unitholders may be
subject to disallowance as discussed below). 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 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.
In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment in
Units.
If a Unitholder disposes of a Unit, he is deemed thereby to dispose of his
entire pro rata interest in all assets of the Trust involved including his pro
rata portion of all Securities represented by a Unit. The Taxpayer Relief Act
of 1997 (the "1997 Tax Act") includes provisions that treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain (e.g.,
short sales, off-setting notional principal contracts, futures or forward
contracts, or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. Unitholders should consult their own tax advisers with regard to any
constructive sale rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Redemption," under certain
circumstances a Unitholder tendering Units for redemption may request an In Kind
Distribution. A Unitholder may also under certain circumstances request an In
Kind Distribution upon termination of the Trust. See "Administration of the
Trust-Amendment and Termination." The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such In Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Redemption." As previously
discussed, prior to the redemption of Units or the termination of the Trust, a
Unitholder is considered as owning a pro rata portion of each of the Trust's
assets for federal income tax purposes. The receipt of an In Kind Distribution
will result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution with
respect to each Security held by the Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion of the Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by the Trust, such Unitholder will generally
recognize gain or loss based on the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by a Trust.
Because the Trust will own many Securities, a Unitholder who requests an In Kind
Distribution will have to analyze the tax consequences with respect to each
Security owned by a Trust. The amount of taxable gain (or loss)
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<PAGE>
recognized upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Security owned by the Trust. Unitholders who request an In Kind
Distribution are advised to consult their tax advisers in this regard.
As discussed in "Rollover in New Trust," a Unitholder may elect to become a
Rollover Unitholder. To the extent a Rollover Unitholder exchanges his Units
for Units of the New Fund in a taxable transaction, such Unitholder will
recognize gains, if any, but generally will not be entitled to a deduction for
any losses recognized upon the disposition of any Securities pursuant to such
exchange to the extent that such Unitholder is considered the owner of
substantially identical securities under the wash sale provisions of the Code
taking into account such Unitholder's deemed ownership of the securities
underlying the Units in the New Fund in the manner described above, if such
substantially identical securities were acquired within a period beginning 30
days before and ending 30 days after such disposition under the wash sale
provisions contained in Section 1091 of the Code. In the event a loss is
disallowed under the wash sale provisions, special rules contained in Section
1091(d) of the Code apply to determine the Unitholder's tax basis in the
securities acquired. Rollover Unitholders are advised to consult their tax
advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary income
as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by nonresident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
At the termination of the Trust, the Trustee will furnish to each Unitholder of
the Trust a statement containing information relating to the dividends received
by the Trust on the Securities, the gross proceeds received by the Trust from
the disposition of any Security (resulting from redemption or the sale of any
Security), and the fees and expenses paid by the Trust. The Trustee will also
furnish annual information returns to Unitholders and to the Internal Revenue
Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
with regard to United States Federal income tax. Unitholders may be subject to
foreign, state and local taxation in other jurisdictions and should consult
their own tax advisers in this regard. As used herein, the term "U.S.
Unitholder" means an owner of a Unit of the Trust that (a) is (i) for United
States federal income tax purposes a citizen or resident of the United States,
(ii) a
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<PAGE>
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or (iii) an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source or (b) does not qualify as a U.S. Unitholder
in paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable. Unitholders should consult their tax advisers
regarding potential foreign, state or local taxation with respect to the Units.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of the Trust is based
on the aggregate underlying value of the Securities in a Trust plus the initial
sales charge described below. The initial sales charge for the Trust is equal
to the difference between the maximum sales charge and the maximum deferred
sales charge. The maximum sales charge is 2.90% of the Public Offering Price
(equivalent to 2.929% of the net amount invested). The deferred sales charge
will be collected as described in the "Fee Table". The total amount of deferred
sales charge payments will be $0.19 per Unit. Units purchased subsequent to the
initial deferred sales charge payment will be subject to the initial sales
charge and the remaining deferred sales charge payments. Units sold or redeemed
prior to such time as the entire applicable deferred sales charge has been
collected will be assessed the remaining deferred sales charge at the time of
such sale or redemption. 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).
Subsequent to the Initial Date of Deposit, the initial sales charge for the
Trust will vary with changes in the aggregate value of the Securities. The
deferred sales charge payments for the Trust will be paid from funds in the
Capital Account of the Trust, if sufficient, or from the periodic sale of
Securities from the Trust. In addition, a pro rata portion of the cash, if any,
in the Income and Capital Accounts of the Trust will be added to the Public
Offering Price per Unit of the Trust. If Units of the Trust were purchased on
the Initial Date of Deposit and held until the mandatory termination of the
Trust, the total sales charge paid would be that amount set forth below.
The sales charges for the Trust will be reduced on a graduated basis as set
forth in the following table:
<TABLE>
<CAPTION>
Total Percent of
Sales Net Amount
Amount of Purchase* Charge Invested
------------------- ------ ----------
<S> <C> <C>
Less than $100,000 2.90% 2.929%
$100,000-249,999 2.70% 2.727%
$250,000-499,999 2.50% 2.525%
$500,000-999,999 2.30% 2.323%
$1,000,000 or more 2.10% 2.121%
<FN>
- --------------------
* The breakpoint sales charges are also applied on a Unit 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>
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<PAGE>
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 an initial sales charge. Investors may purchase
Units at the Public Offering Price less the initial sales charge through
registered investment advisers, certified financial planners or registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management services, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed.
Unitholders of any Kemper Equity Portfolio Trust series and unitholders of any
Ranson or EVEREN common stock unit investment trust series may utilize their
redemption or termination proceeds to purchase Units of the Trust subject only
to the deferred sales charge described herein.
Unitholders of unaffiliated unit investment trusts having an investment strategy
similar to the investment strategy of the Trust may utilize proceeds received
upon termination or upon redemption immediately preceding termination of such
unaffiliated trust to purchase Units of the Trust subject only to the deferred
sales charge described herein.
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.
As indicated above, the initial Public Offering Price of the Units was
established by dividing the aggregate underlying value of the Securities by the
number of Units outstanding. Such price determination as of the opening of
business on the Initial Date of Deposit was made on the basis of an evaluation
of the Securities in the Trust prepared by the Trustee. After the opening of
business on the Initial Date of Deposit, the Evaluator will appraise or cause to
be appraised daily the value of the underlying Securities as of 3:00 P.M.
Central time on days the New York Stock Exchange is open and will adjust the
Public Offering Price of the Units commensurate with such valuation. Such
Public Offering Price will be effective for all orders received at or prior to
3:00 p.m. Central Time on each such day. Orders received by the Trustee,
Sponsor or any dealer for purchases, sales or redemptions after that time, or on
a day when the New York Stock Exchange is closed, will be held until the next
determination of price.
The value of the Securities is determined on each business day by the Evaluator
based on the closing sale prices on a national securities exchange or The Nasdaq
National Market or by taking into account the same factors referred to under
"Redemption-Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units (25
Units for retirement plans or Uniform Gifts to Minors Act purchases).
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<PAGE>
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
other selling agents will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period of
2.25%. Any reduced sales charge is borne by the selling broker-dealer. 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 amount of the concession or agency
commission paid to broker-dealers. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall Act does
permit certain agency transactions and the banking regulators have indicated
that these particular agency transactions are permitted under such Act. In
addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. The
Sponsor reserves the right to change the discounts from time to time. In
addition to such discounts, the Sponsor may, from time to time, pay or allow an
additional discount, in the form of cash or other compensation, to dealers
employing registered representatives who sell, during a specified time period, a
minimum dollar amount of Units of the 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.
At the discretion of the sponsor, volume incentives can be earned as a marketing
allowance by dealer firms who reach cumulative firm sales or sales arrangement
levels of a specified dollar amount of all series of the Ranson - Value Line #1
Strategy Trust sold in the primary market during the 1999 calendar year (the
"Incentive Period"), as set forth in the table below. For firms that meet the
necessary volume level, volume incentives may be given on all trades involving
applicable trusts originated from or by that firm during such trusts' primary
offering period.
<TABLE>
<CAPTION>
Total dollar amount sold over
Incentive period Volume Incentive
----------------------------- ----------------
<S> <C>
$5,000,000 - $9,999,999 0.05%
$10,000,000 - $24,999,999 0.10%
$25,000,000 - $49,999,999 0.125%
$50,000,000 - $99,999,999 0.15%
$100,000,000 or more 0.20%
</TABLE>
17
<PAGE>
Only sales through the Sponsor qualify for volume incentives and for meeting
minimum requirements. The Sponsor reserves the right to modify or change the
volume incentive schedule at any time and make the determination as to which
firms qualify for the marketing allowance and the amount paid.
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of 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 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 to continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the closing sale prices of the
Securities. While the Sponsor may repurchase Units from time to time, it does
not currently intend to maintain an active secondary market for Units. To the
extent that a market is maintained during the initial offering period, the
prices at which Units will be repurchased will be based upon the aggregate
closing sale prices of the Securities in the Trust. Accordingly, Unitholders
who wish to dispose of their Units should inquire of their broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof. Unitholders who
sell or redeem Units prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the remaining
deferred sales charge at the time of such sale or redemption. The offering
price of any Units resold by the Sponsor will be in accord with that described
in the currently effective prospectus describing such Units. Any profit or loss
resulting from the resale of such Units will belong to the Sponsor. 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 office in the city
of New York and, in the case of Units evidenced by a certificate, by tendering
such certificate to the Trustee, properly endorsed or accompanied by a written
instrument or instruments of transfer in a form satisfactory to the Trustee.
Unitholders must sign the request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the Unitholder(s)
of record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one
18
<PAGE>
has been issued, Units represented by a certificate cannot be redeemed until the
certificate representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee no later than the seventh calendar day
following the day on which a tender for redemption is received (the "Redemption
Date"), or if the seventh calendar day is not a business day, on the first
business day prior thereto, by payment of cash equivalent to the Redemption
Price for the 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 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.
Unitholders who sell or redeem Units prior to such time as the entire deferred
sales charge on such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of such sale or redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the 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.
Unitholders tendering Units for redemption may request a distribution in kind (a
"Distribution In Kind") from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is (1) entitled to receive at least $1,000,000 of proceeds as part of
his or her distribution or if he paid at least $1,000,000 to acquire the Units
being tendered and (2) the Unitholder has elected to redeem at least one month
prior to the Mandatory Termination Date. If the Unitholder meets these
requirements, a Distribution In Kind will be made by the Trustee through the
distribution of each of the Securities of the Trust in book entry form to the
account of the Unitholder's bank or broker-dealer at Depository Trust Company.
The tendering Unitholder shall be entitled to receive whole shares of each of
the Securities comprising the portfolio of the Trust and cash from the Capital
Account equal to the fractional shares to which the tendering Unitholder is
entitled. Unitholders who redeem Units prior to such time as the entire
applicable deferred sales charge on such Units has been collected will be
assessed the amount of the remaining deferred sales charge at the time of such
redemption. The Trustee shall make any adjustments necessary to reflect
differences between the Redemption Price of the Units and the value of the
Securities distributed in kind as of the date of tender. If funds in the
Capital Account are insufficient to cover the required cash distribution to the
tendering Unitholder, the Trustee may sell Securities. The in kind redemption
option may be terminated by the Sponsor at any time.
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To the extent that Securities are redeemed in kind or sold, the size (and
possibly the 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 closing sale price of the Securities in the Trust. On the Initial
Date of Deposit, the Public Offering Price per Unit (which is based on the
closing sale prices of the Securities and includes the sales charge) exceeded
the value at which Units could have been redeemed. While the Trustee has the
power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in 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. 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 National Market, the evaluation will generally be based on the last
sale price on the exchange or Nasdaq (unless the Evaluator deems the price
inappropriate as a basis for evaluation). If the Security is not so listed or,
if so listed and the principal market for the Security is other than on the
exchange or system, the evaluation will generally be made by the Evaluator in
good faith based on the last bid price on the over-the-counter market (unless
the Evaluator deems such price inappropriate as a basis for evaluation) or, if a
bid price is not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any combination
thereof. Any such evaluation made during the initial offering period will be
made based on the ask price of any applicable Securities. See "Public Offering
of Units-Public Offering Price." During the initial offering period, the
redemption price and secondary market repurchase price include estimated
organizational costs.
ROLLOVER IN NEW TRUST
It is expected that a special redemption will be made of all Units of the Trust
held by any Unitholder (a "Rollover Unitholder") who affirmatively notifies the
Trustee in writing that he desires to rollover his Units in the Trust no later
than five business days before the Rollover Date specified in "Essential
Information".
All Units of Rollover Unitholders will be redeemed on the Rollover Date, and the
underlying Securities will be distributed to the Distribution Agent on behalf of
such Rollover Unitholders. On the Rollover Date the Distribution
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Agent will be required to sell all of the underlying Securities on behalf of
Rollover Unitholders. The sales proceeds will be net of brokerage fees,
governmental charges or any expenses involved in the sales.
The Distribution Agent will attempt to sell the Securities as quickly as is
practicable on the Rollover Date. The Sponsor does not anticipate that the
selling period will be longer than one day given that the Securities are usually
highly liquid. The liquidity of any Security depends on the daily trading
volume of the Security and the amount that the Sponsor has available for sale on
any particular day.
Pursuant to an exemptive order from the Securities and Exchange Commission, each
terminating Trust (and the Distribution Agent on behalf of Rollover Unitholders)
may sell Securities to the New Fund if those Securities continue to meet the
individual Trust's strategy. The exemption will enable the Trust to eliminate
commission costs on these transactions. The price for those Securities will be
the closing sale price on the sale date on the exchange where the Securities are
principally traded, as certified by the Sponsor and confirmed by the Trustee of
the Trust.
The Rollover Unitholders' proceeds will be invested in the following subsequent
series of the Trust (the "New Fund"), if then being offered. The proceeds of
redemption will be used to buy New Fund units in the appropriate portfolio as
the proceeds become available.
The Sponsor intends to create the New Fund shortly prior to the Rollover Date,
dependent upon the availability and reasonably favorable prices of the
Securities included in the New Fund portfolio, and it is intended that Rollover
Unitholders will be given first priority to purchase the New Fund units. There
can be no assurance, however, as to the exact timing of the creation of the New
Fund or the aggregate number of units in the trust portfolio which the Sponsor
will create. The Sponsor may, in its sole discretion, stop creating new units
in the trust portfolio at any time it chooses, regardless of whether all
proceeds of the Rollover have been invested on behalf of Rollover Unitholders.
Cash which has not been invested on behalf of the Rollover Unitholders in New
Fund units will be distributed shortly after the Rollover Date.
Any Rollover Unitholder may then be redeemed out of the Trust and become a
holder of an entirely different unit investment trust in the New Fund with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold on the Rollover Date. In
accordance with the Rollover Unitholders' offer to purchase the New Fund units,
the proceeds of the sales (and any other cash distributed upon redemption) will
be invested in the New Fund in the appropriate portfolio at the public offering
price, including the applicable sales charge per Unit (which for Rollover
Unitholders is currently expected to be 1.90% of the Public Offering Price of
the New Fund per unit).
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolio is chosen on the basis of timeliness only for
the near term, at which point a new portfolio is chosen. It is contemplated
that a similar process of redemption and rollover in new unit investment trusts
will be available for the New Fund and each subsequent series of the Fund,
approximately fourteen months after that Series' creation.
There can be no assurance that the redemption and rollover in a new trust will
avoid any negative market price consequences stemming from the trading of large
volumes of securities and of the underlying Securities. The above procedures
may be insufficient or unsuccessful in avoiding such price consequences. In
fact, market price trends may make it advantageous to sell or buy more quickly
or more slowly than permitted by these procedures.
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It should also be noted that Rollover Unitholders may realize taxable capital
gains in the Rollover but, in certain circumstances, will not be entitled to a
deduction for certain capital losses and, due to the procedures for investing in
the subsequent Trust, no cash would be distributed at that time to pay any
taxes. Included in the cash for the Rollover will be any amount of cash
attributable to the last distribution of dividend income; accordingly, Rollover
Unitholders also will not have such cash distributed to pay any taxes. See
"Federal Tax Status". Unitholders who do not inform the Distribution Agent that
they wish to have their Units so redeemed and liquidated will not realize
capital gains or losses due to the Rollover and will not be charged any
additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
the New Fund or any subsequent series of the Fund, without penalty or incurring
liability to any Unitholder. If the Sponsor so decides, the Sponsor shall
notify the Unitholders before the Rollover Date would have commenced. The
Sponsor may modify the terms of the New Fund or any subsequent series of the
Fund. The Sponsor may also modify the terms of the Rollover in the New Fund
upon notice to the Unitholders.
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 can not 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 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 Trust's
minimum investment requirement of 100 Units or $1,000. Fractions of Units, if
any,
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will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Dividend income received by 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 Record and Computation Dates of each year on
a pro rata basis to Unitholders of record as of the preceding Record and
Computation Date. All distributions will be net of applicable expenses. There
is no assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, if the balance of the
Capital Account of the Trust exceeds 1% of the net assets of the Trust, the
balance of such Account will be distributed on the fifteenth day of the
subsequent month to Unitholders of record on the first day of such month.
Proceeds received from the disposition of any of the Securities after a Record
and Computation Date and prior to the following Distribution Date will be held
in the Capital Account and not distributed until the next Distribution Date
applicable to the Capital Account. The Trustee shall be required to make a
distribution from the Capital Account as described under "Essential
Information." The Trustee is not required to pay interest on funds held in the
Capital or Income Accounts (but may itself earn interest thereon and therefore
benefits from the use of such funds). The Trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable Distribution
Date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following Distribution Date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by the Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner
of Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the transfer of Units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of the Trust and, to the extent funds are not sufficient therein, from
the Capital Account of a Trust amounts necessary to pay the expenses of a 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 an initial sales charge. In
addition, Unitholders may elect to have distributions of capital (including
capital gains, if any) or dividends or both
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automatically invested without charge in shares of certain mutual funds advised
by Value Line Asset Management 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 their respective prospectuses, which can be obtained from the
Sponsor upon request. An investor should read the prospectus of the
reinvestment fund selected prior to making the election to reinvest.
Unitholders who desire to have such distributions automatically reinvested
should inform their broker at the time of purchase or should file with the
Program Agent referred to below a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record and Computation Date
applicable to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice is received
by the Program Agent. See "Unitholders-Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its unit investment trust division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of the Trust are required to be audited annually, at the Trust's
expense, by independent public accountants designated by the Sponsor, unless the
Sponsor determines that such an audit would not be in the best interest of the
Unitholders of 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;
B. As to the Capital Account: (1) the dates of disposition of any Securities
and the net proceeds received therefrom; (2) deductions for payment of
applicable taxes and fees and expenses of the Trust held for distribution to
Unitholders of record as of a date prior to the determination; and (3) the
balance remaining after such distributions and deductions expressed both as
a total dollar amount and as a dollar amount representing the pro rata
share of each Unit outstanding on the last business day of such calendar
year; and
C. The following information: (1) a list of the Securities as of the last
business day of such calendar year; (2) the number of Units outstanding on
the last business day of such calendar year; (3) the Redemption Price based
on the last evaluation made during such calendar year; and (4) the amount
actually distributed during such calendar year from the Income and Capital
Accounts separately stated, expressed both as total dollar amounts and as
dollar amounts per Unit outstanding on the Record Dates for each such
distribution.
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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.
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.
The Trust Agreement provides that the Sponsor may (but need not) direct the
Trustee to dispose of a Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of a
Security has declined to such an extent or other such credit factors exist so
that in the opinion of the Sponsor the retention of such Securities would be
detrimental to the Trust. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Securities such as those acquired in connection with a merger or
other transaction. If offered such new or exchanged securities or property, the
Trustee shall reject the offer. However, in the event such securities or
property are nonetheless acquired by the Trust, they may be accepted for deposit
in a Trust and either sold by the Trustee or held in a Trust pursuant to the
direction of the Sponsor. 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 Fund" for failed securities or under
"Unitholders-Distributions to Unitholders" for short term investment in U.S.
Treasury obligations and as provided herein, the acquisition by 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 a Trust tendered for redemption and the payment of expenses.
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee is The Bank of New York, the 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
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and records shall be open to inspection by any Unitholder of the Trust at all
reasonable times during usual business hours. The Trustee shall make such
annual or other reports as may from time to time be required under any
applicable state or federal statute, rule or regulation. The Trustee shall keep
a certified copy or duplicate original of the Trust Agreement on file in its
office available for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the Securities held in
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. If the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. Ranson & Associates, Inc., the Sponsor of the 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, 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.
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THE SUPERVISOR AND EVALUATOR. Ranson & Associates, Inc., the Sponsor, also
serves as Supervisor and Evaluator. The Supervisor and 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 Supervisor and Evaluator no successor has accepted
appointment within thirty days after notice of resignation, the Supervisor and
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 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"
(40% of the aggregate value of the Securities based on the value at the date of
deposit of such Securities into the Trust), 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.
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.
In the event of termination of the Trust, written notice thereof will be sent by
the Trustee to all Unitholders of the Trust. Within a reasonable period after
termination of the Trust 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.
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
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Sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of moneys, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the sale by the Trustee of any Securities. In the
event that the Sponsor shall fail to act, the Trustee may act and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or upon the interest thereof. In addition, the Trust
Agreement contains other customary provisions limiting the liability of the
Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement.
EXPENSES OF THE 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 for any Trust. The Trustee's fee which is calculated
monthly is based on the largest number of Units in 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. 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 outstanding during the calendar year for which such compensation
relates. The Trustee's fees and the Evaluator's fees are deducted from the
Income Account of the Trust to the extent funds are available and then from the
Capital Account. Each such fee may be increased without approval of Unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.
The Trust will pay a license fee to Value Line Publishing, Inc. for use of
certain trademarks.
The following 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
28
<PAGE>
an agent for custody and safeguarding of Securities) and of counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by the
Trustee to protect the Trust or the rights and interests of the Unitholders; (e)
indemnification of the Trustee for any loss, liability or expense incurred by it
in the administration of the Trust not resulting from gross negligence, bad
faith or willful misconduct on its part or its reckless disregard for its
obligations under the Trust Agreement; (f) indemnification of the Sponsor for
any loss, liability or expense incurred in acting in that capacity without gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement; (g) expenditures incurred in contacting
Unitholders upon termination of the Trust; and (h) offering costs incurred after
the end of the initial offering period. 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."
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 has been audited by Allen, Gibbs & Houlik, L.C.,
independent auditors, as set forth in their report appearing elsewhere herein,
and is included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
29
<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUST, SERIES 89
We have audited the accompanying statement of financial condition, including the
Trust portfolio, of Ranson Unit Investment Trusts, Series 89, as of the opening
of business on November 12, 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 is 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 cash, a letter of credit deposited, or the
purchase of Securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates made
by the Sponsor, as well as evaluating the overall 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 89 as of November 12, 1999, in conformity with
generally accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
November 12, 1999
30
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 89
STATEMENT OF FINANCIAL CONDITION
AT THE OPENING OF BUSINESS ON NOVEMBER 12, 1999, THE INITIAL DATE OF DEPOSIT
<S> <C>
TRUST PROPERTY
Contracts to purchase Securities (1) (2) $ 500,111
---------
Total $ 500,111
=========
Number of Units 50,516
=========
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities-
Organizational costs (3) $ 2,526
Deferred sales charge liability (5) 9,598
---------
12,124
---------
Interest of Unitholders-
Cost to investors (4) 505,160
Less: Gross underwriting commission and organizational costs (4) 17,173
---------
Net interest to Unitholders (1) (2) (4) 487,987
---------
Total $ 500,111
=========
<FN>
- --------------------
(1) Aggregate cost of the Securities is based on the closing sale price
evaluations as determined by the Trustee.
(2) Cash or an irrevocable letter of credit issued by Intrust Bank, N.A.,
Wichita, Kansas has been deposited with the Trustee covering the funds
(aggregating $500,611) 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 the Trust. The
amount of these costs are set forth in the "Fee Table." A distribution will
be made as of the close of the initial offering period or six months after
the Initial Date of Deposit (if earlier) 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.
(5) The total sales charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is equal to the difference between
the total sales charge and the deferred sales charge. The total sales charge
is 2.90% (equivalent to 2.929% of the net amount invested). The deferred
sales charge is equal to $0.19 per Unit.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 89
VALUE LINE #1 STRATEGY TRUST, SERIES 6 (NOVEMBER 1999 SERIES)
PORTFOLIO AS OF NOVEMBER 12, 1999
Aggregate
Name of Issuer Number Costs of
of Securities Deposited Industry of Price per Securities
Symbol or Contracted For (1) Group Shares Share ($) to Trust ($) (2)
- ------ ----------------------- -------- ------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
ADCT ADC Telecommunications Inc. Technology 104 48.25000 5,018
ADBE Adobe Systems Inc. Technology 69 72.43750 4,998
ADTN Adtran Inc. Technology 131 38.31250 4,994
ALTR Altera Corp. Technology 74 67.75000 5,014
AOL America Online Inc. Technology 35 142.68750 5,014
AEOS American Eagle Outfitters Consumer, Cyclical 126 39.68750 5,001
AFWY American Freightways Corp. Industrial 293 17.06250 4,999
AMGN Amgen Inc. Consumer, Non-cyclical 55 90.50000 4,978
ADI Analog Devices Technology 78 64.50000 5,031
APPB Applebees International Inc. Consumer, Cyclical 156 32.00000 4,992
AMAT Applied Materials Inc. Technology 46 108.43750 4,991
ABFS Arkansas Best Corp. Industrial 364 13.81250 5,005
AZR Aztar Corp. Consumer, Cyclical 513 9.75000 5,002
BFT Bally Total Fitness Holding Consumer, Cyclical 227 22.00000 4,994
BBY Best Buy Co. Inc. Consumer, Cyclical 92 54.37500 5,003
BMCS BMC Software Inc. Technology 74 67.37500 4,986
CDI CDI Corp. Consumer, Non-cyclical 207 24.18750 5,007
CDWC CDW Computer Centers Inc. Consumer, Cyclical 80 62.75000 5,010
CD Cendant Corporation Consumer, Non-cyclical 333 15.00000 4,995
CHA Champion International Corp. Basic Materials 82 61.18750 5,017
CC Circuit City Stores-Circuit Consumer, Cyclical 110 44.81250 5,005
CSCO Cisco Systems Inc. Technology 60 83.75000 5,025
CTV Commscope Inc. Technology 116 42.93750 4,981
CA Computer Associates Technology 81 62.06250 5,027
CPWR Compuware Corp. Technology 161 31.06250 5,001
CTS CTS Corp. Industrial 73 68.81250 5,023
CY Cypress Semiconductor Corp. Technology 162 30.75000 5,002
DSCP Datascope Corp. Consumer, Non-cyclical 137 36.50000 4,983
DELL Dell Computer Corp. Technology 115 43.43750 4,995
DRYR Dreyer's Grand Ice Cream Inc. Consumer, Non-cyclical 302 16.75000 5,002
ERTS Electronic Arts Inc. Technology 56 89.50000 5,012
EMC EMC Corp-Mass Technology 61 81.75000 5,002
FAST Fastenal Co. Consumer, Cyclical 132 37.68750 4,983
GTW Gateway Inc. Technology 66 76.31250 5,037
GMST Gemstar International Technology 52 95.50000 4,966
HDL Handleman Co. Consumer, Cyclical 324 15.43750 5,002
32
<PAGE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 89
VALUE LINE #1 STRATEGY TRUST, SERIES 6 (NOVEMBER 1999 SERIES)-CONTINUED
Aggregate
Name of Issuer Number Costs of
of Securities Deposited Industry of Price per Securities
Symbol or Contracted For (1) Group Shares Share ($) to Trust ($) (2)
- ------ ----------------------- -------- ------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
HET Harrah's Entertainment Inc. Consumer, Cyclical 181 27.62500 5,000
IDPH Idec Pharmaceuticals Corp. Consumer, Non-cyclical 41 121.43750 4,979
IMNX Immunex Corp. Consumer, Non-cyclical 85 58.50000 4,973
IDTI Integrated Device Technology Inc. Technology 249 20.06250 4,996
INTU Intuit Inc. Technology 152 32.81250 4,988
IVX Ivax Corp. Consumer, Non-cyclical 281 17.81250 5,005
JBL Jabil Circuit Inc. Technology 76 65.87500 5,007
JDSU JDS Uniphase Corp. Technology 28 181.62500 5,086
JMED Jones Pharma Inc. Consumer, Non-cyclical 147 34.25000 4,998
KCP Kenneth Cole Productions Inc. Consumer, Cyclical 110 45.37500 4,991
KRON Kronos Inc. Technology 102 49.00000 4,998
LLTC Linear Technology Corp. Technology 66 75.56250 4,987
LU Lucent Technologies Inc. Technology 67 75.06250 5,029
LCOS Lycos Inc. Technology 89 56.31250 5,012
MACR Macromedia Inc. Technology 86 58.06250 4,988
MWL Mail-Well Inc. Consumer, Non-cyclical 376 13.31250 5,006
MEDI Medimmune Inc. Consumer, Non-cyclical 50 100.50000 5,025
MCHP Microchip Technology Inc. Technology 77 65.00000 5,015
MNMD Minimed Inc. Consumer, Non-cyclical 57 87.87500 5,005
MPS Modis Professional Services Inc. Consumer, Non-cyclical 471 10.62500 5,004
MLI Mueller Industries Inc. Industrial 152 33.00000 5,016
NCI Navigant Consulting Co. Consumer, Non-cyclical 198 25.25000 5,000
NOK Nokia OYJ Technology 42 118.12500 4,961
NT Nortel Networks Corporation Technology 67 74.12500 4,975
OCQ Oneida Ltd. Consumer, Cyclical 209 23.93750 5,003
ORCL Oracle Corporation Technology 81 62.06250 5,027
OCA Orthodontic Centers Of America Consumer, Non-cyclical 390 12.81250 4,997
PKE Park Electrochemical Corp. Industrial 136 36.68750 4,990
PMCS PMC - Sierra Inc. Technology 48 104.12500 4,998
POP Pope & Talbot Inc. Basic Materials 346 14.43750 4,995
QCOM Qualcomm Inc. Technology 14 345.50000 4,837
ROAD Roadway Express Inc. Industrial 240 20.87500 5,010
ROP Roper Industries Inc. Industrial 145 34.43750 4,993
SANM Sanmina Corp. Industrial 46 107.87500 4,962
SFA Scientific-Atlanta Inc. Technology 82 60.93750 4,997
SRM Sensormatic Electronics Corp. Industrial 293 17.06250 4,999
SEBL Siebel Systems Inc. Technology 41 123.31250 5,048
33
<PAGE>
<CAPTION>
RANSON UNIT INVESTMENT TRUSTS, SERIES 89
VALUE LINE #1 STRATEGY TRUST, SERIES 6 (NOVEMBER 1999 SERIES)-CONTINUED
Aggregate
Name of Issuer Number Costs of
of Securities Deposited Industry of Price per Securities
Symbol or Contracted For (1) Group Shares Share ($) to Trust ($) (2)
- ------ ----------------------- -------- ------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
SLR Solectron Corp. Industrial 56 88.93750 4,981
SPGLA Spiegel Inc. Consumer, Cyclical 377 13.25000 4,995
STN Station Casinos Inc. Consumer, Cyclical 205 24.43750 5,010
STTX Steel Technologies Inc. Basic Materials 426 11.75000 5,006
SUNW Sun Microsystems Inc. Technology 44 114.75000 5,049
SYBS Sybase Inc. Technology 311 16.06250 4,995
SYMC Symantec Corp. Technology 105 47.75000 5,014
TAN Tandy Corp. Consumer, Cyclical 70 69.37500 5,001
TLAB Tellabs Inc. Technology 74 67.68750 5,009
TXN Texas Instruments Inc. Technology 49 101.18750 4,970
TIF Tiffany & Co. Consumer, Cyclical 78 64.00000 4,992
TBL Timberland Company Consumer, Cyclical 105 47.56250 4,994
TTN Titan Corp. Technology 221 22.62500 5,000
TYC Tyco International Ltd. Industrial 114 43.87500 5,016
UNH United Healthcare Corp. Consumer, Non-cyclical 95 52.68750 5,005
USM US Cellular Corp. Technology 53 94.87500 5,038
USON US Oncology Inc. Consumer, Non-cyclical 1,255 4.00000 5,000
USFC Usfreightways Corporation Industrial 112 44.68750 4,998
VISX Visx Inc. Consumer, Non-cyclical 73 68.31250 4,969
VTSS Vitesse Semiconductor Corp. Technology 93 53.56250 4,976
WAT Waters Corp. Industrial 103 48.50000 4,996
OATS Wild Oats Markets Inc. Consumer, Non-cyclical 146 34.25000 4,991
WSM Williams-Sonoma Inc. Consumer, Cyclical 86 58.37500 5,020
WGO Winnebago Industries Consumer, Cyclical 314 15.93750 5,004
WPPGY WPP Group Plc Consumer, Cyclical 40 125.75000 5,030
XLNX Xilinx Inc. Technology 55 91.56250 5,036
YHOO Yahoo Inc. Technology 26 192.93750 5,021
--------
$500,111
========
<FN>
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 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 November 11, 1999 and all have an
expected settlement date of November 16, 1999 (see "The Fund").
34
<PAGE>
(2) The market value of each Security is based on the closing sale price on a
national securities exchange if the Security is listed thereon or, if not so
listed, then on the over-the-counter market, in each case, on the day prior
to the Initial Date of Deposit. As of the Initial Date of Deposit other
information regarding the Securities in the Trust is as follows:
Cost to Profit (loss)
Sponsor to Sponsor
------- -------------
$500,611 $(500)
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
CONTENTS PAGE
----
<S> <C>
Essential Information 2
Fee Table 4
The Fund 5
The Trust Portfolio 6
Value Line Publishing Inc. Licensing Agreement 8
Risk Factors 9
Federal Tax Status 11
Public Offering of Units 15
Market for Units 18
Redemption 18
Rollover in New Trust 20
Retirement Plans 22
Unitholders 22
Investment Supervision 25
Administration of the Trust 25
Expenses of the Trust 28
Legal Opinions 29
Independent Auditors 29
Report of Independent Auditors 30
Statement of Financial Condition 31
Portfolio 32
Notes to Portfolio 34
</TABLE>
--------------------
When Units of the Trust are no longer available this prospectus may be used as a
preliminary prospectus for a future Trust. If this prospectus is used for a
future Trust, you should note the following:
The information in this prospectus is not complete with respect to future Trust
series and may be changed. No person may sell Units of a future Trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell Units and is not
soliciting an offer to buy Units in any state where the offer or sale is not
permitted.
Ranson & Associates, Inc.
250 N. Rock Road, Suite 150
Wichita, KS 67206-2241
<PAGE>
- --------------------
RANSON
UNIT
INVESTMENT
TRUSTS
- --------------------
VALUE LINE #1
STRATEGY TRUST
[LOGO]
SERIES 6
----------------------------
PROSPECTUS NOVEMBER 12, 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 on Form S-6 for Ranson Unit
Investment Trusts, 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.
3.2. Opinion of counsel to the Sponsor as to the tax status of the securities
being registered.
4.1. Consent of Independent Auditors.
S-1
<PAGE>
SIGNATURES
The Registrant, Ranson Unit Investment Trusts, Series 89 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 89 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 12th day of
November, 1999.
RANSON UNIT INVESTMENT TRUSTS, SERIES 89,
Registrant
By: RANSON & ASSOCIATES, INC.,
Depositor
By: /s/ ALEX R. MEITZNER
---------------------------------------
Alex R. Meitzner
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on November 12, 1999 by the following persons,
who constitute a majority of the Board of Directors of Ranson & Associates, Inc.
SIGNATURE TITLE
- ---------------------- -----------------------
/s/ DOUGLAS K. ROGERS Executive Vice )
- ---------------------- President and Director )
Douglas K. Rogers
/s/ ALEX R. MEITZNER Chairman of the Board )
- ---------------------- of Directors )
Alex R. Meitzner
/s/ ROBIN K. PINKERTON President, Secretary, )
- ---------------------- Treasurer and Director ) /s/ 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 89
TRUST AGREEMENT
This Trust Agreement dated as of November 12, 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. 333-90171) as filed with the Securities and
Exchange Commission on November 12, 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 term "Deferred Sales Charge" shall mean the "deferred sales
charge" as described in the Prospectus.
-1-
<PAGE>
(4) The terms "Income Account Record Date" and "Capital Account Record
Date" shall mean the dates set forth under "Essential Information-Record
and Computation Dates" in the Prospectus.
(5) The terms "Income Account Distribution Date" and "Capital Account
Distribution Date" shall mean the dates set forth under "Essential
Information-Distribution Dates" in the Prospectus.
(6) The term "Initial Date of Deposit" shall mean the date of this Trust
Agreement as set forth above.
(7) The number of Units of the Trust referred to in Section 2.03 is as
set forth under "Essential Information-Number of Units" in the Prospectus.
(8) For the purposes of Section 6.01(g), the liquidation amount is the
amount set forth under "Essential Information-Minimum Value of Trust under
which Trust Agreement may be Terminated" in the Prospectus.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed.
RANSON & ASSOCIATES, INC.,
Depositor
By /s/ ROBIN K. PINKERTON
---------------------------
President
THE BANK OF NEW YORK,
Trustee
By /s/ JEFFREY BIESELIN
---------------------------
Vice President
<PAGE>
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS
SERIES 89
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
November 12, 1999
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts, Series 89
----------------------------------------
Gentlemen:
We have served as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts, Series 89 (the "Fund"), in
connection with the preparation, execution and delivery of the Trust Agreement
dated the date of this opinion between Ranson & Associates, Inc., as Depositor,
and The Bank of New York, as Trustee, pursuant to which the Depositor has
delivered to and deposited the Securities listed in the Schedule to the Trust
Agreement with the Trustee and pursuant to which the Trustee has issued to or on
the order of the Depositor a certificate or certificates representing all the
Units of fractional undivided interest in, and ownership of, the Fund, created
under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the execution
and issuance of certificates evidencing the Units of the Fund have been
duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly
executed and delivered by the Depositor and the Trustee in accordance with
the aforementioned Trust Agreement, will constitute valid and binding
obligations of the Fund and the Depositor in accordance with the terms
thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-90171) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
November 12, 1999
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Ranson Unit Investment Trusts, Series 89
----------------------------------------
Gentlemen:
We have acted as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts, Series 89 (the "Fund"), in
connection with the issuance of Units of fractional undivided interest in the
Fund, under a Trust Agreement dated November 12, 1999 (the "Indenture") between
Ranson & Associates, Inc., as Depositor, and The Bank of New York, as Trustee.
The Fund is comprised of a unit investment trust, Value Line #1 Strategy Trust,
Series 6 (the "Trust").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of equity securities
(the "Equity Securities") as set forth in the Prospectus. For purposes of the
following discussion and opinion, it is assumed that each Equity Security is
equity for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
United States Federal income tax law:
(i) The Trust is not an association taxable as a corporation but
will be governed by the provisions of subchapter J (relating to
trusts) of chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata share
of each asset of the Trust in the proportion that the number of Units
held by him bears to the total number of Units outstanding. Under
subpart E, subchapter J of chapter 1 of the Code, income of a Trust
will be treated as income of each Unitholder in the proportion
described, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the
Trustee. Each Unitholder will be considered to have received his pro
rata share of income derived from each Trust asset when such income is
considered to be received by the Trust. A Unitholder's pro rata
portion of distributions of cash or property by a corporation with
respect to an Equity Security ("dividends" as defined by Section 316
<PAGE>
-2-
of the Code ) are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." A
Unitholder's pro rata portion of dividends which exceed such current
and accumulated earnings and profits will first reduce the
Unitholder's tax basis in such Equity Security, and to the extent that
such dividends exceed a Unitholder's tax basis in such Equity
Security, shall be treated as gain from the sale or exchange of
property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of
each Equity Security held by the Trust (in proportion to the fair
market values thereof on the valuation date closest to the date the
Unitholder purchases his Units), in order to determine his tax basis
for his pro rata portion of each Equity Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder (subject to
various nonrecognition provisions under the Code) upon redemption or
sale of his Units, except to the extent an in kind distribution of
stock is received by such Unitholder from the Trust as discussed
below. Such gain or loss is measured by comparing the proceeds of
such redemption or sale with the adjusted basis of his Units. Before
adjustment, such basis would normally be cost if the Unitholder had
acquired his Units by purchase. Such basis will be reduced, but not
below zero, by the Unitholder's pro rata portion of dividends with
respect to each Equity Security which are not taxable as ordinary
income.
(v) If the Trustee disposes of a Trust asset (whether by sale,
taxable exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder (subject
to various nonrecognition provisions under the Code) and the amount
thereof will be measured by comparing the Unitholder's aliquot share
of the total proceeds from the transaction with his basis for his
fractional interest in the asset disposed of. Such basis is
ascertained by apportioning the tax basis for his Units (as of the
date on which his Units were acquired) among each of the Trust assets
of the Trust (as of the date on which his Units were acquired) ratably
according to their values as of the valuation date nearest the date on
which he purchased such Units. A Unitholder's basis in his Units and
of his fractional interest in each Trust asset must be reduced, but
not below zero, by the Unitholder's pro rata portion of dividends with
respect to each Equity Security which are not taxable as ordinary
income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or upon
the termination of the Trust. As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust's assets.
The receipt of an in kind distribution will result in a Unitholder
receiving an undivided interest in whole shares of stock and possibly
cash. The potential federal income tax consequences which may occur
under an in kind distribution with respect to each Equity Security
owned by the Trust will depend upon whether or not a Unitholder
receives cash in addition to Equity Securities. An "Equity Security"
for this purpose is a particular class of stock issued by a particular
<PAGE>
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corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Equity Securities in exchange for his or her
pro rata portion in the Equity Securities held by the Trust. However,
if a Unitholder also receives cash in exchange for a fractional share
of an Equity Security held by the Trust, such Unitholder will
generally recognize gain or loss based upon the difference between the
amount of cash received by the Unitholder and his tax basis in such
fractional share of an Equity Security held by the Trust. The total
amount of taxable gains (or losses) recognized upon such redemption
will generally equal the sum of the gain (or loss) recognized under
the rules described above by the redeeming Unitholder with respect to
each Equity Security owned by the Trust.
A domestic corporation owning Units in the Trust may be eligible for the
70% dividends received deduction pursuant to Section 243(a) of the Code with
respect to such Unitholder's pro rata portion of dividends received by the Trust
(to the extent such dividends are taxable as ordinary income and are
attributable to domestic corporations), subject to the limitations imposed by
Sections 246 and 246A of the Code.
Section 67 of the Code provides that certain itemized deductions, such as
investment expenses, tax return preparation fees and employee business expenses
will be deductible by individuals only to the extent they exceed 2% of such
individual's adjusted gross income. Unitholders may be required to treat some
or all of the expenses of the Trust as miscellaneous itemized deductions subject
to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of the
pro rata interest in an Equity Security is either sold by the Trust or redeemed
or when a Unitholder disposes of his Units in a taxable transaction, in each
case for an amount greater (or less) than his tax basis therefor (subject to
various non-recognition provisions of the Code).
It should be noted that payments to the Trust of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes and Unitholders should consult their tax advisers regarding
the potential tax consequences relating to the payment of any such withholding
taxes by the Trust. Any dividends withheld as a result thereof will
nevertheless be created as income to the Unitholders. Because under the grantor
trust rules, an investor is deemed to have paid directly his share of foreign
taxes that have been paid or accrued, if any, an investor may be entitled to a
foreign tax credit or deduction for United States tax purposes with respect to
such taxes. A required holding period is imposed for such credits.
Any gain or loss recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
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The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours,
CHAPMAN AND CUTLER
MJK/md
EXHIBIT 4.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We have issued our report dated November 12, 1999 on the statement of
financial condition and related portfolio of Ranson Unit Investment Trusts,
Series 89 as of November 12, 1999 contained in the Registration Statement on
Form S-6 and in the Prospectus. We consent to the use of our report in the
Registration Statement and in the Prospectus and to the use of our name as it
appears under the caption "Independent Auditors".
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
November 12, 1999
