<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 21, 1994
REGISTRATION NO. 33-53445
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT NO. 1
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------
A. EXACT NAME OF TRUST:
Equity Securities Trust, Series 5
B. NAME OF DEPOSITOR:
Bear, Stearns & Co. Inc.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY OF COMMENTS TO:
Peter J. DeMarco MICHAEL R. ROSELLA, Esq.
Managing Director Battle Fowler
Bear, Stearns & Co. Inc. 280 Park Avenue
245 Park Avenue New York, New York 10017
New York, New York 10167 (212) 856-6858
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Equity Securities Trust, Series 5 is
being registered under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940, as amended, and Rule 24f-2
thereunder.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE SECURITIES
BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
$500* (as required by Rule 24f-2)
H. APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the Registration
Statement.
/ / Check if it is proposed that this filing will become effective
immediately upon filing pursuant to Rule 487.
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* Previously paid.
<PAGE>
EQUITY SECURITIES TRUST, SERIES 5
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404 OF REGULATION C
UNDER THE SECURITIES ACT OF 1933
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTION AS
TO THE PROSPECTUS IN FORM S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
------------------------------------- -------------------------------------
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust.................... Front cover of Prospectus
(b) Title of securities issued....... Front cover of Prospectus
2. Name and address of each depositor... The Sponsor
3. Name and address of trustee.......... The Trustee
4. Name and address of principal
underwriters....................... Distribution of Units
5. State of organization of trust....... Organization
6. Execution and termination of trust
agreement.......................... Trust Agreement, Amendment and
Termination
7. Changes of name...................... Not Applicable
8. Fiscal year.......................... Not Applicable
9. Litigation........................... None
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer
securities......................... Certificates
(b) Cumulative or distributive
securities......................... Interest and Principal Distributions
(c) Redemption....................... Trustee Redemption
(d) Conversion, transfer, etc........ Certificates, Sponsor's Repurchase,
Trustee Redemption
(e) Periodic payment plan............ Not Applicable
(f) Voting rights.................... Trust Agreement, Amendment and
Termination
(g) Notice to certificateholders..... Records, Portfolio, Substitution of
Securities, Trust Agreement,
Amendment and Termination, The
Sponsor, The Trustee
(h) Consents required................ Trust Agreement, Amendment and
Termination
(i) Other provisions................. Tax Status
11. Type of securities comprising
units.............................. Objectives, Portfolio, Portfolio
Summary
12. Certain information regarding
periodic payment certificates...... Not Applicable
13. (a) Load, fees, expenses, etc........ Summary of Essential Information,
Public Offering Price, Market for
Units, Volume and Other Discounts,
Sponsor's Profits, Trust Expenses
and Charges
(b) Certain information regarding
periodic payment certificates... Not Applicable
(c) Certain percentages.............. Summary of Essential Information,
Public Offering Price, Market for
Units, Volume and Other Discounts
i
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
------------------------------------- -------------------------------------
(d) Price differences................ Volume and Other Discounts,
Distribution of Units
(e) Other loads, fees, expenses...... Certificates
(f) Certain profits receivable by
depositors, principal
underwriters, trustee or
affiliated persons.............. Sponsor's Profits, Portfolio Summary
(g) Ratio of annual charges to
income............................. Not Applicable
14. Issuance of trust's securities....... Organization, Certificates
15. Receipt and handling of payments from
purchasers......................... Organization
16. Acquisition and disposition of
underlying securities.............. Organization, Objectives, Portfolio,
Portfolio Supervision
17. Withdrawal or redemption............. Comparison of Public Offering Price,
Sponsor's Repurchase Price and
Redemption Price, Sponsor's
Repurchase, Trustee Redemption
18. (a) Receipt, custody and disposition
of income.......................... Distributions, Dividend and Principal
Distributions, Portfolio
Supervision
(b) Reinvestment of distributions.... Not Applicable
(c) Reserves or special funds........ Dividend and Principal Distributions
(d) Schedule of distributions........ Not Applicable
19. Records, accounts and reports........ Records
20. Certain miscellaneous provisions of
trust agreement....................
(a) Amendment........................ Trust Agreement, Amendment and
Termination
(b) Termination...................... Trust Agreement, Amendment and
Termination
(c) and (d) Trustee, removal and
successor.......................... The Trustee
(e) and (f) Depositor, removal and
successor.......................... The Sponsor
21. Loans to security holders............ Not Applicable
22. Limitations on liability............. The Sponsor, The Trustee, The
Evaluator
23. Bonding arrangements................. Part II - Item A
24. Other material provisions of trust
agreement.......................... Not Applicable
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor............ The Sponsor
26. Fees received by depositor........... Not Applicable
27. Business of depositor................ The Sponsor
28. Certain information as to officials
and affiliated persons of
depositor.......................... Not Applicable
29. Voting securities of depositor....... Not Applicable
30. Persons controlling depositor........ Not Applicable
31. Payments by depositor for certain
services rendered to trust......... Not Applicable
32. Payments by depositor for certain
other services rendered to trust... Not Applicable
33. Remuneration of employees of
depositor for certain services
rendered to trust.................. Not Applicable
ii
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
------------------------------------- -------------------------------------
34. Remuneration of other persons for
certain services rendered to
trust.............................. Not Applicable
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's securities by
states............................. Distribution of Units
36. Suspension of sales of trust's
securities......................... Not Applicable
37. Revocation of authority to
distribute......................... None
38. (a) Method of distribution........... Distribution of Units
(b) Underwriting agreements.......... Distribution of Units
(c) Selling agreements............... Distribution of Units
39. (a) Organization of principal
underwriters....................... The Sponsor
(b) N.A.S.D. membership of principal
underwriters.................... The Sponsor
40. Certain fees received by principal
underwriters....................... The Sponsor
41. (a) Business of principal
underwriters....................... The Sponsor
(b) Branch offices of principal
underwriters....................... The Sponsor
(c) Salesmen of principal
underwriters....................... The Sponsor
42. Ownership of trust's securities by
certain persons.................... Not Applicable
43. Certain brokerage commissions
received by principal
underwriters....................... Not Applicable
44. (a) Method of valuation.............. Summary of Essential Information,
Market for Units, Offering Price,
Accrued Interest, Volume and Other
Discounts, Distribution of Units,
Comparison of Public Offering
Price, Sponsor's Repurchase Price
and Redemption Price, Sponsor's
Repurchase, Trustee Redemption
(b) Schedule as to offering price.... Summary of Essential Information
(c) Variation in offering price to
certain persons.................... Distribution of Units, Volume and
Other Discounts
45. Suspension of redemption rights...... Not Applicable
46. (a) Redemption valuation............. Comparison of Public Offering Price,
Sponsor's Repurchase Price and
Redemption Price, and Redemption
Price, and Trustee Redemption
(b) Schedule as to redemption
price.............................. Summary of Essential Information
47. Maintenance of position in underlying
securities......................... Comparison of Public Offering Price,
Sponsor's Repurchase Price and
Redemption Price, Sponsor's
Repurchase, Trustee Redemption
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of
trustee............................ The Trustee
49. Fees and expenses of trustee......... Trust Expenses and Charges
50. Trustee's lien....................... Trust Expenses and Charges
iii
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
------------------------------------- -------------------------------------
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's
securities......................... None
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities...................... Objectives, Portfolio, Portfolio
Supervision, Substitution of
Securities
(b) Transactions involving
elimination of underlying
securities...................... Not Applicable
(c) Policy regarding substitution or
elimination of underlying
securities...................... Substitution of Securities
(d) Fundamental policy not otherwise
covered............................ Not Applicable
53. Tax status of trust.................. Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten
years.............................. Not Applicable
55. Hypothetical account for issuers of
periodic payment plans............. Not Applicable
56. Certain information regarding
periodic payment certificates...... Not Applicable
57. Certain information regarding
periodic payment plans............. Not Applicable
58. Certain other information regarding
periodic payment plans............. Not Applicable
59. Financial statements (Instruction
1(c) to Form S-6).................. Statement of Financial Condition
iv
<PAGE>
[LOGO] EQUITY SECURITIES TRUST SERIES 5
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REIT Series
The Trust is a unit investment trust designated Equity Securities Trust, Series
5 ('Trust'). The Sponsor is Bear, Stearns & Co. Inc. The objectives of the Trust
are to seek to achieve capital appreciation together with a high level of
current income. The Sponsor cannot give assurance that the Trust's objectives
can be achieved. The Trust contains an underlying portfolio of common stocks
issued by domestic real estate investment trusts ('REITs') and contracts and
funds for the purchase of such securities (collectively, the 'Securities').
There are certain risks inherent in an investment in REITs. See 'Risk
Considerations' in Part A and Part B of this Prospectus. The Trust will
terminate approximately three years after the initial Date of Deposit.
Minimum Purchase: 100 Units
This Prospectus consists of two parts. Part A contains the Summary of Essential
Information including descriptive material relating to the Trust and the
Statement of Condition of the Trust. Part B contains general information about
the Trust. Part A may not be distributed unless accompanied by Part B.
PLEASE READ AND RETAIN BOTH PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED JULY 21, 1994
<PAGE>
EQUITY SECURITIES TRUST, SERIES 5, REIT SERIES
SUMMARY OF ESSENTIAL INFORMATION AS OF JULY 20, 1994*
<TABLE>
<S> <C>
DATE OF DEPOSIT: JULY 21, 1994
AGGREGATE VALUE OF SECURITIES............. $158,200
AGGREGATE VALUE OF SECURITIES PER 100
UNITS................................... $961.00
NUMBER OF UNITS........................... 16,462
FRACTIONAL UNDIVIDED INTEREST IN TRUST.... 1/16,462
PUBLIC OFFERING PRICE+
Aggregate Value of Securities in
Trust................................. $158,200
Divided By 16,462 Units (times 100)..... $961.00
Plus Sales Charge of 3.9% of Public
Offering Price per 100 Units.......... $39.00
Public Offering Price per 100 Units+++.. $1,000.00
SPONSOR'S REPURCHASE PRICE AND REDEMPTION
PRICE PER 100 UNITS..................... $961.00
EXCESS OF PUBLIC OFFERING PRICE OVER
REDEMPTION PRICE PER 100 UNITS.......... $39.00
</TABLE>
EVALUATION TIME: 4:00 p.m. New York Time.
MINIMUM PRINCIPAL DISTRIBUTION: $1.00 per 100 Units
LIQUIDATION PERIOD: Beginning 60 days prior to the
Mandatory Termination Date.
MINIMUM VALUE OF TRUST: The Trust may be terminated if
the value of the Trust is less than 40% of the
aggregate value of the Securities at the completion
of the Deposit Period.
MANDATORY TERMINATION DATE: The earlier of September
21, 1997 or the disposition of the last Security in
the Trust.
TRUSTEE: United States Trust Company of New York.
TRUSTEE'S ANNUAL FEE: $.90 per 100 Units outstanding.
OTHER ANNUAL FEES AND EXPENSES: $.35 per 100 Units
outstanding
SPONSOR: Bear, Stearns & Co. Inc.
SPONSOR'S ANNUAL FEE: Maximum of $.25 per 100 Units
outstanding (see 'Trust Expenses and Charges' in
Part B).
RECORD DATE++: First of each month
DIVIDEND DISTRIBUTION DATE++: Fifteenth of each month
- - ------------------
* The business day prior to the initial Date of Deposit. The initial Date of
Deposit is the date on which the Trust Agreement was signed and the deposit of
Securities with the Trustee made.
+ Per 100 units.
++ The first dividend distribution will be made on September 15, 1994 (the
'First Payment Date') to all Certificateholders of record on September 1, 1994
(the 'First Record Date'). The regular monthly payment will begin on October 15,
1994.
+++ On the initial Date of Deposit there will be no cash in the Income or
Principal Accounts. Anyone purchasing Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
DESCRIPTION OF PORTFOLIO
Number of Issues: 38 (38 issuers)
Equity REITs: 38 (100% of the initial aggregate value of Securities)
(NYSE 97.7%; AMEX 2.3%)
Issues by Property Type:
<TABLE>
<S> <C>
Diversified Properties.................... 10.03%
Factory Outlet Centers.................... 5.00%
Manufactured Homes........................ 4.08%
Multi-Family Housing...................... 30.88%
Office/Industrial......................... 18.29%
Regional Malls............................ 19.16%
Shopping Centers.......................... 12.56%
-------
100%
</TABLE>
A-2
<PAGE>
THE TRUST
The Trust is a unit investment trust designated Equity Securities Trust, Series
5 (the 'Trust'). The Sponsor is Bear, Stearns & Co. Inc. The Trust contains an
underlying portfolio of common stocks issued by domestic real estate investment
trusts ('REITs') and contracts and funds for the purchase of such securities
(collectively, the 'Securities'). The objectives of the Trust are to seek to
achieve capital appreciation together with a high level of current income. The
Trust seeks to achieve its objectives by investing in a fixed, diversified
portfolio of REITs. The Trust's Securities will be issued by a geographically
diverse number of issuers and, in the opinion of the Sponsor, will offer an
opportunity for the Trust to achieve its objectives during the life of the
Trust. The Sponsor cannot give assurance that the Trust's objectives can be
achieved. A REIT is a creation of the federal income tax law and, therefore, its
structure and operation must conform to certain requirements of the Internal
Revenue Code. In general, a REIT must hold at least 75% of its total assets in
real estate assets and distribute at least 95% of its taxable income (without
regard to any net capital gains) on an annual basis. There are two principal
types of REITs: those which hold 75% of their invested assets in the ownership
of real estate and benefit from the underlying net rental income generated from
the properties ('Equity REITs') and those which hold 75% of their invested
assets in mortgages which are secured by real estate assets and benefit
predominantly from the difference between the interest income on the mortgage
loans and the interest expense on the capital used to finance the loans
('Mortgage REITs'). A third type combines the investment strategies of the
Equity REITs and the Mortgage REITs ('Hybrid REITs'). In selecting Securities
for the Trust, the Sponsor normally will consider the following factors, among
others: (1) the Sponsor's own evaluations of the market value of the underlying
assets and business of the issuers of the Securities; (2) the dividend income
generated by the Securities; (3) the potential for capital appreciation for the
Securities; (4) the prices of the Securities relative to other comparable
securities; (5) whether the Securities are entitled to the benefits of
protective conditions; (6) the cash flow quality and growth potential of the
Securities; (7) the management quality of the issuers of the Securities; and (8)
the diversification of the Trust's portfolio as to issuers, product type and
geographic focus. There are certain risks inherent in an investment in a
portfolio of REITs. See 'Risk Considerations' in this Part A and in Part B. The
Trust will terminate three years after the initial Date of Deposit. Upon
termination, Certificateholders may elect to receive their terminating
distributions in cash, in the form of in-kind distributions of the Trust's
Securities or may utilize their terminating distributions to purchase units of a
future series of the Trust at a reduced sales charge. See 'Termination' in this
Part A and 'Trust Administration--Trust Termination' in Part B. No issues have
been deposited in the Trust and 38 issues are represented by the Sponsor's
contracts to purchase, which are expected to settle on or about July 27, 1994.
With the deposit of the Securities in the Trust on the initial Date of Deposit,
the Sponsor established a proportionate relationship among the aggregate value
of the specified Securities in the Trust. During the 90 days subsequent to the
initial Date of Deposit, the Sponsor may, but is not obligated to, deposit from
time to time additional Securities in the Trust ('Additional Securities') or
contracts to purchase Additional Securities, maintaining to the extent
practicable the original proportionate relationship of the number of shares of
each Security in the Trust portfolio immediately prior to such deposit, thereby
creating additional Units which will be offered to the public by means of this
Prospectus. These additional Units will each represent, to the extent
practicable, an undivided interest in the same number and type of securities of
identical issuers as are represented by Units issued on the initial Date of
Deposit. It may not be possible to maintain the exact original proportionate
relationship among the number of shares of Securities in the Trust portfolio on
the initial Date of Deposit with the deposit of Additional Securities because
of, among other reasons, purchase requirements, changes in prices, or the
unavailability of Securities. Deposits of Additional Securities in the Trust
subsequent to the 90-day period following the initial Date of Deposit (the
'Deposit Period') must replicate exactly the proportionate relationship among
the number of shares of Securities in the Trust Portfolio at the end of the
initial 90-day period. The number and identity of Securities in the Trust will
be adjusted to reflect the disposition of Securities and/or the receipt of a
stock dividend, a stock split or other distribution with respect to such
Securities or the reinvestment of the proceeds distributed to
Certificateholders. The Portfolio of the Trust may change slightly based on such
disposition and reinvestment. Securities received in exchange for shares will be
similarly treated. Substitute
A-3
<PAGE>
Securities may be acquired under specified conditions when Securities originally
deposited in the Trust are unavailable (see 'The Trust--Substitution of
Securities' in Part B). As additional Units are issued by the Trust as a result
of the deposit of Additional Securities by the Sponsor, the aggregate value of
the Securities in the Trust will be increased and the fractional undivided
interest in the Trust represented by each unit will be decreased. As of the Date
of Deposit, Units in the Trust represent an undivided interest in the principal
and net income of the Trust in the ratio of one hundred Units for the indicated
initial aggregate value of Securities in the Trust on the initial Date of
Deposit as is set forth in the Summary of Essential Information (See 'The
Trust--Organization' in Part B) (For the specific number of Units in the Trust
as of the initial Date of Deposit, see 'Summary of Essential Information' in
this Part A).
The Sponsor was a manager or co-manager of a public offering of the Securities
of issuers in Portfolio Nos. 3, 5, 6, 19, 23 and 32.
RISK CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of the
risks inherent in any investment in common stocks, the risk that the financial
condition of the issuers of the Securities may become impaired or that the
general condition of the stock market may worsen (both of which may contribute
directly to a decrease in the value of the Securities and thus in the value of
the Units).
The portfolio of the Trust is fixed and not 'managed' by the Sponsor. All the
Securities in the Trust are liquidated during a 60-day period at the termination
of the 3-year life of the Trust. Since the Trust will not sell Securities in
response to ordinary market fluctuation, but only at the Trust's termination or
upon the occurrence of certain events, the amount realized upon the sale of the
Securities may not be the highest price attained by an individual Security
during the life of the Trust. In addition, since the Trust will consist entirely
of shares issued by REITs, a domestic corporation or business trust which
invests primarily in income producing real estate or real estate related loans
or mortgages, an investment in the Trust will be subject to risks similar to
those associated with the direct ownership of real estate (in addition to
securities markets risks) because of its policy of concentration in the
securities of companies in the real estate industry. These include declines in
the value of real estate, illiquidity of real property investments, risks
related to general and local economic conditions, dependency on management
skill, heavy cash flow dependency, possible lack of availability of mortgage
funds, overbuilding, extended vacancies of properties, increased competition,
increases in property taxes and operating expenses, changes in zoning laws,
losses due to costs resulting from the clean-up of environmental problems,
liability to third parties for damages resulting from environmental problems,
casualty or condemnation losses, economic or regulatory impediments to raising
rents, changes in neighborhood values and the appeal of properties to tenants
and changes in interest rates. In addition to these risks, Equity REITs may be
more likely to be affected by changes in the value of the underlying property
owned by the trusts, while Mortgage REITs may be more likely to be affected by
the quality of any credit extended. Further, Equity and Mortgage REITs are
dependent upon the management skills of the issuers and generally may not be
diversified. Equity and Mortgage REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, Equity and
Mortgage REITs could possibly fail to qualify for tax free pass-through of
income under the Internal Revenue Code of 1986, as amended (the 'Code'), or to
maintain their exemptions from registration under the Investment Company Act of
1940 (the '1940 Act'). The above factors may also adversely affect a borrower's
or a lessee's ability to meet its obligations to the REIT. In the event of a
default by a borrower or lessee, the REIT may experience delays in enforcing its
rights as a mortgagee or lessor and may incur substantial costs associated with
protecting its investments.
The mandatory termination date of the Trust is approximately three years from
the initial Date of Deposit. It is the present intention of the Sponsor to
select Securities for the Trust that will achieve a high current income and
growth of capital during the life of the Trust. The Sponsor cannot give any
assurance that the business and investment objectives of the issuers of the
Securities will correspond with or in any way meet the limited term objectives
of the Trust.
A-4
<PAGE>
PUBLIC OFFERING PRICE
The Public Offering Price per 100 Units of the Trust is equal to the aggregate
value of the underlying Securities (the price at which they could be directly
purchased by the public assuming they were available) in the Trust divided by
the number of Units outstanding times 100 plus a sales charge of 3.9% of the
Public Offering Price per 100 Units or 4.058% of the net amount invested in
Securities per 100 Units. (See 'Summary of Essential Information.') In addition,
the net amount invested in Securities will involve a proportionate share of
amounts in the Income Account and Principal Account, if any. For additional
information regarding the Public Offering Price, the descriptions of dividend
and principal distributions, repurchase and redemption of Units and other
essential information regarding the Trust, see the Summary of Essential
Information for the Trust. During the initial offering period orders involving
at least 10,000 Units will be entitled to a volume discount from the Public
Offering Price. The Public Offering Price per Unit may vary on a daily basis in
accordance with fluctuations in the aggregate value of the underlying
Securities. (See 'Public Offering' in Part B.) The figures above assume a
purchase of 100 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Public Offering Price per 100 Units by 100 and
multiplying by the number of Units.
DISTRIBUTIONS
Distributions of dividends received, less expenses, will be made by the Trust
monthly. The first dividend distribution will be made on the First Payment Date
to all Certificateholders of record on the First Record Date and thereafter
distributions will be made monthly on the 15th day of every month (the 'Monthly
Distribution Date'). Distributions of capital gains realized, if any, will be
made shortly after the Monthly Distribution Date to Certificateholders of record
on the record date immediately preceding such Monthly Distribution Date. (See
'Rights of Certificateholders--Distributions' in Part B. For the specific dates
representing the First Payment Date and the First Record Date, see 'Summary of
Essential Information.')
MARKET FOR UNITS
The Sponsor, although not obligated to do so, intends to maintain a secondary
market for the Units of the Trust after the initial public offering has been
completed. The secondary market repurchase price will be based on the market
value of the Securities in the Trust portfolio. (See 'Liquidity--Sponsor
Repurchase' for a description on how the secondary market repurchase price will
be determined.) If a market is not maintained a Certificateholder will be able
to redeem his Units with the Trustee. (See 'Liquidity--Trustee Redemption' in
Part B.) There can be no assurance of the making or the maintenance of a market
for any of the Securities contained in the Trust portfolio or of the liquidity
of the Securities in any markets made. Notwithstanding the foregoing, the
Sponsor undertakes to maintain the secondary market during the initial public
offering period. In addition, the Trust may be restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor. The price at which
the Securities may be sold to meet redemptions and the value of the Units will
be adversely affected if trading markets for the Securities are limited or
absent.
TOTAL REINVESTMENT PLAN
Distributions from the Trust are made to Certificateholders monthly. The
Certificateholder has the option, however, of either receiving his dividend
check, together with any principal payments, from the Trustee or participating
in a reinvestment program offered by the Sponsor in shares of GOC Fund, Inc.
(formerly The Manager's Fund, Inc.), U.S. Treasury Money Market Portfolio (the
'Fund'). Gabelli-O'Connor Fixed Income Mutual Funds Management Co. serves as the
investment adviser of the Fund and GOC Fund Distributors, Inc. serves as
distributor for the Fund. Participation in the reinvestment option is
conditioned on the Fund's lawful qualification for sale in the state in which
the Certificateholder is a resident. The Plan is not designed to be a complete
investment program. See 'Total Reinvestment Plan' in Part B for details on how
to enroll in the Total Reinvestment Plan and how to obtain a Fund prospectus.
A-5
<PAGE>
TERMINATION
During the 60 day period prior to the Mandatory Termination Date (approximately
three years after the initial Date of Deposit) (the 'Liquidation Period'),
Securities will begin to be sold in connection with the termination of the Trust
and all Securities will be sold by the Mandatory Termination Date. The Trustee
may utilize the services of the Sponsor for the sale of all or a portion of the
Securities in the Trust. The Sponsor will receive brokerage commissions from the
Trust in connection with such sales in accordance with applicable law. The
Sponsor will determine the manner, timing and execution of the sales of the
underlying Securities. Certificateholders may elect one of the three options in
receiving their terminating distributions. Certificateholders may elect: (1) to
receive their pro rata share of the underlying Securities in-kind, if they own
at least 2,500 Units, (2) to receive cash upon the liquidation of their pro rata
share of the underlying Securities or (3) subject to the receipt by the Trust of
an appropriate exemptive order from the Securities and Exchange Commission, to
invest the amount of cash they would have received upon the liquidation of their
pro rata share of the underlying Securities in units of a future series of the
Trust (if one is offered) at a reduced sales charge. See 'Trust
Administration--Trust Termination' in Part B for a description of how to select
a termination distribution option.
The Sponsor will attempt to sell the Securities as quickly as it can during the
Liquidation Period without, in its judgment, materially adversely affecting the
market price of the Securities, but all of the Securities will in any event be
disposed of by the end of the Liquidation Period. The Sponsor does not
anticipate that the period will be longer than 60 days, and it could be as short
as one day, depending on the liquidity of the Securities being sold. The
liquidity of any Security depends on the daily trading volume of the Security
and the amount that the Sponsor has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsors will generally sell Securities on the first day of the Liquidation
Period; for less liquid Securities, on each of the first two days of the
Liquidation Period, the Sponsor will generally sell any amount of any underlying
Securities at a price no less than 1/2 of one point under the last closing sale
price of those Securities. On each of the following two days, the price limit
will increase to one point under the last closing sale price. After four days,
the Sponsor intends to sell at least a fraction of the remaining underlying
Securities, the numerator of which is one and the denominator of which is the
total number of days remaining (including that day) in the Liquidation Period,
without any price restrictions.
During the Liquidation Period, Certificateholders who have not chosen to receive
distributions-in-kind will be at risk to the extent that Securities are not
sold; for this reason the Sponsor will be inclined to sell the Securities in as
short a period as they can without materially adversely affecting the price of
the Securities. However, Certificateholders who have chosen to receive
distributions-in-kind upon liquidation of the Trust should be aware that this
will be a taxable event to such Certificateholder, and that the
Certificateholder will recognize taxable gain (equal to the difference between
such Certificateholder's tax basis in his Units and the fair market value of
Securities received upon liquidation), which will be a capital gain or loss
except in the case of a dealer in securities. (See 'Tax Status' in this Part B.)
Certificateholders should consult their own tax advisers in this regard.
A-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Sponsor, Trustee, and Certificateholders,
Equity Securities Trust, Series 5 REIT Series:
We have audited the accompanying Statement of Condition and Portfolio (the
'financial statements') of Equity Securities Trust, Series 5 REIT Series as of
July 21, 1994. These financial statements are the responsibility of the Sponsor.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The irrevocable letters of
credit deposited in connection with the securities owned as of July 21, 1994,
pursuant to contracts to purchase, as shown in the Statement of Condition, were
confirmed to us by United States Trust Company of New York, the Trustee.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Equity Securities Trust, Series 5 REIT
Series, at July 21, 1994, in conformity with generally accepted accounting
principles.
New York, New York KPMG PEAT MARWICK
July 21, 1994
A-7
<PAGE>
EQUITY SECURITIES TRUST, SERIES 5
REIT SERIES
STATEMENT OF CONDITION
AS OF DATE OF DEPOSIT, JULY 21, 1994
TRUST PROPERTY
<TABLE>
<CAPTION>
SERIES 5
--------
<S> <C>
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit(1)....... $158,200
--------
Total....................................................... $158,200
--------
--------
</TABLE>
INTEREST OF CERTIFICATEHOLDERS
<TABLE>
<S> <C>
Interest of Certificateholders--Units of Fractional
Undivided Interest Outstanding
(Series 5: 16,462 Units):
Cost to Certificateholders(2).......................... $164,620
Less-Gross Underwriting Commissions(3)................. 6,420
--------
Net Amount Applicable to Certificateholders............ 158,200
--------
Total.................................................. $158,200
--------
--------
</TABLE>
- - ------------------------------------
(1) Aggregate cost to the Trust of the Securities listed in the Portfolio
is determined by the Trustee on the basis set forth under 'Public
Offering--Offering Price' as of 4:00 p.m. on July 20, 1994. Irrevocable letters
of credit issued by Morgan Guaranty Trust Company of New York in an aggregate
amount of $4,000,000 have been deposited with the Trustee to cover the purchase
of $158,200 principal amount of Securities pursuant to contracts to purchase
such Securities.
(2) Aggregate public offering price computed on 16,462 Units of Series 5 on
the basis set forth under 'Public Offering--Offering Price' in Part B.
(3) Sales charge of 3.9% computed on 16,462 Units of Series 5 on the basis
set forth under 'Public Offering Price' in Part B.
A-8
<PAGE>
EQUITY SECURITIES TRUST
SERIES 5
REIT SERIES
PORTFOLIO
AS OF JULY 20, 1994
A MONTHLY PAYMENT SERIES
<TABLE>
<CAPTION>
COST OF
NUMBER OF MARKET SECURITIES
PORTFOLIO SECURITIES PERCENTAGE VALUE TO
NO. (SHS.) NAME OF ISSUER(2) OF FUND(1) PER SHARE TRUST(3)
--------- ---------- --------------------------------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
DIVERSIFIED PROPERTIES: 10.03% 1 100 BRE Properties 1.95 30.875 $ 3,088
2 250 Burnham Pacific Properties 2.68 17.000 4,250
3 200 Colonial Properties Trust 2.91 23.000 4,600
4 300 Sizeler Property Investors 2.49 13.125 3,937
----------
15,875
----------
FACTORY OUTLET CENTERS: 5.00% 5 150 Chelsea GCA Realty 2.46 26.000 3,900
6 150 Tanger Factory Outlet Centers 2.54 26.750 4,012
----------
7,912
----------
MANUFACTURED HOMES: 4.08% 7 150 ROC Communities 1.92 20.250 3,037
8 150 Sun Communities 2.16 22.750 3,412
----------
6,449
----------
MULTI-FAMILY HOUSING: 30.88% 9 150 Associated Estates Realty 2.03 21.375 3,206
10 150 Avalon Properties 2.05 21.625 3,244
11 150 Bay Apartment Communities Inc. 2.05 21.625 3,244
12 200 Charles E. Smith Residential Realty 3.21 25.375 5,075
Inc.
13 100 Equity Residential Properties 1.98 31.250 3,125
14 200 Gables Residential Trust 2.88 22.750 4,550
15 300 Irvine Apartment Communities 3.91 20.625 6,188
16 150 Merry Land & Investment 1.97 20.750 3,113
17 100 Post Properties 1.98 31.375 3,137
18 200 Summit Properties Trust 2.43 19.250 3,850
19 150 Town and Country Trust 1.75 18.500 2,775
20 200 United Dominion Realty Trust 1.75 13.875 2,775
21 200 Wellsford Residential Property 2.89 22.875 4,575
----------
48,857
----------
OFFICE/INDUSTRIAL: 18.29% 22 250 Carr Realty 3.28 20.750 5,188
23 200 Crescent Real Estate Equities, Inc. 3.25 25.750 5,150
24 150 Duke Realty Investments 2.56 27.000 4,050
25 200 Highwoods Properties Inc. 2.58 20.375 4,075
26 250 Liberty Property Trust 3.10 19.625 4,906
27 250 Spieker Properties 3.52 22.250 5,562
----------
28,931
----------
REGIONAL MALLS: 19.16% 28 250 CBL & Associates Properties 3.30 20.875 5,219
29 550 De Bartolo Realty Corporation 5.17 14.875 8,181
30 200 General Growth Properties 2.81 22.250 4,450
31 200 Glimcher Realty Trust 2.64 20.875 4,175
32 300 Simon Property Group 5.24 27.625 8,287
----------
30,312
----------
SHOPPING CENTERS: 12.56% 33 200 Alexander Hagen Properties 2.26 17.875 3,575
34 100 Developers Diversified Realty 1.92 30.375 3,038
35 100 Federal Realty Investment 1.62 25.625 2,563
36 150 JP Realty, Inc. 1.97 20.750 3,113
37 100 Kimco Realty 2.33 36.875 3,688
38 100 Weingarten Realty Investors 2.46 38.875 3,887
----------
19,864
----------
Total Investment in Securities $158,200
----------
----------
</TABLE>
A-9
<PAGE>
FOOTNOTES TO PORTFOLIO
(1) Based on the cost of the Securities to the Trust.
(2) Forward contracts to purchase the Securities were entered into on July 20,
1994. All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be July 28, 1994.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sale prices at the Evaluation Time on the day prior to the Initial Date of
Deposit.
Additional information regarding the Trust is as follows:
<TABLE>
<CAPTION>
SPONSOR'S SPONSOR'S PROFIT
PURCHASE PRICE (INITIAL DATE OF DEPOSIT)
-------------- -------------------------
<S> <C> <C>
Series 5....... $158,200 $ 0
</TABLE>
A-10
<PAGE>
UNDERWRITING SYNDICATE
The names and addresses of the Underwriters of the Units and their
participation in the offering of Equity Securities Trust, Series 5 are as
follows:
<TABLE>
<CAPTION>
% OF EST
UNDERWRITER SERIES 5
- - -------------------------------------------------- --------
<S> <C>
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, NY 10167................................ 21.5%
PRINCIPAL FINANCIAL SECURITIES, INC.
1445 Ross Avenue
Dallas, TX 75202.................................. 10.0
RODMAN & RENSHAW, INC.
120 South LaSalle Street
Chicago, IL 60603................................. 10.0
WHEAT FIRST, BUTCHER & SINGER CAPITAL MARKETS
901 East Byrd Street
Richmond, VA 23219................................ 10.0
ANDERSON & STRUDWICK, INCORPORATED
1108 East Main Street
Richmond, VA 23212................................ 5.0
FSC SECURITIES CORPORATION
2300 Windy Ridge Pkwy., Suite 1100
Marietta, GA 30067................................ 5.0
GIBRALTAR SECURITIES CO.
Ten James Street
Florham Park, NJ 07932............................ 5.0
NEW ENGLAND SECURITIES
399 Boylston Street, 8th Floor
Boston, MA 02116.................................. 5.0
LPL FINANCIAL SECURITIES
155 Federal Street, 14th Floor
Boston, MA 02110
----
5935 Cornerstone Court West
San Diego, CA 92121............................... 2.5
PEREMEL & CO., INC.
1829 Reisterstown Road, Suite 120
Baltimore, MD 21208............................... 2.5
THOMAS JAMES ASSOCIATES, INC.
1895 Mount Hope Avenue
Rochester, NY 14620............................... 2.5
</TABLE>
A-11
<PAGE>
UNDERWRITING SYNDICATE
<TABLE>
<CAPTION>
% OF EST
UNDERWRITER SERIES 5
- - -------------------------------------------------- --------
<S> <C>
BARRON CHASE SECURITIES
One Arin Park
1715 U.S. Highway 35, Suite 301
Middletown, NJ 07748.............................. 1.0
J. C. BRADFORD & CO.
330 Commerce Street
Nashville, TN 37201............................... 1.0
BRANCH, CABELL & CO.
919 East Main Street
Richmond, VA 23217................................ 1.0
BUELL SECURITIES CORP.
1310 Silas Deane Highway
Wethersfield, CT 06109............................ 1.0
FAHNESTOCK & CO. INC.
B.C. Christopher & Co.--Division
W.H. Newbold's Son & Co.--Division
Reich & Co. Inc.--Subsidiary
110 Wall Street
New York, NY 10005................................ 1.0
FIRST MONTAUK SECURITIES CORP.
328 Newman Springs Road
Red Bank, NJ 07701................................ 1.0
GRUNTAL & CO., INCORPORATED
14 Wall Street
New York, NY 10005................................ 1.0
HAMILTON INVESTMENTS, INC.
Two North LaSalle Street
Chicago, IL 60602................................. 1.0
J.B. HANAUER & CO.
Four Gate Hill Drive
Parsippany, NJ 07054.............................. 1.0
JOSEPHTHAL, LYON & ROSS, INC.
45 Broadway
New York, NY 10006................................ 1.0
JW CHARLES/CSG
Subsidiaries of Corporate Management Group, Inc.
980 North Federal Highway, Suite 210
Boca Raton, FL 33432.............................. 1.0
KEMPER SECURITIES GROUP, INC.
77 West Wacker Drive, 28th Floor
Chicago, IL 60601................................. 1.0
</TABLE>
A-12
<PAGE>
UNDERWRITING SYNDICATE
<TABLE>
<CAPTION>
% OF EST
UNDERWRITER SERIES 5
- - -------------------------------------------------- --------
<S> <C>
JOHN G. KINNARD & COMPANY, INCORPORATED
920 Second Avenue South
Minneapolis, MN 55402............................. 1.0
M F I INVESTMENT CORP.
126 North Main Street
P.O. Box 567
Bryan, OH 43506................................... 1.0
MARSH, BLOCK & CO., INC.
50 Broad Street, Suite 314
New York, NY 10004................................ 1.0
NATHAN & LEWIS SECURITIES, INC.
1140 Avenue of the Americas
New York, NY 10036................................ 1.0
OPPENHEIMER & CO., INC.
Oppenheimer Tower
World Financial Center
New York, NY 10281................................ 1.0
SOUTHWEST SECURITIES INC.
1201 Elm Street, Suite 4300
Dallas, TX 75270.................................. 1.0
M.L. STERN & CO., INC.
8350 Wilshire Boulevard
Beverly Hills, CA 90211........................... 1.0
STIFEL, NICOLAUS & COMPANY, INCORPORATED
500 North Broadway
St. Louis, MO 63102............................... 1.0
WEDBUSH MORGAN SECURITIES INC.
1000 Wilshire Boulevard
Los Angeles, CA 90017............................. 1.0
--------
Total........................................ 100%
--------
--------
</TABLE>
A-13
<PAGE>
[LOGO] EQUITY SECURITIES TRUST SERIES 5
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
WHAT IS A REIT?
A Real Estate Investment Trust (REIT) is essentially a corporation created to
allow the public to invest in large portfolios of real estate. REITs pay
virtually no income tax at the corporate level.
IN ORDER TO MAINTAIN THIS SPECIAL TAX STATUS, HOWEVER, A REIT MUST MEET CERTAIN
REQUIREMENTS, INCLUDING THE FOLLOWING:
o distribute annually at least 95% of net taxable income to shareholders
o be managed by one or more directors or trustees
o invest substantially all of its capital in real estate assets
o receive substantially all of its income from real estate investments
o have at least 100 individual shareholders
o issue shares of transferable interest to its owners
REITs can invest in various types of real estate, including: multi-family
housing, shopping malls, manufactured home communities, office buildings,
factory outlet centers, storage facilities, nursing homes and hotels.
According to the National Association of Real Estate Investment Trusts (NAREIT),
there are currently over 200 publicly traded REITs in the United States, with a
total market capitalization approaching $40 billion. In 1993 alone, new equity
offerings of REITs amounted to $11 billion.* This growth has increased the
liquidity of REITs and attracted institutional investors to the market.
WHY INVEST IN REITS?
o Current income and potential capital appreciation.
o Real estate is perceived to be recovering from a cyclical low in certain
markets.
o REITs offer an efficient and attractive vehicle for investing in the real
estate market.
o REITs are a growing market.
o Real estate may be a hedge against inflation.
WHY INVEST IN A REIT UNIT TRUST?
An investment in this REIT UIT will offer you a 3-year interest in a diversified
portfolio of publicly traded REITs for as little as approximately $1,000.
WHAT CRITERIA WILL BE EMPLOYED IN SELECTING THE REITS FOR THIS TRUST?
CONSIDERATION WILL BE GIVEN TO THE FOLLOWING FACTORS:
o Management
o Current Yield
o Potential for Capital Appreciation
o Dividend Coverage
o Price of the Security Relative to Comparable Securities
o Diversification of the Trust's Portfolio Concerning Product Type and
Geographic Focus
o Capital Structure
SPECIAL RISK CONSIDERATIONS
Since the Trust contains common stocks of REITs issued by domestic companies, an
investment in Units of the Trust should be made with an understanding of the
risks inherent in an investment in common stocks. The Trust also will be subject
to risks similar to those associated with the direct ownership of real estate
because of its policy of concentration in the securities of companies in the
real estate industry. Lastly, because the Trust will be liquidated at the
completion of its three-year life, the amount realized upon the sale of the
securities may not be the highest price attained by the security during the life
of the Trust. See the Trust Prospectus for a more complete discussion of 'Risk
Considerations.'
- - ------------------
* NAREIT data have not been independently verified by the Sponsor, Bear Stearns
& Co., Inc.
<PAGE>
[LOGO] EQUITY SECURITIES TRUST SERIES 5
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
FEATURES AND BENEFITS
OF A REIT UIT
INVESTMENT OBJECTIVES:
o Dividend Income
o Capital Appreciation
TRUST STRUCTURE:
o Mandatory Termination Date of Three Years
o Monthly Distributions
PORTFOLIO DESCRIPTION: The Portfolio will consist of approximately 35-40
publicly traded REITs.
PROFESSIONAL SELECTION: The Portfolio's securities will be selected by highly
experienced real estate securities professionals.
PORTFOLIO SUPERVISION: Although not actively managed, the portfolio will be
professionally monitored and securities may be sold if their retention is deemed
detrimental to the unitholders.
DIVERSIFICATION: The Trust will purchase REITs which invest in various types of
real estate located in diverse geographic regions. These REITs will be under the
control of separate managements.
LIQUIDITY: The Trust's units may be sold at any time during its three year life
at the then current market value, which may be more or less than the original
purchase cost.
CONVENIENCE: Unitholders may purchase a diversified portfolio and follow it as
easily as the purchase of an individual security.
LOW MINIMUM INVESTMENT: Units of the Trust are conveniently priced at
approximately $10 per share. The minimum purchase is 100 units.
VOLUME DISCOUNT: Investors wishing to purchase 10,000 units (approximately
$100,000) or more are entitled to a reduced sales charge which is discussed in
greater detail in the Trust Prospectus.
REINVESTMENT OPTION: Unitholders have the option to invest their monthly
dividend checks in the GOC Fund, Inc., U.S. Treasury Money Market Portfolio.
OPTIONS AT TERMINATION: Owners of 2,500 Units or more at time of termination may
elect to receive securities in kind.
<PAGE>
[LOGO]
EQUITY SECURITIES TRUST SERIES 5
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
REIT Series
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUST
ORGANIZATION
'Equity Securities Trust, Series 5' consists of a 'unit investment trust'
designated as set forth in Part A. The Trust was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the 'Trust
Agreement'), dated the initial Date of Deposit, between Bear, Stearns & Co.
Inc., as Sponsor, and United States Trust Company of New York, as Trustee.
On the initial Date of Deposit, the Sponsor deposited with the Trustee
common stocks issued by domestic real estate investment trusts ('REITs')
including funds and delivery statements relating to contracts for the purchase
of certain such securities (collectively, the 'Securities') with an aggregate
value as set forth in Part A and cash or an irrevocable letter of credit issued
by a major commercial bank in the amount required for such purchases. Thereafter
the Trustee, in exchange for the Securities so deposited, delivered to the
Sponsor the Certificates evidencing the ownership of all Units of the Trust. The
Sponsor has a limited right to substitute other securities in the Trust
portfolio in the event of a failed contract. See 'The Trust--Substitution of
Securities'. The Sponsor may also, in certain circumstances, direct the Trustee
to dispose of certain Securities if the Sponsor believes that, because of market
or credit conditions, or for certain other reasons, retention of the Security
would be detrimental to Certificateholders. (See 'Trust
Administration--Portfolio Supervision.')
As of the day prior to the initial Date of Deposit, a 'Unit' represents an
undivided interest or pro rata share in the Securities of the Trust in the ratio
of one hundred Units for the indicated amount of the aggregate market value of
the Securities initially deposited in the Trust as is set forth in the 'Summary
of Essential Information'. To the extent that any Units are redeemed by the
Trustee, the fractional undivided interest or pro rata share in such Trust
represented by each unredeemed Unit will increase, although the actual interest
in such Trust represented by such fraction will remain unchanged. Units will
remain outstanding until redeemed upon tender to the Trustee by
Certificateholders, which may include the Sponsor or the Underwriters, or until
the termination of the Trust Agreement.
1
<PAGE>
With the deposit of the Securities in the Trust on the initial Date of
Deposit, the Sponsor established a proportionate relationship among the initial
aggregate value of specified Securities in the Trust. During the 90 days
subsequent to the initial Date of Deposit, the Sponsor may deposit additional
Securities in the Trust that are substantially similar to the Securities already
deposited in the Trust ('Additional Securities') or contracts to purchase
Additional Securities, in order to create additional Units, maintaining to the
extent practicable the original proportionate relationship of the number of
shares of each Security in the Trust portfolio on the initial Date of Deposit.
These additional Units will each represent, to the extent practicable, an
undivided interest in the same number and type of securities of identical
issuers as are represented by Units issued on the initial Date of Deposit. It
may not be possible to maintain the exact original proportionate relationship
among the Securities deposited on the initial Date of Deposit because of, among
other reasons, purchase requirements, changes in prices, or unavailability of
Securities. Deposits of Additional Securities in the Trust subsequent to the
90-day period following the initial Date of Deposit must replicate exactly the
proportionate relationship among the number of shares of Securities in the Trust
Portfolio at the end of the initial 90-day period. The number and identity of
Securities in the Trust will be adjusted to reflect the disposition of
Securities and/or the receipt of a stock dividend, a stock split or other
distribution with respect to shares or the reinvestment of the proceeds
distributed to Certificateholders. The Portfolio of the Trust may change
slightly based on such disposition and reinvestment. Substitute Securities may
be acquired under specified conditions when Securities originally deposited in
the Trust are unavailable (see 'The Trust--Substitution of Securities' below).
Units may be continuously offered to the public by means of this Prospectus (see
'Public Offering--Distribution of Units') resulting in a potential increase in
the number of Units outstanding. As additional Units are issued by the Trust as
a result of the deposit of Additional Securities, the aggregate value of the
Securities in the Trust will be increased and the fractional undivided interest
in the Trust represented by each Unit will be decreased.
OBJECTIVES
The objectives of the Trust are to seek to achieve capital appreciation
together with a high level of current income. The Trust seeks to achieve these
objectives by investing in a portfolio of common stocks issued by domestic
REITs, and contracts to purchase such Securities. All of the Securities in the
Trust, except for Restricted Securities held by the Trust, if any, are listed on
the New York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers Automated Quotations ('NASDAQ') National
Market System and are generally followed by independent investment research
firms. There is no minimum capitalization or market trading activity requirement
for the selection of Securities for the Trust's portfolio. There can be no
assurance that the Trust's investment objectives can be achieved.
THE SECURITIES
In selecting Securities for the Trust, the Sponsor normally will consider
the following factors, among others: (1) the Sponsor's own evaluations of the
market value of the underlying assets and business of the issuers of the
Securities; (2) the dividend income generated by the Securities; (3) the
potential for capital appreciation for the Securities; (4) the prices of the
Securities relative to other comparable securities; (5) whether the Securities
are entitled to the benefits of protective conditions; (6) the cash flow quality
and growth potential of the Securities; (7) the management quality of the
issuers of the Securities; and (8) the diversification of the Trust's portfolio
as to issuers, product type and geographic focus.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from corporate
income taxes provided the REIT satisfies the requirements of Sections 856
through 860 of the Internal Revenue Code. The major tests for tax-qualified
status are that the REIT (i) be managed by one or more trustees or directors,
(ii) issue shares of transferable interest to its owners, (iii) have at least
100 shareholders, (iv) have no more than 50% of the shares held by five or fewer
individuals, (v) invest substantially all of its capital in real estate related
assets and derive substantially all of its gross income from real estate related
assets and (vi) distribute at least 95% of its taxable income to its
shareholders each year.
2
<PAGE>
The Securities deposited in the Trust on the initial date of deposit
consist entirely of interests in REITs. There are two principal types of REITs:
Equity REITs which typically hold 75% of their invested assets in the ownership
of real estate and benefit from the underlying net rental income generated from
the properties, and Mortgage REITs, which typically hold 75% of their invested
assets in mortgages which are secured by real estate assets and benefit
predominantly from the difference between the interest income on the mortgage
loans and the interest expense on the capital used to finance the loans. A third
type, Hybrid REITs, combines the investment strategies of the Equity REITs and
the Mortgage REITs.
In addition to being classified according to investment type, REITs may be
categorized further in terms of their specialization by property type (e.g.,
retail, multifamily, healthcare, office, etc.,) or geographic focus (nationwide,
regional or metropolitan area). Additional stratification is then possible
within certain product types (e.g., factory outlets, community centers, and
regional malls are all categories within the retail sector.) Lastly, REITs that
are created to exist for an indefinite period of time are known as perpetual
life REITs while finite life REITs (or FREITs) have a specified length of time
before liquidating their underlying assets.
PORTFOLIO
The Trust consists of the Securities (or contracts to purchase such
Securities together with an irrevocable letter or letters of credit for the
purchase of such contracts) described in the 'Portfolios' in Part A, and
Additional Securities deposited upon the creation of additional Units as set
forth above and Substitute Securities acquired by the Trust as long as such
Securities may continue to be held from time to time in the Trust together with
uninvested cash realized from the disposition of Securities. Because certain of
the Securities from time to time may be sold under certain circumstances, as
described herein (see 'Trust Administration'), no assurance can be given that
the Trust will retain for any length of time its present size and composition.
The Trustee has not participated and will not participate in the selection of
Securities for the Trust, and neither the Sponsor nor the Trustee will be liable
in any way for any default, failure or defect in any Securities.
Some of the Securities are publicly traded either on a stock exchange or in
the over-the-counter market. The contracts to purchase Securities deposited
initially in the Trust are expected to settle in five business days, in the
ordinary manner for such Securities. Settlement of the contracts for Securities
is thus expected to take place prior to the settlement of purchase of Units on
the initial Date of Deposit.
SUBSTITUTION OF SECURITIES
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities. In the event of a failure
to deliver any Security that has been purchased for the Trust under a contract
('Failed Securities'), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other securities ('Substitute Securities') to make
up the original corpus of the Trust. In addition, the Sponsor, at its option, is
authorized under the Trust Agreement to direct the Trustee to reinvest in
Substitute Securities the proceeds of the sale of any of the Securities only if
such sale was due to unusual circumstances as set forth under 'Trust
Administration--Portfolio Supervision.'
The Substitute Securities must be purchased within 20 days after the sale
of the portfolio Security or delivery of the notice of the failed contract.
Where the Sponsor purchases Substitute Securities in order to replace Failed
Securities, (i) the purchase price may not exceed the purchase price of the
Failed Securities and (ii) the Substitute Securities must be substantially
similar to the Failed Securities. Where the Sponsor purchases Substitute
Securities in order to replace Securities it sold, the Sponsor will endeavor to
select Securities which are equity securities that possess characteristics that
are consistent with the objectives of the Trust as set forth above. Such
selection may include or be limited to Securities previously included in the
portfolio of the Trust.
3
<PAGE>
Whenever a Substitute Security has been acquired for the Trust, the Trustee
shall, within five days thereafter, notify all Certificateholders of the Trust
of the acquisition of the Substitute Security and the Trustee shall, on the next
Monthly Payment Date which is more than 30 days thereafter, make a pro rata
distribution of the amount, if any, by which the cost to the Trust of the Failed
Security exceeded the cost of the Substitute Security plus accrued interest, if
any.
In the event no reinvestment is made, the proceeds of the sale of
Securities will be distributed to Certificateholders as set forth under 'Rights
of Certificateholders--Distributions.' In addition, if the right of substitution
shall not be utilized to acquire Substitute Securities in the event of a failed
contract, the Sponsor will cause to be refunded the sales charge attributable to
such Failed Securities to all Certificateholders of the Trust, and distribute
the principal and accrued interest attributable to such Failed Securities on the
next Monthly Payment Date.
Because certain of the Securities from time to time may be substituted (see
'Trust Administration--Portfolio Supervision') or may be sold under certain
circumstances, no assurance can be given that the Trust will retain its present
size and composition for any length of time. The proceeds from the sale of a
Security or the exercise of any redemption or call provision will be distributed
to Certificateholders except to the extent such proceeds are applied to meet
redemptions of Units. (See 'Liquidity--Trustee Redemption').
RISK CONSIDERATIONS
FIXED PORTFOLIO
The value of the Units will fluctuate depending on all the factors that
have an impact on the economy and the equity markets. These factors similarly
impact on the ability of an issuer to distribute dividends. The Trust is not a
'managed registered investment company' and Securities will not be sold by the
Trustee as a result of ordinary market fluctuations. Unlike a managed investment
company in which there may be frequent changes in the portfolio of securities
based upon economic, financial and market analyses, securities of a unit
investment trust, such as the Trust, are not subject to such frequent changes
based upon continuous analysis. However, the Sponsor may direct the disposition
by the Trustee of Securities upon the occurrence of certain events. Some of the
Securities in the Trust may also be owned by other clients of the Sponsor and
its affiliates. However, because these clients may have differing investment
objectives, the Sponsor may sell certain Securities from those accounts in
instances where a sale by the Trust would be impermissible, such as to maximize
return by taking advantage of market fluctuations. (See 'Trust
Administration--Portfolio Supervision' below.) Investors should consult with
their own financial advisers prior to investing in the Trust to determine its
suitability. All the Securities in the Trust are liquidated during a 60-day
period at the termination of the 3-year life of the Trust. Since the Trust will
not sell Securities in response to ordinary market fluctuation, but only at the
Trust's termination or upon the occurrence of certain events, the amount
realized upon the sale of the Securities may not be the highest price attained
by an individual Security during the life of the Trust.
COMMON STOCK
Since the Trust contains common stocks of domestic issuers, an investment
in Units of the Trust should be made with an understanding of the risks inherent
in any investment in common stocks including the risk that the financial
condition of the issuers of the Securities may become impaired or that the
general condition of the stock market may worsen (both of which may contribute
directly to a decrease in the value of the Securities and thus in the value of
the Units). Additional risks include risks associated with the right to receive
payments from the issuer which is generally inferior to the rights of creditors
of, or holders of debt obligations or preferred stock issued by, the issuer.
Holders of common stocks have a right to receive dividends only when, if, and in
the amounts declared by the issuer's board of directors and to participate in
amounts available for distribution by the
4
<PAGE>
issuer only after all other claims on the issuer have been paid or provided for.
By contrast, holders of preferred stocks usually have the right to receive
dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis. Dividends on cumulative preferred
stock must be paid before any dividends are paid on common stock and any
cumulative preferred stock dividend which has been omitted is added to future
dividends payable to the holders of such cumulative preferred stock. Preferred
stocks are also usually entitled to rights on liquidation which are senior to
those of common stocks. For these reasons, preferred stocks generally entail
less risk than common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the initial Date of Deposit.
(See 'Risk Considerations--General' for a discussion of the types of risks that
affect holders of common stock of issuers of REITs.)
The Trust may purchase Securities that are not registered ('Restricted
Securities') under the Securities Act of 1933 (the 'Securities Act'), but can be
offered and sold to 'qualified institutional buyers' as that term is defined in
the Securities Act. See 'Liquidity' below for the risks inherent in the purchase
of Restricted Securities.
The value of the Units will fluctuate depending on all the factors that
have an impact on the economy and the equity markets. These factors similarly
impact on the ability of an issuer to distribute dividends. The Trust is not a
'managed registered investment company' and Securities will not be sold by the
Trustee as a result of ordinary market fluctuations. Unlike a managed investment
company in which there may be frequent changes in the portfolio of securities
based upon economic, financial and market analyses, securities of a unit
investment trust, such as the Trust, are not subject to such frequent changes
based upon continuous analysis. However, the Sponsor may direct the disposition
by the Trustee of Securities upon the occurrence of certain events. (See 'Trust
Administration--Portfolio Supervision' below.)
LIQUIDITY
Although all the Securities in the Trust, except for Restricted Securities
held by the Trust, if any, are listed on a national securities exchange or the
NASDAQ National Market System, the principal trading market for the securities
may be in the over-the-counter market. As a result, the existence of a liquid
trading market for the Securities may depend on whether dealers will make a
market in the Securities. There can be no assurance that a market will be made
for any of the Securities, that any market for the Securities will be maintained
or of the liquidity of the Securities in any market made. In addition, the Trust
may be restricted under the Investment Company Act of 1940 from selling
Securities to the Sponsor. The price at which the Securities may be sold to meet
redemptions and the value of the Units will be adversely affected if trading
markets for the Securities are limited or absent.
5
<PAGE>
Some of the Securities in the Trust may represent common stock issued by
REITs that were initially offered to the public within the 12 months preceding
the Date of Deposit, meaning that prior to the REITs initial offering, there had
been no public market for the REITs common stock. The initial public offering
price for such Securities may not be indicative of the market price for the
stock after the initial offering, and there can be no assurance that an active
public market for such Securities will develop or continue after the initial
offering; therefore, these Securities involve risks in addition to the general
risks of investing in common stock issued by REITs.
The Trust may purchase securities that are not registered ('Restricted
Securities') under the Securities Act, but can be offered and sold to 'qualified
institutional buyers' under Rule 144A under the Securities Act. Since it is not
possible to predict with assurance exactly how this market for Restricted
Securities sold and offered under Rule 144A will develop, the Sponsor will
carefully monitor the Trust's investments in these securities, focusing on such
factors, among others, as valuation, liquidity and availability of information.
This investment could have the effect of increasing the level of illiquidity in
the Trust to the extent that qualified institutional buyers become for a time
uninterested in purchasing these Restricted Securities.
There is no assurance that any dividends will be declared or paid in the
future on the Securities. Investors should be aware that there is no assurance
that the Trust's objectives will be achieved.
LEGAL PROCEEDINGS AND LEGISLATION
At any time after the initial Date of Deposit, legal proceedings may be
initiated on various grounds, or legislation may be enacted, with respect to the
Securities in the Trust or to matters involving the business of the issuer of
the Securities. There can be no assurance that future legal proceedings or
legislation will not have a material adverse impact on the Trust or will not
impair the ability of the issuers of the Securities to achieve their business
and investment goals.
REAL ESTATE INVESTMENT TRUSTS
General. Since the Trust will consist entirely of shares issued by REITs,
an investment in the Trust will be subject to varying degrees of risk generally
incident to the ownership of real property (in addition to securities market
risks) and will involve more risk than a portfolio of common stocks that is not
concentrated in a particular industry or a group of industries.* The underlying
value of the Trust's Securities and the Trust's ability to make distributions to
its Certificateholders may be adversely affected by adverse changes in national
economic conditions, adverse changes in local market conditions due to changes
in general or local economic conditions and neighborhood characteristics,
increased competition from other properties, obsolescence of property, changes
in the availability, cost and terms of mortgage funds, the impact of present or
future environmental legislation and compliance with environmental laws, the
ongoing need for capital improvements, particularly in older properties, changes
in real estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and fiscal
policies, dependency on management skills, civil unrest, acts of God, including
earthquakes and other natural disasters (which may result in uninsured losses),
acts of war, adverse changes in zoning laws, and other factors which are beyond
the control of the issuers of the REITs in the Trust.
REITs have been compared to bond equivalents (paying to the REIT holder
their pro rata share of the REIT's annual taxable income). In general, the value
of bond equivalents change as the general levels of interest rates fluctuate.
When interest rates decline, the value of a bond equivalent portfolio invested
at higher yields can be expected to rise. Conversely, when interest rates rise,
the value of a bond equivalent portfolio invested at lower yields can be
expected to decline. Consequently, the value of the REITs may at times be
particularly
- - ------------------
* A Trust is considered to be 'concentrated' in a particular industry when the
Securities in that industry constitute 25% or more of the aggregate face
amount of the portfolio.
6
<PAGE>
sensitive to devaluation in the event of rising interest rates. Equity REITs are
less likely to be affected by interest rate fluctuations than Mortgage REITs and
the nature of the underlying assets of an Equity REIT, i.e., investments in real
property, may be considered more tangible than that of a Mortgage REIT. Equity
REITs are more likely to be adversely affected by changes in the value of the
underlying property it owns than Mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential complexes,
and office buildings; the impact of economic conditions on REITs can also be
expected to vary with geographic location and property type. Investors should be
aware that REITs may not be diversified and are subject to the risks of
financing projects. REITs are also subject to defaults by borrowers,
self-liquidation, the market's perception of the REIT industry generally, and
the possibility of failing to qualify for tax-free pass-through of income under
the Internal Revenue Code, and to maintain exemption from the Investment Company
Act of 1940. A default by a borrower or lessee may cause the REIT to experience
delays in enforcing its rights as mortgagee or lessor and to incur significant
costs related to protecting its investments.
Uninsured Losses. The issuer of REITs generally maintain comprehensive
insurance on presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, there are certain
types of losses, generally of a catastrophic nature, such as earthquakes and
floods, that may be uninsurable or not economically insurable, as to which the
REITs properties are at risk in their particular locales. The management of REIT
issuers use their discretion in determining amounts, coverage limits and
deductibility provisions of insurance, with a view to requiring appropriate
insurance on their investments at a reasonable cost and on suitable terms. This
may result in insurance coverage that in the event of a substantial loss would
not be sufficient to pay the full current market value or current replacement
cost of the lost investment. Inflation, changes in building codes and
ordinances, environmental considerations, and other factors also might make it
infeasible to use insurance proceeds to replace a facility after it has been
damaged or destroyed. Under such circumstances, the insurance proceeds received
by REITs might not be adequate to restore its economic position with respect to
such property.
Environmental Liability. Under various federal, state, and local
environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be liable for the costs of removal or remediation
of hazardous or toxic substances on, under or in such property. Such laws often
impose liability whether or not the owner or operator caused or knew of the
presence of such hazardous or toxic substances and whether or not the storage of
such substances was in violation of a tenant's lease. In addition, the presence
of hazardous or toxic substances, or the failure to remediate such property
properly, may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of the REITs
in the Trust may not be presently liable or potentially liable for any such
costs in connection with real estate assets they presently own or subsequently
acquire while such REITs are held in the Trust.
Americans with Disabilities Act. Under the Americans with Disabilities Act
of 1990 (the 'ADA'), all public accommodations are required to meet certain
federal requirements related to physical access and use by disabled persons. In
the event that any of the REITs in the Trust invest in or hold mortgages in real
estate properties subject to ADA, a determination that any such properties are
not in compliance with the ADA could result in imposition of fines or an award
of damages to private litigants. If any of the REITs in the Trust were required
to make modifications to comply with the ADA, the REITs ability to make expected
distributions to the Trust, could be adversely affected; thus, adversely
affecting the ability of the Trust to make distributions to Certificateholders.
Property Taxes. Real estate generally is subject to real property taxes.
The real property taxes on the properties underlying the REITs in the Trust may
increase or decrease as property tax rates change and as the properties are
assessed or reassessed by taxing authorities.
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<PAGE>
Liquidity. Although the Securities in the Trust are listed on a national
securities exchange or NASDAQ National Market System, real estate investments,
the primary holdings of each of the Securities in the Trust, are relatively
illiquid. Therefore, the ability of the issuers of the Securities in the Trust
to vary their portfolios in response to changes in economic and other conditions
will be limited and, hence, may adversely affect the value of the Units. There
can be no assurance that any issuer of a Security will be able to dispose of its
underlying real estate assets when they find disposition advantageous or
necessary or that the sale price of any disposition will recoup or exceed the
amount of their investment.
PUBLIC OFFERING
OFFERING PRICE
The Public Offering Price per 100 Units of the Trust is equal to the
aggregate value of the underlying Securities (the price at which they could be
directly purchased by the public assuming they were available) in the Trust
divided by the number of Units outstanding times 100 plus a sales charge of 3.9%
of the Public Offering Price per 100 Units or 4.058% of the net amount invested
in Securities per 100 Units. (See 'Summary of Essential Information.') In
addition, the net amount invested in Securities will involve a proportionate
share of amounts in the Income Account and Principal Account, if any. The Public
Offering Price can vary on a daily basis from the amount stated in the Summary
of Essential Information in accordance with fluctuations in the market value of
the Securities and the price to be paid by each investor will be computed as of
the date the Units are purchased.
The aggregate value of the Securities is determined in good faith by the
Trustee on each 'Business Day' as defined in the Indenture in the following
manner: if the Securities are listed on a national securities exchange or on the
NASDAQ National Market System, this evaluation is generally based on the closing
sale prices on that exchange or that system as of the Evaluation Time (unless
the Trustee deems these prices inappropriate as a basis for valuation) or, if
there is no closing sale price at that time on that exchange or that system, at
the mean between the closing bid and asked prices. If the Securities are not so
listed or, if so listed and the principal market therefor is other than on the
exchange, the evaluation generally shall be based on the closing purchase price
in the over-the-counter market (unless the Trustee deems these prices
inappropriate as a basis for evaluation) or, if there is no such closing
purchase price, then the Trustee may utilize, at the Trust's expense, an
independent evaluation service or services to ascertain the values of the
Securities. The independent evaluation service shall use any of the following
methods, or a combination thereof, which it deems appropriate: (a) on the basis
of current bid prices for comparable securities, (b) by appraising the value of
the Securities on the bid side of the market or by such other appraisal deemed
appropriate by the Trustee or (c) by any combination of the above, each as of
the Evaluation Time.
VOLUME AND OTHER DISCOUNTS
Units of the Trust are available at a volume discount from the Public
Offering Price during the initial public offering based upon the number of Units
purchased. This volume discount will result in a reduction of the sales charge
applicable to such purchases. The approximate reduced sales charge applicable to
such purchases is as follows:
<TABLE>
<CAPTION>
APPROXIMATE REDUCED
NUMBER OF UNITS SALES CHARGE
- - -------------------------------------------------- -------------------
<S> <C>
10,000 but less than 25,000....................... 3.7%
25,000 but less than 50,000....................... 3.5%
50,000 but less than 75,000....................... 3.2%
75,000 but less than 100,000...................... 3.0%
100,000 or more................................... 2.5%
</TABLE>
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<PAGE>
These discounts will apply to all purchases of Units by the same purchaser
during the initial public offering period. Units purchased by the same
purchasers in separate transactions during the initial public offering period
will be aggregated for purposes of determining if such purchaser is entitled to
a discount provided that such purchaser must own at least the required number of
Units at the time such determination is made. Units held in the name of the
spouse of the purchaser or in the name of a child of the purchaser under 21
years of age are deemed for the purposes hereof to be registered in the name of
the purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Employees (and their immediate families) of Bear, Stearns & Co. Inc. and of
any underwriter of the Trust may, pursuant to employee benefit arrangements,
purchase Units of the Trust at a price equal to the then market value of the
underlying securities in the Trust during the initial offering period, divided
by the number of Units outstanding plus a reduced charge of 1.75% per Unit (such
amount may be reduced for employees of certain underwriters depending on the
amount of the underwriter concession available with respect to that purchase).
Such arrangements result in less selling effort and selling expenses than sales
to employee groups of other companies. Resales or transfers of Units purchased
under the employee benefit arrangements may only be made through the Sponsor's
secondary market, so long as it is being maintained.
DISTRIBUTION OF UNITS
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, Units will be
distributed by the Sponsor, the Underwriters and dealers at the Public Offering
Price. (See 'Underwriting Syndicate' in Part A.) The initial offering period is
thirty days after each deposit of Securities in the Trust and, unless all Units
are sold prior thereto, the Sponsor may extend the initial offering period for
successive thirty day periods. Certain banks and thrifts will make 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. Under
the Glass-Steagall Act, banks are prohibited from underwriting 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 intends to qualify the Units for sale in substantially all
States through the Underwriters and through dealers who are members of the
National Association of Securities Dealers, Inc. Units may be sold to dealers at
prices which represent a concession of up to 2% per Unit, subject to the
Sponsor's right to change the dealers' concession from time to time. In
addition, for transactions of at least 100,000 Units, the Sponsor intends to
negotiate the applicable sales charge and such charge will be disclosed to any
such purchaser. Such Units may then be distributed to the public by the dealers
at the Public Offering Price then in effect. The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units. In addition,
any dealer, underwriter or firm who purchases Units on the initial Date of
Deposit will be paid an additional concession of $1.00 per 100 Units purchased
that day. The Sponsor reserves the right to change the discounts from time to
time.
Underwriters and broker-dealers of the Trust, banks and/or others are
eligible to participate in a program in which such firms receive from the
Sponsor a nominal award for each of their registered representatives who have
sold a minimum number of units of unit investment trusts created by the Sponsor
during a specified time period. In addition, at various times the Sponsor may
implement other programs under which the sales forces of underwriters, brokers,
dealers, banks and/or others may be eligible to win other nominal awards for
certain sales efforts, or under which the Sponsor will reallow to any such
underwriters, brokers, dealers, banks and/or others that sponsor sales contests
or recognition programs conforming to criteria established by the Sponsor, or
participate 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
pubic 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 underwriters, brokers, dealers, banks and/or others for
certain services or activities which are
9
<PAGE>
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 Certificateholders pay for their
Units or the amount that the Trust will receive from the Units sold.
FREQUENT BUYER PROGRAM
Any dealer, underwriter, or firm whose total combined purchases of the
Trust and other unit investment trusts sponsored by Bear, Stearns & Co. Inc.
('MST/EST Units') from Bear, Stearns & Co. Inc. in a single calendar month fall
in any of the levels listed below, will be paid an additional concession.
<TABLE>
<CAPTION>
ADDITIONAL
AGGREGATE MONTHLY CONCESSION
AMOUNTS OF (PER 100 UNITS)
MST/EST UNITS SOLD
- - -------------------------------------------------- ---------------
<S> <C>
100,000 but less than 200,000..................... $0.50
200,000 but less than 450,000..................... $1.00
450,000 but less than 700,000..................... $1.50
700,000 or more................................... $2.00
</TABLE>
SPONSOR'S AND UNDERWRITERS' PROFITS
The Sponsor and the Underwriters will receive a combined gross underwriting
commission equal to up to 3.9% of the Public Offering Price per 100 Units
(equivalent to 4.058% of the net amount invested in the Securities).
Additionally, the Sponsor may realize a profit on the deposit of the Securities
in the Trust representing the difference between the cost of the Securities to
the Sponsor and the cost of the Securities to the Trust (See 'Portfolio'). The
Sponsor or any Underwriter may realize profits or sustain losses with respect to
Securities deposited in the Trust which were acquired from underwriting
syndicates of which they were a member.
The Sponsor may have participated as an underwriter or manager, co-manager
or member of underwriting syndicates from which some of the aggregate principal
amount of the Securities were acquired for the Trust in the amounts set forth in
'The Trust' in Part A. All or a portion of the Securities deposited in the Trust
may have been acquired through the Sponsor.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the underwriting
syndicate may also realize profits or sustain losses as a result of fluctuations
after the initial Date of Deposit in the aggregate value of the Securities and
hence in the Public Offering Price received by the Sponsor and the Underwriters
for the Units. Cash, if any, made available to the Sponsor prior to settlement
date for the purchase of Units may be used in the Sponsor's business subject to
the limitations of 17 CFR 240.15c3-3 under the Securities Exchange Act of 1934
and may be of benefit to the Sponsor.
Upon termination of the Trust, the Trustee may utilize the services of the
Sponsor for the sale of all or a portion of the Securities in the Trust. The
Sponsor will receive brokerage commissions from the Trust in connection with
such sales in accordance with applicable law.
In maintaining a market for the Units (see 'Sponsor Repurchase') the
Sponsor will realize profits or sustain losses in the amount of any difference
between the price at which it buys Units and the price at which it resells such
Units.
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<PAGE>
RIGHTS OF CERTIFICATEHOLDERS
CERTIFICATES
Ownership of Units of the Trust is evidenced by registered Certificates
executed by the Trustee and the Sponsor. Certificates may be issued in
denominations of one hundred or more Units. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed and/or accompanied
by a written instrument or instruments of transfer. Although no such charge is
presently made or contemplated, the Trustee may require a Certificateholder to
pay $2.00 for each Certificate reissued or transferred and any governmental
charge that may be imposed in connection with each such transfer or interchange.
Mutilated, destroyed, stolen or lost Certificates will be replaced upon delivery
of satisfactory indemnity and payment of expenses incurred.
DISTRIBUTIONS
Dividends and interest received by the Trust are credited by the Trustee to
an Income Account for the Trust. Other receipts, including the proceeds of
Securities disposed of, are credited to a Principal Account for the Trust.
Distributions to each Certificateholder from the Income Account are
computed as of the close of business on each Record Date for the following
Payment Date and consist of an amount substantially equal to such
Certificateholder's pro rata share of the income credited to the Income Account,
less estimated expenses. Distributions from the Principal Account of the Trust
(other than amounts representing failed contracts, as previously discussed) will
be computed as of each Record Date, and will be made to the Certificateholders
of the Trust on or shortly after the next Monthly Payment Date. Proceeds
representing principal received from the disposition of any of the Securities
between a Record Date and a Payment Date which are not used for redemptions of
Units will be held in the Principal Account and not distributed until the second
succeeding Monthly Payment Date. No distributions will be made to
Certificateholders electing to participate in the Total Reinvestment Plan.
Persons who purchase Units between a Record Date and a Payment Date will receive
their first distribution on the second Monthly Payment Date after such purchase.
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 Principal Account of the Trust, amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under 'Trust Expenses and Charges').
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges that may be payable out of the Trust. Amounts so withdrawn
shall not be considered a part of such 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 Principal
Accounts such amounts as may be necessary to cover redemptions of Units by the
Trustee.
The monthly dividend distribution per 100 Units cannot be estimated and
will change and may be reduced as Securities are redeemed, exchanged or sold, or
as expenses of the Trust fluctuate. No distribution need be made from the
Principal Account until the balance therein is an amount sufficient to
distribute $1.00 per 100 Units.
RECORDS
The Trustee shall furnish Certificateholders in connection with each
distribution a statement of the amount of dividends and interest, if any, and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per 100 Units. Within a reasonable time after the
end of each calendar year the Trustee will furnish to each person who at any
time during the calendar year was a Certificateholder of record, a statement
showing (a) as to the Income Account: dividends, interest and other cash amounts
received, amounts paid for purchases of Substitute Securities and redemptions of
Units, if any, deductions for applicable taxes and fees and expenses of the
Trust, and 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 100 Units outstanding on the last business day of such
calendar year; (b) as to the Principal Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payments of
applicable taxes and fees and
11
<PAGE>
expenses of the Trust, amounts paid for purchases of Substitute Securities and
redemptions of Units, if any, and 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 100 Units outstanding on the last
business day of such calendar year; (c) a list of the Securities held, a list of
Securities purchased, sold or otherwise disposed of during the calendar year and
the number of Units outstanding on the last business day of such calendar year;
(d) the Redemption Price per 100 Units based upon the last computation thereof
made during such calendar year; and (e) amounts actually distributed to
Certificateholders during such calendar year from the Income and Principal
Accounts, separately stated, of the Trust, expressed both as total dollar
amounts and as dollar amounts representing the pro rata share of each 100 Units
outstanding on the last business day of such calendar year.
The Trustee shall keep available for inspection by Certificateholders at
all reasonable times during usual business hours, books of record and account of
its transactions as Trustee, including records of the names and addresses of
Certificateholders, Certificates issued or held, a current list of Securities in
the portfolio and a copy of the Trust Agreement.
TAX STATUS
The following is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. 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, as amended (the 'Code'). Certificateholders
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 rendering the opinion set forth below, Battle Fowler has examined the
Agreement, the final form of Prospectus dated the date hereof (the 'Prospectus')
and the documents referred to therein, among others, and has relied on the
validity of said documents and the accuracy and completeness of the facts set
forth therein. In the Opinion of Battle Fowler, special counsel for the Sponsor,
under existing law:
1. The Trust will be classified as a grantor trust for Federal income
tax purposes and not as a partnership or association taxable as a
corporation. Classification of the Trust as a grantor trust will cause the
Trust not to be subject to Federal Income tax, and will cause the
Certificateholders of the Trust to be treated for Federal income tax
purposes as the owners of a pro rata portion of the assets of the Trust.
All income received by the Trust will be treated as income of the
Certificateholders in the manner set forth below.
2. The Trust is not subject to the New York Franchise Tax on Business
Corporations or the New York City General Corporation Tax. For a
Certificateholder who is a New York resident, however, a pro rate portion
of all or part of the income of the Trust will be treated as the income of
the Certificateholder under the income tax laws of the State and City of
New York. Similar treatment may apply in other states.
3. During the 90-day period subsequent to the initial issuance date,
the Sponsor reserves the right to deposit Additional Securities that are
substantially similar to those establishing the Trust. This retained right
falls within the guidelines promulgated by the Internal Revenue Service
('IRS') and should not affect the taxable status of the Trust.
A taxable event will generally occur with respect to each Certificateholder
when the Trust disposes of a Security (whether by sale, exchange or redemption)
or upon the sale, exchange or redemption of Units by such Certificateholder. The
price a Certificateholder pays for his Units, including sales charges, is
allocated among his pro rata portion of each Security held by the Trust (in
proportion to the fair market values thereof on the date the Certificateholder
purchases his Units) in order to determine his initial cost for his pro rata
portion of each Security held by the Trust.
For Federal income tax purposes, a Certificateholder's pro rata portion of
dividends paid with respect to a Security held by a Trust are taxable as
ordinary income to the extent of such corporation's current and accumulated
'earnings and profits' as defined by Section 316 of the Code. A
Certificateholder's pro rata portion
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of dividends paid on such Security that exceed such current and accumulated
earnings and profits will first reduce a Certificateholder's tax basis in such
Security, and to the extent that such dividends exceed a Certificateholder's tax
basis in such Security will generally be treated as capital gain. In instances
where a Certificateholder acquires his Units shortly before the Fund declares a
dividend, such Certificateholder may realize taxable income upon the receipt of
the dividend, even though the payment is, in effect, a return of capital.
The Trust will own shares in REITs, entities that have elected and
qualified for the special tax treatment applicable to 'regulated investment
companies.' If the REIT distributes 90% or more of its investment company
taxable income to its shareholders, it will not be subject to Federal income tax
on the amounts so distributed. Moreover, if the REIT distributes at least 98% of
its investment company taxable income (including any net capital gain) it will
not be subject to the 4% excise tax on certain undistributed income of
'regulated investment companies.' Distributions by the REIT of its taxable
income to its shareholders will be taxable as ordinary income to such
shareholders. Distributions of the REIT's net capital gain, which are designated
as capital gain dividends by the REIT, will be taxable to its shareholders as
long-term capital gain, regardless of the length of time the shareholders have
held their investment in the REIT.
A Certificateholder's portion of gain, if any, upon the sale, exchange or
redemption of Units on the disposition of Securities held by the Trust will
generally be considered a capital gain and will be long-term if the
Certificateholder has held his Units for more than one year. Long-term capital
gains are generally taxed at the same rates applicable to ordinary income,
although individuals who realize long-term capital gains will be subject to a
maximum tax rate of 28% on such gains, rather than the 'regular' maximum tax
rate of 39.6%. Tax rates may increase prior to the time when Certificateholders
may realize gains from the sale, exchange or redemption of the Units or
Securities.
A Certificateholder'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 and will be long-term if the Certificateholder has
held his Units for more than one year. Capital losses are deductible to the
extent of capital gains; in addition, up to $3,000 of capital losses recognized
by non-corporate Certificateholders may be deducted against ordinary income.
Under Section 67 of the Code and the accompanying Regulations, a
Certificateholder who itemizes his deductions may also deduct his pro rata share
of the fees and expenses of the Trust, but only to the extent that such amounts,
together with the Certificateholder's other miscellaneous deductions, exceed 2%
of his adjusted gross income. The deduction of fees and expenses may also be
limited by Section 68 of the Code, which reduces the amount of itemized
deductions that are allowed for individuals with incomes in excess of certain
thresholds.
After the end of each calendar year, the Trustee will furnish to each
Certificateholder an annual 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, and the fees and expenses
paid by the Trust. The Trustee will also furnish annual information returns to
each Certificateholder and to the Internal Revenue Service.
A corporation that owns Units will generally be entitled to a 70% dividends
received deduction with respect to such Certificateholder's pro rata portion of
dividends that are taxable as ordinary income to Certificateholders which are
received by the Trust from a domestic corporation under section 243 of the Code
or from a qualifying foreign corporation under section 245 of the Code (to the
extent the dividends are taxable as ordinary income, as discussed above) in the
same manner as if such corporation directly owned the Securities paying such
dividends. However, a corporation owning Units should be aware that Section 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). Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate
Certificateholder owns certain stock (or Units) the financing or which is
directly attributable to indebtedness incurred by such corporation. Accordingly,
corporate Certificateholders should consult their tax adviser in this regard.
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As discussed in the section 'Termination,' each Certificateholder will have
three options in receiving their termination distributions, which are (i) to
receive their pro rata share of the underlying Securities in kind, (ii) to
receive cash upon liquidation of their pro rata share of the underlying
Securities, or (iii) to invest the amount of cash they would receive upon the
liquidation of their pro rata share of the underlying Securities in units of a
future series of the Trust (if one is offered).
There are special tax consequences should a Certificateholder choose option
(i), the exchange of the Certificateholder's pro rata portion of each of the
share of stock and other assets held by the Trust for shares of stock plus cash.
Treasury Regulations provide that gain or loss is recognized when there is a
conversion of property into property that is materially different in kind or
extent. In this instance, the Certificateholder may be considered the owner of
an undivided interest in all of the Trusts's assets. By accepting the
proportionate number of Fund Shares of the Trust, in partial exchange for his
Unit, the Certificateholder should be treated as merely exchanging his undivided
pro rata ownership of Fund Shares held by the Trust into sole ownership of a
proportionate share of Fund Shares. As such, there should be no material
difference in the Certificateholder's ownership, and therefore the transaction
should be tax free to the extent the Fund Shares are received. Alternatively,
the transaction may be treated as an exchange that would qualify for
nonrecognition treatment to the extent the Certificateholder is exchanging his
undivided interest in all of the Trust's Securities for his proportionate number
of shares of the underlying Securities. In either instance, the transaction
should result in a non-taxable event for the Certificateholder to the extent
Securities are received. However, there is no specific authority addressing the
income tax consequences of an in-kind distribution from a grantor trust, and
investors are urged to consult their tax advisers in this regard.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trusts, are nevertheless taxed under Section 511 of the
Code on 'unrelated business taxable income.' Unrelated business taxable income
is income from a trade or business regularly carried on by the tax-exempt entity
that is unrelated to the entity's exempt purpose. Unrelated business taxable
income generally does not include dividend or interest income or gain from the
sale of investment property, unless such income is derived from property that is
debt-financed or is dealer property. A tax-exempt entity's dividend income from
the Trust and gain from the sale of Units in the Trust or the Trust's sale of
Securities is not expected to constitute unrelated business taxable income to
such tax-exempt entity unless the acquisition of the Unit itself is
debt-financed or constitutes dealer property in the hands of the tax-exempt
entity.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit sharing retirement plan) should
consider among other things (a) whether the investment is prudent under the
Employee Retirement Income Security Act of 1974 ('ERISA'), taking into account
the needs of the plan and all of the facts and circumstances of the investment
in the Trust; (b) whether the investment satisfies the diversification
requirement of Section 404(a)(1)(C) of ERISA; and (c) whether the assets of the
Trust are deemed 'plan assets' under ERISA and the Department of Labor
regulations regarding the definition of 'plan assets.'
Prospective tax-exempt investors are urged to consult their own tax
advisers prior to investing in the Trust.
LIQUIDITY
SPONSOR REPURCHASE
The Sponsor, although not obligated to do so, intends to maintain a
secondary market for the Units and continuously to offer to repurchase the Units
(notwithstanding the foregoing, the Sponsor undertakes to maintain the secondary
market during the initial public offering period). The Sponsor's secondary
market repurchase price will be based on the aggregate value of the Securities
in the Trust portfolio and will be the same as the redemption price. The
aggregate value of the Securities will be determined by the Trustee on a daily
basis and computed on the basis set forth under 'Trustee Redemption'. The
Sponsor does not guarantee the enforceability, marketability or price of any
Securities in the Portfolio or of the Units. Certificateholders who wish to
dispose of their Units should inquire of the Sponsor as to current market prices
prior to making a tender for redemption. The Sponsor may discontinue repurchase
of Units if the supply of Units exceeds demand, or for other business
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reasons. The date of repurchase is deemed to be the date on which Certificates
representing Units are physically received in proper form by Bear, Stearns & Co.
Inc., 245 Park Avenue, New York, New York 10167. Units received after 4 P.M.,
New York Time, will be deemed to have been repurchased on the next business day.
In the event a market is not maintained for the Units, a Certificateholder may
be able to dispose of Units only by tendering them to the Trustee for
redemption.
Units purchased by the Sponsor in the secondary market may be reoffered for
sale by the Sponsor at a price based on the aggregate value of the Securities in
the Trust plus a 3.9% sales charge (4.038% of the net amount invested) plus a
pro rata portion of amounts, if any, in the Income Account. Any Units that are
purchased by the Sponsor in the secondary market also may be redeemed by the
Sponsor if it determines such redemption to be in its best interest.
The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee for
redemption (see 'Trustee Redemption'). Factors which the Sponsor will consider
in making a determination will include the number of Units of all Trusts which
it has in inventory, its estimate of the salability and the time required to
sell such Units and general market conditions. For example, if in order to meet
redemptions of Units the Trustee must dispose of Securities, and if such
disposition cannot be made by the redemption date (seven calendar days after
tender), the Sponsor may elect to purchase such Units. Such purchase shall be
made by payment to the Certificateholder not later than the close of business on
the redemption date of an amount equal to the Redemption Price on the date of
tender.
TRUSTEE REDEMPTION
Units may also be tendered to the Trustee for redemption at its corporate
trust office at 770 Broadway, New York, New York 10003, upon proper delivery of
Certificates representing such Units and payment of any relevant tax. At the
present time there are no specific taxes related to the redemption of Units. No
redemption fee will be charged by the Sponsor or the Trustee. Units redeemed by
the Trustee will be cancelled.
Certificates representing Units to be redeemed must be delivered to the
Trustee and must be properly endorsed or accompanied by proper instruments of
transfer with signature guaranteed (or by providing satisfactory indemnity, as
in the case of lost, stolen or mutilated Certificates). Thus, redemptions of
Units cannot be effected until Certificates representing such Units have been
delivered by the person seeking redemption. (See 'Certificates'.)
Certificateholders must sign exactly as their names appear on the faces of their
Certificates. In certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of corporate
authority.
Within seven calendar days following a tender for redemption, or, if such
seventh day is not a business day, on the first business day prior thereto, the
Certificateholder will be entitled to receive an amount for each Unit tendered
equal to the Redemption Price per Unit computed as of the Evaluation Time set
forth under 'Summary of Essential Information' in Part A on the date of tender.
The 'date of tender' is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the close of trading
on the New York Stock Exchange (4:00 p.m. Eastern Time), the date of tender is
the next day on which such Exchange is open for trading, and such Units will be
deemed to have been tendered to the Trustee on such day for redemption at the
Redemption Price computed on that day.
A Certificateholder will receive his redemption proceeds in cash and
amounts paid on redemption shall be withdrawn from the Income Account, or, if
the balance therein is insufficient, from the Principal Account. All other
amounts paid on redemption shall be withdrawn from the Principal Account. The
Trustee is empowered to sell Securities in order to make funds available for
redemptions. Such sales, if required, could result in a sale of Securities by
the Trustee at a loss. To the extent Securities are sold, the size and diversity
of the Trust will be reduced. The Securities to be sold will be selected by the
Trustee in order to maintain, to the extent practicable, the proportionate
relationship among the number of shares of each stock. Provision is made in the
Indenture under which the Sponsors may, but need not, specify minimum amounts in
which blocks of Securities are to be sold in order to obtain the best price for
the Fund. While these minimum amounts may vary from time to time in
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accordance with market conditions, the Sponsor believes that the minimum amounts
which would be specified would be approximately 100 shares for readily
marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in the
Trust determined by the Trustee on the basis of (i) the cash on hand in the
Trust or moneys in the process of being collected, (ii) the value of the
Securities in the Trust as determined by the Trustee, less (a) amounts
representing taxes or other governmental charges payable out of the Trust, (b)
the accrued expenses of the Trust and (c) cash allocated for the distribution to
Certificateholders of record as of the business day prior to the evaluation
being made. The Trustee may determine the value of the Securities in the Trust
in the following manner: if the Securities are listed on a national securities
exchange or the NASDAQ national market system, this evaluation is generally
based on the closing sale prices on that exchange or that system (unless the
Trustee deems these prices inappropriate as a basis for valuation) or, if there
is no closing sale price on that exchange or system, at the mean between the
closing bid and asked prices. If the Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange, the
evaluation shall generally be based on the closing purchase price in the
over-the-counter market (unless the Trustee deems these prices inappropriate as
a basis for evaluation) or, if there is no such closing purchase price, then the
Trustee may utilize, at the Trust's expense, an independent evaluation service
or services to ascertain the values of the Securities. The independent
evaluation service shall use any of the following methods, or a combination
thereof, which it deems appropriate: (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Securities on the bid
side of the market or (c) by any combination of the above.
The Trustee is irrevocably authorized in its discretion, if the Sponsor
does not elect to purchase a Unit tendered for redemption or if the Sponsor
tenders a Unit for redemption, in lieu of redeeming such Unit, to sell such Unit
in the over-the-counter market for the account of the tendering
Certificateholder at prices which will return to the Certificateholder an amount
in cash, net after deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Price for such Unit. The
Trustee will pay the net proceeds of any such sale to the Certificateholder on
the day he would otherwise be entitled to receive payment of the Redemption
Price.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on that Exchange is restricted or during which
(as determined by the Securities and Exchange Commission) an emergency exists as
a result of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange Commission
may by order permit. The Trustee and the Sponsor are not liable to any person or
in any way for any loss or damage which may result from any such suspension or
postponement.
TOTAL REINVESTMENT PLAN
Distributions of dividend income and capital gain, if any, from the Trust
are made to Certificateholders monthly. The Certificateholder has the option,
however, of either receiving his dividend check, together with any other
payments, from the Trustee or participating in a reinvestment program offered by
the Sponsor in shares of GOC Fund, Inc. (formerly The Manager's Fund, Inc.),
U.S. Treasury Money Market Portfolio (the 'Fund'). Participation in the
reinvestment option is conditioned on the Fund's lawful qualification for sale
in the state in which the Certificateholder is a resident.
Upon enrollment in the reinvestment option, the Trustee will direct
dividend and/or other distributions, if any, to the Fund. The Fund seeks to
maximize current income and to maintain liquidity and a stable net asset value
by investing in short term U.S. Treasury Obligations which have effective
maturities of 397 days or less. For more complete information concerning the
Fund, including charges and expenses, the Certificateholder should fill out and
mail the card attached to the inside back cover of the Prospectus. The
prospectus for the Fund will be sent to Certificateholders. The
Certificateholder should read the prospectus for the Fund carefully before
deciding to participate.
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TRUST ADMINISTRATION
PORTFOLIO SUPERVISION
The Trust is a unit investment trust and is not a 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 managed and
therefore the adverse financial condition of an issuer will not necessarily
require the sale of its Security from the Portfolio. However, the Sponsor may
direct the disposition of Securities upon the occurrence of certain events
including:
1. default in payment of amounts due on any of the Securities;
2. institution of certain legal proceedings;
3. default under certain documents materially and adversely affecting
future declaration or payment of amounts due or expected;
4. the determination of the Sponsor that such sale is desirable to
maintain the qualification of the Trust as a 'regulated investment company'
under the Internal Revenue Code;
5. if the disposition of these Securities is necessary in order to
enable the Trust to make distributions of the Trust's capital gain net
income; or
6. decline in price as a direct result of serious adverse credit
factors affecting the issuer of a Security which, in the opinion of the
Sponsor, would make the retention of the Security detrimental to the Trust
or the Certificateholders.
If a default in the payment of amounts due on any Security occurs and if
the Sponsor fails to give immediate instructions to sell or hold that Security,
the Trust Agreement provides that the Trustee, within 30 days of that failure by
the Sponsor, may sell the Security.
The Trust Agreement provides that it is the responsibility of the Sponsor
to instruct the Trustee to reject any offer made by an issuer of any of the
Securities to issue new securities in exchange and substitution for any Security
pursuant to a recapitalization or reorganization, except that the Sponsor may
instruct the Trustee to accept such an offer or to take any other action with
respect thereto as the Sponsor may deem proper if the issuer failed to declare
or pay, or the Sponsor anticipates such issuer will fail to declare or pay,
anticipated dividends with respect thereto.
The Trust Agreement also authorizes the Sponsor to increase the size and
number of Units of the Trust by the deposit of Additional Securities, contracts
to purchase Additional Securities or cash or a letter of credit with
instructions to purchase Additional Securities in exchange for the corresponding
number of additional Units from time to time subsequent to the initial Date of
Deposit, provided that the original proportionate relationship among the number
of shares of each Security established on the Initial Date of Deposit is
maintained to the extent practicable.
With respect to deposits of Additional Securities (or cash or a letter of
credit with instructions to purchase Additional Securities), in connection with
creating additional Units of the Trust, the Sponsor may specify the minimum
numbers in which Additional Securities will be deposited or purchased. If a
deposit is not sufficient to acquire minimum amounts of each Security,
Additional Securities may be acquired in the order of the Security most
under-represented immediately before the deposit when compared to the original
proportionate relationship. If Securities of an issue originally deposited are
unavailable at the time of the subsequent deposit, the Sponsor may (1) deposit
cash or a letter of credit with instructions to purchase the Security when it
becomes available, or (2) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a Substitute
Security.
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TRUST AGREEMENT AND AMENDMENT
The Trust Agreement may be amended by the Trustee and the Sponsor without
the consent of any of the Certificateholders: (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
other provisions in regard to matters arising thereunder as shall not adversely
affect the interests of the Certificateholders.
The Trust Agreement may also be amended in any respect, or performance of
any of the provisions thereof may be waived, with the consent of the holders of
Certificates evidencing 66 2/3% of the Units then outstanding for the purpose of
modifying the rights of Certificateholders; provided that no such amendment or
waiver shall reduce any Certificateholder's interest in the Trust without his
consent or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of the holders of all Certificates. The
Trust Agreement may not be amended, without the consent of the holders of all
Certificates in the Trust then outstanding, to increase the number of Units
issuable or to permit the acquisition of any Securities in addition to or in
substitution for those initially deposited in such Trust, except in accordance
with the provisions of the Trust Agreement. The Trustee shall promptly notify
Certificateholders, in writing, of the substance of any such amendment.
TRUST TERMINATION
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last of
the Securities held in such Trust but in no event is it to continue beyond the
Mandatory Termination Date. If the value of the Trust shall be less than the
minimum amount set forth under 'Summary of Essential Information' in Part A, the
Trustee may, in its discretion, and shall, when so directed by the Sponsor,
terminate the Trust. The Trust may also be terminated at any time with the
consent of the holders of Certificates representing 100% of the Units then
outstanding. The Trustee may utilize the services of the Sponsor for the sale of
all or a portion of the Securities in the Trust. The Sponsor will receive
brokerage commissions from the Trust in connection with such sales in accordance
with applicable law. In the event of termination, written notice thereof will be
sent by the Trustee to all Certificateholders. Such notice will provide
Certificateholders with three options by which to receive their pro rata share
of the net asset value of the Trust.
1. A Certificateholder who owns at least 2,500 Units and who so elects
by notifying the Trustee prior to the commencement of the Liquidation
Period by returning a properly completed election request (to be supplied
to Certificateholders at least 20 days prior to such date) (see Part
A--'Summary of Essential Information' for the date of the commencement of
the Liquidation Period) and whose interest in the Trust entitles him to
receive at least one share of each underlying Security will have his Units
redeemed on commencement of the Liquidation Period by distribution of the
Certificateholder's pro rata share of the net asset value of the Trust on
such date distributed in kind to the extent represented by whole shares of
underlying Securities and the balance in cash within 7 calendar days next
following the commencement of the Liquidation Period. Certificateholders
subsequently selling such distributed Securities will incur brokerage costs
when disposing of such Securities. An election of this option will not
prevent the Certificateholder from recognizing taxable gain as a result of
the liquidation, even though no cash will be distributed to pay any taxes.
Certificateholders should consult their own tax adviser in this regard.
A Certificateholder may also elect prior to the Mandatory Termination Date
by so specifying in a properly completed election request, the following two
options with regard to the termination distribution of such Certificateholder's
interest in the Trust as set forth below:
2. to receive in cash such Certificateholder's pro rata share of the
net asset value of the Trust derived from the sale by the Sponsor as the
agent of the Trustee of the underlying Securities over a period not to
exceed 60 business days immediately following the commencement of the
Liquidation Period. The Certificateholder's Redemption Price per Unit on
the settlement date of the last trade of a Security in the Trust will be
distributed to such Certificateholder within 7 days of the settlement of
the trade of the last Security to be sold; and/or
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3. upon the receipt by the Trust of an appropriate exemptive order
from the Securities and Exchange Commission, to invest such
Certificateholder's pro rata share of the net asset value of the Trust
derived from the sale by the Sponsor as agent of the Trustee of the
underlying Securities over a period not to exceed 60 business days
immediately following the commencement of the Liquidation Period, in units
of a subsequent series of the Equity Trust (the 'New Series'), provided one
is offered. The Units of a New Series will be purchased by the
Certificateholder within 7 days of the settlement of the trade for the last
Security to be sold. Such purchaser will be entitled to a reduced sales
load of approximately 2.5% of the Public Offering Price upon the purchase
of units of the New Series. It is expected that the terms of the New Series
will be substantially the same as the terms of the Trust described in this
Prospectus, and that similar options with respect to the termination of
such New Series will be available. The availability of this option does not
constitute a solicitation of an offer to purchase Units of a New Series or
any other security. A Certificateholder's election to participate in this
option will be treated as an indication of interest only. At any time prior
to the purchase by the Certificateholder of units of a New Series such
Certificateholder may change his investment strategy and receive, in cash,
the proceeds of the sale of the Securities. An election of this option will
not prevent the Certificateholder from recognizing taxable gain or loss as
a result of the liquidation, even though no cash will be distributed to pay
any taxes. Certificateholders should consult their own tax advisers in this
regard.
The Sponsor has agreed to effect the sales of underlying securities for the
Trustee in the case of the second and third options over a period not to exceed
60 business days immediately following the commencement of the Liquidation
Period free of brokerage commissions. The Sponsor, on behalf of the Trustee,
will sell, unless prevented by unusual and unforeseen circumstances, such as,
among other reasons, a suspension in trading of a Security, the close of a stock
exchange, outbreak of hostilities and collapse of the economy, on each business
day during the 60 business day period at least a number of shares of each
Security which then remains in the portfolio (based on the number of shares of
each issue in the portfolio) multiplied by a fraction the numerator of which is
one and the denominator of which is the number of days remaining in the 60
business day sales period. The Redemption Price Per Unit upon the settlement of
the last sale of Securities during the 60 business day period will be
distributed to Certificateholders in redemption of such Certificateholders'
interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New
Series and the amount of other orders for Units in the New Series, the Sponsor
may purchase a large amount of securities for the New Series in a short period
of time. The Sponsor's buying of securities may tend to raise the market prices
of these securities. The actual market impact of the Sponsor's purchases,
however, is currently unpredictable because the actual amount of securities to
be purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the 60
business day period immediately following the commencement of the Liquidation
Period; depending on the number of sales required, the prices of and demand for
Securities, such sales may tend to depress the market prices and thus reduce the
proceeds of such sales. The Sponsor believes that the sale of underlying
Securities over a 60 business day period as described above is in the best
interest of a Certificateholder and may mitigate the negative market price
consequences stemming from the trading of large amounts of Securities. The
Securities may be sold in fewer than 60 days if, in the Sponsor's judgment, such
sales are in the best interest of Certificateholders. The Sponsor, in
implementing such sales of securities on behalf of the Trustee, will seek to
maximize the sales proceeds and will act in the best interests of the
Certificateholders. There can be no assurance, however, that any adverse price
consequences of heavy trading will be mitigated.
Certificateholders who do not make any election will be deemed to have
elected to receive the Redemption Price per Unit in cash (option number 2).
The Sponsor may for any reason, in their sole discretion, decide not to
sponsor any subsequent series of the Trust, without penalty or incurring
liability to any Certificateholder. If the Sponsor so decides, the Sponsor will
notify the Trustee of that decision, and the Trustee will notify the
Certificateholders before the Termination Date. All Certificateholders will then
elect either option 1, if eligible, or option 2.
By electing to reinvest in the New Series, the Certificateholder indicates
his interest in having his terminating distribution from the Trust invested only
in the New Series created next following termination of the
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Trust; the Sponsor expects, however, that a similar reinvestment program will be
offered with respect to all subsequent series of the Trust, thus giving
Certificateholders a yearly opportunity to elect to 'rollover' their terminating
distributions into a New Series. The availability of the reinvestment privilege
does not constitute a solicitation of offers to purchase units of a New Series
or any other security. A Certificateholder's election to participate in the
reinvestment program will be treated as an indication of interest only. The
Sponsor intends to coordinate the date of deposit of a future series so that the
terminating trust will terminate contemporaneously with the creation of a New
Series.
The Sponsor reserves the right to modify, suspend or terminate the
reinvestment privilege at any time.
THE SPONSOR
The Sponsor, Bear, Stearns & Co. Inc., a Delaware corporation, is engaged
in the underwriting, investment banking and brokerage business and is a member
of the National Association of Securities Dealers, Inc. and all principal
securities and commodities exchanges, including the New York Stock Exchange, the
American Stock Exchange, the Midwest Stock Exchange and the Pacific Stock
Exchange. Bear Stearns maintains its principal business offices at 245 Park
Avenue, New York, New York 10167 and, since its reorganization from a
partnership to a corporation in October, 1985 has been a wholly-owned subsidiary
of The Bear Stearns Companies Inc. Bear Stearns, through its predecessor
entities, has been engaged in the investment banking and brokerage business
since 1923. Bear Stearns is the sponsor for numerous series of unit investment
trusts, including, Equity Securities Trust, Series 1 (and Subsequent Series), A
Corporate Trust, Series 1 (and Subsequent Series), New York Municipal Trust,
Series 1 (and Subsequent Series), New York Discount and Zero Coupon Fund, 1st
Series (and Subsequent Series), Municipal Securities Trust, Series 1 (and
Subsequent Series), 1st Discount Series (and Subsequent Series), Multi-State
Series 1 (and Subsequent Series), High Income Series 1 (and Subsequent Series),
Mortgage Securities Trust, Series 1 (and Subsequent Series) and Insured
Municipal Securities Trust, Series 1 (and Subsequent Series) and 5th Discount
Series (and Subsequent Series).
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations.
The Sponsor will be under no liability to Certificateholders for taking any
action, or refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment except in cases of its own willful
misfeasance, bad faith, gross negligence of reckless disregard of its
obligations and duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor.
If at any time the Sponsor shall resign or fail to perform any of its
duties under the Trust Agreement or becomes incapable of acting or becomes
bankrupt or its affairs are taken over by public authorities, then the Trustee
may either (a) appoint a successor Sponsor; (b) terminate the Trust Agreement
and liquidate the Trust; or (c) continue to act as Trustee without terminating
the Trust Agreement. Any successor Sponsor appointed by the Trustee shall be
satisfactory to the Trustee and, at the time of appointment, shall have a net
worth of at least $1,000,000.
THE TRUSTEE
The Trustee is United States Trust Company of New York, with its principal
place of business at 770 Broadway, New York, New York 10003. United States Trust
Company of New York has, since its establishment in 1853, engaged primarily in
the management of trust and agency accounts for individuals and corporations.
The Trustee is a member of the New York Clearing House Association and is
subject to supervision and examination by the Superintendent of Banks of the
State of New York, the Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System.
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment; or for any disposition of any
20
<PAGE>
moneys, Securities or Certificates in accordance with the Trust Agreement,
except in cases of its own willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties; provided, however, that the
Trustee shall not in any event be liable or responsible for any evaluation made
by any independent evaluation service employed by it. In addition, the Trustee
shall not be liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or the Trust which it may be required to pay under
current or future law of the United States or any other taxing authority having
jurisdiction. The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities pursuant to the
Trust Agreement.
For further information relating to the responsibilities of the Trustee
under the Trust Agreement, reference is made to the material set forth under
'Rights of Certificateholders'.
The Trustee may resign by executing an instrument in writing and filing the
same with the Sponsor, and mailing a copy of a notice of resignation to all
Certificateholders. In such an event the Sponsor is obligated to appoint a
successor Trustee as soon as possible. In addition, 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 Certificateholder by the Sponsor. If upon resignation of the
Trustee no successor has been appointed and has accepted the appointment within
thirty days after notification, the retiring Trustee may apply to a court of
competent jurisdiction for the appointment of a successor. The resignation or
removal of the Trustee becomes effective only when the successor Trustee accepts
its appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. 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.
Any corporation into which the Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Trustee shall be a party, shall be the successor Trustee. The
Trustee must always be a banking corporation organized under the laws of the
United States or any State and have at all times an aggregate capital, surplus
and undivided profits of not less than $2,500,000.
EVALUATION OF THE TRUST
The value of the Securities in the Trust portfolio is determined in good
faith by the Trustee on the basis set forth under 'Public Offering--Offering
Price.' The Sponsor and the Certificateholders may rely on any evaluation
furnished by the Trustee and shall have no responsibility for the accuracy
thereof. Determinations by the Trustee under the Trust Agreement shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the Trustee shall be under no liability to the Sponsor or
Certificateholders for errors in judgment, except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. The Trustee, the Sponsor and the Certificateholders may
rely on any evaluation furnished to the Trustee by an independent evaluation
service and shall have no responsibility for the accuracy thereof.
TRUST EXPENSES AND CHARGES
At no cost to the Trust, the Sponsor has borne all the expenses of creating
and establishing the Trust, including the cost of initial preparation and
execution of the Trust Agreement, registration of the Trust and the Units under
the Investment Company Act of 1940 and the Securities Act of 1933, the initial
preparation and printing of the Certificates, legal expenses, advertising and
selling expenses, expenses of the Trustee, initial fees and other out-of-pocket
expenses.
The Sponsor will not charge the Trust a fee for its services as such. (See
'Sponsor's and Underwriters' Profits'.)
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<PAGE>
The Sponsor will receive for portfolio supervisory services to the Trust an
Annual Fee in the amount set forth under 'Summary of Essential Information' in
Part A. The Sponsor's fee may exceed the actual cost of providing portfolio
supervisory services for these Trusts, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the Equity
Securities Trust in any calendar year exceed the aggregate cost to the Sponsor
of supplying such services in such year. (See 'Portfolio Supervision').
The Trustee will receive for its ordinary recurring services to the Trust
an annual fee in the amount set forth under 'Summary of Essential Information'
in Part A. For a discussion of the services performed by the Trustee pursuant to
its obligations under the Trust Agreement, see 'Trust Administration' and
'Rights of Certificateholders'.
The Trustee's fees applicable to a Trust are payable monthly as of the
Record Date from the Income Account of the Trust to the extent funds are
available and then from the Principal Account. Such fees may be increased
without approval of the Certificateholders by amounts not exceeding
proportionate increases in consumer prices for services as measured by the
United States Department of Labor's Consumer Price Index entitled 'All Services
Less Rent'.
The following additional charges are or may be incurred by the Trust: all
expenses (including counsel fees) of the Trustee incurred and advances made in
connection with its activities under the Trust Agreement, including the expenses
and costs of any action undertaken by the Trustee to protect the Trust and the
rights and interests of the Certificateholders; fees of the Trustee for any
extraordinary services performed under the Trust Agreement; indemnification of
the Trustee for any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification of the
Sponsor for any losses, liabilities and expenses incurred in acting as sponsor
of the Trust without gross negligence, bad faith or willful misconduct on its
part; and all taxes and other governmental charges imposed upon the Securities
or any part of the Trust (no such taxes or charges are being levied, made or, to
the knowledge of the Sponsor, contemplated). The above expenses, including the
Trustee's fees, when paid by or owing to the Trustee are secured by a first lien
on the Trust to which such expenses are charged. In addition, the Trustee is
empowered to sell the Securities in order to make funds available to pay all
expenses.
The accounts of the Trust shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any audit expense which exceeds 50 Cents
per Unit. Certificateholders covered by the audit during the year may receive a
copy of the audited financials upon request.
EXCHANGE PRIVILEGE AND CONVERSION OFFER
Upon receipt by the Trust of an appropriate exemptive order from the
Securities and Exchange Commission, Certificateholders will be able to elect to
exchange any or all of their Units of this Trust for Units of one or more of any
available series of Equity Securities Trust, Mortgage Securities Trust, Insured
Municipal Securities Trust, Municipal Securities Trust, New York Municipal
Trust, Mortgage Securities Trust or A Corporate Trust (the 'Exchange Trusts') at
a reduced sales charge as set forth below. Under the Exchange Privilege, the
Sponsor's repurchase price during the initial offering period of the Units being
surrendered will be based on the market value of the Securities in the Trust
portfolio or on the aggregate offer price of the securities in the other Trust
Portfolios; and, after the initial offering period has been completed, will be
based on the aggregate bid price of the securities in the particular Trust
portfolio. Units in an Exchange Trust then will be sold to the Certificateholder
at a price based on the aggregate offer price of the Securities in the Exchange
Trust portfolio during the initial public offering period of the Exchange Trust;
or based on the aggregate bid price of the securities in the Exchange Trust
Portfolio if its initial offering has been completed plus accrued interest and a
reduced sales charge as set forth below.
Except for unitholders who wish to exercise the Exchange Privilege within
the first five months of their purchase of Units of the Trust, the sales charge
applicable to the purchase of units of an Exchange Trust shall be approximately
1.5% of the price of each Exchange Trust unit (or 1,000 Units for the Mortgage
Securities Trust or
22
<PAGE>
100 Units for the Equity Securities Trust). For unitholders who wish to exercise
the Exchange Privilege within the first five months of their purchase of Units
of the Trust, the sales charge applicable to the purchase of units of an
Exchange Trust shall be the greater of (i) approximately 1.5% of the price of
each Exchange Trust unit (or 1,000 Units for the Mortgage Securities Trust or
100 Units for the Equity Securities Trust), or (ii) an amount which when coupled
with the sales charge paid by the unitholder upon his original purchase of Units
of the Trust at least equals the sales charge applicable in the direct purchase
of units of an Exchange Trust. The Exchange Privilege is subject to the
following conditions:
1. The Sponsor must be maintaining a secondary market in both the
Units of the Trust held by the Certificateholder and the Units of the
available Exchange Trust. While the Sponsor has indicated its intention to
maintain a market in the Units of all Trusts sponsored by it, the Sponsor
is under no obligation to continue to maintain a secondary market and
therefore there is no assurance that the Exchange Privilege will be
available to a Certificateholder at any specific time in the future. At the
time of the Certificateholder's election to participate in the Exchange
Privilege, there also must be Units of the Exchange Trust available for
sale, either under the initial primary distribution or in the Sponsor's
secondary market.
2. Exchanges will be effected in whole units only. Any excess proceeds
from the Units surrendered for exchange will be remitted and the selling
Certificateholder will not be permitted to advance any new funds in order
to complete an exchange. Units of the Mortgage Securities Trust may only be
acquired in blocks of 1,000 Units. Units of the Equity Securities Trust may
only be acquired in blocks of 100 Units.
3. The Sponsor reserves the right to suspend, modify or terminate the
Exchange Privilege. The Sponsor will provide unitholders of the Trust with
60 days prior written notice of any termination or material amendment to
the Exchange Privilege, provided that, no notice need be given if (i) the
only material effect of an amendment is to reduce or eliminate the sales
charge payable at the time of the exchange, to add one or more series of
the Trust eligible for the Exchange Privilege, (ii) there is a suspension
of the redemption of units of an Exchange Trust under Section 22(e) of the
Investment Company Act of 1940, or (iii) an Exchange Trust temporarily
delays or ceases the sale of its units because it is unable to invest
amounts effectively in accordance with its investment objectives, policies
and restrictions. During the 60 day notice period prior to the termination
or material amendment of the Exchange Privilege described above, the
Sponsor will continue to maintain a secondary market in the units of all
Exchange Trusts that could be acquired by the affected unitholders.
Unitholders may, during this 60 day period, exercise the Exchange Privilege
in accordance with its terms then in effect. In the event the Exchange
Privilege is not available to a Certificateholder at the time he wishes to
exercise it, the Certificateholder will immediately be notified and no
action will be taken with respect to his Units without further instructions
from the Certificateholder.
To exercise the Exchange Privilege, a Certificateholder should notify the
Sponsor of his desire to exercise his Exchange Privilege. If Units of a
designated, outstanding series of an Exchange Trust are at the time available
for sale and such Units may lawfully be sold in the state in which the
Certificateholder is a resident, the Certificateholder will be provided with a
current prospectus or prospectuses relating to each Exchange Trust in which he
indicates an interest. He may then select the Trust or Trusts into which he
desires to invest the proceeds from his sale of Units. The exchange transaction
will operate in a manner essentially identical to a secondary market transaction
except that units may be purchased at a reduced sales charge.
EXAMPLE: Assume that after the initial public offering has been completed, a
Certificateholder has five units of a Trust with a current value of $700 per
unit which he has held for more than 5 months and the Certificateholder wishes
to exchange the proceeds for units of a secondary market Exchange Trust with a
current price of $725 per unit. The proceeds from the Certificateholder's
original units will aggregate $3,500. Since only whole units of an Exchange
Trust may be purchased under the Exchange Privilege, the Certificateholder would
be able to acquire four units (or 4,000 Units of the Mortgage Securities Trust
or 400 Units of the Equity Securities Trust) for a total cost of $2,960 ($2,900
for units and $60 for the sales charge). The remaining $540 would be remitted to
the Certificateholder in cash. If the Certificateholder acquired the same number
of units at the same time in a regular secondary market transaction, the price
would have been $3,068.80 ($2,900 for units and $168.80 for the sales charge,
assuming a 5 1/2% sales charge times the public offering price).
23
<PAGE>
THE CONVERSION OFFER
Upon receipt by the Trust of an appropriate exemptive order from the
Securities and Exchange Commission, Unit owners of any registered unit
investment trust for which there is no active secondary market in the units of
such trust (a 'Redemption Trust') will be able to elect to redeem such units and
apply the proceeds of the redemption to the purchase of available Units of one
or more series of Mortgage Securities Trust, A Corporate Trust, Municipal
Securities Trust, Insured Municipal Securities Trust, Mortgage Securities Trust,
New York Municipal Trust or Equity Securities Trust (the 'Conversion Trusts') at
the Public Offering Price for units of the Conversion Trust based on a reduced
sales charge as set forth below. Under the Conversion Offer, units of the
Redemption Trust must be tendered to the trustee of such trust for redemption at
the redemption price, which is based upon the market value of the underlying
securities in the Trust portfolio or the aggregate bid side evaluation of the
underlying bonds in other Trust portfolios and is generally about 1 1/2% to 2%
lower than the offering price for such bonds. The purchase price of the units
will be based on the aggregate offer price of the underlying bonds in the
Conversion Trust portfolio during its initial offering period; or, at a price
based on the aggregate bid price of the underlying bonds if the initial public
offering of the Conversion Trust has been completed, plus accrued interest and a
sales charge as set forth below.
Except for unitholders who wish to exercise the Conversion Offer within the
first five months of their purchase of units of a Redemption Trust, the sales
charge applicable to the purchase of Units of the Conversion Trust shall be
approximately 1.5% of the price of each Unit (or per 1,000 Units for the
Mortgage Securities Trust or 100 Units for the Equity Securities Trust). For
unitholders who wish to exercise the Conversion Offer within the first five
months of their purchase of units of a Redemption Trust, the sales charge
applicable to the purchase of Units of a Conversion Trust shall be the greater
of (i) approximately 1.5% of the price of each Unit (or per 1,000 Units for the
Mortgage Securities Trust or 100 Units for the Equity Securities Trust) or (ii)
an amount which when coupled with the sales charge paid by the unitholder upon
his original purchase of units of the Redemption Trust at least equals the sales
charge applicable in the direct purchase of Units of a Conversion Trust. The
Conversion Offer is subject to the following limitations:
1. The Conversion Offer is limited only to unit owners of any
Redemption Trust, defined as a unit investment trust for which there is no
active secondary market at the time the Certificateholder elects to
participate in the Conversion Offer. At the time of the unit owner's
election to participate in the Conversion Offer, there also must be
available units of a Conversion Trust, either under a primary distribution
or in the Sponsor's secondary market.
2. Exchanges under the Conversion Offer will be effected in whole
units only. Unit owners will not be permitted to advance any new funds in
order to complete an exchange under the Conversion Offer. Any excess
proceeds from units being redeemed will be returned to the unit owner.
Units of the Mortgage Securities Trust may only be acquired in blocks of
1,000 units. Units of the Equity Securities Trust may only be acquired in
blocks of 100 Units.
3. The Sponsor reserves the right to modify, suspend or terminate the
Conversion Offer at any time without notice to unit owners of Redemption
Trusts. In the event the Conversion Offer is not available to a unit owner
at the time he wishes to exercise it, the unit owner will be notified
immediately and no action will be taken with respect to his units without
further instruction from the unit owner. The Sponsor also reserves the
right to raise the sales charge based on actual increases in the Sponsor's
costs and expenses in connection with administering the program, up to a
maximum sales charge of 2% per unit (or per 1,000 units for the Mortgage
Securities Trust or 100 Units for the Equity Securities Trust).
To exercise the Conversion Offer, a unit owner of a Redemption Trust should
notify his retail broker of his desire to redeem his Redemption Trust Units and
use the proceeds from the redemption to purchase Units of one or more of the
Conversion Trusts. If Units of a designated, outstanding series of a Conversion
Trust are at that time available for sale and if such Units may lawfully be sold
in the state in which the unit owner is a resident, the unit owner will be
provided with a current prospectus or prospectuses relating to each Conversion
Trust in which he indicates an interest. He then may select the Trust or Trusts
into which he decides to invest the proceeds from the sale of his Units. The
transaction will be handled entirely through the unit owner's retail broker. The
24
<PAGE>
retail broker must tender the units to the trustee of the Redemption Trust for
redemption and then apply the proceeds to the redemption toward the purchase of
units of a Conversion Trust at a price based on the aggregate offer or bid side
evaluation per Unit of the Conversion Trust, depending on which price is
applicable, plus accrued interest and the applicable sales charge. The
certificates must be surrendered to the broker at the time the redemption order
is placed and the broker must specify to the Sponsor that the purchase of
Conversion Trust Units is being made pursuant to the Conversion Offer. The unit
owner's broker will be entitled to retain $5 of the applicable sales charge.
EXAMPLE: Assume a unit owner has five units of a Redemption Trust which has held
for more than 5 months with a current redemption price of $675 per unit based on
the aggregate bid price of the underlying bonds and the unit owner wishes to
participate in the Conversion Offer and exchange the proceeds for units of a
secondary market Conversion Trust with a current price of $750 per Unit. The
proceeds for the unit owner's redemption of units will aggregate $3,375. Since
only whole units of a Redemption Trust may be purchased under the Conversion
Offer, the unit owner will be able to acquire four units of the Conversion Trust
(or 4,000 units of the Mortgage Securities Trust or 400 Units of the Equity
Securities Trust) for a total cost of $2,860 ($2,800 for units and $60 for the
sales charge). The remaining $515 would be remitted to the unit owner in cash.
If the unit owner acquired the same number of Conversion Trust units at the same
time in a regular secondary market transaction, the price would have been
$2,962.96 ($2,800 for units and $162.96 sales charge, assuming a 5 1/2% sales
charge times the public offering price).
TAX CONSEQUENCES OF THE EXCHANGE PRIVILEGE AND THE CONVERSION OFFER
A surrender of units pursuant to the Exchange Privilege or the Conversion
Offer will constitute a 'taxable event' to the Certificateholder under the
Internal Revenue Code. The Certificateholder will realize a tax gain or loss
that will be of a long- or short-term capital or ordinary income nature
depending on the length of time the units have been held and other factors. (See
'Tax Status.') A Certificateholder's tax basis in the Units acquired pursuant to
the Exchange Privilege or Conversion Offer will be equal to the purchase price
of such Units. Investors should consult their own tax advisers as to the tax
consequences to them of exchanging or redeeming units and participating in the
Exchange Privilege or Conversion Offer.
OTHER MATTERS
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
federal tax law have been passed upon by Messrs. Battle Fowler, 280 Park Avenue,
New York, New York 10017 as counsel for the Sponsor. Messrs. Carter, Ledyard &
Milburn, Two Wall Street, New York, New York 10005 have acted as counsel for the
Trustee.
INDEPENDENT AUDITORS
The Statement of Condition and Portfolio are included herein in reliance
upon the report of KPMG Peat Marwick, independent auditors, and upon the
authority of said firm as experts in accounting and auditing.
25
<PAGE>
I am the owner of ______________ units of Equity Securities Trust, Series
___________________.
I would like to learn more about GOC Fund, Inc. (formerly The Manager's
Fund, Inc.), U.S. Treasury Money Market Portfolio including charges and
expenses. I understand that my request for more information about this
fund in no way obligates me to participate in the reinvestment option,
and that this request form is not an offer to sell. Please send me more
information, including a copy of the current prospectus of GOC Fund,
Inc., U.S. Treasury Money Market Portfolio.
Date _________________________, 199_
___________________________________ ___________________________________
Registered Holder (Print) Registered Holder (Print)
___________________________________ ___________________________________
Registered Holder Signature Registered Holder Signature
(Two signatures if joint tenancy)
My Brokerage Firm's Name _________________________________________________
Street Address ___________________________________________________________
City, State and Zip Code _________________________________________________
Broker's Name _______________________ Broker's No. _______________________
MAIL TO
____________________________
____________________________
____________________________
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN PARTS A AND B OF THIS PROSPECTUS; AND ANY
INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRUST, THE TRUSTEE, THE EVALUATOR, OR THE SPONSOR.
THE TRUST IS REGISTERED AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY
ACT OF 1940. SUCH REGISTRATION DOES NOT IMPLY THAT THE TRUST OR ANY OF ITS UNITS
HAVE BEEN GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR
ANY STATE OR ANY AGENCY OR OFFICER THEREOF.
------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL
TO MAKE SUCH OFFER IN SUCH STATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
- - -------------------------------------------- ----
<S> <C>
PART A
Summary of Essential Information............ A-2
Independent Auditors' Report................ A-7
Statement of Condition...................... A-8
Portfolio................................... A-9
Underwriting Syndicate...................... A-11
PART B
The Trust................................... 1
Risk Considerations......................... 4
Public Offering............................. 8
Rights of Certificateholders................ 11
Tax Status.................................. 12
Liquidity................................... 14
Total Reinvestment Plan..................... 16
Trust Administration........................ 17
Trust Expenses and Charges.................. 21
Exchange Privilege and Conversion Offer..... 22
Other Matters............................... 25
</TABLE>
PARTS A AND B OF THIS PROSPECTUS DO NOT CONTAIN ALL OF THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENT AND EXHIBITS RELATING THERETO, FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C., UNDER THE SECURITIES
ACT OF 1933, AND THE INVESTMENT COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS
MADE.
[LOGO]
REIT SERIES
(UNIT INVESTMENT TRUST)
PROSPECTUS
DATED: JULY 21, 1994
SPONSOR:
BEAR, STEARNS & CO. INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
212-272-2500
TRUSTEE:
UNITED STATES TRUST COMPANY
OF NEW YORK
770 BROADWAY
NEW YORK, N.Y. 10003
<PAGE>
PART II -- ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM A -- BONDING ARRANGEMENTS
The employees of Bear, Stearns & Co. Inc. are covered under Brokers'
Blanket Policy, Standard Form 14, in the amount of $11,000,000 (plus
$196,000,000 excess coverage under Brokers' Blanket Policies, Standard Form 14
and Form B Consolidated). This policy has an aggregate annual coverage of $15
million.
ITEM B -- CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons:
Battle Fowler (included in Exhibit 3.1)
KPMG Peat Marwick
The following exhibits:
*99.1.1 -- Reference Trust Agreement including certain amendments to the
Trust Indenture and Agreement referred to under Exhibit 99.1.1.1
below.
99.1.1.1 -- Form of Trust Indenture and Agreement (filed as Exhibit 1.1.1 to
Amendment No. 2 to Form S-6 Registration Statement No. 33-45561
of Equity Securities Trust, Series 1, Signature Series, Gabelli
Communications Income Trust on June 3, 1992 and incorporated
herein by reference).
*99.1.1.2 -- Amendment to Trust Indentures and Agreements.
99.1.3.4 -- Certificate of Incorporation of Bear, Stearns & Co. Inc., as
amended (filed as Exhibit 99.1.3.4 to Form S-6 Registration
Statement Nos. 33-50891 and 33-50901 of Insured Municipal
Securities Trust, New York Navigator Insured Series 15 and New
Jersey Navigator Insured Series 11; and Municipal Securities
Trust, Multi-State Series 44, respectively, on December 9, 1993
and incorporated herein by reference).
99.1.3.5 -- By-Laws of Bear, Stearns & Co. Inc., as amended (filed as Exhibit
99.1.3.5 to Form S-6 Registration Statement Nos. 33-50891 and
33-50901 of Insured Municipal Securities Trust, New York
Navigator Insured Series 15 and New Jersey Navigator Insured
Series 11; and Municipal Securities Trust, Multi-State Series 44,
respectively, on December 9, 1993 and incorporated herein by
reference).
99.1.4 -- Form of Agreement Among Underwriters (filed as Exhibit 1.4 to
Amendment No. 1 to Form S-6 Registration Statement No. 33-28384
of Insured Municipal Securities Trust, 47th Discount Series and
Series 20 on June 16, 1989 and incorporated herein by reference).
*99.2.1 -- Form of Certificate.
*99.3.1 -- Opinion of Battle Fowler as to the legality of the securities
being registered, including their consent to the filing thereof
and to the use of their name under the headings 'Tax Status' and
'Legal Opinions' in the Prospectus, and to the filing of their
opinion regarding tax status of the Trust.
99.6.0 -- Power of Attorney of Bear, Stearns & Co. Inc., the Depositor, by
its officers and a majority of its Directors (filed as Exhibit
6.0 to Post-Effective Amendment No. 8 to Form S-6 Registration
Statement Nos. 2-92113, 2-92660, 2-93073, 2-93884 and 2-94545 of
Municipal Securities Trust, Multi-State Series 4, 5, 6, 7 and 8,
respectively on October 30, 1992 and incorporated herein by
reference).
- - ------------------
* Filed herewith.
II-1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
EQUITY SECURITIES TRUST, SERIES 5 HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, HEREUNTO
DULY AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 21ST DAY
OF JULY, 1994.
EQUITY SECURITIES TRUST, SERIES 5
(Registrant)
BEAR, STEARNS & CO. INC.
(Depositor)
By /s/ PETER J. DEMARCO
Peter J. DeMarco
(Authorized Signator)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS, WHO CONSTITUTE THE PRINCIPAL OFFICERS AND A MAJORITY OF THE DIRECTORS
OF BEAR, STEARNS & CO. INC., THE DEPOSITOR, IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
NAME TITLE DATE
- - --------------------- ----------------------------- --------------------------
<S> <C> <C>
ALAN C. GREENBERG Chairman of the Board, Chief )
Executive )
Officer, Director and )
Senior Managing Director )
JAMES E. CAYNE President, Director and ) July 21, 1994
Senior Managing Director )
ALVIN H. EINBENDER Chief Operating Officer, )
Executive Vice President, )
Director and Senior )
Managing Director )
JOHN C. SITES, JR. Executive Vice President, )
Director and Senior )
Managing Director )
MICHAEL L. TARNOPOL Executive Vice President, ) By /s/ PETER J. DEMARCO
Director and Senior ) Peter J. DeMarco
Managing Director ) Attorney-in-Fact*
VINCENT J. MATTONE Executive Vice President, )
Director and Senior )
Managing Director )
ALAN D. SCHWARTZ Executive Vice President, )
Director and Senior )
Managing Director )
DOUGLAS P.C. NATION Director and Senior Managing )
Director )
WILLIAM J. MONTGORIS Chief Financial Officer, )
Senior Vice )
President--Finance and )
Senior Managing Director )
KENNETH L. EDLOW Secretary and Senior )
Managing Director )
MICHAEL MINIKES Treasurer and Senior )
Managing Director )
MICHAEL J. ABATEMARCO Controller, Assistant )
Secretary and Senior )
Managing Director )
MARK E. LEHMAN Senior Vice President-- )
General Counsel )
and Senior Managing )
Director )
FREDERICK B. CASEY Assistant Treasurer and )
Senior Managing Director )
</TABLE>
- - ------------
* An executed copy of the power of attorney was filed as Exhibit 6.0 to
Post-Effective Amendment No. 8 to Registration Statement Nos. 2-92113, 2-92660,
2-93073, 2-93884 and 2-94545 on October 30, 1992.
II-2
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Sponsor, Trustee, and Certificateholders
Equity Securities Trust, Series 5:
We hereby consent to the use of our report dated July 21, 1994 included
herein and to the reference to our Firm under the heading 'Independent Auditors'
in the Prospectus.
KPMG PEAT MARWICK
New York, New York
July 21, 1994
II-3
<PAGE>
EXHIBIT 99.1.1
EQUITY SECURITIES TRUST, SERIES 5
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated July
21, 1994 among Bear, Stearns & Co. Inc., as Depositor and United States
Trust Company of New York, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the document
entitled "Equity Securities Trust, Series 1, Signature Series, Gabelli
Communications Income Trust, and Subsequent Series, Trust Indenture and
Agreement" dated June 3, 1992 and as amended on June 1, 1994 (the
"Indenture") and as amended in part by this Agreement (collectively,
such documents hereinafter called the "Indenture and Agreement"). This
Agreement and the Indenture, as incorporated by reference herein, will
constitute a single instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement
as defined in Section 1.1 of the Indenture, and shall be amended
and modified from time to time by an Addendum as defined in
Section 1.1 (1) of the Indenture, such Addendum setting forth any
Additional Securities as defined in Section 1.1 (2) of the
Indenture;
WHEREAS, the Depositor wishes to deposit Securities,
and any Additional Securities as listed on any Addendums hereto,
into the Trust and issue Units, and Additional Units as the case
maybe, in respect thereof pursuant to Sections 2.1 and 2.6 of
the Indenture; and
NOW THEREFORE, in consideration of the premises and of
the mutual agreements herein contained, the Depositor and the
Trustee as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II
hereof, all the provisions contained in the Indenture 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 full in this
instrument.
<PAGE>
Section 2. This Reference Trust Agreement may be
amended and modified by Addendums, attached hereto, evidencing
the purchase of Additional Securities which have been deposited
to effect an increase over the number of Units initially
specified in Part II of this Reference Trust Agreement
("Additional Closings"). The Depositor and Trustee hereby agree
that their respective representations, agreements and
certifications contained in the Closing Memorandum dated
July 21, 1994, relating to the initial deposit of Securities
continue as if such representations, agreements and
certifications were made on the date of such Additional Closings
and with respect to the deposits made therewith, except as such
representations, agreements and certifications relate to their
respective By-Laws and as to which they each represent that their
has been no amendment affecting their respective abilities to
perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions
are hereby agreed to:
(a) The Securities (including Contract Securities)
listed in Schedule A hereto have been deposited in the Trust
under this Agreement.
(b) The number of Units delivered by the Trustee in
exchange for the Securities referred to in Section 2.3 is
16,462.
(c) For the purposes of the definition of Unit in item
(22) of Section 1.1, the fractional undivided interest in and
ownership of the Trust initially is 1/16462 as of the date
hereof.
(d) The term Record Date shall mean the first day of
each month (or the last business day prior thereto) commencing on
September 1, 1994.
(e) The term Distribution Date shall mean the fifteenth
day of each month (or the last business day prior thereto) commencing
on September 15, 1994.
(f) The First Settlement Date shall mean July 28,
1994.
-2-
<PAGE>
(g) For purposes of Section 6.1(g), the liquidation
amount is hereby specified to be 40% of the aggregate value of
the Securities at the completion of the Deposit Period.
(h) For purposes of Section 6.4, the Trustee shall be
paid per annum $.90 per 100 Units outstanding.
(i) For purposes of Section 7.4, the Depositor's maximum annual
supervisory fee is hereby specified to be $.25 per 100 Units
outstanding.
(j) The Termination Date shall be September 21, 1997 or
the disposition of the last Security in the Trust.
(k) The fiscal year for the Trust shall end on
June 30 of each year.
(l) For purposes of this Series of Equity Securities
Trust, the form of Certificate set forth in Indenture shall be
appropriately modified to reflect the title of this Series and
represent as set forth above.
IN WITNESS WHEREOF, the parties hereto have caused this
Reference Trust Agreement to be duly executed on the date first
above written.
[Signatures on separate pages]
-3-
<PAGE>
BEAR, STEARNS & CO. INC.
Depositor
PETER J. DEMARCO
Managing Director
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 21st day of July, 1994 before me personally appeared
Peter J. DeMarco, to me known, who being by me duly sworn, said that he
is an Authorized Signator of Bear, Stearns & Co. Inc., one of the
corporations described in and which executed the foregoing instrument,
and that he signed his name thereto by authority of the Board of
Directors of said Corporation.
TERESA SCILLA
Notary Public
(SEAL)
My Commission expires:
TERESA SCILLA
NOTARY PUBLIC, State of New York
No.31-4752676
Qualified in the County of New York
Term Expires 8/31/94
<PAGE>
UNITED STATES TRUST COMPANY
OF NEW YORK
Trustee
THOMAS CENTRONE
Vice President
(SEAL)
ATTEST:
ANDREW TURNER
Assistant Secretary
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 18th day of July, 1994, before me personally
came Thomas J. Centrone, to me known, who being by me duly sworn,
said that he is an Authorized Signator of United States Trust Company
of New York, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by authority of the Board
of Directors of said corporation; and that he signed his name
thereto by like authority.
DOROTHY S. BOCHINO
Notary Public
(SEAL)
My Commission expires:
DOROTHY S. BOCHINO
NOTARY PUBLIC, State of New York
No. 01B04950864
Qualified in Richmond County
Commission Expires 5-8-95
<PAGE>
SCHEDULE A
SCHEDULE OF PORTFOLIO SECURITIES
<PAGE>
EQUITY SECURITIES TRUST
SERIES 5
REIT SERIES
PORTFOLIO
AS OF JULY 20, 1994
A MONTHLY PAYMENT SERIES
<TABLE>
<CAPTION>
NUMBER OF MARKET
PORTFOLIO SECURITIES PERCENTAGE OF VALUE
NO. (SHS.) NAME OF ISSUER(2) FUND(1) PER SHARE
--------- --------- ----------------------------------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
DIVERSIFIED PROPERTIES: 1 100 BRE Properties 1.95 30.875
10.03%
2 250 Burnham Pacific Properties 2.68 17.000
3 200 Colonial Properties Trust 2.91 23.000
4 300 Sizeler Property Investors 2.49 13.125
FACTORY OUTLET CENTERS: 5 150 Chelsea GCA Realty 2.46 26.000
5.00%
6 150 Tanger Factory Outlet Centers 2.54 26.750
MANUFACTURED HOMES: 4.08% 7 150 ROC Communities 1.92 20.250
8 150 Sun Communities 2.16 22.750
MULTI-FAMILY HOUSING: 9 150 Associated Estates Realty 2.03 21.375
30.88%
10 150 Avalon Properties 2.05 21.625
11 150 Bay Apartment Communities Inc. 2.05 21.625
12 200 Charles E. Smith Residential Realty Inc. 3.21 25.375
13 100 Equity Residential Properties 1.98 31.250
14 200 Gables Residential Trust 2.88 22.750
15 300 Irvine Apartment Communities 3.91 20.625
16 150 Merry Land & Investment 1.97 20.750
17 100 Post Properties 1.98 31.375
18 200 Summit Properties Trust 2.43 19.250
19 150 Town and Country Trust 1.75 18.500
20 200 United Dominion Realty Trust 1.75 13.875
21 200 Wellsford Residential Property 2.89 22.875
OFFICE/INDUSTRIAL: 18.29% 22 250 Carr Realty 3.28 20.750
23 200 Crescent Real Estate Equities, Inc. 3.25 25.750
24 150 Duke Realty Investments 2.56 27.000
25 200 Highwoods Properties Inc. 2.58 20.375
26 250 Liberty Property Trust 3.10 19.625
27 250 Spieker Properties 3.52 22.250
REGIONAL MALLS: 19.16% 28 250 CBL & Associates Properties 3.30 20.875
29 550 De Bartolo Realty Corporation 5.17 14.875
30 200 General Growth Properties 2.81 22.250
31 200 Glimcher Realty Trust 2.64 20.875
32 300 Simon Property Group 5.24 27.625
SHOPPING CENTERS: 12.56% 33 200 Alexander Hagen Properties 2.26 17.875
34 100 Developers Diversified Realty 1.92 30.375
35 100 Federal Realty Investment 1.62 25.625
36 150 JP Realty, Inc. 1.97 20.750
37 100 Kimco Realty 2.33 36.875
38 100 Weingarten Realty Investors 2.46 38.875
Total Investment in Securities
<CAPTION>
COST OF SECURITIES
TO TRUST(3)
--------------------
<S> <C>
DIVERSIFIED PROPERTIES: $ 3,088
10.03%
4,250
4,600
3,937
--------
15,875
--------
FACTORY OUTLET CENTERS: 3,900
5.00%
4,012
--------
7,912
--------
MANUFACTURED HOMES: 4.08% 3,037
3,412
--------
6,449
--------
MULTI-FAMILY HOUSING: 3,206
30.88%
3,244
3,244
5,075
3,125
4,550
6,188
3,113
3,137
3,850
2,775
2,775
4,575
--------
48,857
--------
OFFICE/INDUSTRIAL: 18.29% 5,188
5,150
4,050
4,075
4,906
5,562
--------
28,931
--------
REGIONAL MALLS: 19.16% 5,219
8,181
4,450
4,175
8,287
--------
30,312
--------
SHOPPING CENTERS: 12.56% 3,575
3,038
2,563
3,113
3,688
3,887
--------
19,864
--------
$158,200
--------
--------
</TABLE>
A-9
<PAGE>
FOOTNOTES TO PORTFOLIO
(1) Based on the cost of the Securities to the Trust.
(2) Forward contracts to purchase the Securities were entered into on July 20,
1994. All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be July 28, 1994.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sale prices at the Evaluation Time on the day prior to the Initial Date of
Deposit.
Additional information regarding the Trust is as follows:
<TABLE>
<CAPTION>
SPONSOR'S SPONSOR'S PROFIT
PURCHASE PRICE (INITIAL DATE OF DEPOSIT)
-------------- -------------------------
<S> <C> <C>
Series 5....... $158,200 $ 0
</TABLE>
A-10
AMENDMENT
to
Trust Indentures and Agreements
-------------------------------
This AMENDMENT, dated as of June 1, 1994, made by Bear Stearns & Co.
Inc., and Gruntal & Co., Incorporated, as Depositors (the "Depositors"),
United States Trust Company of New York, as Trustee (the "Trustee"), and
Kenny Information Services, as Evaluator, to the Trust Indentures and
Agreements listed on Schedule A (each an "Agreement")
W I T N E S S E T H, that
WHEREAS the parties hereto are acting as Depositor, Trustee and, as
applicable, Evaluator of various series of Municipal Securities Trust,
Insured Municipal Securities Trust, Mortgage Securities Trust and
Equity Securities Trust each of which was created by a Reference Trust
Agreement which incorporates one of the Agreements listed on Schedule A,
and
WHEREAS all conditions and requirements necessary to make this
Amendment a valid instrument that is legally binding on the parties
hereto and the Unit Holders have been satisfied,
NOW, THEREFORE, the parties hereto agree as follows:
Paragraph (a) of Section 6.01 of each Agreement shall be amended to
read in its entirety as follows:
"(a) all moneys deposited with or received by the Trustee hereunder
shall be held by the Trustee or, as the Trustee shall determine, by U.S.
Trust Company of California, N.A., by U.S. Trust Company of Florida or
by U.S. Trust Company of Texas, N.A., each of which is hereby
designated as a custodian of the Trust for such purpose (each being
hereinafter referred to as a "Custodian"), without interest in trust as
part of the Trust or the Reserve Account until required to be disbursed in
accordance with the provisions of this Indenture and such moneys will be
segregated by separate recordation on the trust ledgers of the Trustee
or the Custodian so long as such practice preserves a valid preference
under applicable law, or if such preference is not so preserved, the
Trustee or Custodian shall handle such moneys in such other manner as
shall constitute the segregation and holding thereof in trust within
the meaning of the Investment Company Act of 1940. The Trustee shall
be answerable for any default or misconduct of any Custodian as fully,
and to the same extent, as if such default or misconduct had been
committed or occasioned by the Trustee."
This Amendment is applicable to all existing and future series of
Municipal Securities Trust, Insured Municipal Securities Trust, Mortgage
Securities Trust and Equity Securities Trust created pursuant to a
Reference Trust Agreement or other trust instrument which incorporates
the terms of any Agreement amended hereby.
IN WITNESS WHEREOF, Bear Stearns & Co. Inc., Gruntal & Co.,
Incorporated, United States Trust Company of New York, and Kenny
Information Services, Inc., have caused this Amendment to be executed by
a duly authorized officer as of the day, month and year first above
written.
Bear Stearns & Co. Inc.,
as Depositor
By Peter DeMarco
Title: Authorized Signator
Gruntal & Co., Incorporated,
as Depositor
By Robert Sablowsky
Title: Authorized Signator
United States Trust Company of New York,
as Trustee
By James P. Donovan
Title: A.V.P.
Kenny Information Systems, Inc.,
as Evaluator
By John R. Fitzgerald
Title: Authorized Signator
Schedule A
to
Amendment
1. Municipal Securities Trust Multi-State Series 12 (and Subsequent
Series) dated April 3, 1985.
2. Insured Municipal Securities Trust 9th Discount Series (and
Subsequent Series) dated April 11, 1985.
3. Municipal Securities Trust Series 26 (and Subsequent Series) dated
April 25, 1985.
4. Insured Municipal Securities Trust 47th Discount Series and Series
20 (and Subsequent Series) dated June 16, 1989.
5. Municipal Securities Trust Multi-State Series 37 (and Subsequent
Series) dated June 30, 1989.
6. Municipal Securities Trust Short-Intermediate Term Series 2 (and
Subsequent Series) dated July 14, 1989.
7. Municipal Securities Trust Series 45 and 73rd Discount Series (and
Subsequent Series) dated July 20, 1989.
8. Mortgage Securities Trust CMO Series 1 (and Subsequent Series) dated
November 1, 1990.
9. Equity Securities Trust, Series 1, Signature Series, Gabelli
Communications Income Trust, dated June 3, 1992.
10. Equity Securities Trust, Series 4, EquiT's, dated January 21, 1994.
<PAGE>
EXHIBIT 99.2.1
No. 1
CERTIFICATE OF OWNERSHIP
--evidencing--
A Fractional Undivided Interest
--in--
EQUITY SECURITIES TRUST
SERIES 5
_____________________
UNITS
_____________________
CUSIP
This is to certify that ______________________________ is the
owner and registered holder of this Certificate evidencing the
ownership of _______ unit(s) of fractional undivided interest in
Equity Securities Trust of the above Series (hereinafter called
the "Trust") created under the laws of the State of New York by a
Trust Indenture and Agreement as incorporated by a Reference
Trust Agreement applicable to the above Series (hereinafter
collectively called the "Indenture") among BEAR, STEARNS & CO.
INC. (hereinafter called the "Depositor"), such other co-Depositors,
if any, identified in the Indenture and UNITED STATES TRUST
COMPANY OF NEW YORK (hereinafter called the "Trustee").
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Indenture to which the holder of
this Certificate by virtue of the acceptance hereof assents and
is bound, a summary of which Indenture is contained in the
Prospectus relating to the Trust. The Depositor(s) hereby grant
and convey all of their right, title and interest in and to the
Trust to the extent of the fractional undivided interest
represented hereby to the registered holder of this Certificate
subject to and in pursuance of the Indenture. This Certificate
is transferable and interchangeable by the registered holder in
person or by his duly authorized attorney at the unit investment
trust office of the Trustee upon surrender of this Certificate
properly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and payment of any
applicable fees and expenses.
<PAGE>
This Certificate shall not become valid or binding for
any purpose until properly executed by the Trustee under the
Indenture.
IN WITNESS WHEREOF, Bear, Stearns & Co. Inc., as
Depositor, and, if applicable, as agent for its co-Depositors,
has caused this Certificate to be executed in facsimile by a duly
authorized officer and United States Trust Company of New York, as
Trustee, has caused this Certificate to be executed in its corporate
name by an authorized officer.
Date: BEAR, STEARNS & CO. INC., Depositor
By:
Authorized Signatory
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By:
Authorized Officer
<PAGE>
ASSIGNMENT
For Value Received ____________ hereby sells, assigns
and transfers unto _________________ the within Certificate and
does hereby irrevocably constitute and appoint ______________
attorney, to transfer the within Certificate on the books of the
Trustee, with full power of substitution in the premises.
Note: The signature(s) to this assignment must
correspond with the name(s) as written above upon the
face of this Certificate in every particular, without
alteration or enlargement or any change whatever.
Date:
_____________________
Signature Guarantee:
[end of certificate]
<PAGE>
EXHIBIT 99.3.1
Battle Fowler
280 Park Avenue
New York, New York 10017
July 21, 1994
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Re: Equity Securities Trust, Series 5
Dear Sirs:
We have acted as special counsel for Bear, Stearns & Co.
Inc., as Depositor, Sponsor and Principal Underwriter
(collectively, the "Depositor") of Equity Securities Trust, Series
5 (the "Trust") in connection with the issuance by the
Trust of 16,462 units of fractional undivided interest (the
"Units") in the Trust. Pursuant to the Trust Agreements referred
to below, the Depositor has transferred to the Trust certain
securities and contracts to purchase certain securities together
with an irrevocable letter of credit to be held by the Trustee
upon the terms and conditions set forth in the Trust Agreements.
(All securities to be acquired by the Trust are collectively
referred to as the "Securities").
In connection with our representation, we have examined
copies of the following documents relating to the creation of the
Trust and the issuance and sale of the Units: (a) the Trust
Indenture and Agreement and related Reference Trust Agreement,
each of even date herewith, relating to the Trust (collectively
the "Trust Agreements") among the Depositor, United States Trust
Company of New York, as Trustee, and Kenny S&P Evaluation
Services, as Evaluator; (b) the Notification of Registration on
Form N-8A and the Registration Statement on Form N-8B-2, as
amended, relating to the Trust, as filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment
Company Act of 1940 (the "1940 Act"); (c) the Registration
Statement on Form S-6 (Registration No. 33-53445) filed with the
Commission pursuant to the Securities Act of 1933 (the "1933
Act"), and all Amendments thereto (said Registration Statement, as
amended by said
<PAGE>
Bear, Stearns & Co. Inc. Page 2
July 21, 1994
Amendment(s) being herein called the "Registration
Statement"); (d) the proposed form of final Prospectus (the
"Prospectus") relating to the Units, which is expected to be filed
with the Commission this day; (e) certified resolutions of the
Executive Committee of the Depositor authorizing the execution and
delivery by the Depositor of the Trust Agreements and the
consummation of the transactions contemplated thereby; (f) the
Certificate of Incorporation and By-Laws of the Depositor, each
certified to by an authorized officer of the Depositor as of a
recent date; and (g) a certificate of an authorized officer of the
Depositor with respect to certain factual matters contained
therein.
We have also examined (i) the Application for an Amended
Order of Exemption from certain provisions of Section 11(a) of the
1940 Act, which has been filed with the Commission by the
Depositors; Mortgage Securities Trust, CMO Series 1 (and
Subsequent Series); Municipal Securities Trust, Series 1 (and
Subsequent Series (including Insured Municipal Securities Trust,
Series 1 (and Subsequent Series) and 5th Discount Series (and
Subsequent Series)); New York Municipal Trust, Series 1 (and
Subsequent Series); and A Corporate Trust, Series 1 (and
Subsequent Series) on October 2, 1990 and as amended thereafter
and the related Exemptive Order (IC-18290) issued by the
Commission on August 28, 1991 and (ii) the Application for an
Amended Order of Exemption from certain provisions of
Section 11(a) of the 1940 Act, which has been filed with the
Commission by the Depositors on behalf of Municipal Securities
Trust, Series 1 (and Subsequent Series (including Insured
Securities Trust, Series 1 (and Subsequent Series) and 5th
Discount Series (and Subsequent Series)); New York Municipal
Trust, Series 1 (and Subsequent Series); A Corporate Trust,
Series 1 (and Subsequent Series); Mortgage Securities Trust, CMO
Series 1 (and Subsequent Series); and Equity Securities Trust
(Series 1, Signature Series, Gabelli Communications Income Trust
and Subsequent Series) on November 12, 1992.
We have not reviewed the financial statements, compilation
of the Securities held by the Trust, or other financial or
statistical data contained in the Registration Statement and the
Prospectus, as to which you have been furnished with the reports
of the accountants appearing in the Registration Statement and the
Prospectus.
In addition, we have assumed the genuineness of all
agreements, instruments and documents submitted to us as originals
and the conformity to originals of all copies thereof submitted to
us. We have also assumed the genuineness of all signatures and
<PAGE>
Bear, Stearns & Co. Inc. Page 3
July 21, 1994
the legal capacity of all persons executing agreements,
instruments and documents examined or relied upon by us.
Statements in this opinion as to the validity, binding
effect and enforceability of agreements, instruments and documents
are subject: (i) to limitations as to enforceability imposed by
bankruptcy, reorganization, moratorium, insolvency and other laws
of general application relating to or affecting the enforceability
of creditors' rights, and (ii) to limitations under equitable
principles governing the availability of equitable remedies.
We are not admitted to the practice of law in any
jurisdiction but the State of New York and we do not hold
ourselves out as experts in or express any opinion as to the laws
of other states or jurisdictions except as to matters of Federal
and Delaware corporate law.
Based exclusively on the foregoing, we are of the opinion
that under existing law:
(1) The Trust Agreements have been duly authorized and
entered into by an authorized officer of the Depositor and is a
valid and binding obligation of the Depositor in accordance with
its terms.
(2) The execution and delivery of the Certificate
evidencing the Units has been duly authorized by the Depositor and
such Certificate, when executed by the Depositor and the Trustee
in accordance with the provisions of the Certificate and the
respective Trust Agreements and issued for the consideration
contemplated therein, will constitute fractional undivided
interests in the Trust, will be entitled to the benefits of the
Trust Agreements, will conform in all material respects to the
description thereof for the Units as provided in the Trust
Agreements and the Registration Statement, and the Units will be
fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name
in the Registration Statement and in the Prospectus under the
headings "Tax Status" and "Legal Opinions". We authorize you to
deliver copies of this opinion to the Trustee and the Underwriters
named in Schedule A to the Master Agreement Among Underwriters, as
amended, relating to the Trust and the Trustee may rely on this
opinion as fully and to the same extent as if it had been
addressed to it.
<PAGE>
Bear, Stearns & Co. Inc. Page 4
July 21, 1994
This opinion is intended solely for the benefit of the
addressees and the Trustee in connection with the issuance of the
Units of the Trust and may not be relied upon in any other manner
or by any other person without our express written consent.
Very truly yours,
Battle Fowler
