File No. 333-22191 CIK #0001025198
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549-1004
POST-EFFECTIVE
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
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 52
(Exact Name of Trust)
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. CHAPMAN AND CUTLER
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective on June
24, 1998 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 52
BABY BOOMER OPPORTUNITY TRUST, SERIES 2
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PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
Please retain both parts of this Prospectus for future reference.
- --------------------------------------------------------------------------------
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 52 (the "Fund") is
comprised of one unit investment trust, Baby Boomer Opportunity Trust, Series 2
(the "Trust"). The Trust offers investors the opportunity to purchase Units
representing proportionate interests in a fixed, diversified portfolio of
actively traded equity securities primarily issued by companies from a variety
of industries expected to benefit from demographic trends associated with those
born between 1946 and 1964, commonly referred to as the "Baby Boomers." Unless
terminated earlier, the Trust will terminate on March 6, 2002 ("Mandatory
Termination Date") and any securities then held will, within a reasonable time
thereafter, be liquidated or distributed by the Trustee. Any Securities
liquidated at termination will be sold at the then current market value for such
Securities; therefore, the amount distributable in cash to a Unitholder upon
termination may be more or less than the amount such Unitholder paid for his
Units.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit is equal to the aggregate underlying value of
the Equity Securities plus or minus cash, if any, in the Capital and Income
Accounts plus the applicable sales charge as described herein, divided by the
number of Units outstanding. See "Summary of Essential Financial Information" in
this Part One.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 24, 1998
VAN KAMPEN AMERICAN CAPITAL
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 52
BABY BOOMER OPPORTUNITY TRUST, SERIES 2
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF APRIL 16, 1998
SPONSOR: VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
SUPERVISOR: VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
(AN AFFILIATE OF THE SPONSOR)
EVALUATOR: AMERICAN PORTFOLIO EVALUATION SERVICES
(A DIVISION OF AN AFFILIATE OF THE SPONSOR)
TRUSTEE: THE BANK OF NEW YORK
BABY
BOOMER
OPPORTUNITY
TRUST
---------------
<S> <C>
GENERAL INFORMATION
Number of Units 2,817,141.593
Fractional Undivided Interest in Trust per Unit 1/2,817,141.593
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 38,850,864
Aggregate Value of Securities per Unit (including accumulated dividends) $ 13.79
Sales charge 4.0% (4.176% of Aggregate Value of Securities excluding principal cash per Unit)(3)$ .57
Public Offering Price per Unit (2)(3) $ 14.36
Redemption Price per Unit $ 13.79
Secondary Market Repurchase Price per Unit $ 13.79
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .57
</TABLE>
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock
Exchange
Initial Date of Deposit March 6, 1997
Mandatory Termination Date March 6, 2002
Minimum Termination Value The Trust may be terminated
if the net asset value of
such Trust is less than
$500,000 unless the net
asset value of such Trust
deposits has exceeded
$15,000,000, then the Trust
Agreement may be terminated
if the net asset value of
such Trust is less than
$3,000,000.
Estimated Net Annual Dividends per Unit $.07776
Trustee's Annual fee $.008 per Unit
Estimated Annual Organizational Expenses (4) $.0210 per Unit
Income Distribution Record Date TENTH day of March, June,
September and December
Income Distribution Date TWENTY-FIFTH day of March,
June, September and December
Capital Account Record Date TENTH day of December
Capital Account Distribution Date TWENTY-FIFTH day of December
- --------------------------------------------------------------------------------
(1)Equity Securities listed on a national securities exchange are valued at the
closing sale price, or if no such price exists, or if the Equity Securities
are not listed, at the closing bid price thereof.
(2)Anyone ordering Units will have added to the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
(3)On each March 6, commencing March 6, 1998, the secondary sales charge will be
reduced by .5 of 1% to a minimum sales charge of 3.0%. See "Public Offering-
Offering Price" in Part Two.
(4)The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering Units
with the Securities and Exchange Commission and states, the initial audit of
the Trust portfolio and the initial fees and expenses of the Trustee but not
including the expenses incurred in the preparation and printing of brochures
and other advertising materials and any other selling expenses) as is common
for mutual funds. Total organizational expenses will be amortized over the
life of the Trust. See "Expenses of the Trust" in Part Two and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
PORTFOLIO
The Baby Boomer Opportunity Trust consists of 30 different issues of Equity
Securities which are primarily actively traded, equity securities issued by
companies from a variety of industries expected to benefit from demographic
trends associated with those born between 1946 and 1964, commonly referred to as
"Baby Boomers". All of the Equity Securities are listed on a national or foreign
securities exchange, or are traded in the over-the-counter market as of the
Initial Date of Deposit.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1998 (1)
-------------
<S> <C>
Net asset value per Unit at beginning of period $ 10.08
=============
Net asset value per Unit at end of period $ 12.95
=============
Distributions to Unitholders of investment income including accrued dividends paid on
Units redeemed (average Units outstanding for entire period) $ 0.06
=============
Distributions to Unitholders from Security sale proceeds (average Units outstanding for
entire period) $ --
=============
Unrealized appreciation (depreciation) of Securities (per Unit outstanding at end
of period) $ 2.72
=============
Distributions of investment income by frequency of payments
Quarterly $ 0.05
Units outstanding at end of period 2,904,082
</TABLE>
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(1)For the period from March 6, 1997 (date of deposit) through February 28,
1998.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS,
INC. AND THE UNITHOLDERS OF BABY BOOMER OPPORTUNITY TRUST, SERIES 2 (VAN KAMPEN
AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 52):
We have audited the accompanying statement of condition (including the
analyses of net assets) and the related portfolio of Baby Boomer Opportunity
Trust, Series 2 (Van Kampen American Capital Equity Opportunity Trust, Series
52) as of February 28, 1998 and the related statements of operations and changes
in net assets for the period from March 6, 1997 (date of deposit) through
February 28, 1998. These statements are the responsibility of the Trustee and
the Sponsor. Our responsibility is to express an opinion on such statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at February 28, 1998 by correspondence with the
Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee and the Sponsor, as well as evaluating
the overall financial statement presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Baby Boomer Opportunity
Trust, Series 2 (Van Kampen American Capital Equity Opportunity Trust, Series
52) as of February 28, 1998 and the results of operations and changes in net
assets for the period from March 6, 1997 (date of deposit) through February 28,
1998, in conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
May 8, 1998
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST
SERIES 52
STATEMENT OF CONDITION
FEBRUARY 28, 1998
BABY BOOMER
OPPORTUNITY
TRUST
---------------
<S> <C>
Trust property
Securities at market value, (cost $ 29,670,736) (note 1) $ 37,578,727
Accumulated dividends 19,440
Receivable for securities sold 80,286
Organizational costs 44,519
---------------
$ 37,722,972
===============
Liabilities and interest to Unitholders
Cash overdraft $ 52,094
Accrued organizational costs 10,456
Redemptions payable 57,092
Interest to Unitholders 37,603,330
---------------
$ 37,722,972
===============
ANALYSES OF NET ASSETS
Interest of Unitholders (2,904,082 Units of fractional undivided interest outstanding)
Cost to original investors of 3,193,649 Units (note 1) $ 34,338,266
Less initial underwriting commission (note 3) 1,552,943
---------------
32,785,323
Less deferred sales charge 510,760
Less redemption of 289,567 Units 3,482,835
---------------
28,791,728
Undistributed net investment income
Net investment income 134,500
Less distributions to Unitholders 137,663
---------------
(3,163)
Realized gain (loss) on Security 906,774
Unrealized appreciation (depreciation) of Securities (note 2) 7,907,991
Distributions to Unitholders of Security sale proceeds --
---------------
Net asset value to Unitholders $ 37,603,330
===============
Net asset value per Unit (2,904,082 outstanding) $ 12.95
===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
BABY BOOMER OPPORTUNITY TRUST, SERIES 2
STATEMENT OF OPERATIONS
PERIOD FROM MARCH 6, 1997 (DATE OF DEPOSIT) THROUGH FEBRUARY 28, 1998
1998
--------------
<S> <C>
Investment income
Dividend income $ 177,936
Expenses
Trustee fees and expenses 20,795
Evaluator fees 5,756
Supervisory fees 5,756
Organizational fees 11,129
--------------
Total expenses 43,436
--------------
Net investment income 134,500
Realized gain (loss) from Securities sale
Proceeds 4,024,559
Cost 3,117,785
--------------
Realized gain (loss) 906,774
Net change in unrealized appreciation (depreciation) of Securities 7,907,991
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 8,949,265
==============
STATEMENT OF CHANGES IN NET
ASSETS PERIOD FROM MARCH 6, 1997 (DATE OF DEPOSIT) THROUGH FEBRUARY 28, 1998
1998
--------------
Increase (decrease) in net assets Operations:
Net investment income $ 134,500
Realized gain (loss) on Securities sales or redemption 906,774
Net change in unrealized appreciation (depreciation) of Securities 7,907,991
--------------
Net increase (decrease) in net assets resulting from operations
8,949,265 Distributions to Unitholders from:
Net investment income (137,663)
Securities sale or redemption proceeds --
Redemption of Units (note 4) (3,482,835)
Deferred Sales Charge (510,760)
--------------
Total increase (decrease) 4,818,007
Net asset value to Unitholders
Beginning of period 144,164
--------------
Additional securities purchased from proceeds of Unit Sales 32,641,159
End of period (including (over) undistributed net investment income of $(3,163)) $ 37,603,330
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
BABY BOOMER OPPORTUNITY TRUST PORTFOLIO AS OF FEBRUARY 28, 1998
- ----------------------------------------------------------------------------------------------------------------------
VALUATION OF
SECURITIES AT
NUMBER MARKET VALUE FEBRUARY 28,
OF SHARES NAME OF ISSUER PER SHARE 1998 (NOTE 1)
- --------------- ------------------------------------------------------------------------------------ --------------
<S> <C> <C> <C>
28,676 Boston Chicken, Inc. $ 6.9062 $ 198,044
- ----------------------------------------------------------------------------------------------------------------------
28,871 Callaway Golf Company 32.2500 931,090
- ----------------------------------------------------------------------------------------------------------------------
24,510 Cisco Systems, Inc. 65.8750 1,614,596
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43,856 Coachmen Industries, Inc. 28.5625 1,252,637
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57,944 Compaq Computer Corporation 32.0625 1,857,829
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23,354 Conseco Inc. 46.9375 1,096,178
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58,464 Del Webb Corporation 32.0000 1,870,848
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29,244 Equitable Companies, Inc. 52.3125 1,529,827
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26,425 Equitable of Iowa Companies 53.1875 1,405,480
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25,449 First Data Corporation 34.0000 865,266
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31,270 Franklin Resources, Inc. 51.0000 1,594,770
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48,976 Harley-Davidson, Inc. 29.0000 1,420,304
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36,453 Hilton Hotels Corporation 29.8125 1,086,755
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12,549 Intel Corporation 89.6250 1,124,704
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33,615 K2, Inc. 20.1250 676,502
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18,438 Marriott International, Inc. 75.7500 1,396,679
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38,926 Mentor Corporation 29.1875 1,136,153
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10,089 Merck & Company, Inc. 127.5625 1,286,978
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18,639 Microsoft Corporation 84.7500 1,579,655
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37,591 Mirage Resourts, Inc. 22.8750 859,894
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35,323 Oracle Corporation 24.6250 869,829
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34,365 Petco Animal Supplies, Inc. 14.3125 491,849
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20,150 Pfizer, Inc. 88.5000 1,783,275
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30,579 Royal Caribbean Cruises Ltd. 54.7500 1,674,200
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31,907 Service Corporation International 37.8750 1,208,478
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32,478 SunAmerica, Inc. 45.3125 1,471,659
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19,573 Tiffany & Company 66.0000 1,291,818
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25,071 T. Rowe Price Associates 47.0000 1,178,337
- ----------------------------------------------------------------------------------------------------------------------
12,736 Walt Disney Company 111.9375 1,425,636
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36,647 WorldCom, Inc. 38.1875 1,399,457
------------- --------------
912,168 $ 37,578,727
============= ==============
</TABLE>
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The accompanying notes are an integral part of these statements.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 52
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1998
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the closing sales price or, if no such price exists, or if the Equity
Securities are not listed at the closing bid price thereof.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange on the closing sale
prices on the exchange or, if not so listed, on the ask price thereof. The cost
was determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value described in
Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income Taxes.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Organizational Costs - The trust will bear all or a portion of its
organizational costs, which will be deferred and amoritized over the life of the
trust.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at February 28, 1998 is as follows:
BABY BOOMER
OPPORTUNITY
TRUST
---------------
Unrealized Appreciation $ 9,398,127
Unrealized Depreciation (1,490,136)
---------------
$ 7,907,991
===============
NOTE 3- OTHER
Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities in
the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such Units to the Trustee for redemption price.
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus an amount equal to the difference between the maximum sales
charge of 4.5% of the Public Offering Price which is equivalent to 4.712% of the
aggregate underlying value of the Securities and the maximum deferred sales
charge of ($0.20 per Unit). These investors paid a deferred sales charge of
$0.20 per Unit. Effective on each March 6th commencing March 6, 1998, the
secondary market sales charge does not include deferred payments but will
instead include only a one-time initial sales charge of 4.0% of the Public
Offering Price and will decrease by .5 of 1% to a minimum sales charge of 3.0%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period ended February 28, 1998, 289,567 Units were presented for
redemption.
Van Kampen American Capital
Prospectus Part Two
Baby Boomer Opportunity Trust
The Fund. Van Kampen American Capital Equity Opportunity Trust (the " Fund"
) is comprised of separate and distinct unit investment trusts, including series
of the Baby Boomer Opportunity Trust (the "Trust" ). The Trust offers investors
the opportunity to purchase Units representing proportionate interests in a
fixed portfolio of equity securities issued by companies from a variety of
industries expected to benefit from demographic trends associated with those
born between 1946 and 1964, commonly referred to as the "Baby Boomers" ("Equity
Securities" or " Securities" ). See "Trust Portfolio" . Unless terminated
earlier, the Trust will terminate on the Mandatory Termination Date set forth
under "Summary of Essential Financial Information" in Part One and any
Securities then held will, within a reasonable time thereafter, be liquidated or
distributed by the Trustee. Any Securities liquidated at termination will be
sold at the then current market value for such Securities; therefore, the amount
distributable in cash to a Unitholder upon termination may be more or less than
the amount such Unitholder paid for his Units.
Attention Foreign Investors. If you are not a United States citizen or
resident, distributions from the Trust will generally be subject to U.S. Federal
withholding taxes; however, under certain circumstances treaties between the
United States and other countries may reduce or eliminate such withholding tax.
See "Federal Taxation." Such investors should consult their tax advisers
regarding the imposition of U.S. withholding on distributions.
Objective of the Trust. The objective of the Trust is to provide the
potential for capital appreciation and income, consistent with the preservation
of invested capital, by investing in a portfolio of equity securities of
companies from a variety of industries expected to benefit from demographic
trends associated with those born between 1946 and 1964. See "Objectives and
Securities Selection." There is, of course, no guarantee that the objective of
the Trust will be achieved.
Public Offering Price. The Public Offering Price of the Units of the Trust
includes the aggregate underlying value of the Securities in the Trust's
portfolio, the applicable sales charge described herein, and cash, if any, in
the Income and Capital Accounts held or owned by the Trust. For sales charges in
the secondary market, see "Public Offering." The minimum purchase is 100 Units
except for certain transactions described under "Public Offering--Unit
Distribution" . See "Public Offering."
Units of the Trust are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by, any depository institution or any government
agency and are subject to investment risk, including possible loss of the
principal amount invested.
NOTE: THIS PROSPECTUS MAY BE USEED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference
This prospectus is dated as of the date of the Prospectus Part One
accompanying this Prospectus Part Two
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable Distribution
Date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information" in Part One. Gross dividends
received by the Trust will be distributed to Unitholders. Expenses of the
Trust will be paid with proceeds from the sale of Securities. For the
consequences of such sales, see "Federal Taxation" . Additionally, upon
termination of the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unitholder his pro rata share of the Trust's assets,
less expenses, in the manner set forth under "Rights of
Unitholders--Distributions of Income and Capital."
Secondary Market for Units. Although not obligated to do so, the Sponsor
intends to maintain a market for Units of the Trust and offer to repurchase
such Units at prices which are based on the aggregate underlying value of
Equity Securities in the Trust (generally determined by the closing sale or
bid prices of the Securities) plus or minus cash, if any, in the Capital and
Income Accounts of the Trust. If a secondary market is not maintained, a
Unitholder may redeem Units through redemption at prices based upon the
aggregate underlying value of the Equity Securities in the Trust plus or minus
a pro rata share of cash, if any, in the Capital and Income Accounts of the
Trust. A Unitholder tendering 1,000 or more Units for redemption may request a
distribution of shares of Securities (reduced by customary transfer and
registration charges) in lieu of payment in cash. See "Rights of
Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. Written notice of any termination of the Trust specifying
the time or times at which Unitholders may surrender their certificates for
cancellation shall be given by the Trustee to each Unitholder at his address
appearing on the registration books of the Trust maintained by the Trustee. At
least 30 days prior to the Mandatory Termination Date the Trustee will provide
written notice thereof to all Unitholders and will include with such notice a
form to enable Unitholders to elect a distribution of shares of Equity
Securities if such Unitholder owns at least 1,000 Units of the Trust, rather
than to receive payment in cash for such Unitholder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity Securities. All
Unitholders will receive cash in lieu of any fractional shares. To be
effective, the election form, together with surrendered certificates if
issued, and other documentation required by the Trustee, must be returned to
the Trustee at least five business days prior to the Mandatory Termination
Date. Unitholders not electing a distribution of shares of Equity Securities
will receive a cash distribution from the sale of the remaining Securities
within a reasonable time after the Trust is terminated. See "Trust
Administration--Amendment or Termination."
Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases). Unitholders also have the opportunity to have their
distributions reinvested into additional Units of the Trust, if Units are
available at the time of reinvestment, or into an open-end management
investment company as described herein. See "Rights of
Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of the
financial condition of the issuers, the general condition of the stock market
and volatile interest rates. See "Risk Factors" and "Trust
Portfolio."
THE TRUST
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust is comprised of separate
and distinct unit investment trusts, including series of the Baby Boomer
Opportunity Trust. 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, among Van Kampen American Capital
Distributors, Inc., as Sponsor, American Portfolio Evaluation Services, a
division of Van Kampen American Capital Investment Advisory Corp., as
Evaluator, Van Kampen American Capital Investment Advisory Corp., as
Supervisor, and The Bank of New York, as Trustee.
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities
issued by companies from a variety of industries expected to benefit from
demographic trends associated with those born between 1946 and 1964, commonly
referred to as "Baby Boomers." Diversification of assets in the Trust
will not eliminate the risk of loss always inherent in the ownership of
securities.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities, including delivery statements relating to contracts for the
purchase of certain such Securities and an irrevocable letter of credit issued
by a financial institution in the amount required for such purchases.
Thereafter, the Trustee, in exchange for such Securities (and contracts) so
deposited, delivered to the Sponsor documentation evidencing the ownership of
Units of the Trust. Unless otherwise terminated as provided in the Trust
Agreement, the Trust will terminate on the Mandatory Termination Date and
Securities then held will within a reasonable time thereafter be liquidated or
distributed by the Trustee.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of the Trust is to provide the potential for capital
appreciation and income, consistent with the preservation of invested capital.
The portfolio is described under "Trust Portfolio" and "
Portfolio" . In selecting the Securities, the Sponsor considered the extent
to which the issuers provide goods and/or services which will benefit from the
demographic trends associated with the generation known as the Baby Boomers,
which is generally acknowledged as those born between 1946 and 1964. In
particular, the Sponsor considered the following factors, among others, in
selecting the Securities: (a) the issuer had to represent a pure play in the
targeted investment area (for example, a company involved in leisure-related
products or services had to be involved entirely in such products or
services); (b) earnings per share estimates had to generally be experiencing
upward revisions by analysts; (c) the issuer had to have a ratio of
price/earnings to long-term earnings growth rate lower than that of the
Standard & Poor's 500 Index (i.e., lower than a ratio of 3.1); and (d) the
issuer's mean long-term earnings growth rate estimate had to exceed 12%
(compared to 6% for the Standard & Poor's 500 Index). Of course, there can be
no assurance that the issuers of the Securities selected through this process
will continue to satisfy such criteria subsequent to the Initial Date of
Deposit.
The Baby Boomer Generation. The baby boomer generation, the 76 million
Americans born between 1946 and 1964, began turning 50 years old in 1996.
Demographics show that aging baby boomers could have a significant impact on
individual lifestyles, the economy and specific industries. Approximately
every seven seconds of every day for ten years a baby boomer will turn 50 and
over fifteen years the number of people between 50 and 64 is expected to
nearly double. As baby boomers, who represent more than one-third of all
Americans, grow older, they are expected to adjust to different personal and
financial circumstances. For example, many reports have noted that the diaper
industry prospered when the first baby boomers were born, the shoe industry
grew as baby boomers grew, and financial publications experienced growth as
baby boomers began to focus on their careers. The Trust has targeted the
companies which the Sponsor believes are in a position to potentially benefit
from these shifting American demographics. As baby boomers make plans for
retirement, more leisure time and future healthcare needs, the Sponsor
believes that companies within the entertainment, financial, healthcare,
leisure, real estate and technology sectors offer the potential to benefit the
most.
Equity Securities. Stocks have been acknowledged as one of the best ways to
increase the value of assets and stay ahead of inflation over time. A single
dollar invested in common stocks (as represented by the Standard & Poor's 500
Index) in 1926 would have been worth $1,371.98 by December 31, 1996. Inflation
(Consumer Price Index) would have increased the cost of a dollar's worth of
goods to only $8.88 over the same period. A single dollar invested in
long-term U.S. government bonds and short-term U.S. Treasury Bills would have
grown to $33.66 and $13.54, respectively, over this period. Of course, these
figures represent past performance of these categories and there is no
guarantee of future results, either of these categories or of the Trust.
Unitholders will be subject to charges, expenses and taxes which are not
reflected in these figures.
General. An investor will be subject to taxation on the dividend income
received from the Trust and on gains from the sale or liquidation of
Securities (see "Federal Taxation" ). Investors should be aware that
there is not any guarantee that the objectives of the Trust will be achieved
because they are subject to the continuing ability of the respective Security
issuers to continue to declare and pay dividends and because the market value
of the Securities can be affected by a variety of factors. Common stocks may
be especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Equity Securities will pay dividends on outstanding common shares. Any
distributions of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust as of the Initial Date of
Deposit. Subsequent to the Initial Date of Deposit, the Securities may no
longer meet such criteria. Should an Equity Security no longer meet such
criteria, such Equity Security will not, simply as a result of such fact, be
removed from the portfolio of the Trust.
Investors should be aware that the Trust is not a "managed" fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Investors should
note in particular that the Securities were selected by the Sponsor as of the
Initial Date of Deposit. The Trust may continue to purchase or hold Securities
originally selected through this process even though the evaluation of the
attractiveness of the Securities may have changed and, if the evaluation were
performed again at that time, the Securities would not be selected for the
Trust.
TRUST PORTFOLIO
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The Trust consists of Equity Securities which are primarily issued by
companies from a variety of industries expected to benefit from demographic
trends associated with those born between 1946 and 1964, commonly referred to
as the "Baby Boomers" . All of the Equity Securities are listed on a
national securities exchange, the NASDAQ National Market System or are traded
in the over-the-counter market.
General. The Trust consists of (a) the Securities listed under "
Portfolio" in Part One as may continue to be held from time to time in
the Trust, (b) any additional Securities acquired and held by the Trust
pursuant to the provisions of the Trust Agreement and (c) any cash held in the
Income and Capital Accounts. Neither the Sponsor nor the Trustee shall be
liable in any way for any failure in any of the Securities. However, should
any contract for the purchase of any of the Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of the moneys held
in the Trust to cover such purchase are reinvested in substitute Securities in
accordance with the Trust Agreement, refund the cash and sales charge
attributable to such failed contract to all Unitholders on the next
distribution date.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will in most cases be distributed to Unitholders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the portfolio is not
managed, the Sponsor may instruct the Trustee to sell Equity Securities under
certain limited circumstances. See "Trust Administration--Portfolio
Administration." Equity Securities, however, will not be sold by the Trust
to take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
RISK FACTORS
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An investment in Units should be made with an understanding of the risks which
an investment in common stocks entails, including the risk that the financial
condition of the issuers of the Equity Securities or the general condition of
the common stock market may worsen and the value of the Equity Securities and
therefore the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases of 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, global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Certain of the issuers may currently be in arrears with respect to
preferred stock dividend payments. Common stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income
or provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock 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 rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities in the
portfolio 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 or at the
time a Unitholder purchases Units.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor. The price at which
the Equity Securities may be sold to meet redemptions, and the value of the
Trust, will be adversely affected if trading markets for the Equity Securities
are limited or absent.
As described under "Trust Operating Expenses," all of the expenses of
the Trust will be paid from the sale of Securities from the Trust. It is
expected that such sales will be made at the end of the initial offering
period and each month thereafter through termination of the Trust. Such sales
will result in capital gains and losses and may be made at times and prices
which adversely affect the Trust. For a discussion of the tax consequences of
such sales, see "Federal Taxation."
Unitholders will be unable to dispose of any of the Equity Securities in the
portfolio, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor. In the absence of any such instructions by
the Sponsor, the Trustee will vote such stocks so as to insure that the stocks
are voted as closely as possible in the same manner and the same general
proportion as are shares held by owners other than the Trust.
FEDERAL TAXATION
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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 (the "Code" ). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust. For purposes of the following discussion and opinion, it is assumed
that each Equity Security is equity for federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from the Trust asset when such income is received by the Trust.
2. Each Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Equity Security when such dividends are
considered to be received by the Trust regardless of whether such dividends
are used to pay a portion of the deferred sales charge. Unitholders will be
taxed in this manner regardless of whether distributions from the Trust are
actually received by the Unitholder or are automatically reinvested.
3. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is received by such Unitholder
as described below). The price a Unitholder pays for his Units is allocated
among his pro rata portion of each Equity Security held by the Trust (in
proportion to the fair market values thereof on the valuation date nearest the
date the Unitholder purchase his Units) in order to determine his initial tax
basis for his pro rata portion of each Equity Security held by the Trust. It
should be noted that certain legislative proposals have been made which could
affect the calculation of basis for Unitholders holding securities that are
substantially identical to the Securities. Unitholders should consult their
own tax advisers with regard to calculation of basis. For federal income tax
purposes, a Unitholder's pro rata portion of dividends, as defined by Section
316 of the Code, paid by a corporation with respect to an Equity Security held
by the Trust are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits" . A
Unitholder's pro rata portion of dividends paid on such Equity Security which
exceeds such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Equity Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity Security shall
generally be treated as capital gain. In general, the holding period for such
capital gain will be determined by the period of time a Unitholder has held
his Units.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the Trust will generally
be considered a capital gain except in the case of a dealer or a financial
institution. A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the Trust
will generally be considered a capital loss (except in the case of a dealer or
a financial institution). Unitholders should consult their tax advisers
regarding the recognition of such capital gains and losses for federal income
tax purpose.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above, and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics' and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. These limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which is defined as net long-term capital
gain over net short-term capital loss for the taxable year) are subject to a
maximum marginal stated tax rate of either 28% or 20%, depending upon the
holding period of the capital assets. In particular, net capital gain,
excluding net gain from property held more than one year but not more than 18
months and gain on certain other assets, is subject to a maximum marginal
stated tax rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Net capital gain that is not taxed at the maximum marginal stated
tax rate of 20% (or 10%) as described in the preceding sentence, is generally
subject to a maximum marginal stated tax rate of 28%. The date on which a Unit
is acquired (i.e., the "trade date" ) is excluded for purposes of
determining the holding period of the Unit. It should be noted that
legislative proposals are introduced from time to time that affect tax rates
and could affect relative differences at which ordinary income and capital
gains are taxed.
In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered "
conversion transactions" effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust including his pro rata
portion of all Equity Securities represented by a Unit.
The Taxpayer Relief Act of 1997 (the "1997 Tax Act" ) includes
provisions that treat certain transactions designed to reduce or eliminate
risk of loss and opportunities for gain (e.g., short sales, off-setting
notional principal contracts, futures or forward contracts, or similar
transactions) as constructive sales for purposes of recognition of gain (but
not loss) and for purposes of determining the holding period. Unitholders
should consult their own tax advisers with regard to any such constructive
sales rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Rights of
Unitholders--Redemption of Units" , under certain circumstances a
Unitholder tendering Units for redemption may request an In Kind Distribution.
A Unitholder may also under certain circumstances request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Equity Security held by the Trust will depend on whether
or not a Unitholder receives cash in addition to Equity Securities. An "
Equity Security" for this purpose is a particular class of stock issued by
a particular corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Equity Securities in exchange for his or her pro rata
portion in the Equity Securities held by the Trust. However, if a Unitholder
also receives cash in exchange for a fractional share of an Equity Security
held by the Trust, such Unitholder will generally recognize gain or loss based
upon the difference between the amount of cash received by the Unitholder and
his tax basis in such fractional share of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request an
In Kind Distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder of his
Units. The cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date nearest the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the Trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified by the Internal Revenue Service that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by the Trust (other than those that are not treated as United
States source income, if any) will generally be subject to United States
income taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States persons.
Such persons should consult their tax advisers.
Unitholders will be notified annually of the amounts of dividends includible
in the Unitholder's gross income and amounts of Trust expenses which may be
claimed as itemized deductions.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
Trust will be treated as the income of the Unitholders under the existing
income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to foreign, state
or local taxation in other jurisdictions and should consult their own tax
advisers in this regard. As used herein, the term "U.S. Unitholder"
means an owner of a Unit of the Trust that (a) is (i) for United States
federal income tax purposes a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or of any political subdivision thereof, or (iii) an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source or (b) does not qualify as a U.S. Unitholder
in paragraph (a) but whose income from a Unit is effectively connected with
such Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
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Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee which is not to exceed the
amount set forth under "Summary of Essential Financial Information,"
for providing portfolio supervisory services for the Trust. Such fee (which is
based on the number of Units outstanding on January 1 of each year for which
such compensation relates) may exceed the actual costs of providing such
supervisory services for this Trust, but at no time will the total amount
received for portfolio supervisory services rendered to all Series of the Fund
and to any other unit investment trusts sponsored by the Sponsor for which the
Supervisor provides portfolio supervisory services in any calendar year exceed
the aggregate cost to the Supervisor of supplying such services in such year.
In addition, the Evaluator, which is a division of Van Kampen American Capital
Investment Advisory Corp., shall receive the annual per Unit evaluation fee
set forth under "Summary of Essential Financial Information" (which
amount is based on the number of Units outstanding on January 1 of each year
for which such compensation relates) for regularly evaluating the Trust
portfolio. The foregoing fees are payable as described under "General"
below. Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor will receive
sales commissions and may realize other profits (or losses) in connection with
the sale of Units and the deposit of the Securities as described under "
Public Offering--Sponsor Compensation."
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" (which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates). The Trustee's
fees are payable as described under "General" below. The Trustee
benefits to the extent there are funds for future distributions, payment of
expenses and redemptions in the Capital and Income Accounts since these
Accounts are non-interest bearing to Unitholders and the amounts earned by the
Trustee are retained by the Trustee. Part of the Trustee's compensation for
its services to the Trust is expected to result from the use of these funds.
Such fees may be increased without approval of the Unitholders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor or, if such category is no longer published, in a
comparable category. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration."
Miscellaneous Expenses. Expenses incurred in establishing the Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and
state registration fees, the initial fees and expenses of the Trustee, legal
and accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and amortized over a five year period. The
following additional charges are or may be incurred by the Trust: (a) normal
expenses (including the cost of mailing reports to Unitholders) incurred in
connection with the operation of the Trust, (b) fees of the Trustee for
extraordinary services, (c) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (d) various
governmental charges, (e) expenses and costs of any action taken by the
Trustee to protect the Trust and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of the Trust without negligence, bad faith or willful
misconduct on its part, (g) accrual of costs associated with liquidating
securities and (h) expenditures incurred in contacting Unitholders upon
termination of the Trust. The expenses set forth herein are payable as
described under "General" below.
General. The fees and expenses of the Trust will accrue on a daily basis and
will be charged to the Trust, in arrears, on a monthly basis as of the tenth
day of each month. The fees and expenses are payable out of the Capital
Account. When such fees and expenses are paid by or owing to the Trustee, they
are secured by a lien on the Trust's portfolio. It is expected that the
balance in the Capital Account will be insufficient to provide for amounts
payable by the Trust and that Equity Securities will be sold from the Trust to
pay such amounts. These sales will result in capital gains or losses to
Unitholders. See "Federal Taxation" .
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate underlying value of the Securities in the
Trust's portfolio, the sales charge described below, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The sales charge for
secondary market transactions is described under "Summary of Essential
FInancial Information" in Part One and will generally be reduced by .5 of
1% annually to a minimum sales charge of 3.5%.
Any sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent. Employees, officers and directors (including their
spouses, children, grandchildren, parents, grandparents, siblings,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law, and
trustees, custodians or fiduciaries for the benefit of such persons) of Van
Kampen American Capital Distributors, Inc. and its affiliates, dealers and
their affiliates and vendors providing services to the Sponsor may purchase
Units at the Public Offering Price less the applicable dealer concession.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases (see "Public Offering--Unit
Distribution" ) by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their spouse or children and (4) officers and directors of bank
holding companies that make Units available directly or through subsidiaries
or bank affiliates. Notwithstanding anything to the contrary in this
Prospectus, such investors, bank trust departments, firm employees and bank
holding company officers and directors who purchase Units through this program
will not receive sales charge reductions for quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One in accordance with fluctuations in the prices of the underlying
Securities in the Trust.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to the total sales charge and dividing the sum so obtained by the number
of Units outstanding. The Public Offering Price shall also include the
proportionate share of any cash held in the Capital Account. This computation
produced a gross underwriting profit equal to the total sales charge. Such
price determination as of the close of business on the day before the Initial
Date of Deposit was made on the basis of an evaluation of the Securities in
the Trust prepared by Interactive Data Corporation, a firm regularly engaged
in the business of evaluating, quoting or appraising comparable securities.
After the close of business on the day before the Initial Date of Deposit, the
Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of the Evaluation Time on days the New York Stock
Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received prior to the Evaluation Time on each such day. Orders
received by the Trustee or Sponsor for purchases, sales or redemptions after
that time, or on a day when the New York Stock Exchange is closed, will be
held until the next determination of price. The Sponsor currently does not
intend to maintain a secondary market during the last six months of a Trust's
life.
The value of the Equity Securities is determined on each business day by the
Evaluator in the following manner: If the Equity Securities are listed on a
national securities exchange this evaluation is generally based on the closing
sale prices on that exchange (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price
on that exchange, at the closing bid prices. If the Equity 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 current bid price
on the over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities on the bid side of the market or (c) by any combination
of the above.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. Units repurchased in
the secondary market, if any, may be offered by this Prospectus at the
secondary market Public Offering Price in the manner described above.
The Sponsor intends to qualify the Units for sale in a number of states. Any
discount provided to investors will be borne by the selling dealer or agent as
indicated under "General" above. For secondary market transactions,
the concession or agency commission will amount to 70% of the sales charge
applicable to the transaction. The breakpoint concession or agency commission
are applied on either a Unit or a dollar basis utilizing a breakpoint
equivalent of $10 per Unit and will be applied on whichever basis is more
favorable to the broker-dealer. The breakpoints will be adjusted to take into
consideration purchase orders stated in dollar which cannot be completely
fulfilled due to the requirement that only whole Units be issued.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not 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.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units except as stated
herein. In connection with fully disclosed transactions with the Sponsor, the
minimum purchase requirement will be that number of Units set forth in the
contract between the Sponsor and the related broker or agent. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase
of Units and to change the amount of the concession or agency commission to
dealers and others from time to time.
Sponsor Compensation. The Sponsor will receive a gross sales commission equal
to the total sales charge imposed on Units, less any reduced sales charge (as
described under "General" above). Any discount provided to investors
will be borne by the selling broker, dealer or agent as indicated under "
General" above.
In addition, the Sponsor realized a profit or sustained a loss, as the case
may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. The Sponsor has
not participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities in the Trust portfolio. The Sponsor may further realize additional
profit or loss as a result of the possible fluctuations in the market value of
the Securities in the Trust after a date of deposit, since all proceeds
received from purchasers of Units (excluding dealer concessions and agency
commissions allowed, if any) will be retained by the Sponsor.
Broker-dealers of the Trust, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a
nominal award for each of their 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 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 such 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 persons at the public offering price
during such programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor pay fees to
qualifying entities for certain services or activities which are primarily
intended to result in sales of Units of the Trust. Such payments are made by
the Sponsor out of its own assets, and not out of the assets of the Trust.
These programs will not change the price Unitholders pay for their Units or
the amount that the Trust will receive from the Units sold.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject
to the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain
a secondary market for Units of the Trust for the period indicated. In so
maintaining a market, the Sponsor will also realize profits or sustain losses
in the amount of any difference between the price at which Units are purchased
and the price at which Units are resold (which price includes the applicable
sales charge). In addition, the Sponsor will also realize profits or sustain
losses resulting from a redemption of such repurchased Units at a price above
or below the purchase price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Sponsor intends to
maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trust. If the
supply of Units exceeds demand or if some other business reason warrants it,
the Sponsor may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. It is the current intention of the Sponsor
not to maintain a market for Units during the final six months of the Trust's
life. In the event that a market is not maintained for the Units and the
Unitholder cannot find another purchaser, a Unitholder desiring to dispose of
his Units may be able to dispose of such Units only by tendering them to the
Trustee for redemption at the Redemption Price. See "Rights of
Unitholders--Redemption of Units." A Unitholder who wishes to dispose of
his Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans.
RIGHTS OF UNITHOLDERS
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Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by certificates unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be in book entry form. Units are
transferable by making a written request to the Trustee and, in the case of
Units evidenced by a certificate, by presentation and surrender of such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign such written
request, and such certificate or transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate
representing the Units to be transferred with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP" ) or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. 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. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account of the Trust. Proceeds
from the sale of Securities to meet redemptions of Units shall be segregated
within the Capital Account from proceeds from the sale of Securities made to
satisfy the fees, expenses and charges of the Trust.
The Trustee will distribute any income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information" in Part One. Proceeds received on the
sale of any Securities in the Trust, to the extent not used to meet
redemptions of Units, pay the deferred sales charge or pay fees and expenses,
will be distributed annually on the Capital Account Distribution Date to
Unitholders of record on the preceding Capital Account Record Date. Proceeds
received from the disposition of any of the Securities after a record date and
prior to the following distribution date will be held in the Capital Account
and not distributed until the next distribution date applicable to such
Capital Account. The Trustee is not required to pay interest on funds held in
the Capital or Income Accounts (but may itself earn interest thereon and
therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account. Because
dividends are not received by the Trust at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the Capital
Account amounts necessary to pay the expenses of the Trust (as determined on
the basis set forth under "Trust Operating Expenses" ). The Trustee
also may withdraw from the Income and Capital Accounts such amounts, if any,
as it deems necessary to establish a reserve for any governmental charges
payable out of the Trust. Amounts so withdrawn shall not be considered a part
of the Trust's assets until such time as the Trustee shall return all or any
part of such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Income and Capital Accounts such amounts as may be necessary
to cover redemptions of Units.
Reinvestment Option. Unitholders of the Trust may elect to have each
distribution of income, capital gains and/or capital on their Units
automatically reinvested in additional Units of the Trust (to the extent Units
may be lawfully offered for sale in the state in which the Unitholder
resides). To participate in the reinvestment plan, a Unitholder may either
contact his or her broker or agent or file with the Trustee a written notice
of election at least ten days prior to the Record Date for which the first
distribution is to apply. A Unitholder's election to participate in the
reinvestment plan will apply to all Units of the Trust owned by such
Unitholder and such election will remain in effect until changed by the
Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Sponsor (see "Public Offering--Public Market" ) or,
until such time as additional Units cease to be issued by the Trust (see "
The Trust" ), distributions may be reinvested in such additional Units. If
Units are unavailable in the secondary market, distributions which would
otherwise have been reinvested shall be paid in cash to the Unitholder on the
applicable Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will be
made based on the net asset value for Units of the Trust as of the Evaluation
Time on the related Distribution Dates. Under the reinvestment plan, the Trust
will pay the Unitholder's distributions to the Trustee which in turn will
purchase for such Unitholder full and fractional Units of the Trust and will
send such Unitholder a statement reflecting the reinvestment.
Unitholders may also elect to have each distribution of income, capital gains
and/or capital on their Units automatically reinvested in Class A shares of
certain Van Kampen American Capital or Morgan Stanley mutual funds which are
registered in the Unitholder's state of residence. Such mutual funds are
hereinafter collectively referred to as the "Reinvestment Funds" .
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trust. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen American
Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois
60181. Texas residents who desire to reinvest may request that a broker-dealer
registered in Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
income, capital gains and/or capital on the participant's Units will, on the
applicable distribution date, automatically be applied, as directed by such
person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such
date. Unitholders with an existing Guaranteed Reinvestment Option (GRO)
Program account (whereby a sales charge is imposed on distribution
reinvestments) may transfer their existing account into a new GRO account
which allows purchases of Reinvestment Fund shares at net asset value as
described above. Confirmations of all reinvestments by a Unitholder into a
Reinvestment Fund will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
The Sponsor, each Reinvestment Fund, and its investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
a statement as to the Income Account: income received, deductions for
applicable taxes and for fees and expenses of the Trust, for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (ii) a statement as to the Capital
Account: the dates of disposition of any Securities and the net proceeds
received therefrom, deductions for payment of applicable taxes, fees and
expenses of the Trust held for distribution to Unitholders of record as of a
date prior to the determination 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 Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) amounts actually distributed
during such calendar year from the Income and Capital Accounts, separately
stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed (or by providing satisfactory indemnity, as in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. No redemption fee will be charged. On the third
business day following such tender, the Unitholder will be entitled to receive
in cash an amount for each Unit equal to the Redemption Price per Unit next
computed after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the Evaluation Time the
date of tender is the next day on which the New York Stock 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.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the Supervisor
for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distributions" ) of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following
the tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form
to the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering
Unitholder is entitled. In implementing these redemption procedures, the
Trustee shall make any adjustments necessary to reflect differences between
the Redemption Price of the Securities distributed in kind as of the date of
tender. If funds in the Capital Account are insufficient to cover the required
cash distribution to the tendering Unitholder, the Trustee may sell Securities
according to the criteria discussed above. For the tax consequences related to
an In Kind Distribution see "Federal Taxation."
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of the Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts. On the Initial Date of Deposit, the Public Offering
Price per Unit (which includes the sales charge) exceeded the values at which
Units could have been redeemed by the amounts shown under "Summary of
Essential Financial Information" in Part One. While the Trustee has the
power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in the Trust, (ii) the value of the Securities in the Trust
and (iii) dividends receivable on the Equity Securities trading ex-dividend as
of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued sales
charges or expenses of the Trust. The Evaluator may determine the value of the
Equity Securities in the Trust in the following manner: if the Equity
Securities are listed on a national securities exchange this evaluation is
generally based on the closing sale prices on that exchange (unless it is
determined that these prices are inappropriate as a basis for valuation) or,
if there is no closing sale price on that exchange, at the closing bid prices.
If the Equity Securities are not so listed or, if so listed and the principal
market therefore is other than on the exchange, the evaluation shall generally
be based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities on the bid side of the market or (c) by any combination
of the above.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
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Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. 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 Trust, however, will not be managed. The Trust Agreement,
however, provides that the Sponsor may (but need not) direct the Trustee to
dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Therefore, except as stated under "
Trust Portfolio" for failed securities and as provided in this paragraph,
the acquisition by the Trust of any securities other than the Securities is
prohibited. Proceeds from the sale of Securities (or any securities or other
property received by the Trust in exchange for Equity Securities) are credited
to the Capital Account for distribution to Unitholders or to pay fees and
expenses of the Trust.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if not
so directed, in its own discretion, for the purpose of redeeming Units of the
Trust tendered for redemption and the payment of expenses.
To the extent practicable, the Supervisor may (but is not obligated to)
designate Securities to be sold by the Trustee in order to maintain the
proportionate relationship among the number of shares of individual issues of
Equity Securities. To the extent this is not practicable, the composition and
diversity of the Equity Securities may be altered. In order to obtain the best
price for the Trust, it may be necessary for the Supervisor to specify minimum
amounts (generally 100 shares) in which blocks of Equity Securities are to be
sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders of 51% of the Units then outstanding, provided that no
such amendment or waiver will reduce the interest in the Trust of any
Unitholder without the consent of such Unitholder or reduce the percentage of
Units required to consent to any such amendment or waiver without the consent
of all Unitholders. The Trustee shall advise the Unitholders of any amendment
promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Trust Units then outstanding or by the Trustee when the value
of the Trust, as shown by any evaluation, is less than that amount set forth
under Minimum Termination Value in "Summary of Essential Financial
Information" in Part One. The Trust Agreement will terminate upon the
sale or other disposition of the last Security held thereunder, but in no
event will it continue beyond the Mandatory Termination Date stated under "
Summary of Essential Financial Information" in Part One.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of the Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. Written notice of any termination specifying the time or
times at which Unitholders may surrender their certificates for cancellation,
if any are then issued and outstanding, shall be given by the Trustee to each
Unitholder so holding a certificate at his address appearing on the
registration books of the Trust maintained by the Trustee. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice
thereof to all Unitholders and will include with such notice a form to enable
Unitholders owning 1,000 or more Units to request an In Kind Distribution
rather than payment in cash upon the termination of the Trust. To be
effective, this request must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date. On the Mandatory Termination
Date (or on the next business day thereafter if a holiday) the Trustee will
deliver each requesting Unitholder's pro rata number of whole shares of each
of the Equity Securities in the portfolio to the account of the broker-dealer
or bank designated by the Unitholder at Depository Trust Company. The value of
the Unitholder's fractional shares of the Equity Securities will be paid in
cash. Unitholders with less than 1,000 Units and those not requesting an In
Kind Distribution will receive a cash distribution from the sale of the
remaining Equity Securities within a reasonable time following the Mandatory
Termination Date. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation
of the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in the Trust upon termination may result in a lower
amount than might otherwise be realized if such sale were not required at such
time. The Trustee will then distribute to each Unitholder his pro rata share
of the balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee
of any of the Securities. In the event of the failure of the Sponsor to act
under the Trust Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is a wholly owned
subsidiary of MSAM Holdings II, Inc., which in turn is a wholly owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD" ).
MSDWD is a global financial services firm with a market capitalization of more
than $21 billion which was created by the merger of Morgan Stanley Group Inc.
with and into Dean Witter, Discover & Co. on May 31, 1997. MSDWD, together
with various of its directly and indirectly owned subsidiaries, is engaged in
a wide range of financial services through three primary businesses:
securities, asset management and credit services. These principal businesses
include securities underwriting, distribution and trading; merger,
acquisition, restructuring and other corporate finance advisory activities;
merchant banking; stock brokerage and research services; asset management;
trading of futures, options, foreign exchange commodities and swaps (involving
foreign exchange, commodities, indices and interest rates); real estate
advice, financing and investing; global custody, securities clearance services
and securities lending; and credit card services. As of June 2, 1997, MSDWD,
together with its affiliated investment advisory companies, had approximately
$270 billion of assets under management, supervision or fiduciary advice.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996 the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of March 31, 1997, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $58.45 billion of investment
products, of which over $10.85 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $47 billion
of assets, consisting of $29.23 billion for 59 open-end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.) $13.4
billion for 37 closed-end funds and $4.97 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-ended funds and unit investment trusts are professionally distributed
by leading financial firms nationwide. Based on cumulative assets deposited,
the Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided" ).
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
- --------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel for the Trustee.
Independent Certified Public Accountants. The financial statements included in
this Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
No person is authorized to give any information or to make any representations
not contained this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of any offer to buy securities in any sate to any person to whom
it is not lawful to make such offer in such state.
TABLE OF CONTENTS
Title Page
The Trust 3
Objectives and Securities Selection 3
Trust Portfolio 5
Risk Factors 5
Federal Taxation 6
Trust Operating Expenses 10
Public Offering 11
Rights of Unitholders 14
Trust Administration 18
Other Matters 22
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
Part Two
Van Kampen American Capital Equity Opportunity Trust
Baby Boomer Opportunity Trust
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference
Dated as of the date of the Prospectus Part One accompanying this
Prospectus Part Two
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
CONTENTS OF POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement comprises
the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
52, certifies that it meets all of the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 24th day
of June, 1998.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST,
SERIES 52
(Registrant)
By VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
(Depositor)
By: Gina Costello
Assistant Secretary
(SEAL)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on June 24,
1998 by the following persons who constitute a majority of the Board of
Directors of Van Kampen American Capital Distributors, Inc.:
SIGNATURE TITLE
Don G. Powell Chairman and Chief )
Executive Officer )
John H. Zimmerman President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Gina Costello_______
(Atttorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed with
the Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of Van Kampen American Capital Equity Opportunity Trust,
Series 64 (File No. 333-33087) and Van Kampen American Capital Equity
Opportunity Trust, Series 87 (File No. 333-44581) and the same are hereby
incorporated herein by this reference.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated May 8, 1998 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity
Trust, Series 52 as of February 28, 1998, and for the period then ended,
contained in this Post-Effective Amendment No. 1 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant THORNTON LLP
Chicago, Illinois
June 24, 1998
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