File No. 333-24249
CIK #1025201
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 55
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
Van Kampen American Capital
Chapman and Cutler Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: An indefinite
number of Units of proportionate interest pursuant to Rule 24f-2
under the Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities
being registered: Indefinite
G. Amount of registration fee: Not Applicable
H. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the
Registration Statement
/ X / Check box if it is proposed that this filing will become effective
on April 7, 1997 pursuant to Rule 487.
Van Kampen American Capital Equity Opportunity Trust
Series 55
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Fund Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Fund Administration
4. Name and address of principal ) *
underwriter
5. Organization of trust ) The Fund
6. Execution and termination of ) The Fund
Trust Indenture and Agreement ) Fund Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Fund
trust's securities and ) Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Fund Administration
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Fund
) Trust Portfolios
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Portfolios
)
) Fund Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or) Fund Operating Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received) Public Offering
by depositor, principal ) *
underwriter, trustee or any ) Trust Portfolios
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Fund
underlying securities ) Rights of Unitholders
) Fund Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Fund Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Fund Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Fund Administration
20. Certain miscellaneous provisions ) Fund Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolios
) Fund Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Fund Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Fund Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Fund Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter)
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Fund Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Fund Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Fund Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Fund Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Fund Operating Expenses
50. Trustee's lien ) Fund Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's ) Cover Page
securities ) Fund Operating Expenses
52. (a) Provisions of trust agreement)
with respect to replacement) Fund Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution)
or elimination of underlying) Fund Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions) Report of Independent Certified
1(c) to Form S-6) ) Public Accountants
) Statements of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
April 7, 1997
VAN KAMPEN AMERICAN CAPITAL
<TABLE>
Van Kampen American Capital Equity Opportunity Trust, Series 55
<CAPTION>
<S> <C> <C>
Strategic Ten Trust Strategic Five Trust Strategic Fifteen Trust
United States Portfolio, Series 15 United States Portfolio, Series 9 Global Portfolio, Series 4
United Kingdom Portfolio, Series 13 Strategic Thirty Trust
Hong Kong Portfolio, Series 13 Global Portfolio, Series 4
</TABLE>
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 55 (the
"Fund" ) is comprised of the underlying separate unit investment trusts
set forth above (the "Trusts" ). The Trusts offer investors the
opportunity to purchase Units representing proportionate interests in a fixed,
diversified portfolio of actively traded equity securities, including common
stocks of foreign issuers. The Strategic Ten Trust United States Portfolio,
United Kingdom Portfolio and Hong Kong Portfolio consist of common stocks of
the ten companies in the Dow Jones Industrial Average (the "DJIA" ),
the Financial Times Industrial Ordinary Share Index (the "FT Index" )
and the Hang Seng Index, respectively, having the highest dividend yield as of
the close of business three business days prior to the Initial Date of
Deposit. The Strategic Five United States Trust consists of common stocks of
the five companies with the 2nd through 6th lowest per share stock prices of
the ten companies in the DJIA having the highest dividend yield as of the
close of business three business days prior to the Initial Date of Deposit.
The Strategic Thirty Global Trust consists of thirty stocks which include the
common stocks of the ten companies having the highest dividend yield as of the
close of business three business days prior to the Initial Date of Deposit in
each of the DJIA, FT Index and the Hang Seng Index. The Strategic Fifteen
Global Trust consists of fifteen common stocks which include the five stocks
in each of the DJIA, FT Index and Hang Seng Index with the 2nd through 6th
lowest per share stock prices of the ten companies in each index having the
highest dividend yield as of the close of business three business days prior
to the Initial Date of Deposit. The publishers of these indexes have not
participated in any way in the creation of the Trusts or in the selection of
stocks included in the Trusts and have not approved any information herein
relating thereto. The publishers of these indexes have not granted to the Fund
or the Sponsor a license to use these indexes and are not affiliated with the
Sponsor. Unless terminated earlier, the Trusts will terminate on May 12, 1998
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. Upon
liquidation, Unitholders may choose to reinvest their proceeds into a
subsequent Series of each Trust, if available, at a reduced sales charge, to
receive a cash distribution, or, in the case of a United States, Strategic
Thirty Global or Strategic Fifteen Global Trust, to receive a pro rata
distribution of the U.S.-traded Securities then included in a Trust plus cash
representing any foreign securities (if they own the requisite number of
Units).
Unless otherwise indicated, all amounts herein are stated in U.S. dollars. In
the case of the securities traded on a foreign securities exchange, these
amounts are computed on the basis of the applicable exchange rate.
Units of the Trusts 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.
- ----------
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.
Attention Foreign Investors. If you are not a United States citizen or
resident, that portion of distributions treated as United States source income
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. However, that portion of
distributions not treated as United States source income will generally not be
subject to U.S. federal withholding tax. See "Taxation." Such
investors should consult their tax advisers regarding the imposition of U.S.
withholding on distributions.
Objective of the Fund. The objective of the Strategic Ten Trusts is to provide
an above average total return through a combination of potential capital
appreciation and dividend income, consistent with the preservation of invested
capital, by investing in a portfolio of ten actively traded equity securities
having the highest dividend yield in the DJIA, FT Index or Hang Seng Index as
of the close of business three business days prior to the Initial Date of
Deposit. The objective of the Strategic Five Trust is to provide an above
average total return through a combination of potential capital appreciation
and dividend income, consistent with the preservation of invested capital, by
investing in a portfolio of five actively traded equity securities having the
2nd through 6th lowest per share price of the ten companies in the DJIA having
the highest dividend yield as of the close of business three business days
prior to the Initial Date of Deposit. The objective of the Strategic Thirty
Trust is to provide an above average total return through a combination of
potential capital appreciation and dividend income, consistent with the
preservation of invested capital, by investing in a portfolio of the thirty
actively traded equity securities comprised of the ten stocks in each of the
DJIA, FT Index and Hang Seng Index having the highest dividend yield as of the
close of business three business days prior to the Initial Date of Deposit.
The objective of the Strategic Fifteen Trust is to provide an above average
total return through a combination of potential capital appreciation and
dividend income, consistent with the preservation of invested capital, by
investing in a portfolio of fifteen common stocks comprised of the five stocks
in each of the DJIA, FT Index and Hang Seng Index with the 2nd through 6th
lowest per share stock price of the ten companies in each index having the
highest dividend yield as of the close of business three business days prior
to the Initial Date of Deposit. See "Objectives and Securities
Selection." Each Trust seeks to achieve better performance than the
related index for such Trust. There is, of course, no guarantee that the
objectives of the Trusts will be achieved.
Public Offering Price.The Public Offering Price of the Units of a Trust during
the initial offering period and for secondary market transactions after the
initial offering period includes the aggregate underlying value of the
Securities in such Trust's portfolio, the initial sales charge described
below, and cash, if any, in the Income and Capital Accounts held or owned by
such Trust. The initial sales charge is equal to the difference between the
maximum total sales charge (2.75% of the Public Offering Price) and the
maximum deferred sales charge ($0.175 per Unit). The monthly deferred sales
charge ($0.0175 per Unit) will begin accruing on a daily basis on May 13, 1997
and will continue to accrue through March 12, 1998. The monthly deferred sales
charge will be charged to each Trust, in arrears, commencing June 13, 1997 and
will be charged on the 13th day of each month thereafter through March 13,
1998. Unitholders will be assessed that portion of the deferred sales charge
accrued from the time they became Unitholders of record. Units purchased
subsequent to the initial deferred sales charge payment will be subject only
to that portion of the deferred sales charge payments not yet collected. This
deferred sales charge will be paid from funds in the Capital Account, if
sufficient, or from the periodic sale of Securities. The total maximum sales
charge assessed to Unitholders on a per Unit basis will be subject to
reduction as set forth in "Public Offering--General" . In the case of
the Global Trusts, the Public Offering Price per Unit is based on the
aggregate value of the foreign Securities computed on the basis of the
offering side value of the relevant currency exchange rate expressed in U.S.
dollars during the initial offering period and on the bid side value for
secondary market transactions. During the initial offering period, the sales
charge is reduced on a graduated scale for sales involving at least 5,000
Units of a Trust. If Units were available for purchase at the time stated in
the "Summary of Essential Financial Information" , the Public Offering
Price per Unit for each Trust would have been that amount set forth under "
Summary of Essential Financial Information" . Except as provided in "
Public Offering --Unit Distribution" , the minimum purchase is 100 Units.
See "Public Offering" .
Additional Deposits. The Sponsor may, from time to time for approximately one
month after the Initial Date of Deposit, deposit additional Securities in the
Trusts as provided under "The Fund" .
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by a Trust will be reinvested into additional Units, if then
available, on the applicable Distribution Date to Unitholders of record of
such Trust on the record date as set forth in the "Summary of Essential
Financial Information" . Unitholders may also elect to receive cash
distributions as provided under "Rights of Unitholders--Reinvestment
Option." The estimated initial distribution for each Trust will be that
amount set forth under "Summary of Essential Financial
Information--Estimated Initial Distribution" and will be made on October
25, 1997 to Unitholders of record on October 10, 1997. Gross dividends
received by a Trust will be distributed to Unitholders. Expenses of a Trust
will be paid with proceeds from the sale of Securities. For the consequences
of such sales, see "Taxation" and "Risk Factors."
Additionally, upon surrender of Units for redemption or termination of a
Trust, the Trustee will distribute to each Unitholder his pro rata share of
such 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
currently intends to maintain a market for Units of the Trusts through October
13, 1997 and offer to repurchase such Units at prices which are based on the
aggregate underlying value of Equity Securities in the applicable Trust
(generally determined by the closing sale prices of the Securities) plus or
minus cash, if any, in the Capital and Income Accounts of such Trust. If a
secondary market is not maintained, a Unitholder may redeem Units at prices
based upon the aggregate underlying value of the Equity Securities in the
applicable Trust plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of such Trust. See "Rights of
Unitholders--Redemption of Units" . Units sold or tendered for redemption
prior to such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales charge
at the time of sale or redemption.
A Unitholder in a United States, Strategic Thirty Global or Strategic Fifteen
Global Trust tendering 1,000 or more Units for redemption may request a
distribution of shares of U.S.-traded Securities (reduced by customary
transfer and registration charges) plus cash representing any foreign
Securities. See "Rights of Unitholders--Redemption of Units" .
Termination. The Fund will terminate approximately thirteen months after the
Initial Date of Deposit regardless of market conditions at that time.
Commencing on the Mandatory Termination Date, Securities will begin to be sold
in connection with the termination of the Trusts. The Sponsor will determine
the manner, timing and execution of the sale of the Securities. Written notice
of any termination of the Trusts shall be given by the Trustee to each
Unitholder at his address appearing on the registration books of the Trusts
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 in
the case of a United States, Strategic Thirty Global or Strategic Fifteen
Global Trust will include with such notice a form to enable Unitholders to
elect a distribution of shares of the U.S.-traded Securities (reduced by
customary transfer and registration charges) if such Unitholder owns at least
1,000 Units of such Trust, rather than to receive payment in cash for such
Unitholder's pro rata share of the amounts realized upon the disposition of
such U.S.-traded Securities. Unitholders will receive cash representing any
foreign Securities and fractional shares. To be effective, the election form,
and any other documentation required by the Trustee, must be returned to the
Trustee at least five business days prior to the Mandatory Termination Date.
Unitholders of each of the Trusts may elect to become Rollover Unitholders as
described in "Special Redemption and Rollover in New Fund" below.
Rollover Unitholders will not receive the final liquidation distribution but
will receive units of a new Series of the Fund, if one is being offered.
Unitholders not electing the Rollover Option or a distribution of shares of
Securities (in the case of a United States, Strategic Thirty Global or
Strategic Fifteen Global Trust) will receive a cash distribution from the sale
of the remaining Securities within a reasonable time after the Trusts are
terminated. See "Fund 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 will initially have their distributions reinvested into additional
Units of the applicable Trust subject only to the remaining deferred sales
charge payments, if Units are available at the time of reinvestment, or, upon
request, either reinvested into an open-end management investment company as
described herein or distributed in cash. See "Rights of
Unitholders--Reinvestment Option" .
Special Redemption and Rollover in New Fund. Unitholders will have the option
of specifying by the Rollover Notification Date stated in "Summary of
Essential Financial Information" to have all of their Units redeemed and
the distributed Securities sold by the Trustee, in its capacity as
Distribution Agent, on the Special Redemption Date. (Unitholders so electing
are referred to herein as "Rollover Unitholders" .) The Distribution
Agent will appoint the Sponsor as its agent to determine the manner, timing
and execution of sales of underlying Securities. The proceeds of the
redemption will then be invested in Units of a new Series of the Fund (the
"1998 Fund" ), if one is offered, at a reduced sales charge
(anticipated to be 1.75% of the Public Offering Price of the 1998 Fund). The
Sponsor may, however, stop offering units of the 1998 Fund at any time in its
sole discretion without regard to whether all the proceeds to be invested have
been invested. Cash which has not been invested on behalf of the Rollover
Unitholders in the 1998 Fund will be distributed shortly after the Special
Redemption Date. However, the Sponsor anticipates that sufficient Units will
be available, although moneys in this Fund may not be fully invested on the
next business day. The trusts included in the 1998 Fund are expected to
contain portfolios consisting of component stocks of the DJIA, FT Index or
Hang Seng Index selected in accordance with the indexing strategies of the
Trusts in the current Series of the Fund. Rollover Unitholders will receive
the amount of dividends in the applicable Income Account of each Trust which
will be included in the reinvestment in units of the 1998 Fund. The Sponsor
currently anticipates that a new series of the Fund will be created each month.
Risk Factors. An investment in the Fund should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. An investment in the Strategic Five Trust may subject a
Unitholder to additional risk due to the relative lack of diversity in its
portfolio because the portfolio contains only five stocks. Accordingly, Units
of the Strategic Five Trust may be subject to greater market risk than other
trusts which contain a more diversified portfolio of securities. For certain
risk considerations related to the Trusts, see "Risk Factors" .
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55
Summary of Essential Financial Information
At the close of the relevant stock market on April 4, 1997
or April 7, 1997 (for the United Kingdom and Hong Kong Trusts)
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
<TABLE>
<CAPTION>
Strategic Strategic Strategic
Ten Ten Ten
United United Hong
States Kingdom Kong
GENERAL INFORMATION Trust Trust Trust
-------------- -------------- --------------
<S> <C> <C> <C>
Number of Units <F1>...................................................... 15,000 15,000 25,000
Fractional Undivided Interest in the Trust per Unit <F1>.................. 1/15,000 1/15,000 1/25,000
Public Offering Price:
Aggregate Value of Securities in Portfolio <F2>........................... $ 149,837 $ 148,121 $ 247,546
Aggregate Value of Securities per Unit.................................... $ 9.99 $ 9.87 $ 9.90
Maximum Sales Charge <F3>................................................. $ .275 $ .275 $ .275
Less Deferred Sales Charge per Unit....................................... $ .175 $ .175 $ .175
Public Offering Price per Unit <F3><F4>................................... $ 10.09 $ 9.97 $ 10.00
Redemption Price per Unit <F5>............................................ $ 9.81 $ 9.69 $ 9.69
Initial Secondary Market Repurchase Price per Unit <F5>................... $ 9.81 $ 9.69 $ 9.72
Excess of Public Offering Price per Unit over Redemption Price per Unit... $ .28 $ .28 $ .31
Estimated Initial Distribution............................................ $ .14 $ .17 $ .29
Estimated Annual Dividends per Unit <F6>.................................. $ .31383 $ .49860 $ .48866
Estimated Annual Organizational Expenses per Unit <F7>.................... $ .00868 $ .01926 $ .04511
Supervisor's Annual Supervisory Fee ...................................... Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee......................................... Maximum of $.0025 per Unit
Rollover Notification Date ............................................... April 13, 1998
Special Redemption Date................................................... May 12, 1998
Mandatory Termination Date ............................................... May 12, 1998
Minimum Termination Value................................................. Each 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's deposits has exceeded $15,000,000,
then the Trust Agreement may be terminated
if the net asset value of the Trust is less
than $3,000,000.
Trustee's Annual Fee and Miscellaneous Expense <F8>....................... $.0087 per Unit
Income and Capital Account Record Dates................................... October 10, 1997 and May 12, 1998
Income and Capital Account Distribution Dates............................. October 25, 1997 and May 22, 1998
Evaluation Time........................................................... Close of the relevant stock market
(generally 4:00 P.M. New York time for a
United States, Strategic Thirty or
Strategic Fifteen Trust, 11:30 A.M. New
York time for the United Kingdom Trust and
3:30 A.M. New York time for the Hong Kong
Trust)
</TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55
Summary of Essential Financial Information (Continued)
At the close of the relevant stock market on April 4, 1997
or April 7, 1997 (for the United Kingdom and Hong Kong Trusts)
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
<TABLE>
<CAPTION>
Strategic
Five Strategic Strategic
United Thirty Fifteen
States Global Global
GENERAL INFORMATION Trust Trust Trust
-------------- -------------- --------------
<S> <C> <C> <C>
Number of Units <F1>...................................................... 15,000 30,000 15,000
Fractional Undivided Interest in the Trust per Unit <F1>.................. 1/15,000 1/30,000 1/15,000
Public Offering Price:
Aggregate Value of Securities in Portfolio <F2>........................... $ 150,122 $ 297,090 $ 149,399
Aggregate Value of Securities per Unit.................................... $ 10.01 $ 9.90 $ 9.96
Maximum Sales Charge <F3>................................................. $ .275 $ .275 $ .275
Less Deferred Sales Charge per Unit....................................... $ .175 $ .175 $ .175
Public Offering Price per Unit <F3><F4>................................... $ 10.11 $ 10.00 $ 10.06
Redemption Price per Unit <F5>............................................ $ 9.83 $ 9.71 $ 9.77
Initial Secondary Market Repurchase Price per Unit <F5>................... $ 9.83 $ 9.72 $ 9.78
Excess of Public Offering Price per Unit over Redemption Price per Unit... $ .28 $ .29 $ .29
Estimated Initial Distribution............................................ $ .14 $ .21 $ .17
Estimated Annual Dividends per Unit <F6>.................................. $ .28839 $ .43633 $ .41815
Estimated Annual Organizational Expenses per Unit <F7>.................... $ .01505 $ .07500 $ .08633
Supervisor's Annual Supervisory Fee ...................................... Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee......................................... Maximum of $.0025 per Unit
Rollover Notification Date ............................................... April 13, 1998
Special Redemption Date................................................... May 12, 1998
Mandatory Termination Date ............................................... May 12, 1998
Minimum Termination Value................................................. Each 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's deposits has exceeded $15,000,000,
then the Trust Agreement may be terminated
if the net asset value of the Trust is less
than $3,000,000.
Trustee's Annual Fee and Miscellaneous Expenses <F8>...................... $.0087 per Unit
Income and Capital Account Record Dates................................... October 10, 1997 and May 12, 1998
Income and Capital Account Distribution Dates............................. October 25, 1997 and May 22, 1998
Evaluation Time........................................................... Close of the relevant stock market
(generally 4:00 P.M. New York time for a
United States, Strategic Thirty or
Strategic Fifteen Trust, 11:30 A.M. New
York time for the United Kingdom Trust and
3:30 A.M. New York time for the Hong Kong
Trust)
- ----------
<FN>
<F1> As of the close of business on any day on which the Sponsor is the sole
Unitholder of a Trust, the number of Units of such Trust may be adjusted so
that the Public Offering Price per Unit will equal approximately $10.
Therefore, to the extent of any such adjustment the fractional undivided
interest per Unit will increase or decrease accordingly from the amounts
indicated above.
<F2>Each Equity Security is valued at the closing sale price. The aggregate value
of Securities in each of the Global Trusts represents the U.S. dollar value
based on the offering side value of the currency exchange rates for the
related currency, at the applicable Evaluation Time on the date of this "
Summary of Essential Financial Information" .
<F3>The Maximum Sales Charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is applicable to all Units and
represents an amount equal to the difference between the Maximum Sales Charge
for a Trust (2.75% of the Public Offering Price) and the amount of the maximum
deferred sales charge ($0.175 per Unit). Subsequent to the Initial Date of
Deposit, the amount of the initial sales charge will vary with changes in the
aggregate value of the Securities in the Trust. Units purchased subsequent to
the initial deferred sales charge payment will be subject only to that portion
of the deferred sales charge payments not yet collected. These deferred sales
charge payments will be paid from funds in the Capital Account, if sufficient,
or from the periodic sale of Securities. The total maximum sales charge will
be 2.75% of the Public Offering Price (2.828% of the aggregate value of the
Securities less the deferred sales charge). See the "Fee Table" below
and "Public Offering--Offering Price" .
<F4>On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts. In the
case of the Global Trusts, the Public Offering Price per Unit is based on the
aggregate value of the foreign Securities computed on the basis of the
offering side value of the relevant currency exchange rate expressed in U.S.
dollars.
<F5>The Redemption Price per Unit and the Initial Secondary Market Repurchase
Price per Unit are reduced by the unpaid portion of the deferred sales charge.
In the case of the Global Trusts, the Redemption Price per Unit is based on
the aggregate value of the foreign Securities computed on the basis of the bid
side value of the relevant currency exchange rate expressed in U.S. dollars.
<F6>Estimated annual dividends are based on the most recently declared dividends
or, in the case of the foreign Securities in the Global Trusts, on the most
recent interim and final dividends declared taking into consideration any
foreign withholding taxes. Estimated Annual Dividends per Unit are based on
the number of Units, the fractional undivided interest in the Securities per
Unit and the aggregate value of the Securities per Unit as of the Initial Date
of Deposit. Investors should note that the actual annual dividends received
per Unit will vary from the estimated amount due to changes in the factors
described in the preceding sentence and actual dividends declared and paid by
the issuers of the Securities.
<F7>Each Trust (and therefore Unitholders of the respective Trust) 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 Trusts. See "Fund Operating Expenses"
and "Statements of Condition" . Historically, the sponsors of unit
investment trusts have paid all of the costs of establishing such trusts.
Estimated Annual Organizational Expenses per Unit have been estimated based on
a projected trust size of $68,000,000, $17,000,000, $5,000,000, $20,000,000,
$3,500,000 and $3,000,000 for the Strategic Ten United States, Strategic Ten
United Kingdom, Strategic Ten Hong Kong, Strategic Five United States,
Strategic Thirty Global and Strategic Fifteen Global Trusts, respectively. To
the extent a Trust is larger or smaller, the actual organizational expenses
paid by such Trust (and therefore by its Unitholders) will vary from the
estimated amount set forth above.
<F8>In connection with the Strategic Ten Hong Kong, Strategic Thirty and Strategic
Fifteen Trusts the Trustee will receive additional annual compensation,
payable at the end of the initial offering and in monthly installments
thereafter, of $1.10 per $1,000 of market value of Equity Securities traded on
the Hong Kong Stock Exchange held in a sub-custodian account at month end.
</TABLE>
FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in a Trust will bear directly or indirectly. See
"Public Offering--Offering Price" and "Fund Operating Expenses"
. Although each Trust has a term of approximately thirteen months, and is a
unit investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees. The examples below assume that the principal
amount of and distributions on an investment are rolled over each year into a
new Series subject only to the anticipated reduced sales charge applicable to
Rollover Unitholders. See "Right of Unitholders--Special Redemption and
Rollover in New Fund." Investors should note that while these examples are
based on the public offering price and the estimated fees for the current
Trust series, the actual public offering price and fees for any new Series
created in the future periods indicated could vary from those of the current
Trust series.
<TABLE>
<CAPTION>
Strategic Strategic Strategic
Ten Ten Ten
United United Hong
States Kingdom Kong
Trust Trust Trust
------------- ------------- -------------
<S> <C> <C> <C>
Unitholder Transaction Expenses (as a percentage of offering price)
Initial Sales Charge Imposed on Purchase<F1>................................... 1.00% 1.00% 1.00%
Deferred Sales Charge<F2>...................................................... 1.75% 1.75% 1.75%
------------- ------------- -------------
Maximum Sales Charge........................................................... 2.75% 2.75% 2.75%
============= ============= =============
Maximum Sales Charge Imposed on Reinvested Dividends<F3>....................... 1.75% 1.75% 1.75%
============= ============= =============
Estimated Annual Fund Operating Expenses (as a percentage of aggregate value)
Trustee's Fee and Other Operating Expenses..................................... 0.087% 0.088% 0.198%
Portfolio Supervision and Evaluation Fees...................................... 0.050% 0.051% 0.051%
Organizational Costs........................................................... 0.087% 0.195% 0.456%
------------- ------------- -------------
Total.......................................................................... 0.224% 0.334% 0.705%
============= ============= =============
</TABLE>
<TABLE>
An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period.
<CAPTION>
Strategic Strategic Strategic
Ten Ten Ten
United United Hong
States Kingdom Kong
Cumulative Expenses Paid for Period of: Trust Trust Trust
------------- ------------- -------------
<S> <C> <C> <C>
1 Year...................................$ 30 $ 31 $ 35
3 Years..................................$ 71 $ 74 $ 85
5 Years.................................. N/A N/A N/A
10 Years................................. N/A N/A N/A
</TABLE>
Example
<TABLE>
<CAPTION>
Strategic
Five Strategic Strategic
United Thirty Fifteen
States Global Global
Trust Trust Trust
------------- ------------- -------------
<S> <C> <C> <C>
Unitholder Transaction Expenses (as a percentage of offering price)
Initial Sales Charge Imposed on Purchase<F1>................................... 1.00% 1.00% 1.00%
Deferred Sales Charge<F2>...................................................... 1.75% 1.75% 1.75%
------------- ------------- -------------
Maximum Sales Charge........................................................... 2.75% 2.75% 2.75%
============= ============= =============
Maximum Sales Charge Imposed on Reinvested Dividends<F3>....................... 1.75% 1.75% 1.75%
============= ============= =============
Estimated Annual Fund Operating Expenses (as a percentage of aggregate value)
Trustee's Fee and Other Operating Expenses..................................... 0.087% 0.125% 0.124%
Portfolio Supervision and Evaluation Fees...................................... 0.050% 0.051% 0.050%
Organizational Costs........................................................... 0.150% 0.758% 0.867%
------------- ------------- -------------
Total.......................................................................... 0.287% 0.934% 1.041%
============= ============= =============
</TABLE>
<TABLE>
An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period.
<CAPTION>
Strategic
Five Strategic Strategic
United Thirty Fifteen
States Global Global
Cumulative Expenses Paid for Period of: Trust Trust Trust
------------- ------------- -------------
<S> <C> <C> <C>
1 Year...................................$ 30$ 37$ 38
3 Years..................................$ 72$ 92$ 95
5 Years.................................. N/A N/A N/A
10 Years................................. N/A N/A N/A
Example
The examples assume reinvestment of all dividends and distributions and
utilize a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. For purposes of the
examples, the deferred sales charge imposed on reinvestment of dividends is
not reflected until the year following payment of the dividend; the cumulative
expenses would be higher if sales charges on reinvested dividends were
reflected in the year of reinvestment. The examples should not be considered
representations of past or future expenses or annual rate of return; the
actual expenses and annual rate of return may be more or less than those
assumed for purposes of the examples.
- ----------
<FN>
<F1>The Initial Sales Charge is actually the difference between the Maximum Sales
Charge (2.75% of the Public Offering Price) and the maximum deferred sales
charge ($.175 per Unit) and would exceed 1.00% if the Public Offering Price
exceeds $10 per Unit.
<F2>The actual fee is $0.0175 per Unit per month, irrespective of purchase or
redemption price, deducted over the 10 months commencing June 13, 1997. If a
holder sells or redeems Units before all of these deductions have been made,
the balance of the deferred sales charge payments remaining will be deducted
from the sales or redemption proceeds. If Unit price exceeds $10 per Unit, the
deferred portion of the sales charge will be less than 1.75%; if Unit price is
less than $10 per Unit, the deferred portion of the sales charge will exceed
1.75%. Units purchased subsequent to the initial deferred sales charge payment
will be subject to only that portion of the deferred sales charge payments not
yet collected.
<F3>Reinvested dividends will be subject only to the deferred sales charge
remaining at the time of reinvestment. See "Rights of
Unitholders--Reinvestment Option" .
</TABLE>
THE FUND
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 55 is comprised
of the following separate underlying unit investment trusts: Strategic Ten
Trust United States Portfolio, Series 15 (the "Strategic Ten United States
Trust" ), Strategic Ten Trust United Kingdom Portfolio, Series 13 (the "
Strategic Ten United Kingdom Trust" ), Strategic Ten Trust Hong Kong
Portfolio, Series 13 (the "Strategic Ten Hong Kong Trust" ), Strategic
Five Trust United States Portfolio, Series 9 (the "Strategic Five United
States Trust" ), Strategic Thirty Trust Global Portfolio, Series 4 (the
"Strategic Thirty Global Trust" ) and Strategic Fifteen Trust Global
Portfolio, Series 4 (the "Strategic Fifteen Global Trust" ). The
Strategic Ten United States Trust, Strategic Ten United Kingdom Trust and
Strategic Ten Hong Kong Trust are referred to herein as the "Strategic Ten
Trusts," the Strategic Five United States Trust is referred to herein as
the "Strategic Five Trust," the Strategic Thirty Global Trust is
referred to herein as the "Strategic Thirty Trust," and the Strategic
Fifteen Global Trust is referred to herein as the "Strategic Fifteen
Trust." The Strategic Ten United States Trust and Strategic Five United
States Trust are referred to herein as the "United States Trusts," the
Strategic Ten United Kingdom Trust is referred to herein as the "United
Kingdom Trust" and the Strategic Ten Hong Kong Trust is referred to herein
as the "Hong Kong Trust." The Strategic Ten United Kingdom Trust,
Strategic Ten Hong Kong Trust, Strategic Thirty Global Trust and Strategic
Fifteen Global Trust are referred to herein as the "Global Trusts."
The Fund was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement" ), dated the
date of this Prospectus (the "Initial Date of Deposit" ), among Van
Kampen American Capital Distributors, Inc., as Sponsor, Van Kampen American
Capital Investment Advisory Corp., as Supervisor, The Bank of New York, as
Trustee, and American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., as Evaluator.
The Fund offers investors the opportunity to purchase Units representing
proportionate interests in portfolios of actively traded equity securities
which are components of the DJIA, the FT Index, or the Hang Seng Index. The
Strategic Ten Trusts consist of common stocks of the ten companies in the
DJIA, FT Index or Hang Seng Index having the highest dividend yield as of the
close of business three business days prior to the Initial Date of Deposit.
The Strategic Five Trust consists of common stocks of the five companies
having the 2nd through 6th lowest per share price of the ten companies in the
DJIA having the highest dividend yield as of the close of business three
business days prior to the Initial Date of Deposit. The Strategic Thirty Trust
consists of thirty stocks which include the common stocks of the ten companies
in each of the DJIA, FT Index and Hang Seng Index having the highest dividend
yield as of the close of business three business days prior to the Initial
Date of Deposit. The Strategic Fifteen Trust consists of fifteen common stocks
which include the five stocks in each of the DJIA, FT Index and Hang Seng
Index with the 2nd through 6th lowest per share stock price of the ten
companies in each index having the highest dividend yield as of the close of
business three business days prior to the Initial Date of Deposit.
These yields are historical and there is no assurance that any dividends will
be declared or paid in the future on the Securities in the Trusts. See "
Risk Factors" . As used herein the terms "Equity Securities" and
"Securities" mean the securities (including contracts to purchase such
securities) listed in "Portfolio" for each Trust and any additional
securities deposited into each Trust as provided herein. The publishers of the
indexes described herein have not participated in any way in the creation of
the Fund or in selection of the stocks included in the Trusts and have not
approved any information herein relating thereto. The Fund may be an
appropriate medium for investors who desire to participate in portfolios of
common stocks with greater diversification than they might be able to acquire
individually and who are seeking to achieve a better performance than the
related indexes through an investment in the highest dividend yielding stocks
of these indexes. An investment in approximately equal values of such stocks
each year has in most instances provided a higher total return than
investments in all of the stocks which are components of the respective
indexes. See "Trust Portfolios" . Unless terminated earlier, the Trusts
will terminate on the Mandatory Termination Date set forth under "Summary
of Essential Financial Information" 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. Upon liquidation, Unitholders may choose
either to reinvest their proceeds into a subsequent Series of the Trusts, if
available, at a reduced sales charge, to receive, in the case of a United
States, Strategic Thirty Global or Strategic Fifteen Global Trust, a pro rata
distribution of the U.S.-traded Securities then included in such Trust (if
they own the requisite minimum number of Units) or to receive a cash
distribution.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolios" herein, 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 that number of Units of the Trusts
indicated in "Summary of Essential Financial Information" . Unless
otherwise terminated as provided in the Trust Agreement, the Trusts will
terminate on the Mandatory Termination Date and any Securities then held will
within a reasonable time thereafter be liquidated or distributed by the
Trustee.
Additional Units of a Trust may be issued at any time by depositing in such
Trust (i) additional Securities, (ii) contracts to purchase securities
together with cash or irrevocable letters of credit or (iii) cash (including a
letter of credit) with instructions to purchase additional Securities. As
additional Units are issued by a Trust, the aggregate value of the Securities
in such Trust will be increased and the fractional undivided interest in such
Trust represented by each Unit will be decreased. The Sponsor may continue to
make additional deposits of Securities or cash with instructions to purchase
additional Securities into a Trust following the Initial Date of Deposit,
provided that such additional deposits will be in amounts which will maintain,
as nearly as practicable, the same percentage relationship among the number of
shares of each Equity Security in such Trust's portfolio that existed
immediately prior to any such subsequent deposit. Any deposit by the Sponsor
of additional Equity Securities will duplicate, as nearly as is practicable,
this actual proportionate relationship and not the original proportionate
relationship on the Initial Date of Deposit, since the actual proportionate
relationship may be different than the original proportionate relationship.
Any such difference may be due to the sale, redemption or liquidation of any
of the Equity Securities deposited in a Trust on the Initial, or any
subsequent, Date of Deposit. If the Sponsor deposits cash, however, existing
and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the Securities between the time of the cash deposit and the purchase of the
Securities and because the Trust will pay the associated brokerage or
acquisition fees.
Each Unit of a Trust initially offered represents an undivided interest in
such Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in a Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in such Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of the Strategic Ten Trusts is to provide an above average total
return through a combination of potential capital appreciation and dividend
income, consistent with the preservation of invested capital, by investing in
a portfolio of ten actively traded equity securities having the highest
dividend yield in the DJIA, FT Index or Hang Seng Index as of the close of
business three business days prior to the Initial Date of Deposit. The
objective of the Strategic Five Trust is to provide an above average total
return through a combination of potential capital appreciation and dividend
income, consistent with the preservation of invested capital, by investing in
a portfolio of five actively traded equity securities having the 2nd through
6th lowest per share price of the ten companies in the DJIA having the highest
dividend yield as of the close of business three business days prior to the
Initial Date of Deposit. The objective of the Strategic Thirty Trust is to
provide an above average total return through a combination of potential
capital appreciation and dividend income, consistent with the preservation of
invested capital, by investing in a portfolio of the thirty actively traded
equity securities comprised of the ten stocks in each of the DJIA, FT Index
and Hang Seng Index having the highest dividend yield as of the close of
business three business days prior to the Initial Date of Deposit. The
objective of the Strategic Fifteen Trust is to provide an above average total
return through a combination of potential capital appreciation and dividend
income, consistent with the preservation of invested capital, by investing in
a portfolio of fifteen common stocks comprised of the five stocks in each of
the DJIA, FT Index and Hang Seng Index with the 2nd through 6th lowest per
share stock price of the ten companies in each index having the highest
dividend yield as of the close of business three business days prior to the
Initial Date of Deposit.
In seeking the Trusts' objectives, the Sponsor also considered the ability of
the Equity Securities to outpace inflation. While inflation is currently
relatively low, the United States has historically experienced periods of
double-digit inflation. While the prices of equity securities will fluctuate,
over time equity securities have outperformed the rate of inflation, and other
less risky investments, such as government bonds and U.S. Treasury bills. Past
performance is, however, no guarantee of future results.
The companies represented in the Trusts are some of the most well-known and
highly capitalized companies in the United States, the United Kingdom and Hong
Kong. An investment in approximately equal values of the ten highest yielding
stocks in the DJIA for a period of one year would have, in 18 of the last 25
years, yielded a higher total return than an investment in all of the stocks
comprising the DJIA. An investment in the ten highest yielding stocks in the
FT Index for a period of one year would have, in 14 of the last 20 years,
yielded a higher total return than an investment in all of the stocks
comprising the FT Index. An investment in the ten highest yielding stocks in
the Hang Seng Index for a period of one year would have, in 8 of the last 19
years, yielded a higher total return than an investment in all of the stocks
comprising the Hang Seng Index. An investment in approximately equal values of
the five companies having the 2nd through 6th lowest per share price of the
ten highest yielding stocks in the DJIA for a period of one year would have,
in 19 of the last 25 years, yielded a higher total return than an investment
in all of the stocks comprising the DJIA. An investment in approximately equal
values of the thirty stocks comprised of the ten highest yielding stocks in
each of the DJIA, FT Index and Hang Seng Index for a period of one year would
have yielded a higher total return in 14, 12 and 7 of the last 19 years than
an investment in all of the stocks comprising the DJIA, FT Index and Hang Seng
Index, respectively. An investment in approximately equal values of the
fifteen stocks comprised of the five stocks having the 2nd through 6th lowest
per share price of the ten highest yielding stocks in each of the DJIA, FT
Index and Hang Seng Index for a period of one year would have yielded a higher
total return in 12, 12 and 8 of the last 19 years than an investment in all of
the stocks comprising the DJIA, FT Index and Hang Seng Index, respectively.
See the table entitled "Comparison of Total Returns" for the
applicable Trust under "Trust Portfolios" . It should be noted that the
foregoing yield comparisons do not take into account any expenses or sales
commissions which would arise from an investment in Units of the Trusts. The
Trusts seek to achieve better performances than the related indexes through
similar investment strategy. Investment in a number of companies having high
dividends relative to their stock prices (usually because their stock prices
are undervalued) is designed to increase each Trust's potential for higher
returns. There is, of course, no assurance that a Trust (which includes
expenses and sales charges) will achieve its objective.
The Global Trusts may be suitable for investors who seek to diversify their
equity holdings with investments in foreign equity securities. Today's
international market offers many opportunities. Foreign equity markets (as
measured by the Morgan Stanley Capital International Europe, Asia, Far East
Index) have outperformed U.S. markets (as measured by the Standard & Poor's
500 Index) in 15 of the past 25 years. International markets can experience
different performances and while some markets may be experiencing rapid
growth, others may be in temporary declines. These market movements may offer
attractive growth potential and possible portfolio diversification for
investors seeking to add to their existing equity portfolio. The Global Trusts
seek to combine the growth potential of undervalued stocks with the strength
of stocks listed on a foreign stock market index. Typically, companies listed
on a major market index are widely recognized, firmly established and
financially strong. Therefore, when undervalued, these stocks may provide
investors with significant growth opportunities.
Investors will be subject to taxation on the dividend income received by the
Trusts and on gains from the sale or liquidation of Securities. The tax
consequences affecting Unitholders will vary in each of the respective Trusts
(see "Taxation" ). Investors should be aware that there is not any
guarantee that the objective of the Trusts will be achieved because it is
subject to the continuing ability of the respective issuers 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 Securities will pay
dividends on outstanding common shares. Any distribution 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. In addition, a decrease in the value of the foreign currencies in
which the foreign Securities are denominated relative to the U.S. dollar will
adversely affect the value of the related Global Trust's assets and income and
the value of the Units of that Trust. See "Risk Factors" .
Investors should note that the above criteria were applied to the Securities
for inclusion in the Trusts as of three business days prior to the Initial
Date of Deposit. Subsequent to this date, the Securities may no longer be
included in the DJIA, FT Index, or Hang Seng Index, may not be providing one
of the ten highest dividend yields within these indexes or may not have one of
the 2nd through 6th lowest per share prices within the relevant index. Should
a Security no longer be included in these indexes or meet the criteria used
for selection for a Trust, such Security will not as a result thereof be
removed from a Trust portfolio.
Investors should be aware that the Fund 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
"Fund Administration--Portfolio Administration" ). In addition,
Securities will not be sold by a 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 three
business days prior to the date the Securities were purchased by the Trusts.
The Trusts may continue to 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 Trusts.
TRUST PORTFOLIOS
- --------------------------------------------------------------------------
The Strategic Ten Trusts consist of common stocks of the ten companies in the
DJIA, FT Index or Hang Seng Index having the highest dividend yield as of the
close of business three business days prior to the Initial Date of Deposit.
The Strategic Five Trust consists of the five common stocks with the 2nd
through 6th lowest per share stock price of the ten companies in the DJIA
having the highest dividend yield as of the close of business three business
days prior to the Initial Date of Deposit. The Strategic Thirty Trust consists
of thirty stocks which include the common stocks of the ten companies in each
of the DJIA, FT Index and Hang Seng Index having the highest dividend yield as
of the close of business three business days prior to the Initial Date of
Deposit. The Strategic Fifteen Trust consists of fifteen common stocks which
include the five stocks in each of the DJIA, FT Index and Hang Seng Index with
the 2nd through 6th lowest per share stock price of the ten companies in each
index having the highest dividend yield as of the close of business three
business days prior to the Initial Date of Deposit. Each of the related stock
indexes is described below.
In the case of the securities traded on the New York Stock Exchange, the yield
for each Equity Security was calculated by annualizing the last dividend
declared and dividing the result by the market value of the Equity Security as
of the close of business three business days prior to the Initial Date of
Deposit. In the case of securities traded on a foreign securities exchange,
the yield for each Equity Security was calculated by adding together the most
recent interim and final dividends declared (foreign companies generally pay
one interim and one final dividend per fiscal year) and dividing the result by
the market value of the Equity Security as of the close of business three
business days prior to the Initial Date of Deposit. An investment in each
Trust involves the purchase of a quality portfolio of attractive equities with
high dividend yields in one convenient purchase.
The Dow Jones Industrial Average. The Dow Jones Industrial Average ("
DJIA" ) was first published in The Wall Street Journal in 1896. Initially
consisting of just 12 stocks, the DJIA expanded to 20 stocks in 1916 and its
present size of 30 stocks on October 1, 1928. The companies which make up the
DJIA have remained relatively constant over the life of the DJIA. However, on
March 17, 1997, four companies were added to the DJIA replacing Bethlehem
Steel Corporation, Texaco, Inc., Westinghouse Electric Corporation and
Woolworth Corporation. The companies added to the DJIA were Hewlett-Packard
Co., Johnson & Johnson, Travelers Group, Inc. and Wal-Mart Stores, Inc. The
following is the list as it currently appears:
<TABLE>
<CAPTION>
<S> <C>
Allied Signal Hewlett-Packard Company
Aluminum Company of America International Business Machines Corporation
American Express Company International Paper Company
AT&T Corporation Johnson & Johnson
Boeing Company J.P. Morgan & Company, Inc.
Caterpillar, Inc. McDonald's Corporation
Chevron Corporation Merck & Company, Inc.
Coca-Cola Company Minnesota Mining & Manufacturing Company
Walt Disney Company Philip Morris Companies, Inc.
E.I. du Pont de Nemours & Company Procter & Gamble Company
Eastman Kodak Company Sears, Roebuck and Company
Exxon Corporation Travelers Group, Inc.
General Electric Company Union Carbide Corporation
General Motors Corporation United Technologies Corporation
Goodyear Tire & Rubber Company Wal-Mart Stores, Inc.
</TABLE>
The Financial Times Industrial Ordinary Share Index. The Financial Times
Industrial Ordinary Share Index (the "FT Index" ) is comprised of 30
common stocks chosen by the editors of The Financial Times as representative
of British industry and commerce. The FT Index began as the Financial News
Industrial Ordinary Share Index in London in 1935 and became the Financial
Times Industrial Ordinary Share Index in 1947. The following stocks are
currently represented in the FT Index:
<TABLE>
<CAPTION>
<S> <C>
ASDA Group Granada Group
Allied Domecq Plc Grand Metropolitan
BG Plc Guest Keen & Nettlefolds (GKN) Plc
BOC Group Guinness
BTR Plc Imperial Chemical Industries Plc
Blue Circle Industries Plc Lucas Varity Plc
Boots Co Marks & Spencer
British Airways National Westminster Bank Plc
British Petroleum Peninsular & Oriental Steam Navigation Company
British Telecom Plc Reuters Holdings
Cadbury Schweppes Royal & Sun Alliance Insurance Group Plc
Courtaulds Plc SmithKline Beecham
EMI Group Plc Tate & Lyle Plc
General Electric Plc TSB Group Plc
Glaxo Wellcome Plc Vodaphone Group Plc
</TABLE>
The Hang Seng Index. The Hang Seng Index, first published in 1969, consists of
33 of the stocks currently listed on the Stock Exchange of Hong Kong Ltd. (the
"Hong Kong Exchange" ). The Hang Seng Index, which is representative of
commerce and industry, finance, properties and utilities, is comprised of the
following companies:
<TABLE>
<CAPTION>
<S> <C>
Amoy Properties Ltd. Hopewell Holdings
Bank of East Asia HSBC Holdings Plc
Cathay Pacific Airways Hutchison Whampoa
Cheung Kong (Holdings) Ltd. Hysan Development Company Ltd.
China Light & Power Company Ltd. Johnson Electric Holdings
Citic Pacific New World Development Co. Ltd.
First Pacific Company Ltd. Oriental Press Group
Great Eagle Holdings Shangri-La Asia Ltd.
Guangdong Investment Shun Tak Holdings Ltd.
Hang Lung Development Company Sino Land Co. Ltd.
Hang Seng Bank Ltd. South China Morning Post (Holdings) Ltd.
Henderson Investment Ltd. Sun Hung Kai Properties Ltd.
Henderson Land Development Company Ltd. Swire Pacific (A)
Hong Kong and China Gas Television Broadcasts
Hong Kong Electric Holdings Ltd. Wharf Holdings
Hong Kong and Shanghai Hotels Wheelock & Co.
Hong Kong Telecommunications Ltd.
</TABLE>
General. Each Trust consists of (a) the Equity Securities (including contracts
for the purchase thereof) listed under the applicable "Portfolio" as
may continue to be held from time to time in such Trust, (b) any additional
Equity Securities acquired and held by such Trust pursuant to the provisions
of the Trust Agreement and (c) any cash held in the related Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for
any failure in any of the Equity Securities. However, should any contract for
the purchase of any of the Equity Securities initially deposited hereunder
fail, the Sponsor will, unless substantially all of the moneys held in such
Trust to cover such purchase are reinvested in substitute Equity Securities in
accordance with the Trust Agreement, refund the cash and sales charge
attributable to such failed contract to all Unitholders on or before the next
scheduled distribution date.
STRATEGIC TEN TRUST UNITED STATES PORTFOLIO
- --------------------------------------------------------------------------
The Strategic Ten United States Trust consists of common stocks of those ten
companies in the DJIA which had the highest dividend yield as of the close of
business three business days prior to the Initial Date of Deposit. The
Strategic Ten United States Trust consists of common stocks of the following
ten companies:
AT&T Corporation. AT&T Corporation provides communication services and
products. The company's products consist of network equipment and computer
systems, which service businesses, consumers, communication services providers
and government agencies. AT&T is involved in basic research as well as product
and service development and offers a general-purpose credit card and financial
and leasing services.
Chevron Corporation. Chevron Corporation is an international oil company with
activities in the United States and abroad. The company is involved in
worldwide, integrated petroleum operations which consist of exploring for,
developing and producing petroleum liquids and natural gas as well as
transporting the products. The company is also active in the mineral and
chemical industry.
E.I. du Pont de Nemours & Company. E.I. du Pont de Nemours & Company is a
research and technology-based company offering products including chemicals,
polymers, fibers and petroleum. The company serves worldwide markets in the
aerospace, agriculture, apparel, automotive, construction, electronics,
packaging, refining and transportation industries. The company's brands
consist of "Teflon", "Lycra" and others.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures and
markets consumer and commercial imaging products. The various segments provide
a number of products and services including cameras, photofinishing, film,
audiovisual equipment and plastics. The company's products and services are
offered worldwide.
Exxon Corporation. Exxon Corporation explores for and produces crude oil and
natural gas and manufactures petroleum products. The company explores for and
mines coal and minerals and transports/sells crude oil, natural gas and
petroleum products. Operations are worldwide.
General Motors Corporation. General Motors Corporation manufactures and sells
vehicles worldwide under the brands "Chevrolet", "Buick", "Cadillac",
"Oldsmobile", "Pontiac", "Saturn" and "GMC" trucks.
International Paper Company. International Paper Company manufactures paper,
paperboard, packaging products, wood pulp, lumber, photosensitive films and
chemicals. The company produces writing and office supply products, envelopes,
business forms, photographic supplies and building products. International
Paper sells its products in the United States, Europe and the Pacific Rim.
J.P. Morgan & Company, Inc. J. P. Morgan & Company, Inc., through
subsidiaries, offers financial services to corporations, governments,
financial institutions, institutional investors, professional firms,
privately-held companies and individuals. The company offers loans, advises on
mergers, acquisitions and privatizations, underwrites debt and equity issues
and deals in government-issued securities worldwide.
Minnesota Mining & Manufacturing Company. Minnesota Mining & Manufacturing
Company is a diversified manufacturer of industrial, commercial and healthcare
products. The company produces and markets more than 60,000 products worldwide.
Philip Morris Companies, Inc. Philip Morris Companies, Inc. has five principal
operating companies which include Philip Morris U.S.A., Philip Morris
International, Inc., Kraft Foods, Inc., Miller Brewing Company and Philip
Morris Capital Corporation and Mission Viejo Company, the real estate
subsidiary of Phillip Morris Capital Corporation.
The following table sets forth a comparison of the total return of the ten
highest yielding DJIA common stocks (the "DJIA Ten" ) with those of all
common stocks comprising the DJIA and with short-term U.S. Treasury
Obligations. It should be noted that the common stocks comprising the DJIA Ten
may not be the same stocks from year to year and may not be the same common
stocks as those included in the Strategic Ten United States Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS*
<CAPTION>
Dow Jones U.S. Treasury
Industrial Bill (12
DJIA Ten Average Month)
--------------- ---------------- --------------
Total Return Total Return Total Return
Year <F1> <F1> <F2>
- -------- --------------- ---------------- --------------
<S> <C> <C> <C>
1972 23.32% 18.21% 3.80%
1973 3.96 (13.12) 6.90
1974 (0.72) (23.14) 8.00
1975 56.52 44.40 5.80
1976 34.93 22.72 5.10
1977 (1.75) (12.70) 5.10
1978 0.12 2.69 7.20
1979 12.37 10.52 10.40
1980 27.23 21.41 11.20
1981 7.52 (3.40) 14.70
1982 26.03 25.79 10.50
1983 38.75 25.65 8.80
1984 11.82 1.08 9.80
1985 29.45 32.78 7.70
1986 35.77 26.92 6.20
1987 5.93 6.02 5.50
1988 24.75 15.95 6.30
1989 25.08 31.71 8.40
1990 (7.57) (0.58) 7.80
1991 34.86 23.93 5.60
1992 7.85 7.35 3.50
1993 26.93 16.74 2.90
1994 4.12 4.95 3.90
1995 36.58 36.49 5.60
1996 28.05 28.58 4.95
* Source: Barron's, Bloomberg L.P., Dow Jones Corporation and Ibottson
Associates. The Sponsor has not independently verified this data but has no
reason to believe that this data is incorrect in any material respect.
Reasonable assumptions were relied on where data was either unavailable or
only partially available and these assumptions could have a material impact on
the historical performance calculations.
- ----------
<FN>
<F1>The DJIA Ten for each period were identified by ranking the dividend yield for
each of the stocks in the DJIA by annualizing the last dividend paid (the last
dividend declared was used in cases when the stock was trading ex-dividend as
of the last day of the year) and dividing the result by the stock's market
value on the first day of trading on the New York Stock Exchange in the
period. Total Return for each period was calculated by taking the difference
between period-end prices and prices at the end of the following period
(adjusted for any stock splits and corporate spinoffs) and adding dividends
for the period. Historical total returns thus represent actual stocks and real
time; the results illustrate what an investor would have obtained had the
investor been invested in the related stocks in the periods indicated. Total
Return does not take into consideration any sales charges, commissions,
expenses or taxes that will be incurred by the Trust.
<F2>Each month a one-bill portfolio containing the short-term bill having not les
than one month to maturity is constructed. (The bill's original term to
maturity is not relevant.) To measure holding period returns for the one-bill
portfolio, the bill is priced as of the last trading day of the current month.
The total return on the bill is then the month-end price divided by the
previous month-end price, minus one.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the DJIA Ten for the most recent three, five, ten, twenty
and twenty-five years periods was 22.11%, 20.04%, 17.78%, 17.85% and 18.64%,
respectively. On the other hand, based on the total returns set forth in the
table above, the average annual total returns for the DJIA for the most recent
three, five, ten, twenty and twenty-five year periods was 22.58%, 18.21%,
16.50%, 14.27% and 12.76%, respectively. Based on the total returns set forth
in the table above, the average annual total return for the 12-month U.S.
Treasury Bills Index for the most recent twenty-five year period was 6.99%.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the Strategic Ten United States Trust. Among other
factors, both stock prices (which may appreciate or depreciate) and dividends
(which may be increased, reduced or eliminated) will affect the returns. Had
the portfolio been available over the periods indicated in the above table,
after deductions for expenses and sales charges and not accounting for taxes,
it would have underperformed the DJIA in 11 of the last 25 years and there can
be no assurance that the Strategic Ten United States Trust will outperform the
DJIA over the life of such Trust or over consecutive rollover periods, if
available. A Unitholder in the Strategic Ten United States Trust would not
necessarily realize as high a total return on an investment in the stocks upon
which the returns shown above are based. The total return figures shown above
do not reflect sales charges, commissions, Trust expenses or taxes, and such
Trust may not be able to invest equally in the DJIA Ten and may not be fully
invested at all times.
The chart below represents past performance of the DJIA and the DJIA Ten (but
does not represent possible performance of the Strategic Ten United States
Trust which, as indicated above, includes certain expenses and commissions not
included in the chart) and should not be considered indicative of future
results. Further, results are hypothetical. The chart assumes that all
dividends during a year (including those on stocks trading ex-dividend as of
the last day of the year) are reinvested at the end of that year and does not
reflect sales charges, commissions, expenses or income taxes. Based on the
foregoing assumptions, the average annual returns (which represent the
percentage return derived by taking the sum of the initial investment and all
appreciation and dividends for the specified investment period) during the
period referred to in the table were 18.64% and 12.76% for the DJIA Ten and
the DJIA, respectively. There can be no assurance that the Strategic Ten
United States Trust will outperform the DJIA over its life or over consecutive
rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1972
<CAPTION>
Period DJIA Ten DJIA
- --------- ------------- ------------
<S> <C> <C>
1972 $ 12,332 $ 11,821
1973 12,820 10,270
1974 12,728 7,894
1975 19,922 11,398
1976 26,881 13,988
1977 26,410 12,212
1978 26,442 12,540
1979 29,713 13,859
1980 37,804 16,827
1981 40,646 16,254
1982 51,227 20,446
1983 71,077 25,691
1984 79,478 25,968
1985 102,885 34,481
1986 139,687 43,763
1987 147,970 46,398
1988 184,593 53,798
1989 230,888 70,857
1990 213,410 70,447
1991 287,805 87,304
1992 310,398 93,721
1993 393,988 109,410
1994 410,220 114,826
1995 560,279 156,726
1996 717,437 201,518
</TABLE>
STRATEGIC TEN TRUST UNITED KINGDOM PORTFOLIO
- --------------------------------------------------------------------------
The United Kingdom Trust consists of common stocks of those ten companies in
the Financial Times Industrial Ordinary Share Index which had the highest
dividend yield as of the close of business three business days prior to the
Initial Date of Deposit. The United Kingdom Trust consists of common stocks of
the following ten companies:
Allied Domecq Plc. Allied Domecq Plc is an international food, drink and
hospitality group. The company owns the "Baskin Robbins" ice cream and
"Dunkin' Donuts" food chains and "Firkin" pubs chain. Through
Hiram Walker, the company also produces a wide range of brands, including
"Ballantine's" scotch whiskey, "Canadian Club" Canadian whiskey,
"Kahlua", "Tia Maria", "Beefeater Gin" and other brands.
BG Plc. BG Plc, through Transco International, provides gas transportation and
storage services to customers in Great Britain. The company also has
exploration and production, international downstream, research and technology
and property development activities.
British Telecom Plc. British Telecom Plc provides telecommunications services.
The company provides local and long-distance telephone call products and
services in the United Kingdom, telephone exchange lines to homes and
businesses, international telephone calls to and from the United Kingdom and
telecommunications equipment for customers' premises. The company has
operations internationally.
BTR Plc. BTR Plc is a holding company with subsidiaries in industrial,
transportation, construction, control systems and electrical and consumer
related divisions. The company produces and sells building products,
agricultural equipment and aircraft equipment and distributes electrical,
health care, environmental control and paper and printing products.
Courtaulds Plc. Courtaulds Plc produces items that protect and/or decorate
environments. The company manufactures fibers, films, coatings, chemicals,
packaging and performance materials and sealants. Courtaulds also manufactures
aerospace equipment and components. The company sells its products
internationally.
Imperial Chemical Industries Plc. Imperial Chemical Industries Plc is an
international chemical company. The company produces paints, acrylics,
polyurethanes, films, chemicals and polymers, tioxide and explosives.
National Westminster Bank Plc. National Westminster Bank Plc, a London-based
retail bank, provides a variety of banking and financial services to both the
domestic and international markets. The bank operates 2,223 branches in the
United Kingdom. In addition the bank provides worldwide corporate and
investment banking, asset management and financing.
Peninsular & Oriental Steam Navigation Company. Peninsular & Oriental Steam
Navigation Company's primary activities include container and bulk shipping,
house building, property investment, construction and development and cruise,
ferry and transport services. Peninsular & Oriental operates worldwide.
Royal & Sun Alliance Insurance Group Plc. Royal & Sun Alliance Insurance Group
Plc is the holding company for the multi-national insurance companies Sun
Alliance Group Plc and Royal Insurance Holdings Plc. The companies provide
major classes of general and life insurances to customers in the United
Kingdom, Australia, Canada, Scandinavia, South Africa and the United States.
Tate & Lyle Plc. Tate & Lyle Plc is the holding company for an international
group of companies which manufacture, refine, process, distribute and trade
sweeteners, starches and their by-products. Products include white sugar,
molasses and low-calorie sweeteners. The group also manufactures and sells
engineered sugar milling equipment and provides reinsurance services.
The following table compares the actual performance of the FT Index and the
ten stocks in the FT Index having the highest dividend yield in each of the
past 20 years (the "FT Ten" ), as of December 31 in each of those
years. The FT Index statistics are based on a geometric, unweighted average of
the companies included in the FT Index, while the statistics for the FT Ten
are based on an approximately equal distribution (based on market price) of
each of the ten stocks. The figures have been adjusted to take into account
the effect of currency exchange rate fluctuations of the U.S. dollar. It
should be noted that the common stocks comprising the FT Ten may not be the
same stocks from year to year and may not be the same common stocks as those
included in the United Kingdom Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS*
<CAPTION>
Financial Times Industrial Ordinary Share
FT Ten Index
--------------------------- --------------------------------------------
Year Total Return <F1> Total Return <F1>
- -------- --------------------------- --------------------------------------------
<S> <C> <C>
1977 74.73% 50.33%
1978 9.99 8.57
1979 4.57 10.46
1980 28.22 33.20
1981 (5.56) (4.62)
1982 4.23 0.24
1983 44.54 22.23
1984 7.81 2.63
1985 75.73 55.28
1986 27.21 24.34
1987 46.38 38.04
1988 12.65 6.59
1989 25.66 22.61
1990 15.03 10.21
1991 8.95 15.15
1992 4.72 (2.22)
1993 36.40 19.38
1994 2.49 1.75
1995 12.03 18.03
1996 7.75 8.67
* Source: Datastream International, Inc. and Extell Financial LTD. The Sponsor
has not independently verified this data but has no reason to believe that
this data is incorrect in any material respect. Reasonable assumptions were
relied on where data was either unavailable or only partially available and
these assumptions could have a material impact on the historical performance
calculations.
- ----------
<FN>
<F1>The FT Ten for each period were identified by ranking the dividend yield for
each of the stocks in the FT Index by adding together the interim and final
dividends paid in the prior period and dividing the result by that stock's
market value on the first trading day on the London Stock Exchange in the then
current period. Total Return for each period was calculated by taking the
difference between the market value of such stocks as of the last trading day
on the London Stock Exchange in the period from the market value of such
stocks as of the first trading day in that period (adjusted for any stock
splits and corporate spinoffs), and adding dividends for the period.
Historical total returns thus represent actual stocks and real time; the
results illustrate what an investor would have obtained had the investor been
invested in the related stocks in the periods indicated. Total Return does not
take into consideration any sales charges, commissions, expenses or taxes that
will be incurred by the United Kingdom Trust. The annual figures in the table
have been adjusted to take into account the effect of currency exchange rate
fluctuations of the U.S. dollar. All values were converted into British pounds
sterling using the opening exchange rate at the beginning of each period. The
year-end total in British pounds sterling was converted into U.S. dollars
using the ending exchange rate. This amount was then converted back into
British pounds sterling using the opening exchange rate at the beginning of
the next period.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the FT Ten for the most recent three, five, ten and twenty
year periods was 7.35%, 12.06%, 16.46% and 20.34%, respectively. On the other
hand, based on the total returns set forth in the table above, the average
annual total returns for the FT Index for the most recent three, five, ten and
twenty year periods was 7.54%, 8.79%, 13.31% and 15.98%, respectively.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the United Kingdom Trust. Among other factors,
both stock prices (which may appreciate or depreciate) and dividends (which
may be increased, reduced or eliminated) will affect the returns. Had the
portfolio been available over the periods indicated in the above table, after
deductions for expenses and sales charges and not accounting for taxes, it
would have underperformed the FT Index in 10 of the last 20 years and there
can be no assurance that such Trust will outperform the FT Index over the life
of such Trust or over consecutive rollover periods, if available. A Unitholder
in the United Kingdom Trust would not necessarily realize as high a total
return on an investment in the stocks upon which the returns shown above are
based. The total return figures shown above do not reflect sales charges,
commissions, Trust expenses or taxes, and such Trust may not be able to invest
equally in the FT Ten and may not be fully invested at all times.
The chart below represents past performance of the FT Index and the FT Ten
(but not the United Kingdom Trust which as indicated above includes certain
expenses and commissions not included in the chart) and should not be
considered indicative of future results. Further, results are hypothetical.
The chart assumes that all dividends during a year are reinvested at the end
of that year and does not reflect commissions, custodial fees or income taxes.
The annual figures in the following table have been adjusted to take into
account the effect of currency exchange rate fluctuations of the U.S. dollar
as described in the footnotes below. Based on the foregoing assumptions, the
compound annual returns (which represent the percentage return derived by
taking the sum of the initial investment and all appreciation and dividends
for the specified investment period) during the period referred to in the
table were 20.34% and 15.98% for the FT Ten and the FT Index, respectively.
There can be no assurance that the United Kingdom Trust will outperform the FT
Index over its life or over consecutive rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1977(1)(2)
<CAPTION>
Period FT Ten FT Index
- --------- ------------ -------------
<S> <C> <C>
1977 $ 17,473 $ 15,033
1978 19,218 16,321
1979 20,097 18,029
1980 25,768 24,014
1981 24,336 22,905
1982 25,365 22,960
1983 36,663 28,064
1984 39,525 28,801
1985 69,459 44,723
1986 88,357 55,606
1987 129,334 76,761
1988 145,700 81,816
1989 183,088 100,313
1990 210,614 110,555
1991 229,456 127,304
1992 240,283 124,481
1993 327,754 148,610
1994 335,921 151,211
1995 376,340 178,473
1996 405,521 193,950
- ----------
<FN>
<F1>The $10,000 initial investment was converted into British pounds sterling
using the opening exchange rate at the beginning of each period.
<F2>The year-end total in British pounds sterling was converted into U.S. dollars
using the ending exchange rate. This amount was then converted back into
British pounds sterling using the opening exchange rate at the beginning of
the next period.
</TABLE>
STRATEGIC TEN TRUST HONG KONG PORTFOLIO
- --------------------------------------------------------------------------
The Hong Kong Trust consists of common stocks of those ten companies in the
Hang Seng Index which had the highest dividend yield as of the close of
business three business days prior to the Initial Date of Deposit. The Hong
Kong Trust consists of common stocks of the following ten companies:
Amoy Properties Ltd. Amoy Properties Ltd. is a property investment company.
The principal activities of the company are property investment and investment
holding, and through its subsidiaries, property investment for rental income,
car park management and property management.
Cathay Pacific Airways. Cathay Pacific Airways is a major airline operator
with services covering the Far East, the Middle East, Europe, North America
and South Africa. The company is also involved in aircraft engineering,
airline catering and airport security.
Hang Lung Development Company. Hang Lung Development Company is an investment
holding company, and through its subsidiaries, property development for sale,
property investment for rental income, and hotel owning and management. The
group also operates in car park management and property management, and
through its associated companies, the group is involved in the operation of
restaurants and dry-cleaning.
Henderson Investment Ltd. Henderson Investment Ltd. is an investment holding
company. The principal activities of its subsidiaries are property development
and investment, investment holding, retailing and hotel business.
Henderson Land Development Company Ltd. Henderson Land Development Company
Ltd. is a holding company whose main operations include property development
and investment, project management, construction, property management and
investment holding. The company holds a stake in Henderson Investment, Hong
Kong Ferry and Hong Kong Gas. Henderson Land also participates in property
development joint ventures in China.
Hong Kong Electric Holdings Ltd. Hong Kong Electric Holdings Ltd. generates
and supplies electricity, engineering consultancy and project management.
Hong Kong Telecommunications Ltd. Hong Kong Telecommunications Ltd. provides
telecommunications, computer, engineering and other services. The company also
sells and rents telecommunications equipment. The principal activities of the
company were carried out in Hong Kong.
Hysan Development Company Ltd. Hysan Development Company Ltd. is an investment
holding company. Its subsidiaries are active in the field of property
investment, property development and capital market investment. The company's
profits mainly come from commercial rental income and luxury residential
property located in Hong Kong.
Shun Tak Holdings Ltd. Shun Tak Holdings Ltd. is involved in shipping,
property, restaurants, air transportation and hotels in the Asia-Pacific
region. The company operates jet-foil services, develops residential and
commercial properties in Hong Kong, Macau and Australia, has interests in
three restaurants and five hotels and operates air cargo services to nine
destinations in Europe and Asia.
South China Morning Post (Holdings) Ltd. South China Morning Post (Holdings)
Ltd. is an investment holding company. The principal activities of the group
consists of the publishing, printing and distribution of the "South China
Morning Post" and "South China Sunday Morning Post", the provision
of entertainment, recreation and leisure services, retailing, production of
commercial films and holding of properties.
The following table compares the actual performance of the Hang Seng Index and
the ten stocks in the Hang Seng Index having the highest dividend yield (the
"Hang Seng Ten" ) in each of the past 19 years, as of December 31 in
each of those years. The Hang Seng Index statistics are based on a geometric,
unweighted average of the companies included in the Hang Seng Index, while the
statistics for the Hang Seng Ten are based on an approximately equal
distribution (based on market price) of each of the ten stocks. The figures
have been adjusted to take into account the effect of currency exchange rate
fluctuations of the U.S. dollar. It should be noted that the common stocks
comprising the Hang Seng Ten may not be the same stocks from year to year and
may not be the same common stocks as those included in the Hong Kong Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS*
<CAPTION>
Hang Seng Ten Hang Seng Index
---------------------------- -------------------------------
Year Total Return <F1> Total Return <F1>
- -------- ---------------------------- -------------------------------
<S> <C> <C>
1978 17.92% 23.27%
1979 67.81 80.78
1980 38.03 67.12
1981 (5.87) (11.61)
1982 (38.76) (48.01)
1983 (3.30) (0.28)
1984 57.36 45.12
1985 43.30 52.26
1986 62.35 52.17
1987 (1.22) (7.09)
1988 43.24 20.70
1989 7.85 10.36
1990 6.02 11.98
1991 51.11 48.59
1992 38.79 33.54
1993 109.72 123.15
1994 (35.60) (29.26)
1995 16.07 27.34
1996 33.68 37.74
* Source: Datastream International, Inc. and The Hong Kong Stock Exchange. The
Sponsor has not independently verified this data but has no reason to believe
that this data is incorrect in any material respect. Reasonable assumptions
were relied on where data was either unavailable or only partially available
and these assumptions could have a material impact on the historical
performance calculations.
- ----------
<FN>
<F1>The Hang Seng Ten for each period were identified by ranking the dividend
yield for each of the stocks in the Hang Seng Index by adding together the
interim and final dividends paid in the prior period and dividing the result
by that stock's market value on the first trading day on the Hong Kong Stock
Exchange in the then current period. Total Return for each period was
calculated by taking the difference between the market value of such stocks as
of the last trading day on the Hong Kong Stock Exchange in the period from the
market value of such stocks as of the first trading day in that period
(adjusted for any stock splits and corporate spinoffs), and adding dividends
for the period. Historical total returns thus represent actual stocks and real
time; the results illustrate what an investor would have obtained had the
investor been invested in the related stocks in the periods indicated. Total
Return does not take into consideration any sales charges, commissions,
expenses or taxes that will be incurred by the Hong Kong Trust. The annual
figures in the table have been adjusted to take into account the effect of
currency exchange rate fluctuations of the U.S. dollar. All values were
converted into Hong Kong dollars using the opening exchange rate at the
beginning of each period. The year-end total in Hong Kong dollars was
converted into U.S. dollars using the ending exchange rate. This amount was
then converted back into Hong Kong dollars using the opening exchange rate at
the beginning of the next period.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the Hang Seng Ten for the most recent three, five, ten and
nineteen year periods was (0.03)%, 23.80%, 21.67% and 21.37%, respectively. On
the other hand, based on the total returns set forth in the table above, the
average annual total returns for the Hang Seng Index for the most recent
three, five, ten and nineteen year periods was 7.51%, 29.89%, 22.51% and
21.99%, respectively.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the Hong Kong Trust. Among other factors, both
stock prices (which may appreciate or depreciate) and dividends (which may be
increased, reduced or eliminated) will affect the returns. Had the portfolio
been available over the periods indicated in the above table, after deductions
for expenses and sales charges and not accounting for taxes, it would have
underperformed the Hang Seng Index in 12 of the last 20 years and there can be
no assurance that the Hong Kong Trust will outperform the Hang Seng Index over
the life of such Trust or over consecutive rollover periods, if available. A
Unitholder in the Hong Kong Trust would not necessarily realize as high a
total return on an investment in the 10 stocks upon which the returns shown
above are based. The total return figures shown above do not reflect sales
charges, commissions, Trust expenses or taxes, and such Trust may not be able
to invest equally in the Hang Seng Ten and may not be fully invested at all
times.
The chart below represents past performance of the Hang Seng Index and the
Hang Seng Ten (but not the Hong Kong Trust which as indicated above includes
certain expenses and commissions not included in the chart) and should not be
considered indicative of future results. Further, results are hypothetical.
The chart assumes that all dividends during a year are reinvested at the end
of that year and does not reflect commissions, custodial fees or income taxes.
The annual figures in the following table have been adjusted to take into
account the effect of currency exchange rate fluctuations on the U.S. dollar
as described in the footnotes below. Based on the foregoing assumptions, the
compound annual returns (which represent the percentage return derived by
taking the sum of the initial investment and all appreciation and dividends
for the specified investment period) during the period referred to in the
table were 21.37% and 21.99% for the Hang Seng Ten and the Hang Seng Index,
respectively. There can be no assurance that the Hong Kong Trust will
outperform the Hang Seng Index over its life or over consecutive rollover
periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1977(1)(2)
<CAPTION>
Period Hang Seng Ten Hang Seng Index
- --------- ------------------ --------------------
<S> <C> <C>
1977 $ 10,000 $ 10,000
1978 11,792 12,327
1979 19,788 22,285
1980 27,314 37,243
1981 25,712 32,918
1982 15,745 17,114
1983 15,226 17,066
1984 23,961 24,766
1985 34,336 37,707
1986 55,747 57,380
1987 55,064 53,314
1988 78,872 64,347
1989 85,063 71,013
1990 90,180 79,522
1991 136,268 118,161
1992 189,127 157,788
1993 396,639 352,097
1994 255,425 249,057
1995 296,465 317,148
1996 396,307 436,845
- ----------
<FN>
<F1>The $10,000 initial investment was converted into Hong Kong dollars using the
opening exchange rate at the beginning of each period.
<F2>The year-end total in Hong Kong dollars was converted into U.S. dollars using
the ending exchange rate. This amount was then converted back into Hong Kong
dollars using the opening exchange rate at the beginning of the next period.
</TABLE>
STRATEGIC FIVE TRUST UNITED STATES PORTFOLIO
- --------------------------------------------------------------------------
The Strategic Five United States Trust consists of common stocks of those five
companies which had the 2nd through 6th lowest per share stock price of the
ten companies in the DJIA which had the highest dividend yield as of the close
of business three business days prior to the Initial Date of Deposit.
Historically, the lowest priced stock in the DJIA has been a company
experiencing difficulties. The Strategic Five United States Trust consists of
common stocks of the following five companies:
Chevron Corporation. Chevron Corporation is an international oil company with
activities in the United States and abroad. The company is involved in
worldwide, integrated petroleum operations which consist of exploring for,
developing and producing petroleum liquids and natural gas as well as
transporting the products. The company is also active in the mineral and
chemical industry.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures and
markets consumer and commercial imaging products. The various segments provide
a number of products and services including cameras, photofinishing, film,
audiovisual equipment and plastics. The company's products and services are
offered worldwide.
General Motors Corporation. General Motors Corporation manufactures and sells
vehicles worldwide under the brands "Chevrolet", "Buick", "Cadillac",
"Oldsmobile", "Pontiac", "Saturn" and "GMC" trucks.
International Paper Company. International Paper Company manufactures paper,
paperboard, packaging products, wood pulp, lumber, photosensitive films and
chemicals. The company produces writing and office supply products, envelopes,
business forms, photographic supplies and building products. International
Paper sells its products in the United States, Europe and the Pacific Rim.
Minnesota Mining & Manufacturing Company. Minnesota Mining & Manufacturing
Company is a diversified manufacturer of industrial, commercial and healthcare
products. The company produces and markets more than 60,000 products worldwide.
The following table sets forth a comparison of the total return of the 2nd
through 6th lowest priced stocks of the ten highest yielding DJIA common
stocks (the "DJIA Five" ) with those of all common stocks comprising
the DJIA. It should be noted that the common stocks comprising the DJIA Five
may not be the same stocks from year to year and may not be the same common
stocks as those included in the Strategic Five United States Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS*
<CAPTION>
Dow Jones U.S. Treasury
Industrial Bill (12
DJIA Five Average Month)
---------------- ---------------- --------------
Total Return Total Return Total Return
Year <F1> <F1> <F2>
- -------- ---------------- ---------------- --------------
<S> <C> <C> <C>
1972 12.18% 18.21% 3.80%
1973 18.58 (13.12) 6.90
1974 0.56 (23.14) 8.00
1975 64.54 44.40 5.80
1976 39.29 22.72 5.10
1977 (4.82) (12.70) 5.10
1978 0.76 2.69 7.20
1979 19.86 10.52 10.40
1980 32.33 21.41 11.20
1981 3.15 (3.40) 14.70
1982 48.11 25.79 10.50
1983 43.50 25.65 8.80
1984 11.60 1.08 9.80
1985 37.00 32.78 7.70
1986 36.10 26.92 6.20
1987 (2.75) 6.02 5.50
1988 22.65 15.95 6.30
1989 10.49 31.71 8.40
1990 (20.71) (0.58) 7.80
1991 56.02 23.93 5.60
1992 24.96 7.35 3.50
1993 38.67 16.74 2.90
1994 3.33 4.95 3.90
1995 42.57 36.49 5.60
1996 32.06 28.58 4.95
* Source: Barron's, Bloomberg L.P., Dow Jones Corporation and Ibottson
Associates. The Sponsor has not independently verified this data but has no
reason to believe that this data is incorrect in any material respect.
Reasonable assumptions were relied on where data was either unavailable or
only partially available and these assumptions could have a material impact on
the historical performance calculations.
- ----------
<FN>
<F1>The DJIA Five for each period were identified by ranking the dividend yield
for each of the stocks in the DJIA by annualizing the last dividend paid (the
last dividend declared was used in cases when the stock was trading
ex-dividend as of the last day of the year) and dividing the result by the
stock's market value on the first day of trading on the New York Stock
Exchange in the period. The top ten highest dividend yielding stocks were then
ranked by price from highest to lowest. The absolute lowest priced stock was
eliminated and the next five lowest priced stocks were selected for the
comparison. Total Return for each period was calculated by taking the
difference between period-end prices and prices at the end of the following
period (adjusted for any stock splits and corporate spinoffs) and adding
dividends for the period. Historical total returns thus represent actual
stocks and real time; the results illustrate what an investor would have
obtained had the investor been invested in the related stocks in the periods
indicated. Total Return does not take into consideration any sales charges,
commissions, expenses or taxes that will be incurred by the Trust.
<F2>Each month a one-bill portfolio containing the short-term bill having not les
than one month to maturity is constructed. (The bill's original term to
maturity is not relevant.) To measure holding period returns for the one-bill
portfolio, the bill is priced as of the last trading day of the current month.
The total return on the bill is then the month-end price divided by the
previous month-end price, minus one.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the DJIA Five for the most recent three, five, ten, twenty
and twenty-five years periods was 24.84%, 27.51%, 18.58%, 19.97% and 20.98%,
respectively. On the other hand, based on the total returns set forth in the
table above, the average annual total returns for the DJIA for the most recent
three, five, ten, twenty and twenty-five year periods was 22.58%, 18.21%,
16.50%, 14.27% and 12.76%, respectively. Based on the total returns set forth
in the table above, the average annual total return for the 12-month U.S.
Treasury Bills Index for the most recent twenty-five year period was 6.99%.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the Strategic Five United States Trust. Among
other factors, both stock prices (which may appreciate or depreciate) and
dividends (which may be increased, reduced or eliminated) will affect the
returns. Had the portfolio been available over the periods indicated in the
above table, after deductions for expenses and sales charges and not
accounting for taxes, it would have underperformed the DJIA in 6 of the last
25 years and there can be no assurance that the Strategic Five United States
Trust will outperform the DJIA over the life of such Trust or over consecutive
rollover periods, if available. A Unitholder in the Strategic Five United
States Trust would not necessarily realize as high a total return on an
investment in the stocks upon which the returns shown above are based. The
total return figures shown above do not reflect sales charges, commissions,
Trust expenses or taxes, and such Trust may not be able to invest equally in
the DJIA Five and may not be fully invested at all times.
The chart below represents past performance of the DJIA and the DJIA Five (but
does not represent possible performance of the Strategic Five United States
Trust which, as indicated above, includes certain expenses and commissions not
included in the chart) and should not be considered indicative of future
results. Further, results are hypothetical. The chart assumes that all
dividends during a year (including those on stocks trading ex-dividend as of
the last day of the year) are reinvested at the end of that year and does not
reflect sales charges, commissions, expenses or income taxes. Based on the
foregoing assumptions, the average annual returns (which represent the
percentage return derived by taking the sum of the initial investment and all
appreciation and dividends for the specified investment period) during the
period referred to in the table were 20.98% and 12.76% for the DJIA Five and
the DJIA, respectively. There can be no assurance that the Strategic Five
United States Trust will outperform the DJIA over its life or over consecutive
rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1972
<CAPTION>
Period DJIA Five DJIA
- --------- -------------- ------------
<S> <C> <C>
1972 $ 11,218 $ 11,821
1973 13,302 10,270
1974 13,377 7,894
1975 22,010 11,398
1976 30,658 13,988
1977 29,180 12,212
1978 29,402 12,540
1979 35,241 13,859
1980 46,635 16,827
1981 48,104 16,254
1982 71,247 20,446
1983 102,239 25,691
1984 114,098 25,968
1985 156,315 34,481
1986 212,745 43,763
1987 206,894 46,398
1988 253,756 53,798
1989 280,375 70,857
1990 222,309 70,447
1991 346,846 87,304
1992 433,419 93,721
1993 601,023 109,410
1994 621,037 114,826
1995 885,412 156,726
1996 1,169,275 201,518
</TABLE>
STRATEGIC THIRTY TRUST GLOBAL PORTFOLIO
- --------------------------------------------------------------------------
The Strategic Thirty Trust consists of thirty stocks which include the common
stocks of the ten companies in each of the DJIA, FT Index and Hang Seng Index
having the highest dividend yield as of the close of business three business
days prior to the Initial Date of Deposit. The Strategic Thirty Trust consists
of common stocks of the following thirty companies:
AT&T Corporation. AT&T Corporation provides communication services and
products. The company's products consist of network equipment and computer
systems, which service businesses, consumers, communication services providers
and government agencies. AT&T is involved in basic research as well as product
and service development and offers a general-purpose credit card and financial
and leasing services.
Chevron Corporation. Chevron Corporation is an international oil company with
activities in the United States and abroad. The company is involved in
worldwide, integrated petroleum operations which consist of exploring for,
developing and producing petroleum liquids and natural gas as well as
transporting the products. The company is also active in the mineral and
chemical industry.
E.I. du Pont de Nemours & Company. E.I. du Pont de Nemours & Company is a
research and technology-based company offering products including chemicals,
polymers, fibers and petroleum. The company serves worldwide markets in the
aerospace, agriculture, apparel, automotive, construction, electronics,
packaging, refining and transportation industries. The company's brands
consist of "Teflon", "Lycra" and others.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures and
markets consumer and commercial imaging products. The various segments provide
a number of products and services including cameras, photofinishing, film,
audiovisual equipment and plastics. The company's products and services are
offered worldwide.
Exxon Corporation. Exxon Corporation explores for and produces crude oil and
natural gas and manufactures petroleum products. The company explores for and
mines coal and minerals and transports/sells crude oil, natural gas and
petroleum products. Operations are worldwide.
General Motors Corporation. General Motors Corporation manufactures and sells
vehicles worldwide under the brands "Chevrolet", "Buick", "Cadillac",
"Oldsmobile", "Pontiac", "Saturn" and "GMC" trucks.
International Paper Company. International Paper Company manufactures paper,
paperboard, packaging products, wood pulp, lumber, photosensitive films and
chemicals. The company produces writing and office supply products, envelopes,
business forms, photographic supplies and building products. International
Paper sells its products in the United States, Europe and the Pacific Rim.
J.P. Morgan & Company, Inc. J. P. Morgan & Company, Inc., through
subsidiaries, offers financial services to corporations, governments,
financial institutions, institutional investors, professional firms,
privately-held companies and individuals. The company offers loans, advises on
mergers, acquisitions and privatizations, underwrites debt and equity issues
and deals in government-issued securities worldwide.
Minnesota Mining & Manufacturing Company. Minnesota Mining & Manufacturing
Company is a diversified manufacturer of industrial, commercial and healthcare
products. The company produces and markets more than 60,000 products worldwide.
Philip Morris Companies, Inc. Philip Morris Companies, Inc. has five principal
operating companies which include Philip Morris U.S.A., Philip Morris
International, Inc., Kraft Foods, Inc., Miller Brewing Company and Philip
Morris Capital Corporation and Mission Viejo Company, the real estate
subsidiary of Phillip Morris Capital Corporation.
Allied Domecq Plc. Allied Domecq Plc is an international food, drink and
hospitality group. The company owns the "Baskin Robbins" ice cream and
"Dunkin' Donuts" food chains and "Firkin" pubs chain. Through
Hiram Walker, the company also produces a wide range of brands, including
"Ballantine's" scotch whiskey, "Canadian Club" Canadian whiskey,
"Kahlua", "Tia Maria", "Beefeater Gin" and other
brands.
BG Plc. BG Plc through Transco International, provides gas transportation and
storage services to customers in Great Britain. The company also has
exploration and production, international downstream, research and technology
and property development activities.
British Telecom Plc. British Telecom Plc provides telecommunications services.
The company provides local and long-distance telephone call products and
services in the United Kingdom, telephone exchange lines to homes and
businesses, international telephone calls to and from the United Kingdom and
telecommunications equipment for customers' premises. The company has
operations internationally.
BTR Plc. BTR Plc is a holding company with subsidiaries in industrial,
transportation, construction, control systems and electrical and consumer
related divisions. The company produces and sells building products,
agricultural equipment and aircraft equipment and distributes electrical,
health care, environmental control and paper and printing products.
Courtaulds Plc. Courtaulds Plc produces items that protect and/or decorate
environments. The company manufactures fibers, films, coatings, chemicals,
packaging and performance materials and sealants. Courtaulds also manufactures
aerospace equipment and components. The company sells its products
internationally.
Imperial Chemical Industries Plc. Imperial Chemical Industries Plc is an
international chemical company. The company produces paints, acrylics,
polyurethanes, films, chemicals and polymers, tioxide and explosives.
National Westminster Bank Plc. National Westminster Bank Plc, a London-based
retail bank, provides a variety of banking and financial services to both the
domestic and international markets. The bank operates 2,223 branches in the
United Kingdom. In addition the Bank provides worldwide corporate and
investment banking, asset management and financing.
Peninsular & Oriental Steam Navigation Company. Peninsular & Oriental Steam
Navigation Company's primary activities include container and bulk shipping,
house building, property investment, construction and development and cruise,
ferry and transport services. Peninsular & Oriental operates worldwide.
Royal & Sun Alliance Insurance Group Plc. Royal & Sun Alliance Insurance Group
Plc is the holding company for the multi-national insurance companies Sun
Alliance Group Plc and Royal Insurance Holdings Plc. The companies provide
major classes of general and life insurances to customers in the United
Kingdom, Australia, Canada, Scandinavia, South Africa and the United States.
Tate & Lyle Plc. Tate & Lyle Plc is the holding company for an international
group of companies which manufacture, refine, process, distribute and trade
sweeteners, starches and their by-products. Products include white sugar,
molasses and low-calorie sweeteners. The group also manufactures and sells
engineered sugar milling equipment and provides reinsurance services.
Amoy Properties Ltd. Amoy Properties Ltd. is a property investment company.
The principal activities of the company are property investment and investment
holding, and through its subsidiaries, property investment for rental income,
car park management and property management.
Cathay Pacific Airways. Cathay Pacific Airways is a major airline operator
with services covering the Far East, the Middle East, Europe, North America
and South Africa. The company is also involved in aircraft engineering,
airline catering and airport security.
Hang Lung Development Company. Hang Lung Development Company is an investment
holding company, and through its subsidiaries, property development for sale,
property investment for rental income, and hotel owning and management. The
group also operates in car park management and property management, and
through its associated companies, the group is involved in the operation of
restaurants and dry-cleaning.
Henderson Investment Ltd. Henderson Investment Ltd. is an investment holding
company. The principal activities of its subsidiaries are property development
and investment, investment holding, retailing and hotel business.
Henderson Land Development Company Ltd. Henderson Land Development Company
Ltd. is a holding company whose main operations include property development
and investment, project management, construction, property management and
investment holding. The company holds a stake in Henderson Investment, Hong
Kong Ferry and Hong Kong Gas. Henderson Land also participates in property
development joint ventures in China.
Hong Kong Electric Holdings Ltd. Hong Kong Electric Holdings Ltd. generates
and supplies electricity, engineering consultancy and project management.
Hong Kong Telecommunications Ltd. Hong Kong Telecommunications Ltd. provides
telecommunications, computer, engineering and other services. The company also
sells and rents telecommunications equipment. The principal activities of the
company were carried out in Hong Kong.
Hysan Development Company Ltd. Hysan Development Company Ltd. is an investment
holding company. Its subsidiaries are active in the field of property
investment, property development and capital market investment. The company's
profits mainly come from commercial rental income and luxury residential
property located in Hong Kong.
Shun Tak Holdings Ltd. Shun Tak Holdings Ltd. is involved in shipping,
property, restaurants, air transportation and hotels in the Asia-Pacific
region. The company operates jet-foil services, develops residential and
commercial properties in Hong Kong, Macau and Australia, has interests in
three restaurants and five hotels and operates air cargo services to nine
destinations in Europe and Asia.
South China Morning Post (Holdings) Ltd. South China Morning Post (Holdings)
Ltd. acts as an investment holding company. The principal activities of the
group and its subsidiaries consist of the publishing, printing and
distribution of the "South China Morning Post" and "South China
Sunday Morning Post", the provision of entertainment, recreation and
leisure services, retailing, production of commercial films and holding of
properties.
The following table compares the actual performance of the combined DJIA, FT
Index and Hang Seng Index and the thirty stocks in these indices selected in
accordance with the Strategic Ten Trust investment strategy in each of the
past 19 years (the "Combined Thirty" ), as of December 31 in each of
those years. The combined DJIA, FT Index and Hang Seng Index statistics are
based on a geometric, unweighted average of the companies included in such
indices, while the statistics for the Combined Thirty are based on an
approximately equal distribution (based on market price) of each of the thirty
stocks. The figures have been adjusted to take into account the effect of
currency exchange rate fluctuations of the U.S. dollar. It should be noted
that the common stocks comprising the combined DJIA, FT Index and Hang Seng
Index may not be the same stocks from year to year and may not be the same
common stocks as those included in the Strategic Thirty Global Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS (2)
<CAPTION>
Strategy Total Returns Index Total Returns
----------------------------------------------- ------------------------------------------------
10 Highest Dividend Yielding Stocks <F1>
-----------------------------------
Hang Seng Combined Hang Seng Combined
Year DJIA FT Index Index Thirty DJIA FT Index Index Indices
- ------- --------- ----------- ------------- ----------- --------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1978 0.12% 9.99% 17.92% 9.34% 2.69% 8.57% 23.27% 11.51%
1979 12.37 4.57 67.81 28.25 10.52 10.46 80.78 33.92
1980 27.23 28.22 38.03 31.16 21.41 33.20 67.12 40.57
1981 7.52 (5.56) (5.87) (1.30) (3.40) (4.62) (11.61) (6.54)
1982 26.03 4.23 (38.76) (2.84) 25.79 0.24 (48.01) (7.33)
1983 38.75 44.54 (3.30) 26.66 25.65 22.23 (0.28) 15.87
1984 11.82 7.81 57.36 25.66 1.08 2.63 45.12 16.28
1985 29.45 75.73 43.30 49.50 32.78 55.28 52.26 46.77
1986 35.77 27.21 62.35 41.78 26.92 24.34 52.17 34.48
1987 5.93 46.38 (1.22) 17.03 6.02 38.04 (7.09) 12.33
1988 24.75 12.65 43.24 26.88 15.95 6.59 20.70 14.41
1989 25.08 25.66 7.85 19.53 31.71 22.61 10.36 21.56
1990 (7.57) 15.03 6.02 4.49 (0.58) 10.21 11.98 7.20
1991 34.86 8.95 51.11 31.64 23.93 15.15 48.59 29.22
1992 7.85 4.72 38.79 17.12 7.35 (2.22) 33.54 12.89
1993 26.93 36.40 109.72 57.68 16.74 19.38 123.15 53.09
1994 4.12 2.49 (35.60) (9.66) 4.95 1.75 (29.26) (7.52)
1995 36.58 12.03 16.07 21.56 36.49 18.03 27.34 27.29
1996 28.05 7.75 33.68 23.16 28.58 8.67 37.74 25.00
- ----------
<FN>
<F1>The Ten Highest Dividend Yielding Stocks in the DJIA, FT Index and Hang Seng
Index, respectively, for any given period were selected by ranking the
dividend yields for each of the stocks in the respective index, as of the
beginning of the period, and dividing by that stock's market value on the
first trading day on the exchange where that stock principally trades in the
given period. The Combined Thirty merely averages the Total Return of the
stocks which comprise the Ten Highest Dividend Yielding Stocks in the DJIA, FT
Index and Hang Seng Index, respectively.
<F2>Total Return represents the sum of the percentage change in market value of
each group of stocks between the first trading day of a period and the total
dividends paid on each group of stocks during the period divided by the
opening market value of each group of stocks as of the first trading day of a
period. Total Return does not take into consideration any sales charges,
commission, expenses or taxes. Total Return does not take into consideration
any reinvestment of dividend income and all returns are stated in terms of the
United States dollar. Although the Trust seeks to achieve a better performance
than its respective index as a whole, there can be no assurance that the Trust
will achieve a better performance over its life or over consecutive rollover
periods, if available.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the Combined Thirty for the most recent three, five, ten and
nineteen year periods was 10.59%, 20.09%, 19.82% and 20.81%, respectively. On
the other hand, based on the total returns set forth in the table above, the
average annual total returns for the combined DJIA, FT Index and Hang Seng
Index for the most recent three, five, ten and nineteen year periods was
13.74%, 20.52%, 18.59% and 18.85%, respectively.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the Strategic Thirty Global Trust. Among other
factors, both stock prices (which may appreciate or depreciate) and dividends
(which may be increased, reduced or eliminated) will affect the returns. Had
the portfolio been available over the period indicated in the above table,
after deductions for expenses and sales charges and not accounting for taxes,
it would have underperformed the DJIA, the FT Index and the Hang Seng Index in
7, 8 and 12 out of the last 19 years, respectively. Had the portfolio been
available over the periods indicated in the above table, after deductions for
expenses and sales charges and not accounting for taxes, it would have
underperformed the combined DJIA, FT Index and Hang Seng Index in 10 of the
last 19 years. There can be no assurance that such Trust will outperform the
related indices over the life of such Trust or over consecutive rollover
periods, if available. A Unitholder in the Strategic Thirty Global Trust would
not necessarily realize as high a total return on an investment in the stocks
upon which the returns shown above are based. The total return figures shown
above do not reflect sales charges, commissions, Trust expenses or taxes, and
such Trust may not be able to invest equally in the Combined Thirty and may
not be fully invested at all times.
The chart below represents past performance of the combined DJIA, FT Index and
Hang Seng Index and the Combined Thirty (but not the Strategic Thirty Global
Trust which as indicated above includes certain expenses and commissions not
included in the chart) and should not be considered indicative of future
results. Further, results are hypothetical. The chart assumes that all
dividends during a year are reinvested at the end of that year and does not
reflect commissions, custodial fees or income taxes. The annual figures in the
following table have been adjusted to take into account the effect of currency
exchange rate fluctuations of the U.S. dollar as described in the footnotes
below. Based on the foregoing assumptions, the compound annual returns (which
represent the percentage return derived by taking the sum of the initial
investment and all appreciation and dividends for the specified investment
period) during the period referred to in the table were 20.81% and 18.85% for
the Combined Thirty and the combined DJIA, FT Index and Hang Seng Index,
respectively. There can be no assurance that the Strategic Thirty Global Trust
will outperform the related indices over its life or over consecutive rollover
periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1978(1)(2)
<CAPTION>
DJIA,
FT Index and
Combined Hang Seng
Period Thirty Index
- --------- -------------- ------------------
<S> <C> <C>
1978 $ 10,934 $ 11,151
1979 14,023 14,934
1980 18,393 20,993
1981 18,154 19,619
1982 17,639 18,182
1983 22,343 21,067
1984 28,076 24,495
1985 41,973 35,952
1986 59,508 48,347
1987 69,641 54,306
1988 88,361 62,132
1989 105,618 75,527
1990 110,364 80,968
1991 145,280 104,629
1992 170,152 118,115
1993 268,303 180,823
1994 242,375 167,223
1995 294,631 212,851
1996 362,869 266,059
- ----------
<FN>
<F1>The $10,000 initial investment was converted into British pounds sterling and
Hong Kong dollars, as applicable, using the opening exchange rate at the
beginning of each period.
<F2>The year-end total in British pounds sterling and Hong Kong dollars, as
applicable, was converted into U.S. dollars using the ending exchange rate.
This amount was then converted back into British pounds sterling and Hong Kong
dollars, as applicable, using the opening exchange rate at the beginning of
the next period.
</TABLE>
STRATEGIC FIFTEEN TRUST GLOBAL PORTFOLIO
- --------------------------------------------------------------------------
The Strategic Fifteen Trust consists of common stocks of fifteen companies
comprising the five stocks in each of the DJIA, FT Index and Hang Seng Index
with the 2nd through 6th lowest per share stock price of the ten companies in
each index having the highest dividend yield as of the close of business three
business days prior to the Initial Date of Deposit. The Strategic Fifteen
Trust consists of common stocks of the following fifteen companies:
Chevron Corporation. Chevron Corporation is an international oil company with
activities in the United States and abroad. The company is involved in
worldwide, integrated petroleum operations which consist of exploring for,
developing and producing petroleum liquids and natural gas as well as
transporting the products. The company is also active in the mineral and
chemical industry.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures and
markets consumer and commercial imaging products. The various segments provide
a number of products and services including cameras, photofinishing, film,
audiovisual equipment and plastics. The company's products and services are
offered worldwide.
General Motors Corporation. General Motors Corporation manufactures and sells
vehicles worldwide under the brands "Chevrolet", "Buick", "Cadillac",
"Oldsmobile", "Pontiac", "Saturn" and "GMC" trucks.
International Paper Company. International Paper Company manufactures paper,
paperboard, packaging products, wood pulp, lumber, photosensitive films and
chemicals. The company produces writing and office supply products, envelopes,
business forms, photographic supplies and building products. International
Paper sells its products in the United States, Europe and the Pacific Rim.
Minnesota Mining & Manufacturing Company. Minnesota Mining & Manufacturing
Company is a diversified manufacturer of industrial, commercial and healthcare
products. The company produces and markets more than 60,000 products worldwide.
British Telecom Plc. British Telecom Plc provides telecommunications services.
The company provides local and long-distance telephone call products and
services in the United Kingdom, telephone exchange lines to homes and
businesses, international telephone calls to and from the United Kingdom and
telecommunications equipment for customers' premises. The company has
operations internationally.
BTR Plc. BTR Plc is a holding company with subsidiaries in industrial,
transportation, construction, control systems and electrical and consumer
related divisions. The company produces and sells building products,
agricultural equipment and aircraft equipment and distributes electrical,
health care, environmental control and paper and printing products.
Courtaulds Plc. Courtaulds Plc produces items that protect and/or decorate
environments. The company manufactures fibers, films, coatings, chemicals,
packaging and performance materials and sealants. Courtaulds also manufactures
aerospace equipment and components. The company sells its products
internationally.
Royal & Sun Alliance Insurance Group Plc. Royal & Sun Alliance Insurance Group
Plc is the holding company for the multi-national insurance companies Sun
Alliance Group Plc and Royal Insurance Holdings Plc. The companies provide
major classes of general and life insurances to customers in the United
Kingdom, Australia, Canada, Scandinavia, South Africa and the United States.
Tate & Lyle Plc. Tate & Lyle Plc is the holding company for an international
group of companies which manufacture, refine, process, distribute and trade
sweeteners, starches and their by-products. Products include white sugar,
molasses and low-calorie sweeteners. The group also manufactures and sells
engineered sugar milling equipment and provides reinsurance services.
Amoy Properties Ltd. Amoy Properties Ltd. is a property investment company.
The principal activities of the company are property investment and investment
holding, and through its subsidiaries, property investment for rental income,
car park management and property management.
Cathay Pacific Airways. Cathay Pacific Airways is a major airline operator
with services covering the Far East, the Middle East, Europe, North America
and South Africa. The company is also involved in aircraft engineering,
airline catering and airport security.
Henderson Investment Ltd. Henderson Investment Ltd. is an investment holding
company. The principal activities of its subsidiaries are property development
and investment, investment holding, retailing and hotel business.
Hong Kong Telecommunications Ltd. Hong Kong Telecommunications Ltd. provides
telecommunications, computer, engineering, and other services. The company
also sells and rents telecommunications equipment. The principal activities of
the company were carried out in Hong Kong.
South China Morning Post (Holdings) Ltd. South China Morning Post (Holdings)
Ltd. acts as an investment holding company. The principal activities of the
group and its subsidiaries consist of the publishing, printing and
distribution of the "South China Morning Post" and "South China
Sunday Morning Post", the provision of entertainment, recreation and
leisure services, retailing, production of commercial films and holding of
properties.
The following table compares the actual performance of the combined DJIA, FT
Index and Hang Seng Index and the fifteen stocks comprised of the five stocks
in each of the DJIA, FT Index or Hang Seng Index with the 2nd through 6th
lowest per share stock price of the ten companies in each index having the
highest dividend yield in each of the past 19 years (the "Combined
Fifteen" ), as of December 31 in each of those years. The combined DJIA, FT
Index and Hang Seng Index statistics are based on a geometric, unweighted
average of the companies included in such indices, while the statistics for
the Combined Fifteen are based on an approximately equal distribution (based
on market price) of each of the fifteen stocks. The figures have been adjusted
to take into account the effect of currency exchange rate fluctuations of the
U.S. dollar. It should be noted that the common stocks comprising the combined
DJIA, FT Index and Hang Seng Index may not be the same stocks from year to
year and may not be the same common stocks as those included in the Strategic
Fifteen Global Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS (2)
<CAPTION>
Strategy Total Returns Index Total Returns
------------------------------------------------ ------------------------------------------------
2nd through 6th Lowest Priced of
the 10 Highest Dividend Yielding
Stocks <F1>
------------------------------------
Hang Seng Combined Hang Seng Combined
Year DJIA FT Index Index Fifteen DJIA FT Index Index Indices
- ------- ---------- ----------- ------------- ----------- --------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1978 0.76% 11.07% 15.43% 9.09% 2.69% 8.57% 23.27% 11.51%
1979 19.86 8.37 63.10 30.44 10.52 10.46 80.78 33.92
1980 32.33 29.67 54.56 38.86 21.41 33.20 67.12 40.57
1981 3.15 (9.78) (10.57) (5.73) (3.40) (4.62) (11.61) (6.54)
1982 48.11 24.16 (44.47) 9.27 25.79 0.24 (48.01) (7.33)
1983 43.50 48.30 (4.07) 29.24 25.65 22.23 (0.28) 15.87
1984 11.60 7.76 35.83 18.40 1.08 2.63 45.12 16.28
1985 37.00 80.71 40.96 52.89 32.78 55.28 52.26 46.77
1986 36.10 19.72 57.82 37.88 26.92 24.34 52.17 34.48
1987 (2.75) 45.69 (0.89) 14.02 6.02 38.04 (7.09) 12.33
1988 22.65 13.20 57.20 31.02 15.95 6.59 20.70 14.41
1989 10.49 30.75 7.10 16.11 31.71 22.61 10.36 21.56
1990 (20.71) 10.98 7.54 (0.73) (0.58) 10.21 11.98 7.20
1991 56.02 5.90 65.96 42.63 23.93 15.15 48.59 29.22
1992 24.96 2.25 45.54 24.25 7.35 (2.22) 33.54 12.89
1993 38.67 38.27 106.81 61.25 16.74 19.38 123.15 53.09
1994 3.33 3.67 (30.46) (7.82) 4.95 1.75 (29.26) (7.52)
1995 42.57 2.62 4.48 16.56 36.49 18.03 27.34 27.29
1996 32.06 (0.49) 26.55 19.37 28.58 8.67 37.74 25.00
- ----------
<FN>
<F1>The Second through Sixth Lowest Priced Stocks of the Ten Highest Dividend
Yielding Stocks in the DJIA, FT Index and Hang Seng Index, respectively, for
any given period were selected by ranking the dividend yields for each of the
stocks in the respective index, as of the beginning of the period, and
dividing by that stock's market value on the first trading day on the exchange
where that stock principally trades in the given period. The Combined Fifteen
merely averages the Total Return of the stocks which comprise the Second
through Sixth Lowest Priced Stocks of the Ten Highest Dividend Yielding Stocks
in the DJIA, FT Index and Hang Seng Index, respectively.
<F2>Total Return represents the sum of the percentage change in market value of
each group of stocks between the first trading day of a period and the total
dividends paid on each group of stocks during the period divided by the
opening market value of each group of stocks as of the first trading day of a
period. Total Return does not take into consideration any sales charges,
commission, expenses or taxes. Total Return does not take into consideration
any reinvestment of dividend income and all returns are stated in terms of the
United States dollar. Although the Trust seeks to achieve a better performance
than its respective index as a whole, there can be no assurance that the Trust
will achieve a better performance over its life or over consecutive rollover
periods, if available.
</TABLE>
Based on the total returns set forth in the table above, the average annual
total returns for the Combined Fifteen for the most recent three, five, ten
and nineteen year periods was 8.65%, 20.77%, 20.23% and 21.65%, respectively.
On the other hand, based on the total returns set forth in the table above,
the average annual total returns for the combined DJIA, FT Index and Hang Seng
Index for the most recent three, five, ten and nineteen year periods was
13.74%, 20.52%, 18.59% and 18.85%, respectively.
The returns shown above represent past performance and are not guarantees of
future performance and should not be used as a predictor of returns to be
expected in connection with the Strategic Fifteen Trust. Among other factors,
both stock prices (which may appreciate or depreciate) and dividends (which
may be increased, reduced or eliminated) will affect the returns. Had the
portfolio been available over the period indicated in the above table, after
deductions for expenses and sales charges and not accounting for taxes, it
would have underperformed the DJIA, the FT Index and the Hang Seng Index in 7,
8 and 12 out of the last 19 years, respectively. Had the portfolio been
available over the periods indicated in the above table, after deductions for
expenses and sales charges and not accounting for taxes, it would have
underperformed the combined DJIA, FT Index and Hang Seng Index in 12 of the
last 19 years. There can be no assurance that such Trust will outperform the
related indices over the life of such Trust or over consecutive rollover
periods, if available. A Unitholder in the Strategic Fifteen Global Trust
would not necessarily realize as high a total return on an investment in the
stocks upon which the returns shown above are based. The total return figures
shown above do not reflect sales charges, commissions, Trust expenses or
taxes, and such Trust may not be able to invest equally in the Combined
Fifteen and may not be fully invested at all times.
The chart below represents past performance of the combined DJIA, FT Index and
Hang Seng Index and the Combined Fifteen (but not the Strategic Fifteen Global
Trust which as indicated above includes certain expenses and commissions not
included in the chart) and should not be considered indicative of future
results. Further, results are hypothetical. The chart assumes that all
dividends during a year are reinvested at the end of that year and does not
reflect commissions, custodial fees or income taxes. The annual figures in the
following table have been adjusted to take into account the effect of currency
exchange rate fluctuations of the U.S. dollar as described in the footnotes
below. Based on the foregoing assumptions, the compound annual returns (which
represent the percentage return derived by taking the sum of the initial
investment and all appreciation and dividends for the specified investment
period) during the period referred to in the table were 21.65% and 18.85% for
the Combined Fifteen and the combined DJIA, FT Index and Hang Seng Index,
respectively. There can be no assurance that the Strategic Fifteen Global
Trust will outperform the related indices over its life or over consecutive
rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1978(1)(2)
<CAPTION>
DJIA,
FT Index and
Combined Hang Seng
Period Fifteen Index
- --------- -------------- ------------------
<S> <C> <C>
1978 $ 10,909 $ 11,151
1979 14,229 14,934
1980 19,758 20,993
1981 18,625 19,619
1982 20,351 18,182
1983 26,303 21,067
1984 31,142 24,495
1985 47,613 35,952
1986 65,649 48,347
1987 74,849 54,306
1988 98,065 62,132
1989 113,865 75,527
1990 113,032 80,968
1991 161,212 104,629
1992 200,307 118,115
1993 322,998 180,823
1994 297,734 167,223
1995 347,024 212,851
1996 414,255 266,059
- ----------
<FN>
<F1>The $10,000 initial investment was converted into British pounds sterling and
Hong Kong dollars, as applicable, using the opening exchange rate at the
beginning of each period.
<F2>The year-end total in British pounds sterling and Hong Kong dollars, as
applicable, was converted into U.S. dollars using the ending exchange rate.
This amount was then converted back into British pounds sterling and Hong Kong
dollars, as applicable, using the opening exchange rate at the beginning of
the next period.
</TABLE>
RISK FACTORS
- --------------------------------------------------------------------------
General. An investment in Units of a Trust 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, and 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 Trusts
have a right to receive dividends only when and if, and in the amounts,
declared by each issuer's board of directors and have a right to participate
in amounts available for distribution by such issuer only after all other
claims on such issuer have been paid or provided for. 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 a portfolio may be expected to fluctuate over the life of
a Trust to values higher or lower than those prevailing on the Initial Date of
Deposit.
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 Trusts 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 redemption, and the value of a
Trust, will be adversely affected if trading markets for the Equity Securities
are limited or absent.
The Trust Agreement authorizes the Sponsor to increase the size of each Trust
and the number of Units thereof by the deposit of additional Securities, or
cash (including a letter of credit) with instructions to purchase additional
Securities, in the Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the cash deposit and the purchase of the Securities and
because each Trust will pay the associated brokerage fees.
As described under "Fund Operating Expenses," all of the expenses of
the Trusts will be paid from the sale of the Securities in such 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 or losses (both of which will generally be
characterized for U.S. federal income tax purposes as short term capital gains
or 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 "
Taxation."
Unitholders will be unable to dispose of any of the Equity Securities in a
Trust, 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 each 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 stocks held by owners other than the Trust.
Foreign Securities. Since certain Equity Securities included in the Global
Trusts consist of securities of foreign issuers, an investment in these Trusts
involves certain investment risks that are different in some respects from an
investment in the United States Trusts which invests entirely in the
securities of domestic issuers. These investment risks include future
political or governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Equity Securities,
the possibility that the financial condition of the issuers of the Equity
Securities may become impaired or that the general condition of the relevant
stock market may worsen (both of which would contribute directly to a decrease
in the value of the Equity Securities and thus in the value of the Units), the
limited liquidity and relatively small market capitalization of the relevant
securities market, expropriation or confiscatory taxation, economic
uncertainties and foreign currency devaluations and fluctuations. In addition,
for foreign issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign issuers
are not necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those applicable
to domestic issuers. The securities of many foreign issuers are less liquid
and their prices more volatile than securities of comparable domestic issuers.
In addition, fixed brokerage commissions and other transaction costs on
foreign securities exchanges are generally higher than in the United States
and there is generally less government supervision and regulation of
exchanges, brokers and issuers in foreign countries than there is in the
United States. However, due to the nature of the issuers of the Equity
Securities selected for the Global Trusts, the Sponsor believes that adequate
information will be available to allow the Supervisor to provide portfolio
surveillance for each Trust.
Equity securities issued by non-U.S. issuers generally pay dividends in
foreign currencies and are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the U.S. dollar foreign exchange
rates for the various Equity Securities. See "Exchange Rate" below.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities in the Global Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds from the
sale of, the Equity Securities. However, there can be no assurance that
exchange control regulations might not be adopted in the future which might
adversely affect payment to either Trust. In addition, the adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the Global
Trusts and on the ability of such Trusts to satisfy their obligation to redeem
Units tendered to the Trustee for redemption.
Investors should be aware that it may not be possible to buy all Equity
Securities at the same time because of the unavailability of any Equity
Security, and restrictions applicable to the Trusts relating to the purchase
of an Equity Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities Act
of 1933 and may not be exempt from the registration requirements of such Act.
Sales of non-exempt Equity Securities by a Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Equity Securities by a Trust will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that a Trust will encounter obstacles in disposing of the
Equity Securities, investors should realize that the Equity Securities may be
traded in foreign countries where the securities markets are not as developed
or efficient and may not be as liquid as those in the United States. The value
of the Equity Securities will be adversely affected if trading markets for the
Equity Securities are limited or absent.
Global Trust Information. The information provided below details certain
important factors which impact the economies of both the United Kingdom and
Hong Kong. This information has been extracted from various governmental and
private publications, but no representation can be made as to its accuracy;
furthermore, no representation is made that any correlation exists between the
economies of the United Kingdom and Hong Kong and the value of the Equity
Securities held by the Global Trusts.
United Kingdom. The emphasis of United Kingdom's economy is in the private
services sector, which includes the wholesale and retail sector, banking,
finance, insurance, and tourism. Services as a whole account for a majority of
the United Kingdom's gross national product and makes a significant
contribution to the country's balance of payments. The United Kingdom
experienced a recovery of output in 1993-1994 accompanied by falling rates of
inflation despite expectations to the contrary. Quarterly changes in real
gross domestic product in the United Kingdom grew moderately during 1994 and
1995 with an approximate .5% increase in the last quarter of 1995 over the
previous quarter. The average quarterly rate of GDP growth in the United
Kingdom (as well as in Europe generally) has been decelerating since 1994.
The United Kingdom is a member of the European Union (the "EU" ),
formerly known as the European Economic Community (the "EEC" ). The EU
was created through the formation of the Maastricht Treaty on European Union
in late 1993. It is expected that the Treaty will have the effect of
eliminating most remaining trade barriers between the fifteen member nations
and make Europe one of the largest common markets in the world. The EU has the
potential to become a powerful trade bloc with a population of over 350
million people and an annual gross national product of more than $4 trillion.
However, the effective implementation of the Treaty provisions and the rate at
which trade barriers are eliminated is uncertain at this time. Furthermore,
the rapid political and social change throughout Europe make the extent and
nature of future economic development in the United Kingdom and Europe and the
impact of such development upon the value of the Equity Securities in the
United Kingdom, Strategic Thirty and Strategic Fifteen Trusts impossible to
predict. Volatility in oil prices could slow economic development throughout
Western Europe. Moreover, it is not possible to accurately predict the effect
of the current political and economic situation upon long-term inflation and
balance of trade cycles and how these changes would affect the currency
exchange rate between the U.S. dollar and the British pound sterling.
Hong Kong. Hong Kong, established as a British colony in the 1840's, is
currently ruled by the British Government through an appointed Governor. Hong
Kong will revert to Chinese sovereignty effective July 1, 1997 with Hong Kong
becoming a Special Administrative Region ("SAR" ) of China. The current
Hong Kong government generally follows a laissez-faire policy towards
industry. There are currently no major import, export or foreign exchange
restrictions. At the present time, regulation of business is generally minimal
with certain exceptions, including regulated entry into certain sectors of the
economy and a fixed exchange rate regime by which the Hong Kong dollar has
been pegged to the U.S. dollar. Over the ten year period between 1983 and
1993, real gross domestic product increased at an average annual rate of
approximately 6%.
Although China has committed by treaty to preserve for 50 years the economic
and social freedoms currently enjoyed in Hong Kong, the continuation of the
economic system in Hong Kong after the reversion will be dependent on the
Chinese government and there can be no assurances that the commitment made by
China regarding Hong Kong will be maintained. Legislation has been enacted in
Hong Kong that will extend democratic voting procedures for Hong Kong's
legislature. China has expressed disagreement with this legislation which it
states is in contravention of the principles evidenced in the Basic Law of the
Hong Kong SAR. The National People's Congress of China has passed a resolution
to the effect that the Legislative Council and certain other councils and
boards of the Hong Kong Government will be terminated on June 30, 1997. It is
expected that such bodies will be subsequently reconstituted in accordance
with China's interpretation of the Basic Law. China and Great Britain have
also yet to resolve their differences on other issues relating to the
reversion to sovereignty. Any increase in uncertainty as to the future
economic and political status of Hong Kong could have a materially adverse
effect on the value of the Strategic Ten Hong Kong, Strategic Thirty and
Strategic Fifteen Trusts. It should be noted by investors that the Strategic
Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts terminate after
the July 1, 1997 reversion to the sovereignty of China. The Sponsor is unable
to predict the level of market liquidity or volatility which may occur after
the reversion to sovereignty, both of which may negatively impact the
Strategic Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts and the
value of the Units.
China currently enjoys a most favored nation status from the United States,
which is subject to annual review by the President of the United States.
However, revocation of such status would have a severe effect on China's trade
and thus could have a materially adverse effect on the value of the Strategic
Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts.
The performance of certain companies listed on the Hong Kong Stock Exchange is
linked to the economic climate of China. For example, between 1985 and 1990,
Hong Kong businesses invested $20 billion in the nearby Chinese province of
Guangdong to take advantage of the lower property and labor costs than were
available in Hong Kong. Recently, however, high economic growth in this area
(industrial production grew at an annual rate of about 20% in 1991, 24% in
1992 and 36.5% in 1993) has been associated with rising inflation and concerns
about the devaluation of the Chinese currency. Any downturn in economic growth
or increase in the rate of inflation in China could have a materially adverse
effect on the value of the Strategic Ten Hong Kong, Strategic Thirty and
Strategic Fifteen Trusts.
Securities prices on the Hong Kong Exchange and, specifically the Hang Seng
Index, can be highly volatile and are sensitive to developments in Hong Kong
and China, as well as other world markets. For example, in 1989, the Hang Seng
Index dropped 1,216 points (approximately 58%) in early June following the
events at Tiananmen Square. The Hang Seng Index gradually climbed in
subsequent months but fell by 181 points on October 13, 1989 (approximately
6.5%) following a substantial fall in the U.S. stock markets. During 1994, the
Hang Seng Index lost approximately 31% of its value. The Hang Seng Index is
subject to change, and delisting of any issues or removal of issuers from the
Hang Seng Index may have an adverse impact on the performance of the Strategic
Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts, although
delisting or removal would not necessarily result in the disposal of the stock
of these companies, nor would it prevent the Strategic Ten Hong Kong,
Strategic Thirty and Strategic Fifteen Trusts from purchasing additional
Equity Securities. In recent years, a number of companies, comprising
approximately 10% of the total capitalization of the Hang Seng Index, have
delisted. In addition to these delistings, as of August 30, 1996, two issuers,
Hong Kong Aircraft Engineering Co. Ltd. and Miramar Hotel and Investment, were
removed from the Hang Seng Index. These issuers were replaced by First Pacific
Company Ltd. and Henderson Investments Ltd. No assurance can be made that
future changes in the composition of the Hang Seng Index will not occur. The
Strategic Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts may be
considered to be concentrated in common stocks of companies engaged in real
estate asset management, development, leasing, property sale and other related
activities. Investment in securities issued by these real estate companies
should be made with an understanding of the many factors which may have an
adverse impact on the equity securities of a particular company or industry.
Generally, these include economic recession, the cyclical nature of real
estate markets, competitive overbuilding, unusually adverse weather
conditions, changing demographics, changes in governmental regulations
(including tax laws and environmental, building, zoning and sales regulation),
increases in real estate taxes or costs of material and labor, the inability
to secure performance guarantees or insurance as required, the unavailability
of investment capital and the inability to obtain construction financing or
mortgage loans at rates acceptable to builders and purchasers of real estate.
With recent Chinese economic development and reform, certain Hong Kong real
estate companies and other investors began purchasing and developing real
estate in southern China. By 1992, however, southern China began to experience
a rise in real estate prices and construction costs, a growing supply of real
estate and a tightening of credit markets. Any worsening of these conditions
could affect the profitability and financial condition of Hong Kong real
estate companies and could have a materially adverse effect on the value of
the Strategic Ten Hong Kong, Strategic Thirty and Strategic Fifteen Trusts.
Exchange Rate. The Global Trusts are comprised of Equity Securities that are
principally traded in foreign currencies and as such involve investment risks
that are substantially different from an investment in a fund which invests in
securities that are principally traded in United States dollars. The United
States dollar value of a portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the United
States dollar foreign exchange rates for the relevant currencies. Most foreign
currencies have fluctuated widely in value against the United States dollar
for many reasons, including supply and demand of the respective currency, the
rate of inflation in the respective economies compared to the United States,
the impact of interest rate differentials between different currencies on the
movement of foreign currency rates, the balance of imports and exports of
goods and services, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and other
countries.
The post-World War II international monetary system was, until 1973, dominated
by the Bretton Woods Treaty, which established a system of fixed exchange
rates and the convertibility of the United States dollar into gold through
foreign central banks. Starting in 1971, growing volatility in the foreign
exchange markets caused the United States to abandon gold convertibility and
to effect a small devaluation of the United States dollar. In 1973, the system
of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most Western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily
currency valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have continued to
"peg" their currencies to the United States dollar although there has
been some interest in recent years in "pegging" currencies to "
baskets" of other currencies or to a Special Drawing Right administered by
the International Monetary Fund. Since 1983, the Hong Kong dollar has been
pegged to the U.S. dollar. In Europe a European Currency Unit ("ECU" )
has been developed. Currencies are generally traded by leading international
commercial banks and institutional investors (including corporate treasurers,
money managers, pension funds and insurance companies). From time to time,
central banks in a number of countries also are major buyers and sellers of
foreign currencies, mostly for the purpose of preventing or reducing
substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual
and proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling
large amounts of the same currency or currencies. However, over the long term,
the currency of a country with a low rate of inflation and a favorable balance
of trade should increase in value relative to the currency of a country with a
high rate of inflation and deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and end of
month equivalent U.S. dollar rates of exchange for the United Kingdom pound
sterling and the Hong Kong dollar:
<TABLE>
FOREIGN EXCHANGE RATES
Range of Fluctuations in
Foreign Currencies
<CAPTION>
United Kingdom
Annual Pound Sterling/ Hong Kong/
Period U.S. Dollar U.S. Dollar
- ---------- ------------------- --------------
<S> <C> <C>
1983 0.616-0.707 6.480-8.700
1984 0.670-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.499-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763
1996 0.583-0.670 7.724-7.742
</TABLE>
Source: Bloomberg L.P.
<TABLE>
<CAPTION>
End of Month Exchange Rates End of Month Exchange Rates
for Foreign Currencies for Foreign Currencies (Continued)
- --------------------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C>
United Kingdom Hong United Kingdom Hong
Pound Sterling/ Kong/U.S. Pound Sterling/ Kong/U.S.
Monthly Period U.S. Dollar Dollar Monthly Period U.S. Dollar Dollar
- ----------------- ------------------- ------------- ------------------- ------------------- -------------
1992 1994 (Continued)
January .559 7.762 September .634 7.727
February .569 7.761 October .611 7.724
March .576 7.740 November .639 7.731
April .563 7.757 December .639 7.738
May .546 7.749 1995
June .525 7.731 January .633 7.732
July .519 7.732 February .631 7.730
August .503 7.729 March .617 7.733
September .563 7.724 April .620 7.742
October .641 7.736 May .630 7.735
November .659 7.742 June .627 7.736
December .662 7.744 July .626 7.738
1993 August .645 7.741
January .673 7.734 September .631 7.732
February .701 7.734 October .633 7.727
March .660 7.731 November .652 7.731
April .635 7.730 December .645 7.733
May .640 7.724 1996
June .671 7.743 January .661 7.728
July .674 7.761 February .653 7.731
August .670 7.755 March .655 7.734
September .668 7.734 April .664 7.735
October .676 7.733 May .645 7.736
November .673 7.725 June .644 7.741
December .677 7.723 July .642 7.735
1994 August .640 7.733
January .664 7.724 September .639 7.733
February .673 7.727 October .615 7.732
March .674 7.737 November .595 7.732
April .659 7.725 December .583 7.735
May .662 7.726 1997
June .648 7.730 January .624 7.750
July .648 7.725 February .614 7.744
August .652 7.728 March .611 7.749
</TABLE>
Source: Bloomberg L.P.
The Evaluator will estimate current exchange rates for the relevant currencies
based on activity in the various currency exchange markets. However, since
these markets are volatile and are constantly changing, depending on the
activity at any particular time of the large international commercial banks,
various central banks, large multi-national corporations, speculators and
other buyers and sellers of foreign currencies, and since actual foreign
currency transactions may not be instantly reported, the exchange rates
estimated by the Evaluator may not be indicative of the amount in United
States dollars a Trust would receive had the Trustee sold any particular
currency in the market. The foreign exchange transactions of a Trust will be
concluded by the Trustee with foreign exchange dealers acting as principals on
a spot (i.e., cash) buying basis. Although foreign exchange dealers trade on a
net basis, they do realize a profit based upon the difference between the
price at which they are willing to buy a particular currency (bid price) and
the price at which they are willing to sell the currency (offer price).
TAXATION
- --------------------------------------------------------------------------
United States Federal Taxation
- --------------------------------------------------------------------------
General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code" ).
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 a Trust.
The Sponsor has been advised by the Trustee that U.S. Unitholders may not be
able to obtain directly Treaty Payments (as described in "United Kingdom
Taxation" below) to which they are entitled under the U.K./U.S. Treaty but
that the U.K. Inland Revenue has approved a special procedure whereby the
Trustee can claim Treaty Payments on behalf of U.S. Unitholders of the United
Kingdom, Strategic Thirty and Strategic Fifteen Trusts and distribute those
payments to Unitholders. To the extent the Trustee obtains Treaty Payments,
U.S. Unitholders will report as gross income earned their pro rata portion of
dividends received by such Trusts as well as the amount of the associated tax
credit. Because, under the grantor trust rules, an investor is deemed to have
paid directly his share of foreign tax credits that have been paid or accrued,
if any, an investor may be entitled to a foreign tax credit or deduction for
United States tax purposes with respect to such taxes. Investors should
consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
For purposes of the following discussion and opinions, it is assumed that each
Security is equity for federal income tax purposes. In the opinion of Chapman
and Cutler, special counsel for the Sponsor, under existing law:
1. Each Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro
rata portion of each of the assets of a Trust under the Code; and the income
of each Trust will be treated as income of the Unitholders thereof under the
Code. Each Unitholder will be considered to have received his pro rata share
of income derived from each Security when such income is considered to be
received by a Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his pro rata portion of each Security when such dividends are received by a
Trust regardless of whether such dividends are used to pay a portion of the
deferred sales charge. Unitholders will be taxed in this manner regardless of
whether distributions from a Trust are actually received by the Unitholder or
are automatically reinvested (see "Rights of Unitholders--Reinvestment
Option" ).
3. Each Unitholder will have a taxable event when a Trust disposes of a
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 from a Trust
as described below). The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of each
Security held by a Trust (in proportion to the fair market values thereof on
the valuation date closest to the date the Unitholder purchases his Units) in
order to determine his initial tax basis for his pro rata portion of each
Security held by a 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 Equity
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 with respect
to a Security held by a Trust is taxable as ordinary income to the extent of
such corporation's current and accumulated "earnings and profits" . A
Unitholder's pro rata portion of dividends paid on such Security which exceed
such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by a Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution) and, will generally be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Securities
held by a Trust will generally be considered a capital loss (except in the
case of a dealer or a financial institution) and, in general, will be
long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
gains and losses for federal income tax purposes. In particular, a Rollover
Unitholder should be aware that a Rollover Unitholder's loss, if any, incurred
in connection with the exchange of Units for units in the next new series of
the Trusts (the "1998 Fund" ) will generally be disallowed with respect
to the disposition of any Securities pursuant to such exchange to the extent
that such Unitholder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into account such
Unitholder's deemed ownership of the securities underlying the Units in the
1998 Fund in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and ending
30 days after such disposition. However, any gains incurred in connection with
such an exchange by a Rollover Unitholder would be recognized. Unitholders
should consult their tax advisers regarding the recognition of gains and
losses for federal income tax purposes.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge
for the Trusts is deferred. It is possible that for federal income tax
purposes a portion of the deferred sales charge may be treated as interest
which would be deductible by a Unitholder subject to limitations on the
deduction of investment interest. In such a case, the non-interest portion of
the deferred sales charge would be added to the Unitholder's tax basis in his
Units. The deferred sales charge could cause the Unitholder's Units to be
considered to be debt-financed under Section 246A of the Code which would
result in a small reduction of the dividends-received deduction. In any case,
the income (or proceeds from redemption) a Unitholder must take into account
for federal income tax purposes is not reduced by amounts deducted to pay the
deferred sales charge. Unitholders should consult their own tax advisers as to
the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by a Trust (to the extent
such dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such
corporation directly owned the Securities paying such dividends (other than
corporate 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 period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by a Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by a Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of a Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust
or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by a Trust or if the
Unitholder disposes of a Unit (although losses incurred by Rollover
Unitholders may be subject to disallowance, as discussed above). For taxpayers
other than corporations, net capital gains (which is defined as net long-term
capital gain over net short-term capital loss for a taxable year) are subject
to a maximum marginal stated tax rate of 28%. However, 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.
"The Revenue Reconciliation Act of 1993" (the "Tax Act" )
raised tax rates on ordinary income while capital gains remain subject to a
28% maximum stated rate for taxpayers other than corporations. Because some or
all capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are "
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 involved including his
pro rata portion of all Securities represented by a Unit. Legislative
proposals have been made that would treat certain transactions designed to
reduce or eliminate risk of loss and opportunities for gain as constructive
sales for purposes of recognition of gain (but not loss). 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 a United States, Strategic Thirty or Strategic Fifteen Trust.
As discussed in "Rights of Unitholders--Redemption of Units," under
certain circumstances a Unitholder in a United States, Strategic Thirty or
Strategic Fifteen Trust tendering Units for redemption may request an In Kind
Distribution of the U.S.-traded Securities in a Trust. A Unitholder in a
United States, Strategic Thirty or Strategic Fifteen Trust may also under
certain circumstances request an In Kind Distribution of the U.S.-traded
Securities in a Trust upon the termination of such Trust. A Unitholder of a
Strategic Thirty or a Strategic Fifteen Trust will receive cash representing
his pro rata portion of the foreign Securities in such a Trust. See "
Rights of Unitholders--Redemption of Units" . The Unitholder requesting an
In Kind Distribution will be liable for expenses related thereto (the "
Distribution Expenses" ) and the amount of such In Kind Distribution will
be reduced by the amount of the Distribution Expenses. See "Rights of
Unitholders--Redemption of Units" . As previously discussed, prior to the
redemption of Units or the termination of such Trust, a Unitholder is
considered as owning a pro rata portion of each of such Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder of such a Trust receiving an undivided interest in
whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Security owned by a United States, Strategic Thirty or
Strategic Fifteen Trust will depend on whether or not a Unitholder receives
cash in addition to Securities. A "Security" for this purpose is a
particular class of stock issued by a particular corporation. A Unitholder
will not recognize gain or loss if a Unitholder only receives Securities in
exchange for his or her pro rata portion in the Securities held by a Trust.
However, if a Unitholder also receives cash in exchange for a fractional share
of a Security or for a foreign Security held by a 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 a Security or such foreign Security held by such Trust.
Because each such United States, Strategic Thirty or Strategic Fifteen Trust
will own many Securities, a Unitholder who requests an In Kind Distribution
will have to analyze the tax consequences with respect to each Security owned
by such Trust. The amount of taxable gain (or loss) recognized upon such
exchange will generally equal the sum of the gain (or loss) recognized under
the rules described above by such Unitholder with respect to each Security
owned by such Trust. Unitholders who request an In Kind Distribution are
advised to consult their tax advisers in this regard.
Rollover Unitholders. As discussed in "Rights of Unitholders--Special
Redemption and Rollover in New Fund," a Unitholder may elect to become a
Rollover Unitholder. To the extent a Rollover Unitholder exchanges his Units
for Units of the 1998 Fund in a taxable transaction, such Unitholder will
recognize gains, if any, but generally will not be entitled to a deduction for
any losses recognized upon the disposition of any Securities pursuant to such
exchange to the extent that such Unitholder is considered the owner of
substantially identical securities under the wash sale provisions of the Code
taking into account such Unitholder's deemed ownership of the securities
underlying the Units in the 1998 Fund in the manner described above, if such
substantially identical securities were acquired within a period beginning 30
days before and ending 30 days after such disposition under the wash sale
provisions contained in Section 1091 of the Code. In the event a loss is
disallowed under the wash sale provisions, special rules contained in Section
1091(d) of the Code apply to determine the Unitholder's tax basis in the
securities acquired. Rollover Unitholders are advised to consult their tax
advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in a Trust
in accordance with the proportion of the fair market values of such Securities
on the valuation date nearest the date the Units are purchased in order to
determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by a Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary
income as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by a
Trust to such Unitholder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by a Trust (other
than those that are not treated as United States source income, if any) will
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade and business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from a Trust.
It should be noted that payments to the Trusts of dividends on Securities that
are attributable to foreign corporations may be subject to foreign withholding
taxes and Unitholders should consult their tax advisers regarding the
potential tax consequences relating to the payment of any such withholding
taxes by the Trusts. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of a Trust, the Trustee will furnish to each Unitholder of
such Trust a statement containing information relating to the dividends
received by such Trust on the Securities, the gross proceeds received by such
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by such Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of Kroll & Tract LLP, special counsel to the Fund for New York
tax matters, each Trust is not an association taxable as a corporation and the
income of the Trusts 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 taxation in
New York or 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 in one of the Trusts 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.
United Kingdom Taxation
- --------------------------------------------------------------------------
Tax Consequences of Ownership of Ordinary Shares. In the opinion of Linklaters
& Paines, United Kingdom special counsel to the Sponsor, based on the terms of
the United Kingdom, Strategic Thirty or Strategic Fifteen Trusts as described
in this Prospectus and on certain representations made by special U.S. counsel
to the Sponsor, the following summary accurately describes the U.K. tax
consequences to certain U.S. Unitholders who beneficially hold Units of such
Trusts as capital assets. This summary is based upon current U.S. law, U.K.
taxation law and Inland Revenue practice in the U.K., the U.S./U.K. convention
relating to taxes on income and capital gains ("the Treaty" ), and the
U.S./U.K. convention relating to estate and gift taxes (the "Estate Tax
Treaty" ). The summary is a general guide only and is subject to any
changes in U.K. or U.S. law, or the practice relating thereto and in the
Treaty or Estate Tax Treaty occurring after the date of this Prospectus which
may affect (including possibly on a retroactive basis) the tax consequences
described herein. Accordingly, Unitholders should consult their own tax
advisers as to the U.K. tax consequences applicable to their particular
circumstances of ownership of the Units of the United Kingdom, Strategic
Thirty or Strategic Fifteen Trusts.
Taxation of Dividends. Where a U.K. resident receives a dividend from a U.K.
company (other than a foreign income dividend (see below)), such resident is
generally entitled to a tax credit, which may be offset against such
resident's U.K. taxes, or, in certain circumstances, repaid. Under the Treaty,
a U.S. Unitholder, who is resident in the U.S. for the purposes of the Treaty,
may, in appropriate circumstances, be entitled to a repayment of that tax
credit, but any such repayment is subject to U.K. withholding tax at the rate
of 15% of the sum of the dividend and the credit. The tax credit, before such
withholding, is equal to one quarter of the dividend (the "Tax Credit
Amount" ). Although such a U.S. Unitholder who held shares directly in a
company resident in the U.K. for the purposes of the Treaty, could generally
claim a refund of a portion of the Tax Credit Amount attributable to the
dividend (a "Treaty Payment" ) pursuant to the terms of the Treaty, the
ability of such a U.S. Unitholder of Units in the United Kingdom, Strategic
Thirty or Strategic Fifteen Trusts to claim such a Treaty Payment is unclear
where dividend payments are made directly to an entity such as the United
Kingdom, Strategic Thirty or Strategic Fifteen Trusts. Any claim for such a
Treaty Payment would have to be supported by evidence of such U.S.
Unitholder's entitlement to the relevant dividend. There is no established
procedure for proving such entitlement where the U.K. company pays the
dividend to a person such as the United Kingdom, Strategic Thirty or Strategic
Fifteen Trusts unless a specific procedure is negotiated in advance with the
U.K. Inland Revenue. In the absence of agreeing such a special procedure,
Unitholders who are U.S. Persons should note that they may not in practice be
able to claim a Treaty Payment from the U.K. Inland Revenue.
Certain U.K. companies which themselves receive income from other
jurisdictions which is subject to withholding of tax at source may elect to
pay some or all of their distributions as foreign income dividends. If a U.K.
company the shares of which are held in the United Kingdom, Strategic Thirty
or Strategic Fifteen Trusts pays a foreign income dividend, no tax credit will
be attributable to such dividend. Accordingly, a U.S. Unitholder would not be
entitled to any repayment of a tax credit under the Treaty.
Taxation of Capital Gains. U.S. Unitholders who are neither resident nor
ordinarily resident for tax purposes in the U.K. will not be liable for U.K.
tax on capital gains realized on the disposal of their Units unless such Units
are used, held or acquired for the purposes of a trade, profession or vocation
carried on in the U.K. through a branch or agency or for the purposes of such
branch or agency.
U.K. Inheritance Tax. An individual Unitholder who is domiciled in the U.S.
for the purposes of the Estate Tax Treaty and who is not a national of the
U.K. for the purposes of the Estate Tax Treaty will generally not be subject
to U.K. inheritance tax in respect of Units in the United Kingdom, Strategic
Thirty or Strategic Fifteen Trusts on the individual's death or on a gift or
other non-arm's length transfer of such Units during the individual's lifetime
provided that any applicable U.S. federal gift or estate tax liability is
paid, unless the Units are part of the business property of a permanent
establishment of the individual in the U.K. or pertain to a fixed base in the
U.K. used by an individual for the performance of independent personal
services. Where the Units have been placed in trust by a settlor, the Units
will generally not be subject to U.K. inheritance tax if the settlor, at the
time of settlement, was domiciled in the U.S. for the purposes of the Estate
Tax Treaty and was not a U.K. national, provided that any applicable U.S.
federal gift or estate tax liability is paid. In the exceptional case where
the Units are subject both to U.K. inheritance tax and to U.S. federal gift or
estate tax, the Estate Tax Treaty generally provides for the tax payable in
the U.K. to be credited against tax paid in the U.S. or for tax paid in the
U.S. to be credited against tax payable in the U.K. based on priority rules
set out in that Treaty.
Stamp Tax. In connection with a transfer of Securities in the United Kingdom,
Strategic Thirty or Strategic Fifteen Trusts, there is generally imposed a
U.K. stamp duty or stamp duty reserve tax payable upon transfer, which tax is
usually imposed on the purchaser of such Securities. Upon acquisition of the
Securities in the United Kingdom, Strategic Thirty or Strategic Fifteen
Trusts, the Trust paid such tax. It is anticipated that upon the sale of such
Securities such tax will be paid by the purchaser thereof and not by the
United Kingdom, Strategic Thirty or Strategic Fifteen Trusts.
Hong Kong Taxation
- --------------------------------------------------------------------------
The Sponsor has been advised that the following summary accurately describes
the Hong Kong tax consequences under existing law to U.S. Unitholders of Units
of the Hong Kong, Strategic Thirty or Strategic Fifteen Trusts. This
discussion is for general purposes only and assumes that such Unitholder is
not carrying on a trade, profession or business in Hong Kong and has no
profits sourced in Hong Kong arising from the carrying on of such trade,
profession or business. Unitholders should consult their tax advisers as to
the Hong Kong tax consequences of ownership of the Units of the Hong Kong,
Strategic Thirty or Strategic Fifteen Trusts applicable to their particular
circumstances.
Taxation of Dividends. Amounts in respect of dividends paid to Unitholders of
the Hong Kong, Strategic Thirty or Strategic Fifteen Trusts are not taxable
and therefore will not be subject to the deduction of any withholding tax.
Profits Tax. A Unitholder of the Hong Kong, Strategic Thirty or Strategic
Fifteen Trusts (other than a person carrying on a trade, profession or
business in Hong Kong) will not be subject to profits tax on any gain or
profits made on the realization or other disposal of his Units.
Hong Kong Estate Duty. Units of the Hong Kong, Strategic Thirty or Strategic
Fifteen Trusts will not give rise to a liability to Hong Kong estate duty.
FUND OPERATING EXPENSES
- --------------------------------------------------------------------------
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Fund. 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 Fund. Such fee (which is
based on the number of Units of each Trust outstanding on January 1 of each
year except during the initial offering period in which event the calculation
is based on the number of Units of each Trust outstanding at the end of the
month of such calculation) may exceed the actual costs of providing such
supervisory services for these Trusts, 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, American Portfolio Evaluation Services, which is a division of
Van Kampen American Capital Investment Advisory Corp., shall receive for
regularly providing evaluation services to the Fund the annual per Unit
evaluation fee set forth under "Summary of Essential Financial
Information" (which is based on the number of Units of each Trust
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which event the calculation is
based on the number of Units of each Trust outstanding at the end of the month
of such calculation) for regularly evaluating the Fund portfolios. 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 and Other Compensation" .
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from each Trust set forth under "Summary of Essential Financial
Information" (which is based on the number of Units of each Trust
outstanding at the end of the month of such calculation until the end of the
initial offering period at which time such calculation is based on the number
of Units of each Trust outstanding on such date) and in connection with the
Global Trusts the additional amounts set forth in footnote (8) in the "
Summary of Essential Financial Information" . 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 each 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 "Fund Administration" .
Miscellaneous Expenses. Expenses incurred in establishing each Trust,
including the cost of the initial preparation of documents relating to such
Trust (including the Prospectus, Trust Agreement and closing documents),
federal and state registration fees, the initial fees and expenses of the
Trustee, legal and accounting expenses, payment of closing fees and any other
out-of-pocket expenses, will be paid by such Trust and amortized over the life
of such Trust. The following additional charges are or may be incurred by a
Trust: (a) normal expenses (including the cost of mailing reports to
Unitholders) incurred in connection with the operation of such 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 a Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of a Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) accrual of costs associated with liquidating the securities held in
a Trust portfolio and (i) expenditures incurred in contacting Unitholders upon
termination of a Trust. The expenses set forth herein are payable as described
under "General" below.
General. During the initial offering period of each Trust, all of the fees and
expenses of such Trust will accrue on a daily basis and will be charged to
such Trust, in arrears, at the end of the initial offering period. After the
initial offering period, all of the fees and expenses of each Trust will
accrue on a daily basis and will be charged to such Trust, in arrears, on a
monthly basis on or before the tenth day of each month. The fees and expenses
are payable out of the Capital Account of the related Trust. When such fees
and expenses are paid by or owing to the Trustee, they are secured by a lien
on the related Trust's portfolio. It is expected that the balance in the
Capital Account of each Trust will be insufficient to provide for amounts
payable by the related Trust, and that Equity Securities will be sold from
such Trust to pay such amounts. These sales will result in capital gains or
losses to Unitholders. See "Taxation" and "Risk Factors" .
PUBLIC OFFERING
- --------------------------------------------------------------------------
General. Units are offered at the Public Offering Price. During the initial
offering period and for secondary market transactions after the initial
offering period the Public Offering Price is based on the aggregate underlying
value of the Securities in each Trust's portfolio, the initial sales charge
described below, and cash, if any, in the Income and Capital Accounts held or
owned by such Trust. The initial sales charge is equal to the difference
between the maximum total sales charge for a Trust (2.75% of the Public
Offering Price) and the maximum deferred sales charge ($0.175 per Unit). The
monthly deferred sales charge ($0.0175 per Unit) will begin accruing on a
daily basis on May 13, 1997 and will continue to accrue through March 12,
1998. The monthly deferred sales charge will be charged to each Trust, in
arrears, commencing June 13, 1997 and will be charged on the 13th day of each
month thereafter through March 13, 1998. If any deferred sales charge payment
date is not a business day, the payment will be charged to the Trusts on the
next business day. Unitholders will be assessed that portion of the deferred
sales charge accrued from the time they became Unitholders of record. Units
purchased subsequent to the initial deferred sales charge payment will be
subject to only that portion of the deferred sales charge payments not yet
collected. This deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Securities. The total
maximum sales charge assessed to Unitholder on a per Unit basis will be 2.75%
of the Public Offering Price (2.828% of the aggregate value of the Securities
less the deferred sales charge). In the case of the Global Trusts, such
underlying value is based on the aggregate value of the foreign Securities
computed on the basis of the offering side value of the relevant currency
exchange rate expressed in U.S. dollars as of the Evaluation Time during the
initial offering period and on the bid side value for secondary market
transactions. The initial sales charge applicable to quantity purchases is
reduced on a graduated basis to any person acquiring 5,000 or more Units as
follows:
<TABLE>
<CAPTION>
Aggregate Number of
Units Purchased* Percentage Sales Charge Reduction Per Unit
- ----------------------- ------------------------------------------
<S> <C>
5,000-9,999 0.25%
10,000-14,999 0.50
15,000-99,999 0.85
100,000 or more 1.75
__________________
*The breakpoint sales charges are also applied on a dollar basis
utilizing a breakpoint equivalent in the above table of $10 per
Unit and will be applied on whichever basis is more favorable to
the investor. The breakpoints will be adjusted to take into
consideration purchase orders stated in dollars which cannot be
completely fulfilled due to the Trusts' requirement that only
whole Units be issued.
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent. An investor may aggregate purchases of Units of the
Trusts for purposes of qualifying for volume purchase discounts listed above.
The reduced sales charge structure will also apply on all purchases by the
same person from any one dealer of units of Van Kampen American
Capital-sponsored unit investment trusts which are being offered in the
initial offering period (a) on any one day (the "Initial Purchase Date"
) or (b) on any day subsequent to the Initial Purchase Date if (1) the units
purchased are of a unit investment trust purchased on the Initial Purchase
Date, and (2) the person purchasing the units purchased a sufficient amount of
units on the Initial Purchase Date to qualify for a reduced sales charge on
such date. In the event units of more than one trust are purchased on the
Initial Purchase Date, the aggregate dollar amount of such purchases will be
used to determine whether purchasers are eligible for a reduced sales charge.
Such aggregate dollar amount will be divided by the public offering price per
unit (on the day preceding the date of purchase) of each respective trust
purchased to determine the total number of units which such amount could have
purchased of each individual trust. Purchasers must then consult the
applicable trust's prospectus to determine whether the total number of units
which could have been purchased of a specific trust would have qualified for a
reduced sales charge and, if so qualified, the amount of such reduction.
Assuming a purchaser qualified for a sales charge reduction or reductions, to
determine the applicable sales charge reduction or reductions it is necessary
to accumulate all purchases made on the Initial Purchase Date and all
purchases made in accordance with (b) above. Units purchased in the name of
the spouse of a purchaser or in the name of a child of such purchaser ("
immediate family members" ) will be deemed for the purposes of calculating
the applicable sales charge to be additional purchases by the purchaser. The
reduced sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for one or more trust estate or fiduciary accounts.
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 immediate family members (as described above) 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.
During the initial offering period, unitholders of any Van Kampen American
Capital-sponsored unit investment trust may utilize their redemption or
termination proceeds to purchase Units of all Trusts subject only to the
deferred sales charge described herein.
During the initial offering period of the Trusts, unitholders of unaffiliated
unit investment trusts having an investment strategy similar to the investment
strategy of the Trusts may utilize proceeds received upon termination or upon
redemption immediately preceding termination of such unaffiliated trust to
purchase Units of a Trust subject only to the deferred sales charge described
herein.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons) of the 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.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Securities in the
Trusts. In the case of the Global Trusts, the Public Offering Price per Unit
is based on the aggregate value of the Securities computed on the basis of the
offering side or bid side value of the relevant currency exchange rate
expressed in U.S. dollars during the initial offering period or secondary
market.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities in each
Trust an amount equal to the difference between the maximum total sales charge
for a Trust and the maximum deferred sales charge for a Trust and dividing the
sum so obtained by the number of Units in each Trust outstanding. In addition,
the Public Offering Price shall include the proportionate share of any cash
held in the Income and Capital Accounts in each Trust. Such price
determination as of the close of the relevant stock market on April 4, 1997 or
April 7, 1997 (for the United Kingdom and Hong Kong Trusts) was made on the
basis of an evaluation of the Securities in the Trusts prepared by Interactive
Data Corporation, a firm regularly engaged in the business of evaluating,
quoting or appraising comparable securities. Thereafter, the Evaluator on each
business day will appraise or cause to be appraised the value of the
underlying Securities in the applicable Trust as of the relevant Evaluation
Time 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 which is not a business day for the related Trust, will be held until
the next determination of price. The term "business day" , as used
herein and under "Rights of Unitholders--Redemption of Units" , shall
exclude Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange, Inc.: New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. In
addition, for the United Kingdom Trust, "business day" shall exclude
the following U.K. holidays: Easter Monday, Bank Holiday, Spring Bank Holiday,
Summer Bank Holiday, and Boxing Day, and for the Hong Kong Trust "business
day" shall exclude the following Hong Kong holidays: Lunar New Year's Day
and the two following days, Ching Ming Festival, Easter Monday, Queen's
Birthday Holiday, Tuen Ng Festival, Summer Bank Holiday, Liberation Day,
Chinese Mid-Autumn Festival and the following day, Chang Yeung Festival,
Christmas Day and the following weekday. In connection with the Strategic
Thirty and Strategic Fifteen Trusts, the term "business day" shall
also exclude any day on which Securities representing greater than 33% of the
Securities in a Trust are not traded on the principal trading exchange for
such Securities due to a customary business holiday on such exchange;
accordingly, purchases or redemptions of Units in such Trusts on such a day
will be based on the next determination of price of the Securities (and the
price of such Units would be the next computed Unit price). Unitholders who
purchase Units subsequent to the Initial Date of Deposit will pay an initial
sales charge equal to the difference between the maximum total sales charge
and the maximum deferred sales charge ($0.175 per Unit) and will be assessed a
deferred sales charge of $0.0175 per Unit on each of the remaining deferred
sales charge payment dates as set forth in "Public Offering--General" .
The Sponsor currently does not intend to maintain a secondary market after
October 13, 1997.
The aggregate underlying value of the Equity Securities during the initial
offering period is determined on each business day by the Evaluator in the
following manner: If the Equity Securities are listed on a national or foreign
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 ask prices. The evaluation of a foreign
Security in either the Strategic Thirty Trust or the Strategic Fifteen Trust
will take into consideration any event or announcement occurring after the
close of the related foreign securities exchange and prior to the Evaluation
Time of such Trust which could have a material affect on the value of such
Security. If the Equity Securities are not listed on a national or foreign
securities exchange or, if so listed and the principal market therefore is
other than on the exchange, the evaluation shall generally be based on the
current ask price on the over-the-counter market (unless it is determined that
these prices are inappropriate as a basis for evaluation). If current ask
prices are unavailable, the evaluation is generally determined (a) on the
basis of current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by any
combination of the above. In the case of the Global Trusts, the value of the
Equity Securities during the initial offering period is based on the aggregate
underlying value of the foreign Securities computed on the basis of the
offering side value of the relevant currency exchange rate expressed in U.S.
dollars as of the related Evaluation Time.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trusts
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Sponsor, broker-dealers and others at the
Public Offering Price. Upon the completion of the initial offering period,
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.
Brokers, dealers and others will be allowed a concession or agency commission
in connection with the distribution of Units during the initial offering
period as set forth in the following table. A portion of such concessions or
agency commissions represents amounts paid by the Sponsor to such brokers,
dealers and others out of its own assets as additional compensation.
<TABLE>
<CAPTION>
Initial Offering Period
Aggregate Number of Concession or Agency
Units Purchased* Commission per Unit
- ------------------------- ------------------------------
<S> <C>
1 - 4,999................ 2.10%
5,000 - 9,999............ 1.85
10,000 - 14,999.......... 1.60
15,000 - 99,999.......... 1.25
100,000 or more.......... 0.50
_____________________
*The breakpoint concessions or agency commissions are
also applied on a dollar basis utilizing a breakpoint
equivalent in the above table of $10 per Unit and will
be applied on whichever basis is more favorable to the
broker, dealer or agent. The breakpoints will be
adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled
due to the Trusts' requirement that only whole Units be
issued.
</TABLE>
Any quantity discount provided to investors will be borne by the selling
dealer or agent as indicated under "General" above. For transactions
involving Rollover Unitholders the total concession or agency commission will
amount to 1.1% per Unit (or such lesser amount resulting from quantity sales
discounts). For all secondary market transactions the total concession or
agency commission will amount to 2.1% per Unit. Notwithstanding anything to
the contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual
transaction exceed the total sales charge applicable to such transaction.
Certain commercial banks are making Units of the Trusts 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 and Other Compensation. The Sponsor will receive the gross sales
commission equal to 2.75% of the Public Offering Price, less any reduced sales
charge for quantity purchases as described under "General" above. Any
such quantity discount provided to investors will be borne by the selling
dealer or agent.
In addition, the Sponsor will realize a profit or will sustain 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 each Trust on the
Initial Date of Deposit as well as on subsequent deposits. See "Notes to
Portfolios" . 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 Fund portfolios. The
Sponsor may further realize additional profit or loss during the initial
offering period as a result of the possible fluctuations in the market value
of the Securities in the Trusts after a date of deposit, since all proceeds
received from purchasers of Units.
Broker-dealers of the Trusts, 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 Trusts. Such payments are made by
the Sponsor out of its own assets, and not out of the assets of any Trust.
These programs will not change the price Unitholders pay for their Units or
the amount that a Trust will receive from the Units sold.
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 currently intends
to maintain a secondary market for Units of the Trusts 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 currently
intends to maintain a market for the Units offered hereby through October 13,
1997 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 Trusts (computed as indicated under "Offering Price" above and
"Rights of Unitholders--Redemption of Units" ). In the case of the
Global Trusts, the aggregate underlying value of the Equity Securities is
computed on the basis of the bid side value of the relevant currency exchange
rate (offer side during the initial offering period) expressed in U.S.
dollars. 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. 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 will be able to
dispose of such Units 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.
Units sold prior to such time as the entire deferred sales charge on such
Units has been collected will be assessed the amount of the remaining deferred
sales charge at the time of sale.
Tax-Sheltered Retirement Plans. Units of the Trusts are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the 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 Trusts may be limited by the plans' provisions and
does not itself establish such plans.
RIGHTS OF UNITHOLDERS
- --------------------------------------------------------------------------
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 Trusts 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 a Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account of such Trust. Other receipts (e.g., capital gains, proceeds
from the sale of Securities, etc.) are credited to the Capital Account of such
Trust. Proceeds from the sale of Securities made to meet redemptions of Units
shall be segregated within the Capital Account of a Trust from proceeds from
the sale of Securities made to satisfy the fees, expenses and charges of such
Trust. In the case of the Global Trusts, dividends to be credited to such
accounts are first converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any income received with respect to any of the
Securities in a Trust on or about the Income Account Distribution Dates to
Unitholders of record on the preceding Income Account Record Dates. See "
Summary of Essential Financial Information" . Proceeds received on the sale
of any Securities in a Trust, to the extent not used to meet redemptions of
Units, pay the deferred sales charge or pay fees and expenses, will be
distributed semi-annually on the Capital Account Distribution Dates to
Unitholders of record on the preceding Capital Account Record Dates. 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
of the appropriate Trust 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. Unitholders
will initially receive their distributions in the form of an automatic
reinvestment into additional Units unless the Unitholder elects to receive
distributions in cash. See "Rights of Unitholders--Reinvestment
Option." 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.
At the end of the initial offering period for each Trust and on or before the
tenth day of each month thereafter, the Trustee will deduct from the Capital
Account of the appropriate Trust amounts necessary to pay the fees and
expenses of such Trust (as determined on the basis set forth under "Fund
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 each Trust. Amounts so
withdrawn shall not be considered a part of such Trust's assets until such
time as the Trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the Trustee may withdraw from the Income
and Capital Accounts of the appropriate Trust such amounts as may be necessary
to cover redemptions of Units.
It is anticipated that the deferred sales charge will be collected from the
Capital Account. To the extent that amounts in the Capital Account are
insufficient to satisfy the then current deferred sales charge obligation,
Equity Securities will be sold to meet such shortfall. Distributions of
amounts necessary to pay the deferred portion of the sales charge will be made
to an account maintained by the Trustee for purposes of satisfying
Unitholders' deferred sales charge obligations.
Reinvestment Option. Unitholders of a Trust will initially have each
distribution of dividend income, capital gains and/or principal on their Units
automatically reinvested in additional Units of such Trust under the "
Automatic Reinvestment Option" (to the extent Units may be lawfully
offered for sale in the state in which the Unitholder resides). Brokers and
dealers who distribute Units to Unitholders pursuant to the Automatic
Reinvestment Option may do so through two options. Brokers and dealers can use
the Dividend Reinvestment Service through Depository Trust Company or purchase
the available Automatic Reinvestment Option CUSIP. If a broker or dealer
decides to continue to utilize the Dividend Reinvestment Service through the
Depository Trust Company, the broker or dealer must have access to a PTS
terminal equipped with the Elective Dividend System function (EDS) prior to
the first Record Date set forth under "Summary of Essential Financial
Information" . The second option available is to purchase the appropriate
CUSIP for automatic reinvestment. Unitholders receiving Units of a Trust
pursuant to participation in the Automatic Reinvestment Option will be subject
to the remaining deferred sales charge payments due on Units (assuming for
these purposes such Units had been outstanding during the primary offering
period). Unitholders may also elect to receive distributions of dividend
income, capital gains and/or principal on their Units in cash. To receive
cash, a Unitholder or his or her broker or agent must file with the Trustee a
written notice of election, together with any certificate representing Units
and other documentation that the Trustee may then require, at least five days
prior to the Record Date for which the first distribution is to apply. A
Unitholder's election to receive cash will apply to all Units of a 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 a Trust (see "
The Fund" ), 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 at the net asset value for Units of a Trust as of the Evaluation Time on
the related Income or Capital Account Distribution Dates. Under the
reinvestment plan, a Trust will pay the Unitholder's distributions to the
Trustee which in turn will purchase for such Unitholder full and fractional
Units of a Trust and will send such Unitholder a statement reflecting the
reinvestment.
Unitholders may also elect to have each distribution of interest income,
capital gains and/or principal on their Units automatically reinvested in
shares of any Van Kampen American Capital mutual funds (except for B shares)
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 Trusts. 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
interest income, capital gains and/or principal 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 of a Trust 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 of a Trust outstanding. 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 of
a Trust a statement (i) as to the Income Account: income received, deductions
for applicable taxes and for fees and expenses of such 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) 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
such 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 by such Trust
and the number of Units of such Trust outstanding on the last business day of
such calendar year; (iv) the Redemption Price per Unit of such Trust 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 of such Trust, 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 a 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 as described above (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 (unless the redeeming Unitholder in a United States,
Strategic Thirty or Strategic Fifteen Trust elects an In Kind Distribution as
described below) an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units and in
the case of the Global Trusts converted into U.S. dollars as of the Evaluation
Time set forth under "Summary of Essential Financial Information" . The
"date of tender" is deemed to be the date on which Units are received
by the Trustee, except that with respect to Units received after the
applicable Evaluation Time, the date of tender is deemed to be the next
business day as defined under "Public Offering--Offering Price" 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 London Stock
Exchange and the Hong Kong Exchange are open for trading on certain days which
are U.S. holidays on which the Fund will not transact business. The foreign
Securities will continue to trade on those days and thus the value of the
Global Trusts may be significantly affected on days when a Unitholder cannot
sell or redeem his Units.
The Trustee is empowered to sell Securities of a Trust in order to make funds
available for redemption if funds are not otherwise available in the Capital
and Income Accounts of such Trust 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. Units tendered for redemption prior to such time as the entire
deferred sales charge on such Units has been collected will be assessed the
amount of the remaining deferred sales charge at the time of redemption.
Unitholders in a United States, Strategic Thirty or Strategic Fifteen Trust
tendering 1,000 or more Units for redemption may request from the Trustee an
in kind distribution ("In Kind Distribution" ) of an amount and value
of U.S.-traded Securities per Unit (plus cash) 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 U.S.-traded Securities in book-entry form to
the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. A Unitholder in the Strategic Thirty or Strategic Fifteen Trusts
electing an In Kind Distribution will not receive a distribution of shares of
the foreign exchange-traded Securities but will instead receive cash
representing his pro rata portion of such Securities.The tendering Unitholder
will receive his pro rata number of whole shares of each of the U.S.-traded
Securities comprising a Trust portfolio and cash from the Capital Account
equal to the pro rata portion of any foreign exchange-traded Securities (in
the Strategic Thirty and Strategic Fifteen Trusts) and any fractional shares
to which the tendering Unitholder is entitled. The Trustee may adjust the
number of shares of any issue of Securities included in a Unitholder's In Kind
Distribution to facilitate the distribution of whole shares, such adjustment
to be made on the basis of the value of Securities on 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.
To the extent that Securities are redeemed in kind or sold, the size of a
Trust will be, and the diversity of such 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. Special U.S. federal income tax consequences will result if a
Unitholder requests an In Kind Distribution. See "Taxation" .
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 each Trust, plus or minus cash, if any, in the Income
and Capital Accounts of such Trust. 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" . The Redemption Price per Unit
is the pro rata share of each Unit in each Trust determined on the basis of
(i) the cash on hand in such Trust, (ii) the value of the Securities in such
Trust and (iii) dividends receivable on the Equity Securities of such Trust
trading ex-dividend as of the date of computation, less (a) amounts
representing taxes or other governmental charges payable out of such Trust and
(b) the accrued expenses of such Trust. The Evaluator may determine the value
of the Equity Securities in a Trust in the following manner: If the Equity
Securities are listed on a national or foreign 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 of a Trust 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 of such Trust
on the bid side of the market or (c) by any combination of the above. In the
case of the Global Trusts, the value of the Equity Securities in the secondary
market is based on the aggregate value of the foreign Securities computed on
the basis of the bid side value of the relevant currency exchange rate
expressed in U.S. dollars as of the Evaluation Time.
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 a Trust is not reasonably practicable, or for such other periods
as the Securities and Exchange Commission may by order permit.
Special Redemption and Rollover in New Fund. It is expected that a special
redemption will be made of all Units of each Trust held by any Unitholder (a
"Rollover Unitholder" ) who affirmatively notifies the Trustee in
writing that he desires to rollover his Units by the Rollover Notification
Date specified in the "Summary of Essential Financial Information" .
All Units of Rollover Unitholders will be redeemed on the Special Redemption
Date and the underlying Securities will be distributed to the Distribution
Agent on behalf of the Rollover Unitholders. On the Special Redemption Date
(as set forth in "Summary of Essential Financial Information" ), the
Distribution Agent will be required to sell all of the underlying Securities
on behalf of Rollover Unitholders. The sales proceeds will be net of brokerage
fees, governmental charges or any expenses involved in the sales.
The Distribution Agent will attempt to sell the Securities as quickly as is
practicable on the Special Redemption Date. The Sponsor does not anticipate
that the period will be longer than one day given that the Securities are
usually highly liquid. However, certain of the factors discussed under "
Risk Factors" could affect the ability of the Sponsor to sell the
Securities of the Global Trusts and thereby affect the length of the sale
period somewhat. The liquidity of any Security depends on the daily trading
volume of the Security and the amount that the Sponsor has available for sale
on any particular day.
Pursuant to an exemptive order, each terminating Trust (and the Distribution
Agent on behalf of Rollover Unitholders) can sell Securities to a New Series
if those Securities continue to meet the related investment strategy of the
respective Series. The exemption will enable each Trust to eliminate
commission costs on these transactions. The price for those securities will be
the closing sale price on the sale date on the exchange where the Securities
are principally traded, as certified by the Trustee.
The Rollover Unitholders' proceeds will be invested in the next subsequent
series of the Fund (the "1998 Fund" ), if then being offered, the
trusts of which will contain portfolios consisting of component stocks of the
DJIA, FT Index or Hang Seng Index selected in accordance with the indexing
strategies of the Trusts in the current Series of the Fund. The proceeds of
redemption will be used to buy 1998 Fund units in the appropriate portfolio as
the proceeds become available.
The Sponsor intends to create the 1998 Fund shortly prior to the Special
Redemption Date, dependent upon the availability and reasonably favorable
prices of the Securities included in the 1998 Fund portfolios, and it is
intended that Rollover Unitholders will be given first priority to purchase
the 1998 Fund units. There can be no assurance, however, as to the exact
timing of the creation of the 1998 Fund units or the aggregate number of 1998
Fund units in each trust portfolio which the Sponsor will create. The Sponsor
may, in its sole discretion, stop creating new units in each trust portfolio
at any time it chooses, regardless of whether all proceeds of the Special
Redemption have been invested on behalf of Rollover Unitholders. Cash which
has not been invested on behalf of the Rollover Unitholders in 1998 Fund units
will be distributed shortly after the Special Redemption Date.
Any Rollover Unitholder may thus be redeemed out of the Fund and become a
holder of an entirely different unit investment trust in the 1998 Fund with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold on the Special
Redemption Date. In accordance with the Rollover Unitholders' offer to
purchase the 1998 Fund units, the proceeds of the sales (and any other cash
distributed upon redemption) will be invested in the 1998 Fund in the
appropriate portfolio at the public offering price, including the applicable
sales charge per Unit (which for Rollover Unitholders is currently expected to
be 1.75% of the Public Offering Price of the 1998 Fund units).
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolios selected by the Sponsor are chosen on the
basis of growth and income potential only for a year, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption
and rollover in new unit investment trusts will be available for the 1998 Fund
and each subsequent series of the Fund, approximately a year after that
Series' creation.
There can be no assurance that the redemption and rollover will avoid any
negative market price consequences stemming from the trading of large volumes
of securities and of the underlying Securities. The above procedures may be
insufficient or unsuccessful in avoiding such price consequences. In fact,
market price trends may make it advantageous to sell or buy more quickly or
more slowly than permitted by these procedures.
It should also be noted that Rollover Unitholders may realize taxable capital
gains on the Special Redemption and Rollover but, in certain circumstances,
will not be entitled to a deduction for certain capital losses and, due to the
procedures for investing in the subsequent Trust, no cash would be distributed
at that time to pay any taxes. Included in the cash for the Special Redemption
and Rollover will be any amount of cash attributable to the last distribution
of dividend income; accordingly, Rollover Unitholders also will not have such
cash distributed to pay any taxes. See "Taxation" . Unitholders who do
not inform the Distribution Agent that they wish to have their Units so
redeemed and liquidated will not realize capital gains or losses due to the
Special Redemption and Rollover and will not be charged any additional sales
charge.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
the 1998 Fund or any subsequent series of the Fund, without penalty or
incurring liability to any Unitholder. If the Sponsor so decides, the Sponsor
shall notify the Unitholders before the Special Redemption Date would have
commenced. The Sponsor may modify the terms of the 1998 Fund or any subsequent
series of the Fund. The Sponsor may also modify the terms of the Special
Redemption and Rollover in the 1998 Fund upon notice to the Unitholders prior
to the Rollover Notification Date specified in the related "Summary of
Essential Financial Information" .
FUND ADMINISTRATION
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Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any Units
tendered 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 portfolios of the Fund are 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 Fund, 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 a 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 a Trust,
they may be accepted for deposit in such Trust and either sold by the Trustee
or held in such Trust pursuant to the direction of the Sponsor (who may rely
on the advice of the Supervisor). Proceeds from the sale of Securities (or any
securities or other property received by the Fund in exchange for Equity
Securities) are credited to the Capital Account for distribution to
Unitholders, to pay any accrued deferred sales charge or to meet redemptions.
Except as stated under "Trust Portfolios" for failed securities and as
provided in this paragraph, the acquisition by a Trust of any securities other
than the Securities is prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in a Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in such
Trust may be altered. In order to obtain the best price for a 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. The Sponsor may consider
sales of units of unit investment trusts it sponsors in selecting
broker/dealers to execute the Trusts' portfolio transactions.
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 representing 51% of the Units of a Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in such 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.
A Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of such Trust then outstanding or by the Trustee when the
value of the Equity Securities owned by a Trust, as shown by any evaluation,
is less than that amount set forth under Minimum Termination Value in the "
Summary of Essential Financial Information." A Trust will be liquidated by
the Trustee in the event that a sufficient number of Units of such Trust not
yet sold are tendered for redemption by the Sponsor, so that the net worth of
such Trust would be reduced to less than 40% of the value of the Securities at
the time they were deposited in such Trust. If a Trust is liquidated because
of the redemption of unsold Units by the Sponsor, the Sponsor will refund to
each purchaser of Units the entire sales charge paid by such purchaser. 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" .
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Fund. 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. At least 30 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination to all Unitholders of
the appropriate Trust and in the case of a United States, Strategic Thirty or
Strategic Fifteen Trust will include with such notice a form to enable
Unitholders owning 1,000 or more Units to request an In Kind Distribution of
the U.S.-traded Securities. 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 the U.S.-traded Securities in a United
States, Strategic Thirty or Strategic Fifteen Trust to the account of the
broker-dealer or bank designated by the Unitholder at Depository Trust
Company. A Unitholder in the Strategic Thirty or Strategic Fifteen Trusts
electing an In Kind Distribution will not receive a distribution of shares of
the foreign exchange-traded Securities but will instead receive cash
representing his pro rata portion of such Securities. The value of the
Unitholder's fractional shares of the Securities will be paid in cash.
Unitholders with less than 1,000 Units, Unitholders in a United States,
Strategic Thirty or Strategic Fifteen Trust with 1,000 or more Units not
requesting an In Kind Distribution and Unitholders who do not elect the
Rollover Option will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. Regardless of the distribution involved, the Trustee will
deduct from the funds of the appropriate 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 Securities in a 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 of each
Trust his pro rata share of the balance of the Income and Capital Accounts of
such Trust.
The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent series of the Trusts pursuant to the Rollover Option
(see "Rights of Unitholders--Special Redemption and Rollover in New
Fund" ). There is, however, no assurance that units of any new series of
such Fund will be offered for sale at that time, or if offered, that there
will be sufficient units available for sale to meet the requests of any or all
Unitholders.
Within 60 days of the final distribution Unitholders will be furnished a final
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 a 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. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ).
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser ("MSAM" ), Morgan Stanley
& Co. Incorporated, a registered broker-dealer and investment adviser, and
Morgan Stanley International, are engaged in a wide range of financial
services. Their 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; and
global custody, securities clearance services and securities lending. As of
December 31, 1996, MSAM, together with its affiliated investment advisory
companies, had approximately $113 billion of assets under management and
fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
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 December 31, 1996, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $59 billion of investment
products, of which over $11.88 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $48 billion
of assets, consisting of $29.9 billion for 59 open end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.), $13.1
billion for 38 closed-end funds and $4.99 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-end 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 Trusts 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 portfolios.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for each Trust. Such
records shall include the name and address of, and the number of Units of each
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 each 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. Kroll & Tract LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statements of condition and the
related securities portfolios at the Initial Date of Deposit 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.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 55:
We have audited the accompanying statements of condition and the related
portfolios of Van Kampen American Capital Equity Opportunity Trust, Series 55
as of April 7, 1997. The statements of condition and portfolios are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of irrevocable letters of credit deposited to
purchase securities by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall 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 Van Kampen American Capital
Equity Opportunity Trust, Series 55 as of April 7, 1997, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
April 7, 1997
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST,
SERIES 55
STATEMENTS OF CONDITION
As of April 7, 1997
<CAPTION>
Strategic Strategic Strategic
Ten Ten Ten
United United Hong
INVESTMENT IN SECURITIES States Kingdom Kong
Trust Trust Trust
-------------- -------------- --------------
<S> <C> <C> <C>
Contracts to purchase Securities <F1>.......... $ 149,837 $ 148,121 $ 247,546
Organizational costs <F2>...................... 59,046 32,742 22,555
-------------- -------------- --------------
Total.......................................... $ 208,883 $ 180,863 $ 270,101
============== ============== ==============
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Accrued organizational costs <F2>.............. $ 59,046 $ 32,742 $ 22,555
Deferred sales charge liability <F3>........... 2,625 2,625 4,375
Interest of Unitholders--
Cost to investors <F4>......................... 151,350 149,550 250,000
Less: Gross underwriting commission <F4><F5>... 4,138 4,054 6,829
-------------- -------------- --------------
Net interest to Unitholders <F4>............... 147,212 145,496 243,171
-------------- -------------- --------------
Total.......................................... $ 208,883 $ 180,863 $ 270,101
============== ============== ==============
==========
<FN>
<F1>The aggregate value of the Securities listed under "Portfolios" herein
and their cost to each Trust are the same. The value of the Securities is
determined by Interactive Data Corporation on the bases set forth under "
Public Offering--Offering Price" . The contracts to purchase Securities are
collateralized by separate irrevocable letters of credit of $149,837, $148,121
and $247,546 which have been deposited with the Trustee with respect to the
Strategic Ten United States, Strategic Ten United Kingdom and Strategic Ten
Hong Kong Trusts, respectively.
<F2>Each Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over the life of such Trust. Organizational costs
have been estimated based on a projected Trust size of $68,000,000,
$17,000,000 and $5,000,000 for the Strategic Ten United States, Strategic Ten
United Kingdom and Strategic Ten Hong Kong Trusts, respectively. To the extent
a Trust is larger or smaller, the estimate will vary. Securities will be sold
to pay organizational costs.
<F3>Represents the amount of mandatory distributions from a Trust on the bases set
forth under "Public Offering" .
<F4>The aggregate public offering price and the aggregate initial sales charge are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Other Compensation" and assume all
single transactions involve less than 5,000 Units. For single transactions
involving 5,000 or more Units, the sales charge is reduced (see "Public
Offering--General" ) resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
<F5>Assumes the maximum sales charge.
</TABLE>
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST,
SERIES 55
STATEMENTS OF CONDITION (Continued)
As of April 7, 1997
<CAPTION>
Strategic
Five Strategic Strategic
United Thirty Fifteen
INVESTMENT IN SECURITIES States Global Global
Trust Trust Trust
-------------- -------------- --------------
<S> <C> <C> <C>
Contracts to purchase Securities <F1>.......... $ 150,122 $ 297,090 $ 149,399
Organizational costs <F2>...................... 30,101 26,251 25,899
-------------- -------------- --------------
Total.......................................... $ 180,223 $ 323,341 $ 175,298
============== ============== ==============
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Accrued organizational costs <F2>.............. $ 30,101 $ 26,251 $ 25,899
Deferred sales charge liability <F3>........... 2,625 5,250 2,625
Interest of Unitholders--
Cost to investors <F4>......................... 151,650 300,000 150,900
Less: Gross underwriting commission <F4><F5>... 4,153 8,160 4,126
-------------- -------------- --------------
Net interest to Unitholders <F4>............... 147,497 291,840 146,774
-------------- -------------- --------------
Total.......................................... $ 180,223 $ 323,341 $ 175,298
============== ============== ==============
==========
<FN>
<F1>The aggregate value of the Securities listed under "Portfolios" herein
and their cost to each Trust are the same. The value of the Securities is
determined by Interactive Data Corporation on the bases set forth under "
Public Offering--Offering Price" . The contracts to purchase Securities are
collateralized by separate irrevocable letters of credit of $150,122, $297,090
and $149,399 which have been deposited with the Trustee with respect to the
Strategic Five United States, Strategic Thirty Global and Strategic Fifteen
Global Trusts, respectively.
<F2>Each Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over the life of such Trust. Organizational costs
have been estimated based on a projected Trust size of $20,000,000, $3,500,000
and $3,000,000 for the Strategic Five United States, Strategic Thirty Global
and Strategic Fifteen Global Trusts, respectively. To the extent a Trust is
larger or smaller, the estimate will vary. Securities will be sold to pay
organizational costs.
<F3>Represents the amount of mandatory distributions from a Trust on the bases set
forth under "Public Offering" .
<F4>The aggregate public offering price and the aggregate initial sales charge are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Other Compensation" and assume all
single transactions involve less than 5,000 Units. For single transactions
involving 5,000 or more Units, the sales charge is reduced (see "Public
Offering--General" ) resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
<F5>Assumes the maximum sales charge.
</TABLE>
<TABLE>
STRATEGIC TEN TRUST UNITED STATES PORTFOLIO, SERIES 15
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends per Securities
of Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------ ------------------------------------------- ----------------- --------------- --------------
<S> <C> <C> <C> <C>
445 AT&T Corporation $ 34.000 $ 1.32 $ 15,130.00
229 Chevron Corporation 65.000 2.16 14,885.00
143 E.I. du Pont de Nemours & Company 104.125 2.28 14,889.88
201 Eastman Kodak Company 75.375 1.76 15,150.38
146 Exxon Corporation 101.625 3.16 14,837.25
280 General Motors Corporation 54.000 2.00 15,120.00
376 International Paper Company 40.000 1.00 15,040.00
154 J. P. Morgan & Company, Inc. 98.250 3.52 15,130.50
178 Minnesota Mining & Manufacturing Company 83.250 2.12 14,818.50
131 Philip Morris Companies, Inc. 113.250 4.80 14,835.75
- ------------ --------------
2,283 $ 149,837.26
============ ==============
</TABLE>
<TABLE>
STRATEGIC TEN TRUST UNITED KINGDOM PORTFOLIO, SERIES 13
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual
Dividends Cost of
Number Market Value per Share Securities
of Shares Name of Issuer <F1> per Share <F2> <F2> to Trust <F2>
- ------------ ------------------------------------------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
2,016 Allied Domecq Plc $ 7.305 $ 0.41 $ 14,726.23
5,206 BG Plc 2.907 0.22 15,134.95
2,106 British Telecom Plc 7.052 0.33 14,852.00
3,468 BTR Plc 4.169 0.20 14,459.65
2,592 Courtaulds Plc 5.692 0.28 14,754.38
1,290 Imperial Chemical Industries Plc 11.637 0.55 15,011.73
1,338 National Westminster Bank Plc 11.433 0.50 15,297.90
1,435 Peninsular & Oriental Steam Navigation Company 10.057 0.53 14,432.03
2,041 Royal & Sun Alliance Insurance Group Plc 7.223 0.33 14,742.64
2,093 Tate & Lyle Plc 7.028 0.29 14,709.19
- ------------ --------------
23,585 $ 148,120.70
============ ==============
</TABLE>
<TABLE>
STRATEGIC TEN TRUST HONG KONG PORTFOLIO, SERIES 13
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends per Securities
of Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------ ------------------------------------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
24,000 Amoy Properties Ltd. $ 1.046 $ 0.06 $ 25,093.58
16,000 Cathay Pacific Airways 1.523 0.07 24,370.72
14,000 Hang Lung Development Company 1.885 0.09 26,384.40
25,000 Henderson Investment Ltd. 0.994 0.05 24,848.33
3,000 Henderson Land Development Company Ltd. 8.068 0.27 24,202.92
7,000 Hong Kong Electric Holdings Ltd. 3.524 0.16 24,667.62
14,800 Hong Kong Telecommunications Ltd. 1.717 0.09 25,408.55
8,000 Hysan Development Company Ltd. 2.962 0.14 23,699.50
38,000 Shun Tak Holdings Ltd. 0.658 0.04 25,016.12
28,000 South China Morning Post (Holdings) Ltd. 0.852 0.04 23,854.40
- ------------ --------------
177,800 $ 247,546.14
============ ==============
</TABLE>
<TABLE>
STRATEGIC FIVE TRUST UNITED STATES PORTFOLIO, SERIES 9
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends per Securities
of Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------ ------------------------------------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C>
459 Chevron Corporation $ 65.000 $ 2.16 $ 29,835.00
402 Eastman Kodak Company 75.375 1.76 30,300.75
559 General Motors Corporation 54.000 2.00 30,186.00
752 International Paper Company 40.000 1.00 30,080.00
357 Minnesota Mining & Manufacturing Company 83.250 2.12 29,720.25
- ------------ --------------
2,529 $ 150,122.00
============ ==============
</TABLE>
<TABLE>
STRATEGIC THIRTY TRUST GLOBAL PORTFOLIO, SERIES 4
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual
Dividends Cost of
Number Market Value per Share Securities
of Shares Name of Issuer <F1> per Share <F2> <F2> to Trust <F2>
- ------------ ------------------------------------------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C>
DJIA Companies:
295 AT&T Corporation $ 34.000 $ 1.32 $ 10,030.00
155 Chevron Corporation 65.000 2.16 10,075.00
96 E.I. du Pont de Nemours & Company 104.125 2.28 9,996.00
134 Eastman Kodak Company 75.375 1.76 10,100.25
97 Exxon Corporation 101.625 3.16 9,857.63
183 General Motors Corporation 54.000 2.00 9,882.00
256 International Paper Company 40.000 1.00 10,240.00
101 J. P. Morgan & Company, Inc. 98.250 3.52 9,923.25
119 Minnesota Mining & Manufacturing Company 83.250 2.12 9,906.75
87 Philip Morris Companies, Inc. 113.250 4.80 9,852.75
FT Index Companies:
1,350 Allied Domecq Plc 7.358 0.41 9,932.64
3,633 BG Plc 2.837 0.22 10,305.84
1,427 British Telecom Plc 7.014 0.33 10,009.21
2,358 BTR Plc 4.251 0.20 10,023.87
1,362 Courtaulds Plc 5.706 0.28 7,771.79
868 Imperial Chemical Industries Plc 11.453 0.56 9,941.37
896 National Westminster Bank Plc 11.273 0.50 10,100.91
968 Peninsular & Oriental Steam Navigation Company 10.301 0.53 9,970.90
1,383 Royal & Sun Alliance Insurance Group Plc 7.235 0.33 10,005.85
1,402 Tate & Lyle Plc 7.080 0.30 9,925.54
Hang Seng Index Companies:
9,500 Amoy Properties Ltd. 1.032 0.06 9,808.35
7,000 Cathay Pacific Airways 1.510 0.07 10,569.79
6,000 Hang Lung Development Company 1.852 0.09 11,111.83
10,000 Henderson Investment Ltd. 0.968 0.05 9,679.29
1,000 Henderson Land Development Company Ltd. 7.969 0.27 7,969.28
3,000 Hong Kong Electric Holdings Ltd. 3.497 0.16 10,492.35
6,000 Hong Kong Telecommunications Ltd. 1.697 0.09 10,182.62
3,000 Hysan Development Company Ltd. 2.943 0.14 8,827.52
16,000 Shun Tak Holdings Ltd. 0.658 0.04 10,531.07
12,000 South China Morning Post (Holdings) Ltd. 0.839 0.04 10,066.46
- ------------ --------------
90,670 $ 297,090.11
============ ==============
</TABLE>
<TABLE>
STRATEGIC FIFTEEN TRUST GLOBAL PORTFOLIO, SERIES 4
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 55)
as of the Initial Date of Deposit:
April 7, 1997
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends per Securities
of Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------ ------------------------------------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C>
DJIA Companies:
153 Chevron Corporation $ 65.000 $ 2.16 $ 9,945.00
132 Eastman Kodak Company 75.375 1.76 9,949.50
182 General Motors Corporation 54.000 2.00 9,828.00
254 International Paper Company 40.000 1.00 10,160.00
118 Minnesota Mining & Manufacturing Company 83.250 2.12 9,823.50
FT Index Companies:
1,415 British Telecom Plc 7.014 0.33 9,925.04
2,338 BTR Plc 4.251 0.20 9,938.85
1,711 Courtaulds Plc 5.706 0.28 9,763.24
1,371 Royal & Sun Alliance Insurance Group Plc 7.235 0.33 9,919.03
1,390 Tate & Lyle Plc 7.080 0.30 9,840.59
Hang Seng Index Companies:
9,500 Amoy Properties Ltd. 1.032 0.06 9,808.35
7,000 Cathay Pacific Airways 1.510 0.07 10,569.79
10,000 Henderson Investment Ltd. 0.968 0.05 9,679.29
6,000 Hong Kong Telecommunications Ltd. 1.697 0.09 10,182.62
12,000 South China Morning Post (Holdings) Ltd. 0.839 0.04 10,066.46
- ------------ --------------
53,564 $ 149,399.26
============ ==============
</TABLE>
NOTES TO PORTFOLIOS
- --------------------------------------------------------------------------
(1) All of the Securities are represented by "regular way" contracts
for the performance of which an irrevocable letter of credit has been
deposited with the Trustee. At the Initial Date of Deposit, the Sponsor has
assigned to the Trustee all of its right, title and interest in and to such
Securities. Contracts to acquire Securities were entered into on April 4, 1997
and April 7, 1997 and have settlement dates ranging from April 8, 1997 through
April 14, 1997 (see "The Fund" ).
(2) The market value of each of the Equity Securities is based on the closing
sale price of each Security on the applicable exchange (converted into U.S.
dollars at the offer side of the exchange rate at the Evaluation Time in the
case of the Global Trusts) on the day prior to the Initial Date of Deposit for
the United States, Strategic Thirty and Strategic Fifteen Trusts and on the
Initial Date of Deposit for the United Kingdom and Hong Kong Trusts. Estimated
annual dividends are based on the most recently declared dividends or, with
respect to dividends of foreign Securities in the Global Trusts, on the most
recent interim and final dividends declared (converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time). Estimated annual
dividends of foreign Securities in the Global Trusts reflect the net amounts
after giving effect to foreign withholding taxes. The aggregate value of the
Securities at the Evaluation Time for the Global Trusts (based on the closing
sale price of each Security and, if applicable, converted into U.S. dollars at
the bid side of the related currency exchange rate at the Evaluation Time) was
$148,032, $247,514, $297,018 and $149,363 for the United Kingdom Trust, Hong
Kong Trust, Strategic Thirty Trust and Strategic Fifteen Trust, respectively.
This is the basis on which the Redemption Price per Unit will be determined.
The offer side exchange rates of the Securities in the Global Trusts (the
basis on which the Public Offering Price per Unit will be determined during
the initial offering period) is greater than the related bid side values.
Other information regarding the Securities in the Fund, as of the Initial Date
of Deposit (converted into U.S. dollars at the offer side of the exchange rate
at the Evaluation Time in the case of the Global Trusts), is as follows:
<TABLE>
<CAPTION>
Aggregate
Profit Estimated
Cost To (Loss) To Annual
Sponsor Sponsor Dividends
------------ -------------- --------------
<S> <C> <C> <C>
Strategic Ten United States Trust $ 149,837 $ -- $ 4,707
Strategic Ten United Kingdom Trust $ 148,636 $ (515) $ 7,479
Strategic Ten Hong Kong Trust $ 247,488 $ 58 $ 12,217
Strategic Five United States Trust $ 150,122 $ -- $ 4,326
Strategic Thirty Global Trust $ 297,502 $ (412) $ 13,090
Strategic Fifteen Global Trust $ 149,650 $ (251) $ 6,272
</TABLE>
An affiliate of the Sponsor may have participated as issuer, sole underwriter,
managing underwriter or member of an underwriting syndicate in a public
offering of one or more of the stocks in the Trust. An affiliate of the
Sponsor may serve as a specialist in the stocks in the Trust on one or more
stock exchanges and may have a long or short position in any of these stocks
or in options on any of these stocks, and may be on the opposite side of
public orders executed on the floor of an exchange where such stocks are
listed. An officer, director or employee of the Sponsor or an affiliate may be
an officer or director of one or more of the issuers of the stocks in the
Trusts. An affiliate of the Sponsor may trade for its own account as an
odd-lot dealer, market maker, block positioner and/or arbitrageur in any
stocks or options relating thereto. The Sponsor, its affiliates, directors,
elected officers and employee benefit programs may have either a long or short
position in any stock or option of the issuers.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Fund, the Sponsor or the Underwriters. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any state
to any person to whom it is not lawful to make such offer in such state.
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.
When Units of the Trusts are no longer available, or for investors who will
reinvest into subsequent series of the Trusts, this Prospectus may be used as
a preliminary prospectus for a future series, in which case investors would
note the following:
Information contained herein is subject to completion or amendment. A
registration statement relating to securities of a future series has been
filed with the Securities and Exchange Commission. These securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. The Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial Information..... 5
The Fund....................................... 10
Objectives and Securities Selection............ 11
Trust Portfolios............................... 14
Strategic Ten Trust United States Portfolio.... 16
Strategic Ten Trust United Kingdom Portfolio... 19
Strategic Ten Trust Hong Kong Portfolio........ 23
Strategic Five Trust United States Portfolio... 26
Strategic Thirty Trust Global Portfolio........ 29
Strategic Fifteen Trust Global Portfolio....... 35
Risk Factors................................... 41
Taxation....................................... 48
Fund Operating Expenses........................ 54
Public Offering................................ 55
Rights of Unitholders.......................... 61
Fund Administration............................ 66
Other Matters.................................. 71
Report of Independent Certified Public
Accountants................................... 72
Statements of Condition ....................... 73
Notes to Portfolios............................ 79
</TABLE>
TABLE OF CONTENTS
PROSPECTUS
Van Kampen American Capital Equity Opportunity Trust, Series 55
April 7, 1997
Strategic Ten Trust
United States Portfolio, Series 15
United Kingdom Portfolio, Series 13
Hong Kong Portfolio, Series 13
Strategic Five Trust
United States Portfolio, Series 9
Strategic Thirty Trust
Global Portfolio, Series 4
Strategic Fifteen Trust
Global Portfolio, Series 4
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
Please retain this Prospectus for future reference.
Contents of Registration Statement
This Amendment of Registration Statement comprises the following
papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of Counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of
securites being registered.
3.4 Opinion and consent of counsel as to certain United Kingdom tax
matters.
4.1 Consent of Interactive Data Corporation
4.2 Consent of Independent Certified Public Acountants.
EX-27 Financial Data Schedules.
Signatures
The Registrant, Van Kampen American Capital Equity Opportunity
Trust, Series 55, hereby identifies Van Kampen Merritt Equity Opportunity
Trust, Series 1, Series 2, Series 4 and Series 7 and Van Kampen American
Capital Equity Opportunity Trust, Series 13 and Series 14 for purposes of
the representations required by Rule 487 and represents the following:
(1) that the portfolio securities deposited in the series as to the
securities of which this Registration Statement is being filed do not
differ materially in type or quality from those deposited in such
previous series; (2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide essential
financial information for, the series with respect to the securities of
which this Registration Statement is being filed, this Registration
Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such
previous series as to which the effective date was determined by the
Commission or the staff; and (3) that it has complied with Rule 460 under
the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
55 has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Chicago and State of Illinois on the 7th day of April, 1997.
Van Kampen American Capital Equity
Opportunity Trust, Series 55
By Van Kampen American Capital
Distributors, Inc.
By Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on April 7,
1997 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 )
William R. Molinari President and Chief Operating )
Officer
Ronald A. Nyberg Executive Vice President and )
General Counsel
William R. Rybak Executive Vice President and )
Chief Financial Officer )
Sandra A. Waterworth
(Attorney-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 Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and with the Registration Statement on Form S-6 of Insured Municipals
Income Trust, 170th Insured Multi-Series (File No. 33-55891) and the same
are hereby incorporated herein by this reference.
Exhibit 1.1
Van Kampen American Capital Equity Opportunity Trust
Series 55
Trust Agreement
Dated: April 7, 1997
This Trust Agreement among Van Kampen American Capital Distributors,
Inc., as Depositor, American Portfolio Evaluation Services, a division of
Van Kampen American Capital Investment Advisory Corp., as Evaluator, Van
Kampen American Capital Investment Advisory Corp., as Supervisory
Servicer, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Van Kampen Merritt Equity Opportunity Trust, Series 1
and Subsequent Series, Standard Terms and Conditions of Trust, Effective
November 21, 1991" (herein called the "Standard Terms and Conditions of
Trust") and such provisions as are set forth in full and such provisions
as are incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and Sections
of the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee
agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(22), listed in the
Schedule hereto, have been deposited in trust under this Trust
Agreement.
2. The fractional undivided interest in and ownership of the
Trust represented by each Unit is the amount set forth under
"Summary of Essential Financial Information - Fractional Undivided
Interest in the Trust per Unit" in the Prospectus. Such fractional
undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03, (b) increased or
decreased in connection with an adjustment to the number of Units
pursuant to Section 2.03, or (c) decreased by the number of Units
redeemed pursuant to Section 5.02.
3. Section 1.01(1) shall be amended to read as follows:
"(1) "Depositor" shall mean Van Kampen American Capital
Distributors, Inc. and its successors in interest, or any
successor depositor appointed as hereinafter provided."
4. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean American Portfolio
Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp. and its successors in
interest, or any successor evaluator appointed as
hereinafter provided."
5. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Van Kampen
American Capital Investment Advisory Corp. and its
successors in interest, or any successor portfolio
supervisor appointed as hereinafter provided."
6. Section 1.01(19) will be inapplicable for this Trust.
7. Section 1.01(34) shall be amended to read as follows:
"(34) The term "Rollover Unitholder" shall be defined as
set forth in Section 5.05, herein."
8. Section 1.01(35) shall be amended to read as follows:
"(35) The "Rollover Notification Date" shall be defined
as set forth in the Prospectus under "Summary of Essential
Information."
9. Section 1.01(36) shall be amended to read as follows:
"(36) The term "Rollover Distribution" shall be defined
as set forth in Section 5.05, herein."
10. Section 1.01(37) shall be amended to read as follows:
"(37) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.05 herein."
11. Section 1.01(38) shall be amended to read as follows:
"(38) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information - Special Redemption
Date."
12. The Initial Date of Deposit for the Trust is the date
hereof.
13. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligations requires settlement in a
foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of
the Contract Obligation and cash or a Letter of Credit in
U.S. dollars sufficient to perform such foreign exchange
contract."
14. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Van Kampen American Capital
Equity Opportunity Trust" will replace "Select Equity Trust."
15. The second sentence in the second paragraph of Section
3.11 shall be revised as follows: "However, should any issuance,
exchange or substitution be effected notwithstanding such rejection
or without an initial offer, any securities, cash and/or property
received shall be deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee unless the Depositor advises
the Trustee to keep such securities, cash or properties."
16. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.15.:
"Section 3.15. Foreign Exchange Transactions; Reclaiming
Foreign Taxes. The Trustee shall use reasonable efforts
to reclaim or recoup any amounts of non-U.S. tax paid by
the Trust or withheld from income received by the Trust to
which the Trust may be entitled as a refund."
17. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.17.:
"Section 3.17. Deferred Sales Charge. If the prospectus
related to the Trust specifies a deferred sale charge, the
Trustee shall, on the dates specified in and as permitted
by such Prospectus, withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit
such amount to a special non-Trust account maintained at
the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the
Capital Account is insufficient to make any such
withdrawal, the Trustee shall, as directed by the
Depositor, either advance funds in an amount equal to the
proposed withdrawal and be entitled to reimbursement of
such advance upon the deposit of additional monies in the
Capital Account, sell Securities and credit the proceeds
thereof to such special Depositor's account or credit (if
permitted by law) Securities in kind to such special
Depositor's Account. If a Unitholder redeems Units prior
to full payment of the deferred sales charge, the Trustee
shall, if so provided in the related Prospectus, on the
Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid
portion of the deferred sales charge and distribute such
amount to such special Depositor's Account. The Depositor
may at any time instruct the Trustee in writing to
distribute to the Depositor cash or Securities previously
credited to the special Depositor's Account."
18. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.16.:
"Section 3.16. Foreign Exchange Transactions; Foreign
Currency Exchange. Unless the Depositor shall otherwise
direct, whenever funds are received by the Trustee in
foreign currency, upon the receipt thereof or, if such
funds are to be received in respect of a sale of
Securities, concurrently with the contract of the sale for
the Security (in the latter case the foreign exchange
contract to have a settlement date coincident with the
relevant contract of sale for the Security), the Depositor
shall enter into a foreign exchange contract for the
conversion of such funds to U.S. dollars. The Depositor
shall have no liability for any loss or depreciation
resulting from such action taken."
19. Article IV, Section 4.01(b) of the Standard Terms and
Conditions of Trust is hereby deleted and replaced in its entirety
with the following:
"(b) During the initial offering period such
Evaluation shall be made in the following manner: if the
Securities are listed on a national or foreign securities
exchange, such Evaluation shall generally be based on the
last available sale price on or immediately prior to the
Evaluation Time on the exchange which is the principal
market therefor, which shall be deemed to be the New York
Stock Exchange if the Securities are listed thereon
(unless the Evaluator deems such price inappropriate as a
basis for evaluation) or, if there is no such available
sale price on such exchange at the last available ask
price of the Equity Securities. If the Securities are not
so listed or, if so listed, the principal market therefor
is other than on such exchange or there is no such
available sale price on such exchange, such Evaluation
shall generally be based on the following methods or any
combination thereof whichever the Evaluator deems
appropriate: (i) in the case of Equity Securities, on the
basis of the current ask price on the over-the-counter
market (unless the Evaluator deems such price
inappropriate as a basis for evaluation), (ii) on the
basis of current offering prices for the Zero Coupon
Obligations as obtained from investment dealers or brokers
who customarily deal in securities comparable to those
held by the Fund, (iii) if offering prices are not
available for the Zero Coupon Obligations or the Equity
Securities, on the basis of offering or ask price for
comparable securities, (iv) by determining the valuation
of the Zero Coupon Obligations or the Equity Securities on
the offering or ask side of the market by appraisal or (v)
by any combination of the above. If the Trust holds
Securities denominated in a currency other than U.S.
dollars, the Evaluation of such Security shall be
converted to U.S. dollars based on current offering side
exchange rates (unless the Evaluator deems such prices
inappropriate as a basis for valuation). As used herein,
the closing sale price is deemed to mean the most recent
closing sale price on the relevant securities exchange
immediately prior to the Evaluation time. For each
Evaluation, the Evaluator shall also confirm and furnish
to the Trustee and the Depositor, on the basis of the
information furnished to the Evaluator by the Trustee as
to the value of all Trust assets other than Securities,
the calculation of the Trust Fund Evaluation to be
computed pursuant to Section 5.01."
20. Article IV, Section 4.01(c) of the Standard Terms and
Conditions of Trust is hereby deleted and replaced in its entirety
with the following:
(c) For purposes of the Trust Fund Evaluations
required by Section 5.01 in determining Redemption Value
and Unit Value, Evaluation of the Securities shall be made
in the manner described in Section 4.01(b), on the basis
of current bid prices for the Zero Coupon Obligations, the
bid side value of the relevant currency exchange rate
expressed in U.S. dollars and, except in those cases in
which the Equity Securities are listed on a national or
foreign securities exchange and the last available sale
prices are utilized, on the basis of the last available
bid price of the Equity Securities.
21. Article V, Section 5.01 of the Standard Terms and
Conditions of Trust is hereby amended to add the following at the
conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in foreign currency shall
be converted by the Trustee to U.S. dollars based on
current exchange rates, in the same manner as provided in
Section 4.01(b) or 4.01(c), as applicable, for the
conversion of the valuation of foreign Equity Securities,
and the Evaluator shall report such conversion with each
Evaluation made pursuant to Section 4.01."
22. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the Depositor shall
offer a subsequent series of the Trusts (the "New Series"), the
Trustee shall, at the Depositor's sole cost and expense, include in
the notice sent to Unitholders specified in Section 8.02 a form of
election whereby Unitholders, whose redemption distribution would be
in an amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Units(s) redeemed in kind in the
manner provided in Section 5.02, the Securities included in the
redemption distribution sold, and the cash proceeds applied by the
Distribution Agent to purchase Units of the New Series, all as
hereinafter provided. The Trustee shall honor properly completed
election forms returned to the Trustee, accompanied by any
Certificate evidencing Units tendered for redemption or a properly
completed redemption request with respect to uncertificated Units,
by its close of business on the Rollover Notification Date.
All Units so tendered by a Unitholder (a "Rollover Unitholder")
shall be redeemed and cancelled on the Rollover Notification Date.
Subject to payment by such Rollover Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption
is to be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the Rollover
Notification Date of the net asset value (determined on the basis of
the Trust Fund Evaluation as of the Rollover Notification Date in
accordance with Section 4.01) multiplied by the number of Units
being redeemed (herein called the "Rollover Distribution"). Any
Securities that are made part of the Rollover Distribution shall be
valued for purposes of the redemption distribution as of the
Rollover Notification Date.
All Securities included in a Unitholder's Rollover Distribution
shall be sold by the Distribution Agent on the Special Redemption
Date specified in the Prospectus pursuant to the Depositor's
direction, and the Distribution Agent shall employ the Depositor as
broker in connection with such sales. For such brokerage services,
the Depositor shall be entitled to compensation at its customary
rates, provided however, that its compensation shall not exceed the
amount authorized by applicable Securities laws and regulations.
The Depositor shall direct that sales be made in accordance with the
guidelines set forth in the Prospectus under the heading "Special
Redemption and Rollover in New Fund." Should the Depositor fail to
provide direction, the Distribution Agent shall sell the Securities
in the manner provided in the prospectus for "less liquid Equity
Securities." The Distribution Agent shall have no responsibility
for any loss or depreciation incurred by reason of any sale made
pursuant to this Section.
Upon each trade date for sales of Securities included in the
Rollover Unitholder's Rollover Distribution, the Distribution Agent
shall, as agent for such Rollover Unitholder, enter into a contract
with the Depositor to purchase from the Depositor Units of the New
Series (if any), at the Depositor's public offering price for such
Units on such day, and at such reduced sales charge as shall be
described in the prospectus for the Trusts. Such contract shall
provide for purchase of the maximum number of Units of the New
Series whose purchase price is equal to or less than the cash
proceeds held by the Distribution Agent for the Unitholder on such
day (including therein the proceeds anticipated to be received in
respect of Securities traded on such day net of all brokerage fees,
governmental charges and any other expenses incurred in connection
with such sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included in the
Rollover Unitholder's redemption distribution shall not be
consummated in accordance with its terms, the Distribution Agent
shall apply the cash proceeds held for such Unitholder as of the
settlement date for the purchase of Units of the New Series to
purchase the maximum number of units which such cash balance will
permit, and the Depositor agrees that the settlement date for Units
whose purchase was not consummated as a result of insufficient funds
will be extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such purchase. If
the Unitholder's Rollover Distribution will produce insufficient
cash proceeds to purchase all of the Units of the New Series
contracted for, the Depositor agrees that the contract shall be
rescinded with respect to the Units as to which there was a cash
shortfall without any liability to the Rollover Unitholder or the
Distribution Agent. Any cash balance remaining after such purchase
shall be distributed within a reasonable time to the Rollover
Unitholder by check mailed to the address of such Unitholder on the
registration books of the Trustee. Units of the New Series will be
uncertificated unless and until the Rollover Unitholder requests a
certificate. Any cash held by the Distribution Agent shall be held
in a non-interest bearing account which will be of benefit to the
Distribution Agent in accordance with normal banking procedures.
Neither the Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation resulting from
any reinvestment made in accordance with this paragraph, or for any
failure to make such reinvestment in the event the Depositor does
not make Units available for purchase.
(b) Notwithstanding the foregoing, the Depositor may, in its
discretion at any time, decide not to offer a New Series in the
future, and if so, this Section 5.05 concerning the Rollover of
Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent shall,
however, be entitled to receive reimbursement from the Trust for any
and all expenses and disbursements to the same extent as the Trustee
is permitted reimbursement hereunder."
(d) Notwithstanding the foregoing, in lieu of selling
Securities through the Depositor on the open market the Distribution
Agent may sell Securities from a terminating Trust into the
corresponding New Series if those Securities continue to meet the
New Series' strategy. The price for those Securities will be the
closing sale price on the sale date on the exchange where the
Securities are principally traded, as certified by the Sponsor.
23. Article VI, Section 6.01(e) of the Standard Terms and
Conditions of Trust is hereby amended to read as follows:
"(e) (I) Subject to the provisions of subparagraphs (II)
and (III) of this paragraph, the Trustee may employ agents, sub-
custodians, attorneys, accountants and auditors and shall not
be answerable for the default or misconduct of any such agents,
sub-custodians, attorneys, accountants or auditors if such
agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee
shall be fully protected in respect of any action under this
Indenture taken or suffered in good faith by the Trustee in
accordance with the opinion of counsel, which may be counsel to
the Depositor acceptable to the Trustee, provided, however,
that this disclaimer of liability shall not (i) excuse the
Trustee from the responsibilities specified in subparagraph II
below or (ii) limit the obligation of the Trustee to indemnify
the Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys, accountants
or auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the
affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of an
eligible foreign custodian (which is employed by the Trustee as
a sub-custodian as contemplated by subparagraph (I) of this
paragraph (e) and which may be an affiliate or subsidiary of
the Trustee or any other entity in which the Trustee may have
an ownership interest) the Trust's foreign securities, cash and
cash equivalents in amounts reasonably necessary to effect the
Trust's foreign securities transactions, provided that:
(1) The Trustee shall have:
(i) determined that maintaining the Trust's assets
in a particular country or countries is consistent with
the best interests of the Trust and the Unitholders;
(ii) determined that maintaining the Trust's assets
with such eligible foreign custodian is consistent with
the best interests of the Trust and the Unitholders; and
(iii) entered into a written contract which is
consistent with the best interests of the Trust and the
Unitholders and which will govern the manner in which such
eligible foreign custodian will maintain the Trust's
assets and which provides that:
(A) The Trust will be adequately indemnified
and its assets adequately insured in the event of
loss (without regard to the indemnity provided by the
Trustee under Section III hereof);
(B) The Trust's assets will not be subject to
any right, charge, security interest, lien or claim
of any kind in favor of the eligible foreign
custodian or its creditors except a claim for payment
for their safe custody or administration;
(C) Beneficial ownership of the Trust's assets
will be freely transferable without the payment of
money or value other than for safe custody or
administration;
(D) Adequate records will be maintained
identifying the assets as belonging to the Trust;
(E) The Trust's independent public accountants
will be given access to records identifying assets of
the Trust or confirmation of the contents of those
records; and
(F) The Trustee will receive periodic reports
with respect to safekeeping of the Trust's assets,
including, but not necessarily limited to,
notification of any transfer to or from the Trustee's
account.
(2) The Trustee shall establish a system to monitor such
foreign custody arrangements to ensure compliance with the
conditions of this subparagraph.
(3) The Trustee, at least annually, shall review and
approve the continuing maintenance of Trust assets in a
particular country or countries with a particular eligible
foreign custodian or particular eligible foreign custodians as
consistent with the best interests of the Trust and the
Unitholders.
(4) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of
a particular eligible foreign custodian pursuant to this
subparagraph, and such records shall be available for
inspection by Unitholders and the Securities and Exchange
Commission at the Trustee's offices at all reasonable times
during its usual business hours.
(5) Where the Trustee has determined that a foreign
custodian may no longer be considered eligible under this
subparagraph or that, pursuant to clause (3) above, continuance
of the arrangement would not be consistent with the best
interests of the Trust and the Unitholders, the Trust must
withdraw its assets from the care of that custodian as soon as
reasonably practicable, and in any event within 180 days of the
date when the Trustee made the determination.
As used in this subparagraph (II),
(1) "foreign securities" include: securities issued
and sold primarily outside the United States by a foreign
government, a national of any foreign country or a corporation
or other organization incorporated or organized under the laws
of any foreign country and securities issued or guaranteed by
the government of the United States or by any state or any
political subdivision thereof or by any agency thereof or by
any entity organized under the laws of the United States or of
any state thereof which have been issued and sold primarily
outside the United States.
(2) "eligible foreign custodian" means:
(a) The following securities depositories and
clearing agencies which operate transnational systems for the
central handling of securities or equivalent book entries
which, by appropriate exemptive order issued by the Securities
and Exchange Commission, have been qualified as eligible
foreign custodians for the Trust but only for so long as such
exemptive order continues in effect: Morgan Guaranty Trust
Company of New York, Brussels, Belgium, in its capacity as
operator of the Euroclear System ("Euroclear"), and Central de
Livraison de Valeurs Mobilires, S.A. ("CEDEL").
(b) Any other entity that shall have been qualified
as an eligible foreign custodian for the foreign securities of
the Trust by the Securities and Exchange Commission by
exemptive order, rule or other appropriate action, commencing
on such date as it shall have been so qualified but only for so
long as such exemptive order, rule or other appropriate action
continues in effect.
The determinations set forth above to be made by the
Trustee should be made only after consideration of all matters
which the Trustee, in carrying out its fiduciary duties, finds
relevant, including, but not necessarily limited to,
consideration of the following:
1. With respect to the selection of the country
where the Trust's assets will be maintained, the Trustee should
consider:
a. Whether applicable foreign law would restrict
the access afforded the Trust's independent public accountants
to books and records kept by an eligible foreign custodian
located in that country;
b. Whether applicable foreign law would restrict
the Trust's ability to recover its assets in the event of the
bankruptcy of an eligible foreign custodian located in that
country;
c. Whether applicable foreign law would restrict
the Trust's ability to recover assets that are lost while under
the control of an eligible foreign custodian located in that
country;
d. The likelihood of expropriation,
nationalization, freezes, or confiscation of the Trust's
assets; and
e. Whether difficulties in converting the Trust's
cash and cash equivalents to U.S. dollars are reasonably
foreseeable.
2. With respect to the selection of an eligible
foreign custodian, the Trustee should consider:
a. The financial strength of the eligible foreign
custodian, its general reputation and standing in the country
in which it is located, its ability to provide efficiently the
custodial services required and the relative cost for those
services;
b. Whether the eligible foreign custodian would
provide a level of safeguards for maintaining the Trust's
assets not materially different from that provided by the
Trustee in maintaining the Trust's securities in the United
States;
c. Whether the eligible foreign custodian has
branch offices in the United States in order to facilitate the
assertion of jurisdiction over and enforcement of judgments
against such custodian; and
d. In the case of an eligible foreign custodian
that is a foreign securities depository, the number of
participants in, and operating history of, the depository.
3. The Trustee should consider the extent of the
Trust's exposure to loss because of the use of an eligible
foreign custodian. The potential effect of such exposure upon
Unitholders shall be disclosed, if material, by the Depositor
in the Prospectus relating to the Trust.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss that shall occur as
the result of the failure of an eligible foreign custodian
holding the foreign securities of the Trust to exercise
reasonable care with respect to the safekeeping of such foreign
securities to the same extent that the Trustee would be
required to indemnify and hold the Trust harmless if the
Trustee were holding such foreign securities in the
jurisdiction of the United States whose laws govern the
indenture, provided, however, that the Trustee will not be
liable for loss except by reason of the gross negligence, bad
faith or willful misconduct of the Trustee or the eligible
foreign custodian."
24. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the requisite number of Units needed
to be tendered to exercise an In Kind Distribution as set forth in
Sections 5.02 and 8.02 shall be that number set forth in the
Prospectus.
25. Section 8.02 is hereby revised to require an affirmative
vote of Unitholders representing 66 2/3% of the then outstanding
Units to terminate the Trust rather than the 51% indicated therein.
26. Section 3.01 of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"Section 3.01. Initial Costs. The following
organization and regular and recurring expenses of the
Trust shall be borne by the Trustee: (a) to the extent
not borne by the Depositor, expenses incurred in
establishing a Trust, including the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the
indenture, and other documents relating to the Trust,
Securities and Exchange Commission and state blue sky
registration fees, the costs of the initial valuation of
the portfolio and audit of the Trust, the initial fees and
expenses of the Trustee, and legal and other out-of-pocket
expenses related thereto, but not including the expenses
incurred in the printing of preliminary prospectuses and
prospectuses, expenses incurred in the preparation and
printing of brochures and other advertising materials and
any other selling expenses, (b) the amount specified in
Section 3.05 and Article VIII, (c) to the extent permitted
by Section 6.02, auditing fees and, to the extent not
borne by the Depositor, expenses incurred in connection
with maintaining the Trust's registration statement
current with Federal and State authorities, (d) any
Certificates issued after the Initial Date of Deposit ;
and (e) expenses of any distribution agent. The Trustee
shall be reimbursed for those organizational expenses
referred to in clause (a) as provided in the Prospectus.
27. Section 6.01(i) of the Standard Terms and Conditions of
Trust shall be amended by adding the following to the beginning of
such Section:
"Except as provided in Sections 3.01 and 3.05,"
28. Section 8.04 is hereby amended by deleting the first word
of such Section and replacing it with the following:
"Except as provided in Sections 3.01 and 3.05, the"
29. Section 3.05(a) is hereby replaced with the following:
"(a) On or immediately after the tenth the day of each
month, the Trustee shall satisfy itself as to the adequacy of
the Reserve Account, making any further credits thereto as may
appear appropriate in accordance with Section 3.04 and shall
then with respect to each Trust:
(i) deduct from the Capital Account and pay to
itself individually the amounts that it is at the time
entitled to receive pursuant to Section 6.04;
(ii) deduct from the Capital Account and pay to, or
reserve for, the Evaluator the amount that it is at the
time entitled to receive pursuant to Section 4.03;
(iii) deduct from the Capital Account and pay to
counsel, as hereinafter provided for, an amount equal to
unpaid fees and expenses, if any, of such counsel pursuant
to Section 3.08, as certified to by the Depositor; and
(iv) deduct from the Capital Account and pay to, or
reserve for, the Supervisory Servicer the amount that it
is entitled to receive pursuant to Section 3.13."
30. Section 2.03(a) shall be replaced in its entirety by the
following:
"(a) The Trustee hereby acknowledges receipt of the deposit of
the Securities listed in the Schedules to the Trust Agreement
and referred to in Section 2.01 hereof and, simultaneously with
the receipt of said deposit, has recorded on its books the
ownership, by the Depositor or such other person or persons as
may be indicated by the Depositor, of the aggregate number of
Units specified in the Trust Agreement and has delivered, or on
the order of the Depositor will deliver, in exchange for such
Securities, documentation evidencing the ownership of the
number of Units specified and, if such Units are represented by
a Certificate, such Certificate substantially in the form above
recited, representing the ownership of those Units. The number
of Units may be increased throutgh a split of the Units or
decreased through a reverse split thereof, as directed by the
Depositor, on any day on which the Depositor is the only
Unitholder, which revised number of Units shall be recorded by
the Trustee on its books. The Trustee hereby agrees that on
the date of any Supplemental Indenture it shall acknowledge
that the additional Securities identified therein have been
deposited with it by recording on its books the ownership, by
the Depositor or such other person or persons as may be
indicated by the Depositor, of the aggregate number of Units to
be issued in respect of such additional Securities so
deposited, and shall, if so requested, execute a Certificate or
Certificates substantially in the form above recited
representing the ownership of an aggregate number of those
Units."
31. Section 2.01(b) is hereby replaced with the following:
(b) From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its discretion,
to assign, convey to and deposit with the Trustee (i)
additional Securities, duly endorsed in blank or accompanied by
all necessary instruments of assignment and transfer in proper
form (or Contract Obligations relating to such Securities),
and/or (ii) cash (or a Letter of Credit in lieu of cash) with
instructions to purchase additional Securities, in an amount
equal to the portion of the Unit Value of the Units created by
such deposit attributable to the Securities to be purchased
pursuant to such instructions. Such deposit of additional
Securities or cash with instructions to purchase additional
Securities shall be made, in each case, pursuant to a
Supplemental Indenture accompanied by a legal opinion issued by
legal counsel satisfactory to the Depositor. Instructions to
purchase additional Securities shall be in writing, and shall
specify the name of the Security, CUSIP number, if any,
aggregate amount, price or price range and date to be
purchased. When requested by the Trustee, the Depositor shall
act as broker to execute purchases in accordance with such
instructions; the Depositor shall be entitled to compensation
therefor in accordance with applicable law and regulations.
The Trustee shall have no liability for any loss or
depreciation resulting from any purchase made pursuant to the
Depositor's instructions or made by the Depositor as broker,
except by reason of its own negligence, lack of good faith or
willful misconduct.
In connection with any deposit pursuant to this Section 2.01(b)
in the Select Equity and Treasury Trust, the Depositor shall be
obligated to determine that the maturity value of the Zero
Coupon Obligations included in the deposit, divided by the
number of Units created by reason of the deposit, shall equal
at least $10.00.
The Depositor, in each case, shall ensure that each deposit of
additional Securities pursuant to this Section shall be, as
nearly as is practicable, in the identical ratio as the
Percentage Ratio for such Securities as is specified in the
Trust Agreement for each Trust. The Depositor shall deliver
the additional Securities which were not delivered concurrently
with the deposit of additional Securities and which were
represented by Contract Obligations within 10 calendar days
after such deposit of additional Securities (the "Additional
Securities Delivery Period"). If a contract to buy such
Securities between the Depositor and seller is terminated by
the seller thereof for any reason beyond the control of the
Depositor or if for any other reason the Securities are not
delivered to the Trust by the end of the Additional Securities
Delivery Period for such deposit, the Trustee shall immediately
draw on the Letter of Credit, if any, in its entirety, apply
the moneys in accordance with Section 2.01(d), and the
Depositor shall forthwith take the remedial action specified in
Section 3.12. If the Depositor does not take the action
specified in Section 3.12 within 10 calendar days of the end of
the Additional Securities Delivery Period, the Trustee shall
forthwith take the action specified in Section 3.12.
In Witness Whereof, Van Kampen American Capital Distributors, Inc.
has caused this Trust Agreement to be executed by one of its Vice
Presidents or Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or one of its Vice
Presidents or Assistant Secretaries, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., and Van Kampen American Capital Investment Advisory Corp., have
each caused this Trust Indenture and Agreement to be executed by their
respective President or one of their respective Vice Presidents and the
corporate seal of each to be hereto affixed and attested to by the
Secretary, Assistant Secretary or one of their respective Vice Presidents
or Assistant Vice Presidents and The Bank of New York, has caused this
Trust Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested to by one of its
Assistant Treasurers all as of the day, month and year first above
written.
Van Kampen American Capital
Distributors, Inc.
By Sandra A. Waterworth
Vice President
Attest:
By Gina M. Scumaci
Assistant Secretary
American Portfolio Evaluation
Services, a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
Van Kampen American Capital
Investment Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
The Bank of New York
By Jeffrey Bieselin
Vice President
Attest
By Norbert Loney
Assistant Treasurer
Schedule A to Trust Agreement
Securities Initially Deposited
in
Van Kampen American Capital Equity Opportunity Trust, Series 55
(Note: Incorporated herein and made a part hereof are the "Portfolios"
as set forth in the Prospectus.)
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
April 7, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 55
Gentlemen:
We have served as counsel for Van Kampen American Capital
Distributors, Inc. as Sponsor and Depositor of Van Kampen American
Capital Equity Opportunity Trust, Series 55 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated April 7, 1997, among Van Kampen American
Capital Distributors, Inc., as Depositor, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., as Evaluator, Van Kampen American Capital Investment Advisory
Corp., as Supervisory Servicer, and The Bank of New York, as Trustee,
pursuant to which the Depositor has delivered to and deposited the
Securities listed in the Schedule to the Trust Agreement with the Trustee
and pursuant to which the Trustee has provided to or on the order of the
Depositor documentation evidencing ownership of Units of fractional
undivided interest in and ownership of the Trust (hereinafter referred to
as the "Units"), created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to
enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Trust have been duly authorized; and
2. The certificates evidencing the Units in the Trust,
when duly executed and delivered by the Depositor and the
Trustee in accordance with the aforementioned Trust Agreement,
will constitute valid and binding obligations of such Trust and
the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-24249) relating to the Units
referred to above and to the use of our name and to the reference to our
firm in said Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
MJK/cjw
Exhibit 3.2
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
April 7, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen American Capital Equity Opportunity Trust, Series 55
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 55 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated April 7, 1997 (the "Indenture") among Van Kampen
American Capital Distributors, Inc., as Depositor, Van Kampen American
Capital Investment Advisory Corp., as Evaluator, Van Kampen American
Capital Investment Advisory Corp., as Supervisory Servicer, and The Bank
of New York, as Trustee. The Fund is comprised of four separate unit
investment trusts (the "Trusts"), Strategic Ten Trust United States
Portfolio, Series 15, Strategic Ten Trust United Kingdom Portfolio,
Series 13, Strategic Ten Trust Hong Kong Portfolio, Series 13, Strategic
Five Trust United States Portfolio, Series 9, Strategic Thirty Trust
Global Portfolio, Series 4 and Strategic Fifteen Trust Global Portfolio,
Series 4.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent.
The assets of each Trust will consist of a portfolio of securities
(the "Securities") as set forth in the Prospectus. For purposes of this
opinion, it is assumed that each Security is equity for federal income
tax purposes.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing United States Federal income tax law:
(i) Each Trust is not an association taxable as a
corporation but will be governed by the provisions of
subchapter J (relating to Trusts) of chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata
share of each asset of a Trust in the proportion that the
number of Units held by him bears to the total number of Units
outstanding. Under subpart E, subchapter J of chapter 1 of the
Code, income of a Trust will be treated as income of each
Unitholder in the proportion described, and an item of Trust
income will have the same character in the hands of a
Unitholder as it would have in the hands of the Trustee. Each
Unitholder will be considered to have received his pro rata
share of income derived from each Trust asset when such income
is considered to be received by a Trust. A Unitholder's pro
rata portion of distributions of cash or property by a
corporation with respect to a Security ("dividends" as defined
by Section 316 of the Code ) are taxable as ordinary income to
the extent of such corporation's current and accumulated
"earnings and profits." A Unitholder's pro rata portion of
dividends which exceed such current and accumulated earnings
and profits will first reduce the Unitholder's tax basis in
such Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Security, shall be treated as
gain from the sale or exchange of property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata
portion of each Security held by a Trust (in the proportion to
the fair market values thereof on the valuation date closest to
the date the Unitholder purchases his Units), in order to
determine his tax basis for his pro rata portion of each
Security held by a Trust.
(iv) Gain or loss will be recognized to a Unitholder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an
in kind distribution of stock is received by such Unitholder
from a Trust as discussed below. Such gain or loss is measured
by comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis
would normally be cost if the Unitholder had acquired his Units
by purchase. Such basis will be reduced, but not below zero,
by the Unitholder's pro rata portion of dividends with respect
to each Security which are not taxable as ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder
(subject to various nonrecognition provisions under the Code)
and the amount thereof will be measured by comparing the
Unitholder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning
the tax basis for his Units (as of the date on which his Units
were acquired) among each of the Trust assets (as of the date
on which his Units were acquired) ratably according to their
values as of the valuation date nearest the date on which he
purchased such Units. A Unitholder's basis in his Units and of
his fractional interest in each Trust asset must be reduced,
but not below zero, by the Unitholder's pro rata portion of
dividends with respect to each Security which are not taxable
as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in
kind distribution of Securities upon the redemption of Units or
upon the termination of the Trust. As previously discussed,
prior to the redemption of Units or the termination of a Trust,
a Unitholder is considered as owning a pro rata portion of each
of the particular Trust's assets. The receipt of an in kind
distribution will result in a Unitholder receiving an undivided
interest in whole shares of stock and possibly cash. The
potential federal income tax consequences which may occur under
an in kind distribution with respect to each Security owned by
a Trust will depend upon whether or not a Unitholder receives
cash in addition to Securities. A "Security" for this purpose
is a particular class of stock issued by a particular
corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Securities in exchange for his or her
pro rata portion in the Securities held by the Trust. However,
if a Unitholder also receives cash in exchange for a fractional
share of a Security held by the Trust, such Unitholder will
generally recognize gain or loss based upon the difference
between the amount of cash received by the Unitholder and his
tax basis in such fractional share of a Security held by a
Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of
the gain (or loss) recognized under the rules described above
by the redeeming Unitholder with respect to each Security owned
by a Trust.
A domestic corporation owning Units in a Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the
Code with respect to such Unitholder's pro rata portion of dividends
received by a Trust (to the extent such dividends are taxable as ordinary
income and are attributable to domestic corporations), subject to the
limitations imposed by Sections 246 and 246A of the Code. It should be
noted that various legislative proposals that would affect the dividends
received deduction have been introduced.
Section 67 of the Code provides that certain itemized deductions,
such as investment expenses, tax return preparation fees and employee
business expenses will be deductible by individuals only to the extent
they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part
of the pro rata interest in a Security is either sold by a Trust or
redeemed or when a Unitholder disposes of his Units in a taxable
transaction, in each case for an amount greater (or less) than his tax
basis therefor.
It should be noted that payments to a Trust of dividends on
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unitholders should consult their tax
advisers regarding the potential tax consequences relating to the payment
of any such withholding taxes by the Trust. Any dividends withheld as a
result thereof will nevertheless be treated as income to the Unitholders.
Because under the grantor trust rules, an investor is deemed to have paid
directly his share of foreign taxes that have been paid or accrued, if
any, an investor may be entitled to a foreign tax credit or deduction for
United States tax purposes with respect to such taxes. Investors should
consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including state or local taxes
or collateral tax consequences with respect to the purchase, ownership
and disposition of Units.
Very truly yours,
Chapman and Cutler
MJK/cjw
Exhibit 3.3
Kroll & Tract LLP
520 Madison Avenue
New York, New York 10022-4235
April 7, 1997
Van Kampen American Capital Equity
Opportunity Trust, Series 55
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen American Capital
Equity Opportunity Trust, Series 55 (the "Fund") consisting of Strategic
Ten Trust United States Portfolio, Series 15 (the "Strategic Ten United
States Trust"), Strategic Ten Trust United Kingdom Portfolio, Series 13
(the "Strategic Ten United Kingdom Trust"), Strategic Ten Trust Hong Kong
Portfolio, Series 13 (the "Strategic Ten Hong Kong Trust"), Strategic
Five Trust United States Portfolio, Series 9 (the "Strategic Five United
States Trust"), Strategic Fifteen Trust Global Portfolio, Series 4 (the
"Strategic Fifteen Global Trust") and Strategic Thirty Trust Global
Portfolio, Series 4 (the "Strategic Thirty Global Trust") (individually a
"Trust" and in the aggregate the "Trusts") for purposes of determining
the applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen American
Capital Distributors, Inc. (the "Depositor"), American Portfolio
Evaluation Services, a division of an affiliate of Depositor, as
Evaluator, Van Kampen American Capital Investment Advisory Corp., an
affiliate of the Depositor, as Supervisory Servicer (the "Supervisory
Servicer"), and The Bank of New York, as trustee (the "Trustee"). As
described in the prospectus relating to the Fund dated today to be filed
as an amendment to a registration statement heretofore filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Prospectus") (File number 333-24249) the objectives of the
Fund are to provide the potential for dividend income and capital
appreciation through investment in a fixed portfolio of actively traded
equity securities in the country denominated in the Trust's name and in
the case of the Trust denominated "Treasury" also to protect capital by
investing a portion of the portfolio in "zero coupon" U.S. Treasury
obligations. It is noted that no opinion is expressed herein with regard
to the Federal tax aspects of the securities, the Trusts, units of the
Trust (the "Units"), or any interest, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trust the securities and/or contracts and cash for
the purchase thereof together with an irrevocable letter of credit in the
amount required for the purchase price of the securities comprising the
corpus of the Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities
to be deposited in the Trust, and, upon the receipt thereof, will deliver
to the Depositor a registered certificate for the number of Units
representing the entire capital of each Trust as more fully set forth in
the Prospectus. The Units, which are represented by certificates
("Certificates"), will be offered to the public upon the effectiveness of
the registration statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash
dividends received by the Fund and with the proceeds from the disposition
of securities held in the Fund and the proceeds of the treasury
obligation on maturity and the distribution of such cash dividends and
proceeds to the Unit holders. The Trustee will also maintain records of
the registered holders of Certificates representing an interest in the
Fund and administer the redemption of Units by such Certificate holders
and may perform certain administrative functions with respect to an
automatic reinvestment option.
Generally, equity securities held in the Trust may be removed
therefrom by the Trustee at the direction of the Depositor upon the
occurrence of certain specified events which adversely affect the sound
investment character of the Fund, such as default by the issuer in
payment of declared dividends or of interest or principal on one or more
of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to
sell equity securities designated by the Supervisory Servicer only for
the purpose of redeeming Units tendered to it and of paying expenses for
which funds are not available. The Trustee does not have the power to
vary the investment of any Unit holder in the Fund, and under no
circumstances may the proceeds of sale of any equity securities held by
the Fund be used to purchase new equity securities to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(1)
defines the term "corporation" to include, among other things, "any
business conducted by a trustee or trustees wherein interest or ownership
is evidenced by certificate or other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which interest or
ownership is evidenced by certificate or other written instrument
includes, but is not limited to, an association commonly referred to
as a "business trust" or "Massachusetts trust". In determining
whether a trustee or trustees are conducting a business, the form of
the agreement is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and
powers, will be regarded as decisive factors in determining whether
a trust is subject to tax under Article 9-A. The mere investment of
funds and the collection of income therefrom, which incidental
replacement of securities and reinvestment of funds, does not
constitute the conduct of a business in the case of a business
conducted by a trustee or trustees. 20 NYCRR 1-2.5(b)(2) (July 11,
1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd
Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47
N.Y. Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the
trustee of an unincorporated investment trust was without authority to
reinvest amounts received upon the sales of securities and could dispose
of securities making up the trust only upon the happening of certain
specified events or the existence of certain specified conditions, the
trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell securities contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such
securities is limited to circumstances in which the credit-worthiness or
soundness of the issuer of such equity security is in question or in
which cash is needed to pay redeeming Unit holders or to pay expenses, or
where the Fund is liquidated subsequent to the termination of the
Indenture. In substance, the Trustee will merely collect and distribute
income and will not reinvest any income or proceeds, and the Trustee has
no power to vary the investment of any Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust
will be deemed to be the owner of the trust under certain circumstances,
and therefore taxable on his proportionate interest in the income
thereof. Where this Federal tax rule applies, the income attributed to
the grantor will also be income to him for New York income tax purposes.
See TSB-M-78(9)(c), New York Department of Taxation and Finance, June 23,
1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be
considered as owning a share of each asset of a Trust in the proportion
that the number of Units held by such holder bears to the total number of
Units outstanding and the income of a Trust will be treated as the income
of each Unit holder in said proportion pursuant to Subpart E of Part I,
Subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings, and court decisions interpreting the laws of the State and City
of New York:
1. Each Trust will not constitute an association taxable as a
corporation under New York law, and, accordingly, will not be
subject to tax on its income under the New York State franchise tax
or the New York City general corporation tax;
2. The income of the Trust will be treated as the income of
the Unit holders under the income tax laws of the State and City of
New York; and
3. Unit holders who are not residents of the State of New
York are not subject to the income tax laws thereof with respect to
any interest or gain derived from the Fund or any gain from the sale
or other disposition of the Units, except to the extent that such
interest or gain is from property employed in a business, trade,
profession or occupation carried on in the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name
and the reference to our firm in the Registration Statement and in the
Prospectus.
Very truly yours,
Kroll & Tract LLP
MNS:to
Exhibit 3.4
Linklaters & Paines
885 Third Avenue, Suite 2600
New York, NY 10022
April 7, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Dear Sirs:
Van Kampen American Capital Equity Opportunity Trust, Series 55
Strategic Ten Trust United Kingdom Portfolio, Series 13
(the "United Kingdom Trust")
1. We have acted as special United Kingdom ("UK") taxation
advisers in connection with the issue of units ("Units") in the United
Kingdom Trust on the basis of directions given to us by Chapman and
Cutler, counsel to yourselves.
2. This opinion is limited to UK taxation law as applied in
practice on the date hereof by the Inland Revenue and is given on the
basis that it will be governed by and construed in accordance with
English law as enacted.
3. For the purpose of this opinion, the only documentation which
we have examined is the prospectus for the Van Kampen American Capital
Equity Opportunity Trust, Series 53 dated March 10, 1997 (the
"Prospectus") which is to serve as the preliminary prospectus for the Van
Kampen American Capital Equity Opportunity Trust, Series 55 consisting of
the United Kingdom Portfolio; the Strategic Ten Trust United States
Portfolio Series 15; the Strategic Ten Trust Hong Kong Portfolio Series
13, the Strategic Five Trust United States Portfolio, Series 9; the
Strategic Thirty Trust, Series 4 and the Strategic Fifteen Trust, Series
4 (together, the "Funds"). We have been advised by Chapman and Cutler
that there will be no material differences between the Prospectus and the
final prospectus to be issued for the Funds.
4. We have assumed for the purposes of this opinion that:-
4.1 a holder of Units ("Unitholder") is, under the terms of
the Trust Agreement governing the United Kingdom Trust, entitled to
have paid to him (subject to a deduction for annual expenses,
including total applicable custodial fees and certain other costs
associated with foreign trading and annual Trustee's, Sponsor's,
portfolio supervisory, evaluation and administrative fees and
expenses) his pro rata share of all the income which arises to the
United Kingdom Trust from the investments in the United Kingdom
Trust, and that, under the governing law of the Trust Agreement,
this is a right as against the assets of the United Kingdom Trust
rather than a right enforceable in damages only against the Trustee;
4.2 subject as discussed in paragraph 11 below, for taxation
purposes the Trustee is not a UK resident; is a US resident; and the
general administration of the United Kingdom Trust will be carried
out only in the US;
4.3 no Units are registered in a register kept in the UK by or
on behalf of the Trustee;
4.4 the United Kingdom Trust is not treated as a corporation
for US tax purposes;
4.5 the structure, including the investment strategy of the
United Kingdom Trust, will be substantially the same as that set out
in the Prospectus; and
4.6 each Unitholder is neither resident nor ordinarily
resident in the UK, nor is any such Unitholder carrying on a trade
in the UK through a branch or agent.
5. We understand that the United Kingdom Trust will contain the
ten common stocks in the Financial Times Industrial Ordinary Share Index
having the highest dividend yield at the close of business three business
days prior to the initial Date of Deposit of the United Kingdom Trust;
and that the United Kingdom Trust will hold such UK common stocks for a
period of approximately thirteen months, after which time the United
Kingdom Trust will terminate and the stocks will be sold. We address UK
tax issues in relation only to the United Kingdom Trust.
6. Where a dividend which carries a tax credit, as distinct from a
foreign income dividend (in relation to which see 7 below) or a "special
dividend" (in relation to which see 8 below), is paid by a UK resident
company to a qualifying US resident which (either alone or together with
one or more associated corporations) controls directly or indirectly less
than 10 per cent of the voting stock of that UK company, the qualifying
US resident is entitled, on making a claim to the UK Inland Revenue, to a
payment of a tax credit currently equal to a quarter of the dividend less
a withholding of 15 per cent of the aggregate amount of the tax credit
and the dividend. Thus, on payment by a UK company of a dividend of 80
pounds, a tax credit of 20 pounds arises and so a qualifying US resident
will be entitled on making such a claim to a payment from the UK Inland
Revenue of 5 pounds (being 20 pounds less 15 per cent of (20 pounds + 80
pounds)).
A person will be a qualifying US resident for these purposes if:-
6.1 that person is a resident of the US for the purposes of
the double tax treaty between the US and the UK (the "Treaty").
The Trustee (in its capacity as recipient of the dividend on behalf
of the United Kingdom Trust) will be a resident of the US for these
purposes if it is resident in the US for the purposes of US tax.
However, it will only be a resident of the US for Treaty purposes to
the extent that the income derived by the United Kingdom Trust is
subject to US tax as the income of a US resident, either in the
hands of the United Kingdom Trust itself or in the hands of its
beneficiaries.
We have assumed that the United Kingdom Trust will not be subject to
US tax on its income and that such income will be treated as income
of the beneficiaries of the United Kingdom Trust for US purposes.
Accordingly, the United Kingdom Trust would be a US resident for the
purposes of the Treaty only to the extent that the beneficiaries
would be taxable in the US on such income or treated as so taxable
by agreement between the relevant authorities. The provisions of
the Treaty have been extended to grant resident status to tax exempt
charitable trusts and pension funds. We understand that this is
confirmed on the US Treasury side by its "Technical Explanation" of
the Treaty issued on March 9, 1977;
6.2 the dividend is paid to that person.
We believe that the payment of a dividend to the Trustee and onward
payment by the Trustee to a Unitholder should qualify as the payment
of the dividend to the Unitholder for these purposes. The position
is however not completely free from doubt, but this appears to be
present Inland Revenue practice;
6.3 the beneficial owner of the dividend is a resident of the
US for the purposes of the Treaty.
The United Kingdom Trust will not be the beneficial owner of any
dividend for these purposes. Whether a Unitholder is beneficial
owner will depend upon the circumstances of his ownership of the
Units;
6.4 that person satisfies the other requirements of the Treaty
including the following:-
6.4.1 the dividend is not received in connection with a UK
permanent establishment or fixed base of that person;
6.4.2 subject to certain exemptions, that person is not a
US corporation (a) 25 per cent or more of whose capital is
owned directly or indirectly by persons who are not individual
residents or nationals of the US; and (b) which either (i)
suffers US tax on the dividend at a rate substantially less
than that which is generally imposed on corporate profits or
(ii) is an 80:20 corporation for the purposes of the US
Internal Revenue Code of 1954, section 861;
6.5 that person is not a corporation resident in both the US
and the UK; and
6.6 that person is not exempt from US tax in a case where (a)
that person's interest in the UK company is not acquired for bona
fide commercial reasons and (b) if the recipient of the dividend
were a resident of the UK and exempt from UK tax, the UK exemption
would be limited or removed.
Therefore, although the position is not free from doubt, a
Unitholder, where the requirements set out above are satisfied,
should, on making an appropriate claim, be entitled to repayment of
part of the UK tax credit. However, since the UK Inland Revenue
normally require claims to be made by the beneficial owner of a
dividend, the Trustee will not, in the absence of arrangements with
the UK Inland Revenue and the Unitholders, be able to claim any such
repayment.
Moreover, in order to make a claim for repayment, the Unitholder
will need to produce evidence of the payment of the dividend and of
his interest in it. Normally this is achieved by submitting to the
UK Inland Revenue tax vouchers which derive directly from the UK
company paying a dividend, or which are prepared by the Trustee and
evidence to the satisfaction of the Inland Revenue the entitlement
of the Unitholder to that dividend. Where the Trustee provides
neither of these, it will in practice be difficult for the
Unitholder to establish his beneficial interest in any dividend
payment and accordingly his entitlement to any tax credit.
7. Since July 1, 1994, it is possible for a UK resident company to
elect to treat a cash dividend paid by it as a "foreign income dividend"
("FID"). If a company makes an effective election to pay a FID in
respect of shares which are held in the United Kingdom Trust, there will
be no entitlement to a refundable tax credit in respect of that FID,
notwithstanding 6 above.
8. Section 69 of, and Schedule 7 to, the Finance Act 1997 provide
that if, on or after that date, a company pays a dividend where there are
arrangements by virtue of which the amount, timing or form of the
dividend is referable to a transaction in shares or securities (a
"special dividend"), that special dividend will be treated in the same
way as FID. Accordingly, if a company pays a special dividend in respect
of shares which are held in the United Kingdom Trust, there will be no
entitlement to a refundable tax credit in respect of that special
dividend, notwithstanding 6 above.
9. The United Kingdom Trust may be held to be trading in stock
rather than holding stock for investment purposes by virtue, inter alia,
of the length of the time for which the stock is held. If the stock is
purchased and sold through a UK resident agent, then, if the United
Kingdom Trust is held to be trading in such stock, profits made on the
disposal of such stock may, subject to 10 below, be liable to United
Kingdom tax on income.
10. Under current law, the United Kingdom Trust's liability to tax
on such trading profits will be limited to the amount of tax (if any)
withheld from the United Kingdom Trust's income provided such profits
derive from transactions carried out on behalf of the United Kingdom
Trust by a UK agent where the following conditions are satisfied:
10.1 the transactions from which the profits are derived are
investment transactions;
10.2 the agent carries on a business of providing investment
management services;
10.3 the transactions are carried out by the agent on behalf of
the United Kingdom Trust in the ordinary course of that business;
10.4 the remuneration received by the agent is at a rate which
is no less than that which is customary for the type of business
concerned;
10.5 the agent acts for the United Kingdom Trust in an
independent capacity.
The agent will act in an independent capacity if the relationship
between the agent and the United Kingdom Trust, taking account of
its legal, financial and commercial characteristics, is one which
would exist between independent persons dealing at arm's length.
This will be regarded as the case by the UK Inland Revenue if, for
example, the provision of services by the agent to the United
Kingdom Trust (and any connected person) does not form a substantial
part of the agent's business (namely where it does not exceed 70 per
cent of the agent's business, by reference to fees or some other
measure if appropriate).
In addition, this condition will be regarded as satisfied by the UK
Inland Revenue if interests in the United Kingdom Trust, a
collective fund, are freely marketed;
10.6 the agent (and persons connected with the agent) do not
have a beneficial interest in more than 20 per cent of the United
Kingdom Trust's income derived from the investment transactions
(excluding reasonable management fees paid to the agent); and
10.7 the agent acts in no other capacity in the UK for the
United Kingdom Trust.
Further where stock is purchased and sold through a UK broker in the
ordinary course of a brokerage business carried on in the UK by that
broker, the remuneration which the broker receives for the
transactions is at a rate which is no less than that which is
customary for that class of business and the broker acts in no other
capacity for the United Kingdom Trust in the UK, profits arising
from transactions carried out through that broker will not be liable
to UK tax.
Accordingly, unless a Unitholder, being neither resident nor
ordinarily resident in the UK, has a presence in the UK (other than
through an agent or a broker acting in the manner described above)
in connection with which the Units are held, the Unitholder will not
be charged to UK tax on such profits.
11. We understand that the Trustee has a branch in the UK and a
wholly-owned UK resident subsidiary. Where the Trustee has a presence in
the UK then it is technically possible that income or gains of the United
Kingdom Trust could be assessed upon the Trustee, whether arising from
securities (which includes stock) or from dealings in those securities.
However, we consider that any such risk should be remote provided that:-
11.1 any income derived by the Trustee will be derived by it
(see 6.1 above) as a resident of the US for the purposes of the
Treaty; and
11.2 neither the UK branch nor the UK resident subsidiary of
the Trustee will have any involvement with establishing or managing
the United Kingdom Trust or its assets, nor will they derive income
or gains from the United Kingdom Trust or its assets.
12. Where the Trustee makes capital gains on the disposal of shares
in the UK companies in which the United Kingdom Trust invests, a
Unitholder will not be liable to UK capital gains tax on those gains.
13. UK stamp duty will generally be payable at the rate of 50p per
100 pounds of the consideration (or any part thereof) in respect of a
transfer of the shares in a UK incorporated company or in respect of a
transfer to be effected on a UK share register. UK stamp duty reserve
tax will generally be payable on the entering into of an unconditional
agreement to transfer such shares, or on a conditional agreement to
transfer such shares becoming unconditional, at the rate of 0.5 per cent
of the consideration to be provided. The tax will generally be paid by
the purchaser of such shares.
No UK stamp duty or stamp duty reserve tax should be payable on an
agreement to transfer nor a transfer of Units, provided that such
transfer is neither executed in nor brought into the UK.
14. In our opinion the taxation paragraphs contained on pages 44 to
45 of the Prospectus under the heading "United Kingdom Taxation", which
relate to the United Kingdom Trust and which are to be contained in the
final prospectus to be issued for the Funds, represent a fair summary of
the material UK taxation consequences for a US resident Unitholder.
15. This opinion is addressed to you on the understanding that you
(and only you) may rely upon it in connection with the issue and sale of
the Units (and for no other purpose). This opinion may not be quoted or
referred to in any public document or filed with any governmental agency
or other person without our written consent. We consent however to the
reference which is to be made in the prospectus to be issued for the
Funds to our opinion as to the UK tax consequences to US persons holding
Units in the United Kingdom Trust.
Yours faithfully
Linklaters & Paines
Linklaters & Paines
885 Third Avenue, Suite 2600
New York, NY 10022
April 7, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Dear Sirs:
Van Kampen American Capital Equity Opportunity Trust, Series 55
Strategic Fifteen Trust, Series 4 (the "Trust")
1. We have acted as special United Kingdom ("UK") taxation
advisers in connection with the issue of units ("Units") in the above
Trust on the basis of directions given to us by Chapman and Cutler,
counsel to yourselves.
2. This opinion is limited to UK taxation law as applied in
practice on the date hereof by the Inland Revenue and is given on the
basis that it will be governed by and construed in accordance with
English law as enacted.
3. For the purpose of this opinion, the only documentation which
we have examined is the prospectus for the Van Kampen American Capital
Equity Opportunity Trust, Series 53 dated March 10, 1997 (the
"Prospectus") which is to serve as the preliminary prospectus for the Van
Kampen American Capital Equity Opportunity Trust, Series 55 consisting of
the Strategic Ten Trust United Kingdom Portfolio Series 13; Strategic Ten
Trust Hong Kong Portfolio Series 13, Strategic Ten Trust United States
Portfolio Series 15, the Strategic Five Trust, Series 9; the Trust and
the Strategic Thirty Trust, Series 4 (together, the "Funds"). We have
been advised by Chapman and Cutler that there will be no material
differences between the Prospectus and the final prospectus to be issued
for the Funds.
4. We have assumed for the purposes of this opinion that:-
4.1 a holder of Units ("Unitholder") is, under the terms of
the Trust Agreement governing the Trust, entitled to have paid to
him (subject to a deduction for annual expenses, including total
applicable custodial fees and certain other costs associated with
foreign trading and annual Trustee's, Sponsor's, portfolio
supervisory, evaluation and administrative fees and expenses) his
pro rata share of all the income which arises to the Trust from the
investments in the Trust, and that, under the governing law of the
Trust Agreement, this is a right as against the assets of the Trust
rather than a right enforceable in damages only against the Trustee;
4.2 subject as discussed in paragraph 11 below, for taxation
purposes the Trustee is not a UK resident; is a US resident; and the
general administration of the Trust will be carried out only in the
US;
4.3 no Units are registered in a register kept in the UK by or
on behalf of the Trustee;
4.4 the Trust is not treated as a corporation for US tax
purposes;
4.5 the structure, including the investment strategy of the
Trust, will be substantially the same as that set out in the
Prospectus; and
4.6 each Unitholder is neither resident nor ordinarily
resident in the UK, nor is any such Unitholder carrying on a trade
in the UK through a branch or agent.
5. We understand that the portfolio of the Trust will consist of
the common stock of the five companies with the second through sixth
lowest per share stock prices of the ten companies in each of the Dow
Jones Industrial Average, the Financial Times Industrial Ordinary Share
Index and the Hang Seng Index having the highest dividend yield at the
close of business three days prior to the Initial Date of Deposit of the
Fund; and that the Trust will hold such common stocks for a period of
approximately thirteen months, after which time the Trust will terminate
and the stocks will be sold. We address UK tax issues in relation only
to the common stocks of companies in the Financial Times Industrial
Ordinary Share Index comprised in the Portfolio of the Trust (the "UK
Equities").
6. Where a dividend which carries a tax credit, as distinct from a
foreign income dividend (in relation to which see 7 below) or a "special
dividend" (in relation to which see 8 below), is paid by a UK resident
company to a qualifying US resident which (either alone or together with
one or more associated corporations) controls directly or indirectly less
than 10 per cent of the voting stock of that UK company, the qualifying
US resident is entitled, on making a claim to the UK Inland Revenue, to a
payment of a tax credit currently equal to a quarter of the dividend less
a withholding of 15 per cent of the aggregate amount of the tax credit
and the dividend. Thus, on payment by a UK company of a dividend of 80
pounds, a tax credit of 20 pounds arises and so a qualifying US resident
will be entitled on making such a claim to a payment from the UK Inland
Revenue of 5 pounds (being 20 pounds less 15 per cent of (20 pounds + 80
pounds)).
A person will be a qualifying US resident for these purposes if:-
7. that person is a resident of the US for the purposes of the
double tax treaty between the US and the UK (the "Treaty").
The Trustee (in its capacity as recipient of the dividend on behalf of
the Trust) will be a resident of the US for these purposes if it is
resident in the US for the purposes of US tax. However, it will only be
a resident of the US for Treaty purposes to the extent that the income
derived by the Trust is subject to US tax as the income of a US resident,
either in the hands of the Trust itself or in the hands of its
beneficiaries.
We have assumed that the Trust will not be subject to US tax on its
income and that such income will be treated as income of the
beneficiaries of the Trust for US purposes. Accordingly, the Trust
would be a US resident for the purposes of the Treaty only to the
extent that the beneficiaries would be taxable in the US on such
income or treated as so taxable by agreement between the relevant
authorities. The provisions of the Treaty have been extended to
grant resident status to tax exempt charitable trusts and pension
funds. We understand that this is confirmed on the US Treasury side
by its "Technical Explanation" of the Treaty issued on March 9,
1977;
7.1 the dividend is paid to that person.
We believe that the payment of a dividend to the Trustee and onward
payment by the Trustee to a Unitholder should qualify as the payment of
the dividend to the Unitholder for these purposes. The position is
however not completely free from doubt, but this appears to be present
Inland Revenue practice;
7.2 the beneficial owner of the dividend is a resident of the US
for the purposes of the Treaty.
The Trust will not be the beneficial owner of any dividend for these
purposes. Whether a Unitholder is beneficial owner will depend upon the
circumstances of his ownership of the Units;
7.3 that person satisfies the other requirements of the Treaty
including the following:-
7.3.1 the dividend is not received in connection with a UK permanent
establishment or fixed base of that person;
7.3.2 subject to certain exemptions, that person is not a US
corporation (a) 25 per cent or more of whose capital is owned directly
or indirectly by persons who are not individual residents or nationals of
the US; and (b) which either (i) suffers US tax on the dividend at a rate
substantially less than that which is generally imposed on corporate
profits or (ii) is an 80:20 corporation for the purposes of the US
Internal Revenue Code of 1954, section 861;
7.4 that person is not a corporation resident in both the US and
the UK; and
7.5 that person is not exempt from US tax in a case where (a) that
person's interest in the UK company is not acquired for bona fide
commercial reasons and (b) if the recipient of the dividend were a
resident of the UK and exempt from UK tax, the UK exemption would be
limited or removed.
Therefore, although the position is not free from doubt, a Unitholder,
where the requirements set out above are satisfied, should, on making an
appropriate claim, be entitled to repayment of part of the UK tax credit.
However, since the UK Inland Revenue normally require claims to be made
by the beneficial owner of a dividend, the Trustee will not, in the
absence of arrangements with the UK Inland Revenue and the Unitholders,
be able to claim any such repayment.
Moreover, in order to make a claim for repayment, the Unitholder will
need to produce evidence of the payment of the dividend and of his
interest in it. Normally this is achieved by submitting to the UK Inland
Revenue tax vouchers which derive directly from the UK company paying a
dividend, or which are prepared by the Trustee and evidence to the
satisfaction of the Inland Revenue the entitlement of the Unitholder to
that dividend. Where the Trustee provides neither of these, it will in
practice be difficult for the Unitholder to establish his beneficial
interest in any dividend payment and accordingly his entitlement to any
tax credit.
8. Since July 1, 1994, it is possible for a UK resident company to
elect to treat a cash dividend paid by it as a "foreign income dividend"
("FID"). If a company makes an effective election to pay a FID in
respect of UK Equities which are held in the Trust, there will be no
entitlement to a refundable tax credit in respect of that FID,
notwithstanding 6 above.
9. Section 69 of, and Schedule 7 of, the Finance Act 1997 provide
that, if, on or after October 8, 1996, a company pays a dividend where
there are arrangements by virtue of which the amount, timing or form of
the dividend is referable to a transaction in shares or securities (a
"special dividend"), that special dividend will be treated in the same
way as FID. Accordingly, if a company pays a special dividend in respect
of UK Equities which are held in the Trust, there will be no entitlement
to a refundable tax credit in respect of that special dividend,
notwithstanding 6 above.
10. The Trust may be held to be trading in stock rather than
holding stock for investment purposes by virtue, inter alia, of the
length of the time for which the stock is held. If the stock is
purchased and sold through a UK resident agent, then, if the Trust is
held to be trading in such stock, profits made on the disposal of such
stock may, subject to 10 below, be liable to United Kingdom tax on
income.
11. Under current law, the Trust's liability to tax on such trading
profits will be limited to the amount of tax (if any) withheld from the
Trust's income provided such profits derive from transactions carried out
on behalf of the Trust by a UK agent where the following conditions are
satisfied:
11.1 the transactions from which the profits are derived are
investment transactions;
11.2 the agent carries on a business of providing investment
management services;
11.3 the transactions are carried out by the agent on behalf of the
Trust in the ordinary course of that business;
11.4 the remuneration received by the agent is at a rate which is no
less than that which is customary for the type of business concerned;
11.5 the agent acts for the Trust in an independent capacity.
The agent will act in an independent capacity if the relationship between
the agent and the Trust, taking account of its legal, financial and
commercial characteristics, is one which would exist between independent
persons dealing at arm's length. This will be regarded as the case by
the UK Inland Revenue if, for example, the provision of services by the
agent to the Trust (and any connected person) does not form a substantial
part of the agent's business (namely where it does not exceed 70 per cent
of the agent's business, by reference to fees or some other measure if
appropriate).
In addition, this condition will be regarded as satisfied by the UK
Inland Revenue if interests in the Trust, a collective fund, are freely
marketed;
11.6 the agent (and persons connected with the agent) do not have a
beneficial interest in more than 20 per cent of the Trust's income
derived from the investment transactions (excluding reasonable management
fees paid to the agent); and
11.7 the agent acts in no other capacity in the UK for the Trust.
Further where stock is purchased and sold through a UK broker in the
ordinary course of a brokerage business carried on in the UK by that
broker, the remuneration which the broker receives for the transactions
is at a rate which is no less than that which is customary for that class
of business and the broker acts in no other capacity for the Trust in the
UK, profits arising from transactions carried out through that broker
will not be liable to UK tax.
Accordingly, unless a Unitholder, being neither resident nor ordinarily
resident in the UK, has a presence in the UK (other than through an agent
or a broker acting in the manner described above) in connection with
which the Units are held, the Unitholder will not be charged to UK tax on
such profits.
12. We understand that the Trustee has a branch in the UK and a
wholly-owned UK resident subsidiary. Where the Trustee has a presence in
the UK then it is technically possible that income or gains of the Trust
could be assessed upon the Trustee, whether arising from securities
(which includes stock) or from dealings in those securities. However, we
consider that any such risk should be remote provided that:-
12.1 any income derived by the Trustee will be derived by it (see
6.1 above) as a resident of the US for the purposes of the Treaty; and
12.2 neither the UK branch nor the UK resident subsidiary of the
Trustee will have any involvement with establishing or managing the Trust
or its assets, nor will they derive income or gains from the Trust or its
assets.
13. Where the Trustee makes capital gains on the disposal of shares
in the UK companies in which the Trust invests, a Unitholder will not be
liable to UK capital gains tax on those gains.
14. UK stamp duty will generally be payable at the rate of 50p per
100 pounds of the consideration (or any part thereof) in respect of a
transfer of the shares in a UK incorporated company or in respect of a
transfer to be effected on a UK share register. UK stamp duty reserve
tax will generally be payable on the entering into of an unconditional
agreement to transfer such shares, or on a conditional agreement to
transfer such shares becoming unconditional, at the rate of 0.5 per cent
of the consideration to be provided. The tax will generally be paid by
the purchaser of such shares.
No UK stamp duty or stamp duty reserve tax should be payable on an
agreement to transfer nor a transfer of Units, provided that such
transfer is neither executed in nor brought into the UK.
15. In our opinion the taxation paragraphs contained on pages 44 to
45 of the Prospectus under the heading "United Kingdom Taxation", as
governed by the general words appearing immediately under the heading
"United Kingdom Taxation - Tax consequences of Ownership of Shares" which
relate to the Trust and which are to be contained in the final prospectus
to be issued for the Funds, represent a fair summary of the material UK
taxation consequences for a US resident Unitholder.
16. This opinion is addressed to you on the understanding that you
(and only you) may rely upon it in connection with the issue and sale of
the Units (and for no other purpose). This opinion may not be quoted or
referred to in any public document or filed with any governmental agency
or other person without our written consent. We consent however to the
reference which is to be made in the prospectus to be issued for the
Funds to our opinion as to the UK tax consequences to US persons holding
Units in the Trust.
Yours faithfully
Linklaters & Paines
Linklaters & Paines
885 Third Avenue, Suite 2600
New York, NY 10022
April 7, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Dear Sirs:
Van Kampen American Capital Equity Opportunity Trust, Series 55
Strategic Thirty Trust, Series 4 (the "Trust")
1. We have acted as special United Kingdom ("UK") taxation
advisers in connection with the issue of units ("Units") in the above
Trust on the basis of directions given to us by Chapman and Cutler,
counsel to yourselves.
2. This opinion is limited to UK taxation law as applied in
practice on the date hereof by the Inland Revenue and is given on the
basis that it will be governed by and construed in accordance with
English law as enacted.
3. For the purpose of this opinion, the only documentation which
we have examined is the prospectus for the Van Kampen American Capital
Equity Opportunity Trust, Series 53 dated March 10, 1997 (the
"Prospectus") which is to serve as the preliminary prospectus for the Van
Kampen American Capital Equity Opportunity Trust, Series 55 consisting of
the Strategic Ten Trust United States Portfolio Series 15, the Strategic
Ten Trust United Kingdom Portfolio Series 13; the Strategic Ten Trust
Hong Kong Portfolio Series 13, the Strategic Five Trust, Series 9; the
Strategic Fifteen Trust, Series 4 and the Trust (together, the "Funds").
We have been advised by Chapman and Cutler that there will be no material
differences between the Prospectus and the final prospectus to be issued
for the Funds.
4. We have assumed for the purposes of this opinion that:-
4.1 a holder of Units ("Unitholder") is, under the terms of
the Trust Agreement governing the Trust, entitled to have paid to
him (subject to a deduction for annual expenses, including total
applicable custodial fees and certain other costs associated with
foreign trading and annual Trustee's, Sponsor's, portfolio
supervisory, evaluation and administrative fees and expenses) his
pro rata share of all the income which arises to the Trust from the
investments in the Trust, and that, under the governing law of the
Trust Agreement, this is a right as against the assets of the Trust
rather than a right enforceable in damages only against the Trustee;
4.2 subject as discussed in paragraph 11 below, for taxation
purposes the Trustee is not a UK resident; is a US resident; and the
general administration of the Trust will be carried out only in the
US;
4.3 no Units are registered in a register kept in the UK by or
on behalf of the Trustee;
4.4 the Trust is not treated as a corporation for US tax
purposes;
4.5 the structure, including the investment strategy of the
Trust, will be substantially the same as that set out in the
Prospectus; and
4.6 each Unitholder is neither resident nor ordinarily
resident in the UK, nor is any such Unitholder carrying on a trade
in the UK through a branch or agent.
5. We understand that the portfolio of the Trust will consist of
the common stock of the ten companies in each of the Dow Jones Industrial
Average, the Financial Times Industrial Ordinary Share Index and the Hang
Seng Index having the highest dividend yield at the close of business
three days prior to the Initial Date of Deposit of the Fund; and that the
Trust will hold such common stocks for a period of approximately thirteen
months, after which time the Trust will terminate and the stocks will be
sold. We address UK tax issues in relation only to the common stocks of
companies in the Financial Times Industrial Ordinary Share Index
comprised in the Portfolio of the Trust (the "UK Equities").
6. Where a dividend which carries a tax credit, as distinct from a
foreign income dividend (in relation to which see 7 below) or a "special
dividend" (in relation to which see 8 below), is paid by a UK resident
company to a qualifying US resident which (either alone or together with
one or more associated corporations) controls directly or indirectly less
than 10 per cent of the voting stock of that UK company, the qualifying
US resident is entitled, on making a claim to the UK Inland Revenue, to a
payment of a tax credit currently equal to a quarter of the dividend less
a withholding tax of 15 per cent of the aggregate amount of the tax
credit and the dividend. Thus, on payment by a UK company of a dividend
of 80 pounds, a tax credit of 20 pounds arises and so a qualifying US
resident will be entitled on making such a claim to a payment from the UK
Inland Revenue of 5 pounds (being 20 pounds less 15 per cent of (20
pounds + 80 pounds)).
A person will be a qualifying US resident for these purposes if:-
6.1 that person is a resident of the US for the purposes of
the double tax treaty between the US and the UK (the "Treaty").
The Trustee (in its capacity as recipient of the dividend on behalf
of the Trust) will be a resident of the US for these purposes if it
is resident in the US for the purposes of US tax. However, it will
only be a resident of the US for Treaty purposes to the extent that
the income derived by the Trust is subject to US tax as the income
of a US resident, either in the hands of the Trust itself or in the
hands of its beneficiaries.
We have assumed that the Trust will not be subject to US tax on its
income and that such income will be treated as income of the
beneficiaries of the Trust for US purposes. Accordingly, the Trust
would be a US resident for the purposes of the Treaty only to the
extent that the beneficiaries would be taxable in the US on such
income or treated as so taxable by agreement between the relevant
authorities. The provisions of the Treaty have been extended to
grant resident status to tax exempt charitable trusts and pension
funds. We understand that this is confirmed on the US Treasury side
by its "Technical Explanation" of the Treaty issued on March 9,
1977;
6.2 the dividend is paid to that person.
We believe that the payment of a dividend to the Trustee and onward
payment by the Trustee to a Unitholder should qualify as the payment
of the dividend to the Unitholder for these purposes. The position
is however not completely free from doubt, but this appears to be
present Inland Revenue practice;
6.3 the beneficial owner of the dividend is a resident of the
US for the purposes of the Treaty.
The Trust will not be the beneficial owner of any dividend for these
purposes. Whether a Unitholder is beneficial owner will depend upon
the circumstances of his ownership of the Units;
6.4 that person satisfies the other requirements of the Treaty
including the following:-
6.4.1 the dividend is not received in connection with a UK
permanent establishment or fixed base of that person;
6.4.2 subject to certain exemptions, that person is not a
US corporation (a) 25 per cent or more of whose capital is
owned directly or indirectly by persons who are not individual
residents or nationals of the US; and (b) which either (i)
suffers US tax on the dividend at a rate substantially less
than that which is generally imposed on corporate profits or
(ii) is an 80:20 corporation for the purposes of the US
Internal Revenue Code of 1954, section 861;
6.5 that person is not a corporation resident in both the US
and the UK; and
6.6 that person is not exempt from US tax in a case where (a)
that person's interest in the UK company is not acquired for bona
fide commercial reasons and (b) if the recipient of the dividend
were a resident of the UK and exempt from UK tax, the UK exemption
would be limited or removed.
Therefore, although the position is not free from doubt, a
Unitholder, where the requirements set out above are satisfied,
should, on making an appropriate claim, be entitled to repayment of
part of the UK tax credit. However, since the UK Inland Revenue
normally require claims to be made by the beneficial owner of a
dividend, the Trustee will not, in the absence of arrangements with
the UK Inland Revenue and the Unitholders, be able to claim any such
repayment.
Moreover, in order to make a claim for repayment, the Unitholder
will need to produce evidence of the payment of the dividend and of
his interest in it. Normally this is achieved by submitting to the
UK Inland Revenue tax vouchers which derive directly from the UK
company paying a dividend, or which are prepared by the Trustee and
evidence to the satisfaction of the Inland Revenue the entitlement
of the Unitholder to that dividend. Where the Trustee provides
neither of these, it will in practice be difficult for the
Unitholder to establish his beneficial interest in any dividend
payment and accordingly his entitlement to any tax credit.
7. Since July 1, 1994, it is possible for a UK resident company to
elect to treat a cash dividend paid by it as a "foreign income dividend"
("FID"). If a company makes an effective election to pay a FID in
respect of UK Equities which are held in the Trust, there will be no
entitlement to a refundable tax credit in respect of that FID,
notwithstanding 6 above.
8. Section 69 of, and Schedule 7 of, the Finance Act 1997 provide
that, if, on or after October 8, 1996, a company pays a dividend where
there are arrangements by virtue of which the amount, timing or form of
the dividend is referable to a transaction in shares or securities (a
"special dividend"), that special dividend will be treated in the same
way as FID. Accordingly, if a company pays a special dividend in respect
of UK Equities which are held in the Trust, there will be no entitlement
to a refundable tax credit in respect of that special dividend,
notwithstanding 6 above.
9. The Trust may be held to be trading in stock rather than
holding stock for investment purposes by virtue, inter alia, of the
length of the time for which the stock is held. If the stock is
purchased and sold through a UK resident agent, then, if the Trust is
held to be trading in such stock, profits made on the disposal of such
stock may, subject to 10 below, be liable to United Kingdom tax on
income.
10. Under current law, the Trust's liability to tax on such trading
profits will be limited to the amount of tax (if any) withheld from the
Trust's income provided such profits derive from transactions carried out
on behalf of the Trust by a UK agent where the following conditions are
satisfied:
10.1 the transactions from which the profits are derived are
investment transactions;
10.2 the agent carries on a business of providing investment
management services;
10.3 the transactions are carried out by the agent on behalf of
the Trust in the ordinary course of that business;
10.4 the remuneration received by the agent is at a rate which
is no less than which is customary for the type of business
concerned;
10.5 the agent acts for the Trust in an independent capacity.
The agent will act in an independent capacity if the relationship
between the agent and the Trust, taking account of its legal,
financial and commercial characteristics, is one which would exist
between independent persons dealing at arms' length. This will be
regarded as the case by the UK Inland Revenue if, for example, the
provision of services by the agent to the Trust (and any connected
person) does not form a substantial part of the agent's business
(namely where it does not exceed 70 per cent of the agent's
business, by reference to fees or some other measure if
appropriate).
In addition, this condition will be regarded as satisfied by the UK
Inland Revenue if interest in the Trust, a collective fund, are
freely marketed;
10.6 the agent (and persons connected with the agent) do not
have a beneficial interest in more than 20 per cent of the Trust's
income derived from the investment transactions (excluding
reasonable management fees paid to the agent); and
10.7 the agent acts in no other capacity in the UK for the
Trust.
Further where stock is purchased and sold through a UK broker in the
ordinary course of a brokerage business carried on in the UK by that
broker, the remuneration which the broker receives for the
transactions is at a rate which is no less than that which is
customary for that class of business and the broker acts in no other
capacity for the Trust in the UK, profits arising from transactions
carried out through that broker will not be liable to UK tax.
Accordingly, unless a Unitholder, being neither resident nor
ordinarily resident in the UK, has a presence in the UK (other than
through an agent or a broker acting in the manner described above)
in connection with which the Units are held, the Unitholder will not
be charged to UK tax on such profits.
11. We understand that the Trustee has a branch in the UK and a
wholly-owned UK resident subsidiary. Where the Trustee has a presence in
the UK then it is technically possible that income or gains of the Trust
could be assessed upon the Trustee, whether arising from securities
(which includes stock) or from dealings in those securities. However, we
consider that any such risk should be remote provided that:-
11.1 any income derived by the Trustee will be derived by it
(see 6.1 above) as a resident of the US for the purposes of the
Treaty; and
11.2 neither the UK branch nor the UK resident subsidiary of
the Trustee will have any involvement with establishing or managing
the Trust or its assets, nor will they derive income or gains from
the Trust or its assets.
12. Where the Trustee makes capital gains on the disposal of shares
in the UK companies in which the Trust invests, a Unitholder will not be
liable to UK capital gains tax on those gains.
13. UK stamp duty will generally be payable at the rate of 50p per
100 pounds of the consideration (or any part thereof) in respect of a
transfer of the shares in a UK incorporated company or in respect of a
transfer to be effected on a UK share register. UK stamp duty reserve
tax will generally be payable on the entering into of an unconditional
agreement to transfer such shares, or on a conditional agreement to
transfer such shares becoming unconditional, at the rate of 0.5 per cent
of the consideration to be provided. The tax will generally be paid by
the purchaser of such shares.
No UK stamp duty or stamp duty reserve tax should be payable on an
agreement to transfer nor a transfer of Units, provided that such
transfer is neither executed in nor brought into the UK.
14. In our opinion the taxation paragraphs contained on pages 44 to
45 of the Prospectus under the heading "United Kingdom Taxation", as
governed by the general words appearing immediately under the heading
"United Kingdom Taxation - Tax consequences of Ownership of Shares" which
relate to the Trust and which are to be contained in the final prospectus
to be issued for the Funds, represent a fair summary of the material UK
taxation consequences for a US resident Unitholder.
15. This opinion is addressed to you on the understanding that you
(and only you) may rely upon it in connection with the issue and sale of
the Units (and for no other purpose). This opinion may not be quoted or
referred to in any public document or filed with any governmental agency
or other person without our written consent. We consent however to the
reference which is to be made in the prospectus to be issued for the
Funds to our opinion as to the UK tax consequences to US persons holding
Units in the Trust.
Yours faithfully
Linklaters & Paines
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
April 4, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital
Strategic Five Trust, United States Portfolio, Series 9
Strategic Ten Trust, United States Portfolio, Series 15
Strategic Ten Trust, United Kingdom Portfolio, Series 13
Strategic Ten Trust, Hong Kong Portfolio, Series 13
Global Fifteen Trust, Series 4
Global Thirty Trust, Series 4
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-24249
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as
the Evaluator, and to the use of the Obligations prepared by us which are
referred to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
Exhibit 4.2
Independent Certified Public Accountants' Consent
We have issued our report dated April 7, 1997 on the statements of
condition and related securities portfolios of Van Kampen American
Capital Equity Opportunity Trust, Series 55 as of April 7, 1997 contained
in the Registration Statement on Form S-6 and Prospectus. We consent to
the use of our report in the Registration Statement and Prospectus and to
the use of our name as it appears under the caption "Other Matters-
Independent Certified Public Accountants."
Grant Thornton LLP
Chicago, Illinois
April 7, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 9
<NAME> DFIV
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 150122
<INVESTMENTS-AT-VALUE> 150122
<RECEIVABLES> 0
<ASSETS-OTHER> 30101
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180223
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32726
<TOTAL-LIABILITIES> 32726
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 147497
<SHARES-COMMON-STOCK> 15000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 147497
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 15
<NAME> DTEN
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 149837
<INVESTMENTS-AT-VALUE> 149837
<RECEIVABLES> 0
<ASSETS-OTHER> 59046
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208883
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 61671
<TOTAL-LIABILITIES> 61671
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 147212
<SHARES-COMMON-STOCK> 15000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 147212
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> HTEN
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 247546
<INVESTMENTS-AT-VALUE> 247546
<RECEIVABLES> 0
<ASSETS-OTHER> 22555
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 270101
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26930
<TOTAL-LIABILITIES> 26930
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243171
<SHARES-COMMON-STOCK> 25000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 243171
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> STFN
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 149399
<INVESTMENTS-AT-VALUE> 149399
<RECEIVABLES> 0
<ASSETS-OTHER> 25899
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 175298
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28524
<TOTAL-LIABILITIES> 28524
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 146774
<SHARES-COMMON-STOCK> 15000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 146774
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> STTY
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 297090
<INVESTMENTS-AT-VALUE> 297090
<RECEIVABLES> 0
<ASSETS-OTHER> 26251
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 323341
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31501
<TOTAL-LIABILITIES> 31501
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 291840
<SHARES-COMMON-STOCK> 30000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 291840
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on April 7, 1997 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> UTEN
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-12-1998
<PERIOD-START> APR-07-1997
<PERIOD-END> APR-07-1997
<INVESTMENTS-AT-COST> 148121
<INVESTMENTS-AT-VALUE> 148121
<RECEIVABLES> 0
<ASSETS-OTHER> 32742
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180863
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 35367
<TOTAL-LIABILITIES> 35367
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 145496
<SHARES-COMMON-STOCK> 15000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 145496
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
