File No: 333-27417
CIK #1025206
Securities and Exchange Commission
Washington, D.C. 20549-1004
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 60
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:
Chapman And Cutler Van Kampen American Capital
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 undivided fractional beneficial interests 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
______________________________________________________________________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 60
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
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Trust Administration
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust 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 Trust
Trust's securities and ) Federal Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
) Risk Factors
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
) Risk Factors
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Portfolio
)
) Trust 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 ) Trust Operating Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) Trust Portfolio
underwriter, trustee or any )
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 Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust 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 ) Trust 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
) Trust 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
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
trustee )
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's )
securities ) *
52. (a) Provisions of trust agreement )
with respect to replacement ) Trust Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Federal 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
) Statement of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
June 2, 1997
Van Kampen American Capital
Van Kampen American Capital Equity Opportunity Trust, Series 60
Brand Name Equity Trust, Series 4
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 60 (the
"Fund" ) is comprised of one unit investment trust, Brand Name Equity
Trust, Series 4 (the "Trust" ). The Trust offers investors the
opportunity to purchase Units representing proportionate interests in a fixed
portfolio of equity securities issued by companies diversified within the
non-durable consumer goods industry including common stocks of foreign
issuers, all of which are in American Depositary Receipt ("ADRs" ) form
or New York Share form ("Equity Securities" or "Securities" ).
See "Trust Portfolio" . Unless terminated earlier, the Trust will
terminate on June 3, 2002 and any Securities then held will, within a
reasonable time thereafter, be liquidated or distributed by the Trustee. Any
Securities liquidated at termination will be sold at the then current market
value for such Securities; therefore, the amount distributable in cash to a
Unitholder upon termination may be more or less than the amount such
Unitholder paid for his Units.
Attention Foreign Investors. If you are not a United States citizen or
resident, distributions from the Trust will generally be subject to U.S.
Federal withholding taxes; however, under certain circumstances treaties
between the United States and other countries may reduce or eliminate such
withholding tax. See "Federal Taxation." Such investors should consult
their tax advisers regarding the imposition of U.S. withholding on
distributions.
Objectives of the Trust. The objectives of the Trust are to provide the
potential for capital appreciation and income, consistent with the
preservation of invested capital, by investing in a portfolio of equity
securities of companies engaged in the design, production and distribution of
products diversified within the non-durable consumer goods industry. See "
Objectives and Securities Selection." There is, of course, no guarantee
that the objectives of the Trust will be achieved.
Public Offering Price. The Public Offering Price of the Units of the Trust
includes the aggregate underlying value of the Securities in the Trust's
portfolio, the initial sales charge described below, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The initial sales
charge is equal to the difference between the maximum total sales charge of
4.5% of the Public Offering Price and the maximum deferred sales charge ($0.20
per Unit). The monthly deferred sales charge ($0.0333 per Unit) will begin
accruing on a daily basis on December 2, 1997 and will continue to accrue
through June 1, 1998. The monthly deferred sales charge will be charged to the
Trust, in arrears, commencing January 2, 1998 and will be charged on the 2nd
day of each month thereafter through June 2, 1998. Unitholders will be
assessed 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 Unitholders on a per Unit basis will be 4.5%
of the Public Offering Price (4.712% of the aggregate value of the Securities
less the deferred sales charge), subject to reduction as set forth in "
Public Offering--General." During the initial offering period, the sales
charge is reduced on a graduated scale for sales involving at least 5,000
Units. If Units were available for purchase at the close of business on the
day before the Initial Date of Deposit, the Public Offering Price per Unit
would have been that amount set forth under "Summary of Essential
Financial Information." For sales charges in the secondary market, see
"Public Offering." The minimum purchase is 100 Units except for
certain transactions described under "Public Offering--Unit
Distribution" . See "Public Offering."
Additional Deposits. The Sponsor may, from time to time during a period of up
to approximately six months after the Initial Date of Deposit, deposit
additional Securities in the Trust as provided under "The Trust."
Units of the Trust are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by, any depository institution or any government
agency and are subject to investment risk, including the 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.
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable Distribution
Date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information." The initial estimated
distribution will be $.04 per Unit and will be made on September 25, 1997 to
Unitholders of record on September 10, 1997. Gross dividends received by the
Trust will be distributed to Unitholders. Expenses of the Trust will be paid
with proceeds from the sale of Securities. For the consequences of such sales,
see "Federal Taxation" . Additionally, upon termination of the Trust,
the Trustee will distribute, upon surrender of Units for redemption, to each
Unitholder his pro rata share of the Trust's assets, less expenses, in the
manner set forth under "Rights of Unitholders--Distributions of Income and
Capital."
Secondary Market for Units. After the initial offering period, although not
obligated to do so, the Sponsor intends to maintain a market for Units of the
Trust and offer to repurchase such Units at prices which are based on the
aggregate underlying value of Equity Securities in the Trust (generally
determined by the closing sale or bid prices of the Securities) plus or minus
cash, if any, in the Capital and Income Accounts of the Trust. If a secondary
market is maintained during the initial offering period, the prices at which
Units will be repurchased will be based upon the aggregate underlying value of
the Equity Securities in the Trust (generally determined by the closing sale
or asked prices of the Securities) plus or minus cash, if any, in the Capital
and Income Accounts of the Trust. If a secondary market is not maintained, a
Unitholder may redeem Units through redemption at prices based upon the
aggregate underlying value of the Equity Securities in the Trust plus or minus
a pro rata share of cash, if any, in the Capital and Income Accounts of the
Trust. A Unitholder tendering 1,000 or more Units for redemption may request a
distribution of shares of Securities (reduced by customary transfer and
registration charges) in lieu of payment in cash. See "Rights of
Unitholders--Redemption of Units." Units sold or tendered for redemption
prior to such time as the entire deferred sales charge has been collected will
be assessed the amount of the remaining deferred sales charge at the time of
sale or redemption.
Termination. Commencing on the Mandatory Termination Date Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. Written notice of any termination of the Trust specifying
the time or times at which Unitholders may surrender their certificates for
cancellation shall be given by the Trustee to each Unitholder at his address
appearing on the registration books of the Trust maintained by the Trustee. At
least 30 days prior to the Mandatory Termination Date the Trustee will provide
written notice thereof to all Unitholders and will include with such notice a
form to enable Unitholders to elect a distribution of shares of Equity
Securities if such Unitholder owns at least 1,000 Units of the Trust, rather
than to receive payment in cash for such Unitholder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity Securities. All
Unitholders will receive cash in lieu of any fractional shares. To be
effective, the election form, together with surrendered certificates if
issued, and other documentation required by the Trustee, must be returned to
the Trustee at least five business days prior to the Mandatory Termination
Date. Unitholders not electing a distribution of shares of Equity Securities
will receive a cash distribution from the sale of the remaining Securities
within a reasonable time after the Trust is terminated. See "Trust
Administration--Amendment or Termination."
Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases). Unitholders also have the opportunity to have their
distributions reinvested into additional Units of the Trust, if Units are
available at the time of reinvestment, or into an open-end management
investment company as described herein. See "Rights of
Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers, the general condition of the
stock market, volatile interest rates and risks related to an investment in
the non-durable consumer goods industry. See "Risk Factors."
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 60
Summary of Essential Financial Information
At the Close of Business on the day before the Initial Date of Deposit: May 30, 1997
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
<CAPTION>
General Information
<S> <C>
Number of Units <F1>...................................................... 15,000
Fractional Undivided Interest in the Trust per Unit <F1>.................. 1/15,000
Public Offering Price: ...................................................
Aggregate Value of Securities in Portfolio <F2>.......................... $ 147,007
Aggregate Value of Securities per Unit .................................. $ 9.80
Maximum Sales Charge <F3>................................................ $ .45
Less Deferred Sales Charge per Unit...................................... $ .20
Public Offering Price Per Unit <F3><F4><F5>.............................. $ 10.05
Redemption Price per Unit <F6>............................................ $ 9.60
Secondary Market Repurchase Price per Unit <F6>........................... $ 9.60
Excess of Public Offering Price per Unit over Redemption Price per Unit... $ .45
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee... Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee..... Maximum of $.0025 per Unit
Evaluation Time....................... 4:00 P.M. New York time
Mandatory Termination Date............ June 3, 2002
Minimum Termination Value............. The Trust may be terminated if the net asset value of the Trust is less than
$500,000 unless the net asset value of the Trust 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.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Estimated Annual Dividends per Unit <F7>........ $.14675
Trustee's Annual Fee............................ $.008 per Unit
Estimated Annual Organizational Expenses <F8>... $.00206 per Unit
Income Distribution Record Date................. Tenth day of March, June, September and December
Income Distribution Date........................ Twenty-fifth of March, June, September and December
Capital Account Record Date..................... Tenth day of December
Capital Account Distribution Date............... Twenty-fifth day of December
- ----------
<FN>
<F1>As of the close of business on any day on which the Sponsor is the sole
Unitholder of the Trust, the number of Units 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 from the amount indicated above.
<F2>Each Equity Security listed on a national securities exchange is valued at the
closing sale price or, if the Equity Security is not listed, at the closing
ask price thereof.
<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
of 4.5% of the Public Offering Price and the amount of the maximum deferred
sales charge of $0.20 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. In addition to the initial sales charge,
Unitholders will pay a deferred sales charge of $0.0333 per Unit per month
which will begin accruing on a daily basis on December 2, 1997 and will
continue to accrue through June 1, 1998. The monthly deferred sales charge
will be charged to the Trust, in arrears, commencing January 2, 1998 and will
be charged on the 2nd day of each month thereafter through June 2, 1998. Units
purchased subsequent to the initial deferred sales charge payment will be
subject only to the 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 4.5% of the Public Offering Price (4.712%
of the aggregate value of the Securities in the Trust 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.
<F5>Commencing on June 2, 1998, the secondary market sales charge will not include
deferred payments but will instead include only a one-time initial sales
charge of 4.0% of the Public Offering Price and will be reduced by .5 of 1% on
each subsequent June 2, to a minimum sales charge of 3.0%. See "Public
Offering."
<F6>The Redemption Price per Unit and the Secondary Market Repurchase Price per
Unit are reduced by the unpaid portion of the deferred sales charge.
<F7>Estimated annual dividends are based on annualizing the most recently declared
dividends 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.
<F8>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the
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 material and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over the life of the
Trust. See "Trust Operating Expenses" and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts. Estimated Annual Organizational
Expenses have been estimated based on a projected trust size of $70,000,000.
To the extent the Trust is larger or smaller, the actual organizational
expenses paid by the Trust (and therefore by Unitholders) will vary from the
estimated amount set forth above.
</TABLE>
FEE TABLE
- --------------------------------------------------------------------------
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in the Trust will bear directly or indirectly. See
"Public Offering--Offering Price" and "Trust Operating
Expenses" . Although the Trust is a unit investment trust rather than a
mutual fund, this information is presented to permit a comparison of fees.
Investors should note that while these examples are based on the public
offering price and the estimated fees for the Trust, the actual public
offering price and fees could vary from the estimated amounts below.
<TABLE>
<CAPTION>
Amount Per
Unitholder Transaction Expenses (as of the Initial Date of Deposit) (as a percentage of offering price) 100 Units
--------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase <F1>............................................................ 2.50% $ 25.00
Deferred Sales Charge <F2>............................................................................... 2.00% 20.00
--------- --------------
Maximum Sales Charge..................................................................................... 4.50% $ 45.00
========= ==============
Maximum Sales Charge Imposed on Reinvested Dividends <F3>................................................ 2.00% $ 20.00
========= ==============
Estimated Annual Trust Operating Expenses (as of the Initial Date of Deposit) (as a percentage of
aggregate value)
Trustee's Fee ........................................................................................... 0.082% $ 0.80
Portfolio Supervision and Evaluation Fees ............................................................... 0.051% 0.50
Organizational Costs..................................................................................... 0.021% 0.21
Other Operating Expenses ................................................................................ 0.038% 0.37
--------- --------------
Total ................................................................................................... 0.192% $ 1.88
========= ==============
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for Period of:
------------------------------------------------
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
----------- ----------- ----------- ------------
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 $ 47 $ 51 $ 55 N/A
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. For purposes of the
example, 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 example should not be considered as
a representation of past or future expenses or annual rate of return; the
actual expenses and annual rate of return may be more or less than those
assumed for purposes of the example.
- ----------
<FN>
<F1>The Initial Sales Charge is actually the difference between the Maximum Sales
Charge (4.50% of the Public Offering Price) and the maximum deferred sales
charge ($0.20 per Unit) and would exceed 2.50% if the Public Offering Price
exceeds $10 per Unit.
<F2>The actual fee is $0.0333 per Unit per month, irrespective of purchase or
redemption price, deducted over the six months commencing January 2, 1998. 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 2.00%; if Unit price is
less than $10 per Unit, the deferred portion of the sales charge will exceed
2.00%. 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 TRUST
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 60 is comprised
of one unit investment trust, Brand Name Equity Trust, Series 4. The Trust was
created under the laws of the State of New York pursuant to a Trust Indenture
and Agreement (the "Trust Agreement" ), dated the date of this
Prospectus (the "Initial Date of Deposit" ), among Van Kampen American
Capital Distributors, Inc., as Sponsor, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory Corp.,
as Evaluator, Van Kampen American Capital Investment Advisory Corp., as
Supervisor, and The Bank of New York, as Trustee.
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities
issued by companies diversified within the non-durable consumer goods
industry. Diversification of assets in the Trust will not eliminate the risk
of loss always inherent in the ownership of securities.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio" 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 Trust
indicated in "Summary of Essential Financial Information." Unless
otherwise terminated as provided in the Trust Agreement, the Trust will
terminate on the Mandatory Termination Date, and Securities then held will
within a reasonable time thereafter be liquidated or distributed by the
Trustee.
Additional Units of the Trust may be issued at any time by depositing in the
Trust (i) additional Securities, (ii) or 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 the Trust as a result of the deposit of
additional Securities by the Sponsor, the aggregate value of the Securities in
the Trust will be increased and the fractional undivided interest in the Trust
represented by each Unit will be decreased. The Sponsor may continue to make
additional deposits of Securities or cash with instructions to purchase
Securities into the Trust for a period of up to approximately six months
following the Initial Date of Deposit, provided that such additional deposits
will be in amounts which will maintain the same proportionate relationship
among the number of shares of each Equity Security in the Trust's portfolio
that existed immediately prior to any such subsequent deposit. Any deposit by
the Sponsor of additional Equity Securities will duplicate this actual
proportionate relationship and not the original proportionate relationship on
the subsequent date of deposit, since the original proportionate relationship
may be different than the actual proportionate relationship. Any such
difference may be due to the sale, redemption or liquidation of any of the
Equity Securities deposited in the 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 fees.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in the Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objectives of the Trust are to provide the potential for capital
appreciation and income, consistent with the preservation of invested capital.
The portfolio is described under "Trust Portfolio" and in "
Portfolio" . The Sponsor has attempted to select a portfolio of leading
brand name companies that provide the potential for growth at sustainably
higher rates than the general stock market for an extended period of time. In
selecting the Securities, the Sponsor considered the following factors, among
others: (a) the issuer's position within the industry, (b) breadth and
stability of the issuer's business base and (c) growth potential. Most of the
products produced by the issuers included in the Trust are consumable products
used around the world. The Sponsor believes that global demographics provide
the potential for growth in these products in excess of overall economic
growth. The companies included in the Trust are generally leaders in their
field and the Sponsor believes these leadership positions should be sustained
given the stability of the markets generally and the strength of these brand
name companies. In addition, the Sponsor has attempted to select companies
with superior management which can help the company maintain a leadership
position within its market. The Sponsor has attempted to select companies
which exhibit attractive balance sheets, strong cash flow and above-average
returns on investment. Exploitation of the attractive product markets requires
investment to drive future growth. Debt capacity and cash flow may help to
provide a company the ability to reinvest in the business while a high return
on investment (and return on equity) may provide the potential for high growth
rates from reinvestment.
Stocks have been acknowledged as one of the best ways to stay ahead of
inflation over time. An investment of $1 in common stocks (as represented by
the Standard & Poor's 500 Index) on January 1, 1926 would have been worth
approximately $1,371.76 by December 31, 1996. Over the same time period, $1
invested in long-term U.S. Government bonds would have been worth
approximately $33.66, $1 invested in short-term U.S. Treasury bills would have
been worth approximately $13.54 and $1 growing at the rate of inflation would
have been worth approximately $8.88. In addition, over the period January 1,
1991 through December 31, 1996, an investment of $10,000 in the stocks
included in the Morgan Stanley Consumer Index and the Standard & Poor's 500
Index would have been worth approximately $26,131 and $26,492, respectively,
while $10,000 growing at the rate of inflation over the same period would have
been worth approximately $11,883.
The Morgan Stanley Consumer Index is an unmanaged statistical composite
measuring the performance of 30 stocks from 21 consumer-oriented industries.
The Standard & Poor's 500 Index is an unmanaged statistical composite
measuring the performance of 500 stocks from 83 industrial groups. Investors
should note that the Morgan Stanley Consumer Index does not include all of the
Securities in the Trust portfolio and the Trust is not designed to correlate
with this or any other index. Of course, the figures above represent past
performance of these investment categories and there is no guarantee of future
results, either of these categories or of the Trust. The Trust also includes a
sales charge and expenses which are not reflected above.
Consumer Products Companies. Companies within the non-durable consumer goods
industry are typically considered growth companies. A growth company is
generally defined as a relatively steady performer over time which provides
the potential to sustain an above-average growth rate during various economic
cycles. Because of their size, resilience and strength, brand name companies
appear to be some of the most favorable growth companies in which to invest.
Additionally, the Sponsor believes that brand name companies are poised to
benefit as access to and consumer demand in developing countries continues to
grow.
Many of the companies behind brand name products are industry leaders in both
domestic and international markets. They are established, well-managed,
financially strong and proven performers. Many companies have undertaken
restructuring and expansion projects which have increased their profit
potential. As large companies, they are able to provide their brands with a
great deal of support, including large advertising budgets able to produce
sales beyond the life of a campaign, research and development prowess
producing high quality and new products, effective distribution and
promotional efforts creating widespread exposure throughout the retail
industry, and exposure to international markets and expansion of operations to
capitalize on growth opportunities in developing countries worldwide. The
Sponsor believes that as cost differences between brand name and generic
products shrink, consumers will be willing to pay a premium for brand name
products they recognize and believe to be of better quality.
The Food and Beverage Industry. The Department of Commerce ranks the food and
beverage industry as the second largest U.S. manufacturing sector. In recent
years, this industry has had consistently positive earnings and has tended to
be recession-resistant. Performance has reflected consumer demand more than
general economic conditions.
Food processing companies include manufacturers of packaged foods such as
canned and frozen foods, baked goods, desserts, jelly, coffee and hot
chocolate, and processors of agricultural products such as fruits, vegetables,
cereals, flour, meat and poultry, including pet food. Distributors include
food wholesalers (companies that distribute food products to retailers,
restaurants and institutions) and retailers, supermarket chains and
restaurants. The beverage companies represented manufacture alcoholic and
non-alcoholic drinks. The issuers in the Trust include companies that have
successfully adapted to new consumer demands such as developing low calorie,
low fat and low sodium products for a public increasingly concerned with
health and fitness. The Sponsor anticipates that continued adaptation will
result in consumer support and lead to continued growth.
Pharmaceutical Industry. The medical sector has historically provided
investors with significant growth opportunities. One of the industries
included in the sector is pharmaceutical companies. Pharmaceutical companies
develop, manufacture and sell prescription and over-the-counter drugs. In
addition, they are well known for the significant amounts of money they spend
on research and development. As the population of the United States ages, the
companies involved in the pharmaceutical field will continue to search for and
develop new drugs through advanced technologies and diagnostics. On a
world-wide basis, pharmaceutical companies are involved in the development and
distribution of drugs and vaccines. These activities may make the
pharmaceutical sector very attractive for investors seeking the potential for
growth in their investment portfolio.
General. An investor will be subject to taxation on the dividend income
received from the Trust and on gains from the sale or liquidation of
Securities (see "Federal Taxation" ). Investors should be aware that
there is not any guarantee that the objectives of the Trust will be achieved
because they are subject to the continuing ability of the respective Security
issuers to continue to declare and pay dividends and because the market value
of the Securities can be affected by a variety of factors. Common stocks may
be especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Equity Securities will pay dividends on outstanding common shares. Any
distributions of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust as of the Initial Date of
Deposit. Subsequent to the Initial Date of Deposit, the Securities may no
longer meet such criteria. Should an Equity Security no longer meet such
criteria, such Equity Security will not, simply as a result of such fact, be
removed from the portfolio of the Trust.
Investors should be aware that the Trust is not a "managed" fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Investors should
note in particular that the Securities were selected by the Sponsor as of the
Initial Date of Deposit. The Trust may continue to purchase or hold Securities
originally selected through this process even though the evaluation of the
attractiveness of the Securities may have changed and, if the evaluation were
performed again at that time, the Securities would not be selected for the
Trust.
TRUST PORTFOLIO
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The Trust consists of 32 different issues of Equity Securities which are
primarily issued by established companies with extensive domestic and
international operations that are engaged in the design, production and
distribution of products within the non-durable consumer goods industry,
including common stocks of foreign issuers (all of which are in American
Depositary Receipt or New York Share form). All of the Equity Securities are
listed on a national securities exchange, the NASDAQ National Market System or
are traded in the over-the-counter market. The following is a general
description of each of the companies included in the Trust.
American Home Products Corporation. American Home Products Corporation is a
research-based pharmaceutical and health care products company and is a
developer, manufacturer and marketer of prescription drugs and
over-the-counter medications. The company also produces women's health care
products, vaccines, generic pharmaceuticals, biotechnology products,
agricultural products, animal health care products, medical devices, and
infant and food products.
Anheuser-Busch Companies, Inc. Anheuser-Busch Companies, Inc. is a diversified
corporation whose subsidiaries include a brewery organization, a theme park
operator and an aluminum beverage container manufacturer. The company also has
interests in malt production, rice milling, real estate development, turf
farming, creative services, metalized and paper label printing, railcar repair
and transportation services.
Avon Products, Inc. Avon Products, Inc. is a worldwide manufacturer and
direct-seller of beauty products, fashion jewelry and prestige fragrances. The
company markets its products to women in 119 countries through approximately
1.7 million independent representatives. Avon also offers gift and decorative
products such as ceramics, glassware, collectibles and ornaments.
Bristol-Myers Squibb Company. Bristol-Myers Squibb Company researches,
develops, manufactures and markets prescription and non-prescription drugs,
medical devices, health and skin care products, toiletries and beauty aids.
The company's line of drugs include cardiovascular drugs and antibiotics,
central nervous system drugs, chemotherapeutic agents, diagnostic agents and
others.
Campbell Soup Company. Campbell Soup Company is a major manufacturer of canned
soups both condensed and ready-to-serve. The company also produces other
convenience foods which include "Swanson" frozen dinners, "
Prego" spaghetti sauce, "Pepperidge Farm" bakery products and many
other brand name products. Campbell's distributes its products to chain
stores, distributors and wholesalers worldwide.
Clorox Company. Clorox Company develops, manufactures and sells grocery store
products both domestically and internationally. The company's product lines
include laundry additives, home cleaning products, cat litter and
insecticides, charcoal grill products and salad dressings and sauces. Clorox
also produces products for the janitorial, institutional and food service
industries.
The Coca-Cola Company. The Coca-Cola Company manufactures, markets and
distributes soft drinks, soft-drink syrups and concentrates worldwide,
including "Coca-Cola," "Diet Coke," "Tab," "
Sprite," "Diet Sprite," "Fanta," "Fresca," "
Cherry Coke," "Diet Cherry Coke," "PowerAde," "
Fruitopia" and "Minute Maid" sodas. Other products include juices,
juice-drinks and mixers like "Minute Maid," "Hi-C" and "
Bacardi" brands.
Colgate-Palmolive Company. Colgate-Palmolive Company is a global consumer
products company whose core products consist of oral care, body care,
household surface care, fabric care and animal nutrition and dietary care.
Colgate-Palmolive markets its products internationally under a variety of
brand names including "Colgate," "Palmolive," "Ajax,"
"Fab" and "Irish Spring" as well as "Hill's Science
Diet" and "Prescription Diet."
ConAgra, Inc. ConAgra, Inc. produces food inputs and ingredients, refrigerated
foods and grocery/diversified products. The company produces a variety of
products from basic agricultural inputs to the production and sale of branded
consumer items.
CPC International, Inc. CPC International, Inc. is a major food company with
operations in 58 countries in North America, Europe, Latin America, Asia and
South Africa. The company produces a variety of branded foods which include
"Hellmann's" mayonnaise, "Skippy" peanut butter, "
Knorr's" dehydrated soups, "Mazola" corn oil, as well as starches,
syrups, desserts, bakery, pasta and bread spreads.
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.
Gillette Company. Gillette Company manufactures male and female grooming
products, writing instruments and correction products, toothbrushes and oral
care products and alkaline batteries. The company's products include blades
and razors, shaving preparations, electric shavers, hair epilation devices and
other products. Gillette's products are distributed in over 200 countries and
territories.
Heinz (H.J.) Company. Heinz (H.J.) Company manufactures and markets food
products. The company produces ketchup, sauces, vinegar, pickles, canned tuna,
pet food, frozen potatoes, meat products and corn syrup and other items.
Heinz's subsidiary, Weight Watchers International operates and franchises
weight control centers and licenses diet foods to other manufacturers. The
company sells its products internationally.
Johnson & Johnson. Johnson & Johnson manufactures and sells a broad range of
products in health care and other fields. The company's business is divided
into the consumer, professional and pharmaceutical segments. Products include
contraceptives, therapeutics, veterinary products, dental products, surgical
instruments, dressings and apparel and nonprescription drugs.
Kellogg Company. Kellogg Company manufactures cereal products and convenience
foods. The company produces "Rice Krispies," "Special K," "
Frosted Flakes," "Froot Loops" and other cereals. Other
subsidiaries offer dessert mixes, soup bases, gelatin desserts and yogurt
products. Kellogg sells its products in the United States and other countries.
Kimberly-Clark Corporation. Kimberly-Clark Corporation manufactures disposable
hygiene products and specialty papers. The company's global brands include
"Huggies," "Pull-Ups," "Kotex," "Depend," "
Kleenex," "Scott," "Kimwipes" and "Wypall." Other
brands outside the United States include "Andrex," "Scottex,"
"Page," "Popee" and "Kimbies." Kimberly-Clark also
produces professional health care products.
Liz Claiborne, Inc. Liz Claiborne, Inc. designs and markets a wide range of
women's and men's apparel and related items, such as fragrances. The company
focuses on women's designs for work and leisure-time needs, as well as men's
separates, including sweaters, pants, shirts and jackets. Products are
manufactured to the company's specifications and sold to department and
specialty stores in the United States and abroad.
Mattel, Inc. Mattel, Inc. is a worldwide designer, manufacturer and marketer
of children's toys. The company's core product line includes "Barbie,"
"Fisher-Price," "Disney" and "Hot Wheels" toys and
accessories. Mattel markets its products in more than 140 nations throughout
the world.
McDonald's Corporation. McDonald's Corporation develops, operates, franchises
and services a worldwide system of restaurants. These restaurants prepare,
assemble, package and sell a limited menu of quickly-prepared,
moderately-priced foods. There are over 19,200 restaurants in the United
States and 94 countries worldwide. Food items include hamburgers, chicken,
salads, breakfast foods and beverages.
Nabisco Holdings Corporation. Nabisco Holdings Corporation manufactures and
sells a variety of packaged foods. Products include candy, cookies, oatmeal,
condiments and dog treats. The company sells its line under a number of brand
names including "Ritz," "Bubble Yum," "Stella D'Oro,"
"Blue Bonnet" and "Snackwell's." Nabisco operates worldwide.
Nestle, SA. Nestle, SA is a holding company. The company has subsidiaries that
produce and sell drinks, cereals, powdered milk, culinary products, frozen
food, chocolate, ready-to-eat dishes, refrigerated products, food service
products, pet food, pharmaceuticals and cosmetics. Nestle has 494 production
facilities in approximately 71 countries.
Nike, Inc. Nike, Inc. designs, develops and markets a wide variety of
high-quality footwear and apparel products. The company sells its products to
approximately 18,000 retail accounts in the United States and through a mix of
independent distributors, licensees and subsidiaries in approximately 110
countries around the world.
PepsiCo, Inc. PepsiCo, Inc. operates on a worldwide basis in the soft drink,
snack food and restaurant business segments. Some of the company's products
include "Pepsi-Cola," "Slice" and "Mountain Dew" soft
drinks and "Frito-Lay" snack foods. The company also operates "
Pizza Hut," "Taco Bell" and "Kentucky Fried Chicken"
restaurants worldwide.
The Procter & Gamble Company. The Procter & Gamble Company manufactures and
distributes household products. Its laundry and cleaning, personal care and
food and beverage segments are distributed primarily through grocery stores
and other retail outlets. Products of the pulp and chemicals segment are sold
directly to the users. The company's products are sold throughout the United
States and abroad.
Revlon, Inc. Revlon, Inc. manufactures and sells a wide variety of beauty
products throughout the world. The company's principal brands include "
Revlon," "Almay," "Ultima II" and several other regional
brands. Revlon brands are sold in approximately 175 countries and territories.
Sara Lee Corporation. Sara Lee Corporation is a worldwide manufacturer and
marketer of consumer products including packaged meats, bakery items, coffee,
personal products and household and personal care items. The company's brand
names include "Sara Lee" food items, "Jimmy Dean" packaged
meats, "Coach" leatherware, "Hanes" clothing and hosiery, "
L'eggs" hosiery, "Champion" activewear and other brand names.
Schering-Plough Corporation. Schering-Plough Corporation discovers, develops,
manufactures and markets pharmaceuticals and consumer products. Pharmaceutical
products include prescription drugs, over-the-counter medicines, vision care
products and animal health care products. The consumer products group consists
of cosmetics, proprietary medicines, toiletries and foot care products.
Unilever, NV. Unilever, NV manufactures branded and packaged consumer goods,
including food, detergents and personal care products. The company also,
through National Starch and Chemical in the United States, has interests in
the development and production of resins and specialty organic chemicals for
industrial use. Unilever markets its products worldwide.
The Walt Disney Company. The Walt Disney Company is a diversified
international entertainment company. The company, through it's subsidiaries,
owns and operates theme parks and resorts, film studios, consumer products,
television networks, radio networks, cable networks, newspapers and magazines.
Disney owns, among others, ABC Television, ABC Radio, The Disney Channel,
Disney Land and Disney-MGM Studios.
Warner-Lambert Company. Warner-Lambert Company discovers, develops,
manufactures and markets pharmaceutical, consumer health care and
confectionary products. The company's products include "Listerine"
mouthwash, "Trident" gum, "Schick" razors, "Tetra"
fish food, "Sudafed" and "Benadryl" decongestants, "
Halls" cough drops, "Dilantin" epilepsy drug, "Centrax"
tranquilizer, "Neosporin" topical antibiotic and other products.
Wendy's International, Inc. Wendy's International, Inc. operates, develops and
franchises a system of fast food restaurants. The restaurants offer
hamburgers, salads and chicken sandwiches. The company operates or franchises
over 4,500 "Wendy's" and "Tim Hortons" restaurants in the
United States and 33 countries and territories.
Wrigley (WM) Jr. Company. Wrigley (WM) Jr. Company manufactures chewing gum.
The company produces and sells gum under the brand names "Wrigley's
Spearmint," "Doublemint," "Juicy Fruit" and "Big
Red" . Other brand names include "Freedent," "Orbit," "
Hubba Bubba" and "Extra" . Wrigley sells its products in the United
States, Europe, Australia, Canada, the Philippines, Taiwan and other countries.
General. The Trust consists of (a) the Securities listed under "
Portfolio" as may continue to be held from time to time in the Trust, (b)
any additional Securities acquired and held by the Trust pursuant to the
provisions of the Trust Agreement and (c) any cash held in the Income and
Capital Accounts. Neither the Sponsor nor the Trustee shall be liable in any
way for any failure in any of the Securities. However, should any contract for
the purchase of any of the Securities initially deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in the Trust to
cover such purchase are reinvested in substitute Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable to such
failed contract to all Unitholders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will in most cases be distributed to Unitholders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the portfolio is not
managed, the Sponsor may instruct the Trustee to sell Equity Securities under
certain limited circumstances. See "Trust Administration--Portfolio
Administration." Equity Securities, however, will not be sold by the Trust
to take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
RISK FACTORS
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Consumer Products, Food and Beverage, and Pharmaceutical Companies. The Trust
is concentrated in issuers within the consumer products industry. A portfolio
concentrated in a single industry may present more risk than an a portfolio of
more broadly diversified investments. The Trust, and therefore Unitholders,
may be particularly susceptible to a negative impact resulting from adverse
market conditions or other factors affecting issuers in the consumer products
industry because any negative impact on the consumer products industry will
not be diversified among issuers within other unrelated industries.
Accordingly, an investment in Units should be made with an understanding of
the risks inherent in the consumer products industry.
Investment in securities issued by non-durable consumer products companies
should be made with an understanding of the many factors which may have an
adverse impact on the credit quality of the particular company or industry.
These include cyclicality of revenues and earnings, changing consumer demands,
regulatory restrictions, products liability litigation and other litigation
resulting from accidents, extensive competition (including that of low-cost
foreign companies), unfunded pension fund liabilities and employee and retiree
benefit costs and financial deterioration resulting from leveraged buy-outs,
takeovers or acquisitions. In general, expenditures on consumer products will
be affected by the economic health of consumers. Various factors such as
recession and any related tightening of consumer credit and spending may have
a continuing adverse effect on the industry. Other factors of particular
relevance to the profitability of the industry are the effects of increasing
environmental regulation on packaging and on waste disposal, the continuing
need to conform with foreign regulations governing packaging and the
environment, the outcome of trade negotiations and their effect on foreign
subsidies and tariffs, foreign exchange rates, the price of oil and its effect
on energy costs, inventory cutbacks by retailers, transportation and
distribution costs, health concerns relating to the consumption of certain
products, the effect of demographics on consumer demand, the availability and
cost of raw materials and the ongoing need to develop new products and to
improve productivity.
Investment in stocks of the food and beverage industry, including
manufacturers of packaged foods, processors of agricultural products, beverage
companies and food distributors, should be made with an understanding of the
many factors that may have an adverse impact on the value of the stocks of
these companies and their ability to pay dividends. These factors include the
sensitivity of revenues, earnings, and financial condition to economic
conditions, changing consumer demands or preferences, fluctuations in the
prices of agricultural commodities, fluctuations in the cost of other raw
materials such as packaging, and the effects of inflation on pricing
flexibility. The revenues and earnings of these companies can also be affected
by extensive competition that can result in lost sales or in lower margins
resulting from efforts to maintain market share. Food and beverage companies
are also subject to regulation under various federal laws--such as the Food,
Drug, and Cosmetic Act--as well as state, local and foreign laws and
regulations. Costs associated with complying with changing regulatory
restrictions, such as food labeling requirements, could adversely affect
earnings. Food and beverage companies are also becoming increasingly exposed
to risks associated with international operation, including foreign currency
fluctuations and future political and economic developments in other
countries. Other risk factors include potential deterioration in financial
condition resulting from litigation related to product liability, accidents,
or trademark or patent disputes; unfunded pension liability; changing
accounting standards and leveraged buyouts, takeovers, or recapitalizations.
An investment in Units of the Trust should be made with an understanding of
the characteristics of the pharmaceutical and medical technology industries
and the risks which such investment may entail. Pharmaceutical and medical
technology companies are companies involved in drug development and production
services. Such companies have potential risks unique to their sector of the
health care field. Such companies are subject to governmental regulation of
their products and services, a factor which could have a significant and
possibly unfavorable effect on the price and availability of such products or
services. Furthermore, such companies face the risk of increasing competition
from generic drug sales, the termination of their patent protection for drug
products and the risk that technological advances will render their products
or services obsolete. The research and development costs of bringing a drug to
market are substantial and include lengthy governmental review processes, with
no guarantee that the product will ever come to market. Many of these
companies may have losses and not offer certain products for some time. Such
companies may also have persistent losses during a new product's transition
from development to production, and revenue patterns may be erratic.
Legislative proposals concerning health care have been under consideration by
federal and state governments from time to time in recent years. These
proposals span a wide range of topics, including cost and price controls
(which might include a freeze on the prices of prescription drugs), national
health insurance, incentives for competition in the provision of health care
services, tax incentives and penalties related to health care insurance
premiums and promotion of pre-paid health care plans. The Sponsor is unable to
predict the effect of any of these proposals, if enacted, on the issuers of
Equity Securities in the Trust.
Foreign Issuers. Since certain of the Equity Securities in the Trust consist
of securities to foreign issuers, an investment in the Trust involves some
investment risks that are different in some respects from an investment in a
trust that invests entirely in securities of domestic issuers. Those
investment risks include future political and governmental restrictions which
might adversely affect the payment or receipt of payment of dividends on the
relevant Equity Securities. In addition, for the 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. However, due
to the nature of the issuers of Equity Securities included in the Trust, the
Sponsor believes that adequate information will be available to allow the
Supervisor to provide portfolio surveillance.
The securities of the foreign issuers in the Trust are in American Depositary
Receipt or New York Share form. ADRs evidence American Depositary Receipts
which represent common stock deposited with a custodian in a depositary.
American Depositary Shares, and receipts therefor (ADRs), are issued by an
American bank or trust company to evidence ownership of underlying securities
issued by a foreign corporation. New York Shares are similar to and are
generally subject to similar risks as ADRs. These instruments may not
necessarily be denominated in the same currency as the securities into which
they may be converted. For purposes of the discussion herein, the term ADR
generally includes American Depositary Shares. ADRs may be sponsored or
unsponsored. In an unsponsored facility, the depositary initiates and arranges
the facility at the request of market makers and acts as agent for the ADR
holder, while the company itself is not involved in the transaction. In a
sponsored facility, the issuing company initiates the facility and agrees to
pay certain administrative and shareholder-related expenses. Sponsored
facilities use a single depositary and entail a contractual relationship
between the issuer, the shareholder and the depositary; unsponsored facilities
involve several depositaries with no contractual relationship to the company.
The depositary bank that issues an ADR generally charges a fee, based on the
price of the ADR, upon issuance and cancellation of the ADR. This fee would be
in addition to the brokerage commissions paid upon the acquisition or
surrender of the security. In addition, the depositary bank incurs expenses in
connection with the conversion of dividends or other cash distributions paid
in local currency into U.S. dollars and such expenses are deducted from the
amount of the dividend or distribution paid to holders, resulting in a lower
payout per underlying shares represented by the ADR than would be the case if
the underlying share were held directly. Investors should be aware that the
Trustee of the Trust may act as the depositary bank for certain ADRs which may
include certain of the Securities. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices
in the ADR market may also exist with respect to certain ADRs. In varying
degrees, any or all of these factors may affect the value of the ADR compared
with the value of the underlying shares in the local market. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that for
the underlying shares. ADRs are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements of the
Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs
and consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. 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 soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries. Therefore, for any securities of issuers (whether
or not they are in ADR form) whose earnings are stated in foreign currencies,
or which pay dividends in foreign currencies or which are traded in foreign
currencies, there is a risk that their United States dollar value will vary
with fluctuations in the United States dollar foreign exchange rates for the
relevant currencies.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trust 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 the 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 Trust and on the ability of
the Trust to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
Equity Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the risk
that the financial condition of the issuers of the Equity Securities or the
general condition of the common stock market may worsen and the value of the
Equity Securities and therefore the value of the Units may decline. Common
stocks are especially susceptible to general stock market movements and to
volatile increases and decreases of value as market confidence in and
perceptions of the issuers change. These perceptions are based on
unpredictable factors including expectations regarding government economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the issuers
of those common stocks that are generally subordinate to those of creditors
of, or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and have a right to participate in amounts
available for distribution by the issuer only after all other claims on the
issuer have been paid or provided for. Certain of the issuers may currently be
in arrears with respect to preferred stock dividend payments. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Equity Securities in the portfolio may be expected to fluctuate over the life
of the Trust to values higher or lower than those prevailing on the Initial
Date of Deposit or at the time a Unitholder purchases Units.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor. The price at which
the Equity Securities may be sold to meet redemptions, and the value of the
Trust, will be adversely affected if trading markets for the Equity Securities
are limited or absent.
As described under "Trust Operating Expenses," all of the expenses of
the Trust will be paid from the sale of Securities from the Trust. It is
expected that such sales will be made at the end of the initial offering
period and each month thereafter through termination of the Trust. Such sales
will result in capital gains and losses and may be made at times and prices
which adversely affect the Trust. For a discussion of the tax consequences of
such sales, see "Federal Taxation."
The Trust Agreement authorizes the Sponsor to increase the size of the 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 the Trust will pay the associated brokerage fees.
Unitholders will be unable to dispose of any of the Equity Securities in the
portfolio, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor. In the absence of any such instructions by
the Sponsor, the Trustee will vote such stocks so as to insure that the stocks
are voted as closely as possible in the same manner and the same general
proportion as are shares held by owners other than the Trust.
FEDERAL TAXATION
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The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221
of the Internal Revenue Code of 1986 (the "Code" ). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from the Trust asset when such income is considered to be
received by the Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his pro rata portion of each Equity Security when such dividends are
considered to be received by the Trust regardless of whether such dividends
are used to pay a portion of the deferred sales charge. Unitholders will be
taxed in this manner regardless of whether distributions from the Trust are
actually received by the Unitholder or are automatically reinvested.
3. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is received by such Unitholder
as described below). The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of each
Equity Security held by the Trust (in proportion to the fair market values
thereof on the valuation date nearest the date the Unitholder purchase his
Units) in order to determine his initial tax basis for his pro rata portion of
each Equity Security held by the Trust. It should be noted that certain
legislative proposals have been made which could affect the calculation of
basis for Unitholders holding securities that are substantially identical to
the 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 an Equity Security held by the Trust are taxable as
ordinary income to the extent of such corporation's current and accumulated
"earnings and profits" . A Unitholder's pro rata portion of dividends
paid on such Equity Security which exceeds such current and accumulated
earnings and profits will first reduce a Unitholder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unitholder's tax
basis in such Equity Security shall generally be treated as capital gain. In
general, 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 Equity Securities held by the Trust will generally
be considered a capital gain 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 (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 Equity
Securities held by the 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
such capital 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 Trust 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 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 the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above, and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. These limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains 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 "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 Act, the Act includes a
provision that would recharacterize 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 including his pro rata
portion of all Equity 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 of 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 the Trust. As discussed in "Rights of
Unitholders--Redemption of Units" , under certain circumstances a
Unitholder tendering Units for redemption may request an In Kind Distribution.
A Unitholder may also under certain circumstances request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Equity Security held by the Trust will depend on whether
or not a Unitholder receives cash in addition to Equity Securities. An "
Equity Security" for this purpose is a particular class of stock issued by
a particular corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Equity Securities in exchange for his or her pro rata
portion in the Equity Securities held by the Trust. However, if a Unitholder
also receives cash in exchange for a fractional share of an Equity Security
held by the Trust, such Unitholder will generally recognize gain or loss based
upon the difference between the amount of cash received by the Unitholder and
his tax basis in such fractional share of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request an
In Kind Distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder of his
Units. The cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date nearest the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the Trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified by the Internal Revenue Service that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by the Trust (other than those that are not treated as United
States source income, if any) will generally be subject to United States
income taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States persons.
Such persons should consult their tax advisers.
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 corporations 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 or 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 the Trust.
It should be noted that payments to the Trust of dividends on Equity
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. Legislative
proposals have been made which would impose a required holding period for such
credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
In the opinion of Kroll & Tract LLP, special counsel to the Trust for New York
tax matters, the Trust is not an association taxable as a corporation and the
income of the Trust will be treated as the income of the Unitholders under the
existing income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to 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 of the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
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Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee which is not to exceed the
amount set forth under "Summary of Essential Financial Information,"
for providing portfolio supervisory services for the Trust. Such fee (which is
based on the number of Units outstanding on January 1 of each year for which
such compensation relates except during the initial offering period in which
event the calculation is based on the number of Units outstanding at the end
of the month of such calculation) may exceed the actual costs of providing
such supervisory services for this Trust, but at no time will the total amount
received for portfolio supervisory services rendered to Series 1 and
subsequent series of Van Kampen Merritt Equity Opportunity Trust (and its
successors) and to any other unit investment trusts sponsored by the Sponsor
for which the Supervisor provides portfolio supervisory services in any
calendar year exceed the aggregate cost to the Supervisor of supplying such
services in such year. In addition, the Evaluator, which is a division of Van
Kampen American Capital Investment Advisory Corp., shall receive the annual
per Unit evaluation fee set forth under "Summary of Essential Financial
Information" (which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number
of Units outstanding at the end of the month of such calculation) for
regularly evaluating the Trust portfolio. The foregoing fees are payable as
described under "General" below. Both of the foregoing fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a
comparable category. The Sponsor will receive sales commissions and may
realize other profits (or losses) in connection with the sale of Units and the
deposit of the Securities as described under "Public Offering--Sponsor
Compensation."
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" (which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number
of Units outstanding at the end of the month of such calculation). 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 and the amounts earned by the Trustee
are retained by the Trustee. Part of the Trustee's compensation for its
services to the Trust is expected to result from the use of these funds. Such
fees may be increased without approval of the Unitholders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor or, if such category is no longer published, in a
comparable category. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration."
Miscellaneous Expenses. Expenses incurred in establishing the Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and
state registration fees, the initial fees and expenses of the Trustee, legal
and accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and amortized over the life of the Trust.
The following additional charges are or may be incurred by the Trust: (a)
normal expenses (including the cost of mailing reports to Unitholders)
incurred in connection with the operation of the Trust, (b) fees of the
Trustee for extraordinary services, (c) expenses of the Trustee (including
legal and auditing expenses) and of counsel designated by the Sponsor, (d)
various governmental charges, (e) expenses and costs of any action taken by
the Trustee to protect the Trust and the rights and interests of Unitholders,
(f) indemnification of the Trustee for any loss, liability or expenses
incurred in the administration of the Trust without negligence, bad faith or
wilful misconduct on its part, (g) accrual of costs associated with
liquidating securities and (h) expenditures incurred in contacting Unitholders
upon termination of the Trust. The expenses set forth herein are payable as
described under "General" below.
General. During the initial offering period of the Trust, all of the fees and
expenses will accrue on a daily basis and will be charged to the Trust, in
arrears, at the end of the initial offering period. After the initial offering
period of the Trust, all of the fees and expenses of the Trust will accrue on
a daily basis and will be charged to the Trust, in arrears, on a monthly basis
as of the tenth day of each month. The fees and expenses are payable out of
the Capital Account. When such fees and expenses are paid by or owing to the
Trustee, they are secured by a lien on the Trust's portfolio. It is expected
that the balance in the Capital Account will be insufficient to provide for
amounts payable by the Trust and that Equity Securities will be sold from the
Trust to pay such amounts. These sales will result in capital gains or losses
to Unitholders. See "Federal Taxation" .
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate underlying value of the Securities in the
Trust's portfolio, the initial sales charge described below, and cash, if any,
in the Income and Capital Accounts held or owned by the Trust. The initial
sales charge is equal to the difference between the maximum total sales charge
for the Trust of 4.5% of the Public Offering Price and the maximum deferred
sales charge for the Trust ($0.20 per Unit). The monthly deferred sales charge
($0.0333 per Unit) will begin accruing on a daily basis on December 2, 1997
and will continue to accrue through June 1, 1998. The monthly deferred sales
charge will be charged to the Trust, in arrears, commencing January 2, 1998
and will be charged on the 2nd day of each month thereafter through June 2,
1998. If any deferred sales charge payment date is not a business day, the
payment will be charged to the Trust on the next business day. Unitholders
will be assessed only 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
Unitholders on a per Unit basis will be 4.5% of the Public Offering Price
(4.712% of the aggregate value of the Securities in the Trust less the
deferred sales charge). The sales charge for secondary market transactions is
described under "Offering Price" below. The initial sales charge
applicable to quantity purchases is, during the initial offering period,
reduced on a graduated basis to any person acquiring 5,000 or more Units as
follows:
<TABLE>
<CAPTION>
Aggregate Number of
Units Purchased * Dollar Amount of Sales Charge Reduction Per Unit
- ---------------------- -----------------------------------------------------------
<S> <C>
5,000-9,999 $0.03
10,000-24,999 $0.05
25,000-49,999 $0.10
50,000-99,999 $0.15
100,000 or more $0.20
_______________
*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 Trust's requirement that only whole
Units be issued.
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent. This reduced sales charge structure will 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 qualifies 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.
During the initial offering period of the Trust, unitholders of any Van Kampen
American Capital-sponsored unit investment trust may utilize their redemption
or termination proceeds to purchase Units of this 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 and daughters-in-law and trustees, custodians or
fiduciaries for the benefit of such persons) of Van Kampen American Capital
Distributors, Inc. and its affiliates, dealers and their affiliates, and
vendors providing services to the Sponsor may purchase Units at the Public
Offering Price less the applicable dealer concession.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases (see "Public Offering--Unit
Distribution" ) by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their 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.
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
Trust.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to the difference between the maximum total sales charge of 4.5% of the
Public Offering Price and the maximum deferred sales charge ($0.20 per Unit)
and dividing the sum so obtained by the number of Units outstanding. The
Public Offering Price shall also include the proportionate share of any cash
held in the Capital Account. This computation produced a gross underwriting
profit equal to 4.5% of the Public Offering Price. Such price determination as
of the close of business on the day before the Initial Date of Deposit was
made on the basis of an evaluation of the Securities in the Trust prepared by
Interactive Data Corporation, a firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities. After the close of
business on the day before the Initial Date of Deposit, the Evaluator will
appraise or cause to be appraised daily the value of the underlying Securities
as of the Evaluation Time on days the New York Stock Exchange is open and will
adjust the Public Offering Price of the Units commensurate with such
valuation. Such Public Offering Price will be effective for all orders
received prior to the Evaluation Time on each such day. Orders received by the
Trustee or Sponsor for purchases, sales or redemptions after that time, or on
a day when the New York Stock Exchange is closed, will be held until the next
determination of price. 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 for the Trust of 4.5% of the
Public Offering Price and the maximum deferred sales charge for the Trust
($0.20 per Unit) and will be assessed a deferred sales charge of $0.0333 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 November 30, 2001. Commencing on June 2,
1998, the secondary market sales charge will not include deferred payments but
will instead include only a one-time initial sales charge of 4.0% of the
Public Offering Price and will be reduced by .5 of 1% on each subsequent June
2, to a minimum sales charge of 3.0%.
The 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 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. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange, the
evaluation shall generally be based on the current 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 offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. 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.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units on the Initial Date of Deposit of
3.60%. After the Initial Date of Deposit, broker-dealers or others will be
allowed a concession or agency commission in connection with the distribution
of Units during the initial offering period of 3.20% per Unit; volume
concessions or agency commissions of an additional .30% of the Public Offering
Price will be given to any broker/dealer or bank, who purchases from the
Sponsor at least $100,000 on the Initial Date of Deposit or $250,000 on any
day thereafter. Any quantity discount provided to investors will be borne by
the selling dealer or agent as indicated under "General" above.
However, for transactions involving unitholders of any Van Kampen American
Capital-sponsored unit investment trust who purchase Units during the initial
offering period with redemption or termination proceeds from such trust, the
concession or agency commission will be 1% per Unit. For secondary market
transactions, the concession or agency commission will amount to 70% of the
sales charge applicable to the transaction. The breakpoints described above
are also applied on a dollar basis utilizing a breakpoint equivalent of $10
per Unit and will be applied on whichever basis is more favorable to the
broker, dealer or agent. The breakpoints will be adjusted to take into
consideration purchase orders stated in dollars which cannot be completely
fulfilled due to the Trust's requirement that only whole Units be issued.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units except as stated
herein. In connection with fully disclosed transactions with the Sponsor, the
minimum purchase requirement will be that number of Units set forth in the
contract between the Sponsor and the related broker or agent. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase
of Units and to change the amount of the concession or agency commission to
dealers and others from time to time.
Sponsor Compensation. The Sponsor will receive a gross sales commission equal
to 4.5% of the Public Offering Price of the Units (equivalent to 4.712% of the
aggregate value of Securities less the deferred sales charge), less any
reduced sales charge for quantity purchases (as described under "
General" above). Any quantity discount provided to investors will be borne
by the selling broker, dealer or agent as indicated under "General"
above.
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 the Trust on the
Initial Date of Deposit as well as on subsequent deposits. See "Notes to
Portfolio." The Sponsor has not participated as sole underwriter or as
manager or as a member of the underwriting syndicates or as an agent in a
private placement for any of the Securities in the Trust portfolio. The
Sponsor may further realize additional profit or loss during the initial
offering period as a result of the possible fluctuations in the market value
of the Securities in the Trust after a date of deposit, since all proceeds
received from purchasers of Units (excluding dealer concessions and agency
commissions allowed, if any) will be retained by the Sponsor. Broker-dealers
or others (each "a distributor" ) who distribute 500,000-999,999 Units
during the initial offering period will receive additional compensation from
the Sponsor, after the close of the initial offering period, of $0.005 for
each Unit it distributes; or each distributor who distributes 1,000,000 -
1,999,999 Units will receive additional compensation of $0.01 for each Unit it
distributes; or each distributor who distributes 2,000,000 - 2,999,999 Units
will receive additional compensation of $0.015 for each Unit it distributes;
or each distributor who distributes 3,000,000 or more Units will receive
additional compensation of $0.02 for each Unit it distributes. The breakpoints
described above are also applied on a dollar basis utilizing a breakpoint
equivalent of $10 per Unit and will be applied on whichever basis is more
favorable to the distributor. The breakpoints will be adjusted to take into
consideration purchase orders stated in dollars which cannot be completely
fulfilled due to the Trust's requirement that only whole Units be issued.
Broker-dealers of the Trust, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a
nominal award for each of their representatives who have sold a minimum number
of units of unit investment trusts created by the Sponsor during a specified
time period. In addition, at various times the Sponsor may implement other
programs under which the sales forces of brokers, dealers, banks and/or others
may be eligible to win other nominal awards for certain sales efforts, or
under which the Sponsor will reallow to such brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor, or participate in sales programs
sponsored by the Sponsor, an amount not exceeding the total applicable sales
charges on the sales generated by such persons at the public offering price
during such programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor pay fees to
qualifying entities for certain services or activities which are primarily
intended to result in sales of Units of the Trust. Such payments are made by
the Sponsor out of its own assets, and not out of the assets of the Trust.
These programs will not change the price Unitholders pay for their Units or
the amount that the Trust will receive from the Units sold.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject
to the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain
a secondary market for Units of the Trust for the period indicated. In so
maintaining a market, the Sponsor will also realize profits or sustain losses
in the amount of any difference between the price at which Units are purchased
and the price at which Units are resold (which price includes the applicable
sales charge). In addition, the Sponsor will also realize profits or sustain
losses resulting from a redemption of such repurchased Units at a price above
or below the purchase price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Sponsor intends to
maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trust (computed as
indicated under "Offering Price" above "Rights of
Unitholders--Redemption of Units" ). If the supply of Units exceeds demand
or if some other business reason warrants it, the Sponsor may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. It is the current intention of the Sponsor to maintain a market for
Units through November 30, 2001 only. In the event that a market is not
maintained for the Units and the Unitholder cannot find another purchaser, a
Unitholder desiring to dispose of his Units may be able to dispose of such
Units only by tendering them to the Trustee for redemption at the Redemption
Price. See "Rights of Unitholders--Redemption of Units." A Unitholder
who wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof. 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 Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans.
RIGHTS OF UNITHOLDERS
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Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by certificates unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be in book entry form. Units are
transferable by making a written request to the Trustee and, in the case of
Units evidenced by a certificate, by presentation and surrender of such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign such written
request, and such certificate or transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate
representing the Units to be transferred with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP" ) or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account of the Trust. Proceeds
from the sale of Securities to meet redemptions of Units shall be segregated
within the Capital Account from proceeds from the sale of Securities made to
satisfy the fees, expenses and charges of the Trust.
The Trustee will distribute any income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information." Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units,
pay the deferred sales charge or pay fees and expenses, will be distributed
annually on the Capital Account Distribution Date to Unitholders of record on
the preceding Capital Account Record Date. Proceeds received from the
disposition of any of the Securities after a record date and prior to the
following distribution date will be held in the Capital Account and not
distributed until the next distribution date applicable to such Capital
Account. The Trustee is not required to pay interest on funds held in the
Capital or Income Accounts (but may itself earn interest thereon and therefore
benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account. Because
dividends are not received by the Trust at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
At the end of the initial offering period and as of the tenth day of each
month thereafter, the Trustee will deduct from the Capital Account amounts
necessary to pay the expenses of the Trust (as determined on the basis set
forth under "Trust Operating Expenses" ). The Trustee also may withdraw
from the Income and Capital Accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of
the Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw
from the Income and Capital Accounts such amounts as may be necessary to cover
redemptions of Units.
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 the Trust may elect to have each
distribution of income, capital gains and/or capital on their Units
automatically reinvested in additional Units of the Trust subject to the
remaining deferred sales charge payments due on Units, if any, pursuant to 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. To participate in the reinvestment plan, a
Unitholder may either contact his or her broker or agent or file with the
Trustee a written notice of election at least five days prior to the Record
Date for which the first distribution is to apply. A Unitholder's election to
participate in the reinvestment plan will apply to all Units of the Trust
owned by such Unitholder and such election will remain in effect until changed
by the Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Sponsor (see "Public Offering--Public Market" ) or,
until such time as additional Units cease to be issued by the Trust (see "
The Trust" ), distributions may be reinvested in such additional Units. If
Units are unavailable in the secondary market, distributions which would
otherwise have been reinvested shall be paid in cash to the Unitholder on the
applicable Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will be
made subject to any remaining deferred sales charge based on the net asset
value for Units of the Trust as of the Evaluation Time on the related
Distribution Dates. Under the reinvestment plan, the Trust will pay the
Unitholder's distributions to the Trustee which in turn will purchase for such
Unitholder full and fractional Units of the Trust and will send such
Unitholder a statement reflecting the reinvestment.
Unitholders may also elect to have each distribution of income, capital gains
and/or capital on their Units automatically reinvested in 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 Trust. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen American
Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois
60181. Texas residents who desire to reinvest may request that a broker-dealer
registered in Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
income, capital gains and/or capital on the participant's Units will, on the
applicable distribution date, automatically be applied, as directed by such
person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such
date. Unitholders with an existing Guaranteed Reinvestment Option (GRO)
Program account (whereby a sales charge is imposed on distribution
reinvestments) may transfer their existing account into a new GRO account
which allows purchases of Reinvestment Fund shares at net asset value as
described above. Confirmations of all reinvestments by a Unitholder into a
Reinvestment Fund will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
The Sponsor, each Reinvestment Fund, and its investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received, deductions for applicable taxes and
for fees and expenses of the Trust, for redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed in each
case both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such calendar
year; (ii) as to the Capital Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payment of
applicable taxes, fees and expenses of the Trust held for distribution to
Unitholders of record as of a date prior to the determination and the balance
remaining after such distributions and deductions expressed both as a total
dollar amount and as a dollar amount representing the pro rata share of each
Unit outstanding on the last business day of such calendar year; (iii) a list
of the Securities held and the number of Units outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit based
upon the last computation thereof made during such calendar year; and (v)
amounts actually distributed during such calendar year from the Income and
Capital Accounts, separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed (or by providing satisfactory indemnity, as in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. No redemption fee will be charged. On the third
business day following such tender, the Unitholder will be entitled to receive
in cash an amount for each Unit equal to the Redemption Price per Unit next
computed after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the Evaluation Time the
date of tender is the next day on which the New York Stock Exchange is open
for trading and such Units will be deemed to have been tendered to the Trustee
on such day for redemption at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the Supervisor
for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distributions" ) of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following
the tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form
to the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering
Unitholder is entitled. In implementing these redemption procedures, the
Trustee shall make any adjustments necessary to reflect differences between
the Redemption Price of the Securities distributed in kind as of the date of
tender. If funds in the Capital Account are insufficient to cover the required
cash distribution to the tendering Unitholder, the Trustee may sell Securities
according to the criteria discussed above. For the tax consequences related to
an In Kind Distribution see "Federal Taxation."
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of the Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts. On the Initial Date of Deposit, the Public Offering
Price per Unit (which includes the sales charge) exceeded the values at which
Units could have been redeemed by the amounts shown under "Summary of
Essential Financial Information." While the Trustee has the power to
determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in the Trust, (ii) the value of the Securities in the Trust
and (iii) dividends receivable on the Equity Securities trading ex-dividend as
of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued sales
charges or expenses of the Trust. The Evaluator may determine the value of the
Equity Securities in the Trust in the following manner: if the Equity
Securities are listed on a national securities exchange this evaluation is
generally based on the closing sale prices on that exchange (unless it is
determined that these prices are inappropriate as a basis for valuation) or,
if there is no closing sale price on that exchange, at the closing bid prices.
If the Equity Securities are not so listed or, if so listed and the principal
market therefore is other than on the exchange, the evaluation shall generally
be based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities on the bid side of the market or (c) by any combination
of the above.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and diversity of the Trust will be reduced. Such
sales may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
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Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. The Trust, however, will not be managed. The Trust Agreement,
however, provides that the Sponsor may (but need not) direct the Trustee to
dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Therefore, except as stated under "
Trust Portfolio" for failed securities and as provided in this paragraph,
the acquisition by the Trust of any securities other than the Securities is
prohibited. Proceeds from the sale of Securities (or any securities or other
property received by the Trust in exchange for Equity Securities), unless held
for reinvestment as herein provided, are credited to the Capital Account for
distribution to Unitholders, to meet redemptions or to pay charges and
expenses of the Trust.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if not
so directed, in its own discretion, for the purpose of redeeming Units of the
Trust tendered for redemption and the payment of expenses.
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. To the extent this is not practicable,
the composition and diversity of the Equity Securities may be altered. In
order to obtain the best price for the Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold. The Sponsor may consider sales of units
of unit investment trusts which it sponsors in selecting broker/dealers to
execute the Trust's 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 of 51% of the Units then outstanding, provided that no
such amendment or waiver will reduce the interest in the Trust of any
Unitholder without the consent of such Unitholder or reduce the percentage of
Units required to consent to any such amendment or waiver without the consent
of all Unitholders. The Trustee shall advise the Unitholders of any amendment
promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Trust Units then outstanding or by the Trustee when the value
of the Trust, as shown by any evaluation, is less than that amount set forth
under Minimum Termination Value in "Summary of Essential Financial
Information." The Trust will be liquidated by the Trustee in the event
that a sufficient number of Units not yet sold are tendered for redemption by
the Sponsor so that the net worth of the Trust would be reduced to less than
40% of the value of the Securities at the time they were deposited in the
Trust. If the Trust is liquidated because of the redemption of unsold Units
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 Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of the Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. Written notice of any termination specifying the time or
times at which Unitholders may surrender their certificates for cancellation,
if any are then issued and outstanding, shall be given by the Trustee to each
Unitholder so holding a certificate at his address appearing on the
registration books of the Trust maintained by the Trustee. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice
thereof to all Unitholders and will include with such notice a form to enable
Unitholders owning 1,000 or more Units to request an In Kind Distribution
rather than payment in cash upon the termination of the Trust. To be
effective, this request must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date. On the Mandatory Termination
Date (or on the next business day thereafter if a holiday) the Trustee will
deliver each requesting Unitholder's pro rata number of whole shares of each
of the Equity Securities in the portfolio to the account of the broker-dealer
or bank designated by the Unitholder at Depository Trust Company. The value of
the Unitholder's fractional shares of the Equity Securities will be paid in
cash. Unitholders with less than 1,000 Units and those not requesting an In
Kind Distribution will receive a cash distribution from the sale of the
remaining Equity Securities within a reasonable time following the Mandatory
Termination Date. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation
of the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in the Trust upon termination may result in a lower
amount than might otherwise be realized if such sale were not required at such
time. The Trustee will then distribute to each Unitholder his pro rata share
of the balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee
of any of the Securities. In the event of the failure of the Sponsor to act
under the Trust Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. 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-ended funds and unit investment trusts are professionally distributed
by leading financial firms nationwide. Based on cumulative assets deposited,
the Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided" ).
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
- --------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Kroll & Tract LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio 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 60 (Brand Name Equity Trust):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series
60 (Brand Name Equity Trust) as of June 2, 1997. The statement of condition
and portfolio 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 an irrevocable letter 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 60 Brand Name Equity Trust) as of
June 2, 1997, in conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
June 2, 1997
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 60
STATEMENT OF CONDITION
As of June 2, 1997
<CAPTION>
<S> <C>
Investment in Securities:
Contracts to purchase securities <F1>.......... $ 147,007
Organizational costs <F2>...................... 72,225
-----------
............................................... $ 219,232
===========
Liabilities and Interest of Unitholders:
Liabilities--..................................
Accrued organizational costs <F2>.............. $ 72,225
Deferred sales charge liability <F3>........... 3,000
Interest of Unitholders-- .....................
Cost to investors <F4>......................... 150,750
Less: Gross underwriting commission <F4><F5>... 6,743
-----------
Net interest to Unitholders <F4>............... 144,007
-----------
Total.......................................... $ 219,232
===========
- ----------
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" and
their cost to the 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 an irrevocable letter of credit of $147,007 which has been
deposited with the Trustee.
<F2>The Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over the life of the Trust. Organizational costs
have been estimated based on a projected trust size of $70,000,000. To the
extent the Trust is larger or smaller, the estimate will vary.
<F3>Represents the amount of mandatory distributions from the Trust on the bases
set forth under "Public Offering" .
<F4>The aggregate public offering price and the aggregate sales charge of 4.5% are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor 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>
BRAND NAME EQUITY TRUST, SERIES 4
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 60)
as of the Initial Date of Deposit:
June 2, 1997
<CAPTION>
Estimated
Annual Cost of
Number of Market Value Dividends Securities
Shares Name of Issuer<F1> per Share<F2> per Share<F2> to Trust<F2>
- ------------- ------------------------------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
61 American Home Products Corporation $ 76.250 $ 1.64 $ 4,651.25
108 Anheuser-Busch Companies, Inc. 42.875 0.96 4,630.50
72 Avon Products, Inc. 63.750 1.26 4,590.00
63 Bristol-Myers Squibb Company 73.375 1.52 4,622.63
100 Campbell Soup Company 46.000 0.77 4,600.00
36 Clorox Company 126.250 2.32 4,545.00
67 The Coca-Cola Company 68.250 0.56 4,572.75
73 Colgate-Palmolive Company 62.000 1.10 4,526.00
76 ConAgra, Inc. 60.125 1.09 4,569.50
54 CPC International, Inc. 86.000 1.64 4,644.00
56 Eastman Kodak Company 82.875 1.76 4,641.00
52 Gillette Company 88.875 0.86 4,621.50
106 Heinz (H.J.) Company 43.000 1.16 4,558.00
76 Johnson & Johnson 59.875 0.88 4,550.50
63 Kellogg Company 73.750 1.68 4,646.25
91 Kimberly-Clark Corporation 50.125 0.96 4,561.38
100 Liz Claiborne, Inc. 45.625 0.45 4,562.50
156 Mattel, Inc. 29.875 0.24 4,660.50
92 McDonald's Corporation 50.250 0.33 4,623.00
115 Nabisco Holdings Corporation 39.625 0.62 4,556.88
+ 73 Nestle, SA 61.750 0.90** 4,507.75
81 Nike, Inc. 57.000 0.40 4,617.00
122 PepsiCo, Inc. 36.750 0.50 4,483.50
34 The Procter & Gamble Company 137.875 1.80 4,687.75
112 Revlon, Inc. 40.750 0.00 4,564.00
113 Sara Lee Corporation 40.875 0.84 4,618.88
51 Schering-Plough Corporation 90.750 1.52 4,628.25
+ 24 Unilever, NV 193.750 2.24** 4,650.00
56 The Walt Disney Company 81.875 0.53 4,585.00
46 Warner-Lambert Company 100.750 1.52 4,634.50
194 Wendy's International, Inc. 23.375 0.24 4,534.75
77 Wrigley (WM) Jr. Company 59.250 0.76 4,562.25
2,600 $ 147,006.77
============ ==============
</TABLE>
NOTES TO PORTFOLIO
- --------------------------------------------------------------------------
(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, Securities may
have been delivered to the Sponsor pursuant to certain of these contracts; 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
May 30, 1997 and are expected to settle on June 4, 1997 (see "The
Trust" ).
(2) The market value of each of the Securities is based on the closing sale
price of each listed Security on the applicable exchange, or if not so listed,
on the ask price on the day prior to the Initial Date of Deposit. Estimated
annual dividends are based on annualizing the most recently declared
dividends. The aggregate value of the Securities on the day prior to the
Initial Date of Deposit based on the closing sale price of each listed
Security, and on the bid price if not so listed, (which is the basis on which
the Redemption Price per Unit will be determined) was $146,970. The ask price
of the applicable Securities (the basis on which the Public Offering Price per
Unit will be determined during the initial offering period) is greater than
the bid price of such Securities. Other information regarding the Securities
in the Trust, as of the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
Profit Estimated
(Loss) to Annual
Cost to Sponsor Sponsor Dividends
<S> <C> <C>
$147,098 $(91) $2,201
</TABLE>
A security marked by "+" indicates an American Depositary Receipt or
New York Shares. "**" Indicates that the dividends shown reflect the
net amounts after giving effect to foreign withholding taxes.
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
Trust. 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
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy securities in any state to any person to whom
it is not lawful to make such offer in such state.
TABLE OF CONTENTS
Title Page
Summary of Essential Financial Information 3
Fee Table 5
The Trust 6
Objectives and Securities Selection 7
Trust Portfolio 9
Risk Factors 12
Federal Taxation 16
Trust Operating Expenses 20
Public Offering 22
Rights of Unitholders 26
Trust Administration 31
Other Matters 35
Report of Independent Certified Public
Accountants 36
Statement of Condition 37
Portfolio 38
Notes to Portfolio 39
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
June 2, 1997
Van Kampen American Capital Equity Opportunity Trust, Series 60
Brand Name Equity Trust, 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 Page
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.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Acountants.
EX-27 Financial Data Schedule.
Signatures
The Registrant, Van Kampen American Capital Equity Opportunity
Trust, Series 60, 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
60 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 2nd day of June, 1997.
Van Kampen American Capital Equity
Opportunity Trust, Series 60
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 June 2,
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 60
Trust Agreement
Dated: June 2, 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. The Initial Date of Deposit for the Trust is June 2,
1997.
7. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Brand Name Equity Trust,
Series 4" will replace "Select Equity Trust."
8. 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."
9. 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). The Evaluator shall add to the Evaluation of each
Security the amount of any commissions and relevant taxes
associated with the acquisition of the Security. 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."
10. 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. In
addition, the Evaluator shall (i) not make the addition
specified in the fourth sentence of Section 4.01(b) and (ii)
shall reduce the Evaluation of each Security by the amount of
any liquidation costs (other than brokerage costs incurred on
any national securities exchange) and any capital gains or
other taxes which would be incurred by the Trust upon the sale
of such Security, such taxes being computed as if the Security
were sold on the date of the Evaluation."
11. 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.
12. Section 1.01(19) shall be amended to read as follows:
"(19) "Percentage Ratio" shall mean, for each Trust which
will issue additional Units pursuant to Section 2.03
hereof, (a) the percentage relationship among the Equity
Securities based on the number of shares of each Equity
Security per Unit existing immediately prior to such
additional deposit with respect to the Select Equity Trust
and (b) the percentage relationship existing on the
Initial Date of Deposit among the maturity value per Unit
of the Zero Coupon Obligations, each Equity Security per
Unit as a percent of all shares of Equity Securities and
the sum of the maturity value per Unit of the Zero Coupon
Obligations and all Equity Securities attributable to each
Unit with respect to the Select Equity and Treasury Trust.
The Percentage Ratio shall be adjusted to the extent
necessary, and may be rounded, to reflect the occurrence
of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of an
Equity Security."
13. The last sentence of the eighth paragraph of Section 5.02
shall be revised as follows: "Any balance remaining after such
disbursements shall be credited to the Capital Account and may be
used to acquire additional Securities (or, if permitted by
applicable rules and regulations as indicated by an opinion of
counsel, in other securities) or for any of the other purposes set
forth under the Indenture."
14. 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."
15. 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.
16. 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,"
17. 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"
18. 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 through 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."
19. 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
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 60
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
June 2, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust,
Series 60
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 60 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated June 2, 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. 333-27417) 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
June 2, 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 60
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 60 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated June 2, 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 one unit investment
trust, Brand Name Equity Trust, 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 equity
securities (the "Equity Securities") as set forth in the Prospectus.
For purposes of this opinion, it is assumed that each Equity Security is
equity for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing United States Federal income tax law:
(i) 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 the Trust in the proportion that the
number of Units held by him bears to the total number of Units
outstanding. Under subpart E, subchapter J of chapter 1 of the
Code, income of the Trust will be treated as income of each
Unitholder in the proportion described, and an item of Trust
income will have the same character in the hands of a
Unitholder as it would have in the hands of the Trustee. Each
Unitholder will be considered to have received his pro rata
share of income derived from each Trust asset when such income
is considered to be received by the Trust. A Unitholder's pro
rata portion of distributions of cash or property by a
corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code ) are taxable as ordinary
income to the extent of such corporation's current and
accumulated "earnings and profits." A Unitholder's pro rata
portion of dividends which exceed such current and accumulated
earnings and profits will first reduce the Unitholder's tax
basis in such Equity Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity
Security, shall be treated as gain from the sale or exchange of
property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata
portion of each Equity Security held by 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 initial tax basis for his pro rata
portion of each Equity Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an
in kind distribution of stock is received by such Unitholder
from the Trust as discussed below. Such gain or loss is
measured by comparing the proceeds of such redemption or sale
with the adjusted basis of his Units. Before adjustment, such
basis would normally be cost if the Unitholder had acquired his
Units by purchase. Such basis will be reduced, but not below
zero, by the Unitholder's pro rata portion of dividends with
respect to each Equity Security which are not taxable as
ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder
(subject to various nonrecognition provisions under the Code)
and the amount thereof will be measured by comparing the
Unitholder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning
the tax basis for his Units (as of the date on which his Units
were acquired) among each of the Trust assets of such Trust (as
of the date on which his Units were acquired) ratably according
to their values as of the valuation date nearest the date on
which he purchased such Units. A Unitholder's basis in his
Units and of his fractional interest in each Trust asset must
be reduced, but not below zero, by the Unitholder's pro rata
portion of dividends with respect to the Equity Security which
is not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in
kind distribution of Equity Securities upon the redemption of
Units or upon the termination of the Trust. As previously
discussed, prior to the redemption of Units or the termination
of the Trust, a Unitholder is considered as owning a pro rata
portion of each of the 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 Equity Security owned by the United States Trust will
depend upon whether or not a Unitholder receives cash in
addition to Equity Securities. An "Equity Security" for this
purpose is a particular class of stock issued by a particular
corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Equity Securities in exchange for his
or her pro rata portion in the Equity Securities held by the
Trust. However, if a Unitholder also receives cash in exchange
for a fractional share of an Equity Security held by the Trust,
such Unitholder will generally recognize gain or loss based
upon the difference between the amount of cash received by the
Unitholder and his tax basis in such fractional share of an
Equity Security held by the Trust. The total amount of taxable
gains (or losses) recognized upon such redemption will
generally equal the sum of the gain (or loss) recognized under
the rules described above by the redeeming Unitholder with
respect to each Equity Security owned by the Trust.
Dividends received by a Trust which are attributable to a domestic
corporation owning Units in a Trust and which are taxable as ordinary
income may be eligible for the 70% dividends received deduction pursuant
to Section 243(a) of the Code, 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 the Trust as
miscellaneous itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part
of the pro rata interest in an Equity Security is either sold by the
Trust or redeemed or when a Unitholder disposes of his Units in a taxable
transaction, in each case for an amount greater (or less) than his tax
basis therefor.
It should be noted that payments to the Trust of dividends on Equity
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 audits.
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 foreign, state or
local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
Very truly yours
Chapman and Cutler
MJK/cjw
Exhibit 3.3
Kroll & Tract LLP
520 Madison Avenue
New York, New York 10022
June 2, 1997
Van Kampen American Capital Equity
Opportunity Trust, Series 60
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 60 (the "Fund") consisting of Brand
Name Equity Trust, Series 4 (individually a "Trust") for the 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 a subsidiary of Depositor, as
Evaluator and 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 333-27417), the objectives of the Fund are to
provide the potential for capital appreciation from a portfolio of equity
securities of companies involved in the non-durable consumer products
industry. It is noted that no opinion is expressed herein with regard to
the Federal tax aspects of the securities, 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 the 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 Unitholders. 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 Certificateholders
and may perform certain administrative functions with respect to an
automatic investment 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..
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(l)
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, with incidental replacement of securities
and reinvestment of funds, does not constitute the
conduct of a business in the case of a business
conducted by the trustee or trustees. 20 NYCRR 1-
2.3(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. 1073, 85 N.Y.S.2d 705 (1949).
An opinion of the Attorney General of the State of New York, 47 N.Y.
Atty. 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 sell
obligations contained in the corpus of the Fund and reinvest the proceeds
therefrom. Further, the power to sell such obligations is limited to
circumstances in which the creditworthiness 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 pursuant 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 a Trust.
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 1,
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:ac
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
May 30, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital Brand Name Equity Trust, Series 4
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-27417
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 June 2, 1997 on the statement of
condition and related securities portfolio of Van Kampen American Capital
Equity Opportunity Trust, Series 60 as of June 2, 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
June 2, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on June 2, 1997 it is
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</LEGEND>
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<NAME> BNET
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<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-02-1997
<PERIOD-END> JUN-02-1997
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