File No. 333-29411
CIK #1025213
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 67
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 proportionate interest pursuant to Rule 24f-2
under the Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities
being registered: Indefinite
G. Amount of registration fee: Not Applicable
H. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the
Registration Statement
/ X / Check box if it is proposed that this filing will become
effective on July 24, 1997 at 2:00 P.M. pursuant to Rule 487.
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 67
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 ) *
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
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
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 ) *
underwriter, trustee or any ) Trust Portfolio
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 Trusts ) 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 ) Cover Page
securities ) Trust Operating Expenses
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) Trustamental 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
July 24, 1997
Principal Financial Securities, Inc.
Biotechnology Trust, Series 1
The Trust. Principal Financial Securities, Inc. Biotechnology Trust, Series 1
(the "Trust" ) is a unit investment trust included in Van Kampen
American Capital Equity Opportunity Trust, Series 67. The Trust offers
investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio primarily consisting of common
stocks issued by biotechnology companies (the "Equity Security" or
"Securities" ). See "Trust Portfolio." Unless terminated
earlier, the Trust will terminate on July 24, 2001 and any Equity Securities
then held will, within a reasonable time thereafter, be liquidated or
distributed by the Trustee. Any Equity Securities liquidated at termination
will be sold at the then current market value for such Equity 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 or her Units.
Objectives of the Trust. The objective of the Trust is to provide the
potential for capital appreciation by investing in a portfolio primarily
consisting of common stocks issued by biotechnology companies. See "
Objectives and Securities Selection." Each Unit of the Trust represents an
undivided fractional interest in all the Equity Securities deposited in the
Trust. 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 January 24, 1998 and will continue to accrue
through July 23, 1998. The monthly deferred sales charge will be charged to
the Trust, in arrears, commencing February 24, 1998 and will be charged on the
24th day of each month thereafter through July 24, 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 10,000
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." The minimum purchase is 200 Units (100 Units for a
tax-sheltered retirement plan). See "Public Offering."
Additional Deposits. The Sponsor may, from time to time for approximately six
months following the Initial Date of Deposit, deposit additional Equity
Securities in the Trust as provided under "The Trust."
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." Gross dividends, if any,
received by the Trust will be distributed to Unitholders. Expenses of the
Trust will be paid with proceeds from the sale of Equity Securities. For the
consequences of such sales, see "Tax Status." Additionally, upon
termination of the Trust, the Trustee will distribute 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 Managing Underwriter 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 prices of the listed Equity
Securities and the bid prices of the over-the-counter traded Equity
Securities), plus or minus a pro rata share of 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 prices of the listed
Equity Securities and the ask prices of the over-the-counter traded Equity
Securities), plus or minus a pro rata share of 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 (generally
determined by the closing sale prices of the listed Equity Securities and the
bid prices of the over-the-counter traded Equity Securities), plus or minus a
pro rata share of cash, if any, in the Capital and Income Accounts of the
Trust. 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. At least 60 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 2,500 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, 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."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the
possible deterioration of either the financial condition of the issuers or the
general condition of the stock market, volatile interest rates, economic
recession and risks relating to an investment in biotechnology companies. The
Trust is not actively managed and Equity Securities will not be sold by the
Trust to take advantage of market fluctuations or changes in anticipated rates
of appreciation. Units of the Trust are not deposits or obligations of, or
guaranteed or endorsed by, any bank and are not federally insured or otherwise
protected by the Federal Deposit Insurance Corporation, the Federal Reserve
Board or any other agency and involve investment risk, including the possible
loss of principal. See "Risk Factors."
<TABLE>
Summary of Essential Financial Information
As of the Close of Business on the Day Before the Initial Date of Deposit: July 23, 1997
Managing Underwriter and Supervisor: Principal Financial Securities, Inc.
Sponsor: Van Kampen American Capital Distributors, Inc.
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 Equity Securities in Portfolio <F2>................................................................ $ 146,726
Aggregate Value of Equity Securities per Unit......................................................................... $ 9.78
Maximum Sales Charge <F3>............................................................................................. $ .45
Less Deferred Sales Charge per Unit................................................................................... $ .20
Public Offering Price per Unit <F3><F4><F5>........................................................................... $ 10.03
Redemption Price per Unit<F6>......................................................................................... $ 9.39
Secondary Market Repurchase Price per Unit <F6>....................................................................... $ 9.58
Excess of Public Offering Price per Unit over Redemption Price per Unit............................................... $ .64
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee Maximum of $.0025 per Unit
Evaluation Time 4:00 P.M. New York time
Mandatory Termination Date July 24, 2001
Minimum Termination Value The Trust may be terminated if the net asset value of the Trust is less
than 40% of the total value of Equity Securities deposited in the Trust
during the primary offering period
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee..........................$.008 per Unit
Estimated Annual Organizational Expenses <F7>.$.00550 per Unit
Income Account Record Date....................Tenth day of December
Income Account Distribution Date..............Twenty-fifth day of December
Capital Account Record Date...................Tenth day of December
Capital Account Distribution Date <F8>........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 so listed, at the 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 January 24, 1998 and will
continue to accrue through July 23, 1998. The monthly deferred sales charge
will be charged to the Trust, in arrears, commencing February 24, 1998 and
will be charged on the 24th day of each month thereafter through July 24,
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 sales 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 July 24, 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 July 24 to a minimum sales charge of 3.5%. 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>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the Trust
portfolio and the initial fees and expenses of the Trustee but not including
the expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over the life of the
Trust. See "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 $20,000,000.
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.
<F8>If the amount available for distribution in the Capital Account equals at
least $0.01 per Unit, a distribution from the Capital Account will be made
monthly on the twenty-fifth day of the month to Unitholders of record on the
tenth day of such month.
</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
the example is 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
========= ===============
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.................................................................................... 0.056% 0.55
Other Operating Expenses ............................................................................... 0.043% 0.42
--------- ---------------
Total .................................................................................................. 0.232% $ 2.27
========= ===============
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for Period of:
---------------------------------------
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each time period $ 47 $ 51 $ 57 N/A
The example assumes reinvestment of all distributions and utilizes a 5% annual
rate of return as mandated by Securities and Exchange Commission regulations
applicable to mutual funds. The example should not be considered
representations of past or future expenses or annual rate of return; the
actual expenses and annual rate of return may be more or less than those
assumed for purposes of the 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 February 24, 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.
</TABLE>
THE TRUST
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 67 is comprised
of one unit investment trust, Principal Financial Securities, Inc.
Biotechnology Trust, Series 1 (the "Trust" ). The Trust was created
under the laws of the State of New York pursuant to a Trust Indenture and
Agreement (the "Trust Agreement" ), dated the 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, Principal Financial Securities, Inc., as Supervisor and The Bank of
New York, as Trustee.
The Trust may be an appropriate medium for investors who desire to participate
in a diversified portfolio of equity securities issued by biotechnology
companies. Diversification of assets in the Trust will not eliminate the risk
of loss always inherent in the ownership of securities. For a breakdown of the
portfolio, see "Trust Portfolio."
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Equity Securities indicated under "Portfolio" herein, including
delivery statements relating to contracts for the purchase of certain such
Equity 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 Equity 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
Equity 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 additional Equity Securities, contracts to purchase securities or
irrevocable letters of credit or cash with instructions to purchase additional
Equity Securities in exchange for the corresponding number of additional
Units. As additional Units are issued by the Trust as a result of the deposit
of additional Equity 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 Equity Securities (or cash or a
letter of credit with instructions to purchase additional Equity Securities)
into the Trust for approximately six months following the Initial Date of
Deposit. Such additional deposits may be made provided that for 90 days such
additional deposits will be in amounts which will maintain, as nearly as
practicable, an equal proportionate relationship among each Equity Security in
the Trust's portfolio based on market value, and thereafter such additional
deposits will be in amounts which will maintain the proportionate relationship
based on the number of shares of each Equity Security in the Trust's portfolio
as exists immediately preceding such additional deposit. Any deposit by the
Sponsor of additional Securities will duplicate, as nearly as practicable,
this original proportionate relationship and not the actual proportionate
relationship on the subsequent date of deposit, since the actual proportionate
relationship may be different than the original proportionate relationship.
Any such difference may be due to the sale, redemption or liquidation of any
of the Equity Securities deposited in the Trust on the Initial, or any
subsequent, Date of Deposit. The required percentage relationship of the
Equity Securities will be adjusted, to the extent necessary, to reflect the
occurrence of a stock dividend, a stock split or similar event which affects
the capital structure of the issuer of an Equity Security but which does not
affect the Trust's percentage ownership of the common stock equity of such
issuer at the time of such event. If the Sponsor deposits cash or a letter of
credit with instructions to purchase additional Securities, 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 Equity 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 Managing Underwriter, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of the Trust is to provide investors with the potential for
capital appreciation and diversification from a portfolio of biotechnology
issues. The portfolio is described under "Trust Portfolio" and "
Portfolio" herein. The Equity Securities were selected by Principal
Financial Securities, Inc., the Managing Underwriter. Over the next few years,
the Managing Underwriter anticipates that shares of well-placed biotechnology
firms could offer substantial investment opportunities. The Managing
Underwriter believes that the biotech industry is currently in pursuit of the
solutions to many of today's medical problems and that the major drug industry
recognizes this and has formed important strategic alliances with a broad
cross-section of biotech firms. In addition, the Managing Underwriter believes
that some biotech issues may be bought out by major drug companies who are
increasingly focusing on biotech solutions for their own product team.
As the population continues to age, health care needs will likely continue to
grow. Biotechnology, with its advances in molecular biology and biochemistry,
is an industry that may fill this need, and can present a variety of
significant investment opportunities for the aggressive growth portion of an
investment portfolio. Many of the issues in the biotech area, while holding
the keys to a promising future of earnings realization on new products, do not
have current earnings or broad product lines. There may be disappointments
with individual companies which will partially offset potential gains of other
issuers. A diversified investment approach is highly appropriate in this area.
The Principal Financial selection process, for potentially locating the
best-positioned issues for investment, is geared toward identifying those
companies which are in an advanced stage of product development. The companies
in the selection universe have completed at least Phase II on their important
products or have important and deep-pocketed partners who are committed to the
development process (Phase II of Phases I-IV generally involves comparing the
effects of a new drug on subjects with the effects of a placebo administered
in a control group). The Managing Underwriter also believes it important to
invest in those companies which can make the transition from research and
development to production and marketing. The Managing Underwriter seeks
companies that have either cash on hand which can see them through the next
two years without new financing or the access to new funding through existing
partners. Although the companies in the selection universe tend to be small
capitalization issues, an average portfolio market capitalization floor of
$250 million is required to help insure adequate liquidity.
Principal Financial biotechnology analyst, William Tanner, Ph.D., believes
that the advent of recombinant DNA technology has revolutionized drug
discovery processes and medical treatment capabilities, changing the
competitive landscape of the commercial health care industry. Dr. Tanner
believes that it is possible for a smaller company with a single product line
to realize significant revenues typically only recognized by larger
pharmaceutical companies in the past.
At the core of the industry-wide revitalization is that a key goal of science
and medicine is to ultimately improve the quality of life. This commitment has
driven research efforts leading to new product development and breakthrough
discoveries. For instance, the industry witnessed rapid growth during the
earlier part of the 1990s when biotechnology companies increased the speed
with which scientific advancements evolved into commercial products. Not only
has such progress made contributions to improve human health, but it may also
provide investors with increased opportunities.
A number of trends continue to spur the growth of the biotechnology industry
and may present important investment opportunities: issues relating to health
care appear to continue to dominate the national and global public forum;
demographics depict a rapidly aging population which may result in an increase
in demand for medical therapeutics; continual progress in understanding the
basic biological mechanisms involved in diseases creates new avenues for
therapeutic intervention; the biotechnology industry is maturing and
outsourcing and partnering with large pharmaceutical corporations are becoming
an important part of the business; and Food and Drug Administration reform has
shortened the drug approval process which could reduce development expenses
and speed up the realization of product revenues. Of course, biotechnology
companies are subject to government regulation and approval of their products
and are often subject to rapid product obsolescence as new technologies
develop, limited product lines and stock price volatility. An investment in
Units should be made with an understanding of such risks. See "Risk
Factors" .
A.C. Moore, Senior Vice President and Principal Financial's Chief Investment
Strategist, serves as an advisor to Principal Financial Securities' CEO,
Executive Committee, Research Department and investment consultants on the
overall investment strategy for the firm and for its clients.
Moore has over 29 years of experience in the financial services industry as a
securities analyst, research director and portfolio manager. He has served as
a consultant to the Council of Economic Advisors during two presidential
administrations and has been named among the top five most-quoted market
strategists in the country. He has been a frequent guest on BBC, CNN, CNBC,
CBS and PBS, including Louis Rukeyser's Wall Street Week.
Moore holds a bachelor's degree in finance from Wake Forest University and a
Juris Doctor degree from the University of North Carolina, Chapel Hills School
of Law. He is a member of The New York Society of Security Analysts, The
Market Technicians Association, The Financial Analysts Federation and The
American Bar Association.
General. An investor will be subjected to taxation on any dividend income
received from the Trust and on gains from the sale or liquidation of
Securities (see "Tax Status" ). 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 Equity Security
issuers to continue to declare and pay dividends and because the market value
of the Equity 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 Equity 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 Equity Securities and the
declaration of any dividends depends upon several factors including the
financial condition of the issuers and general economic conditions.
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,
Equity 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 Equity Securities were selected by the Managing
Underwriter prior to the Initial Date of Deposit. The Trust may continue to
purchase or hold Equity Securities originally selected through this process
even though the evaluation of the attractiveness of the Equity Securities may
have changed and, if the evaluation were performed again at that time, the
Equity Securities would not be selected for the Trust.
TRUST PORTFOLIO
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The Trust consists of 24 Equity Securities issued by biotechnology companies.
All of the Equity Securities are listed on a national securities exchange, the
NASDAQ National Market System or traded in the over-the-counter market. Each
of the companies whose Equity Securities are included in the portfolio were
selected by the Managing Underwriter based upon those factors referred to
under "Objectives and Securities Selection" above. The following is a
general description of each of the companies included in the Trust.
Advanced Tissue Sciences, Inc. Advanced Tissue Sciences, Inc. has developed
technology relating to the replication of bone marrow cells, skin cells and
cells of other organs. The company is applying the technology to the
development of products based on the growth of various human skin tissues.
Advanced Tissue Sciences has also developed a skin replacement known as "
Dermagraft" for treatment of severe burns and ulcers.
Affymetrix, Inc. Affymetrix, Inc. develops and manufactures a genetic
information system called the "GeneChip" . The company's system is a
platform for acquiring, analyzing and managing complex genetic information to
improve the diagnosis, monitoring and treatment of disease.
Amylin Pharmaceuticals, Inc. Amylin Pharmaceuticals, Inc. researches for and
develops novel therapeutic products based on amylin, a pancreatic hormone.
Amylin plays a crucial role in carbohydrate metabolism and can be used to
treat diabetes and other metabolic disorders. The company is testing an
amylin-based drug for use in treating Type I diabetes and insulin-using Type
II diabetes.
ARIAD Pharmaceuticals, Inc. ARIAD Pharmaceuticals, Inc. provides research and
development of pharmaceuticals which target intracellular communication
pathways to change the course of disease. The company's strategy is to
identify intracellular interactions that are critical to the disease process
and control these interactions with small molecules created through
structure-based design.
ArQule, Inc. ArQule, Inc. discovers and produces chemical compounds for the
commercial, pharmaceutical and biotechnology industries. The company
manufactures and delivers two types of arrays of synthesized compounds to its
pharmaceutical and biotechnology partners: "Mapping Array" compound
sets and "Directed Array" compound sets.
Arris Pharmaceutical Corporation. Arris Pharmaceutical Corporation is
developing synthetic, small molecule therapeutics for important diseases where
regulating the activity of proteases could provide new therapeutic value. The
company's protease program targets the inhibition of enzymes implicated in
asthma, inflammatory disease, blood clotting disorders, infectious diseases,
osteoporosis, cancer and autoimmune disease.
Cadus Pharmaceutical Corporation. Cadus Pharmaceutical Corporation discovers
novel small molecule therapeutics that act on targets in human cell signaling
pathways. The company has developed drug discovery technologies based on
genetically engineered yeast cells. Cadus's drug discovery programs are
focused on allergic inflammation, acute inflammation and cancer.
DepoTech Corporation. DepoTech Corporation develops and manufactures
sustained-release therapeutic drug delivery products. The company has
developed an injectable sustained-release delivery material called "
DepoFoam" consisting of thousands of chambers which can hold waterstable
drugs. DepoTech has also developed an anti-cancer drug formulation to be used
with it's "DepoFoam" called "DepoCyt" .
Gilead Sciences, Inc. Gilead Sciences, Inc. is involved in the discovery and
development of pharmaceuticals based on nucleotides, which are the basis of
DNA and RNA. Nucleotides are molecules which can be modified chemically to
cease the production or activity of disease-causing proteins. The company is
focusing on viral infections, cardiovascular diseases and cancer.
Guilford Pharmaceuticals, Inc. Guilford Pharmaceuticals, Inc. researches,
develops and commercializes drugs for the treatment of cancer and other
diseases and therapeutic and diagnostic products for neurological diseases and
conditions. The company is seeking to commercialize "GLIADEL" for
brain cancer and "DOPASCAN" for Parkinson's disease.
Human Genome Sciences, Inc. Human Genome Sciences, Inc. discovers human
genes. The company uses gene sequencing techniques combined with a proprietary
bioinformatics process to identify genes. Information gathered from gene
sequencing and analysis will become the exclusive intellectual property of the
company through patents and rights. Human Genome intends to collaborate and
produce products based on the gene research.
ICOS Corporation. ICOS Corporation is a biopharmaceutical company. The
company seeks to develop treatments for chronic inflammatory diseases,
including arthritis, multiple sclerosis and asthma. Products will be designed
to attack the earliest stages associated with inflammation.
IDEC Pharmaceuticals Corporation. IDEC Pharmaceuticals Corporation develops
targeted immunotherapies for the treatment of cancer and autoimmune diseases.
The company's products are active antibodies that target lymphocytes and
harness the body's own mechanisms for fighting disease. Designed for
administration in outpatient settings, IDEC's products also offer the
potential for reduced treatment costs.
Immune Response Corporation. Immune Response Corporation is a
biopharmaceutical company. The company seeks to develop treatments that
trigger the human body's immune response to the HIV virus, rheumatoid
arthritis, psoriasis, multiple sclerosis and several types of cancer. Immune
Response is currently focusing on developing a vaccine for HIV, which would
delay the progression of AIDS.
Ligand Pharmaceuticals. Ligand Pharmaceuticals develops drugs that regulate
hormone activated intracellular receptors. These receptors play a role in
regulating the genetic processes affecting diseases such as gynecological
disorders, certain cancers and cardiovascular, inflammatory and skin diseases.
Liposome Company, Inc. Liposome Company, Inc. develops lipid and
liposome-based pharmaceuticals. The company develops proprietary parenteral
pharmaceuticals for the therapy, prevention and diagnosis of life-threatening
illnesses. Liposomes are microscopic, man-made lipid spheres which can be
engineered to entrap drugs, creating new pharmaceuticals which enhance
efficiency and/or improve safety.
Millennium Pharmaceuticals, Inc. Millennium Pharmaceuticals, Inc. researches
genetics, genomics and bioinformatics. The company develops therapeutic and
diagnostic products for obesity, Type II diabetes, atherosclerosis, asthma,
cancer and diseases of the central nervous system.
Neurocrine Biosciences, Inc. Neurocrine Biosciences, Inc. is focused on the
discovery and development of therapeutics to treat diseases and disorders of
the central nervous and immune systems. The company's disciplines provide an
understanding of the central nervous, immune and endocrine systems, leading to
therapeutic opportunities for anxiety, depression, Alzheimer's disease,
obesity and multiple sclerosis.
Neurogen Corporation. Neurogen Corporation is a biopharmaceutical company
which discovers, develops and manufactures products for the treatment of
psychiatric and neurological disorders. The company uses genetic engineering,
synthetic chemistry and neurobiology. Research focuses on therapeutic drugs in
the hypnotic, antipsychotic, neurodegenerative disease and antidepressant
market segments.
Regeneron Pharmaceuticals, Inc. Regeneron Pharmaceuticals, Inc. discovers and
develops biotechnology-based compounds for the treatment of neurodegenerative
diseases, peripheral neuropathies and nerve injury.
Sugen, Inc. Sugen, Inc. is developing small molecule drugs which target
specific cellular signal transduction pathways. These transduction pathways
have been implicated in diseases such as cancer and diabetes, as well as
hematopoietic and neurodegenerative disorders. The company has research and
development collaborations with Zeneca, ASTA Medica, Allergan and the National
Cancer Institute.
Transkaryotic Therapies, Inc. Transkaryotic Therapies, Inc. has developed two
proprietary technology platforms, Gene Activation and gene therapy. The
company's Gene Activation technology is a proprietary approach to the large
scale production of therapeutic proteins which does not require the cloning of
genes and their subsequent insertion into non-human cell lines.
Vical, Inc. Vical, Inc. is a developer of gene-based pharmaceutical products
for human gene therapy. The company and its collaborators have developed core
technologies that allow direct transfer of specific genes into cells "In
Vivo" . Therapeutic areas that Vical is applying its gene transfer
technology to are infectious diseases, cancer, cardiovascular diseases and
autoimmune disorders.
XOMA Corporation. XOMA Corporation is a biopharmaceutical company developing
products to treat primary infections and serious complications of infectious
diseases, traumatic injury and surgery, as well as immunological disorders.
The company is focused on the development of products derived from BPI
(bactericidal/permeability-increasing protein). XOMA's flagship product is
"Neuprex" .
General. The Trust consists of such of the Equity Securities listed under "
Portfolio" as may continue to be held from time to time in the Trust and
any additional Equity Securities acquired and held by the Trust pursuant to
the provisions of the Trust Agreement together with 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 Equity Securities. However, should any
contract for the purchase of any of the Equity Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of the moneys held
in the Trust to cover such purchase are reinvested in substitute Equity
Securities in accordance with the Trust Agreement, refund the cash and sales
charge attributable to such failed contract to all Unitholders on 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 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. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other property 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). 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.
Unitholders will be unable to dispose of any of the Equity Securities 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.
The Managing Underwriter may acquire the Equity Securities for the Sponsor.
The Managing Underwriter in its general securities business acts as agent or
principal in connection with the purchase and sale of equity securities,
including the Equity Securities in the Trust, and may act as a market maker in
certain of the Equity Securities. The Managing Underwriter may also, from time
to time, issue reports on and make recommendations relating to equity
securities, which may include the Equity Securities. From time to time the
Managing Underwriter may act as investment banker or an employee or affiliate
may be a director of a company whose shares are included among the Equity
Securities; nonpublic information concerning such a company would not be
disclosed to the Managing Underwriter or for the benefit of the Trust under
such circumstances.
RISK FACTORS
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The Trust is concentrated in issuers within the biotechnology industry. A
portfolio concentrated in a single industry may present more risk than 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
biotechnology industry because any negative impact on the biotechnology
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 associated with companies in the biotechnology
industry. Because the Securities are issued by companies involved in a variety
of sectors within the biotechnology industry, each Security may be subject to
risks specific to the company's sector. The companies included in the Trust
portfolio may include companies involved in research on antibodies,
anti-infectives, biomaterials, blood substitutes, diagnostic imaging, drug
delivery, drug discovery, drug design, genomics, immunology, neurosciences,
novel manufacturing technologies, oncology, services including drug
development, information technology and drug distribution and vaccines.
Biotechnology companies are subject to governmental regulation of their
products and services, a factor which could have a significant unfavorable
effect on the price and availability of such products or services.
Furthermore, such companies face the risk of patent protection for drug or
medical products and the risk that rapid technological advances, which are
typical within the industry, will render their products obsolete. The success
of certain issuers depends on the commercial viability of a limited number of
products or services. The research and development costs of bringing a drug,
product or service to market are substantial, and include lengthy governmental
review processes and rigorous clinical testing with no guarantee that the
drug, product or service will ever come to market or will achieve acceptance
by the medical community if brought to market. 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
state and federal legislatures in recent years. These proposals span a wide
range of topics, including costs and price controls (which might include a
freeze on the prices of prescription drugs), national health insurance,
incentives for competition in providing health care services, tax incentives
and penalties related to health care insurance premiums and promotion of
pre-paid health care plans. It is impossible to predict the effect of any of
these proposals, if adopted, on the issuers of the Securities.
The Securities in the Trust are issued by companies with small market
capitalizations. Accordingly, an investment in Units of the Trust should be
made with an understanding of the risks of small capitalization companies.
Smaller companies often have rates of sales, earnings, growth and share price
appreciation that exceed those of larger companies; however, such companies
also generally have limited product lines, markets or financial resources.
Investors should note that stocks of smaller companies often have limited
marketability and typically experience more market price volatility than
stocks of larger companies. Accordingly, no assurance can be made that upon
redemption or termination of the Trust the value of the Securities (and
therefore the net asset value of Units) will be greater than or equal to the
value at the time a Unitholder purchased Units.
The principal trading market for certain of 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 Managing
Underwriter or 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.
In the opinion of the Managing Underwriter, certain of the Equity Securities
included in the Trust which may have the highest potential for capital
appreciation also from time to time may experience limited purchase or sale
availability in the market place. In anticipation of this possibility, the
Managing Underwriter intends to make a market in said Equity Securities to
facilitate the creation of subsequent deposits for this Trust which may have
an impact on the price at which Units are valued during the initial offering
period. In addition, upon termination of the Trust, this potential limited
daily trading volume may result in negative market price consequences for the
Trust stemming from the liquidation of a significant amount of these Equity
Securities. The Sponsor will attempt to mitigate these consequences with a
longer liquidation period for these Equity Securities at the Trust's
termination than might be required for the other Equity Securities included in
the Trust. However, these procedures may be insufficient or unsuccessful in
avoiding such negative price consequences.
An investment in Units should be made with an understanding of the risks which
an investment in common stocks entail, 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. The perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the 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. 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 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.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity,
generally have 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 of liquidation which are senior to those of common stockholders.
TAX STATUS
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The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221
of the Internal Revenue Code of 1986 (the "Code" ). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust.
For purposes of the following discussion and opinion it is assumed that each
Equity Security is equity for federal income tax purposes. In the opinion of
Chapman and Cutler, special counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from the Trust asset when such income is 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.
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 purchases 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.
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 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, Evaluator and Managing Underwriter. The Sponsor will
not receive any fees in connection with its activities relating to the Trust.
The Evaluator shall receive that evaluation fee set forth under "Summary
of Essential Financial Information" (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) for regularly evaluating the Trust portfolio. Such fee may exceed
the actual cost of providing such evaluation services for this Trust, but at
no time will the total amount paid to the Evaluator for providing evaluation
services to unit investment trusts of which Van Kampen American Capital
Distributors, Inc. acts as Sponsor in any calendar year exceed the aggregate
cost to the Evaluator of supplying such services in such year. As Supervisor
for the Trust, the Managing Underwriter will receive an annual supervisory fee
which is not to exceed the amount set forth under "Summary of Essential
Financial Information" (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) for
providing portfolio supervisory services for the Trust. Such fee may exceed
the actual cost of providing such supervision services for this Trust, but at
no time will the total amount paid to the Managing Underwriter for providing
portfolio supervision services to unit investment trusts for which Principal
Financial Securities, Inc. is the principal underwriter in any calendar year
exceed the aggregate cost to the Supervisor of supplying such services in such
year. The foregoing fees will be 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 and the Managing
Underwriter will receive sales commissions and may realize other profits (or
losses) in connection with the sale of Units and the deposit of the Equity
Securities as described under "Public Offering--Sponsor and Managing
Underwriter Compensation."
Trustee's Fee. For its services the Trustee will receive an annual fee from
the Trust as 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 the 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 "Tax Status" .
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 January 24, 1998
and will continue to accrue through July 23, 1998. The monthly deferred sales
charge will be charged to the Trust, in arrears, commencing February 24, 1998
and will be charged on the 24th day of each month thereafter through July 24,
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 sales charge applicable to quantity purchases is, during the initial
offering period, reduced on a graduated basis to any person acquiring at least
10,000 Units as follows:
<TABLE>
<CAPTION>
Dollar Amount of Sales Charge Reduction
Number of Units Per Unit
- ------------------ -------------------------------------------
<S> <C>
10,000 - 24,999... $.05
25,000 - 49,999... $.10
50,000 - 99,999... $.15
100,000 or more... $.20
</TABLE>
Any sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law,
fathers-in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons) of Principal Financial
Securities, Inc. and its affiliates, dealers and their affiliates, and vendors
providing services to the Managing Underwriter may purchase Units at the
Public Offering Price less the applicable dealer concession.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Equity 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 Equity 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.
Such underlying value shall include the proportionate share of any cash held
in the Income and Capital Accounts. 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 Equity Securities in
the Trust prepared by Interactive Data Corporation, a firm regularly engaged
in the business of evaluating, quoting or appraising comparable securities.
Thereafter, the Evaluator on each business day will appraise or cause to be
appraised the value of the underlying Equity 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 Managing
Underwriter 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 Managing Underwriter currently does
not intend to maintain a secondary market after January 24, 2001. Commencing
on July 24, 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 July 24, to a minimum sales charge of 3.5%.
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 prices 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, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
Equity Securities in the Trust but rather the entire pool of Equity
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 Managing Underwriter 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. Any
quantity discount provided to investors will be borne by the Managing
Underwriter as indicated under "General" above. 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 3.50%. 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%. For secondary market transactions, the
concession or agency commission will amount to 70% of the sales charge
applicable to the transaction.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 200 Units (100 Units for a
tax-sheltered retirement plan). The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of any concession to registered representatives from time to time.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive a gross sales commission equal to 4.5% of the Public Offering Price of
the Units, less any reduced sales charge for quantity purchases as described
under "General" above. Any such quantity discounts provided to
investors will be borne by the Managing Underwriter as indicated under "
General" above. The Sponsor will receive from the Managing Underwriter the
excess of such gross sales commission over the Managing Underwriter's
discount. The Managing Underwriter will be allowed a discount in connection
with the distribution of Units underwritten during the initial offering period
of 3.5%.
In addition, the Managing Underwriter 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 Equity Securities by the Managing Underwriter and the cost of such
Equity 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
Equity Securities in the Trust portfolio. The Sponsor and the Managing
Underwriter 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 Equity Securities in the Trust after a date of deposit, since all
proceeds received from the sale of Units (excluding dealer concessions and
agency commissions allowed, if any) will be retained by the Sponsor or
Managing Underwriter.
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 their 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 the Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor or
Managing Underwriter prior to the date of settlement for the purchase of Units
may be used in the Sponsor's or Managing Underwriter's business and may be
deemed to be a benefit to the Sponsor or Managing Underwriter, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Managing Underwriter
intends to maintain a secondary market for Units of the Trust for the period
indicated. In so maintaining a market, the Managing Underwriter 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 Managing
Underwriter 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 Managing Underwriter
intends to maintain a secondary 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 and "Rights of
Unitholders--Redemption of Units" ). If the supply of Units exceeds demand
or if some other business reason warrants it, the Managing Underwriter may
either discontinue all purchases of Units or discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units and
the Unitholder cannot find another purchaser, a Unitholder desiring to dispose
of his Units will be able to dispose of such Units by tendering them to the
Trustee for redemption at the Redemption Price. It is the current intention of
the Managing Underwriter not to maintain a secondary market after January 24,
2001. A Unitholder who wishes to dispose of his Units should inquire of his
broker as to current market prices in order to determine whether there is in
existence any price in excess of the Redemption Price and, if so, the amount
thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase for tax-sheltered
retirement plans is 100 Units.
RIGHTS OF UNITHOLDERS
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General. 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 book entry unless a Unitholder
makes a written request to the Managing Underwriter that ownership be
evidenced by certificates. 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
Equity Securities, etc.) are credited to the Capital Account. Proceeds from
the sale of Equity Securities to meet redemptions of Units shall be segregated
within the Capital Account from proceeds from the sale of Equity 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
Equity 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
Equity Securities in the Trust, to the extent not used to meet redemptions of
Units, pay the deferred sales charge or pay expenses, will (except as
hereinafter provided) 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 Equity
Securities after a record date and prior to the following distribution date
will be held in the Capital Account of the Trust and not distributed until the
next distribution date applicable to such Capital Account. Funds in the
Capital Account will, however, be distributed on the twenty-fifth day of each
month to holders of record on the tenth day of such month if the amount
available for distribution equals at least $0.01 per Unit. 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, if any, 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 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.
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. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder of the Trust 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 Equity 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 Equity Securities held by the
Trust 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 or her
Units by tender to the Trustee at its Unit Investment Trust Division, 101
Barclay Street, 20th Floor, New York, New York 10286 of a request for
redemption duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed as described above and by payment of applicable
governmental charges, if any. No redemption fee will be charged. On the third
business day following such tender the Unitholder will be entitled to receive
in cash (unless the redeeming Unitholder elects an "In Kind
Distribution" as described below) an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units as of the Evaluation Time set forth under "Summary of
Essential Financial Information." The "date of tender" is deemed
to be the date on which Units are received by the Trustee, except that with
respect to Units received after the applicable Evaluation Time the date of
tender is 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 Equity Securities of the Trust in order to
make funds available for redemption if funds are not otherwise available in
the Capital and Income Accounts to meet redemptions. The Equity 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 in the Trust tendering 2,500 or more Units for redemption may
request from the Trustee in lieu of a cash redemption a distribution in kind
("In Kind Distribution" ) of an amount and value of Equity Securities
per Unit equal to the Redemption Price per Unit as determined as of the next
evaluation following the tender. An In Kind Distribution on redemption of
Units will be made by the Trustee through the distribution of each of the
Equity Securities in book-entry form to the account of the Unitholder's
broker-dealer at Depository Trust Company. The tendering Unitholder will
receive his pro rata number of whole shares of each of the Equity Securities
comprising the Trust portfolio and cash from the Capital Account equal to the
fractional shares to which the tendering Unitholder is entitled. The Trustee
may adjust the number of shares of any issue of Equity Securities included in
a Unitholder's In Kind Distribution to facilitate the distribution of whole
shares, such adjustment to be made on the basis of the value of the Equity
Securities on the date of tender. If funds in the Capital Account are
insufficient to cover the required cash distribution to the tendering
Unitholder, the Trustee may sell Equity Securities according to the criteria
discussed above.
To the extent that Equity 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 the Equity 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 Equity Securities in the portfolio at
the time of redemption. Special federal income tax consequences will result if
a Unitholder requests an In Kind Distribution. See "Tax Status."
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 of the Trust. On the Initial Date of Deposit, the Public
Offering Price per Unit (which includes the sales charge) exceeded the values
at which Units could have been redeemed by the amounts shown under "
Summary of Essential Financial Information." The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand, (ii) the value of the Equity Securities 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) any remaining deferred sales charge and
accrued 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 of the Trust are not so listed or, if so listed and
the principal market therefore is other than on the exchange, the evaluation
shall generally be based on the current bid price on the over-the-counter
market (unless these prices are inappropriate as a basis for evaluation). If
current bid prices are unavailable or inappropriate as a basis for valuation,
the evaluations generally determined (a) on the basis of current bid prices
for comparable securities, (b) by appraising the value of the Equity
Securities on the bid side of the market or (c) by any combination of the
above.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
- --------------------------------------------------------------------------
Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter'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 Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter 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 Managing Underwriter 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. While the Trust will not be managed, the Trust Agreement does
provide 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 Equity 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 such Trust pursuant to the direction of the Sponsor (who
may rely on the advice of the Supervisor). Proceeds from the sale of Equity
Securities (or any securities or other property received by the Trust in
exchange for Equity Securities) are credited to the Capital Account for
distribution to Unitholders or to meet redemptions. Except as stated under
"Trust Portfolio--General" for failed securities and as provided in
this paragraph, the acquisition by the Trust of any securities other than the
Equity Securities is prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Equity Securities designated by the Supervisor, or
if no such designation has been made, 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 individual issues of
Equity Securities in the Trust. To the extent this is not practicable, the
composition and diversity of the Equity Securities in such Trust may be
altered. In order to obtain the best price for 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 or Managing
Underwriter may consider sales of units of unit investment trusts 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 representing 51% of the Units of the Trust 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 Units of the Trust then outstanding or by the Trustee when the
value of the Equity Securities owned by the Trust, as shown by any evaluation,
is less than that amount set forth under Minimum Termination Value in the "
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 Managing Underwriter or the Sponsor, so that
the net worth of the Trust would be reduced to less than 40% of the value of
the Equity Securities at the time they were deposited in the Trust. If the
Trust is liquidated because of the redemption of unsold Units by the Sponsor
and/or the Managing Underwriter, 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 Equity 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. At least 60 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination to all Unitholders of
the Trust and will include with such notice a form to enable Unitholders
owning 2,500 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 Trust 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 2,500 Units and Unitholders 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 of the Trust his pro rata
share of the balance of the Income and Capital Accounts.
The Sponsor will attempt to sell Securities as quickly as possible commencing
on the Mandatory Termination Date without in the judgment of the Sponsor
materially adversely affecting the market price of the Securities. The Sponsor
does not anticipate that the period will be longer than one month, and it
could be as short as one day, depending on the liquidity of the Securities
being sold. The liquidity of any Security depends on the daily trading volume
of the Security and the amount that the Sponsor has available on any
particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities; for highly liquid Securities,
the Securities will generally be sold on the Mandatory Termination Date; for
less liquid Securities, on each of the first two days subsequent to the
Mandatory Termination Date, the amount of any underlying Securities will
generally be sold at a price no less than 1/2 of one point under the closing
sale price of those Securities on the preceding day. Thereafter, the Sponsor
intends to sell without any price restrictions at least a portion of the
remaining underlying Securities, the numerator of which is one and the
denominator of which is the total number of days remaining (including that
day) in the one month period following the Mandatory Termination Date.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Equity 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 Equity 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, Supervisor 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.
Managing Underwriter. Principal Financial Securities, Inc., is a leading U.S.
investment banking and full-service securities brokerage firm based in Dallas.
A member of the New York Stock Exchange and SIPC, Principal Financial
Securities has 53 branch offices in 15 states throughout the Southwest,
Midwest and West. Principal Financial Securities is a member of The Principal
Financial Group, a diversified family of insurance and financial services
companies with over $60 billion in assets under management.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is a wholly owned
subsidiary of MSAM Holdings II, Inc., which in turn is a wholly owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD" ).
MSDWD is a global financial services firm with a market capitalization of more
than $21 billion which was created by the merger of Morgan Stanley Group Inc.
with and into Dean Witter, Discover & Co. on May 31, 1997. MSDWD, together
with various of its directly and indirectly owned subsidiaries, is engaged in
a wide range of financial services through three primary businesses:
securities, asset management and credit services. These principal businesses
include securities underwriting, distribution and trading; merger,
acquisition, restructuring and other corporate finance advisory activities;
merchant banking; stock brokerage and research services; asset management;
trading of futures, options, foreign exchange commodities and swaps (involving
foreign exchange, commodities, indices and interest rates); real estate
advice, financing and investing; global custody, securities clearance services
and securities lending; and credit card services. As of June 2, 1997, MSDWD,
together with its affiliated investment advisory companies, had approximately
$270 billion of assets under management, supervision or fiduciary advice.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996 the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
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 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 Equity 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 Trust. 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 Equity 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. Morris N. Simkin, Esq. 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 67 (Principal Financial Securities, Inc. Biotechnology Trust, Series 1):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 67
(Principal Financial Securities, Inc. Biotechnology Trust, Series 1) as of
July 24, 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 67 (Principal Financial Securities, Inc.
Biotechnology Trust, Series 1) as of July 24, 1997, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
July 24, 1997
<TABLE>
PRINCIPAL FINANCIAL SECURITIES, INC. BIOTECHNOLOGY TRUST, SERIES 1
STATEMENT OF CONDITION
As of July 24, 1997
<CAPTION>
INVESTMENT IN SECURITIES
<S> <C>
Contracts to purchase Securities <F1>................. $ 146,726
Organizational costs <F2>............................. 43,957
-----------
Total................................................. $ 190,683
===========
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--.........................................
Accrued organizational costs <F2>..................... $ 43,957
Deferred sales charge liability <F3>.................. 3,000
Interest of Unitholders-- ............................
Units of fractional undivided interest outstanding:...
Cost to investors <F4>................................ $ 150,450
Less: Gross underwriting commission <F4><F5>.......... 6,724
-----------
Net interest to Unitholders <F4>...................... 143,726
-----------
Total................................................. $ 190,683
===========
==========
<FN>
<F1>The aggregate value of the Equity Securities listed under "Portfolio"
herein and their cost to the Trust are the same. The value of the Equity
Securities is determined by Interactive Data Corporation on the basis set
forth under "Public Offering--Offering Price." The contracts to
purchase Equity Securities are collateralized by an irrevocable letter of
credit of $146,726 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 $20,000,000. 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 basis set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Managing Underwriter Compensation"
and assume all single transactions involve less than 10,000 Units. For single
transactions involving more than 10,000 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>
PRINCIPAL FINANCIAL SECURITIES, INC. BIOTECHNOLOGY TRUST, SERIES 1
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 67)
as of the Initial Date of Deposit: July 24, 1997
<CAPTION>
Cost of
Number Market Value per Securities
of Shares Name of Issuer <F1> Share <F2> to Trust <F2>
- ------------ ----------------------------------- ----------------------- --------------
<S> <C> <C> <C>
451 Advanced Tissue Sciences, Inc. $ 13.625 $ 6,144.88
178 Affymetrix, Inc. 35.250 6,274.50
478 Amylin Pharmaceuticals, Inc. 12.625 6,034.75
1,037 ARIAD Pharmaceuticals, Inc. 5.875 6,092.38
361 ArQule, Inc. 17.250 6,227.25
473 Arris Pharmaceutical Corporation 12.750 6,030.75
497 Cadus Pharmaceutical Corporation 12.375 6,150.38
435 DepoTech Corporation 14.500 6,307.50
225 Gilead Sciences, Inc. 27.000 6,075.00
277 Guilford Pharmaceuticals, Inc. 22.250 6,163.25
179 Human Genome Sciences, Inc. 33.500 5,996.50
728 ICOS Corporation 8.250 6,006.00
215 IDEC Pharmaceuticals Corporation 28.750 6,181.25
739 Immune Response Corporation 7.813 5,773.44
508 Ligand Pharmaceuticals 12.250 6,223.00
762 Liposome Company, Inc. 7.938 6,048.38
381 Millennium Pharmaceuticals, Inc. 15.750 6,000.75
707 Neurocrine Biosciences, Inc. 8.750 6,186.25
307 Neurogen Corporation 20.250 6,216.75
641 Regeneron Pharmaceuticals, Inc. 9.375 6,009.38
497 Sugen, Inc. 12.625 6,274.63
192 Transkaryotic Therapies, Inc. 32.000 6,144.00
513 Vical, Inc. 12.125 6,220.13
1,189 XOMA Corporation 5.000 5,945.00
11,970 $ 146,726.10
========== ==============
NOTES TO PORTFOLIO
<FN>
<F1>All of the Equity Securities are represented by "regular way"
contracts for the performance of which an irrevocable letter of credit has
been deposited with the Trustee. At the Initial Date of Deposit, the Sponsor
has assigned to the Trustee all of its right, title and interest in and to
such Equity Securities. Contracts to acquire the Equity Securities were
entered into on July 23, 1997 and are expected to settle on July 28, 1997 (see
"The Trust" ).
<F2>The market value of each of the Equity Securities is based on the aggregate
underlying value of the Equity Securities acquired (generally determined by
the closing sale prices of the listed Equity Securities and the ask prices of
the over-the-counter traded Equity Securities on the business day prior to the
Initial Date of Deposit). 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 $143,858. Other
information regarding the Equity Securities in the Trust, as of the Initial
Date of Deposit, is as follows:
</TABLE>
<TABLE>
<CAPTION>
Profit (Loss) To Managing
Cost To Managing Underwriter Underwriter
------------------------------ -----------------------------
<S> <C>
$146,726 $--
</TABLE>
An affiliate of the Sponsor may have participated as issuer, sole underwriter,
managing underwriter or member of an underwriting syndicate in a public
offering of one or more of the stocks in the Trust. An affiliate of the
Sponsor may serve as a specialist in the stocks in the Trust on one or more
stock exchanges and may have a long or short position in any of these stocks
or in options on any of these stocks, and may be on the opposite side of
public orders executed on the floor of an exchange where such stocks are
listed. An officer, director or employee of the Sponsor or an affiliate may be
an officer or director of one or more of the issuers of the stocks in the
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
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state
TABLE OF CONTENTS.
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial 3
Information
The Trust 5
Objectives and Securities Selection 6
Trust Portfolio 7
Risk Factors 10
Tax Status 12
Trust Operating Expenses 15
Public Offering 17
Rights of Unitholders 20
Trust Administration 22
Other Matters 27
Report of Independent Certified Public 27
Accountants
Statement of Condition 28
Portfolio 29
Notes to Portfolio 30
</TABLE>
This Prospectus contains information concerning the Trust and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust 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
July 24, 1997
PRINCIPAL FINANCIAL SECURITIES, INC. BIOTECHNOLOGY TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust,Series 67
Principal Financial Securities, Inc.
Fountain Place
1445 Ross Avenue, Suite 2300
Dallas, Texas 75201
Please retain this Prospectus for future reference.
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 67, hereby identifies Van Kampen Merritt Equity Opportunity
Trust, Series 4 and Series 7, and Van Kampen American Capital Equity
Opportunity Trust, Series 13, Series 14 and Series 57 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
67 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 24th day of July, 1997.
Van Kampen American Capital Equity
Opportunity Trust, Series 67
By Van Kampen American Capital
Distributors, Inc.
By Gina M. Costello
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on July 24, 1997.
Signature Title
Don G. Powell Chairman and Chief Executive )
Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
Gina M. Costello
(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 67
Trust Agreement
Dated: July 24, 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,
Principal Financial Securities, Inc., 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(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) for the first 90 days of the term of the
Trust, an equal percentage relationship among the Equity
Securities based on the number of shares of each Equity
Security based on value, and thereafter, the percentage
relationship among the Equity Securities 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."
4. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Principal Financial
Securities, Inc. Biotechnology Trust" will replace "Select Equity
Trust."
5. 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."
6. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the requisite number of Units needed
to be tendered to exercise an In Kind Distribution as set forth in
Sections 5.02 and 8.02 shall be that number set forth in the
Prospectus.
7. Section 8.02 is hereby revised to require one affirmative
vote of Unitholders representing 66 2/3% of the then outstanding
Units to terminate the Trust rather than the 51% indicated therein.
8. 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."
9. 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."
10. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Principal
Financial Securities, Inc. and its successors in interest,
or any successor portfolio supervisor appointed as
hereinafter provided."
11. 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.
12. 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,"
13. 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"
14. 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."
15. 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."
16. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.17.:
"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."
17. 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."
18. 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 Principal Financial Securities, Inc., have each caused this
Trust Indenture and Agreement to be executed by their respective
President or other officer 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 James J. Boyne
Vice President, Associate General
Counsel and Assistant Secretary
Attest:
By Cathy Napoli
Assistant Secretary
American Portfolio Evaluation
Services, a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. McDonnell
President
Attest:
By James J. Boyne
Assistant Secretary
Principal Financial Securities, Inc.
By Paul Larkin
Executive Vice President
Attest:
By Robert Hughes
Vice President
The Bank of New York
By Ted Rudich
Vice President
Attest:
By Paul Kelleher
Assistant Treasurer
Schedule A to Trust Agreement
Securities Initially Deposited
in
Van Kampen American Capital Equity Opportunity Trust, Series 67
(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
July 24, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 67
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 67 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated July 24, 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, Principal Financial Securities, Inc., 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 documentation evidencing
ownership of the Units in the Trust have been duly authorized;
and
2. The documentation evidencing ownership of 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 the
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. 333-29411) 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/slm
Exhibit 3.2
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
July 24, 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 67
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 67 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated July 24, 1997 (the "Indenture") among Van Kampen
American Capital Distributors, Inc., as Depositor, Van Kampen American
Capital Investment Advisory Corp., as Evaluator, Principal Financial
Securities, Inc., as Supervisory Servicer, and The Bank of New York, as
Trustee. The Fund is comprised of one unit investment trust, Principal
Financial Securities, Inc. Biotechnology Trust, Series 1.
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.
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/slm
Exhibit 3.3
Morris N. Simkin, Esq.
520 Madison Ave., 5th Floor
New York, New York 10022
July 24, 1997
Van Kampen American Capital Equity
Opportunity Trust, Series 67
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 67 (the "Fund") consisting of Principal
Financial Securities, Inc. Biotechnology Trust, Series 1 (the "Trust")
for purposes of determining the applicability of certain New York taxes
under the circumstances hereinafter described.
The Fund is created pursuant to a Trust Agreement (the
"Indenture"), dated as of today (the "Date of Deposit") among Van Kampen
American Capital Distributors, Inc. (the "Depositor"), American Portfolio
Evaluation Services, a division of an affiliate of Depositor, as
Evaluator, Principal Financial Securities, Inc., as Supervisor (the
"Supervisor"), 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 (respectively, the "Prospectus" and the "Registration Statement")
(File Number 333-29411), the objectives of the Fund are to provide the
potential for dividend income and capital appreciation through investment
in a fixed portfolio of actively traded equity securities in the
biotechnology or related fields. It is noted that no opinion is
expressed herein with regard to the Federal tax aspects of the
securities, the Trust, 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 Unit holders. The Trustee will also maintain records of
the registered holders of Certificates representing an interest in the
Fund and administer the redemption of Units by such Certificate holders
and may perform certain administrative functions with respect to an
automatic reinvestment option.
Generally, equity securities held in the Trust may be removed
therefrom by the Trustee at the direction of the Depositor upon the
occurrence of certain specified events which adversely affect the sound
investment character of the Fund, such as default by the issuer in
payment of declared dividends or of interest or principal on one or more
of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to
sell equity securities designated by the Supervisor only for the purpose
of redeeming Units tendered to it and of paying expenses for which funds
are not available. The Trustee does not have the power to vary the
investment of any Unit holder in the Fund, and under no circumstances may
the proceeds of sale of any equity securities held by the Fund be used to
purchase new equity securities to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(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 a
trustee or trustees. 20 NYCRR 1-2.5(b)(2) (July 11,
1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd
Dept. 1949).
In an opinion of the Attorney General of the State of New York,
47 N.Y. Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the
trustee of an unincorporated investment trust was without authority to
reinvest amounts received upon the sales of securities and could dispose
of securities making up the trust only upon the happening of certain
specified events or the existence of certain specified conditions, the
trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell equity securities contained in the corpus of the
Fund and reinvest the proceeds therefrom. Further, the power to sell
such equity securities 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 the
Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust
will be deemed to be the owner of the trust under certain circumstances,
and therefore taxable on his proportionate interest in the income
thereof. Where this Federal tax rule applies, the income attributed to
the grantor will also be income to him for New York income tax purposes.
See TSB-M-78(9)(c), New York Department of Taxation and Finance, June 23,
1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be
considered as owning a share of each asset of a Trust in the proportion
that the number of Units held by such holder bears to the total number of
Units outstanding and the income of a Trust will be treated as the income
of each Unit holder in said proportion pursuant to Subpart E of Part I,
Subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings and court decisions interpreting the laws of the State and City
of New York:
1. The 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,
Morris N. Simkin, Esq.
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
July 23, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 67
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-29411
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 July 24, 1997 on the statement of
condition and related securities portfolio of Van Kampen American Capital
Equity Opportunity Trust, Series 67 as of July 24, 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
July 24, 1997
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This report reflects the current period taken from 487 on July 24, 1997 it is
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