File No. 333-36173 CIK #1025222
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 2 to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 76
(Exact Name of Trust)
Van Kampen Funds Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on January 25, 2000 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 76
GLOBAL ENERGY TRUST, SERIES 4
- --------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part I of this Prospectus may not be distributed unless accompanied by
Part II. Please retain both parts of this Prospectus for future reference.
- --------------------------------------------------------------------------------
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 76 (the "Fund") is
comprised of one unit investment trust, Global Energy Trust, Series 4 (the
"Trust"). The Trust offers investors the opportunity to purchase Units
representing proportionate interests in a fixed portfolio of equity securities
issued by companies diversified within the energy industry including common
stocks of foreign issuers, certain of which are in American Depository Receipt
("ADRs") from ("Equity Securities" or "Securities"). Unless terminated earlier,
the Trust will terminate on April 7, 2003 and any Securities liquidated at
termination will be sold at the then current market value for such securities;
therefore, the amount distributable in cash to a Unitholder upon termination may
be more or less than the amount such Unitholder paid for his units.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit is equal to the aggregate underlying value of
the Equity Securities plus of minus cash, if any, in the Capital and Income
Accounts plus the applicable sales charge as described herein, divided by the
number of Units outstanding. See "Summary of Essential Financial Information".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is January 25, 2000
Van Kampen
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 76
Global Energy Trust, Series 4
Summary of Essential Financial Information
As of November 2, 1999
Sponsor: Van Kampen Funds Inc.
Supervisor: Van Kampen Investment Advisory Corp.
(An Affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Global
Energy
Trust
---------------
General Information
<S> <C>
Number of Units 2,313,099.680
Fractional Undivided Interest in Trust per Unit 1/2,313,099.680
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 19,651,355.29
Aggregate Value of Securities per Unit (including accumulated dividends) $ 8.50
Sales charge 3.500% (3.627% of Aggregate Value of Securities excluding
principal cash per Unit) (3) $ .30
Public Offering Price per Unit (2)(3) $ 8.80
Redemption Price per Unit $ 8.50
Secondary Market Repurchase Price per Unit $ 8.50
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .30
</TABLE>
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock Exchange
Initial Date of Deposit October 7, 1997
Mandatory Termination Date April 7, 2003
Minimum Termination Value The Trust may be terminated if the net asset value of
such Trust is less than $500,000 unless the net asset value of the Trust
deposits has exceeded $15,000,000, then the Trust Agreement may be terminated if
the net asset value of such Trust is less than $3,000,000.
<TABLE>
<CAPTION>
<S> <C>
Estimated Net Annual Dividends per Unit $.18225
Trustee's Annual fee $.008 per Unit
Estimated Annual Organizational Expenses (4) $.005 per Unit
Income Distribution Record Date TENTH day of March, June, September and December
Income Distribution Date TWENTY-FIFTH day of March, June, September and December
Capital Account Record Date TENTH day of December
Capital Account Distribution Date TWENTY-FIFTH day of December
</TABLE>
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(1) Equity Securities listed on a national securities exchange are valued at
the closing sale price, or if no such price exists, or if the Equity
Securities are not listed, at the closing bid price thereof.
(2) Anyone ordering Units will have added to the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
(3) Effective on each October 7, the secondary sales charge will decrease by .5
of 1% to a minimum sales charge of 3.0%. See "Public Offering-Offering
Price" in Part Two.
(4) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the initial
audit of the Trust portfolio and the initial fees and expenses of the
Trustee but not including the expenses incurred in the preparation and
printing of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. Total organizational expenses will
be amortized over five years. See "Expenses of the Trust" in Part Two and
"Statement of Condition." Historically, the sponsors of unit investment
trusts have paid all the costs of establishing such trusts.
PORTFOLIO
The Global Energy Trust consists of 20 different issues of Equity Securities
which are primarily issued by companies diversified within the energy industry.
All of the Equity Securities are listed on a national securities exchange, the
NASDAQ National Market System or are traded in the over-the-counter market as of
the Date of deposit.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1998 (1) 1999
------------ ------------
<S> <C> <C>
Net asset value per Unit at beginning of period......................................... $ 9.87 $ 7.33
============ ============
Net asset value per Unit at end of period............................................... $ 7.33 $ 8.81
============ ============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)...................... $ 0.19 $ 0.20
============ ============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)....................................................... $ 0.20 $ --
============ ============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at
end of period)....................................................................... $ (1.49) $ 3.10
============ ============
Distributions of investment income by frequency of payments
Quarterly............................................................................ $ 0.17 $ 0.19
Units outstanding at end of period...................................................... 4,100,352 2,443,546
</TABLE>
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(1) For the period from October 7, 1997 (date of deposit) through September 30,
1998.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen American Capital Equity Opportunity Trust, Series 76 (Global Energy
Trust, Series 4):
We have audited the accompanying statement of condition (including the
analyses of net assets) and the related portfolio of Van Kampen American Capital
Equity Opportunity Trust, Series 76 (Global Energy Trust, Series 4) as of
September 30, 1999 and the related statements of operations and changes in net
assets for the period from October 7, 1997 (date of deposit) through September
30, 1998 and the year ended September 30, 1999. These statements are the
responsibility of the Trustee and the Sponsor. Our responsibility is to express
an opinion on such statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at September 30, 1999 by correspondence with
the Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee and the Sponsor, as well as evaluating
the overall financial statement presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Van Kampen American Capital
Equity Opportunity Trust, Series 76 (Global Energy Trust, Series 4) as of
September 30, 1999 and the results of operations and changes in net assets for
the period from October 7, 1997 (date of deposit) through September 30, 1998 and
the year ended September 30, 1999, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
November 12, 1999
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 76
Statement of Condition
September 30, 1999
Global
Energy
Trust
--------------
Trust property
<S> <C>
Cash $ --
Securities at market value, (cost $19,975,084) (Note 1) 21,438,419
Accumulated dividends 40,617
Receivable for securities sold 136,975
Organizational Expenses 36,215
--------------
$ 21,652,226
==============
Liabilities and interest to Unitholders
Cash overdraft $ 740
Accrued organizational costs --
Redemptions payable 131,038
Interest to Unitholders 21,520,448
--------------
$ 21,652,226
==============
Analyses of Net Assets
Interest of Unitholders (2,443,546 Units of fractional undivided interest outstanding)
Cost to original investors of 4,622,982 Units (note 1) $ 43,542,205
Less initial underwriting commission (note 3) 1,940,581
--------------
41,601,624
Less redemption of 2,179,436 Units 16,956,195
--------------
24,645,429
Undistributed net investment income
Net investment income 1,216,691
Less distributions to Unitholders 1,304,194
--------------
(87,503)
Realized gain (loss) on Securities sale (3,650,431)
Unrealized appreciation (depreciation) of Securities (note 2) 1,463,335
Distributions to Unitholders of Security sale proceeds --
Deferred sales charges (850,352)
--------------
Net asset value to Unitholders $ 21,520,448
==============
Net asset value per Unit (2,443,546 Units outstanding) $ 8.81
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
GLOBAL ENERGY TRUST, SERIES 4
Statements of Operations
Period from October 7, 1997 (date of
deposit) through September
30, 1998 and the year ended
September 30, 1999
1998 1999
------------- -------------
Investment income
<S> <C> <C>
Dividend income.................................................................. $ 759,817 $ 575,403
Expenses
Trustee fees and expenses..................................................... 27,641 33,347
Evaluator fees................................................................ 8,150 9,849
Organizational fees........................................................... 9,484 12,072
Supervisory fees.............................................................. 8,137 9,849
------------- -------------
Total expenses............................................................. 53,412 65,117
------------- -------------
Net investment income......................................................... 706,405 510,286
Realized gain (loss) from Security sale
Proceeds......................................................................... 5,097,075 13,050,547
Cost............................................................................. 5,506,816 16,291,237
------------- -------------
Realized gain (loss).......................................................... (409,741) (3,240,690)
Net change in unrealized appreciation (depreciation) of Securities.................. (6,105,831) 7,569,166
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............... $(5,809,167) $ 4,838,762
============= =============
Statement of Changes in Net
Assets Period from October 7, 1997 (date of
deposit) through September 30, 1998
and the year ended September 30, 1999
1998 1999
------------- -------------
Increase (decrease) in net assets Operations:
Net investment income............................................................ $ 706,405 $ 510,286
Realized gain (loss) on Securities sales......................................... (409,741) (3,240,690)
Net change in unrealized appreciation (depreciation) of Securities............... (6,105,831) 7,569,166
------------- -------------
Net increase (decrease) in net assets resulting from operations............... (5,809,167) 4,838,762
Distributions to Unitholders from:
Net investment income............................................................ (675,849) (628,345)
Security sale or redemption proceeds............................................. -- --
Redemption of Units................................................................. (4,113,989) (12,842,206)
------------- -------------
Deferred Sales Charge............................................................... (715,412) (134,970)
------------- -------------
Total increase (decrease)..................................................... (11,314,417) (8,766,759)
Net asset value to Unitholders
Beginning of period.............................................................. 145,033 30,055,568
Additional Securities purchased from the proceeds of Unit Sales.................. 41,224,952 231,639
------------- -------------
End of period (including undistributed/(overdistributed) net investment
income of $(30,556) and $(87,503), respectively).............................. $30,055,568 $ 21,520,448
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
GLOBAL ENERGY TRUST, SERIES 4 PORTFOLIO as of September 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
- --------------- ------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
28,523 BP Amoco Corporation $ 110.8125 $ 3,160,705
- ------------------------------------------------------------------------------------------------------------------------------------
13,497 Atlantic Richfield Company 88.6250 1,196,172
- ------------------------------------------------------------------------------------------------------------------------------------
12,700 Baker Hughes, Incorporated 29.0000 368,300
- ------------------------------------------------------------------------------------------------------------------------------------
45,774 Bouygues Offshore SA 19.3750 886,871
- ------------------------------------------------------------------------------------------------------------------------------------
35,385 Coastal Corporation 40.9375 1,448,573
- ------------------------------------------------------------------------------------------------------------------------------------
10,165 Coflexip S.A. 47.5000 482,838
- ------------------------------------------------------------------------------------------------------------------------------------
63,600 Dynergy Incorporated 20.6870 1,315,693
- ------------------------------------------------------------------------------------------------------------------------------------
17,127 Elf Aquitaine S.A. 91.6250 1,569,261
- ------------------------------------------------------------------------------------------------------------------------------------
18,870 ENI SPA 63.0000 1,188,810
- ------------------------------------------------------------------------------------------------------------------------------------
14,337 NOVA Corporation 21.4375 307,349
- ------------------------------------------------------------------------------------------------------------------------------------
39,414 Occidental Petroleum Corporation 23.1250 911,449
- ------------------------------------------------------------------------------------------------------------------------------------
22,668 Phillips Petroleum Company 48.7500 1,105,065
- ------------------------------------------------------------------------------------------------------------------------------------
19,975 Royal Dutch Petroleum Company 59.0620 1,179,763
- ------------------------------------------------------------------------------------------------------------------------------------
19,029 Texaco, Incorporated 63.1250 1,201,206
- ------------------------------------------------------------------------------------------------------------------------------------
19,821 Total, SA 63.4375 1,257,395
- ------------------------------------------------------------------------------------------------------------------------------------
69,985 Transcanada Pipelines LTD. 13.0625 914,179
- ------------------------------------------------------------------------------------------------------------------------------------
45,301 Turbos de Acero de Mexico S.A. 12.2500 554,937
- ------------------------------------------------------------------------------------------------------------------------------------
33,990 Ultramar Daimond Shamrock Corporation 25.5000 866,745
- ------------------------------------------------------------------------------------------------------------------------------------
22,831 Vintage Petroleum, Incorporated 13.5000 308,219
- ------------------------------------------------------------------------------------------------------------------------------------
31,201 YPF Sociedad Anonima 38.9375 1,214,889
------------- --------------
584,193 $ 21,438,419
============= ==============
</TABLE>
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The accompanying notes are an integral part of these statements.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 76
Notes to Financial Statements
September 30, 1998 and 1999
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the closing sales price or, if no such price exists, or if the Equity
Securities are not listed at the closing bid price thereof.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national or foreign securities exchange on or the
relevant stock exchanges the closing sale prices on the exchange. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value described in
Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income taxes.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Organizational Costs - The trust will bear all or a portion of its
organizational costs, which will be deferred and amoritized over five years.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at September 30, 1999 is as follows:
Global
Energy
Trust
----------------
Unrealized Appreciation $ 3,165,610
Unrealized Depreciation (1,702,275)
-----------------
$ 1,463,335
=================
NOTE 3- OTHER
Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities in
the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such Units to the Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus an amount equal to the difference between the maximum sales
charge of 4.5% of the public offering price which is equivalent to 4.712% of the
aggregate underlying value of the Securities and the maximum deferred sales
charge of ($0.20 per Unit). These investors paid a deferred sales charge of
$0.20 per Unit. Effective on each October 7 commencing October 7, 1998, the
secondary sales charge does not include deferred payments but will instead
include only a one-time initial sales charge of 4.0% of the public offering
price and will decrease by .5 of 1% to a minimum sales charge of 3.0%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period from October 7, 1997 through September 30, 1998 and the
year ended September 30, 1999, 494,930 Units and 1,684,506 Units, respectively,
were presented for redemption.
GLOBAL ENERGY TRUST
SERIES 1-4
Prospectus Part Two
- --------------------------------------------------------------------------------
The Fund. The Global Energy Trust (the "Trust" or the "Global Energy Trust")
is one of several unit investment trusts created under separate series of Van
Kampen Merritt Equity Opportunity Trust, Van Kampen American Capital Equity
Opportunity Trust, Van Kampen Equity Opportunity Trust or Van Kampen Focus
Portfolios (the "Fund"). The Global Energy Trust offers investors the
opportunity to purchase Units representing proportionate interests in a fixed,
diversified portfolio of equity securities issued by companies diversified
within the energy industry including common stocks of foreign issuers, all of
which are in American Depositary Receipt form ("ADRs") ("Equity Securities").
See "Portfolio" in Part One of this Prospectus. Unless terminated earlier, the
Trust will terminate on the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus and any
securities then held will, within a reasonable time thereafter, be liquidated or
distributed by the Trustee. Any Securities liquidated at termination will be
sold at the then current market value for such Securities; therefore, the amount
distributable in cash to a Unitholder upon termination may be more or less than
the amount such Unitholder paid for his Units.
Objective of the Trust. The objective of the Global Energy Trust is to
provide the potential for capital appreciation and income, consistent with the
preservation of capital, by investing in a portfolio of equity securities
diversified within the energy industry.
There is, of course, no guarantee that the objective of the Trust will be
achieved.
Public Offering Price. The secondary market Public Offering Price of the
Trust will include the aggregate underlying value of the Securities in the
Trust, the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. See "Public Offering".
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of a Trust, with changes in
dividends received and with the sale or liquidation of Securities; therefore,
there is no assurance that the annual dividend distribution will be realized in
the future.
Distributions. Distributions of dividends received and capital, if any,
received by the Trust will be paid in cash on the applicable Distribution Date
to Unitholders of record on the record date as set forth in the "Summary of
Essential Financial Information" in Part One of this Prospectus. For Series 1,
any distribution of income and/or capital will be net of the expenses of the
Trust. For all other Series, gross dividends received by a Trust will be
distributed to Unitholders. Expenses of such a Trust will be paid with proceeds
from the sale of Securities. See "Federal Taxation." Additionally, upon
termination of the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unitholder his pro rata share of the Trust asset, less
expenses, in the manner set forth under "Rights of Unitholders--Distributions of
Income and Capital".
Termination. Commencing on the Mandatory Termination Date as specified in
Part One for the Trust, Equity Securities will begin to be sold in connection
with the termination of the Trust. The Sponsor will determine the manner, timing
and execution of the sale of the Equity Securities. Written notice of any
termination of the Trust specifying the time or times at which Unitholders may
surrender their certificates for cancellation shall be given by the Trustee to
each Unitholder at his address appearing on the registration books of the Trust
maintained by the Trustee. At least 30 days prior to the Mandatory Termination
Date for the Trust the Trustee will provide written notice thereof to all
Unitholders and will include with such notice a form to enable Unitholders to
elect a distribution of shares of Equity Securities if such Unitholder owns at
least 1,000 Units of the Trust, rather than to receive payment in cash for such
Unitholder's pro rata share of the amounts realized upon the disposition by the
Trustee of Equity Securities. All Unitholders will receive cash in lieu of any
fractional shares. To be effective, the election form, together with surrendered
certificates if issued, and other documentation required by the Trustee, much be
returned to the Trustee at least five business days prior to the Mandatory
Termination Date. Unitholders not electing a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the remaining
Securities within a reasonable time after the Trust is terminated. See "Trust
Administration--Amendment or Termination".
Reinvestment Option. Unitholders of any Van Kampen-sponsored unit investment
trust may utilize their redemption or termination proceeds to purchase units of
any other Van Kampen trust in the initial offering period accepting rollover
investments subject to a reduced sales charge to the extent stated in the
related prospectus (which may be deferred in certain cases). Unitholders have
the opportunity to have their distributions reinvested into an open-end,
management investment company as described herein. Unitholders also have the
option of having distributions reinvested into additional Units of the Trust if
Units are available at the time of reinvestment as described herein. See "Rights
of Unitholders--Reinvestment Option."
Units of a Trust are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by, any depository institution or any government
agency and are subject to investment risk, including possible loss of the
principal amount invested.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part
I accompanying this Prospectus Part II.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. See "Risk Factors".
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"), among Van Kampen Funds
Inc., as Sponsor, American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator, Van Kampen Investment Advisory
Corp., as Supervisor, and The Bank of New York, as Trustee, or their
predecessors.
The Trust may be an appropriate medium for investors who desire to
participate in a portfolio of equity securities with greater diversification
than they might be able to acquire individually. 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 "Portfolio" in Part One of
this Prospectus.
Each Unit represents a fractional undivided interest in the Trust. To the
extent that any Units are redeemed by the Trustee, the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Trust is to provide investors with the potential for
capital appreciation and income. The portfolio of the Trust is described under
"Trust Portfolio" herein and under "Portfolio" in Part One of this Prospectus.
An investor will be subjected to taxation on the dividend income received from
the Fund and on gains from the sale or liquidation of Securities (see "Federal
Taxation"). Investors should be aware that there is not any guarantee that the
objective of the Trust will be achieved because it is subject to the continuing
ability of the respective Security issuers to continue to declare and pay
dividends and because the market value of the Securities can be affected by a
variety of factors. Common stocks may be especially susceptible to general stock
market movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. Investors should be aware
that there can be no assurance that the value of the underlying Securities will
increase or that the issuers of the Equity Securities will pay dividends on
outstanding common shares. Any distributions of income will generally depend
upon the declaration of dividends by the issuers of the Securities and the
declaration of any dividends depends upon several factors including the
financial condition of the issuers and general economic conditions.
In selecting Securities for the Trust, the following factors, among others,
were considered: (a) the issuer's position within the industry, (b) breadth and
stability of the issuer's business base and (c) growth potential.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust as of the date the Trust was created.
Subsequent thereto, the Equity Securities may no longer meet such criteria.
Should an Equity Security no longer meet such criteria, such Equity Security
will not as a result thereof be removed from the portfolio of the Trust.
Investors should be aware that the Fund is not a "managed" trust and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that the
securities were selected by the Sponsor as of the date the Securities were
purchased by the Trust. The Trust may continue to purchase or hold Securities
originally selected through this process even though the evaluation of the
attractiveness of the Securities may have changed and, if the evaluation were
performed again at that time, the Securities would not be selected for such
Trust.
TRUST PORTFOLIO
The Global Energy Trust initially consisted of several different issues of
Equity Securities, all of which are issued by companies diversified within the
energy industry including common stocks of foreign issuers, all of which are
ADRs. The Equity Securities in the portfolio are listed on a national securities
exchange, the NASDAQ National Market System or are traded in the
over-the-counter market.
The Trust consists of such of the Securities listed under "Portfolio" in Part
One of this Prospectus as may continue to be held from time to time in the Trust
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
Securities.
Because certain of the 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 Securities under certain limited circumstances. Securities,
however, will not be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
RISK FACTORS
Equity Securities. An investment in Units should be made with an
understanding of the risks which an investment in common stocks entails,
including the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market may worsen and
the value of the Equity Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market confidence
in and perceptions of the issuers change. These perceptions are based on
unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, 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 Fund 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 Fund to values
higher or lower than those prevailing on the date of purchase by a Unitholder.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
Energy Industry. The Global Energy Trust may include securities which are
issued by companies engaged in refining and marketing oil and related products.
According to the U.S. Department of Commerce, the factors which will most likely
shape the industry in the future include the price and availability of oil from
the Middle East, changes in United States environmental policies and the
continued decline in U.S. production of crude oil. Possible effects of these
factors may be increased U.S. and world dependence on oil from the Organization
of Petroleum Exporting Countries ("OPEC") and highly uncertain and potentially
more volatile oil prices. Factors which the Sponsor believes may increase the
profitability of oil and petroleum operations include increasing demand for oil
and petroleum products as a result of the continued increases in annual miles
driven and the improvement in refinery operating margins caused by increases in
average domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the two
principal requirements for stable crude oil markets. Without excess capacity,
supply disruptions in some countries cannot be compensated for by others.
Surplus capacity in Saudi Arabia and a few other countries and the utilization
of that capacity prevented during the Persian Gulf crisis, and continue to
prevent, severe market disruption. Although unused capacity contributed to
market stability in 1990 and 1991, it ordinarily creates pressure to overproduce
and contributes to market uncertainty. The likely restoration of a large portion
of Kuwait's and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand. Formerly,
OPEC members attempted to exercise control over production levels in each
country through a system of mandatory production quotas. Because of the crisis
in the Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be curtailed on at
least one occasion as a result of weak prices, even in the absence of supplies
from Kuwait and Iraq. The pressure to deviate from mandatory quotas, if they are
reimposed, is likely to be substantial and could lead to a weakening of prices.
In the longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to compensate
for expected sharp drops in U.S. crude oil production and exports from the
former Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have
the petroleum reserves that will allow the required increase in production
capacity to be attained. Given the large-scale financing that is required, the
prospect that such expansion will occur soon enough to meet the increased demand
is uncertain.
Declining U.S. crude oil production will likely lead to increased dependence
on OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments in order to comply with increasingly stringent environmental
legislation, such as the 1990 amendments to the Clean Air Act. If the cost of
these changes is substantial enough to cut deeply into profits, smaller refiners
may be forced out of the industry entirely. Moreover, lower consumer demand due
to increases in energy efficiency and conservation, due to gasoline
reformulations that call for less crude oil, due to warmer winters or due to a
general slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. No assurance can
be given that the demand for or prices of oil will increase or that any
increases will not be marked by great volatility. Some oil companies may incur
large cleanup and litigation costs relating to oil spills and other
environmental damage. Oil production and refining operations are subject to
extensive federal, state and local environmental laws and regulations governing
air emissions and the disposal of hazardous materials. Increasingly stringent
environmental laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil and
petroleum products industry include the ability of a few influential producers
significantly to affect production, the concomitant volatility of crude oil
prices and increasing public and governmental concern over air emissions, waste
product disposal, fuel quality and the environmental effects of fossil-fuel use
in general.
In addition, any future scientific advances concerning new sources of energy
and fuels or legislative changes relating to the energy industry or the
environment could have a negative impact on the petroleum products industry.
While legislation has been enacted to deregulate certain aspects of the oil
industry, no assurances can be given that new or additional regulations will not
be adopted. Each of the problems referred to could adversely affect the
financial stability of the issuers of any petroleum industry stocks in the
Global Energy Trust. The Global Energy Trust may also include securities which
are issued by companies engaged in the exploration for and mining of various
minerals, including coal, and/or the manufacture, transportation, or marketing
of chemical products and plastics. The problems faced by such companies are
similar to those discussed with regard to petroleum companies.
The Global Energy Trust may include securities which are issued by companies
that own or operate nuclear generating facilities. Governmental authorities may
from time to time review existing, and impose additional, requirements governing
the licensing, construction and operation of nuclear power plants. Nuclear
generating projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing difficulties.
These have been caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic conditions. This
experience indicates that the risk of significant cost increases, delays and
licensing difficulties remains present through the completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units in
service have experienced unplanned outages or extensions of scheduled outages
due to equipment problems or new regulatory requirements sometimes followed by a
significant delay in obtaining regulatory approval to return to service. A major
accident at a nuclear plant anywhere, such as the accident at the plant in
Chernobyl, could cause the imposition of limits or prohibitions on the
operation, construction or licensing of nuclear units in the United Sates.
In view of the uncertainties discussed above, there can be no assurance that
any company's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a company could
earn an adequate return on its investment in such Units. The likelihood of a
significantly adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact. It should be
recognized, however, that one or more of such adverse events could occur and
individually or collectively could have a material adverse impact on the
financial condition or the results of operations of a company.
The Global Energy Trust may include securities which are issued by companies
whose revenues are primarily derived from the sale of electric energy. The
problems faced by such issuers include the difficulty in obtaining approval for
timely and adequate rate increases from the applicable public utility
commissions, the difficulty of financing large construction programs, increased
competition, reductions in estimates of future demand for electricity in certain
areas of the country, the limitations on operations and increased costs and
delays attributable to environmental considerations, the difficulty of the
capital market in absorbing utility debt, the difficulty in obtaining fuel at
reasonable prices and the effect of energy conservation. All of such issuers
have been experiencing certain of these problems in varying degrees. In
addition, federal, state and municipal governmental authorities may from time to
time review existing, and impose additional, regulations governing the
licensing, construction and operation of nuclear power plants, which may
adversely affect the financial condition or the results of operations of such
issuers.
The Global Energy Trust may include securities which are issued by companies
engaged in the exploration, drilling, production, refining, transmission,
marketing or distribution of natural gas. The problems faced by such issuers
include many of those faced by electric utilities discussed above, and, in
addition, rising costs of rail transportation to transport fossil fuels,
availability and costs of natural gas for resale and difficulties of gas
pipeline and distribution companies in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers and suppliers. All of such issuers have
been experiencing certain of these problems in varying degrees.
Foreign Issuers. Since certain of the Equity Securities in certain of the
Trusts are securities of foreign issuers, an investment in these Trusts involves
some investment risks that are different in some respects from an investment in
a trust that invests entirely in securities of domestic issuers. Those
investment risks include future political and governmental restrictions which
might adversely affect the payment or receipt of dividends on the relevant
Equity Securities. In addition, for the foreign issuers that are not subject to
the reporting requirements of the Securities Exchange Act of 1934, there may be
less publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. However, due to the nature
of the issuers of Equity Securities included in the Trusts, the Sponsor believes
that adequate information will be available to allow the Supervisor to provide
portfolio surveillance.
The securities of the foreign issuers in the Trusts are in ADR form. ADRs
evidence American Depository Receipts which represent common stock deposited
with a custodian in a depositary. American Depositary Shares, and receipts
therefore (ADRs), are issued by an American bank or trust company to evidence
ownership of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares. ADRs may be
sponsored or unsponsored. In an unsponsored facility, the depositary initiates
and arranges the facility at the request of market makers and acts as agent for
the ADR holder, while the company itself is not involved in the transaction. In
a sponsored facility, the issuing company initiates the facility and agrees to
pay certain administrative and shareholder-related expenses. Sponsored
facilities use a single depositary and entail a contractual relationship between
the issuer, the shareholder and the depositary; unsponsored facilities involve
several depositaries with no contractual relationship to the company. The
depositary bank that issues an ADR generally charges a fee, based on the price
of the ADR, upon issuance and cancellation of the ADR. This fee would be in
addition to the brokerage commissions paid upon the acquisition or surrender of
the security. In addition, the depositary bank incurs expenses in connection
with the conversion of dividends or other cash distributions paid in local
currency into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices in
the ADR market may also exist with respect to certain ADRs. In varying degrees,
any or all of these factors may affect the value of the ADR compared with the
value of the underlying shares in the local market. In addition, the rights of
holders of ADRs may be different than those of holders of the underlying shares,
and the market for ADRs may be less liquid than that for the underlying shares.
ADRs are registered securities pursuant to the Securities Act of 1933 and may be
subject to the reporting requirements of the Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs and
consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated widely in value
against the United States dollar for many reasons, including supply and demand
of the respective currency, the soundness of the world economy and the strength
of the respective economy as compared to the economies of the United States and
other countries. Therefore, for any securities of issuers (whether or not they
are in ADR form) whose earnings are stated in foreign currencies, or which pay
dividends in foreign currencies or which are traded in foreign currencies, there
is a risk that their United States dollar value will vary with fluctuations in
the United States dollar foreign exchange rates for the relevant currencies.
On the basis of the best information available to the Sponsor at the Initial
Date of Deposit, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment to
the Trusts of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control regulations
might not be adopted in the future which might adversely affect payment to the
Trusts. In addition, the adoption of exchange control regulations and other
legal restrictions could have an adverse impact on the marketability of
international securities in the Trusts and on the ability of the Trusts to
satisfy its obligation to redeem Units tendered to the Trustee for redemption.
General. The Trust consists of such of the Securities listed under
"Portfolio" as may continue to be held from time to time in such Trust in Part
One of this Prospectus 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 Securities.
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 a Trust will retain for any length of time its
present size and composition. Although the portfolios are not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain limited
circumstances. See "Trust Administration." Equity Securities, however, will not
be sold by a 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 a Trust and will vote such stocks in accordance with the instructions
of the Sponsor.
Year 2000 Readiness Disclosure. These two paragraphs constitute "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem". The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
FEDERAL TAXATION
Global Energy Trust, Series 1. The Trust has elected and intends to qualify
on a continuing basis for special federal income tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Trust so qualifies and timely distributes to Unitholders 90% or
more of its taxable income (without regard to its net capital gain, i.e., the
excess of its net long-term capital gain over its net short-term capital loss),
it will not be subject to federal income tax on the portion of its taxable
income (including any net capital gain) that it distributes to Unitholders. In
addition, to the extent the Trust timely distributes to Unitholders at least 98%
of its taxable income (including any net capital gain), it will not be subject
to the 4% excise tax on certain undistributed income of "regulated investment
companies." Because the Trust intends to timely distribute its taxable income
(including any net capital gain), it is anticipated that the Trust will not be
subject to federal income tax or the excise tax.
Distributions to Unitholders of the Trust's taxable income, other than
distributions which are designated as capital gain dividends, will be taxable as
ordinary income to Unitholders, except that to the extent that distributions to
a Unitholder in any year exceed the Trust's current and accumulated earnings and
profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholder) on December 31 of the year such distributions are
declared.
Distributions of the Trust's net capital gain which are properly designated
as capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or treated
as arising from) the sale or redemption of Units will generally be a capital
gain or loss, except in the case of a dealer or a financial institution. The
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) is generally subject to a maximum marginal stated tax rate
of 20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income. Note, however, that the 1998 Tax Act and the Taxpayer Relief Act of 1997
(the "1997 Tax Act") provide that the application of the rules described above
in the case of pass-through entities such as the Trust will be prescribed in
future Treasury Regulations. Note that if a Unitholder holds Units for six
months or less and subsequently sells such Units at a loss, the loss will be
treated as a long-term capital loss to the extent that any long-term capital
gain distribution is made with respect to such Units during the six-month period
or less that the Unitholder owns the Units.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units. The 1997 Tax Act includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g. short sales, offsetting notional principal contracts, futures or
forward contracts or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period.
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. 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.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than Real
Estate Investment Trusts) and is designated by the Trust as being eligible for
such 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. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a pro
rata portion of the foreign securities held by the Trust, must include in their
gross income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust deems
to be the Unitholders' portion of foreign income taxes paid with respect to, or
withheld from, dividends, interest or other income of the Trust from its foreign
investments. Unitholders may then subtract from their federal income tax the
amount of such taxes withheld, or else treat such foreign taxes as deductions
from gross income; however, as in the case of investors receiving income
directly from foreign sources, the above described tax credit or deduction is
subject to certain limitations. The 1997 Tax Act imposes a required holding
period for such credits. Unitholders should consult their tax advisers regarding
this election and its consequences to them.
Under the Code, certain miscellaneous 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 adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received from the
Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon redemption of Units or termination of the Trust. Unitholders
electing an in kind distribution of shares of Securities should be aware that
the exchange is subject to taxation and Unitholders will recognize gain or loss
(subject to various nonrecognition provisions of the Code) based on the value of
the Securities received. Investors electing an in kind distribution should
consult their own tax advisors with regard to such transaction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
The foregoing discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to United States
Unitholders.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from the Trust that
are designated by the Trust as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes, if all of the
following conditions are met (i) the capital gain dividend is not effectively
connected with the conduct by the foreign investor of a trade or business within
the United States, (ii) the foreign investor (if an individual) is not present
in the United States for 183 days or more during his or her taxable year, and
(iii) the foreign investor provides all certification which may be required of
his status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers with respect to
United States tax consequences of ownership of Units. Units in the Trust and
Trust distributions may also be subject to state and local taxation and
Unitholders should consult their tax advisers in this regard.
Global Energy Trust, Series 2 and Subsequent Series. The following is a
general discussion of certain of the federal income tax consequences of the
purchase, ownership and disposition of the Units of the Trust. 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 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 Security when such dividends are considered to
be received by the Trust. Unitholders will be taxed in this manner regardless of
whether distributions from the Trust are actually received by the Unitholder or
are automatically reinvested.
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder as described
below). The price a Unitholder pays for his Units, generally including sales
charges, is allocated among his pro rata portion of each Security held by the
Trust (in proportion to the fair market values thereof on the valuation date
nearest the date the Unitholder purchase his Units) in order to determine his
initial tax basis for his pro rata portion of each Security held by the Trust.
Unitholders should consult their own tax advisers with regard to calculation of
basis. For federal income tax purposes, a Unitholder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a corporation with
respect to a Security held by the Trust is taxable as ordinary income to the
extent of such corporation's current and accumulated "earnings and profits". A
Unitholder's pro rata portion of dividends paid on such Security which exceeds
such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, the holding period for such capital gain will be
determined by the period of time a Unitholder has held his Units.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain, except in the case of a dealer or a financial
institution. A Unitholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will generally be
considered a capital loss (except in the case of a dealer or a financial
institution).
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 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.
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. Unitholders should
consult with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. The Internal Revenue Service Restructing and
Reform Act of 1998 (the "1998 Tax Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as net long-term capital gain
over net short-term capital loss for the taxable year) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax rate of
20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposed for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust including his pro rata
portion of all Securities represented by a Unit.
The Taxpayer Relief Act of 1997 (the "1997 Act") includes provisions that
treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures or forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not of loss) and for purposes of
determining the holding period. Unitholders should consult their own tax
advisers with regard to any such constructive sales rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Rights of Unitholders--Redemption of
Units", under certain circumstances a Unitholder tendering Units for redemption
may request an in kind distribution. A Unitholder may also under certain
circumstances request an in kind distribution upon the termination of the Trust.
See "Rights of Unitholders--Redemption of Units." As previously discussed, prior
to the redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust's 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 Security held by the Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion of the Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of Security held by the Trust, such Unitholder will generally
recognize gain or loss based upon the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an in
kind distribution will have to analyze the tax consequences with respect to each
Security owned by 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 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 Securities held in the Trust
in accordance with the proportion of the fair market values of such Securities
on the valuation date nearest the date the Units are purchased in order to
determine such Unitholder's tax basis for his pro rata portion of each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary income
as described above.
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 that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporations for a three-year period ending with the close
of its taxable year preceding payment was effectively connected to the conduct
of a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the United
States and a foreign country. Non-U.S. Unitholders should consult their own tax
advisers regarding the imposition of U.S. withholding on distributions from the
Trust.
It should be noted that payments to the Trust of dividends on Securities that
are attributable to foreign corporations may be subject to foreign withholding
taxes and Unitholders should consult their tax advisers regarding the potential
tax consequences relating to the payment of any such withholding taxes by the
Trust. Any dividends withheld as a result thereof will nevertheless be treated
as income to the Unitholders. Because, under the grantor trust rules, an
investor is deemed to have paid directly his share of foreign taxes that have
been paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect to such taxes.
The 1997 Act imposes a required holding period for such credits. Investors
should consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any 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.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
Investment Advisory Corp., which is an affiliate of the Sponsor, will receive an
annual supervisory fee, payable as described under "Generalwhich is not to
exceed the amount set forth under "Summary of Essential Financial Information"
in Part One of this Prospectus, for providing portfolio supervisory services for
the Trust. Such fee (which is based on the number of Units outstanding on
January 1 of each year) may exceed the actual costs of providing such
supervisory services for this Fund, but at no time will the total amount
received for portfolio supervisory services rendered to Series 1 and subsequent
series of the Fund in any calendar year exceed the aggregate cost to the
Supervisor of supplying such services in such year. In addition, the Evaluator,
which is a division of Van Kampen Investment Advisory Corp., shall receive as an
annual per Unit evaluation fee, payable as described under "General", for
regularly evaluating each Trust's portfolio that amount set forth under "Summary
of Essential Financial Information" in Part One of this Prospectus (which is
based on the outstanding number of Units on January 1 of each year). 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 dealers will receive sales commissions and may realize
other profits (or losses) in connection with the sale of Units as described
under "Public Offering--Sponsor and Dealer Compensation".
Trustee's Fee. For its services the Trustee will receive as an annual per
Unit fee from the Trust that amount set forth under "Summary of Essential
Information" in Part One of this Prospectus (which is based on the outstanding
number of units on January 1 of each year). The Trustee's fees are payable as
described under "General". 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 Series 2 and
subsequent Series, 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 respective Trust and
amortized over the life of such 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 a 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 a Trust without negligence, bad faith
or wilful misconduct on its part and (g) expenditures incurred in contacting
Unitholders upon termination of the Trust. The Trust may pay the cost of
updating its registration statement each year. Unit investment trust sponsors
have historically paid these costs.
General. All of the fees and expenses of each Trust will accrue on a daily
basis and will be charged to such Trust, in arrears, on a monthly basis on or
before the tenth day of each month. The fees and expenses of Series 1 are
payable out of the Income Account or, if insufficient, out of the Capital
Account of such Trust. The fees and expenses of Series 2 and subsequent Series
are payable out of the Capital Account of such Trust. When such fees and
expenses are paid by or owning to the Trustee, they are secured by a lien on the
portfolio of the Trust. Since the Securities are all common stocks, and the
income stream produced by dividend payments is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or all
expenses of the Trust. If the balances in the Income and Capital Accounts are
insufficient to provide for amounts payable by the Trust, the Trustee has the
power to sell Securities to pay such amounts. These sales may result in capital
gains or losses to Unitholders. See "Federal Taxation".
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The current sales charge
applicable to Units is described in Part One of this Prospectus under "Summary
of Essential Financial Information".
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law and trustees, custodians or fiduciaries for the
benefit of such persons) of Van Kampen Funds Inc. and its affiliates, dealers
and their affiliates, and vendors providing services to the Sponsor may purchase
Units at the Public Offering Price less the applicable dealer concession.
Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Trust Administration--General--Unit Distribution")
by (1) investors who purchase Units through registered investment advisers,
certified financial planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or asset
management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed, (2) bank trust departments investing funds over which they
exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, custodial or similar capacity, (3) any person who for at
least 90 days, has been an officer, director or bona fide employee of any firm
offering Units for sale to investors or their immediate family members (as
described above) and (4) officers and directors of bank holding companies that
make Units available directly or through subsidiaries or bank affiliates.
Notwithstanding anything to the contrary in this Prospectus, such investors,
bank trust departments, firm employees and bank holding company officers and
directors who purchase Units through this program will not receive sales charge
reductions for quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in Part One of
this Prospectus in accordance with fluctuations in the prices of the underlying
Securities in the Trust.
The price of the Units as of the opening of business on the date stated in
the "Summary of Essential Financial Information" in Part One of this Prospectus
was established by adding to the determination of the aggregate underlying value
of the Securities that amount specified under "Summary of Essential Financial
Information" in Part One and dividing the sum so obtained by the number of Units
outstanding. The Public Offering Price shall include the proportionate share of
any cash held in the Capital Account. This computation produced a gross sales
commission initially equal to that amount specified under "Summary of Essential
Financial Information" in Part One. The Evaluator will appraise or cause to be
appraised daily the value of the underlying Securities as of the close of
trading on the New York Stock Exchange (which is presently 4:00 P.M. New York
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 at or prior to the
close of trading on the New York Stock Exchange on each such day. Orders
received by the Trustee, Sponsor or any dealer 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. Such sales charge
will be reduced annually, as set forth in "Summary of Essential Financial
Information" in Part One of this Prospectus, by .5 of 1% to a minimum sales
charge of 1.5% (3.0% for Series 2 and subsequent Series).
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made for
Securities listed on a national stock exchange or, if no such price exists, at
the bid prices on the day the valuation is made.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in the
manner described.
Broker-dealers or others will be allowed a concession or agency commission of
70% of the sale charge in connection with the distribution of Units.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the agency
commission referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Units; however, the
Glass-Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions are not
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units and 25 Units for a
tax-sheltered retirement plan. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public Offering--General" above.
Cash, if any, made available to the Sponsor prior to the date of settlement for
the purchase of Units may be used in the Sponsor's business and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to, and certain
dealers may, maintain a secondary market for Units of each Trust. In so
maintaining a market, the Sponsor and any such dealers 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. In addition, the
Sponsor and any such dealers 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 they are not obligated to do so, the Sponsor intends
to maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust. The Sponsor does not
intend to maintain a market for Units during the final six months of a Trust's
term. If the supply of Units exceeds demand or if some other business reason
warrants it, the Sponsor may either discontinue all purchases of Units or
discontinue purchases of Units at such prices. In the event that a market is not
maintained for the Units and the Unitholder cannot find another purchaser, a
Unitholder desiring to dispose of his Units may be able to dispose of such Units
only by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". A Unitholder who wishes to
dispose of his Units should inquire of his broker as to current market prices in
order to determine whether there is in existence any price in excess of the
Redemption Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The purchase
of Units of the Trust may be limited by the plans' provisions and does not
itself establish such plans. The minimum purchase in connection with a
tax-sheltered retirement plan is 25 Units of the Trust.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust is evidenced by separate registered certificates
executed by the Trustee and the Sponsor. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer. A Unitholder must sign exactly as
his name appears on the face of the certificate 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 multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require
a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, return of principal, etc.) are credited to the Capital Account. The
Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to Unitholders
of record on the preceding Income Record Dates. See "Summary of Essential
Financial Information" in Part One of the Prospectus. Proceeds received on the
sale of any Securities in the Trust, to the extent not used to meet redemptions
of Units or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held in
the Capital Account and not distributed until the next distribution date
applicable to such Capital Account. The Trustee is not required to pay interest
on funds held in the Capital or Income Accounts (but may itself earn interest
thereon and therefore benefits from the use of such funds).
The distribution to the Unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share of
the cash in the Income Account after deducting estimated expenses, if
applicable. Because dividends are not received by the Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to fluctuate
from distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner. A person
will become the owner of Units, and thereby a Unitholder of record, on the date
of settlement provided payment has been received. 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.
On or before the tenth day of each month, the Trustee will deduct from the
Income Account and, to the extent funds are not sufficient therein, 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
will deduct amounts necessary to pay the expenses of Series 2 and subsequent
Series from the Capital Account only. The Trustee also may withdraw from said
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 a Trust's assets until such time as the Trustee
shall return all or any part of such amounts to the appropriate accounts. In
addition, the Trustee may withdraw from the Income and Capital Accounts such
amounts as may be necessary to cover redemptions of Units.
Reinvestment Option. Unitholders may elect to have each distribution of
interest income, capital gains and/or principal on their Units automatically
reinvested in shares of certain Van Kampen mutual funds which are registered in
the Unitholder's state of residence. Such mutual funds are hereinafter
collectively referred to as the "Reinvestment Funds".
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen Funds Inc. at
One Parkview Plaza, Oakbrook Terrace, Illinois 60181. Texas residents who desire
to reinvest may request that a broker-dealer registered in Texas send the
prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units will,
on the applicable distribution date, automatically be applied, as directed by
such person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such date.
Unitholders with an existing Guaranteed Reinvestment Option (GRO) Program
account (whereby a sales charge is imposed on distribution reinvestments) may
transfer their existing account into a new GRO account which allows purchases of
Reinvestment Fund shares at net asset value as described above.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. A participant may at
any time prior to five days preceding the next succeeding distribution date, by
so notifying the Trustee in writing, elect to terminate his or her reinvestment
plan and receive future distributions of his or her Units in cash. There will be
no charge or other penalty for such termination. Each Reinvestment Fund, its
sponsor and investment adviser shall have the right to terminate at any time the
reinvestment plan relating to such fund.
Unitholders of the Trust may elect to have each distribution of income,
capital gains and/or capital on their Units automatically reinvested in
additional Units of such Trust without a sales charge (to the extent Units may
be lawfully offered for sale in the state in which the Unitholder resides). To
participate in the reinvestment plan, a Unitholder may either contact his or her
broker or agent or file with the Trustee a written notice of election at least
ten days prior to the Record Date for which the first distribution is to apply.
A Unitholder's election to participate in the reinvestment plan will apply to
all Units of the applicable Trust owned by such Unitholder and such election
will remain in effect until changed by the Unitholder.
Reinvestment plan distributions may be reinvested in Units of the Trust
already held in inventory by the Sponsor (see "Public Offering--Public Market")
or, until such time as additional Units cease to be issued by the Trust (see
"The Trust"), distributions may be reinvested in such additional Units. If Units
are unavailable in the secondary market, distributions which would otherwise
have been reinvested shall be paid in cash to the Unitholder on the applicable
Distribution Date.
Purchases made pursuant to the reinvestment plan will be made without a sales
charge at the net asset value for Units of the Trust as of the Evaluation Time
on the related Income or Capital Distribution Dates. Under the reinvestment
plan, the Trust will pay the Unitholder's distributions to the Trustee which in
turn will purchase for such Unitholder full and fractional Units of the Trust
and will send such Unitholder a statement reflecting the reinvestment.
A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its sponsor and its investment adviser
shall have the right to terminate at any time the reinvestment plan relating to
such Reinvestment Fund and the Sponsor shall have the right to suspend or
terminate the reinvestment plan for reinvestment in additional Units of the
Trust at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit outstanding. For as long as the Sponsor deems it to be in the best
interest of the Unitholders, the accounts of the Trust shall be audited, not
less frequently than annually, by independent certified public accountants, and
the report of such accountants shall be furnished by the Trustee to Unitholders
upon request. Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each person who at any time during the
calendar year was a registered Unitholder a statement (i) as to the Income
Account: income received, deductions for applicable taxes and for fees and
expenses of the Trust, for redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed in each case both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; (ii) as
to the Capital Account: the dates of disposition of any Securities (other than
pursuant to In Kind Distributions) and the net proceeds received therefrom, the
results of In Kind Distributions in connection with redemptions of Units, if
any, deductions for payment of applicable taxes and fees and expenses of the
Trust held for distribution to Unitholders of record as of a date prior to the
determination and the balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (iii) a list of the Securities held and the number of Units
outstanding on the last business day of such calendar year; (iv) the Redemption
Price per Unit based upon the last computation thereof made during such calendar
year; and (v) amounts actually distributed during such calendar year from the
Income and Capital Accounts, separately stated, expressed as total dollar
amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in a Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286 of the certificates representing the Units
to be redeemed, duly endorsed or accompanied by proper instruments of transfer
with signature guaranteed (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender the Unitholder will be entitled to
receive in cash (unless the redeeming Unitholder elects an In Kind Distribution
as indicated 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. The
"date of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the close of trading on the
New York Stock Exchange (which is currently 4:00 P.M. New York time) the date of
tender is the next day on which such Exchange is open for trading and such Units
will be deemed to have been tendered to the Trustee on such day for redemption
at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by the
Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distributions") of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following the
tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form to
the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering Unitholder
is entitled. In implementing these redemption procedures, the Trustee shall make
any adjustments necessary to reflect differences between the Redemption Price of
the Securities distributed in kind as of the date of tender. If funds in the
Capital Account are insufficient to cover the required cash distribution to the
tendering Unitholder, the Trustee may sell Securities according to the criteria
discussed above. For the tax consequences related to an In Kind Distribution see
"Federal Taxation."
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of such Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result in
lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder depending
on the value of the Securities in the portfolio at the time of redemption.
Special federal income tax consequences will result if a Unitholder requests an
In Kind Distribution. See "Federal Taxation".
The Redemption Price per Unit 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. While the Trustee has the
power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in the Trust determined on the basis of (i) the cash on
hand in such Trust or monies in the process of being collected and (ii) the
value of the Securities in the Trust, less (a) amounts representing taxes or
other governmental charges payable out of such Trust, (b) any amount owing to
the Trustee for its advances and (c) the accrued expenses of such Trust. The
Evaluator may determine the value of a Securities in the Trust in the following
manner: if the Securities are listed on a national securities exchange, the
evaluation will generally be based on the last available sale price on the
exchange (unless the Evaluator deems the price inappropriate as a basis for
evaluation) or, if there is no last available sale price on an exchange, at the
last available bid prices.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and the diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Securities
in the Trust is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such Units
by notifying the Trustee before the close of business on the next succeeding
business day and by making payment therefor to the Unitholder not later than the
day on which the Units would otherwise have been redeemed by the Trustee. Units
held by the Sponsor may be tendered to the Trustee for redemption as any other
Units.
The offering price of any Units acquired by the Sponsor will be in accord
with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Sponsor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.
Portfolio Administration. The portfolio of the Fund are not "managed" by the
Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. The Trust Agreement
provides that the Sponsor may (but need not) direct the Trustee to dispose of an
Equity Security in the event that an issuer defaults in the payment of a
dividend that has been declared, that any action or proceeding has been
instituted restraining the payment of dividends or there exists any legal
question or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments of
dividends, the credit standing of the issuer or otherwise impair the sound
investment character of the Equity Security, that the issuer has defaulted on
the payment on any other of its outstanding obligations, that the price of the
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 a Trust. In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that Series 1 continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code. Except as stated under "Trust Portfolio--General" for failed
securities, the acquisition by the Fund of any securities other than the
Securities is prohibited. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
property, the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by a Trust, they may be accepted
for deposit in such Trust and either sold by the Trustee or held in such Trust
pursuant to the direction of the Sponsor (who may rely on the advice of the
Supervisor). Proceeds from the sale of Securities (or any securities or other
property received by the Fund in exchange for Equity Securities) are credited to
the applicable Capital Account for distribution to Unitholders or to meet
redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also sell
Securities designated by the Supervisor, or if not so directed, in its own
discretion, for the purpose of redeeming Units of a Trust tendered for
redemption and the payment of expenses.
When the Trust sells Securities, the composition and diversity of the Equity
Securities may be altered. In order to obtain the best price for the Trust, it
may be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, (as determined in good faith by the Sponsor
and the Trustee) provided, however, that the Trust Agreement may not be amended
to increase the number of Units. The Trust Agreement may also be amended in any
respect by the Trustee and Sponsor, or any of the provisions thereof may be
waived, with the consent of the holders of 51% of the Units then outstanding,
provided that no such amendment or waiver will reduce the interest in the Trust
of any Unitholder without the consent of such Unitholder or reduce the
percentage of Units required to consent to any such amendment or waiver without
the consent of all Unitholders. The Trustee shall advise the Unitholders of any
amendment promptly after execution thereof.
A Trust may be liquidated (1) at any time by consent of Unitholders
representing 66 2/3% of the Units then outstanding, or (2) by the Trustee when
the value of the Trust, as shown by any evaluation, is less than that indicated
under "Summary of Essential Financial Information" in Part One of the
Prospectus. The Trust Agreement will terminate upon the sale or other
disposition of the last Security held thereunder, but in no event will it
continue beyond the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any are
then issued and outstanding, shall be given by the Trustee to each Unitholder so
holding a certificate at his address appearing on the registration books of the
Fund maintained by the Trustee. At least 30 days before the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders and will include with such notice a form to enable Unitholders
owning 1,000 or more Units to request an In Kind Distribution rather than
payment in cash upon the termination of the Trust. To be effective, this request
must be returned to the Trustee at least five business days prior to the
Mandatory Termination Date. On the Mandatory Termination Date (or on the next
business day thereafter if a holiday) the Trustee will deliver each requesting
Unitholder's pro rata number of whole shares of each of the Equity Securities in
the portfolio to the account of the broker-dealer or bank designated by the
Unitholder at Depository Trust Company. The value of the Unitholder's fractional
shares of the Equity Securities will be paid in cash. Unitholders with less than
1,000 Units and those not requesting an In Kind Distribution will receive a cash
distribution from the sale of the remaining Equity Securities within a
reasonable time following the Mandatory Termination Date. The Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation of
the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in the Trust upon termination may result in a lower
amount than might otherwise be realized if such sale were not required at such
time. The Trustee will then distribute to each Unitholder his pro rata share of
the balance of the Income and Capital Accounts.
Within 60 days of the final distribution, Unitholders will be furnished a
final distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion will determine that any amounts held in reserve are no
longer necessary, it will make distribution thereof to Unitholders in the same
manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or negligence (negligence in the case of the
Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee of
any of the Securities. In the event of the failure of the Sponsor to act under
the Trust Agreement, the Trustee may act thereunder and shall not be liable for
any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the Trust
which the Trustee may be required to pay under any present or future law of the
United States of America or of any other taxing authority having jurisdiction.
In addition, the Trust Agreement contains other customary provisions limiting
the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the Evaluator shall be under no liability to the Trustee, Sponsor
or Unitholders for errors in judgment. This provision shall not protect the
Evaluator in any case of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van
Kampen Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.,
which in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW").
MSDW, 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.
Van Kampen Funds 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. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of September 30, 1997, the Sponsor and its Van Kampen affiliates managed
or supervised approximately $65.3 billion of investment products, of which over
$10.85 billion is invested in municipal securities. The Sponsor and its Van
Kampen affiliates managed $54 billion of assets, consisting of $34.3 billion for
55 open-end mutual funds (of which 45 are distributed by Van Kampen Funds Inc.)
$14.2 billion for 37 closed-end funds and $5.5 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen's open-end funds, closed-ended funds and
unit investment trusts are professionally distributed by leading financial firms
nationwide. Based on cumulative assets deposited, the Sponsor believes that it
is the largest sponsor of insured municipal unit investment trusts, primarily
through the success of its Insured Municipals Income Trust(R) or the IM-IT(R)
trust. The Sponsor also provides surveillance and evaluation services at cost
for approximately $13 billion of unit investment trust assets outstanding. Since
1976, the Sponsor has serviced over two million investor accounts, opened
through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
All costs and expenses incurred in creating and establishing Series 1,
including the cost of the initial preparation, printing and execution of the
Trust Agreement and the certificates, legal and accounting expenses, advertising
and selling expenses, expenses of the Trustee, initial evaluation fees and other
out-of-pocket expenses have been borne by the Sponsor at no cost to such Trust.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of the Banks of the State of New York and the Board of Governors
of the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of such 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
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.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in Part One of this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as set
forth in their report in Part One of this Prospectus, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing.
No person is authorized to give any information or to make any representations
not contained 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 dealers. This Prospectus does not constitute an offer to sell, or
a solicitation of any offer to buy, securities in any state to any persons to
whom it is not lawful to make such offer in such state.
Table of Contents Page
----------------- ------
The Trust 2
Objectives and Securities Selection 2
Trust Portfolio 2
Risk Factors 2
Federal Taxation 4
Trust Operating Expenses 8
Public Offering 8
Rights of Unitholders 9
Trust Administration 11
Other Matters 13
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and exhibits relating thereto, which the Fund has filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.
GENTPRO76
GLOBAL ENERGY TRUST
PROSPECTUS
PART TWO
Note: This Prospectus May Be Used Only
When Accompanied by Part One. Both
Parts of this Prospectus should be
retained for future reference.
Dated as of the date
of the Prospectus
Part One accompanying
this prospectus
Part Two.
Sponsor:
VAN KAMPEN FUNDS INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series 76,
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of Chicago and State
of Illinois on the 25th day of January, 2000.
Van Kampen American Capital Equity Opportunity Trust,
Series 76
(Registrant)
By Van Kampen Funds Inc.
(Depositor)
By Gina Costello
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on January 25,
2000 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Gina M. Costello______________
(Attorney in Fact)*
- --------------------
* An executed copy of each of the related powers of attorney is filed herewith
or was filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated November 12, 1999 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity Trust,
Series 76 as of September 30, 1999, and for the period then ended, contained in
this Post-Effective Amendment No. 2 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the caption
"Auditors".
Grant Thornton LLP
Chicago, Illinois
January 25, 2000
