File No. 333-38969
CIK #1025226
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 80
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
Chapman and Cutler Van Kampen American Capital Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of undivided fractional
beneficial interest.
F. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the
Registration Statement
/ X / Check box if it is proposed that this filing will become effective
on November 25, 1997 at 2:00 p.m. pursuant to Rule 487.
Van Kampen American Capital Equity Opportunity Trust
Series 80
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) *
underwriter
5. Organization of trust ) The Trusts
6. Execution and termination of ) The Trusts
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trusts
trust's securities and ) Federal Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trusts
) Trust Portfolios
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Portfolios
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or ) Trust Operating Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) *
underwriter, trustee or any ) Trust Portfolios
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trusts
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolios
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities ) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's ) Cover Page
securities ) Trust Operating Expenses
52. (a) Provisions of trust agreement )
with respect to replacement ) Trust Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Federal Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Report of Independent Certified
1(c) to Form S-6) ) Public Accountants
) Statements of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
November 25, 1997
VAN KAMPEN AMERICAN CAPITAL
Strategic Picks Opportunity Trust, November 1997 Series
Strategic Picks Opportunity Trust-Combined Series, November 1997
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 80 (the
"Fund" ) is comprised of two underlying, separate unit investment
trusts designated as the Strategic Picks Opportunity Trust, November 1997
Series (the "Strategic Picks Trust" ) and the Strategic Picks
Opportunity Trust-Combined Series, November 1997 (the "Strategic Picks
Combined Trust" ) (collectively, the "Trusts" ). The Trusts offer
investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio of actively traded equity
securities. The Strategic Picks Trust consists of ten common stocks selected
from a pre-screened subset of the Morgan Stanley Capital International USA
Index (the "Strategic Picks Subset" ) with the highest dividend yields
as of the close of business three business days prior to the Initial Date of
Deposit. The Morgan Stanley Capital International USA Index (the "MSCI USA
Index" ) is the property of Morgan Stanley & Co. Morgan Stanley has granted
a license for use by the Trusts of the MSCI USA Index and related trademarks
and tradenames. The Strategic Picks Combined Trust consists of twenty common
stocks comprised of the ten stocks in the Strategic Picks Trust and the ten
highest dividend yielding stocks in the Dow Jones Industrial Average (the "
DJIA" ) as of the close of business three business days prior to the
Initial Date of Deposit. The DJIA is the property of Dow Jones & Company, Inc.
Dow Jones & Company, Inc. has not granted to the Strategic Picks Combined
Trust or the Sponsor a license to use the DJIA. Dow Jones & Company, Inc. has
not participated in any way in the creation of such Trust or in the selection
of the stocks included in such Trust and has not approved any information
herein relating thereto. Units are not designed so that their prices will
parallel or correlate with any movements in the DJIA, and it is expected that
their prices will not parallel or correlate with such movements. The common
stocks included in the Trusts are referred to herein as the "Equity
Securities" or "Securities" . Unless terminated earlier, the Trusts
will terminate on the Mandatory Termination Date and any Securities then held
will, within a reasonable time thereafter, be liquidated or distributed by the
Trustee. Any Securities liquidated at termination will be sold at the then
current market value for such Securities; therefore, the amount distributable
in cash to a Unitholder upon termination may be more or less than the amount
such Unitholder paid for his Units. Upon liquidation, Unitholders may choose
to reinvest their proceeds into the next Series of the Trusts, if available,
at a reduced sales charge, to receive a cash distribution or to receive a pro
rata distribution of the Securities then included in the Trusts (if they own
the requisite number of Units).
An investment in Units will be automatically redeemed on the first Special
Redemption Date (approximately thirteen months from the Initial Date of
Deposit) unless the Unitholder elects in writing to hold Units through Trust
termination.
Attention Foreign Investors. If you are not a United States citizen or
resident, distributions from a Trust will generally be subject to U.S. federal
withholding taxes; however, under certain circumstances treaties between the
United States and other countries may reduce or eliminate such withholding
tax. See "Federal Taxation." Such investors should consult their tax
advisers regarding the imposition of U.S. withholding on distributions.
Units of the Trusts are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by, any depository institution or any government
agency and are subject to investment risk, including possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Objectives of the Trusts. The objective of the Strategic Picks Trust is to
provide an above average total return through a combination of potential
capital appreciation and dividend income, consistent with the preservation of
invested capital, by investing in a portfolio of ten actively traded equity
securities having the highest dividend yield in the Strategic Picks Subset as
of the close of business three business days prior to the Initial Date of
Deposit. The objective of the Strategic Picks Combined Trust is to provide an
above average total return through a combination of potential capital
appreciation and dividend income, consistent with the preservation of invested
capital, by investing in a portfolio of twenty actively traded equity
securities comprised of the ten stocks in the Strategic Picks Trust and the
ten common stocks having the highest dividend yield in the DJIA as of the
close of business three business days prior to the Initial Date of Deposit.
There is, of course, no guarantee that the objectives of the Trusts will be
achieved.
Public Offering Price. The Public Offering Price of the Units of each Trust
during the initial offering period and for secondary market transactions after
the initial offering period includes the aggregate underlying value of the
Securities in such Trust's portfolio, initial sales charge, and cash, if any,
in the Income and Capital Accounts held or owned by such Trust. The initial
sales charge is computed as described under "Public Offering--General"
. Unitholders will also be subject to a deferred sales charge as described
under "Public Offering--General" . During the initial offering period,
the sales charge is reduced on a graduated scale for sales involving at least
5,000 Units of a Trust. If Units were available for purchase at the close of
business on the day before the Initial Date of Deposit, the Public Offering
Price per Unit would have been that amount set forth under "Summary of
Essential Financial Information" . Except as provided in "Public
Offering--Unit Distribution" , the minimum purchase is 100 Units. See "
Public Offering" .
Additional Deposits. The Sponsor may, from time to time after the Initial Date
of Deposit, deposit additional Securities in the Trusts as provided under "
The Trusts" .
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by a Trust will be reinvested into additional Units, if then
available, on the Distribution Date to Unitholders of record on the record
date as set forth in the "Summary of Essential Financial Information" .
Unitholders may also elect to receive cash distributions as provided under
"Rights of Unitholders--Reinvestment Option." The estimated initial
distribution for the Trusts will be that amount set forth under "Summary
of Essential Information--Estimated Initial Distribution" and will be made
on May 25, 1998 to Unitholders of record on May 10, 1998. Gross dividends
received by the Trusts will be distributed to Unitholders. Expenses of the
Trusts will be paid with proceeds from the sale of Securities. For the
consequences of such sales, see "Federal Taxation" . Additionally, upon
surrender of Units for redemption or termination of a Trust, the Trustee will
distribute to each Unitholder his pro rata share of such Trust's assets, less
expenses, in the manner set forth under "Rights of
Unitholders--Distributions of Income and Capital" .
Secondary Market For Units. Although not obligated to do so, the Sponsor
currently intends to maintain a market for Units through October 22, 1998 and
offer to repurchase such Units at prices which are based on the aggregate
underlying value of Equity Securities (generally determined by the closing
sale or bid prices of the Securities) plus or minus cash, if any, in the
Capital and Income Accounts of a Trust. If a secondary market is not
maintained, a Unitholder may redeem Units at prices based upon the aggregate
underlying value of the Equity Securities plus or minus a pro rata share of
cash, if any, in the Capital and Income Accounts of a Trust. See "Rights
of Unitholders--Redemption of Units" . Units sold or tendered for
redemption prior to such time as the entire deferred sales charge on such
Units has been collected will be assessed the amount of the remaining deferred
sales charge at the time of sale or redemption. A Unitholder tendering 1,000
or more Units for redemption may request a distribution of shares of
Securities (reduced by customary transfer and registration charges) in lieu of
payment in cash. See "Rights of Unitholders--Redemption of Units" .
Termination. An investment in Units of a Trust will terminate approximately
thirteen months from the Initial Date of Deposit unless a Unitholder elects in
writing to remain invested in the Trust through the Mandatory Termination
Date. Approximately thirteen months after the Initial Date of Deposit,
Unitholders will be given the option to (i) have their Units redeemed and
reinvest the proceeds into a subsequent Series of the Trust, (ii) receive an
in-kind distribution of Securities in such Trust (if applicable) or (iii)
continue to hold the Units through the termination of the Trust approximately
two years following the Initial Date of Deposit. If a Unitholder makes no
election at the first Special Redemption Date, the Unitholder's Units will be
redeemed on such date and the Unitholder will receive cash representing their
pro rata portion of the Trust's assets. At least 30 days prior to the
Mandatory Termination Date the Trustee will provide written notice thereof to
all Unitholders and will include with such notice a form to enable Unitholders
to elect a distribution of shares of the Securities (reduced by customary
transfer and registration charges) if such Unitholder owns at least 1,000
Units, rather than to receive payment in cash for such Unitholder's pro rata
share of the amounts realized upon the disposition of such Securities.
Unitholders will receive cash in lieu of any fractional shares. To be
effective, the election form, and any other documentation required by the
Trustee, must be returned to the Trustee at least five business days prior to
the Mandatory Termination Date. Unitholders may elect to become Rollover
Unitholders as described in "Special Redemption and Rollover in New
Trusts" below. Rollover Unitholders will not receive the final liquidation
distribution but will receive units of a new Series of the Trusts, if one is
being offered. Unitholders not electing the Rollover Option or a distribution
of shares of Securities will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after the Trust is terminated.
See "Trust Administration--Amendment or Termination" .
Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase Units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases).
Unitholders will initially have distributions reinvested into additional Units
of the Trusts subject only to the remaining deferred sales charge payments as
set forth herein, if Units are available at the time of reinvestment, or upon
request, either reinvested into an open-end management investment company as
described herein or distributed in cash. See "Rights of
Unitholders--Reinvestment Option" .
Special Redemption and Rollover in New Trusts. The Sponsor currently
anticipates that a new series of the Fund will be created each month.
Unitholders will have the option of specifying by either Rollover Notification
Date stated in the "Summary of Essential Financial Information" to
have all of their Units redeemed and the distributed Securities sold by the
Trustee, in its capacity as Distribution Agent, on the related Special
Redemption Date. (Unitholders so electing are referred to herein as "
Rollover Unitholders" .) The Distribution Agent will appoint the Sponsor as
its agent to determine the manner, timing and execution of sales of underlying
Securities. The proceeds of the redemption will then be invested in units of a
new Series of the Trusts (the "New Trust" ), if one is offered, at a
reduced sales charge. The Sponsor may, however, stop offering units of the New
Trust at any time in its sole discretion without regard to whether all the
proceeds to be invested have been invested. Cash which has not been invested
on behalf of the Rollover Unitholders in the New Trust will be distributed
shortly after the related Special Redemption Date. However, the Sponsor
anticipates that sufficient Units will be available, although moneys in these
Trusts may not be fully invested on the next business day. The New Trust is
expected to contain two portfolios of common stocks selected in accordance
with the investment strategies of the current Trusts. Rollover Unitholders
will receive the amount of dividends in the Income Account of the Trusts which
will be included in the reinvestment in units of the New Trust.
Risk Factors. An investment in the Trusts should be made with an understanding
of the risks associated therewith, including the possible deterioration of the
financial condition of the issuers, the general condition of the stock market
and stock price volatility. For certain risk considerations related to the
Trusts, see "Risk Factors" .
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 80
Summary of Essential Financial Information
At the close of business on the day before the Initial Date of Deposit: November 24, 1997
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Van Kampen American Capital Investment Advisory Corp.
(An affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Strategic
Strategic Picks
Picks Combined
GENERAL INFORMATION Trust Trust
------------ ------------
<S> <C> <C>
Number of Units <F1>........................................................... 14,910 14,912
Fractional Undivided Interest in the Trust per Unit <F1>....................... 1/14,910 1/14,912
Public Offering Price:
Aggregate Value of Securities in Portfolio <F2>...............................$ 147,600 $ 147,621
Aggregate Value of Securities per Unit........................................$ 9.90 $ 9.90
Sales Charge <F3>.............................................................$ .275 $ .275
Less Deferred Sales Charge per Unit...........................................$ .175 $ .175
Public Offering Price per Unit <F3><F4>.......................................$ 10.00 $ 10.00
Redemption Price per Unit <F5>.................................................$ 9.72 $ 9.72
Initial Secondary Market Repurchase Price per Unit <F5>........................$ 9.72 $ 9.72
Excess of Public Offering Price per Unit over Redemption Price per Unit <F5>...$ .28 $ .28
Estimated Initial Distribution per Unit........................................$ .11 $ .11
Estimated Annual Dividends per Unit <F6>.......................................$ .29158 $ .28092
Estimated Organizational Expenses per Unit <F7>................................$ .03848 $ .07183
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee ............Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee...............Maximum of $.0025 per Unit
Rollover Notification Dates ....................November 22, 1998 and October 23, 1999
Special Redemption Dates........................December 22, 1998 and November 23, 1999
Mandatory Termination Date .....................November 23, 1999
Each Trust may be terminated if the net asset value of such Trust is less than
$500,000 unless the net asset value of such Trust's deposits have exceeded
$15,000,000, then the Trust Agreement may be terminated if the net asset value of
Minimum Termination Value.......................such Trust is less than $3,000,000.
Trustee's Annual Fee ...........................$.008 per Unit
Income and Capital Account Record Dates.........May 10 and January 10
Income and Capital Account Distribution Dates...May 25 and January 25
Evaluation Time.................................Close of the New York Stock Exchange
- ----------
<FN>
<F1>As of the close of business on any day on which the Sponsor is the sole
Unitholder of a Trust, the number of Units may be adjusted so that the Public
Offering Price per Unit will equal approximately $10. Therefore, to the extent
of any such adjustment the fractional undivided interest per Unit will
increase or decrease from the amount indicated above.
<F2>Each Security listed on a national securities exchange is valued at the
closing sale price or if the Security is not so listed, at the asked price
thereof.
<F3>The Sales Charge consists of an initial sales charge and a deferred sales
charge. The initial sales charge is applicable to all Units and represents an
amount equal to the difference between the first year sales charge (2.75% of
the Public Offering Price) and the amount of the deferred sales charge imposed
prior to the first Special Redemption Date ($0.175 per Unit). Unitholders will
also be subject to a deferred sales charge during the first year of the Trusts
equal to $0.175 per Unit. Unitholders who elect to hold Units after the first
Special Redemption Date will be charged an additional $0.15 per Unit deferred
sales charge after such date. This additional deferred sales charge will not
be imposed on Unitholders who do not elect to hold Units after such date.
Subsequent to the Initial Date of Deposit, the amount of the initial sales
charge will vary with changes in the aggregate value of the Securities in a
Trust. Units purchased subsequent to the initial deferred sales charge payment
will be subject only to that portion of the deferred sales charge payments not
yet collected. These deferred sales charge payments will be paid from funds in
the Capital Account, if sufficient, or from the periodic sale of Securities.
See the "Fee Table" below and "Public Offering--General" .
<F4>On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts.
<F5>The Redemption Price per Unit and the Initial Secondary Market Repurchase
Price per Unit are reduced by the unpaid portion of the deferred sales charge
imposed prior to the first Special Redemption Date.
<F6>Estimated annual dividends are based on the most recently declared dividends.
Estimated Annual Dividends per Unit are based on the number of Units, the
fractional undivided interest in the Securities per Unit and the aggregate
value of the Securities per Unit as of the Initial Date of Deposit. Investors
should note that the actual annual dividends received per Unit will vary from
the estimated amount due to changes in the factors described in the preceding
sentence and actual dividends declared and paid by the issuers of the
Securities.
<F7>Each Trust (and therefore Unitholders) 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 one year and paid
from funds in the Capital Account, if sufficient, or from the sale of
Securities. See "Trust Operating Expenses" and "Statements of
Condition" . Historically, the sponsors of unit investment trusts have paid
all of the costs of establishing such trusts. Estimated Annual Organizational
Expenses per Unit have been estimated based on a projected trust size of
$10,000,000 and $5,000,000 for the Strategic Picks and Strategic Picks
Combined Trusts, respectively. To the extent a Trust is larger or smaller, the
actual organizational expenses paid by such Trust (and therefore by
Unitholders) will vary from the estimated amount set forth above.
</TABLE>
FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor will bear directly or indirectly. See "Public
Offering--General" and "Trust Operating Expenses" . Although each Trust has a
fixed term, and is a unit investment trust rather than a mutual fund, this
information is presented to permit a comparison of fees. The fee tables below
assume that the principal amount of and distributions on an investment are
redeemed at the first Special Redemption Date. The examples below assume that
the principal amount of and distributions on an investment are rolled over
each year into a new Series of the Trusts subject only to the anticipated
reduced sales charge applicable to Rollover Unitholders. See "Right of
Unitholders--Special Redemption and Rollover in New Trusts." Investors should
note that while these examples are based on the public offering price and the
estimated fees for the current Trusts, the actual public offering price and
fees for any new Series of the Trusts created in the future periods indicated
could vary from those of the current Trusts.
Strategic Picks Trust
<TABLE>
<CAPTION>
Amount Per
Unitholder Transaction Expenses (as of the Initial Date of Deposit) (as a percentage of offering price) 100 Units
---------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase <F1>........................................................... 1.00% $ 10.00
Deferred Sales Charge <F2> <F3>......................................................................... 1.75% 17.50
--------- ---------------
Sales Charge <F3>....................................................................................... 2.75% $ 27.50
========= ===============
Maximum Sales Charge Imposed on Reinvested Dividends <F3> <F4>......................................... 1.75% $ 17.50
========= ===============
Estimated Annual Trust Operating Expenses (as of the Initial Date of Deposit) (as a percentage of
aggregate value)
Trustee's Fee .......................................................................................... 0.081% $ 0.80
Portfolio Supervision and Evaluation Fees .............................................................. 0.051% 0.50
Organizational Costs.................................................................................... 0.389% 3.85
Other Operating Expenses ............................................................................... 0.035% 0.35
--------- ---------------
Total .................................................................................................. 0.556% $ 5.50
========= ===============
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for Period of:
---------------------------------------
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period $ 33 $ 80 N/A N/A
</TABLE>
Strategic Picks Combined Trust
<TABLE>
<CAPTION>
Amount Per
Unitholder Transaction Expenses (as of the Initial Date of Deposit) (as a percentage of offering price) 100 Units
---------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase <F1>........................................................... 1.00% $ 10.00
Deferred Sales Charge <F2> <F3>......................................................................... 1.75% 17.50
--------- ---------------
Sales Charge <F3>....................................................................................... 2.75% $ 27.50
========= ===============
Maximum Sales Charge Imposed on Reinvested Dividends <F3> <F4>.......................................... 1.75% $ 17.50
========= ===============
Estimated Annual Trust Operating Expenses (as of the Initial Date of Deposit) (as a percentage of
aggregate value)
Trustee's Fee .......................................................................................... 0.081% $ 0.80
Portfolio Supervision and Evaluation Fees .............................................................. 0.051% 0.50
Organizational Costs.................................................................................... 0.726% 7.18
Other Operating Expenses ............................................................................... 0.035% 0.35
--------- ---------------
Total .................................................................................................. 0.893% $ 8.83
========= ===============
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for Period of:
---------------------------------------
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period $ 36 $ 90 N/A N/A
The examples assume reinvestment of all dividends and distributions at the end
of each year and utilize a 5% annual rate of return as mandated by Securities
and Exchange Commission regulations applicable to mutual funds. For purposes
of the examples, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the dividend;
the cumulative expenses would be higher if sales charges on reinvested
dividends were reflected in the year of reinvestment. The examples should not
be considered representations of past or future expenses or annual rate of
return; the actual expenses and annual rate of return may be more or less than
those assumed for purposes of the examples.
- ----------
<FN>
<F1>The Initial Sales Charge is actually the difference between the Sales Charge
(2.75% of the Public Offering Price) and the Deferred Sales Charge ($0.175 per
Unit) and would exceed 1.00% if the Public Offering Price exceeds $10 per Unit.
<F2>The actual deferred sales charge imposed during the Trust's first year is
$0.0175 per Unit per month, irrespective of purchase or redemption price,
deducted during the first year of the Trust. If a holder sells or redeems
Units before all of these deductions have been made, the balance of the
deferred sales charge payments remaining will be deducted from the sales or
redemption proceeds. If Unit price exceeds $10 per Unit, the deferred portion
of the sales charge will be less than 1.75%; if Unit price is less than $10
per Unit, the deferred portion of the sales charge will exceed 1.75%. Units
purchased subsequent to the initial deferred sales charge payment will be
subject to only that portion of the deferred sales charge payments not yet
collected. Unitholders who do not elect to hold Units subsequent to the first
Special Redemption Date will be subject only to this deferred sales charge of
$0.175 per Unit imposed during the first year of the Trust.
<F3>In addition to the Deferred Sales Charge set forth above, Unitholders who
elect to hold Units subsequent to the first Special Redemption Date will be
subject to a deferred sales charge of $0.15 per Unit which will imposed after
such date as described under "Public Offering--General" . This would
increase the total maximum sales charge for such Unitholders to 4.25% of the
Public Offering Price imposed over a two year period.
<F4>Reinvested dividends will be subject only to the deferred sales charge
remaining at the time of reinvestment. See "Rights of
Unitholders--Reinvestment Option" .
</TABLE>
THE TRUSTS
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 80 is comprised
of two separate unit investment trusts: Strategic Picks Opportunity Trust,
November 1997 Series and Strategic Picks Opportunity Trust-Combined Series,
November 1997. The Fund was created under the laws of the State of New York
pursuant to a Trust Indenture and Trust Agreement (the "Trust
Agreement" ), dated the date of this Prospectus (the "Initial Date of
Deposit" ), among Van Kampen American Capital Distributors, Inc., as
Sponsor, Van Kampen American Capital Investment Advisory Corp., as Supervisor,
The Bank of New York, as Trustee, and American Portfolio Evaluation Services,
a division of Van Kampen American Capital Investment Advisory Corp., as
Evaluator.
The Strategic Picks Trust offers investors the opportunity to purchase Units
representing proportionate interests in a portfolio of actively traded equity
securities consisting of ten common stocks selected from the Strategic Picks
Subset with the highest dividend yields as of the close of business three
business days prior to the Initial Date of Deposit. The Strategic Picks
Combined Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities of
twenty common stocks comprised of the ten stocks in the Strategic Picks Trust
and the ten highest dividend yielding stocks in the DJIA as of the close of
business three business days prior to the Initial Date of Deposit. See "
Trust Portfolios." These yields are historical and there is no assurance
that any dividends will be declared or paid in the future on the Securities in
the Trusts. The Trusts may be an appropriate medium for investors who desire
to participate in a portfolio of common stocks with greater diversification
than they might be able to acquire individually. Diversification of assets in
a Trust will not eliminate the risk of loss always inherent in the ownership
of securities.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolios" herein, including delivery
statements relating to contracts for the purchase of certain such Securities
and an irrevocable letter of credit issued by a financial institution in the
amount required for such purchases. Thereafter, the Trustee, in exchange for
such Securities (and contracts) so deposited, delivered to the Sponsor
documentation evidencing the ownership of that number of Units indicated in
"Summary of Essential Financial Information" . Unless terminated
earlier, the Trusts will terminate on the Mandatory Termination Date set forth
under "Summary of Essential Financial Information" and any Securities
then held will, within a reasonable time thereafter, be liquidated or
distributed by the Trustee. Any Securities liquidated at termination will be
sold at the then current market value for such Securities; therefore, the
amount distributable in cash to a Unitholder upon termination may be more or
less than the amount such Unitholder paid for his Units. Upon either Rollover
Notification Date, Unitholders may choose to reinvest their proceeds into a
subsequent Series of the Trusts, if available, at a reduced sales charge, to
receive a pro rata distribution of the Securities then included in the Trusts
(if they own the requisite minimum number of Units) or to receive a cash
distribution. At the first Rollover Notification Date Unitholders may also
elect to continue their investment in Units through the Mandatory Termination
Date (approximately two years following the Initial Date of Deposit).
Unitholders who make no election at the first Rollover Notification Date will
have their Units redeemed on the first Special Redemption Date and will
receive a cash distribution of the proceeds.
Additional Units of the Trusts may be issued at any time by depositing in the
Trusts (i) additional Securities, (ii) contracts to purchase securities
together with cash or irrevocable letters of credit or (iii) cash (or a letter
of credit) with instructions to purchase additional Securities. As additional
Units are issued by the Trusts as a result of the deposit of additional
Securities, the aggregate value of the Securities in the Trusts will be
increased and the fractional undivided interest in the Trusts represented by
each Unit will be decreased. The Sponsor may continue to make additional
deposits of Securities or cash with instructions to purchase Securities into
the Trusts following the Initial Date of Deposit, provided that such
additional deposits will be in amounts which will maintain, as nearly as
practicable, the same percentage relationship among the number of shares of
each Equity Security in the related Trust's portfolio that existed immediately
prior to any such subsequent deposit. Any deposit of additional Equity
Securities will duplicate, as nearly as is practicable, this actual
proportionate relationship and not the original proportionate relationship on
the Initial Date of Deposit, since the actual proportionate relationship may
be different than the original proportionate relationship. Any such difference
may be due to the sale, redemption or liquidation of any of the Equity
Securities deposited in a Trust on the Initial, or any subsequent, Date of
Deposit. Existing and new investors may experience a dilution of their
investments and a reduction in their anticipated income because of the
purchase of additional Securities and because the Trusts will pay the
associated brokerage fees.
Each Unit initially offered represents an undivided interest in the related
Trust. To the extent that any Units are redeemed by the Trustee or additional
Units are issued as a result of additional Securities being deposited by the
Sponsor, the fractional undivided interest in a Trust represented by each
unredeemed Unit will increase or decrease accordingly, although the actual
interest in such Trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the Trustee by
Unitholders, which may include the Sponsor, or until the termination of the
Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of each Trust is to provide an above average total return
through a combination of potential capital appreciation and dividend income,
consistent with the preservation of invested capital, by investing in a
portfolio which contains common stocks selected through the following
processes.
The portfolio of the Strategic Picks Trust is selected by implementing the
following investment strategy. Beginning with the MSCI USA Index, all stocks
of companies in the financial or utility sectors and stocks included in the
Dow Jones Industrial Average are removed. This pool of stocks is screened for
only those companies that have positive one- and three-year sales and earnings
growth rates and two years positive dividend growth. The remaining stocks are
ranked highest to lowest by annual trading volume and only the top 75% are
retained. The remaining stocks, which then comprise the "Strategic Picks
Subset," are ranked by dividend yield and the ten highest-yielding stocks
are selected for the Strategic Picks Trust portfolio.
The portfolio of the Strategic Picks Combined Trust is selected by combining
the ten common stocks in the Strategic Picks Trust with the ten highest
dividend yielding common stocks in the Dow Jones Industrial Average as of the
close of business three business days prior to the Initial Date of Deposit.
Accordingly, the Strategic Picks Combined Trust consists of twenty stocks
which represent a combined portfolio of stocks selected through the Strategic
Picks investment strategy and the "Dogs of the Dow" investment
strategy.
The MSCI USA Index consists of approximately 370 large domestic companies in
the United States and has existed since January 1, 1970. Dividend yield is
calculated for each Security by annualizing the last quarterly or semi-annual
ordinary dividend declared on the Security and dividing the result by its
closing sale price three business days prior to the Initial Date of Deposit.
This yield is historical and there is no assurance that any dividends will be
declared or paid in the future on the Securities.
Investing in indexes is a popular way to try to capture the broad movement of
a single market. By refining an index, it may be possible to outperform the
general market. The Strategic Picks Trust utilizes a simple strategy: Refine
an index of domestic stocks (the MSCI USA Index), remove those that don't meet
specific quality tests, pick the most liquid stocks, and choose the ten stocks
with the highest dividend yield for the portfolio. This strategy seeks to
identify industrial companies that demonstrate high quality, undervalued stock
price, high liquidity and historically high dividends.
Morgan Stanley Capital International. Recognized as a world leader in global
financial research, Morgan Stanley monitors more than 4,000 companies in 43
countries, representing 80% of the total market value of the world's stock
markets. The Morgan Stanley Capital International ("MSCI" ) databases
are used as a benchmark by more than 90% of the investment community. With
hundreds of analysts located across the globe, Morgan Stanley provides
comprehensive research and in-depth knowledge about general markets and
specific companies around the world.
Since 1968, MSCI global indices have presented an array of investment
opportunities available to the international investor, including indices such
as the MSCI USA Index and the MSCI Europe, Australasia and Far East Index
(EAFE). These indices seek to represent an accurate normal portfolio. In
addition, index valuation ratios and company-level fundamental data provide
tools for the international investor. MSCI believes that local stock exchange
indices are not comparable with one another due to differences in the
representation of the local market, mathematical formulas, methods of
adjusting for capital changes, and base dates. The same criteria and
calculation methodology are applied across all MSCI indices. Further, while
accounting standards continue to differ according to local customs and
practices, fundamental data is analyzed and presented in a uniform and
meaningful manner in MSCI indices--allowing investors to compare investment
opportunities across markets. Each MSCI country index is constructed so as to
minimize double counting, assuring that all industry groups are
proportionately represented, and that each country's contribution to the
global or regional index is accurately based on its market capitalization.
In 1986, Morgan Stanley acquired the indices and data from Capital
International Perspective, S.A. ("CIPSA" ) based in Geneva,
Switzerland. CIPSA has been researching and publishing international indices
since 1969 and continues to be solely responsible for the decisions regarding
constituent additions and deletions as well as any other methodological
modifications to the indices. Morgan Stanley contributes its expertise in
technology and the marketing and distribution of the MSCI Indices and
publications. Selection of the constituents for MSCI Indices is conducted
independent of the Sponsor which has no input regarding the components of any
index.
The MSCI USA Index is the exclusive property of Morgan Stanley. Morgan Stanley
Capital International is a service mark of Morgan Stanley and has been
licensed for use by Van Kampen American Capital Distributors, Inc.
This fund is not sponsored, endorsed, sold or promoted by Morgan Stanley.
Morgan Stanley makes no representation or warranty, express or implied, to the
owners of this fund or any member of the public regarding the advisability of
investing in funds generally or in this fund particularly or the ability of
the MSCI USA Index to track general stock market performance. Morgan Stanley
is the licensor of certain trademarks, service marks and trade names of Morgan
Stanley and of the MSCI USA Index which is determined, composed and calculated
by Morgan Stanley without regard to the issuer of this fund or this fund.
Morgan Stanley has no obligation to take the needs of the issuer of this fund
or the owners of this fund into consideration in determining, composing or
calculating the MSCI USA Index. Morgan Stanley is not responsible for and has
not participated in the determination of the timing of, prices at, or
quantities of this fund to be issued or in the determination or calculation of
the equation by which Units of this fund is redeemable for cash. Morgan
Stanley has no obligation or liability to owners of this fund in connection
with the administration, marketing or trading of this fund.
ALTHOUGH MORGAN STANLEY SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE
IN THE CALCULATION OF THE INDEX FROM SOURCES WHICH MORGAN STANLEY CONSIDERS
RELIABLE, NEITHER MORGAN STANLEY NOR ANY OTHER PARTY GUARANTEES THE ACCURACY
AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN. NEITHER
MORGAN STANLEY NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS
TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND
COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED HEREUNDER OR FOR ANY OTHER USE. NEITHER MORGAN STANLEY NOR ANY OTHER
PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND MORGAN STANLEY HEREBY
EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MORGAN STANLEY OR ANY
OTHER PARTY HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.
The MSCI Index Methodology. While the MSCI index methodology has evolved to
capture the growth of the investment universe, the index philosophy has never
been compromised to simplify the complicated process of investing: MSCI
indices are based on detailed analysis to make it easier for the investor to
measure international performance. Constituents are selected for a country
index through the following process: (1) Define the "Market" ; (2)
Capture 60% of the market capitalization of the country across all industry
groups; (3) Select the most liquid securities within each industry; (4) Select
stocks with sufficient free float; (5) Avoid cross-ownership; and (6) Apply
full market capitalization weights. In the case of the MSCI USA Index, which
is the foundation for the Strategic Picks Trust investment strategy, these
criteria are applied within the United States market.
The initial research for the MSCI Indices covers the full breadth of the
global equity securities market. Country specialists track the evolution of
both listed and unlisted shares of domestically listed companies in nearly
every country in the world. Based in Geneva, these country teams collect
share, pricing, ownership, float and liquidity data for effectively all
companies worldwide. Sources for this information are local stock exchanges
and brokerage firms, newspapers, and company contacts. From this master
matrix, the total country market capitalization is adjusted for
double-counting and non-domiciled companies. All of the companies within this
research coverage are eligible for inclusion in the MSCI indices except
non-domiciled companies, investment trusts and mutual funds.
Once the total country market capitalization is analyzed, 60% of the
capitalization of each industry group and thus 60% of the entire market is
targeted for each MSCI index. This ensures that the index reflects the
industry characteristics of the overall market, and permits the construction
of accurate regional and global industry indices. Research coverage in MSCI
products and publications extends beyond the index coverage (60%) to capture
80% of the market for each country. This coverage includes daily performance
as well as monthly valuation ratios and summarized financial statement data.
When selecting the constituents of an index, the most effective industry
classification is used--either the local convention or the MSCI schema of 58
industry groups--in order to mirror the industry characteristics of the local
market. Once the selection process is complete, the index constituents are
re-classified into the MSCI schema of 58 industries and 8 economic sectors in
order to facilitate cross-country comparisons. The MSCI classification schema
has been adopted by Reuters for their industry classification. Securities are
selected to represent an industry based on size and the portion of earnings
and revenues attributable to that industry group. Even within an industry the
goal is to represent the full diversity of business segments. An industry
representation may exceed the 60% target because one or two large companies
dominate an industry. Similarly, an industry may fall below the 80% level
under conventional analysis because its companies lack good liquidity and
float, or because of extensive cross-ownership.
A goal of the MSCI index construction process is to select the most liquid
stocks within each industry group, all other things being equal, since
liquidity is necessary but not sole determinant for inclusion in the index.
Liquidity is monitored by monthly average trading value over time in order to
determine normal levels of volume, excluding temporary peaks and troughs. A
stock's liquidity is significant not only in absolute terms, but also relative
to its market capitalization and to average liquidity for the country as a
whole.
Float is monitored for every security in the market, and low float (a small
percentage of shares freely tradable) may exclude a stock from consideration
in the index. But float can be difficult to determine: in some markets good
sources are generally not available; in other markets, information on smaller
and less prominent issues can be subject to error and time lags. Government
ownership and cross-ownership positions can change over time and are not
always made public. Float also tends to be defined differently depending on
the source. Thus, evaluations of float run the risk of penalizing those
markets that have good disclosure, regardless of the actual degree of
availability of shares. As with liquidity, sufficient float is an important
consideration, not an inflexible rule.
Cross-ownership occurs when one company has a significant ownership in another
company in the same country. In situations where cross-ownership is
substantial, including both companies in an index can skew industry weights,
distort country-level valuations (such as country price-earnings and
price-book value ratios) and overstate a country's true market size. An
integral part of the country research function is identifying cross ownerships
in order to avoid or minimize them. Country specialists in Geneva do much of
the cross-ownership identification through researching company reports, local
newspapers and stock exchange data.
All standard MSCI indices are weighted by each company's full market
capitalization (both listed and unlisted shares). This approach has the
significant advantage of objectivity--the number of shares outstanding for a
company is a constituent figure for companies around the world and is easily
agreed upon and obtainable. Full market capitalization weighting is favored to
other weighting schemes for both theoretical and practical reasons: (a) it is
impossible to judge whether a position which is currently in firm hands might
be available in the future; (b) the quality and timeliness of information on
float varies from market to market and adjustments penalize those markets with
the highest standards of disclosure; (c) the most serious consequence of float
limitations is limited liquidity which can be monitored objectively; much
effort is spent in researching and monitoring these factors when selecting
constituents for each country index but once a security is selected, it is
included in the index at its full market value. A growing number of very
sizable companies have been brought or are expected to be brought to the
market with modest initial tranches being publicly available. At the same
time, the obvious relevance of these companies instantly positions them among
the core investment opportunities in their market. In order to allow the MSCI
indices to capture this new market trend, in very exceptional cases, a company
may be included at a portion of its total market capitalization.
General. Investors will be subject to taxation on the dividend income, if any,
received by the Trusts and on gains from the sale or liquidation of
Securities. Investors should be aware that there is not any guarantee that the
objectives of the Trusts will be achieved because it is subject to the
continuing ability of the respective issuers to declare and pay dividends and
because the market value of the Securities can be affected by a variety of
factors. Common stocks may be especially susceptible to general stock market
movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. Investors should be aware
that there can be no assurance that the value of the underlying Securities
will increase or that the issuers of the Securities will pay dividends on
outstanding common shares. Any distribution of income will generally depend
upon the declaration of dividends by the issuers of the Securities and the
declaration of any dividends depends upon several factors including the
financial condition of the issuers and general economic conditions. See "
Risk Factors" .
The investment strategies utilized by the the Trusts are designed to be
implemented on an annual basis. Investors who hold Units through Trust
termination may have investment results that differ significantly from a Unit
investment that is reinvested into a new trust each year. Investors should
note that a change in the federal taxation of capital gains was recently
enacted that reduces the maximum stated marginal tax rate for certain capital
gains for investments held for more than 18 months to 20% (10% in the case of
certain taxpayers in the lowest federal tax bracket). Unitholders who elect to
continue their investment through Trust termination would qualify for such
treatment. Unitholders who make no election at the first Special Redemption
Date and Unitholders who elect to reinvest into a new series of a Trust at the
first Special Redemption Date will not qualify for such treatment but would be
subject to a maximum stated marginal federal capital gains tax rate of 28%.
See "Federal Taxation" .
Investors should be aware that the Trusts are not "managed" funds and
as a result the adverse financial condition of a company will not result in
its elimination from a 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 for inclusion in the
Trusts as of three business days prior to the Initial Date of Deposit.
Subsequent to this time, the Securities may no longer meet the criteria
necessary for inclusion on the Initial Date of Deposit. Should a Security fail
to meet such criteria subsequent to this time, such Security will not as a
result thereof be removed from the portfolio. In addition, since the Sponsor
may deposit additional Equity Securities which were originally selected
through this process, the Sponsor may continue to sell Units of the Trusts
even though the Equity Securities would no longer be chosen for deposit into
the Trusts if the selection process were to be made again at a later time.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will in most cases be distributed to Unitholders and will not be
reinvested, no assurance can be given that 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--Portfolio
Administration."
Each Trust consists of (a) the Equity Securities (including contracts for the
purchase thereof) listed under the related "Portfolio" as may continue
to be held from time to time in such Trust, (b) any additional Equity
Securities acquired and held by such Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Equity Securities. However, should any contract for the purchase
of any of the Equity Securities initially deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in the Trust to
cover such purchase are reinvested in substitute Equity Securities in
accordance with the Trust Agreement, refund the cash and sales charge
attributable to such failed contract to all Unitholders on or before the next
scheduled distribution date.
TRUST PORTFOLIOS
- --------------------------------------------------------------------------
Strategic Picks Opportunity Trust
The Strategic Picks Opportunity Trust consists of a diversified portfolio of
10 different issues of Securities selected from the pre-screened Strategic
Picks Subset having the highest dividend yield as of the close of business
three business days prior to the Initial Date of Deposit. All of the
Securities are listed on a national securities exchange, the NASDAQ National
Market System or are traded in the over-the-counter market. The following is a
general description of each of the companies that are included in the
Strategic Picks Trust.
American Home Products Corporation. American Home Products Corporation is a
research-based pharmaceutical and health care products company. The company
discovers, develops, manufactures and markets prescription drugs and
over-the-counter medications. American Home Products is also involved with
vaccines, biotechnology, agricultural products, animal health care and medical
devices.
Amoco Corporation. Amoco Corporation is a worldwide integrated petroleum and
chemical company. Through its subsidiaries, Amoco explores for and produces
crude oil and natural gas worldwide. The company also manufactures, transports
and markets petroleum products and chemicals.
Bell Atlantic Corporation. Bell Atlantic Corporation provides a wide variety
of phone and cable-TV services throughout the northeast and mid-Atlantic
regions. The company's telecommunications services include local and wireless
phone services. Bell Atlantic will offer long distance services within a
13-state region.
BellSouth Corporation. BellSouth Corporation is a communications services
company. The company provides telecommunications, wireless communications,
directory advertising and publishing, video, Internet and information services
to more than 27 million customers in 20 countries worldwide.
Chrysler Corporation. Chrysler Corporation, and its consolidated subsidiaries,
manufactures, assembles and sells cars and trucks under the "Chrysler"
, "Dodge" , "Plymouth" , "Eagle" and "Jeep"
brand names and related parts and accessories. The company sells its products
primarily in the United States, Canada and Mexico through retail dealerships,
most of which are privately owned and financed.
Heinz (H.J.) Company. Heinz (H.J.) Company manufactures and markets food
products. The company produces ketchup, sauces, vinegar, pickles, canned tuna,
pet food, baby food, meat products, corn syrup and other items. Heinz's
subsidiary, Weight Watchers International, operates and franchises weight
control centers and licenses diet foods to other manufacturers. The company
sells its products internationally.
Mobil Corporation. Mobil Corporation is a major, integrated, international oil
company with interests in petrochemicals and plastics. The company explores
for, produces and markets oil, gas and petroleum products worldwide. Mobil
also produces and markets petrochemicals, industrial and consumer plastics and
lubricants. Other activities include research and development support for its
businesses.
Norfolk Southern Corporation. Norfolk Southern Corporation, a holding company,
owns Norfolk Southern Railway Company, a freight railroad and North American
VanLines, Inc., a motor carrier. In addition, through Pocahontas Land
Corporation, the company also produces natural resources. The railroad
system's lines extend over 14,652 miles of road in 20 states and the Province
of Ontario.
PPG Industries, Inc. PPG Industries, Inc. is a global producer of coatings and
resins, continuous-strand fiber glass, flat and fabricated glass and
chemicals. The company also produces automotive and industrial coatings and
aircraft transparencies. PPG produces automotive glass and chlor-alkali and
specialty chemicals and architectural finishes.
SBC Communications, Inc. SBC Communications, Inc. is a telecommunications
company with wireless customers across the United States, as well as
investments in telecommunications businesses in nine countries. The company
offers a wide range of services, including local and long-distance telephone
service, wireless communications, paging, Internet access, cable TV and
messaging and other products and services.
The following table sets forth a comparison of the hypothetical total return
of the ten highest yielding common stocks selected in accordance with the
investment strategy utilized by the Strategic Picks Trust (the "Strategy
Stocks" ) applied on a biennial basis with the one-year total returns of
all common stocks comprising the S&P 500, the Dow Jones Industrial Average and
the MSCI USA Index. It should be noted that the common stocks comprising the
Strategy Stocks may not be the same stocks from year to year and may not be
the same common stocks as those included in the Strategic Picks Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS(1)*
<CAPTION>
Standard & Dow Jones
Year Strategy Stocks Poor's 500 Index Industrial Average MSCI USA Index
- ---------------------------------------------- ---------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
1977 0.32% (7.16)% (12.71)% (7.11)%
1978 13.26 6.39 2.69 6.00
1979 17.00 18.19 10.52 13.86
1980 40.64 31.52 21.41 27.97
1981 5.09 (4.84) (3.40) (3.50)
1982 39.84 20.37 25.79 20.13
1983 17.66 22.31 25.68 21.11
1984 10.89 5.97 1.06 5.71
1985 46.11 31.05 32.78 31.04
1986 34.86 18.54 26.91 17.02
1987 11.38 5.67 6.02 4.41
1988 16.05 16.34 15.95 15.34
1989 31.87 31.21 31.71 30.21
1990 0.52 (3.13) (0.57) (1.89)
1991 47.88 30.00 23.93 30.17
1992 2.26 7.43 7.34 7.06
1993 7.32 9.92 16.72 9.82
1994 9.91 1.28 4.95 2.05
1995 38.10 37.11 36.48 37.04
1996 23.90 22.68 28.57 23.36
1997 thru 9/30 26.51 29.45 24.79 29.38
* Source: Barron's, Fact Set, Bloomberg, Morgan Stanley Capital International
and The Wall Street Journal. The Sponsor has not independently verified this
data but has no reason to believe that this data is incorrect in any material
respect.
- ----------
<FN>
<F1>The Strategy Stocks for each period were identified by ranking the dividend
yield for each of the stocks in the Strategic Picks Subset by annualizing the
last dividend paid (the last dividend declared was used in cases when the
stock was trading ex-dividend as of the last day of the period) and dividing
the result by the stock's market value on the first day of trading on the New
York Stock Exchange in the period. Total Return for each period was calculated
by taking the difference between period-end prices and prices at the end of
the following period (adjusted for any stock splits and corporate spinoffs)
and adding dividends for the period. If the dividend yield for two companies
was the same in any period, the company with the largest market capitalization
was utilized. Historical total returns thus represent actual stocks and real
time; the results illustrate what an investor would have obtained had the
investor been invested in the related stocks in the periods indicated. Total
Return does not take into consideration any sales charges, commissions,
expenses or taxes that will be incurred by the Strategic Picks Trust or
Unitholders.
</TABLE>
Based on the hypothetical total returns set forth in the table above, the
average annual total returns for the Strategy Stocks for the most recent
three, five, ten and twenty calendar year periods were 23.4%, 15.6%, 18.0% and
19.8%, respectively. Based on the hypothetical total returns set forth in the
table above, the average annual total returns for the S&P 500 for the most
recent three, five, ten and twenty calendar year periods were 19.4%, 15.0%,
15.1% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the DJIA for the most
recent three, five, ten and twenty calendar year periods were 22.6%, 18.2%,
16.5% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the MSCI USA Index for
the most recent three, five, ten and twenty calendar year periods were 19.9%,
15.2%, 15.1% and 13.8%, respectively.
The hypothetical returns shown above represent past performance and are not
guarantees of future performance and should not be used as a predictor of
returns to be expected in connection with the Strategic Picks Trust. Among
other factors, both stock prices (which may appreciate or depreciate) and
dividends (which may be increased, reduced or eliminated) will affect the
returns. Had the portfolio been available over the periods indicated in the
above table, after deductions for expenses and sales charges and not
accounting for taxes, it would have underperformed the S&P 500, the DJIA and
the MSCI USA Index in 8, 8 and 7 of the last 20 calendar years, respectively.
There can be no assurance that the Strategic Picks Trust will outperform the
S&P 500, the Dow Jones Industrial Average or the MSCI USA Index over the life
of such Trust or over consecutive rollover periods, if available. A Unitholder
would not necessarily realize as high a total return on an investment in the
stocks upon which the hypothetical returns shown above are based for the
following reasons: the hypothetical total return figures shown above do not
reflect sales charges, commissions, Trust expenses or taxes; the Trusts are
established at different times of the year; the Trust may not be able to
invest equally in the Strategy Stocks and may not be fully invested at all
times; and Equity Securities are often purchased or sold at prices different
from the closing prices used in buying and selling Units.
The chart below represents past performance of the Strategy Stocks, S&P 500,
the Dow Jones Industrial Average and the MSCI USA Index (but does not
represent possible performance of the Strategic Picks Trust which, as
indicated above, includes certain expenses and commissions not included in the
chart) and should not be considered indicative of future results. Further,
results are hypothetical. The chart assumes that all dividends during a year
(including those on stocks trading ex-dividend as of the last day of the year)
are reinvested at the end of that year and does not reflect sales charges,
commissions, expenses or income taxes. Based on the foregoing assumptions, the
average annual returns (which represent the percentage return derived by
taking the sum of the initial investment and all appreciation and dividends
for the specified investment period) during the period ended December 31, 1996
were 19.8%, 14.3%, 14.3% and 13.8% for the Strategy Stocks, the S&P 500, the
Dow Jones Industrial Average and the MSCI USA Index, respectively. There can
be no assurance that the Strategic Picks Trust will outperform the S&P 500,
the Dow Jones Industrial Average or the MSCI USA Index over its life or over
consecutive rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1977
<CAPTION>
Standard & Dow Jones MSCI
Strategy Poor's 500 Industrial USA
Period Stocks Index Average Index
- ------------------------------------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1977 $ 10,032 $ 9,284 $ 8,730 $ 9,289
1978 11,362 9,877 8,965 9,846
1979 13,294 11,674 9,908 11,211
1980 18,696 15,354 12,029 14,347
1981 19,648 14,610 11,620 13,845
1982 27,476 17,587 14,617 16,632
1983 32,328 21,510 18,366 20,142
1984 35,849 22,794 18,565 21,293
1985 52,378 29,872 24,650 27,902
1986 70,638 35,410 31,286 32,651
1987 78,676 37,418 33,170 34,091
1988 91,304 43,532 38,460 39,320
1989 120,402 57,118 50,656 51,199
1990 121,028 55,331 50,362 50,231
1991 178,977 71,930 62,414 65,386
1992 183,021 77,274 67,001 70,002
1993 196,419 84,940 78,217 76,876
1994 215,884 86,027 82,089 78,452
1995 298,135 117,952 112,043 107,511
1996 369,390 144,703 144,065 132,625
1997 thru 9/30 467,315 187,318 179,778 171,590
</TABLE>
The following table sets forth a comparison of the hypothetical total return
of the ten highest yielding common stocks selected in accordance with the
investment strategy utilized by the Strategic Picks Trust (the "Strategy
Stocks") applied on a biennial basis with the two-year total returns of
all common stocks comprising the S&P 500, the Dow Jones Industrial Average and
the MSCI USA Index. It should be noted that the common stocks comprising the
Strategy Stocks may not be the same stocks from period to period and may not
be the same common stocks as those included in the Strategic Picks Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS(1)*
<CAPTION>
Two Year Period Standard & Dow Jones
Ended December 31 Strategy Stocks Poor's 500 Index Industrial Average MSCI USA Index
- -------------------- --------------- ---------------- ------------------ ------------------
<S> <C> <C> <C> <C>
1978 30.98% (1.23)% (10.35)% (1.54)%
1980 36.18 55.44 34.18 45.71
1982 32.93 14.54 21.51 15.93
1984 28.61 29.61 27.01 28.03
1986 78.65 55.35 68.52 53.34
1988 33.88 22.94 22.93 20.43
1990 31.85 27.10 30.95 27.75
1992 51.19 39.66 33.04 39.36
1994 12.53 11.33 22.52 12.07
1996 80.36 68.21 75.50 69.05
1997 thru 9/30 24.07 29.45 24.79 29.38
* Source: Barron's, Fact Set, Bloomberg, Morgan Stanley Capital International
and The Wall Street Journal. The Sponsor has not independently verified this
data but has no reason to believe that this data is incorrect in any material
respect.
- ----------
<FN>
<F1>The Strategy Stocks for each period were identified by ranking the dividend
yield for each of the stocks in the Strategic Picks Subset by annualizing the
last dividend paid (the last dividend declared was used in cases when the
stock was trading ex-dividend as of the last day of the period) and dividing
the result by the stock's market value on the first day of trading on the New
York Stock Exchange in the period. Total Return for each period was calculated
by taking the difference between period-end prices and prices at the end of
the following period (adjusted for any stock splits and corporate spinoffs)
and adding dividends for the period. If the dividend yield for two companies
was the same in any period, the company with the largest market capitalization
was utilized. Historical total returns thus represent actual stocks and real
time; the results illustrate what an investor would have obtained had the
investor been invested in the related stocks in the periods indicated. Total
Return does not take into consideration any sales charges, commissions,
expenses or taxes that will be incurred by the Strategic Picks Trust or
Unitholders.
</TABLE>
Based on the hypothetical total returns set forth in the table above, the
average annual total returns for the Strategy Stocks for the most recent
three, five, ten and twenty calendar year periods were 23.7%, 15.7%, 18.4% and
18.4%, respectively. Based on the hypothetical total returns set forth in the
table above, the average annual total returns for the S&P 500 for the most
recent three, five, ten and twenty calendar year periods were 19.4%, 15.0%,
15.1% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the DJIA for the most
recent three, five, ten and twenty calendar year periods were 22.6%, 18.2%,
16.5% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the MSCI USA Index for
the most recent three, five, ten and twenty calendar year periods were 19.9%,
15.2%, 15.1% and 13.8%, respectively.
The hypothetical returns shown above represent past performance and are not
guarantees of future performance and should not be used as a predictor of
returns to be expected in connection with the Strategic Picks Trust. Among
other factors, both stock prices (which may appreciate or depreciate) and
dividends (which may be increased, reduced or eliminated) will affect the
returns. Had the portfolio been available over the periods indicated in the
above table, after deductions for expenses and sales charges and not
accounting for taxes, it would have underperformed the S&P 500, the DJIA and
the MSCI USA Index in 4, 5 and 4 of the last 10 two-year periods,
respectively. There can be no assurance that the Strategic Picks Trust will
outperform the S&P 500, the Dow Jones Industrial Average or the MSCI USA Index
over the life of such Trust or over consecutive rollover periods, if
available. A Unitholder would not necessarily realize as high a total return
on an investment in the stocks upon which the hypothetical returns shown above
are based for the following reasons: the hypothetical total return figures
shown above do not reflect sales charges, commissions, Trust expenses or
taxes; the Trusts are established at different times of the year; the Trust
may not be able to invest equally in the Strategy Stocks and may not be fully
invested at all times; and Equity Securities are often purchased or sold at
prices different from the closing prices used in buying and selling Units.
The chart below represents past performance of the Strategy Stocks, S&P 500,
the Dow Jones Industrial Average and the MSCI USA Index (but does not
represent possible performance of the Strategic Picks Trust which, as
indicated above, includes certain expenses and commissions not included in the
chart) and should not be considered indicative of future results. Further,
results are hypothetical. The chart assumes that all dividends during a period
(including those on stocks trading ex-dividend as of the last day of the
period) are reinvested at the end of that period and does not reflect sales
charges, commissions, expenses or income taxes. Based on the foregoing
assumptions, the average annual returns (which represent the percentage return
derived by taking the sum of the initial investment and all appreciation and
dividends for the specified investment period) during the period ended
December 31, 1996 were 18.4%, 14.3%, 14.3% and 13.8% for the Strategy Stocks,
the S&P 500, the Dow Jones Industrial Average and the MSCI USA Index,
respectively. There can be no assurance that the Strategic Picks Trust will
outperform the S&P 500, the Dow Jones Industrial Average or the MSCI USA Index
over its life or over consecutive rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1977
<CAPTION>
Two Year Standard & Dow Jones MSCI
Period Ended Strategy Poor's 500 Industrial USA
December 31 Stocks Index Average Index
- ---------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1978 $ 13,098 $ 9,877 $ 8,965 $ 9,846
1980 17,836 15,354 12,029 14,347
1982 23,709 17,587 14,617 16,632
1984 30,493 22,794 18,565 21,293
1986 54,476 35,410 31,286 32,651
1988 72,932 43,532 38,460 39,320
1990 96,158 55,331 50,362 50,231
1992 145,383 77,274 67,001 70,002
1994 163,593 86,027 82,089 78,452
1996 295,053 144,703 144,065 132,625
1997 thru 9/30 366,072 187,318 179,778 171,590
</TABLE>
Strategic Picks Combined Trust
The Strategic Picks Combined Trust consists of a diversified portfolio of 20
different issues of Securities consisting of the ten stocks in the Strategic
Picks Trust and the ten stocks in the DJIA having the highest dividend yield
as of the close of business three business days prior to the Initial Date of
Deposit. All of the Securities are listed on a national securities exchange,
the NASDAQ National Market System or are traded in the over-the-counter
market. The following is a general description of each of the companies that
are included in the Strategic Picks Combined Trust.
A T & T Corporation. A T & T Corporation provides communication services and
products. The company's products consist of network equipment and computer
systems, which service businesses, consumers, communication services providers
and government agencies. A T & T is involved in basic research as well as
product and service development and offers a general-purpose credit card and
financial and leasing services.
American Home Products Corporation. American Home Products Corporation is a
research-based pharmaceutical and health care products company. The company
discovers, develops, manufactures and markets prescription drugs and
over-the-counter medications. American Home Products is also involved with
vaccines, biotechnology, agricultural products, animal health care and medical
devices.
Amoco Corporation. Amoco Corporation is a worldwide integrated petroleum and
chemical company. Through its subsidiaries, Amoco explores for and produces
crude oil and natural gas worldwide. The company also manufactures, transports
and markets petroleum products and chemicals.
Bell Atlantic Corporation. Bell Atlantic Corporation provides a wide variety
of phone and cable-TV services throughout the northeast and mid-Atlantic
regions. The company's telecommunications services include local and wireless
phone services. Bell Atlantic will offer long distance services within a
13-state region.
BellSouth Corporation. BellSouth Corporation is a communications services
company. The company provides telecommunications, wireless communications,
directory advertising and publishing, video, Internet and information services
to more than 27 million customers in 20 countries worldwide.
Caterpillar, Inc. Caterpillar, Inc. designs, manufactures and markets
earth-moving, construction and materials handling machinery. Products include
track and wheel loaders, lift trucks, backhoe loaders and related equipment.
The company also produces diesel and natural gas engines and turbines and
electric power generation systems. Products are sold through a worldwide
network of independent dealers.
Chevron Corporation. Chevron Corporation is an international oil company with
activities in the United States and abroad. The company is involved in
worldwide, integrated petroleum operations which consist of exploring for,
developing and producing petroleum liquids and natural gas as well as
transporting the products. Chevron is also active in the mineral and chemical
industry.
Chrysler Corporation. Chrysler Corporation, and its consolidated subsidiaries,
manufactures, assembles and sells cars and trucks under the "Chrysler"
, "Dodge" , "Plymouth" , "Eagle" and "Jeep"
brand names and related parts and accessories. The company sells its products
primarily in the United States, Canada and Mexico through retail dealerships,
most of which are privately owned and financed.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures and
markets consumer and commercial imaging products. The various segments provide
a number of products and services including cameras, photofinishing, film and
audiovisual equipment. The company's products and services are offered
worldwide.
Exxon Corporation. Exxon Corporation explores for and produces crude oil and
natural gas and manufactures petroleum products. The company explores for and
mines coal and minerals and transports/sells crude oil, natural gas and
petroleum products. Operations are worldwide.
General Motors Corporation. General Motors Corporation manufactures and sells
vehicles worldwide under the brands "Chevrolet" , "Buick" , "
Cadillac" , "Oldsmobile" , "Pontiac" , "Saturn" and
"GMC" trucks. The company also offers financing and insurance,
mortgage banking, constructs and operates satellites and has other operations.
Heinz (H.J.) Company. Heinz (H.J.) Company manufactures and markets food
products. The company produces ketchup, sauces, vinegar, pickles, canned tuna,
pet food, baby food, meat products, corn syrup and other items. Heinz's
subsidiary, Weight Watchers International, operates and franchises weight
control centers and licenses diet foods to other manufacturers. The company
sells its products internationally.
International Paper Company. International Paper Company manufactures paper,
paperboard, packaging products, wood pulp, lumber, photosensitive films and
chemicals. The company produces writing and office supply products, envelopes,
business forms, photographic supplies and building products. International
Paper sells its products in the United States, Europe and the Pacific Rim.
J.P. Morgan & Company, Inc. J.P. Morgan & Company, Inc., through subsidiaries,
offers financial services to corporations, governments, financial
institutions, institutional investors, professional firms, privately-held
companies and individuals. The company offers loans, advises on mergers,
acquisitions and privatizations, underwrites debt and equity issues and deals
in government-issued securities worldwide.
Minnesota Mining & Manufacturing Company. Minnesota Mining & Manufacturing
Company is a diversified manufacturer of industrial, commercial and health
care products. The company produces and markets more than 60,000 products
worldwide.
Mobil Corporation. Mobil Corporation is a major, integrated, international oil
company with interests in petrochemicals and plastics. The company explores
for, produces and markets oil, gas and petroleum products worldwide. Mobil
also produces and markets petrochemicals, industrial and consumer plastics and
lubricants. Other activities include research and development support for its
businesses.
Norfolk Southern Corporation. Norfolk Southern Corporation, a holding company,
owns Norfolk Southern Railway Company, a freight railroad and North American
VanLines, Inc., a motor carrier. In addition, through Pocahontas Land
Corporation, the company also produces natural resources. The railroad
system's lines extend over 14,652 miles of road in 20 states and the Province
of Ontario.
Philip Morris Companies, Inc. Philip Morris Companies, Inc. has five principal
operating companies which include Philip Morris U.S.A., Philip Morris
International, Inc., Kraft Foods, Inc., Miller Brewing Company and Philip
Morris Capital Corporation.
PPG Industries, Inc. PPG Industries, Inc. is a global producer of coatings and
resins, continuous-strand fiber glass, flat and fabricated glass and
chemicals. The company also produces automotive and industrial coatings and
aircraft transparencies. PPG produces automotive glass and chlor-alkali and
specialty chemicals and architectural finishes.
SBC Communications, Inc. SBC Communications, Inc. is a telecommunications
company with wireless customers across the United States, as well as
investments in telecommunications businesses in nine countries. The company
offers a wide range of services, including local and long-distance telephone
service, wireless communications, paging, Internet access, cable TV and
messaging and other products and services.
The following table sets forth a comparison of the hypothetical total return
of the ten highest yielding common stocks selected in accordance with the
investment strategy utilized by the Strategic Picks Combined Trust (the "
Strategy Stocks" ) on an annual basis with the one year total returns of
all common stocks comprising the S&P 500, the Dow Jones Industrial Average and
the MSCI USA Index. It should be noted that the common stocks comprising the
Strategy Stocks may not be the same stocks from year to year and may not be
the same common stocks as those included in the Strategic Picks Combined
Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS(1)*
<CAPTION>
Standard & Dow Jones
Year Strategy Stocks Poor's 500 Index Industrial Average MSCI USA Index
- --------------------------------------------- ----------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
1977 (0.72)% (7.16)% (12.71)% (7.11)%
1978 6.69 6.39 2.69 6.00
1979 14.69 18.19 10.52 13.86
1980 33.94 31.52 21.41 27.97
1981 6.31 (4.84) (3.40) (3.50)
1982 32.94 20.37 25.79 20.13
1983 28.21 22.31 25.68 21.11
1984 11.36 5.97 1.06 5.71
1985 37.78 31.05 32.78 31.04
1986 35.32 18.54 26.91 17.02
1987 8.66 5.67 6.02 4.41
1988 20.40 16.34 15.95 15.34
1989 28.48 31.21 31.71 30.21
1990 (3.53) (3.13) (0.57) (1.89)
1991 41.37 30.00 23.93 30.17
1992 5.06 7.43 7.34 7.06
1993 17.13 9.92 16.72 9.82
1994 7.02 1.28 4.95 2.05
1995 37.34 37.11 36.48 37.04
1996 25.98 22.68 28.57 23.36
1997 thru 9/30 25.00 29.45 24.79 29.38
* Source: Barron's, Fact Set, Bloomberg, Morgan Stanley Capital International
and The Wall Street Journal. The Sponsor has not independently verified this
data but has no reason to believe that this data is incorrect in any material
respect.
- ----------
<FN>
<F1>The Strategy Stocks for each period were identified by separately ranking the
dividend yield for each of the stocks in the Strategic Picks Subset and the
DJIA by annualizing the last dividend paid (the last dividend declared was
used in cases when the stock was trading ex-dividend as of the last day of the
period) and dividing the result by the stock's market value on the first day
of trading on the New York Stock Exchange in the period. Total Return for each
period was calculated by taking the difference between period-end prices and
prices at the end of the following period (adjusted for any stock splits and
corporate spinoffs) and adding dividends for the period. If the dividend yield
for two companies was the same in any period, the company with the largest
market capitalization was utilized. Historical total returns thus represent
actual stocks and real time; the results illustrate what an investor would
have obtained had the investor been invested in the related stocks in the
periods indicated. Total Return does not take into consideration any sales
charges, commissions, expenses or taxes that will be incurred by the Strategic
Picks Combined Trust or Unitholders.
</TABLE>
Based on the hypothetical total returns set forth in the table above, the
average annual total returns for the Strategy Stocks for the most recent
three, five, ten and twenty calendar year periods were 22.8%, 17.9%, 18.0% and
18.9%, respectively. Based on the hypothetical total returns set forth in the
table above, the average annual total returns for the S&P 500 for the most
recent three, five, ten and twenty calendar year periods were 19.4%, 15.0%,
15.1% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the DJIA for the most
recent three, five, ten and twenty calendar year periods were 22.6%, 18.2%,
16.5% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the MSCI USA Index for
the most recent three, five, ten and twenty calendar year periods were 19.9%,
15.2%, 15.1% and 13.8%, respectively.
The hypothetical returns shown above represent past performance and are not
guarantees of future performance and should not be used as a predictor of
returns to be expected in connection with the Strategic Picks Combined Trust.
Among other factors, both stock prices (which may appreciate or depreciate)
and dividends (which may be increased, reduced or eliminated) will affect the
returns. Had the portfolio been available over the periods indicated in the
above table, after deductions for expenses and sales charges and not
accounting for taxes, it would have underperformed the S&P 500, the DJIA and
the MSCI USA Index in 7, 7 and 6 of the last 20 calendar years, respectively.
There can be no assurance that the Strategic Picks Combined Trust will
outperform the S&P 500, the Dow Jones Industrial Average or the MSCI USA Index
over the life of such Trust or over consecutive rollover periods, if
available. A Unitholder would not necessarily realize as high a total return
on an investment in the stocks upon which the hypothetical returns shown above
are based for the following reasons: the hypothetical total return figures
shown above do not reflect sales charges, commissions, Trust expenses or
taxes; the Trusts are established at different times of the year; the Trust
may not be able to invest equally in the Strategy Stocks and may not be fully
invested at all times; and Equity Securities are often purchased or sold at
prices different from the closing prices used in buying and selling Units.
The chart below represents past performance of the Strategy Stocks, S&P 500,
the Dow Jones Industrial Average and the MSCI USA Index (but does not
represent possible performance of the Strategic Picks Combined Trust which, as
indicated above, includes certain expenses and commissions not included in the
chart) and should not be considered indicative of future results. Further,
results are hypothetical. The chart assumes that all dividends during a year
(including those on stocks trading ex-dividend as of the last day of the year)
are reinvested at the end of that year and does not reflect sales charges,
commissions, expenses or income taxes. Based on the foregoing assumptions, the
average annual returns (which represent the percentage return derived by
taking the sum of the initial investment and all appreciation and dividends
for the specified investment period) during the period ended December 31, 1996
were 18.9%, 14.3%, 14.3% and 13.8% for the Strategy Stocks, the S&P 500, the
Dow Jones Industrial Average and the MSCI USA Index, respectively. There can
be no assurance that the Strategic Picks Combined Trust will outperform the
S&P 500, the Dow Jones Industrial Average or the MSCI USA Index over its life
or over consecutive rollover periods, if available.
<TABLE>
Value of $10,000 Invested January 1, 1977
<CAPTION>
Standard & Dow Jones MSCI
Strategy Poor's 500 Industrial USA
Period Stocks Index Average Index
- ------------------------------------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1977 $ 9,929 $ 9,284 $ 8,730 $ 9,289
1978 10,593 9,877 8,965 9,846
1979 12,148 11,674 9,908 11,211
1980 16,271 15,354 12,029 14,347
1981 17,297 14,610 11,620 13,845
1982 22,993 17,587 14,617 16,632
1983 29,479 21,510 18,366 20,142
1984 32,826 22,794 18,565 21,293
1985 45,227 29,872 24,650 27,902
1986 61,200 35,410 31,286 32,651
1987 66,496 37,418 33,170 34,091
1988 80,062 43,532 38,460 39,320
1989 102,859 57,118 50,656 51,199
1990 99,233 55,331 50,362 50,231
1991 140,286 71,930 62,414 65,386
1992 147,378 77,274 67,001 70,002
1993 172,616 84,940 78,217 76,876
1994 184,725 86,027 82,089 78,452
1995 253,701 117,952 112,043 107,511
1996 319,613 144,703 144,065 132,625
1997 thru 9/30 399,516 187,318 179,778 171,590
</TABLE>
The following table sets forth a comparison of the hypothetical total return
of the ten highest yielding common stocks selected in accordance with the
investment strategy utilized by the Strategic Picks Combined Trust (the "
Strategy Stocks" ) applied on a bi-annual basis with the two year total
returns of all common stocks comprising the S&P 500, the Dow Jones Industrial
Average and the MSCI USA Index. It should be noted that the common stocks
comprising the Strategy Stocks may not be the same stocks from period to
period and may not be the same common stocks as those included in the
Strategic Picks Combined Trust.
<TABLE>
COMPARISON OF TOTAL RETURNS(1)*
<CAPTION>
Dow Jones
Two Year Strategy Standard & Industrial
Period Ended December 31 Stocks Poor's 500 Index Average MSCI USA Index
- --------------------------- -------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1978 18.97% (1.23)% (10.35)% (1.54)%
1980 40.53 55.44 34.18 45.71
1982 34.73 14.54 21.51 15.93
1984 40.64 29.61 27.01 28.03
1986 73.35 55.35 68.52 53.34
1988 32.69 22.94 22.93 20.43
1990 26.86 27.10 30.95 27.75
1992 55.87 39.66 33.04 39.36
1994 24.30 11.33 22.52 12.07
1996 80.36 68.21 75.50 69.05
1997 thru 9/30 23.51 29.45 24.79 29.38
* Source: Barron's, Fact Set, Bloomberg, Morgan Stanley Capital International
and The Wall Street Journal. The Sponsor has not independently verified this
data but has no reason to believe that this data is incorrect in any material
respect.
- ----------
<FN>
<F1>The Strategy Stocks for each period were identified by separately ranking the
dividend yield for each of the stocks in the Strategic Picks Subset and the
DJIA by annualizing the last dividend paid (the last dividend declared was
used in cases when the stock was trading ex-dividend as of the last day of the
period) and dividing the result by the stock's market value on the first day
of trading on the New York Stock Exchange in the period. Total Return for each
period was calculated by taking the difference between period-end prices and
prices at the end of the following period (adjusted for any stock splits and
corporate spinoffs) and adding dividends for the period. If the dividend yield
for two companies was the same in any period, the company with the largest
market capitalization was utilized. Historical total returns thus represent
actual stocks and real time; the results illustrate what an investor would
have obtained had the investor been invested in the related stocks in the
periods indicated. Total Return does not take into consideration any sales
charges, commissions, expenses or taxes that will be incurred by the Strategic
Picks Combined Trust or Unitholders.
</TABLE>
Based on the hypothetical total returns set forth in the table above, the
average annual total returns for the Strategy Stocks for the most recent
three, five, ten and twenty calendar year periods were 24.2%, 19.8%, 19.4% and
19.0%, respectively. Based on the hypothetical total returns set forth in the
table above, the average annual total returns for the S&P 500 for the most
recent three, five, ten and twenty calendar year periods were 19.4%, 15.0%,
15.1% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the DJIA for the most
recent three, five, ten and twenty calendar year periods were 22.6%, 18.2%,
16.5% and 14.3%, respectively. Based on the hypothetical returns set forth in
the table above, the average annual total returns for the MSCI USA Index for
the most recent three, five, ten and twenty calendar year periods were 19.9%,
15.2%, 15.1% and 13.8%, respectively.
The hypothetical returns shown above represent past performance and are not
guarantees of future performance and should not be used as a predictor of
returns to be expected in connection with the Strategic Picks Combined Trust.
Among other factors, both stock prices (which may appreciate or depreciate)
and dividends (which may be increased, reduced or eliminated) will affect the
returns. Had the portfolio been available over the periods indicated in the
above table, after deductions for expenses and sales charges and not
accounting for taxes, it would have underperformed the S&P 500, the DJIA and
the MSCI USA Index in 2, 4 and 2 of the last 10 two-year periods,
respectively. There can be no assurance that the Strategic Picks Combined
Trust will outperform the S&P 500, the Dow Jones Industrial Average or the
MSCI USA Index over the life of such Trust or over consecutive rollover
periods, if available. A Unitholder would not necessarily realize as high a
total return on an investment in the stocks upon which the hypothetical
returns shown above are based for the following reasons: the hypothetical
total return figures shown above do not reflect sales charges, commissions,
Trust expenses or taxes; the Trusts are established at different times of the
year; the Trust may not be able to invest equally in the Strategy Stocks and
may not be fully invested at all times; and Equity Securities are often
purchased or sold at prices different from the closing prices used in buying
and selling Units.
The chart below represents past performance of the Strategy Stocks, S&P 500,
the Dow Jones Industrial Average and the MSCI USA Index (but does not
represent possible performance of the Strategic Picks Combined Trust which, as
indicated above, includes certain expenses and commissions not included in the
chart) and should not be considered indicative of future results. Further,
results are hypothetical. The chart assumes that all dividends during a period
(including those on stocks trading ex-dividend as of the last day of the
period) are reinvested at the end of that year and does not reflect sales
charges, commissions, expenses or income taxes. Based on the foregoing
assumptions, the average annual returns (which represent the percentage return
derived by taking the sum of the initial investment and all appreciation and
dividends for the specified investment period) during the period ended
December 31, 1996 were 19.0%, 14.3%, 14.3% and 13.8% for the Strategy Stocks,
the S&P 500, the Dow Jones Industrial Average and the MSCI USA Index,
respectively. There can be no assurance that the Strategic Picks Combined
Trust will outperform the S&P 500, the Dow Jones Industrial Average or the
MSCI USA Index over its life or over consecutive rollover periods, if
available.
<TABLE>
Value of $10,000 Invested January 1, 1977
<CAPTION>
Two Year Standard & Dow Jones MSCI
Period Ended Strategy Poor's 500 Industrial USA
December 31 Stocks Index Average Index
- ---------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1978 $ 11,897 $ 9,877 $ 8,965 $ 9,846
1980 16,719 15,354 12,029 14,347
1982 22,526 17,587 14,617 16,632
1984 31,681 22,794 18,565 21,293
1986 54,920 35,410 31,286 32,651
1988 72,873 43,532 38,460 39,320
1990 92,444 55,331 50,362 50,231
1992 144,097 77,274 67,001 70,002
1994 179,111 86,027 82,089 78,452
1996 323,047 144,703 144,065 132,625
1997 thru 9/30 398,995 187,318 179,778 171,590
</TABLE>
RISK FACTORS
- --------------------------------------------------------------------------
General. 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 Trusts have a right to receive dividends only
when and if, and in the amounts, declared by each issuer's board of directors
and have a right to participate in amounts available for distribution by such
issuer only after all other claims on such issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding, and
thus the value of the Equity Securities in a portfolio may be expected to
fluctuate over the life of the Trusts to values higher or lower than those
prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trusts may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor. The price at which
the Equity Securities may be sold to meet redemptions, and the value of the
Trusts, will be adversely affected if trading markets for the Equity
Securities are limited or absent.
An investment in Units of a Trust will terminate approximately thirteen months
from the Initial Date of Deposit unless a Unitholder elects in writing to
remain invested in the Trust through the Mandatory Termination Date. If a
Unitholder makes no election at the first Special Redemption Date, the
Unitholder's Units will be redeemed on such date and the Unitholder will
receive cash representing their pro rata portion of the Trust's assets.
Unitholders who sell or redeem their Units prior to holding such Units for
more than 18 months will not benefit from the reduced federal long-term
capital gains tax rate of 20%. For example, Unitholders who elect to become
Rollover Unitholders on or prior to the first Special Redemption Date will not
benefit from this reduced tax rate. Of course, there can be no assurance that
Unitholders will realize capital gains upon the disposition of Units or
Securities. Unitholders who elect to hold Units after the first Special
Redemption Date should note that this redemption process could cause the value
of the Trust to fall below the Minimum Termination Value stated under "
Summary of Essential Financial Information" and could result in a
termination of the Trust before the Mandatory Termination Date. This could
cause a Unitholder who elects to hold Units after the first Special Redemption
Date to receive a distribution of Unit proceeds prior to holding such Units
for more than 18 months notwithstanding such election.
The Trust Agreement authorizes the Sponsor to increase the size of the Trusts
and the number of Units thereof by the deposit of additional Securities, or
cash (including a letter of credit) with instructions to purchase additional
Securities, in the Trusts and issuance of a corresponding number of additional
Units. If the Sponsor deposits cash, existing and new investors may experience
a dilution of their investments and reduction in their anticipated income
because of fluctuations in the prices of the Securities between the time of
the cash deposit and the purchase of the Securities and because the Trusts
will pay the associated brokerage fees.
As described under "Trust Operating Expenses," all of the expenses of
the Trusts will be paid from the sale of Securities. It is expected that such
sales will be made at the end of the initial offering period and each month
thereafter through termination of the Trusts. Such sales will result in
capital gains and losses and may be made at times and prices which adversely
affect the Trusts. For a discussion of the tax consequences of such sales, see
"Federal Taxation."
Unitholders will be unable to dispose of any of the Equity Securities, as
such, and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in the Trusts and will vote such stocks in accordance with the
instructions of the Sponsor. In the absence of any such instructions by the
Sponsor, the Trustee will vote such stocks so as to insure that the stocks are
voted as closely as possible in the same manner and the same general
proportion as are shares held by owners other than the Trusts.
FEDERAL TAXATION
- --------------------------------------------------------------------------
General. The following is a general discussion of certain of the Federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (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. 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 Equity Security when such dividends are
considered to be received by the Trust regardless of whether such dividends
are used to pay a portion of the deferred sales charge. Unitholders will be
taxed in this manner regardless of whether distributions from the Trust are
actually received by the Unitholder or are automatically reinvested (see "
Rights of Unitholders--Reinvestment Option" ).
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 to the date the Unitholder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Security held by the Trust. It
should be noted that certain legislative proposals have been made which could
affect the calculation of basis for Unitholders holding securities that are
substantially identical to the Securities. Unitholders should consult their
own tax advisers with regard to calculation of basis. For Federal income tax
purposes, a Unitholder's pro rata portion of dividends as defined by Section
316 of the Code paid by a corporation with respect to 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 exceed such current and
accumulated earnings and profits will first reduce a Unitholder's tax basis in
such Security, and to the extent that such dividends exceed a Unitholder's tax
basis in such Security shall generally be treated as capital gain. In general,
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). Unitholders should consult their tax advisers
regarding the recognition of gains and losses for federal income tax purposes.
In particular, a Rollover Unitholder should be aware that a Rollover
Unitholder's loss, if any, incurred in connection with the exchange of Units
for units in the next new Series of the Trusts (the "New Trust" ) will
generally be disallowed with respect to the disposition of any Securities
pursuant to such exchange to the extent that such Unitholder is considered the
owner of substantially identical securities under the wash sale provisions of
the Code taking into account such Unitholder's deemed ownership of the
securities underlying the Units in the New Trust in the manner described
above, if such substantially identical securities were acquired within a
period beginning 30 days before and ending 30 days after such disposition.
However, any gains incurred in connection with such an exchange by a Rollover
Unitholder would be recognized.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge
for the Trust is deferred. The income (or proceeds from redemption) a
Unitholder must take into account for federal income tax purposes is not
reduced by amounts deducted to pay the deferred sales charge. Unitholders
should consult their own tax advisers as to the income tax consequences of the
deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above, and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Securities paying such dividends (other than
corporate shareholders, 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 recently issued which address
special rules that must be considered in determining whether the 46 day
holding period requirement is met. Moreover, the allowable percentage of the
deduction will be reduced from 70% if a corporate Unitholder owns certain
stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. It should be noted that various
legislative proposals that would affect the dividends received deduction have
been introduced. Unitholders should consult with their tax advisers with
respect to the limitations on and possible modifications to the dividends
received deduction.
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 (although losses incurred by Rollover
Unitholders may be subject to disallowance, as discussed above). 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 subject
to a maximum marginal stated tax rate of either 28% or 20%, depending upon the
holding periods of the capital assets. Capital 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. Generally, capital gains
realized from assets held for more than one year but not more than 18 months
are taxed at a maximum marginal stated tax rate of 28% and capital gains
realized from assets (with certain exclusions) held for more than 18 months
are taxed at a maximum marginal stated tax rate of 20% (10% in the case of
certain taxpayers in the lowest tax bracket). Further, capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income. Legislation is currently pending that provides the appropriate
methodology that should be applied in netting the realized capital gains and
losses. Such legislation is proposed to be effective retroactively for tax
years ending after May 6, 1997. The date on which a Unit is acquired (i.e.,
the "trade date" ) is excluded for purposes of determining the holding
period of the Unit. It should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed.
In addition, please note that capital gains may be recharacterized as ordinary
income in the case of certain financial transactions that are considered "
conversion transactions" effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust involved including his
pro rata portion of all Securities represented by a Unit. The Taxpayer Relief
Act of 1997 (the "1997 Tax Act" ) includes provisions that treat
certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, 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. Unitholders should consult their
own tax advisers with regard to any such constructive sale 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" . The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "
Distribution Expenses" ) and the amount of such In Kind Distribution will
be reduced by the amount of the Distribution Expenses. See "Rights of
Unitholders--Redemption of Units" . As previously discussed, prior to the
redemption of Units or the termination of 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
will depend on whether or not a Unitholder receives cash in addition to
Securities. A "Security" for this purpose is a particular class of
stock issued by a particular corporation. A Unitholder will not recognize gain
or loss if a Unitholder only receives Securities in exchange for his or her
pro rata portion in the Securities held by the Trust. However, if a Unitholder
also receives cash in exchange for a fractional share of a Security held by
the Trust, such Unitholder will generally recognize gain or loss based upon
the difference between the amount of cash received by the Unitholder and his
tax basis in such fractional share of a Security held by 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.
As discussed in "Rights of Unitholders--Special Redemption and Rollover in
New Trusts," a Unitholder may elect to become a Rollover Unitholder. To
the extent a Rollover Unitholder exchanges his Units for Units of the New
Trust in a taxable transaction, such Unitholder will recognize gains, if any,
but generally will not be entitled to a deduction for any losses recognized
upon the disposition of any Securities pursuant to such exchange to the extent
that such Unitholder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into account such
Unitholder's deemed ownership of the securities underlying the Units in the
New Trust in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and ending
30 days after such disposition under the wash sale provisions contained in
Section 1091 of the Code. In the event a loss is disallowed under the wash
sale provisions, special rules contained in Section 1091(d) of the Code apply
to determine the Unitholder's tax basis in the securities acquired. Rollover
Unitholders are advised to consult their tax advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in 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 by the Internal Revenue Service that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by the Trust (other than those that are not treated as United
States source income, if any) will generally be subject to United States
income taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States persons.
Such persons should consult their tax advisers.
At the termination of the Trust, the Trustee will furnish to each Unitholder 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.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
Trust will be treated as the income of the Unitholders under the existing
income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit of the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
- --------------------------------------------------------------------------
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trusts. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee which is not to exceed the
amount set forth under "Summary of Essential Financial Information" ,
for providing portfolio supervisory services for the Trusts. Such fee (which
is based on the number of Units outstanding on January 1 of each year except
during the initial offering period in which event the calculation is based on
the number of Units outstanding at the end of the month of such calculation)
may exceed the actual costs of providing such supervisory services for these
Trusts, but at no time will the total amount received for portfolio
supervisory services rendered to all Series of the Fund and to any other unit
investment trusts sponsored by the Sponsor for which the Supervisor provides
portfolio supervisory services in any calendar year exceed the aggregate cost
to the Supervisor of supplying such services in such year. In addition,
American Portfolio Evaluation Services, which is a division of Van Kampen
American Capital Investment Advisory Corp., shall receive for regularly
providing evaluation services to the Trusts the annual per Unit evaluation fee
set forth under "Summary of Essential Financial Information" (which is
based on the number of Units outstanding on January 1 of each year for which
such compensation relates except during the initial offering period in which
event the calculation is based on the number of Units outstanding at the end
of the month of such calculation) for regularly evaluating the Trust
portfolios. The fees set forth herein are payable as described under "
General" below. Both of the foregoing fees may be increased without
approval of the Unitholders by amounts not exceeding proportionate increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index published by the United States Department of Labor or, if such
category is no longer published, in a comparable category. The Sponsor will
receive sales commissions and may realize other profits (or losses) in
connection with the sale of Units and the deposit of the Securities as
described under "Public Offering--Sponsor and Other Compensation".
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trusts set forth under "Summary of Essential Financial
Information" (which is based on the number of Units outstanding at the end
of the month of such calculation until the end of the initial offering period
at which time such calculation is based on the number of Units outstanding on
such date). The fees set forth herein are payable as described under "
General" below. The Trustee benefits to the extent there are funds for
future distributions, payment of expenses and redemptions in the Capital and
Income Accounts since these Accounts are non-interest bearing and the amounts
earned by the Trustee are retained by the Trustee. Part of the Trustee's
compensation for its services to the Trusts 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 each Trust,
including the cost of the initial preparation of documents relating to such
Trust (including the Prospectus, Trust Agreement and closing documents),
federal and state registration fees, the initial fees and expenses of the
Trustee, legal and accounting expenses, payment of closing fees and any other
out-of-pocket expenses, will be paid by each Trust and amortized over one
year. The following additional charges are or may be incurred by such Trust:
(a) normal expenses (including the cost of mailing reports to Unitholders)
incurred in connection with the operation of the Trust, (b) fees of the
Trustee for extraordinary services, (c) expenses of the Trustee (including
legal and auditing expenses) and of counsel designated by the Sponsor, (d)
various governmental charges, (e) expenses and costs of any action taken by
the Trustee to protect the Trust and the rights and interests of Unitholders,
(f) indemnification of the Trustee for any loss, liability or expenses
incurred in the administration of the Trust without negligence, bad faith or
wilful misconduct on its part, (g) accrual of associated with liquidating
securities and (h) expenditures incurred in contacting Unitholders upon
termination of the Trust. The fees set forth herein are payable as described
under "General" below.
General. During the initial offering period of the Trusts, all of the fees and
expenses of the Trusts will accrue on a daily basis and will be charged to the
related Trust, in arrears, at the end of the initial offering period. After
the initial offering period, all of the fees and expenses of the Trusts will
accrue on a daily basis and will be charged to the related Trust, in arrears,
on a monthly basis on or before the tenth day of each month. The fees and
expenses are payable out of the Capital Account of the related Trust. When
such fees and expenses are paid by or owing to the Trustee, they are secured
by a lien on the related Trust's portfolio. If the balance in the Capital
Account is insufficient to provide for amounts payable by a Trust, the Trustee
has the power to sell Equity Securities to pay such amounts. It is expected
that the balance in the Capital Account will be insufficient to provide for
amounts payable by the Trusts and that Equity Securities will be sold from
related Trust 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. During the initial
offering period and for secondary market transactions after the initial
offering period the Public Offering Price is based on the aggregate underlying
value of the Securities in a Trust's portfolio, the initial sales charge
described below, and cash, if any, in the Income and Capital Accounts held or
owned by such Trust. The initial sales charge is equal to the difference
between the total first year sales charge for a Trust (2.75% of the Public
Offering Price) and the deferred sales charge imposed prior to the first
Special Redemption Date ($0.175 per Unit). The monthly deferred sales charge
($0.0175 per Unit) will begin accruing on a daily basis on January 13, 1998
and will continue to accrue through November 12, 1998. The monthly deferred
sales charge will be charged to each Trust, in arrears, commencing February
13, 1998 and will be charged on the 13th day of each month thereafter through
November 13, 1998. In addition, Unitholders who elect to hold Units after the
first Special Redemption Date will be subject to an additional deferred sales
charge of $0.15 per Unit which will begin accruing on a daily basis commencing
January 22, 1999 and will continue to accrue through September 21, 1999; this
monthly deferred sales charge will be charged to each Trust, in arrears,
commencing February 22, 1999 and will be charged on the 22nd day of each month
thereafter through September 22, 1999. If any deferred sales charge payment
date is not a business day, the payment will be charged to the Trusts on the
next business day. Unitholders will be assessed only that portion of the
deferred sales charge accrued from the time they became Unitholders of record.
Units purchased subsequent to the initial deferred sales charge payment will
be subject to only that portion of the deferred sales charge payments not yet
collected. The deferred sales charges will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Securities. The sales
charge assessed to Unitholders during a Trust's first year on a per Unit basis
will be 2.75% of the Public Offering Price (2.828% of the aggregate value of
the Securities less the deferred sales charge). The total sales charge
assessed to each Unitholder who elects to hold Units through termination of a
Trust will be 4.25% of the Public Offering Price (4.439% of the aggregate
value of the Securities less the deferred sales charge). The sales charge
applicable to quantity purchases is reduced on a graduated basis to any person
acquiring 5,000 or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number of Units Percentage of Sales Charge Reduction Per
Purchased* Unit
- ------------------------------- --------------------------------------------
<S> <C>
5,000 - 9,999 ................. 0.25%
10,000 - 14,999 ............... 0.50
15,000 - 99,999 ............... 0.85
100,000 or more................ 1.75
*The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor. The breakpoints will
be adjusted to take into consideration purchase orders stated in dollars
which cannot be completely fulfilled due to the requirement that only whole
Units be issued.
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent. This reduced sales charge structure will apply on all
purchases by the same person from any one dealer of units of Van Kampen
American Capital-sponsored unit investment trusts which are being offered in
the initial offering period (a) on any one day (the "Initial Purchase
Date" ) or (b) on any day subsequent to the Initial Purchase Date if (1)
the units purchased are of a unit investment trust purchased on the Initial
Purchase Date, and (2) the person purchasing the units purchased a sufficient
amount of units on the Initial Purchase Date to qualify for a reduced sales
charge on such date. In the event units of more than one trust are purchased
on the Initial Purchase Date, the aggregate dollar amount of such purchases
will be used to determine whether purchasers are eligible for a reduced sales
charge. Such aggregate dollar amount will be divided by the public offering
price per unit (on the day preceding the date of purchase) of each respective
trust purchased to determine the total number of units which such amount could
have purchased of each individual trust. Purchasers must then consult the
applicable trust's prospectus to determine whether the total number of units
which could have been purchased of a specific trust would have qualified for a
reduced sales charge and, if so qualified, the amount of such reduction.
Assuming a purchased qualified for a sales charge reduction or reductions, to
determine the applicable sales charge reduction or reductions it is necessary
to accumulate all purchases made on the Initial Purchase Date and all
purchases made in accordance with (b) above. Units purchased in the name of
the spouse of a purchaser or in the name of a child of such purchaser ("
immediate family members" ) will be deemed for the purposes of calculating
the applicable sales charge to be additional purchases by the purchaser. The
reduced sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for one or more trust estate or fiduciary accounts.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases (see "Public Offering--Unit
Distribution" ) by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their immediate family members (as described above) and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law,
fathers-in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons) of Van Kampen American Capital
Distributors, Inc. and its affiliates, dealers and their affiliates and
vendors providing services to the Sponsor may purchase Units at the Public
Offering Price less the applicable dealer concession.
During the initial offering period of the Trusts, unitholders of unaffiliated
unit investment trusts having an investment objective similar to the
investment objective of the Trusts may utilize proceeds received upon
termination or upon redemption immediately preceding termination of such
unaffiliated trust to purchase Units of the Trusts at the Public Offering
Price per Unit less 1%.
During the initial offering period, unitholders of any Van Kampen American
Capital-sponsored unit investment trust may utilize their redemption or
termination proceeds to purchase Units of the Trusts at the Public Offering
Price per Unit less 1%.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Securities in the
Trusts.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to the difference between the total first year sales charge of 2.75% of
the Public Offering Price and the deferred sales charge imposed prior to the
first Special Redemption Date ($0.175 per Unit) and dividing the sum so
obtained by the number of Units outstanding. The Public Offering Price per
Unit shall include the proportionate share of any cash held in the Income and
Capital Accounts. Such price determination as of the close of the relevant
stock market on the day before the Initial Date of Deposit was made on the
basis of an evaluation of the Securities prepared by Interactive Data
Corporation, a firm regularly engaged in the business of evaluating, quoting
or appraising comparable securities. Thereafter, the Evaluator on each
business day will generally appraise or cause to be appraised the value of the
underlying Securities as of the Evaluation Time and will adjust the Public
Offering Price of the Units commensurate with such valuation. Such Public
Offering Price will be effective for all orders received prior to the
Evaluation Time on each such day. Orders received by the Trustee or Sponsor
for purchases, sales or redemptions after that time, or on a day which is not
a business day for the Trusts, will be held until the next determination of
price. Unitholders who purchase Units subsequent to the Initial Date of
Deposit will pay an initial sales charge equal to the difference between the
total first year sales charge and the deferred sales charge imposed prior to
the first Special Redemption Date ($0.175 per Unit) and will be assessed a
deferred sales charge of $0.0175 per Unit on each of the remaining deferred
sales charge payment dates as set forth in "Public Offering--General" .
In addition, Unitholders who elect to hold Units after the first Special
Redemption Date will be assessed an additional deferred sales charge of
$0.01875 per Unit on each of the deferred sales charge payment dates during
the Trust's second year as set forth in "Public Offering--General" .
The Sponsor currently does not intend to maintain a secondary market after
October 22, 1998.
The aggregate underlying value of the Equity Securities during the initial
offering period is determined on each business day by the Evaluator in the
following manner: if the Equity Securities are listed on a national securities
exchange, this evaluation is generally based on the closing sale prices on
that exchange (unless it is determined that these prices are inappropriate as
a basis for valuation) or, if there is no closing sale price on that exchange,
at the closing ask prices. If the Equity Securities are not so listed or, if
so listed and the principal market therefore is other than on the exchange,
the evaluation shall generally be based on the current ask price on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the value of
the Equity Securities on the ask side of the market or (c) by any combination
of the above.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather
the entire pool of Securities, taken as a whole, which are represented by the
Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Sponsor, broker-dealers and others at the
Public Offering Price. Upon the completion of the initial offering period,
Units repurchased in the secondary market, if any, may be offered by this
Prospectus at the secondary market Public Offering Price in the manner
described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Brokers, dealers and others will be allowed a concession or agency commission
in connection with the distribution of Units during the initial offering
period as set forth in the following table. A portion of such concessions or
agency commissions represents amounts paid by the Sponsor to such brokers,
dealers and others out of its own assets as additional compensation.
<TABLE>
<CAPTION>
Aggregate Number of Initial Offering Period Concession or Agency Commission
Units Purchased* per Unit
- ----------------------- ----------------------------------------------------------
<S> <C>
1 - 4,999 2.10%
5,000 - 9,999 1.85
10,000 - 14,999 1.60
15,000 - 99,999 1.25
100,000 or more 0.50
____________________
* The breakpoint concessions or agency commissions are also applied on a dollar
basis utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the broker, dealer or
agent. The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
</TABLE>
In addition to the amounts set forth above, during the initial offering period
any firm that distributes 500,000 - 999,999 Units of a Trust will receive
additional compensation of $.0025 per Unit; any firm that distributes
1,000,000 - 1,999,999 Units of a Trust will receive additional compensation of
$.005 per Unit; any firm that distributes 2,000,000 - 2,999,999 Units of a
Trust will receive additional compensation of $.01 per Unit; any firm that
distributes 3,000,000 - 3,999,999 Units of a Trust will receive additional
compensation of $.015 per Unit; any firm that distributes 4,000,000 -
4,999,999 Units of a Trust will receive additional compensation of $.02 per
Unit; any firm that distributes 5,000,000 Units or more of a Trust will
receive additional compensation of $.025 per Unit. Such additional
compensation will be paid by the Sponsor out of its own assets at the end of
the initial offering period.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For transactions involving
Rollover Unitholders, the total concession or agency commission will amount to
1.1% per Unit (or such lesser amount resulting from quantity sales discounts).
For all secondary transactions, the total concession or agency commission will
amount to 2.1% per Unit. In addition to the amounts set forth above, for
transactions involving Unitholders who elect to hold Units after the first
Special Redemption Date the total concession or agency commission will include
an additional 1% per Unit which will be paid to the broker, dealer or agent
subsequent to the first Special Redemption Date. Notwithstanding anything to
the contrary herein, the total of any concessions, agency commissions and any
additional compensation allowed or paid to any broker, dealer or other
distributor of Units with respect to any individual transaction, shall in no
case exceed the total sales charge applicable to such transaction.
Certain commercial banks are making Units available to their customers on an
agency basis. A portion of the sales charge (equal to the agency commission
referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust Units;
however, the Glass-Steagall Act does permit certain agency transactions and
the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units except as stated
herein. In connection with fully disclosed transactions with the Sponsor, the
minimum purchase requirement will be that number of Units set forth in the
contract between the Sponsor and the related broker or agent. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase
of Units and to change the amount of the concession or agency commission to
dealers and others from time to time.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trusts and returns over
specified periods on other similar Van Kampen American Capital trusts or
investment strategies utilized by the Trusts (which may show performance net
of expenses and charges which the Trusts would have charged) with returns on
other taxable investments such as the common stocks comprising the MSCI USA
Index, the Dow Jones Industrial Average, the S&P 500, other investment
indices, corporate or U.S. Government bonds, bank CDs, money market accounts
or money market funds, or with performance data from Lipper Analytical
Services, Inc., Morningstar Publications, Inc. or various publications, each
of which has characteristics that may differ from those of the Trusts.
Information on percentage changes in the dollar value of Units may be included
from time to time in advertisements, sales literature, reports and other
information furnished to current or prospective Unitholders. Total return
figures may not be averaged, and may not reflect deduction of the sales
charge, which would decrease return. No provision is made for any income taxes
payable. Past performance may not be indicative of future results. The Trust
portfolios are not managed and Unit price and return fluctuate with the value
of common stocks in the portfolios, so there may be a gain or loss when Units
are sold. As with other performance data, performance comparisons should not
be considered representative of the Trusts' relative performance for any
future period.
Sponsor and Other Compensation. The Sponsor will receive the gross sales
commission equal to 2.75% of the Public Offering Price of the Units (4.25% of
the Public Offering Price with respect to sales to Unitholders who elect to
hold Units after the first Special Redemption Date), less any reduced sales
charge for purchases as described under "General" above. Any such
discount provided to investors will be borne by the selling dealer or agent.
In addition, the Sponsor will realize a profit or will sustain a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trusts on the
Initial Date of Deposit as well as on subsequent deposits. See "Notes to
Portfolios" . The Sponsor has not participated as sole underwriter or as
manager or as a member of the underwriting syndicates or as an agent in a
private placement for any of the Securities in the Trust portfolios. The
Sponsor may further realize additional profit or loss during the initial
offering period as a result of the possible fluctuations in the market value
of the Securities after a date of deposit, since all proceeds received from
purchasers of Units.
Broker-dealers of the Trusts, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a
nominal award for each of their representatives who have sold a minimum number
of units of unit investment trusts created by the Sponsor during a specified
time period. In addition, at various times the Sponsor may implement other
programs under which the sales forces of brokers, dealers, banks and/or others
may be eligible to win other nominal awards for certain sales efforts, or
under which the Sponsor will reallow to such brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor or participate in sales programs by the
Sponsor, an amount not exceeding the total applicable sales charges on the
sales generated by such persons at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time pursuant
to objective criteria established by the Sponsor paid fees to qualifying
entities for certain services or activities which are primarily intended to
result in sales of Units of the Trusts. Such payments are made by the Sponsor
out of its own assets, and not out of assets of the Trusts. These programs
will not change the price Unitholders pay for their Units or the amount that
the Trusts will receive from the Units sold.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject
to the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor currently intends
to maintain a secondary market for Units for the period indicated. In so
maintaining a market, the Sponsor will also realize profits or sustain losses
in the amount of any difference between the price at which Units are purchased
and the price at which Units are resold (which price includes the applicable
sales charge). In addition, the Sponsor will also realize profits or sustain
losses resulting from a redemption of such repurchased Units at a price above
or below the purchase price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Sponsor currently
intends to maintain a market for the Units offered hereby through October 22,
1998 and offer continuously to purchase Units at prices, subject to change at
any time, based upon the aggregate underlying value of the Equity Securities
(computed as indicated under "Offering Price" above and "Rights of
Unitholders--Redemption of Units" ). If the supply of Units exceeds demand
or if some other business reason warrants it, the Sponsor may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. In the event that a market is not maintained for the Units and the
Unitholder cannot find another purchaser, a Unitholder desiring to dispose of
his Units will be able to dispose of such Units by tendering them to the
Trustee for redemption at the Redemption Price. See "Rights of
Unitholders--Redemption of Units" . A Unitholder who wishes to dispose of
his Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof. Units sold prior to such time as the
entire deferred sales charge on such Units has been collected will be assessed
the amount of the remaining deferred sales charge at the time of sale
(however, Units sold on or prior to the first Special Redemption Date will not
be assessed the unpaid $0.15 per Unit deferred sales charge remaining after
such date).
Tax-Sheltered Retirement Plans. Units are available for purchase in connection
with certain types of tax-sheltered retirement plans, including Individual
Retirement Accounts for the individuals, Simplified Employee Pension Plans for
employees, qualified plans for self-employed individuals, and qualified
corporate pension and profit sharing plans for employees. The purchase of
Units may be limited by the plans' provisions and does not itself establish
such plans.
RIGHTS OF UNITHOLDERS
- --------------------------------------------------------------------------
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units will be evidenced by certificates unless a Unitholder or
the Unitholder's registered broker-dealer makes a written request to the
Trustee that ownership be in book entry form. Units are transferable by making
a written request to the Trustee and, in the case of Units evidenced by a
certificate, by presentation and surrender of such certificate to the Trustee
properly endorsed or accompanied by a written instrument or instruments of
transfer. A Unitholder must sign such written request, and such certificate or
transfer instrument, exactly as his name appears on the records of the Trustee
and on the face of any certificate representing the Units to be transferred
with the signature guaranteed by a participant in the Securities Transfer
Agents Medallion Program ("STAMP" ) or such other signature guarantee
program in addition to, or in substitution for, STAMP as may be accepted by
the Trustee. In certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of corporate
authority. Certificates will be issued in denominations of one Unit or any
whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by a Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds from the sales
of Securities to meet redemptions of Units shall be segregated within the
Capital Account from proceeds from the sale of Securities made to satisfy the
fees, expenses and charges of a Trust.
The Trustee will distribute any income received with respect to any of the
Securities on or about the Income Account Distribution Date to Unitholders of
record on the preceding Income Record Date. See "Summary of Essential
Financial Information" . Proceeds received on the sale of any Securities,
to the extent not used to meet redemptions of Units, pay the deferred sales
charge or pay expenses, will be distributed on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account and not distributed until the next distribution date
applicable to such Capital Account. The Trustee is not required to pay
interest on funds held in the Capital or Income Accounts (but may itself earn
interest thereon and therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account. Because
dividends are not received by the Trusts at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
At the end of the initial offering period and as of the tenth day of each
month thereafter, the Trustee will deduct from the Capital Account amounts
necessary to pay the expenses of the Trusts (as determined on the basis set
forth under "Trust Operating Expenses" ). The Trustee also may withdraw
from the Income and Capital Accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of
the Trusts. 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.
It is anticipated that the deferred sales charge will be collected from the
Capital Account. To the extent that amounts in the Capital Account are
insufficient to satisfy the then current deferred sales charge obligation,
Equity Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made to an
account maintained by the Trustee for purposes of satisfying Unitholders'
deferred sales charge obligations.
Reinvestment Option. Unitholders will initially have each distribution of
dividend income, capital gains and/or principal on their Units automatically
reinvested in additional Units of the Trusts under the "Automatic
Reinvestment Option" (to the extent Units may be lawfully offered for sale
in the state in which the Unitholder resides). Brokers and dealers who
distribute Units to Unitholders pursuant to the Automatic Reinvestment Option
may do so through two options. Brokers and dealers can use the Dividend
Reinvestment Service through Depository Trust Company or purchase the
available Automatic Reinvestment Option CUSIP. If a broker or dealer decides
to continue to utilize the Dividend Reinvestment Service through the
Depository Trust Company, the broker or dealer must have access to a PTS
terminal equipped with the Elective Dividend System function (EDS) prior to
the first Record Date set forth under "Summary of Essential Financial
Information" . The second option available is to purchase the appropriate
CUSIP for automatic reinvestment. Unitholders receiving Units pursuant to
participation in the Automatic Reinvestment Option will be subject to the
remaining deferred sales charge payments due on Units (assuming for these
purposes such Units had been outstanding during the primary offering period).
Unitholders may also elect to receive distributions of dividend income,
capital gains and/or principal on their Units in cash. To receive cash, a
Unitholder or his or her broker or agent must file with the Trustee a written
notice of election, together with any certificate representing Units and other
documentation that the Trustee may then require, at least five days prior to
the Record Date for which the first distribution is to apply. A Unitholder's
election to receive cash will apply to all Units of a Trust owned by such
Unitholder and such election will remain in effect until changed by the
Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Sponsor (see "Public Offering--Public Market" ) or,
until such time as additional Units cease to be issued by a Trust (see "
The Trust" ), distributions may be reinvested in such additional Units. If
Units are unavailable in the secondary market, distributions which would
otherwise have been reinvested shall be paid in cash to the Unitholder on the
applicable Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will be
made at the net asset value for Units as of the Evaluation Time on the related
Income or Capital Account 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 and will send such
Unitholder a statement reflecting the reinvestment.
Unitholders may also elect to have each distribution of interest income,
capital gains and/or principal on their Units automatically reinvested in
Class A shares of certain Van Kampen American Capital or Morgan Stanley mutual
funds which are registered in the Unitholder's state of residence. Such mutual
funds are hereinafter collectively referred to as the "Reinvestment
Funds" .
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets
forth the procedures to follow to commence reinvestment. A Unitholder may
obtain a prospectus for the respective Reinvestment Funds from Van Kampen
American Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181. Texas residents who desire to reinvest may request that a
broker-dealer registered in Texas send the prospectus relating to the
respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
a net asset value as computed as of the close of trading on the New York Stock
Exchange on such date. Unitholders with an existing Guaranteed Reinvestment
Option (GRO) Program account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new GRO
account which allows purchases of Reinvestment Fund shares at net asset value
as described above. Confirmations of all reinvestments by a Unitholder into a
Reinvestment Fund will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
The Sponsor, each Reinvestment Fund, and its investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder of a Trust (i) a
statement as to the Income Account: income received, deductions for applicable
taxes and for fees and expenses of the Trust, for redemptions of Units, if
any, and the balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (ii) a statement as to the Capital Account: the
dates of disposition of any Securities and the net proceeds received
therefrom, deductions for payment of applicable taxes, fees and expenses of
the Trust held for distribution to Unitholders of record as of a date prior to
the determination and the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (iii) a list of the Securities held by the Trust
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) the amounts actually
distributed during such calendar year from the Income and Capital Accounts,
separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as described above (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender, the Unitholder will be entitled
to receive in cash (unless the redeeming Unitholder elects an In Kind
Distribution as described below) an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units. The "date of tender" is deemed to be the date on
which Units are received by the Trustee, except that with respect to Units
received after the applicable Evaluation Time the date of tender is the next
business day as defined under "Public Offering--Offering Price" and
such Units will be deemed to have been tendered to the Trustee on such day for
redemption at the redemption price computed on that day. Units redeemed prior
to such time as the entire deferred sales charge has been collected will be
assessed the amount of the remaining deferred sales charge at the time of
redemption (however, Units redeemed on or prior to the first Special
Redemption Date will not be assessed the unpaid $0.15 per Unit deferred sales
charge remaining after such date).
An investment in Units of a Trust will be redeemed on the first Special
Redemption Date unless a Unitholder elects in writing to remain invested in
the Trust through the Mandatory Termination Date. On the first Rollover
Notification Date the Trustee will provide written notice and a form of
election to Unitholders of each Trust giving Unitholders the option to (i)
have their Units redeemed and reinvest the proceeds into a subsequent Series
of the Trust (i.e., become Rollover Unitholders), (ii) receive an In Kind
Distribution of Securities in such Trust (if the Unitholder owns at least
1,000 Units) or (iii) continue to hold the Units through the Mandatory
Termination Date. Unitholders who do not affirmatively elect in writing on the
first Rollover Notification Date to become Rollover Unitholders, to receive an
in-kind distribution or to continue to hold Units through the Mandatory
Termination Date will have their Units redeemed on the first Special
Redemption Date and will receive a cash distribution equal to the Redemption
Price per Unit on such date. To be effective, any such election must be
received by the Trustee no later than five business days prior to the first
Special Redemption Date.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the Supervisor
for this purpose. Units so redeemed shall be cancelled. Units tendered for
redemption prior to such time as the entire deferred sales charge on such
Units has been collected will be assessed the amount of the remaining deferred
sales charge at the time of redemption.
Unitholders tendering 1,000 or more Units of a Trust for redemption may
request from the Trustee in lieu of a cash redemption an in kind distribution
("In Kind Distribution" ) 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 related Trust
portfolio and cash from the Capital Account equal to the fractional shares to
which the tendering Unitholder is entitled. The Trustee may adjust the number
of shares of any issue of Securities included in a Unitholder's In Kind
Distribution to facilitate the distribution of whole shares, such adjustment
to be made on the basis of the value of Securities on the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering Unitholder, the Trustee may sell Securities
according to the criteria discussed above.
To the extent that Securities are redeemed in kind or sold, the size of a
Trust will be, and the diversity of a 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 (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities, plus or minus cash, if any, in the Income and Capital
Accounts. On the Initial Date of Deposit, the Public Offering Price per Unit
(which includes the initial sales charge) exceeded the values at which Units
could have been redeemed by the amounts shown under "Summary of Essential
Financial Information" . The Redemption Price per Unit is the pro rata
share of each Unit in a Trust determined on the basis of (i) the cash on hand
in the Trust, (ii) the value of the Securities and (iii) dividends receivable
on the Equity Securities trading ex-dividend as of the date of computation,
less (a) amounts representing taxes or other governmental charges payable out
of the Trust, (b) the accrued expenses of the Trust and (c) any unpaid
deferred sales charge payments (however, Unitholders who redeem their Units on
or prior to the first Special Redemption Date will not be assessed the unpaid
$0.15 per Unit deferred sales charge remaining after such date). The Evaluator
may determine the value of the Equity Securities in the following manner: if
the Equity Securities are listed on a national securities exchange, this
evaluation is generally based on the closing sale prices on that exchange
(unless it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at the
closing bid prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefore is other than on the exchange, the
evaluation shall generally be based on the current bid price on the
over-the-counter market (unless these prices are inappropriate as a basis for
evaluation). If current bid prices are unavailable, the evaluation is
generally determined (a) on the basis of current bid prices for comparable
securities, (b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit.
Special Redemption and Rollover in New Trusts. It is expected that a special
redemption will be made of all Units held by any Unitholder (a "Rollover
Unitholder" ) who affirmatively notifies the Trustee in writing that he
desires to rollover his Units by either Rollover Notification Date specified
in the "Summary of Essential Financial Information" .
All Units of Rollover Unitholders will be redeemed on the related Special
Redemption Date and the underlying Securities will be distributed to the
Distribution Agent on behalf of the Rollover Unitholders. On the related
Special Redemption Date (as set forth in "Summary of Essential Financial
Information" ), the Distribution Agent will be required to sell all of the
underlying Securities on behalf of Rollover Unitholders. The sales proceeds
will be net of brokerage fees, governmental charges or any expenses involved
in the sales.
The Distribution Agent will attempt to sell the Securities as quickly as is
practicable on the appropriate Special Redemption Date. The Sponsor does not
anticipate that the period will be longer than one day given that the
Securities are usually liquid. However, certain of the factors discussed under
"Risk Factors" could affect the ability of the Sponsor to sell the
Securities and thereby affect the length of the sale period somewhat. The
liquidity of any Security depends on the daily trading volume of the Security
and the amount that the Sponsor has available for sale on any particular day.
The Rollover Unitholders' proceeds will be invested in the then current Series
of the Trusts (the "New Trust" ), if then being offered, which will
contain a portfolio of common stocks selected in accordance with the
investment strategies of the Trusts. The proceeds of redemption will be used
to buy New Trust units in the portfolio as the proceeds become available.
The Sponsor intends to create a New Trust shortly prior to each Special
Redemption Date, dependent upon the availability and reasonably favorable
prices of the securities included in the New Trust portfolio, and it is
intended that Rollover Unitholders will be given first priority to purchase
the New Trust units. There can be no assurance, however, as to the exact
timing of the creation of the New Trust units or the aggregate number of New
Trust units which the Sponsor will create. The Sponsor may, in its sole
discretion, stop creating new units in a trust portfolio at any time it
chooses, regardless of whether all proceeds of the Special Redemption have
been invested on behalf of Rollover Unitholders. Cash which has not been
invested on behalf of the Rollover Unitholders in New Trust units will be
distributed shortly after the Special Redemption Date.
Any Rollover Unitholder may thus be redeemed out of the Trusts and become a
holder of an entirely different unit investment trust in the New Trust with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold on the Special
Redemption Date. In accordance with the Rollover Unitholders' offer to
purchase the New Trust units, the proceeds of the sales (and any other cash
distributed upon redemption) will be invested in the New Trust at the public
offering price, including a reduced sales charge.
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolios selected by the Sponsor are chosen on the
basis of growth potential only for the near term, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption
and rollover in new unit investment trusts will be available for each
subsequent series of the Fund.
There can be no assurance that the redemption and rollover in the Trusts will
avoid any negative market price consequences stemming from the trading of
large volumes of securities and of the underlying Securities in the Trusts.
The above procedures may be insufficient or unsuccessful in avoiding such
price consequences. In fact, market price trends may make it advantageous to
sell or buy more quickly or more slowly than permitted by these procedures.
It should also be noted that Rollover Unitholders may realize taxable capital
gains on a Special Redemption and Rollover but, in certain circumstances, will
not be entitled to a deduction for certain capital losses and, due to the
procedures for investing in the subsequent Series of the Trusts, no cash would
be distributed at that time to pay any taxes. Included in the cash for a
Special Redemption and Rollover will be any amount of cash attributable to the
last distribution of dividend income; accordingly, Rollover Unitholders also
will not have such cash distributed to pay any taxes. See "Federal
Taxation" . Unitholders who do not inform the Distribution Agent that they
wish to have their Units so redeemed and liquidated will not realize capital
gains or losses due to either Special Redemption and Rollover.
The Sponsor may for any reason, in its sole discretion, decide not to sponsor
subsequent Series of the Trusts, without penalty or incurring liability to any
Unitholder. If the Sponsor so decides, the Sponsor shall notify the
Unitholders before the Special Redemption Date would have commenced. The
Sponsor may modify the terms of any subsequent Series of the Trusts. The
Sponsor may also modify the terms of a Special Redemption and Rollover upon
notice to the Unitholders prior to the related Rollover Notification Date
specified in the related "Summary of Essential Financial Information" .
TRUST ADMINISTRATION
- --------------------------------------------------------------------------
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any Units
tendered for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.
Portfolio Administration. The portfolios of the Trusts are not "
managed" by the Sponsor, Supervisor or the Trustee; their activities
described herein are governed solely by the provisions of the Trust Agreement.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Trusts, however, will not be
managed. The Trust Agreement, however, provides that the Sponsor may (but need
not) direct the Trustee to dispose of an Equity Security in certain events
such as the issuer having defaulted on the payment on any of its outstanding
obligations or the price of an Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the Sponsor the
retention of such Securities would be detrimental to a Trust. Pursuant to the
Trust Agreement and with limited exceptions, the Trustee may sell any
securities or other properties acquired in exchange for Equity Securities such
as those acquired in connection with a merger or other transaction. If offered
such new or exchanged securities or property, the Trustee shall reject the
offer. However, in the event such securities or property are nonetheless
acquired by a Trust, they may be accepted for deposit in such Trust and either
sold by the Trustee or held in such Trust pursuant to the direction of the
Sponsor (who may rely on the advice of the Supervisor). Proceeds from the sale
of Securities (or any securities or other property received by a Trust in
exchange for Equity Securities) are credited to the Capital Account for
distribution to Unitholders or to pay fees and expenses of such Trust. Except
as stated under "Trust Portfolios" for failed securities and as
provided in this paragraph, the acquisition by a Trust of any securities other
than the Securities is prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units tendered for redemption and the payment of expenses.
To the extent practicable, the Supervisor may (but is not obligated to)
designate Securities to be sold by the Trustee in order to maintain the
proportionate relationship among the number of shares of individual issues of
Equity Securities in a Trust. To the extent this is not practicable, the
composition and diversity of the Equity Securities in a Trust may be altered.
In order to obtain the best price for a Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold. In effecting puchases and sales of a
Trust's portfolio securities, the Sponsor may direct that orders be placed
with and brokerage commissions be paid to brokers, including brokers which may
be affiliated with the Trust, the Sponsor or dealers participating in the
offering of Units. In addition, in selecting among firms to handle a
particular transaction, the Sponsor may take into account whether the firm has
sold or is selling units of unit investment trusts which it sponsors.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units of a Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in such Trust of any Unitholder without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders. The Trustee shall
advise the Unitholders of any amendment promptly after execution thereof.
An investment in Units of a Trust will terminate on the first Special
Redemption Date unless a Unitholder elects in writing to remain invested in
the Trust through the Mandatory Termination Date. On the first Rollover
Notification Date the Trustee will provide written notice and a form of
election to Unitholders of each Trust giving Unitholders the option to (i)
have their Units redeemed and reinvest the proceeds into a subsequent Series
of the Trust (i.e., become Rollover Unitholders), (ii) receive an In Kind
Distribution of the Securities in such Trust (if the Unitholder owns at least
1,000 Units) or (iii) continue to hold the Units through the Mandatory
Termination Date. Unitholders who do not affirmatively elect on the first
Rollover Notification Date to become Rollover Unitholders, to receive an
in-kind distribution or to continue to hold Units through the Mandatory
Termination Date will have their Units redeemed on the first Special
Redemption Date and will receive a cash distribution equal to the Redemption
Price per Unit on such date. To be effective, any such election must be
received by the Trustee no later than five business days prior to the first
Special Redemption Date. Unitholders who elect to remain invested in a Trust
through the Mandatory Termination Date will not receive new Units and will not
receive an interest in a new investment. Such Unitholder will continue to hold
the same Units and remain invested in the same Trust until the Mandatory
Termination Date or until such time as the Unitholder redeems the Units.
Each Trust may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units then outstanding or by the Trustee when the
value of the Equity Securities owned by such Trust, as shown by any
evaluation, is less than that amount set forth under Minimum Termination Value
in "Summary of Essential Financial Information." A Trust will be
liquidated by the Trustee in the event that a sufficient number of Units not
yet sold are tendered for redemption by the Sponsor so that the net worth of
such Trust would be reduced to less than 40% of the value of the Securities at
the time they were deposited in such Trust. If a Trust is liquidated because
of the redemption of unsold Units by the Sponsor, the Sponsor will refund to
each purchaser of Units the entire sales charge paid by such purchaser. The
Trust Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information".
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of the Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. At least 30 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination to all Unitholders 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 Trusts. 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 Securities in the related Trust
to the account of the broker-dealer or bank designated by the Unitholder at
Depository Trust Company. The value of the Unitholder's fractional shares of
the Securities will be paid in cash. Unitholders with less than 1,000 Units,
Unitholders with 1,000 or more Units not requesting an In Kind Distribution
and Unitholders who do not elect the Rollover Option will receive a cash
distribution from the sale of the remaining Securities within a reasonable
time following the Mandatory Termination Date. Regardless of the distribution
involved, the Trustee will deduct from the funds of a Trust any accrued costs,
expenses, advances or indemnities provided by the Trust Agreement, including
estimated compensation of the Trustee, costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Securities 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.
The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent Series of the Trusts pursuant to the Rollover Option
(see "Rights of Unitholders--Special Redemption and Rollover in New
Fund" ). There is, however, no assurance that units of any new Series of
the Trusts will be offered for sale at that time, or if offered, that there
will be sufficient units available for sale to meet the requests of any or all
Unitholders.
Within 60 days of the final distribution, Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distributions thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement. The Trustee shall not be liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or
upon the interest thereon or upon it as Trustee under the Trust Agreement or
upon or in respect of a Trust which the Trustee may be required to pay under
any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is a wholly owned
subsidiary of MSAM Holdings II, Inc., which in turn is a wholly owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD" ).
MSDWD is a global financial services firm with a market capitalization of more
than $21 billion which was created by the merger of Morgan Stanley Group Inc.
with and into Dean Witter, Discover & Co. on May 31, 1997. MSDWD, together
with various of its directly and indirectly owned subsidiaries, is engaged in
a wide range of financial services through three primary businesses:
securities, asset management and credit services. These principal businesses
include securities underwriting, distribution and trading; merger,
acquisition, restructuring and other corporate finance advisory activities;
merchant banking; stock brokerage and research services; asset management;
trading of futures, options, foreign exchange commodities and swaps (involving
foreign exchange, commodities, indices and interest rates); real estate
advice, financing and investing; global custody, securities clearance services
and securities lending; and credit card services. As of June 2, 1997, MSDWD,
together with its affiliated investment advisory companies, had approximately
$270 billion of assets under management, supervision or fiduciary advice.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco and Seattle. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of September 30, 1997, the Sponsor and its Van Kampen American Capital
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 American Capital 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 American Capital Distributors, 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 American Capital's open-end funds,
closed-ended funds and unit investment trusts are professionally distributed
by leading financial firms nationwide. Based on cumulative assets deposited,
the Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolios.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trusts. Such
records shall include the name and address of, and the number of Units held
by, every Unitholder of the Trusts. Such books and records shall be open to
inspection by any Unitholder at all reasonable times during the usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided" ). The
Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in each Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
- --------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel for the Trustee.
Independent Certified Public Accountants. The statements of condition and the
related securities portfolios at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 80:
We have audited the accompanying statements of condition and the related
portfolios of Van Kampen American Capital Equity Opportunity Trust, Series 80
as of November 25, 1997. The statements of condition and portfolios are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of irrevocable letters of credit deposited to
purchase securities by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 80 as of November 25, 1997, in conformity
with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
November 25, 1997
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 80
STATEMENTS OF CONDITION
As of November 25, 1997
<CAPTION>
Strategic
Strategic Picks
INVESTMENT IN SECURITIES Picks Combined
Trust Trust
------------- -------------
<S> <C> <C>
Contracts to purchase Securities <F1>...........$ 147,600 $ 147,621
Organizational costs <F2>....................... 38,482 35,917
------------- -------------
Total..........................................$ 186,082 $ 183,538
============= =============
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--...................................
Accrued organizational costs <F2>..............$ 38,482 $ 35,917
Deferred sales charge liability <F3>........... 2,609 2,610
Interest of Unitholders-- ......................
Cost to investors <F4>......................... 149,100 149,120
Less: Gross underwriting commission <F4><F5>... 4,109 4,109
------------- -------------
Net interest to Unitholders <F4>............... 144,991 145,011
------------- -------------
Total..........................................$ 186,082 $ 183,538
============= =============
==========
<FN>
<F1>The aggregate value of the Securities listed under each "Portfolio"
herein and their cost to each Trust are the same. The value of the Securities
is determined by Interactive Data Corporation on the bases set forth under
"Public Offering--Offering Price" . The contracts to purchase
Securities are collateralized by a letter of credit of $147,600 and $147,621
which has been deposited with the Trustee with respect to the Strategic Picks
Trust and the Strategic Picks Combined Trust, respectively.
<F2>Each Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over one year. Organizational costs have been
estimated based on a projected Trust size of $10,000,000 and $5,000,000 for
the Strategic Picks and Strategic Picks Combined Trusts, respectively. To the
extent a Trust is larger or smaller, the estimate will vary. Securities will
be sold to pay organizational costs.
<F3>Represents the amount of mandatory distributions from the Trusts on the bases
set forth under "Public Offering."
<F4>The aggregate public offering price and the aggregate first year sales charge
are computed on the bases set forth under "Public Offering--General"
and "Public Offering--Sponsor and Other Compensation" and assume all
single transactions involve less than 5,000 Units. For single transactions
involving 5,000 or more Units, the sales charge is reduced (see "Public
Offering--General" ) resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
<F5>Assumes only the first year sales charge.
</TABLE>
<TABLE>
STRATEGIC PICKS OPPORTUNITY TRUST, NOVEMBER 1997 SERIES
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 80)
as of the Initial Date of Deposit: November 25, 1997
<CAPTION>
Estimated
Annual Cost of
Number of Market Value Dividends per Securities
Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------- ------------------------------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
208 American Home Products Corporation $ 71.563 $ 1.72 $ 14,885.00
157 Amoco Corporation 93.063 2.80 14,610.81
172 Bell Atlantic Corporation 84.688 3.08 14,566.25
274 BellSouth Corporation 52.938 1.44 14,504.88
449 Chrysler Corporation 33.250 1.60 14,929.25
300 Heinz (H.J.) Company 49.688 1.26 14,906.25
198 Mobil Corporation 74.125 2.12 14,676.75
465 Norfolk Southern Corporation 32.125 0.80 14,938.13
266 PPG Industries, Inc. 56.000 1.36 14,896.00
210 SBC Communications, Inc. 69.938 1.79 14,686.88
2,699 $ 147,600.20
============= ==============
</TABLE>
<TABLE>
STRATEGIC PICKS OPPORTUNITY TRUST - COMBINED SERIES, NOVEMBER 1997 SERIES
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 80)
as of the Initial Date of Deposit: November 25, 1997
<CAPTION>
Estimated
Annual Cost of
Number of Market Value Dividends per Securities
Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
- ------------- ------------------------------------------- ----------------- --------------- --------------
<S> <C> <C> <C> <C>
136 A T & T Corporation $ 54.313 $ 1.32 $ 7,386.50
104 American Home Products Corporation 71.563 1.72 7,442.50
79 Amoco Corporation 93.063 2.80 7,351.94
86 Bell Atlantic Corporation 84.688 3.08 7,283.13
137 BellSouth Corporation 52.938 1.44 7,252.44
156 Caterpillar, Inc. 47.375 1.00 7,390.50
89 Chevron Corporation 82.875 2.32 7,375.88
225 Chrysler Corporation 33.250 1.60 7,481.25
122 Eastman Kodak Company 60.938 1.76 7,434.38
118 Exxon Corporation 62.813 1.64 7,411.88
120 General Motors Corporation 61.063 2.00 7,327.50
150 Heinz (H.J.) Company 49.688 1.26 7,453.13
158 International Paper Company 46.500 1.00 7,347.00
64 J.P. Morgan & Company, Inc. 112.938 3.52 7,228.00
77 Minnesota Mining & Manufacturing Company 95.688 2.12 7,367.94
99 Mobil Corporation 74.125 2.12 7,338.38
232 Norfolk Southern Corporation 32.125 0.80 7,453.00
173 Philip Morris Companies, Inc. 43.375 1.60 7,503.88
133 PPG Industries, Inc. 56.000 1.36 7,448.00
105 SBC Communications, Inc. 69.938 1.79 7,343.44
2,563 $ 147,620.67
============= ==============
NOTES TO PORTFOLIOS
- ----------------------------------------------------------------------------
<FN>
<F1>All of the Securities are represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been deposited
with the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to
the Trustee all of its right, title and interest in and to such Securities.
Contracts to acquire Securities were entered into on November 24, 1997 and are
expected to settle on November 28, 1997. (see "The Trust" ).
<F2>The market value of each of the Equity Securities is based on the closing sale
price of each listed Security on the applicable exchange, or on the asked
price if not so listed, on the day prior to the Initial Date of Deposit.
Estimated annual dividends are based on the most recently declared dividends.
Other information regarding the Securities in the Trusts, as of the Initial
Date of Deposit is as follows:
</TABLE>
<TABLE>
<CAPTION>
Aggregate
Profit (Loss) To Estimated
Cost To Sponsor Sponsor Annual Dividends
------------------- --------------------- --------------------
<S> <C> <C> <C>
Strategic Picks Trust $ 147,600 $ -- $ 4,348
Strategic Picks Combined Trust $ 147,621 $ -- $ 4,189
</TABLE>
An affiliate of the Sponsor may have participated as issuer, sole underwriter,
managing underwriter or member of an underwriting syndicate in a public
offering of one or more of the stocks in the Trusts. An affiliate of the
Sponsor may serve as a specialist in the stocks in the Trusts on one or more
stock exchanges and may have a long or short position in any of these stocks
or in options on any of these stocks, and may be on the opposite side of
public orders executed on the floor of an exchange where such stocks are
listed. An officer, director or employee of the Sponsor or an affiliate may be
an officer or director of one or more of the issuers of the stocks in the
Trusts. An affiliate of the Sponsor may trade for its own account as an
odd-lot dealer, market maker, block positioner and/or arbitrageur in any
stocks or options relating thereto. The Sponsor, its affiliates, directors,
elected officers and employee benefit programs may have either a long or short
position in any stock or option of the issuers.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom
it is not lawful to make such offer in such state.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial Information........... 4
The Trusts........................................... 8
Objectives and Securities Selection.................. 9
Trust Portfolios..................................... 13
Risk Factors......................................... 26
Federal Taxation..................................... 28
Trust Operating Expenses............................. 32
Public Offering...................................... 33
Rights of Unitholders................................ 39
Trust Administration................................. 44
Other Matters........................................ 49
Report of Independent Certified Public Accountants... 49
Statements of Condition ............................. 50
Portfolios........................................... 51
Notes to Portfolios.................................. 53
</TABLE>
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
When Units of the Trusts are no longer available, or for investors who will
reinvest into subsequent series of the Trusts, this Prospectus may be used as
a preliminary prospectus for a future series; in which case investors should
note the following:
Information contained herein is subject to completion or amendment. A
registration statement relating to securities of a future series has been
filed with the Securities and Exchange Commission. These securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. The Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
PROSPECTUS
November 25, 1997
Van Kampen American Capital
Equity Opportunity Trust, Series 80
Strategic Picks Opportunity Trust, November 1997 Series
Strategic Picks Opportunity Trust-Combined Series, November 1997
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Please retain this Prospectus for future reference.
Contents of Registration Statement
This Amendment of Registration Statement comprises the following
papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of Counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of
securites being registered.
4.1 Consent of Interactive Data Corporation
4.2 Consent of Independent Certified Public Acountants.
EX-27 Financial Data Schedules.
Signatures
The Registrant, Van Kampen American Capital Equity Opportunity
Trust, Series 80, hereby identifies Van Kampen Merritt Equity Opportunity
Trust, Series 1, Series 2, Series 4 and Series 7 and Van Kampen American
Capital Equity Opportunity Trust, Series 13, Series 14 and Series 57 for
purposes of the representations required by Rule 487 and represents the
following: (1) that the portfolio securities deposited in the series as
to the securities of which this Registration Statement is being filed do
not differ materially in type or quality from those deposited in such
previous series; (2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide essential
financial information for, the series with respect to the securities of
which this Registration Statement is being filed, this Registration
Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such
previous series as to which the effective date was determined by the
Commission or the staff; and (3) that it has complied with Rule 460 under
the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
80 has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Chicago and State of Illinois on the 25th day of November,
1997.
Van Kampen American Capital Equity
Opportunity Trust, Series 80
By Van Kampen American Capital
Distributors, Inc.
By Gina M. Costello
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on November
25, 1997 by the following persons who constitute a majority of the Board
of Directors of Van Kampen American Capital Distributors, Inc.
Signature Title
Don G. Powell Chairman and Chief Executive )
Officer )
William R. Molinari President and Chief Operating)
Officer
Ronald A. Nyberg Executive Vice President and )
General Counsel
William R. Rybak Executive Vice President and )
Chief Financial Officer )
Gina M. Costello (Attorney-in-fact*)
*An executed copy of each of the related powers of attorney was
filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen American Capital Equity
Opportunity Trust, Series 64 (File No. 333-33087) and the same is hereby
incorporated herein by this reference.
Exhibit 1.1
Van Kampen American Capital Equity Opportunity Trust
Series 80
Trust Agreement
Dated: November 25, 1997
This Trust Agreement among Van Kampen American Capital Distributors,
Inc., as Depositor, American Portfolio Evaluation Services, a division of
Van Kampen American Capital Investment Advisory Corp., as Evaluator, Van
Kampen American Capital Investment Advisory Corp., as Supervisory
Servicer, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Van Kampen Merritt Equity Opportunity Trust, Series 1
and Subsequent Series, Standard Terms and Conditions of Trust, Effective
November 21, 1991" (herein called the "Standard Terms and Conditions of
Trust") and such provisions as are set forth in full and such provisions
as are incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and Sections
of the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee
agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(22), listed in the
Schedule hereto, have been deposited in trust under this Trust
Agreement.
2. The fractional undivided interest in and ownership of the
Trust represented by each Unit is the amount set forth under
"Summary of Essential Financial Information - Fractional Undivided
Interest in the Trust per Unit" in the Prospectus. Such fractional
undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03,(b) increased or
decreased in connection with an adjustment to the number of Units
pursuant to Section 2.03, or (c) decreased by the number of Units
redeemed pursuant to Section 5.02.
3. Section 1.01(1) shall be amended to read as follows:
"(1) "Depositor" shall mean Van Kampen American Capital
Distributors, Inc. and its successors in interest, or any
successor depositor appointed as hereinafter provided."
4. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean American Portfolio
Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp. and its successors in
interest, or any successor evaluator appointed as
hereinafter provided."
5. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Van Kampen
American Capital Investment Advisory Corp. and its
successors in interest, or any successor portfolio
supervisor appointed as hereinafter provided."
6. Section 1.01(19) shall be amended to read as follows:
"(19) "Percentage Ratio" shall mean, for each Trust which
will issue additional Units pursuant to Section 2.03
hereof, (a) the percentage relationship among the Equity
Securities based on the number of shares of each Equity
Security per Unit existing immediately prior to such
additional deposit with respect to the Select Equity Trust
and (b) the percentage relationship existing on the
Initial Date of Deposit among the maturity value per Unit
of the Zero Coupon Obligations, each Equity Security per
Unit as a percent of all shares of Equity Securities and
the sum of the maturity value per Unit of the Zero Coupon
Obligations and all Equity Securities attributable to each
Unit with respect to the Select Equity and Treasury Trust.
The Percentage Ratio shall be adjusted to the extent
necessary, and may be rounded, to reflect the occurrence
of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of an
Equity Security.
7. Section 1.01(34) shall be amended to read as follows:
"(34) The term "Rollover Unitholder" shall be defined as
set forth in Section 5.05, herein."
8. Section 1.01(35) shall be amended to read as follows:
"(35) The "Rollover Notification Date" shall be defined
as set forth in the Prospectus under "Summary of Essential
Information."
9. Section 1.01(36) shall be amended to read as follows:
"(36) The term "Rollover Distribution" shall be defined
as set forth in Section 5.05, herein."
10. Section 1.01(37) shall be amended to read as follows:
"(37) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.05 herein."
11. Section 1.01(38) shall be amended to read as follows:
"(38) The term "Special Redemption and Liquidation
Period" shall be redefined as "Special Redemption Date"
and shall be as set forth in the Prospectus under "Summary
of Essential Information - Special Redemption Date."
12. The Initial Date of Deposit for the Trust is September 23,
1997.
13. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Van Kampen American Capital
Equity Opportunity Trust" will replace "Select Equity Trust."
14. The second sentence in the second paragraph of Section
3.11 shall be revised as follows: "However, should any issuance,
exchange or substitution be effected notwithstanding such rejection
or without an initial offer, any securities, cash and/or property
received shall be deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee unless the Depositor advises
the Trustee to keep such securities, cash or properties."
15. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.17.:
"Section 3.17. Deferred Sales Charge. If the prospectus
related to the Trust specifies a deferred sale charge, the
Trustee shall, on the dates specified in and as permitted
by such Prospectus, withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit
such amount to a special non-Trust account maintained at
the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the
Capital Account is insufficient to make any such
withdrawal, the Trustee shall, as directed by the
Depositor, either advance funds in an amount equal to the
proposed withdrawal and be entitled to reimbursement of
such advance upon the deposit of additional monies in the
Capital Account, sell Securities and credit the proceeds
thereof to such special Depositor's account or credit (if
permitted by law) Securities in kind to such special
Depositor's Account. If a Unitholder redeems Units prior
to full payment of the deferred sales charge, the Trustee
shall, if so provided in the related Prospectus, on the
Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid
portion of the deferred sales charge and distribute such
amount to such special Depositor's Account. The Depositor
may at any time instruct the Trustee in writing to
distribute to the Depositor cash or Securities previously
credited to the special Depositor's Account."
16. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the Depositor shall
offer a subsequent series of the Trust (the "New Series"), the
Trustee shall, on each Rollover Notification Date and at the
Depositor's sole cost and expense, include a form of election (which
may be included in the notice sent to Unitholders specified in
Section 8.02) whereby Unitholders, whose redemption distribution
would be in an amount sufficient to purchase at least one Unit of
the New Series, may elect to have their Units(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included in the
redemption distribution sold, and the cash proceeds applied by the
Distribution Agent to purchase Units of the New Series, all as
hereinafter provided. The Trustee shall honor properly completed
election forms returned to the Trustee, accompanied by any
Certificate evidencing Units tendered for redemption or a properly
completed redemption request with respect to uncertificated Units,
by its close of business five days prior to the related Special
Redemption Date.
All Units so tendered by a Unitholder (a "Rollover Unitholder")
shall be redeemed and cancelled on the related Special Redemption
Date. Subject to payment by such Rollover Unitholder of any tax or
other governmental charges which may be imposed thereon, such
redemption is to be made in kind pursuant to Section 5.02 by
distribution of cash and/or Securities to the Distribution Agent on
such Special Redemption Date of the net asset value (determined on
the basis of the Trust Fund Evaluation as of such Special Redemption
Date in accordance with Section 4.01) multiplied by the number of
Units being redeemed (herein called the "Rollover Distribution").
Any Securities that are made part of the Rollover Distribution shall
be valued for purposes of the redemption distribution as of such
Special Redemption Date.
All Securities included in a Unitholder's Rollover Distribution
shall be sold by the Distribution Agent on the related Special
Redemption Date specified in the Prospectus pursuant to the
Depositor's direction, and the Distribution Agent may employ the
Depositor as broker in connection with such sales. For such
brokerage services, the Depositor shall be entitled to compensation
at its customary rates, provided however, that its compensation
shall not exceed the amount authorized by applicable Securities laws
and regulations. The Depositor shall direct that sales be made in
accordance with the guidelines set forth in the Prospectus under the
heading "Special Redemption and Rollover in New Trust." Should the
Depositor fail to provide direction, the Distribution Agent shall
sell the Securities in the manner provided in the prospectus for
"less liquid Equity Securities." The Distribution Agent shall have
no responsibility for any loss or depreciation incurred by reason of
any sale made pursuant to this Section.
Upon each trade date for sales of Securities included in the
Rollover Unitholder's Rollover Distribution, the Distribution Agent
shall, as agent for such Rollover Unitholder, enter into a contract
with the Depositor to purchase from the Depositor Units of the New
Series (if any), at the Depositor's public offering price for such
Units on such day, and at such reduced sales charge as shall be
described in the prospectus for the Trusts. Such contract shall
provide for purchase of the maximum number of Units of the New
Series whose purchase price is equal to or less than the cash
proceeds held by the Distribution Agent for the Unitholder on such
day (including therein the proceeds anticipated to be received in
respect of Securities traded on such day net of all brokerage fees,
governmental charges and any other expenses incurred in connection
with such sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included in the
Rollover Unitholder's redemption distribution shall not be
consummated in accordance with its terms, the Distribution Agent
shall apply the cash proceeds held for such Unitholder as of the
settlement date for the purchase of Units of the New Series to
purchase the maximum number of units which such cash balance will
permit, and the Depositor agrees that the settlement date for Units
whose purchase was not consummated as a result of insufficient funds
will be extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such purchase. If
the Unitholder's Rollover Distribution will produce insufficient
cash proceeds to purchase all of the Units of the New Series
contracted for, the Depositor agrees that the contract shall be
rescinded with respect to the Units as to which there was a cash
shortfall without any liability to the Rollover Unitholder or the
Distribution Agent. Any cash balance remaining after such purchase
shall be distributed within a reasonable time to the Rollover
Unitholder by check mailed to the address of such Unitholder on the
registration books of the Trustee. Units of the New Series will be
uncertificated unless and until the Rollover Unitholder requests a
certificate. Any cash held by the Distribution Agent shall be held
in a non-interest bearing account which will be of benefit to the
Distribution Agent in accordance with normal banking procedures.
Neither the Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation resulting from
any reinvestment made in accordance with this paragraph, or for any
failure to make such reinvestment in the event the Depositor does
not make Units available for purchase.
(b) Notwithstanding the foregoing, the Depositor may, in its
discretion at any time, decide not to offer a New Series in the
future, and if so, this Section 5.05 concerning the Rollover of
Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent shall,
however, be entitled to receive reimbursement from the Trust for any
and all expenses and disbursements to the same extent as the Trustee
is permitted reimbursement hereunder."
(d) Notwithstanding the foregoing, in lieu of selling
Securities through the Depositor on the open market the Distribution
Agent may sell Securities from a terminating Trust into the
corresponding New Series if those Securities continue to meet the
New Series' strategy. The price for those Securities will be the
closing sale price on the sale date on the exchange where the
Securities are principally traded, as certified by the Sponsor.
17. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the requisite number of Units needed
to be tendered to exercise an In Kind Distribution as set forth in
Sections 5.02 and 8.02 shall be that number set forth in the
Prospectus.
18. Section 8.02 is hereby revised to require an affirmative
vote of Unitholders representing 66 2/3% of the then outstanding
Units to terminate the Trust rather than the 51% indicated therein.
19. Section 3.01 of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"Section 3.01. Initial Costs. The following
organization and regular and recurring expenses of the
Trust shall be borne by the Trustee: (a) to the extent
not borne by the Depositor, expenses incurred in
establishing a Trust, including the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the
indenture, and other documents relating to the Trust,
Securities and Exchange Commission and state blue sky
registration fees, the costs of the initial valuation of
the portfolio and audit of the Trust, the initial fees and
expenses of the Trustee, and legal and other out-of-pocket
expenses related thereto, but not including the expenses
incurred in the printing of preliminary prospectuses and
prospectuses, expenses incurred in the preparation and
printing of brochures and other advertising materials and
any other selling expenses, (b) the amount specified in
Section 3.05 and Article VIII, (c) to the extent permitted
by Section 6.02, auditing fees and, to the extent not
borne by the Depositor, expenses incurred in connection
with maintaining the Trust's registration statement
current with Federal and State authorities, (d) any
Certificates issued after the Initial Date of Deposit ;
and (e) expenses of any distribution agent. The Trustee
shall be reimbursed for those organizational expenses
referred to in clause (a) as provided in the Prospectus.
20. Section 6.01(i) of the Standard Terms and Conditions of
Trust shall be amended by adding the following to the beginning of
such Section:
"Except as provided in Sections 3.01 and 3.05,"
21. Section 8.04 is hereby amended by deleting the first word
of such Section and replacing it with the following:
"Except as provided in Sections 3.01 and 3.05, the"
22. Notwithstanding anything to the contrary herein, the
annual audit of the Trust's accounts described in Section 6.02 shall
not be required.
23. Section 2.03(a) shall be amended by adding the following
sentence immediately after the first sentence of such Section: "The
number of Units may be increased through a split of the Units or
decreased through a reverse split thereof, as directed by the
Depositor, on any day on which the Depositor is the only Unitholder,
which revised number of Units shall be recorded by the Trustee on
its books."
24. Sections 4.01(b) and (c) are hereby replaced with the
following:
"(b) During the initial offering period such Evaluation
shall be made in the following manner: if the Securities are
listed on a national securities exchange, such Evaluation shall
generally be based on the last available sale price on or
immediately prior to the Evaluation Time on the exchange which
is the principal market therefor, which shall be deemed to be
the New York Stock Exchange if the Securities are listed
thereon (unless the Evaluator deems such price inappropriate as
a basis for evaluation) or, if there is no such available sale
price on such exchange. If the Securities are not so listed
or, if so listed, the principal market therefor is other than
on such exchange or there is no such available sale price on
such exchange, such Evaluation shall generally be based on the
following methods or any combination thereof whichever the
Evaluator deems appropriate: (i) in the case of Equity
Securities, on the basis of the current ask price (unless the
Evaluator deems such price inappropriate as a basis for
evaluation), (ii) on the basis of current offering prices for
the Zero Coupon Obligations as obtained from investment dealers
or brokers who customarily deal in securities comparable to
those held by the Fund, (iii) if offering or ask prices are not
available for the Zero Coupon Obligations or the Equity
Securities, on the basis of offering or ask price for
comparable securities, (iv) by determining the valuation of the
Zero Coupon Obligations or the Equity Securities on the
offering or ask side of the market by appraisal or (v) by any
combination of the above. For each Evaluation, the Evaluator
shall also confirm and furnish to the Trustee and the
Depositor, on the basis of the information furnished to the
Evaluator by the Trustee as to the value of all Trust assets
other than Securities, the calculation of the Trust Fund
Evaluation to be computed pursuant to Section 5.01.
(c) For purposes of the Trust Fund Evaluations required
by Section 5.01 in determining Redemption Value and Unit Value,
Evaluation of the Securities shall be made in the manner
described in 4.01(b), on the basis of current bid prices for
the Zero Coupon Obligations and, except in those cases in which
the Equity Securities are listed on a national securities
exchange and the last available sale prices are utilized, on
the basis of the last available bid prices of the Equity
Securities."
25. Section 3.05(a) is hereby replaced with the following:
"(a) On or immediately after the tenth the day of each
month, the Trustee shall satisfy itself as to the adequacy of
the Reserve Account, making any further credits thereto as may
appear appropriate in accordance with Section 3.04 and shall
then with respect to each Trust:
(i) deduct from the Capital Account and pay to
itself individually the amounts that it is at the time
entitled to receive pursuant to Section 6.04;
(ii) deduct from the Capital Account and pay to, or
reserve for, the Evaluator the amount that it is at the
time entitled to receive pursuant to Section 4.03;
(iii) deduct from the Capital Account and pay to
counsel, as hereinafter provided for, an amount equal to
unpaid fees and expenses, if any, of such counsel pursuant
to Section 3.08, as certified to by the Depositor; and
(iv) deduct from the Capital Account and pay to, or
reserve for, the Supervisory Servicer the amount that it
is entitled to receive pursuant to Section 3.13."
26. Section 2.01(b) is hereby replaced with the following:
(b) From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its discretion,
to assign, convey to and deposit with the Trustee (i)
additional Securities, duly endorsed in blank or accompanied by
all necessary instruments of assignment and transfer in proper
form (or Contract Obligations relating to such Securities),
and/or (ii) cash (or a Letter of Credit in lieu of cash) with
instructions to purchase additional Securities, in an amount
equal to the portion of the Unit Value of the Units created by
such deposit attributable to the Securities to be purchased
pursuant to such instructions. Such deposit of additional
Securities or cash with instructions to purchase additional
Securities shall be made, in each case, pursuant to a
Supplemental Indenture accompanied by a legal opinion issued by
legal counsel satisfactory to the Depositor. Instructions to
purchase additional Securities shall be in writing, and shall
specify the name of the Security, CUSIP number, if any,
aggregate amount, price or price range and date to be
purchased. When requested by the Trustee, the Depositor shall
act as broker to execute purchases in accordance with such
instructions; the Depositor shall be entitled to compensation
therefor in accordance with applicable law and regulations.
The Trustee shall have no liability for any loss or
depreciation resulting from any purchase made pursuant to the
Depositor's instructions or made by the Depositor as broker,
except by reason of its own negligence, lack of good faith or
willful misconduct.
In connection with any deposit pursuant to this Section 2.01(b)
in the Select Equity and Treasury Trust, the Depositor shall be
obligated to determine that the maturity value of the Zero
Coupon Obligations included in the deposit, divided by the
number of Units created by reason of the deposit, shall equal
at least $10.00.
The Depositor, in each case, shall ensure that each deposit of
additional Securities pursuant to this Section shall be, as
nearly as is practicable, in the identical ratio as the
Percentage Ratio for such Securities as is specified in the
Trust Agreement for each Trust. The Depositor shall deliver
the additional Securities which were not delivered concurrently
with the deposit of additional Securities and which were
represented by Contract Obligations within 10 calendar days
after such deposit of additional Securities (the "Additional
Securities Delivery Period"). If a contract to buy such
Securities between the Depositor and seller is terminated by
the seller thereof for any reason beyond the control of the
Depositor or if for any other reason the Securities are not
delivered to the Trust by the end of the Additional Securities
Delivery Period for such deposit, the Trustee shall immediately
draw on the Letter of Credit, if any, in its entirety, apply
the moneys in accordance with Section 2.01(d), and the
Depositor shall forthwith take the remedial action specified in
Section 3.12. If the Depositor does not take the action
specified in Section 3.12 within 10 calendar days of the end of
the Additional Securities Delivery Period, the Trustee shall
forthwith take the action specified in Section 3.12.
In Witness Whereof, Van Kampen American Capital Distributors, Inc.
has caused this Trust Agreement to be executed by one of its Vice
Presidents or Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or one of its Vice
Presidents or Assistant Secretaries, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., and Van Kampen American Capital Investment Advisory Corp., have
each caused this Trust Indenture and Agreement to be executed by their
respective President or one of their respective Vice Presidents and the
corporate seal of each to be hereto affixed and attested to by the
Secretary, Assistant Secretary or one of their respective Vice Presidents
or Assistant Vice Presidents and The Bank of New York, has caused this
Trust Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested to by one of its
Assistant Treasurers all as of the day, month and year first above
written.
Van Kampen American Capital
Distributors, Inc.
By James J. Boyne
Vice President, Associate General
Counsel and Assistant Secretary
Attest:
By Cathy Napoli
Assistant Secretary
American Portfolio Evaluation
Services, a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. McDonnell
President
Attest:
By James J. Boyne
Assistant Secretary
Van Kampen American Capital
Investment Advisory Corp.
By Dennis J. McDonnell
President
Attest:
By James J. Boyne
Assistant Secretary
The Bank of New York
By Ted Rudich
Vice President
Attest:
By Jeffrey Cohen
Assistant Treasurer
Schedule A to Trust Agreement
Securities Initially Deposited
in
Van Kampen American Capital Equity Opportunity Trust, Series 80
(Note: Incorporated herein and made a part hereof are the "Portfolios"
as set forth in the Prospectus.)
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
November 25, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 80
Gentlemen:
We have served as counsel for Van Kampen American Capital
Distributors, Inc. as Sponsor and Depositor of Van Kampen American
Capital Equity Opportunity Trust, Series 80 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated November 25, 1997, among Van Kampen American
Capital Distributors, Inc., as Depositor, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., as Evaluator, Van Kampen American Capital Investment Advisory
Corp., as Supervisory Servicer, and The Bank of New York, as Trustee,
pursuant to which the Depositor has delivered to and deposited the
Securities listed in the Schedule to the Trust Agreement with the Trustee
and pursuant to which the Trustee has provided to or on the order of the
Depositor documentation evidencing ownership of Units of fractional
undivided interest in and ownership of the Trust (hereinafter referred to
as the "Units"), created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to
enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Trust have been duly authorized; and
2. The certificates evidencing the Units in the Trust,
when duly executed and delivered by the Depositor and the
Trustee in accordance with the aforementioned Trust Agreement,
will constitute valid and binding obligations of such Trust and
the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-38969) relating to the Units
referred to above and to the use of our name and to the reference to our
firm in said Registration Statement and in the related Prospectus.
Respectfully submitted,
Chapman and Cutler
MJK/slm
Exhibit 3.2
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
November 25, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen American Capital Equity Opportunity Trust, Series 80
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 80 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated November 25, 1997 (the "Indenture") among Van
Kampen American Capital Distributors, Inc., as Depositor, Van Kampen
American Capital Investment Advisory Corp., as Evaluator, Van Kampen
American Capital Investment Advisory Corp., as Supervisory Servicer, and
The Bank of New York, as Trustee. The Fund is comprised of two unit
investment trusts, Strategic Picks Opportunity Trust, November 1997
Series and Strategic Picks Opportunity Trust-Combined Series, November
1997 (collectively, the "Trusts").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent.
The assets of each Trust will consist of a portfolio of equity
securities (the "Equity Securities" or "Securities") as set forth in the
Prospectus. For the purposes of the following discussion and opinion, it
is assumed that each Equity Security is equity for federal income tax
purposes.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing United States Federal income tax law:
(i) Each Trust is not an association taxable as a
corporation but will be governed by the provisions of
subchapter J (relating to Trusts) of chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata
share of each asset of the particular Trust in the proportion
that the number of Units held by him bears to the total number
of Units outstanding. Under subpart E, subchapter J of chapter
1 of the Code, income of a Trust will be treated as income of
each Unitholder in the proportion described, and an item of
Trust income will have the same character in the hands of a
Unitholder as it would have in the hands of the Trustee. Each
Unitholder will be considered to have received his pro rata
share of income derived from each Trust asset when such income
is considered to be received by a Trust. A Unitholder's pro
rata portion of distributions of cash or property by a
corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code ) are taxable as ordinary
income to the extent of such corporation's current and
accumulated "earnings and profits." A Unitholder's pro rata
portion of dividends which exceed such current and accumulated
earnings and profits will first reduce the Unitholder's tax
basis in such Equity Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity
Security, shall be treated as gain from the sale or exchange of
property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata
portion of each Equity Security held by a Trust (in the
proportion to the fair market values thereof on the valuation
date closest to the date the Unitholder purchases his Units),
in order to determine his tax basis for his pro rata portion of
each Equity Security held by a Trust.
(iv) Gain or loss will be recognized to a Unitholder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an
in kind distribution of stock is received by such Unitholder
from a Trust as discussed below. Such gain or loss is measured
by comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis
would normally be cost if the Unitholder had acquired his Units
by purchase. Such basis will be reduced, but not below zero,
by the Unitholder's pro rata portion of dividends with respect
to each Equity Security which are not taxable as ordinary
income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder
(subject to various nonrecognition provisions under the Code)
and the amount thereof will be measured by comparing the
Unitholder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning
the tax basis for his Units (as of the date on which his Units
were acquired) among each of the Trust assets of such Trust (as
of the date on which his Units were acquired) ratably according
to their values as of the valuation date nearest the date on
which he purchased such Units. A Unitholder's basis in his
Units and of his fractional interest in each Trust asset must
be reduced, but not below zero, by the Unitholder's pro rata
portion of dividends with respect to each Equity Security which
are not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in
kind distribution of Equity Securities upon the redemption of
Units or upon the termination of the Trust. As previously
discussed, prior to the redemption of Units or the termination
of a Trust, a Unitholder is considered as owning a pro rata
portion of each of the particular Trust's assets. The receipt
of an in kind distribution will result in a Unitholder
receiving an undivided interest in whole shares of stock and
possibly cash. The potential federal income tax consequences
which may occur under an in kind distribution with respect to
each Equity Security owned by the Trust will depend upon
whether or not a United States Unitholder receives cash in
addition to Equity Securities. An "Equity Security" for this
purpose is a particular class of stock issued by a particular
corporation. A Unitholder will not recognize gain or loss if a
Unitholder only receives Equity Securities in exchange for his
or her pro rata portion in the Equity Securities held by the
Trust. However, if a Unitholder also receives cash in exchange
for a fractional share of an Equity Security held by the Trust,
such Unitholder will generally recognize gain or loss based
upon the difference between the amount of cash received by the
Unitholder and his tax basis in such fractional share of an
Equity Security held by the Trust. The total amount of taxable
gains (or losses) recognized upon such redemption will
generally equal the sum of the gain (or loss) recognized under
the rules described above by the redeeming Unitholder with
respect to each Equity Security owned by a Trust.
A domestic corporation owing Units in a Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the
Code, with respect to such Unitholder's pro rata portion of dividends
received by the Trust (to the extent such dividends are taxable as
ordinary income, as discussed above and are attributable to domestic
corporations) subject to the limitations imposed by Sections 246 and 246A
of the Code.
Section 67 of the Code provides that 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 such individual's adjusted gross income.
Unitholders may be required to treat some or all of the expenses of a
Trust as miscellaneous itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part
of the pro rata interest in an Equity Security is either sold by the
Trust or redeemed or when a Unitholder disposes of his Units in a taxable
transaction, in each case for an amount greater (or less) than his tax
basis therefor, subject to various non-recognition provisions of the
Code.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including foreign, state or
local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
Very truly yours
Chapman and Cutler
MJK/slm
Exhibit 3.3
Winston & Strawn
200 Park Avenue
New York, New York 10166-4193
November 25, 1997
Van Kampen American Capital Equity
Opportunity Trust, Series 80
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen American Capital
Equity Opportunity Trust, Series 80 (the "Fund") consisting of Strategic
Picks Opportunity Trust, November 1997 Series ("SPOT") and Strategic
Picks Opportunity Trust-Combined Series, November 1997 ("SPOC")
(hereafter SPOT and SPOC are referred to individually as the "Trust" and
in the aggregate as the "Trusts") for purposes of determining the
applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen American
Capital Distributors, Inc. (the "Depositor"), American Portfolio
Evaluation Services, a division of an affiliate of the Depositor, as
Evaluator, Van Kampen American Capital Investment Advisory Corp., an
affiliate of the Depositor, as Supervisor and The Bank of New York, as
Trustee (the "Trustee"). As described in the prospectus relating to the
Fund dated today to be filed as an amendment to a registration statement
heretofore filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (respectively the "Prospectus" and the
"Registration Statement") (File number 333-38969), the objectives of the
Fund are to provide an above average total return through a combination
of capital appreciation and dividend income consistent with the
preservation of invested capital by investing, in the case of SPOT, in
ten equity securities selected from the Morgan Stanley Capital
International USA Index, and in the case of SPOC, in twenty equity
securities consisting of the ten equity securities in SPOT and ten equity
securities selected from the Dow Jones Industrial Average. It is noted
that no opinion is expressed herein with regard to the Federal tax
aspects of the securities, the Trusts, units of the Trusts (the "Units"),
or any interest, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trust the securities and/or contracts and cash for
the purchase thereof together with an irrevocable letter of credit in the
amount required for the purchase price of the securities comprising the
corpus of the Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities
to be deposited in the Trusts, and, upon the receipt thereof, will
deliver to the Depositor a registered certificate for the number of Units
representing the entire capital of the Trusts as more fully set forth in
the Prospectus. The Units, which are represented by certificates
("Certificates"), will be offered to the public upon the effectiveness of
the Registration Statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash
dividends received by the Fund and with the proceeds from the disposition
of securities held in the Fund and the distribution of such cash
dividends and proceeds to the Unit holders. The Trustee will also
maintain records of the registered holders of Certificates representing
an interest in the Fund and administer the redemption of Units by such
Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option.
Generally, equity securities held in the Trusts may be removed
therefrom by the Trustee at the direction of the Depositor upon the
occurrence of certain specified events which adversely affect the sound
investment character of the Fund, such as default by the issuer in
payment of declared dividends or of interest or principal on one or more
of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to
sell equity securities designated by the Supervisor only for the purpose
of redeeming Units tendered to it and of paying expenses for which funds
are not available. The Trustee does not have the power to vary the
investment of any Unit holder in the Fund, and under no circumstances may
the proceeds of sale of any equity securities held by the Fund be used to
purchase new equity securities to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(1)
defines the term "corporation" to include, among other things, "any
business conducted by a trustee or trustees wherein interest or ownership
is evidenced by certificate or other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which interest or
ownership is evidenced by certificate or other written instrument
includes, but is not limited to, an association commonly referred to
as a "business trust" or "Massachusetts trust". In determining
whether a trustee or trustees are conducting a business, the form of
the agreement is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and
powers, will be regarded as decisive factors in determining whether
a trust is subject to tax under Article 9-A. The mere investment of
funds and the collection of income therefrom, which incidental
replacement of securities and reinvestment of funds, does not
constitute the conduct of a business in the case of a business
conducted by a trustee or trustees. 20 NYCRR 1-2.5(b)(2) (July 11,
1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd
Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47
N.Y. Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the
trustee of an unincorporated investment trust was without authority to
reinvest amounts received upon the sales of securities and could dispose
of securities making up the trust only upon the happening of certain
specified events or the existence of certain specified conditions, the
trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell securities contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such
securities is limited to circumstances in which the credit-worthiness or
soundness of the issuer of such equity security is in question or in
which cash is needed to pay redeeming Unit holders or to pay expenses, or
where the Fund is liquidated subsequent to the termination of the
Indenture. In substance, the Trustee will merely collect and distribute
income and will not reinvest any income or proceeds, and the Trustee has
no power to vary the investment of any Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust
will be deemed to be the owner of the trust under certain circumstances,
and therefore taxable on his proportionate interest in the income
thereof. Where this Federal tax rule applies, the income attributed to
the grantor will also be income to him for New York income tax purposes.
See TSB-M-78(9)(c), New York Department of Taxation and Finance, June 23,
1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be
considered as owning a share of each asset of a Trust in the proportion
that the number of Units held by such holder bears to the total number of
Units outstanding and the income of a Trust will be treated as the income
of each Unit holder in said proportion pursuant to Subpart E of Part I,
Subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings, and court decisions interpreting the laws of the State and City
of New York:
1. Each of the Trusts will not constitute an association
taxable as a corporation under New York law, and, accordingly, will
not be subject to tax on its income under the New York State
franchise tax or the New York City general corporation tax;
2. The income of the Trusts will be treated as the income of
the Unit holders under the income tax laws of the State and City of
New York; and
3. Unit holders who are not residents of the State of New
York are not subject to the income tax laws thereof with respect to
any interest or gain derived from the Fund or any gain from the sale
or other disposition of the Units, except to the extent that such
interest or gain is from property employed in a business, trade,
profession or occupation carried on in the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name
and the reference to our firm in the Registration Statement and in the
Prospectus.
Very truly yours,
Winston & Strawn
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
November 25, 1997
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital
Strategic Picks Opportunity Trust, November 1997 Series
Strategic Picks Opportunity Trust-Combined Series, November 1997
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-38969
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as
the Evaluator, and to the use of the Obligations prepared by us which are
referred to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
Exhibit 4.2
Independent Certified Public Accountants' Consent
We have issued our report dated November 25, 1997 on the statements
of condition and related securities portfolios of Van Kampen American
Capital Equity Opportunity Trust, Series 80 as of November 25, 1997
contained in the Registration Statement on Form S-6 and Prospectus. We
consent to the use of our report in the Registration Statement and
Prospectus and to the use of our name as it appears under the caption
"Other Matters-Independent Certified Public Accountants."
Grant Thornton LLP
Chicago, Illinois
November 25, 1997
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<RESTATED>
[LEGEND]
This report reflects the current period taken from 487 on November 25, 1997 it
is unaudited
[/LEGEND]
<SERIES>
<NUMBER> 197
<NAME> SPOT
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-25-1997
<PERIOD-END> NOV-25-1997
<INVESTMENTS-AT-COST> 147600
<INVESTMENTS-AT-VALUE> 147600
<RECEIVABLES> 0
<ASSETS-OTHER> 38482
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 186082
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41091
<TOTAL-LIABILITIES> 41091
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144991
<SHARES-COMMON-STOCK> 14910
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 144991
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on November 25, 1997 it
is unaudited
</LEGEND>
<SERIES>
<NUMBER> 197
<NAME> SPOC
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-25-1997
<PERIOD-END> NOV-25-1997
<INVESTMENTS-AT-COST> 147621
<INVESTMENTS-AT-VALUE> 147621
<RECEIVABLES> 0
<ASSETS-OTHER> 35917
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 183538
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38527
<TOTAL-LIABILITIES> 38527
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 145011
<SHARES-COMMON-STOCK> 14912
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 145011
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
