File No. 33-58477
CIK #896973
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 12
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
Van Kampen American Capital
Chapman and Cutler Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: An indefinite
number of Units of proportionate interest pursuant to Rule 24f-2
under the Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities
being registered: Indefinite
G. Amount of registration fee: $500 (previously paid)
H. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the
Registration Statement
/ / Check box if it is proposed that this filing will become
effective pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 12
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) *
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trust
trust's securities and ) Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses) Prospectus Front Cover
Page
) Summary of Essential Financial
) Information
) Trust 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 Portfolio
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities ) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter)
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's ) 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 ) Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
May 16, 1995
Swiss Blue Chip Strategic Trust, Series 1
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 12 (the
"Fund") is comprised of one underlying unit investment trust
designated as the Swiss Blue Chip Strategic Trust, Series 1 ("Swiss Equity
Trust"or "Trust"). The Trust offers investors the opportunity to
purchase Units representing proportionate interests in a fixed, diversified
portfolio of common stocks issued by companies located in Switzerland which
are traded on the Zurich, Basel or Geneva stock exchanges as of the Initial
Date of Deposit (the "Equity Securities"or "Securities").
Unless terminated earlier, the Trust will terminate on May 16, 2001 (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. Unless otherwise indicated, all amounts herein
are stated in U.S. dollars computed on the basis of the exchange rate for
Swiss francs on the Initial Date of Deposit.
Objective of the Trust. The objective of the 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 actively traded equity securities listed on the
Zurich, Basel or Geneva stock exchanges as of the Initial Date of Deposit and
issued by companies located in Switzerland. See "Portfolio."There is,
of course, no guarantee that the objective of the Trust will be achieved.
Public Offering Price. The Public Offering Price per Unit of the Trust is
equal to the aggregate underlying value of the Securities in the Trust plus or
minus cash, if any, in the Capital and Income Accounts of the Trust, divided
by the number of Units of the Trust outstanding, plus a sales charge equal to
5.5% of the Public Offering Price which is equivalent to 5.820% of the
aggregate value of the Securities in the Trust. The Public Offering Price per
Unit is based on the aggregate value of the Securities computed on the basis
of the offering side value of the currency exchange rate for Swiss francs
expressed in U.S. dollars during the initial offering period and on the bid
side value for the secondary market transactions and includes the commissions
and stamp taxes associated with acquiring the Securities during the initial
offering period and the liquidation costs associated with selling Securities
to meet redemptions or upon Trust termination. During the initial offering
period, the sales charge is reduced on a graduated scale for sales involving
at least 10,000 Units. If Units were available for purchase at 10:00 A.M. New
York time on the Initial Date of Deposit, the Public Offering Price per Unit
would have been that amount set forth under "Summary of Essential
Financial Information."The minimum purchase is 500 Units (100 Units for a
tax-sheltered retirement plan). See "Public Offering."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Additional Deposits. The Sponsor may, from time to time during a period of up
to approximately 12 months after the Initial Date of Deposit, deposit
additional Securities in the Trust, provided it maintains, as nearly as is
practicable, the original proportionate relationship of the Equity Securities
in the Trust's portfolio. See "The Trust."
Dividend and Capital Gains Distributions. Distributions of dividends and
realized capital gains, if any, received by the Trust will be paid in cash on
the applicable Distribution Date to Unitholders of record on the record date
as set forth in the "Summary of Essential Financial Information."The
initial estimated distribution will be $.04 per Unit and will be made on
June 30, 1995 to Unitholders of record on June 15, 1995. Any distribution of
income and/or capital gains will be net of the expenses of the Trust. See "
Taxation."Additionally, upon surrender of Units for redemption or
termination of the Trust, the Trustee will distribute to each Unitholder his
pro rata share of the Trust's assets, less expenses, in the manner set forth
under "Rights of Unitholders--Distributions of Income and Capital."
Secondary Market for Units. Although not obligated to do so, International
Assets Advisory Corp. (the "Managing Underwriter") currently intends
to maintain a market for Units of the Trust and offer to repurchase Units at
prices which are based on the aggregate underlying value of Equity Securities
in the Trust (generally determined by the closing sale prices of the
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is not maintained, a Unitholder may redeem
Units at prices based upon the aggregate underlying value of the Equity
Securities in the Trust plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date, Securities will
begin to be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the Securities.
Written notice of any termination of the Trust shall be given by the Trustee
to each Unitholder at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders. Unitholders 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."
Portfolio Supervision. Van Kampen American Capital Investment Advisory Corp.,
the Supervisor for the Trust, has retained Global Assets Advisors, Inc. ("
Global Assets Advisors") as the Sub-Supervisor to provide research to the
Supervisor and perform portfolio supervisory services for the Trust. The
Sponsor believes that this arrangement is desirable in the present
circumstances due to the complexity of the foreign equity security markets and
Global Assets Advisors' expertise in providing equity research on individual
foreign equity securities, emerging markets and the foreign equity security
markets in general. The Supervisor will pay Global Assets Advisors the entire
supervisory fee for providing these services. See "Summary of Essential
Financial Information."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. For certain risk considerations related to the Trust, see
"Risk Factors."Units of the Trust are not deposits or obligations of,
and are not guaranteed or endorsed by, any bank and are not federally insured
or otherwise protected by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other agency and involve investment risk,
including the possible loss of market value.
<TABLE>
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
At 10:00 A.M. New York time on May 16, 1995
Managing Underwriter: International Assets Advisory Corp.
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor (1): Van Kampen American Capital Investment Advisory Corp.
Sub-Supervisor (1): Global Assets Advisors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units................................................................. 100,000
Fractional Undivided Interest in the Trust per Unit............................. 1/100,000
Public Offering Price:
Aggregate Offering Price of Securities in Portfolio <F2>........................ $ 943,392
Aggregate Offering Price of Securities per Unit................................. $ 9.43
Sales Charge 5.5% (5.820% of the Aggregate Value of Securities per Unit) <F3>... $ .55
Public Offering Price per Unit <F3><F4>......................................... $ 9.98
Redemption Price per Unit <F5>.................................................. $ 9.43
Initial Secondary Market Repurchase Price per Unit.............................. $ 9.43
Excess of Public Offering Price per Unit over Redemption Price per Unit......... $ .55
Calculation of Estimated Net Annual Dividends per Unit <F6>:
Estimated Gross Annual Dividends per Unit....................................... $ .11301
Less: Estimated Annual Expense per Unit......................................... $ .02255
Estimated Net Annual Dividends per Unit......................................... $ .09046
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee <F1>... Maximum of $.007 per Unit
Evaluator's Annual Evaluation Fee.......... Maximum of $.0025 per Unit
Mandatory Termination Date................. May 16, 2001
Minimum Termination Value.................. The Trust may be terminated if the net asset value of the Trust is
less than $500,000 unless the net asset value of the Trust's
deposits has exceeded $15,000,000, then the Trust may be
terminated if the net asset value of the Trust is less than
$3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee <F7>........... $.008 per Unit
Income Account Record Date.......... Fifteenth day of June and December
Income Account Distribution Date.... Last day of June and December
Capital Account Record Date......... Fifteenth day of December
Capital Account Distribution Date... Last day of December
Evaluation Time..................... Close of the relevant stock market (generally 10:00 A.M. New York time)
<FN>
<F1> Pursuant to a contractual arrangement with the Supervisor, Global Assets
Advisors, Inc. will provide to the Supervisor on an agency basis supervisory
services in return for the entire supervisory fee.
<F2> Each Equity Security is valued at the closing sale price. The aggregate value
of Securities in the Trust represents the U.S. dollar value based on the
offering side value of the currency exchange rate for the Swiss franc at the
Evaluation Time on the date of this "Summary of Essential Financial
Information"and includes the commissions and stamp taxes associated with
acquiring such Securities.
<F3> Effective on various dates the sales charge will decrease. See "Public
Offering--Offering Price."
<F4> On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts. The
Public Offering Price per Unit is based on the aggregate value of the
Securities computed on the basis of the offering side value of the currency
exchange rate expressed in U.S. dollars and includes the commissions and stamp
taxes associated with acquiring such Securities.
<F5> The Redemption Price per Unit is based on the aggregate value of the
Securities computed on the basis of the bid side value of the currency
exchange rate for the Swiss franc expressed in U.S. dollars and includes the
Trust's estimated costs of liquidating Securities to meet redemptions
(approximately $.02 per Unit).
<F6> Estimated annual dividends are based on annualizing the most recently paid
dividends taking into consideration Swiss withholding tax.
<F7> In addition, the Trustee will receive additional annual compensation, payable
in monthly installments, of $.30 per $1,000 of market value of Equity
Securities held in a sub-custodian account at month end.
</TABLE>
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 12, which is
comprised of one unit investment trust, Swiss Blue Chip Strategic Trust,
Series 1, 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 Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities
which are listed on the Zurich, Basel or Geneva stock exchanges as of the
Initial Date of Deposit and are issued by companies located in Switzerland.
Unless terminated earlier, the Trust 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.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio"herein, including delivery
statements relating to contracts for the purchase of certain such Securities
and an irrevocable letter of credit issued by a financial institution in the
amount required for such purchases. Thereafter, the Trustee, in exchange for
such Securities (and contracts) so deposited, delivered to the Sponsor
documentation evidencing the ownership of that number of Units of the Trust
indicated in "Summary of Essential Financial Information."
Additional Units of the Trust may be issued for a period of up to 12 months
following the Initial Date of Deposit by depositing in the Trust additional
Securities or contracts to purchase securities together with irrevocable
letters of credit or cash. As additional Units are issued by the Trust as a
result of the deposit of additional Securities by the Sponsor, the aggregate
value of the Securities in the Trust will be increased and the fractional
undivided interest in the Trust represented by each Unit will be decreased.
The Sponsor may continue to make additional deposits of Securities 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
original proportionate relationship of the Equity Securities in the Trust's
portfolio based on the number of shares of the Equity Securities. Any deposit
by the Sponsor of additional Equity Securities will duplicate, as nearly as is
practicable, this original proportionate relationship and not the actual
proportionate relationship on the subsequent date of deposit, since the actual
proportionate relationship may be different than the original proportionate
relationship. Any such difference may be due to the sale, redemption or
liquidation of any of the Equity Securities deposited in the Trust on the
Initial, or any subsequent, Date of Deposit.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in the Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor or the Managing
Underwriter, or until the termination of the Trust Agreement.
OBJECTIVE AND SECURITIES SELECTION
The objective of the Trust is to provide an above average total return through
a combination of potential capital appreciation and dividend income by
investing in a portfolio of common stocks issued by companies located in
Switzerland and listed on the Zurich, Basel or Geneva stock exchanges as of
the Initial Date of Deposit. There is, of course, no assurance that the Trust
(which includes expenses and sales charges) will achieve its objective.
The Equity Securities selected for deposit in the Trust were chosen by
International Assets Advisory Corporation ("IAAC"or the "Managing
Underwriter"). In selecting the Equity Securities for inclusion in the
Trust, the Managing Underwriter considered the following criteria as of the
Initial Date of Deposit: (a) market capitalization for each issuer is in
excess of $1 billion; (b) each Security is one of the 23 stocks included in
the Swiss Market Index (described by Bloomberg L.P. as "a
capitalization-weighted index of the largest and most liquid stocks traded on
the Geneva, Zurich and Basel stock exchanges"); (c) sales or turnover for
each issuer is in excess of $5 billion; and (d) each issuer is among the
leaders within its industry. In selecting the Equity Securities, the Managing
Underwriter also considered the following factors: (a) maintaining portfolio
diversification; (b) selecting common stocks which have a strong position
within the international marketplace; and (c) the possibility for
above-average total return. In the Managing Underwriter's opinion, an
investment in the portfolio of Swiss Equity Securities will accomplish the
Trust's objectives.
Over the past five calendar years, the Swiss market, without giving effect to
currency exchange adjustments, has outperformed the U.S. market. Between
January 1, 1990 and December 31, 1994, the U.S. market, as measured by the Dow
Jones Industrial Average, rose 39.27%. After giving effect to currency
exchange adjustments, the Swiss market, as measured by the Swiss Market Index,
rose 74.10% over the same period. This comparison is, of course, for
illustration purposes only. The Swiss Market Index includes several securities
in addition to the Securities in the Trust. Past performance of the Swiss
Market Index is not indicative of how the Securities in the Trust will perform
over the life of the Trust.
Despite Switzerland's relatively small size and lack of natural resources,
many Swiss companies have enjoyed economic success. In fact, because of
Switzerland's relatively small domestic market, many Swiss companies
(including certain of those included in the portfolio) have become industry
leaders in such sectors as finance, pharmaceuticals, food manufacturing, and
the chemical industry. In addition, Switzerland's neutrality, its social,
political and economic strength, and the relative stability of the Swiss franc
add to the attractiveness of investing in Swiss companies.
Investors will be subject to taxation on the dividend income received by the
Trust and on gains from the sale or liquidation of Securities. Investors
should be aware that there is not any guarantee that the objective of the
Trust will be achieved because it is subject to the continuing ability of the
respective issuers to declare and pay dividends and because the market value
of the Securities can be affected by a variety of factors. Common stocks may
be especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Securities will pay dividends on outstanding common shares. Any
distribution of income will generally depend upon the declaration of dividends
by the issuers of the Securities and the declaration of any dividends depends
upon several factors including the financial condition of the issuers and
general economic conditions. In addition, a decrease in the value of the Swiss
franc relative to the U.S. dollar will adversely affect the value of the
Trust's assets and income and the value of the Units of the Trust. See "
Risk Factors."
Investors should note that the above criteria was applied to the Securities
for inclusion in the Trust as of the Initial Date of Deposit. Subsequent to
the Initial Date of Deposit, the Securities may no longer meet the above
criteria. Should a Security no longer meet the criteria originally established
for inclusion in the Trust, such Security will not as a result thereof be
removed from the Trust portfolio.
Investors should be aware that the Trust is not a "managed"fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration"). In addition,
Securities will not be sold by a Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. The Trust may
continue to hold Securities even though the evaluation of the attractiveness
of the Securities may have changed and, if the evaluation were performed again
at that time, the Securities would not be selected for the Trust.
TRUST PORTFOLIO
The Trust consists of common stocks of companies located in Switzerland which
are listed on the Zurich, Basel or Geneva stock exchanges as of the Initial
Date of Deposit. In June 1995 Switzerland will introduce a new electronic
stock exchange system which will have the capability to process trading,
settlement and clearing on a real time basis in one computer-based network.
The new system is expected to result in an increase in overall market
liquidity which will allow the attractive medium or small capitalization
companies that are currently traded on the three exchanges to become more
accessible. As a result of the implementation of the new electronic system,
the Zurich, Basel and Geneva exchanges will close. The new system should
surpass the inefficiencies experienced with the old structure and should
improve valuations of medium and small capitalization companies.
BBC Brown Boveri AG. BBC is a holding company for a 50% stake in ABB Asea
Brown Boveri Ltd., a privately-held international company. The company,
through over 1,300 affiliates, is active in the following principal sectors:
power generation systems; power transmission networks; products and systems
for local distribution and control of electrical energy; products, systems and
services for industrial processes; rail transportation systems; financial
services; and other electrical engineering-related activities.
Ciba-Geigy AG. Ciba-Geigy produces and sells pharmaceuticals, chemicals, and
biological products, operating in over 60 countries internationally. The
pharmaceuticals and healthcare division is the company's largest profit
contributor and includes pharmaceutical specialties, self-medication,
diagnostics and Ciba Vision. The agriculture division includes plant
protection, animal health and seeds. The industrial division consists of
textile dyes, chemicals, additives, composites, polymers and pigments.
CS Holdings. CS Holdings is a holding company to banks and other financial
service institutions. The company has over 330 offices in Switzerland and 500
worldwide. Holdings include: Credit Suisse, providing worldwide universal
banking services; CS First Boston Group Inc. (USA), involved in investment
banking and dealings in derivatives and other financial services in the USA,
Europe, and the Pacific Rim; Leu Holding, providing private banking services
through Bank Leu, Bank Hofmann, Clariden Bank, and Bank Heusser & Cie;
Sweizerishe Volksbank, providing banking through 192 branches to small to
medium sized firms and individuals; Fides Trust, offering investment
consultancy and information services; CS Life, offering life insurance to bank
customers; Elektrowatt, involved in energy production in Switzerland.
Holderbank, "Holderbank Financiere Glaris AG". Holderbank is the largest
cement producer in the world, with operations on five continents. The company
produces cement, truck-mixed concrete and concrete chemicals, aggregates,
concrete technology and other products as well as services. The company's
cement production capacity is approximately 60 million tons.
Nestle SA. Nestle is a holding company and the world's largest food company.
The company has interests in beverages, milk products and dietetics, prepared
dishes and cooking aids, chocolate and confectionery products, pet food,
mineral water, frozen food, pharmaceuticals and cosmetics. The group's
products are manufactured in 489 factories and sold in over 100 countries.
Nestle's international brands include Nescafe coffee, Carnation milk, Buitoni
pasta, Perrier water, Stouffer's frozen foods and Libby's juices.
Roche Holdings AG. The Roche group is involved in the research, development,
manufacture and sale of pharmaceutical and chemical products worldwide.
Principal businesses encompass the preventative, diagnostic and therapeutic
aspects of health care. The group's activities are divided into four main
divisions: Pharmaceuticals; Vitamins and Fine Chemicals; Diagnostics; and
Fragrances and Flavors. Roche distributes its products throughout Europe, the
US, Asia and Latin America.
Sandoz AG. Sandoz manufactures chemicals and pharmaceuticals internationally.
The company's principal activities are: Pharmaceuticals, including
preparations of medicines for central nervous disorders, endocrinology, asthma
and allergies, cardiovascular disorders and organ transplants; Chemicals,
including dyestuffs for textile, leather, paper and aluminum industries;
Nutrition, including Ovaltine, Gerber baby food and sports nutrition;
Agrochemicals, providing herbicides, insecticides and fungicides; Seeds; and
Construction and Environment products.
Swiss Bank Corporation, "Schweizerischer Bankverein SBC". The
principal activity of the group is the provision of an extensive range of
banking and associated services in Switzerland and worldwide. These services
include foreign exchange and banknote dealings, precious metal trading,
mortgages and building loans.
Swiss Reinsurance, "Schweizerische Rueckversicherungs-Gesellschaft". Swiss
Reinsurance is principally involved in providing reinsurance and insurance
industry services. The company has a global presence, with 55 reinsurance
operations in 25 countries across all continents. In September 1994, the
company sold its European direct insurance businesses, receiving over 5
billion Swiss francs on the sale. The company will now focus on its core
business of reinsurance.
Union Bank of Switzerland, "Schweizerische Bankgesellschaft". UBS is
the largest Swiss bank in terms of equity. The principal activity of the group
is the provision of a wide range of banking and financial services in the
domestic and overseas market. The bank offers corporate and institutional
banking, retail banking and basic banking services, corporate finance,
merchant banking, investment counseling and portfolio management, trading and
risk management.
Winterthur, "Winterthur Schweizerische Versicherungs-Gesellschaft".
Winterthur is the second largest Swiss insurer. The company writes life and
non-life insurance coverage throughout Switzerland and overseas. Income
premiums in 1993 were geographically spread as follows: Switzerland 43.5%,
rest of Europe 38.1%, North America 13.2%, Asia 4.9%.
Zurich Insurance, "Zurich Versicherungsgesellschaft". Zurich Insurance
is an international insurance company that offers life and non-life insurance
products. The company provides life, automobile, property, accident, sickness,
and general liability insurance to individuals and groups. Zurich operates
through approximately 32 branch offices that serve Switzerland, the European
community, North America and elsewhere.
The Trust consists of (a) the Equity Securities (including contracts for the
purchase thereof) listed under "Portfolio"as may continue to be held
from time to time in the Trust, (b) any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Trust Agreement and
(c) any cash held in the related Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of
the Equity Securities. However, should any contract for the purchase of any of
the Equity Securities initially deposited hereunder fail, the Sponsor will,
unless substantially all of the moneys held in 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.
Investors should note that the above criteria was applied to the Equity
Securities selected for inclusion in the Trust portfolio as of the date
indicated above. Since the Sponsor may deposit additional Equity Securities
which were originally selected through this process, the Sponsor may continue
to sell Units of the Trust even though the Equity Securities would no longer
be chosen for deposit into the Trust if the selection process were to be made
again at a later time.
RISK FACTORS
General. An investment in Units of the Trust should be made with an
understanding of the risks which an investment in foreign 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 Trust 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 Trust to values higher or
lower than those prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor or the Managing
Underwriter. The price at which the Equity Securities may be sold to meet
redemption, and the value of the Trust, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
Unitholders will be unable to dispose of any of the Equity Securities in the
Trust, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Supervisor.
Other Equity Risks. Since the Equity Securities consist of securities of
foreign issuers, an investment in the Trust involves certain investment risks
that are different in some respects from an investment in a trust which
invests entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant Equity
Securities, the possibility that the financial condition of the issuers of the
Equity Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute directly to a
decrease in the value of the Equity Securities and thus in the value of the
Units), the limited liquidity and relatively small market capitalization of
the relevant securities market, expropriation or confiscatory taxation,
economic uncertainties and foreign currency devaluations and fluctuations. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer. Also,
foreign issuers are not necessarily subject to uniform accounting, auditing
and financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of comparable
domestic issuers. In addition, fixed brokerage commissions and other
transaction costs on foreign securities exchanges are generally higher than in
the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there
is in the United States. However, due to the nature of the issuers of the
Equity Securities, the Sponsor believes that adequate information will be
available to allow the Supervisor to provide portfolio surveillance for the
Trust.
Equity securities issued by non-U.S. issuers generally pay dividends in
foreign currencies and are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the U.S. dollar foreign exchange
rates for the various Equity Securities. See "Exchange Rate"below.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trust of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trust. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trust and on the ability of
the Trust to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
Investors should be aware that it may not be possible to buy all Equity
Securities at the same time because of the unavailability of any Equity
Security, and restrictions applicable to the Trust relating to the purchase of
an Equity Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities Act
of 1933 and may not be exempt from the registration requirements of such Act.
Sales of non-exempt Equity Securities by the Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Equity Securities by the Trust will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that the Trust will encounter obstacles in disposing of the
Equity Securities, investors should realize that the Equity Securities may be
traded in foreign countries where the securities markets are not as developed
or efficient and may not be as liquid as those in the United States. The value
of the Equity Securities will be adversely affected if trading markets for the
Equity Securities are limited or absent.
Switzerland. The information provided below details certain important factors
which impact the economy of Switzerland. This information has been extracted
from various governmental and private publications, but no representation can
be made as to its accuracy; furthermore, no representation is made that any
correlation exists between the economy of Switzerland and the value of the
Equity Securities held by the Trust.
Currently, securities trading in Switzerland is concentrated on the Zurich,
Basel and Geneva Exchanges. In Switzerland, the cantons (federal states) are
to a certain extent entitled to enact laws regarding the securities brokerage
business, yet procedures are uniform throughout Switzerland. In addition, the
various exchanges are in differing respects self-regulated. However, following
implementation of a new national electronic stock exchange, the Swiss Stock
Exchange, the cantonal stock exchange laws will be replaced by a new Federal
Stock Exchange Law. The nationwide electronic exchange is expected to begin
operating in June 1995 and will connect all market trading and settlements in
one computer-based network. The new Federal Stock Exchange Law is scheduled to
take effect April 1, 1996. Currently, a security may not be officially traded
on an exchange without being admitted to the quotations list under the listing
regulations. A Swiss company whose securities are to be listed must: (i)
generally have been in business for at least five years, (ii) have published
its audited yearly accounts as well as its business report, (iii) have a
paid-in capital of not less than 5 million Swiss francs and (iv) the total
nominal amount of one specific issue is to be at least 10 million Swiss francs
or have a market value of at least 25 million Swiss francs. The new Federal
Stock Exchange Law will cover all aspects of securities trading and focuses on
rules relating to disclosure and takeovers. The new law is also designed to
promote more far-reaching shareholder rights and satisfy needs of
international investors. Of course, the Sponsor cannot predict the extent to
which the new law will achieve its objectives or the effect, if any, the new
system will have on the Equity Securities in the Trust.
The current Swiss securities markets have substantially less volume than the
U.S. securities markets and the capitalization of the Swiss markets is highly
concentrated. This combination of lower volume and greater concentration in
the Swiss securities markets may create a risk of greater price volatility
than in the U.S. securities markets. While one of the goals of the new
electronic stock exchange system is to increase overall market liquidity, it
is not possible to predict the effect that the introduction of the new system
will have on the Swiss securities market, in general, or the Equity Securities
in the Trust.
In late 1993, the European Union (the "EU"), formerly known as the
European Economic Community, was created through the Maastricht Treaty. It is
expected that the Treaty will have the effect of eliminating most remaining
trade barriers between the twelve member nations and make Europe one of the
largest common markets in the world. While Switzerland is not a member of the
EU, Switzerland and several other countries are members of the European Free
Trade Association (the "EFTA"). These countries signed an agreement
with the EU in 1991 to establish a European Economic Area (the "EEA").
Broadly defined, the aim of the agreement is to extend the same advantages of
the single European market to the EFTA countries. While it is not possible to
predict the future influence of the EEA treaty on the Swiss stock market, it
is expected that the removal of most barriers to the free movement of goods
and labor in the EFTA countries will positively impact Swiss multinational
companies but also may have a negative impact on non-multinational Swiss
companies. Furthermore, the recent rapid political and social change
throughout Europe make the extent and nature of future economic development in
Switzerland and Europe, and the impact of such development upon the value of
the Equity Securities, impossible to predict. Moreover, it is not possible to
accurately predict the effect of the current political and economic situation
upon long-term inflation and balance of trade cycles and how these changes
would affect the currency exchange rate between the U.S. dollar and the Swiss
franc.
Exchange Rate. The Trust is comprised of Equity Securities that are
principally traded in Swiss francs and as such involves investment risks that
are substantially different from an investment in a fund which invests in
securities that are principally traded in United States dollars. The United
States dollar value of the portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the United
States dollar foreign exchange rates for the Swiss franc. Most foreign
currencies have fluctuated widely in value against the United States dollar
for many reasons, including supply and demand of the respective currency, the
rate of inflation in the respective economies compared to the United States,
the impact of interest rate differentials between different currencies on the
movement of foreign currency rates, the balance of imports and exports of
goods and services, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and other
countries.
The post-World War II international monetary system was, until 1973, dominated
by the Bretton Woods Treaty, which established a system of fixed exchange
rates and the convertibility of the United States dollar into gold through
foreign central banks. Starting in 1971, growing volatility in the foreign
exchange markets caused the United States to abandon gold convertibility and
to effect a small devaluation of the United States dollar. In 1973, the system
of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating"exchange rates, under which daily
currency valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have continued to
"peg"their currencies to the United States dollar although there has
been some interest in recent years in "pegging"currencies to "
baskets"of other currencies or to a Special Drawing Right administered by
the International Monetary Fund. Since January 1973, the Swiss franc has
traded on a floating exchange rate basis against all currencies. The Swiss
franc is fully convertible and transferable into all currencies without
administrative or legal restrictions, both for non-residents and residents of
Switzerland. Currencies are generally traded by leading international
commercial banks and institutional investors (including corporate treasurers,
money managers, pension funds and insurance companies). From time to time,
central banks in a number of countries also are major buyers and sellers of
foreign currencies, mostly for the purpose of preventing or reducing
substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual
and proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling
large amounts of the same currency or currencies. However, over the long term,
the currency of a country with a low rate of inflation and a favorable balance
of trade should increase in value relative to the currency of a country with a
high rate of inflation and deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and end of
month equivalent U.S. dollar rates of exchange for the Swiss franc.
<TABLE>
FOREIGN EXCHANGE RATES
Range of Fluctuations in
the Swiss franc
<CAPTION>
Annual Swiss franc/
Period U.S. dollar
<S> <C>
1985 2.081 - 2.903
1986 1.604 - 2.093
1987 1.322 - 1.610
1988 1.272 - 1.592
1989 1.541 - 1.758
1990 1.244 - 1.537
1991 1.245 - 1.576
1992 1.232 - 1.545
1993 1.393 - 1.546
1994 1.249 - 1.480
</TABLE>
Source: Bloomberg L.P.
<TABLE>
<CAPTION>
End of Month Exchange Rates
for the Swiss franc
<S> <C>
Swiss franc/
Monthly Period U.S. dollar
1992
January 1.4290
February 1.4845
March 1.5020
April 1.5170
May 1.4562
June 1.3747
July 1.3155
August 1.2504
September 1.2368
October 1.3743
November 1.4337
December 1.4675
1993
January 1.4880
February 1.5280
March 1.4910
April 1.4315
May 1.4205
June 1.5140
July 1.5240
August 1.4785
September 1.4257
October 1.4925
November 1.4990
December 1.4885
1994
January 1.4568
February 1.4265
March 1.4135
April 1.4035
May 1.4025
June 1.3335
July 1.3400
August 1.3320
September 1.2875
October 1.2565
November 1.3265
December 1.3085
1995
January 1.2855
February 1.2375
March 1.1285
April 1.4400
</TABLE>
Source: Bloomberg L.P.
The Evaluator will estimate the current exchange rate for the Swiss franc
based on activity in the Swiss currency exchange market. However, since this
market may be volatile and is constantly changing, depending on the activity
at any particular time of the large international commercial banks, various
central banks, large multi-national corporations, speculators and other buyers
and sellers of foreign currencies, and since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated by
the Evaluator may not be indicative of the amount in United States dollars the
Trust would receive had the Trustee sold any particular currency in the
market. The foreign exchange transactions of the Trust will be concluded by
the Trustee with foreign exchange dealers acting as principals on a spot
(i.e., cash) buying basis. Although foreign exchange dealers trade on a net
basis, they do realize a profit based upon the difference between the price at
which they are willing to buy a particular currency (bid price) and the price
at which they are willing to sell the currency (offer price).
TAXATION
United States Federal Taxation
General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code"). Unitholders
should consult their tax advisers in determining the federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of 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 each Security when such income is received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, redemption, or otherwise) or upon the
sale or redemption of Units by such Unitholder. The price a Unitholder pays
for his Units, 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 date the Unitholder purchases his Units) in order to
determine his initial cost for his pro rata portion of each Security held by
the Trust. For federal income tax purposes, a Unitholder's pro rata portion of
dividends as defined by Section 316 of the Code paid with respect to a
Security held by 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, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
3. 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 and, will be long-term if the Unitholder has held his Units for
more than one year (the date on which the Units are acquired (i.e., the "
trade date") is excluded for purposes of determining whether the Units
have been held for more than one year). A Unitholder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital loss except in the
case of a dealer or a financial institution and, in general, will be long-term
if the Unitholder has held his Units for more than one year. Unitholders
should consult their tax advisers regarding the recognition of gains and
losses for federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"are
allowable only to the extent that they exceed two percent of an individual
taxpayer's adjusted gross income. Miscellaneous itemized deductions subject to
this limitation under present law include a Unitholder's pro rata share of
expenses paid by the Trust, including fees of the Trustee and the Sponsor.
Dividends Received Deduction. To the extent dividends received by the Trust
are attributable to foreign corporations, a corporation that owns Units will
not be entitled to the dividends received deduction with respect to its pro
rata portion of such dividends, since the dividends received deduction is
generally available only with respect to dividends paid by domestic
corporations.
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. For taxpayers other than corporations, net
capital gains are subject to a maximum marginal stated tax rate of 28%.
However, it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993"(the "Tax Act")
raised tax rates on ordinary income while capital gains remain subject to a
28% maximum stated rate for taxpayers other than corporations. Because some or
all capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are "
conversion transactions"effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. To the extent they are not
treated as United States source income, distributions by the Trust will
generally not 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. However, distributions, by the Trust that
are treated as United States source income, if any, would generally be subject
to such taxation and withholding. Investors should consult their tax advisers.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
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 Tanner Propp & Farber, special counsel to the Fund 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.
Switzerland Taxation
The following discussion assumes that Unitholders are individual residents of
the United States who are not citizens of Switzerland, or corporations or
other entities created or organized under the law of the United States or of
any state or territory of the United States, who do not carry on a trade or
business in Switzerland through a "permanent establishment"in
Switzerland, and are therefore eligible for benefits pursuant to the Income
Tax Treaty between the United States and Switzerland (the "Treaty").
Pursuant to the Treaty, neither the Trust nor the Unitholders will be regarded
as having a permanent establishment in Switzerland if, as provided under the
terms of the Trust Agreement, the Trust carries on its securities transactions
in Switzerland through a broker or general commission agent or any other agent
of independent status where such person is acting in the ordinary course of
its business and accordingly, pursuant to the Treaty, neither the Trust nor
the Unitholders, solely as a result of their investment in Units of the Trust,
will be subject to Swiss income taxation, except with respect to Swiss income
taxes imposed on dividends. Dividends paid to the Trust by a company resident
in Switzerland are subject to Swiss withholding tax at a rate of 35 percent.
Pursuant to the Treaty, Unitholders may obtain a partial refund of Swiss
withholding tax upon proper filing of a refund request with the Federal Tax
Administration of Switzerland which will result in a net Swiss withholding tax
of 15 percent on dividends. Unitholders should consult their tax advisers with
respect to matters of Swiss taxation and the application of the Treaty.
The tax discussion set forth above is a summary included for general
informational purposes only. In view of the individual nature of tax
consequences, each Unitholder is advised to consult his own tax adviser with
respect to the specific tax consequences of being a Unitholder of the Trust
and the exercise or expiration of the rights, including the effect and
applicability of state, local, foreign, and other tax laws and the possible
effects of changes in federal or other tax laws.
TRUST OPERATING EXPENSES
Initial Costs. All costs and expenses incurred in creating and establishing
the Trust, including the cost of the initial preparation, printing and
execution of the Trust Agreement and the certificates, legal and accounting
expenses, advertising and selling expenses, expenses of the Trustee, initial
fees of an evaluator and other out-of-pocket expenses have been borne by the
Sponsor at no cost to the Fund.
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is a wholly owned subsidiary
of the Sponsor, will receive an annual supervisory fee, payable in monthly
installments, which is not to exceed the amount set forth under "Summary
of Essential Financial Information", for providing portfolio supervisory
services for the Trust. Such fee (which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which case the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) may exceed the actual costs of providing such supervisory
services for this Trust, but at no time will the total amount received for
portfolio supervisory services rendered to series of Van Kampen American
Capital Equity Opportunity Trust 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. Pursuant to a contract
with the Supervisor, Global Assets Advisors, Inc., a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities, provides, for both the initial offering period and
secondary market transactions, portfolio supervisory services for the Trust
and receives for such services the entire supervisory fee paid to the
Supervisor. 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 Trust the annual
per Unit evaluation fee, payable in monthly installments, set forth under "
Summary of Essential Financial Information"(which is based on the number
of Units of the Trust outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of Units of the Trust outstanding at
the end of the month of such calculation) for regularly evaluating the Trust
portfolio. Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter"in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor and the Managing
Underwriter will receive sales commissions and the Managing Underwriter 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
Managing Underwriter Compensation".
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information"(which is based on the number of Units of the Trust
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which case the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) and the additional amounts set forth in footnote (7) in the "
Summary of Essential Financial Information."The Trustee's fees are
payable in monthly installments on or before the fifteenth day of each month
from the Income Account of the Trust to the extent funds are available and
then from the Capital Account of the Trust. The Trustee benefits to the extent
there are funds for future distributions, payment of expenses and redemptions
in the Capital and Income Accounts since these Accounts are non-interest
bearing and the amounts earned by the Trustee are retained by the Trustee.
Part of the Trustee's compensation for its services to the Trust is expected
to result from the use of these funds. Such fees may be increased without
approval of the Unitholders by amounts not exceeding proportionate increases
under the category "All Services Less Rent of Shelter"in the Consumer
Price Index published by the United States Department of Labor or, if such
category is no longer published, in a comparable category. For a discussion of
the services rendered by the Trustee pursuant to its obligations under the
Trust Agreement, see "Rights of Unitholders--Reports Provided"and
"Trust Administration."
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of such
Trust, (b) fees of the Trustee for extraordinary services, (c) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect 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) foreign custodial and transaction
fees and (h) expenditures incurred in contacting Unitholders upon termination
of the Trust. The fees and expenses set forth herein are payable out of the
Trust. When such fees and expenses are paid by or owing to the Trustee, they
are secured by a lien on the Trust's portfolio. Since the Equity Securities
are all common stocks, and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of the Trust. If the balances in the
Income and Capital Accounts are insufficient to provide for amounts payable by
the Trust, the Trustee has the power to sell Equity Securities to pay such
amounts. These sales may result in capital gains or losses to Unitholders. See
"Taxation."
PUBLIC OFFERING
General. Units are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Equity Securities and includes a sales
charge of 5.5% of the Public Offering Price--which charge is equivalent to
5.820% of the aggregate underlying value of the Securities). Such underlying
value shall include the proportionate share of any undistributed cash held in
the Capital and Income Accounts of the Trust. Such underlying value is based
on the aggregate value of the Securities computed on the basis of the offering
side value of the currency exchange rate for the Swiss franc expressed in U.S.
dollars as of the Evaluation Time during the initial offering period and on
the bid side value for secondary market transactions and in each case includes
the estimated costs of acquiring or liquidating the Securities, as the case
may be. The sales charge applicable to quantity purchases is, during the
initial offering period, reduced on a graduated basis to any person acquiring
10,000 or more Units as follows:
<TABLE>
<CAPTION>
Sales Charge
Aggregate Number of Units Purchased Reduction Per Unit
<S> <C>
10,000-24,999.......................... 0.60%
25,000-49,999.......................... 0.90
50,000-99,999.......................... 1.30
100,000 or more........................ 2.10
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent. Registered representatives of
the Managing Underwriter may purchase Units of the Trust at the current Public
Offering Price less the underwriting commission during the initial offering
period, and less the dealer's concession for secondary market transactions.
Registered representatives of selling brokers, dealers, or agents may purchase
Units of the Trust at the current Public Offering Price less the dealer's
concession during the initial offering period and for secondary market
transactions.
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. The Public Offering Price per Unit is based on the aggregate value of
the Securities computed on the basis of the offering side or bid side value of
the currency exchange rate for the Swiss franc expressed in U.S. dollars
during the initial offering period or secondary market, respectively, and
includes the estimated costs of acquiring or liquidating the Securities.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities in the Trust
an amount equal to 5.820% of such value and dividing the sum so obtained by
the number of Units in the Trust outstanding. Such underlying value shall
include the proportionate share of any cash held in the Income and Capital
Accounts in the Trust. This computation produced a gross underwriting profit
equal to 5.5% of the Public Offering Price. Such price determination as of the
close of the relevant stock market on the date set forth under "Summary of
Essential Financial Information"was made on the basis of an evaluation of
the Securities in the Trust prepared by Interactive Data Services, Inc., a
firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities. Thereafter, the Evaluator on each business day will
appraise or cause to be appraised the value of the underlying Securities in
the Trust 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 Managing Underwriter for purchases,
sales or redemptions after that time, or on a day which is not a business day
for the Trust, will be held until the next determination of price. The term
"business day", as used herein and under "Rights of
Unitholders--Redemption of Units", shall exclude Saturdays, Sundays and
the following holidays as observed by the New York Stock Exchange, Inc.: New
Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas Day. In addition "business
day"shall exclude the following Swiss holidays: Easter Monday, Ascension
Day, Whit Monday and Boxing Day.
The value of the Equity Securities during the initial offering period is
determined on each business day by the Evaluator in the following manner: if
the Equity Securities are listed on a national securities exchange, this
evaluation is generally based on the closing sale prices on that exchange
(unless it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market 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. The value of the Equity Securities during the initial offering
period is based on the aggregate value of the Securities computed on the basis
of the offering side value of the currency exchange rate expressed in U.S.
dollars as of the Evaluation Time and includes the costs of acquiring the
Securities.
In offering the Units to the public, neither the Sponsor, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
Securities in the Trust but rather the entire pool of Securities, taken as a
whole, which are represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Managing Underwriter, 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.
It is the intention of the Sponsor to qualify Units of the Trust for sale in a
number of states. Sales initially will be made to any broker, dealer or bank
at prices which represent a concession or agency commission in connection with
the distribution of Units during the initial offering period of 3.6% of the
Public Offering Price. Volume concessions or agency commissions of an
additional 0.40% of the Public Offering Price will be given to any broker,
dealer or bank who purchases from the Managing Underwriter at least $100,000
on the Initial Date of Deposit. For secondary market transactions, such
concession or agency commission will amount to 3.6% of the Public Offering
Price (or 65% of the then current maximum sales charge after May 23, 1996).
However, resale of Units of the Trust by such Managing Underwriter, dealers
and others to the public will be made at the Public Offering Price described
in the prospectus. Effective on each May 23, commencing May 23, 1996, the
sales charge will be reduced by .5 of 1% to a minimum of 3.5%.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 500 Units (100 Units for a
tax-sheltered retirement plan). The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive the gross sales commission equal to 5.5% of the Public Offering Price
of the Units, less any reduced sales charge for quantity purchases as
described under "General"above. Any such quantity discount provided
to investors will be borne by the selling dealer or agent. The Sponsor will
receive from the Managing Underwriter the excess of such gross sales
commission over the Managing Underwriter's discount. The Managing Underwriter
will be allowed a discount in connection with the distribution of Units of (a)
4.3% per Unit for sales up to $10,000,000 and (b) 4.5% per Unit for sales in
excess of $10,000,000. Any quantity discount provided to investors will be
borne by the selling Managing Underwriter, dealer or agent as indicated under
"General"above.
In addition, the Managing Underwriter will realize a profit or will sustain a
loss, as the case may be, as a result of the difference between the price paid
for the Securities by the Managing Underwriter and the cost of such Securities
to the Trust on the Initial Date of Deposit as well as on subsequent deposits.
See "Portfolio."The Sponsor has not participated as sole underwriter
or as manager or as a member of the underwriting syndicates or as an agent in
a private placement for any of the Securities in the Trust portfolio. The
Managing Underwriter may further realize additional profit or loss during the
initial offering period as a result of the possible fluctuations in the market
value of the Securities in the Trust after a date of deposit, since all
proceeds received from purchasers of Units (excluding dealer concessions and
agency commissions allowed, if any) will be retained by the Managing
Underwriter.
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 or
Managing Underwriter prior to the date of settlement for the purchase of Units
may be used in the Sponsor's or the Managing Underwriter's business and may be
deemed to be a benefit to the Sponsor or Managing Underwriter, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market"below, the Managing Underwriter
currently intends to maintain a secondary market for Units of the Trust. In so
maintaining a market, the Managing Underwriter will also realize profits or
sustain losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge). In addition, the Managing Underwriter
or 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 Managing Underwriter
currently intends to maintain a market for the Units offered hereby and offer
continuously to purchase Units at prices, subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in the Trust
(computed as indicated under "Offering Price"above and "Rights of
Unitholders--Redemption of Units"). The aggregate underlying value of the
Equity Securities is computed on the basis of the bid side value of the
currency exchange rate for the Swiss franc (offer side during the initial
offering period) expressed in U.S. dollars. If the supply of Units exceeds
demand or if some other business reason warrants it, the Managing Underwriter
may either discontinue all purchases of Units or discontinue purchases of
Units at such prices. In the event that a market is not maintained for the
Units and the Unitholder cannot find another purchaser, a Unitholder desiring
to dispose of his Units will be able to dispose of such Units by tendering
them to the Trustee for redemption at the Redemption Price. See "Rights of
Unitholders--Redemption of Units."A Unitholder who wishes to dispose of
his Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee
Pension Plans for employees, qualified plans for self-employed individuals,
and qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is 100 Units.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by book entry unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be evidenced by certificates. Units are
transferable by making a written request to the Trustee and, in the case of
Units evidenced by a certificate, by presentation and surrender of such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign such written
request, and such certificate or transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate
representing the Units to be transferred with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP") or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account of the Trust. Other receipts (e.g., capital gains, proceeds
from the sale of Securities, etc.) are credited to the Capital Account of the
Trust. Dividends to be credited to such accounts are first converted into U.S.
dollars at the applicable exchange rate for the Swiss franc.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information."Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units
or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account of the Trust and not distributed until the next
distribution date applicable to the 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 after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the fifteenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account of the Trust amounts necessary to pay the expenses of the Trust (as
determined on the basis set forth under "Trust Operating Expenses").
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any governmental charges payable
out of the Trust. Amounts so withdrawn shall not be considered a part of the
Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Income and Capital Accounts of the Trust such amounts as may
be necessary to cover redemptions of Units.
Reports Provided. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of income and the
amount of other receipts (received since the preceding distribution), if any,
being distributed, expressed in each case as a dollar amount representing the
pro rata share of each Unit of the Trust outstanding. Within a reasonable
period of time after the end of each calendar year, the Trustee shall furnish
to each person who at any time during the calendar year was a registered
Unitholder of the Trust a statement (i) as to the Income Account: income
received, deductions for applicable taxes and for fees and expenses of the
Trust, for redemptions of Units, if any, and the balance remaining after such
distributions and deductions, expressed in each case both as a total dollar
amount and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (ii) as to the
Capital Account: the dates of disposition of any 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 such Trust and the number of Units of the Trust outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit of the
Trust based upon the last computation thereof made during such calendar year;
and (v) amounts actually distributed during such calendar year from the Income
and Capital Accounts of the Trust, separately stated, expressed as total
dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in 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 corporate trust office at 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
seventh calendar day following such tender, or if the seventh calendar day is
not a business day, on the first business day prior thereto, the Unitholder
will be entitled to receive in cash an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units and converted into U.S. dollars as of the Evaluation Time set
forth under "Summary of Essential Financial Information". The "
date of tender"is deemed to be the date on which Units are received by
the Trustee, except that with respect to Units received after the applicable
Evaluation Time the date of tender is 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. Swiss stock exchanges are open for trading on
certain days which are U.S. holidays on which the Trust will not transact
business. The Securities will continue to trade on those days and thus the
value of the Trust may be significantly affected on days when a Unitholder
cannot sell or redeem his Units.
The Trustee is empowered to sell Securities of the Trust in order to make
funds available for redemption if funds are not otherwise available in the
Capital and Income Accounts of the Trust to meet redemptions. The Securities
to be sold will be selected by the Trustee from those designated on a current
list provided by the Supervisor for this purpose. Units so redeemed shall be
cancelled.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust (net of applicable commissions and stamp
taxes). On the Initial Date of Deposit, the Public Offering Price per Unit
(which includes the sales charge) exceeded the values at which Units could
have been redeemed by the amounts shown under "Summary of Essential
Financial Information."The Redemption Price per Unit is the pro rata
share of each Unit in the Trust determined on the basis of (i) the cash on
hand in the Trust, (ii) the value of the Securities in the Trust and (iii)
dividends receivable on the Equity Securities of the Trust trading ex-dividend
as of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued expenses of
the Trust. The Evaluator may determine the value of the Equity Securities in
the Trust in the following manner: if the Equity Securities are listed on a
national securities exchange, this evaluation is generally based on the
closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange, at the closing bid prices. If the Equity
Securities are not so listed or, if so listed and the principal market
therefore is other than on the exchange, the evaluation shall generally be
based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities of such Trust on the bid side of the market or (c) by
any combination of the above. The value of the Equity Securities in the
secondary market is based on the aggregate value of the Securities computed on
the basis of the bid side value of the currency exchange rate for the Swiss
franc expressed in U.S. dollars as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase such Units by notifying the Trustee
before the close of business on the next succeeding business day and by making
payment therefor to the Unitholder not later than the day on which the Units
would otherwise have been redeemed by the Trustee. Units held by the Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter will be
in accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit resulting from the
resale of such Units will belong to the Managing Underwriter which likewise
will bear any loss resulting from a lower offering or redemption price
subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. While the Trust will not be managed, the Trust Agreement,
however, does provide that the Sponsor may (but need not) direct the Trustee
to dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor the retention of such Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Proceeds from the sale of Securities
(or any securities or other property received by the Trust in exchange for
Equity Securities) are credited to the Capital Account for distribution to
Unitholders or to meet redemptions. Except as stated under "Trust
Portfolio"for failed securities and as provided in this paragraph, the
acquisition by the Trust of any securities other than the Securities is
prohibited.
As indicated under "Rights of Unitholders--Redemption of Units"above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in the
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units of the Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in the Trust of any Unitholder without the consent of such Unitholder
or reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of the Trust then outstanding. The Trust will be
liquidated by the Trustee in the event that a sufficient number of Units of
the Trust not yet sold are tendered for redemption by the Managing Underwriter
or the Sponsor so that the net worth of the Trust would be reduced to less
than 40% of the value of the Securities at the time they were deposited in the
Trust. If the Trust is liquidated because of the redemption of unsold Units by
the Sponsor and/or the Managing Underwriter, the Sponsor will refund to
each purchaser of Units the entire sales charge paid by such purchaser. The
Trust Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. At least 30 days before the Mandatory Termination Date the Trustee
will provide written notice of any termination to all Unitholders of the
Trust. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. The Trustee will deduct from the funds of the Trust any
accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of
liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of Securities in
the Trust upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. The Trustee will then
distribute to each Unitholder of the Trust his pro rata share of the balance
of the Income and Capital Accounts of the Trust.
Within 60 days after the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and
duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement. The Trustee shall not be liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or
upon the interest thereon or upon it as Trustee under the Trust Agreement or
upon or in respect of the Trust which the Trustee may be required to pay under
any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Managing Underwriter and Sub-Supervisor. International Assets Advisory
Corporation ("IAAC"), the Managing Underwriter for the Trust, is a
full-service securities brokerage firm specializing in global investing. IAAC
was formed as a Florida corporation in 1981 and registered as a broker/dealer
in 1982. The firm has focused on the sale of global debt and equity securities
to its clients. IAAC has developed an experienced team specializing in the
selection, research, trading, currency exchange and execution of individual
equity and fixed-income products on a global basis. Members of this team are
also affiliated with Global Assets Advisors, Inc. and have many years of
experience in the global marketplace. Global Assets Advisors, Inc., is the
Sub-Supervisor and provides research and portfolio supervisory services for
the Trust pursuant to a contract with the Supervisor. Global Assets Advisors
is a wholly-owned subsidiary of International Assets Holding Corporation and a
related corporation of IAAC. The principal offices of IAAC and Global Assets
Advisors are located at 250 Park Avenue South, Suite 200, Winter Park, Florida
32789. The telephone number is (800) 432-0000.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. Van Kampen American Capital Distributors,
Inc. management owns a significant minority equity position. Effective
December 20, 1994, the parent of Van Kampen Merritt Inc. acquired American
Capital Management & Research, Inc. As a result, Van Kampen Merritt Inc., has
changed its name to Van Kampen American Capital Distributors, Inc. Van Kampen
American Capital Distributors, Inc. specializes in the underwriting and
distribution of unit investment trusts and mutual funds. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas, 77056, (713) 993-0500. It maintains a
branch office in Philadelphia and has regional representatives in Atlanta,
Dallas, Los Angeles, New York, San Francisco, Seattle and Tampa. As of
December 31, 1994 the total stockholders' equity of Van Kampen Merritt Inc.
was $117,357,000 (audited). (This paragraph relates only to the Sponsor and
not to the Trust or to the Managing Underwriter. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286 (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided").
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Tanner Propp & Farber has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 12 (Swiss Blue Chip Strategic Trust, Series 1):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 12
(Swiss Blue Chip Strategic Trust, Series 1) as of May 16, 1995. The statement
of condition and portfolio are the responsibility of the Sponsor. Our
responsibility is to express an opinion on such financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of an irrevocable letter of credit deposited
to purchase securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 12 (Swiss Blue Chip Strategic Trust, Series
1) as of May 16, 1995, in conformity with generally accepted accounting
principles.
Chicago, Illinois
May 16, 1995 GRANT THORNTON LLP
<TABLE>
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
STATEMENT OF CONDITION
As of May 16, 1995
<CAPTION>
INVESTMENT IN SECURITIES
<S> <C>
Contracts to purchase Securities <F1>................. $ 943,392
Total................................................. $ 943,392
INTEREST OF UNITHOLDERS
Interest of Unitholders--
Units of fractional undivided interest outstanding:...
Cost to investors <F2>................................ $ 998,000
Less: Gross underwriting commission <F2>.............. $ 54,608
Net interest to Unitholders <F2>...................... $ 943,392
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio"herein
and their cost to the Trust are the same. The value of the Securities is
determined by Interactive Data Services, Inc. on the bases set forth under
"Public Offering--Offering Price."The contracts to purchase
Securities are collateralized by an irrevocable letter of credit of $943,392
which has been deposited with the Trustee.
<F2>The aggregate public offering price and the aggregate sales charge of 5.5% are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Managing Underwriter Compensation"
and assume all single transactions involve less than 10,000 Units. For single
transactions involving 10,000 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.
</TABLE>
<TABLE>
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 12)
as of the Initial Date of Deposit: May 16, 1995
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends Securities
of Shares Name of Issuer <F1> per Share <F2> per Share <F2> to Trust <F2>
<S> <C> <C> <C> <C>
110 BBC Brown Boveri AG $ 991.743 $ 16.60 $109,091.74
150 Ciba-Geigy AG 694.479 14.11 104,171.62
400 CS Holdings 87.851 2.99 35,140.17
500 Holderbank 171.527 2.49 85,763.64
120 Nestle SA 982.575 20.76 117,908.68
14 Roche Holdings AG 5,912.221 39.85 82,771.13
120 Sandoz AG 647.844 9.96 77,741.12
200 Swiss Bank Corporation 168.200 6.64 33,640.00
120 Swiss Reinsurance 696.975 8.72 83,637.07
40 Union Bank of Switzerland 946.794 26.57 37,871.79
150 Winterthur 580.383 13.28 87,057.26
80 Zurich Insurance 1,107.476 16.60 88,598.11
2,004 $943,392.34
</TABLE>
NOTES TO PORTFOLIO
(1) All of the Securities are represented by "regular way"contracts for
the performance of which an irrevocable letter of credit has been deposited
with the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to
the Trustee all of its right, title and interest in and to such Securities.
Contracts to acquire Securities were entered into on May 15, 1995 and are
expected to settle on May 22, 1995. (see "The Trust").
(2) The market value of each of the Equity Securities is based on the closing
sale price of each Security on the applicable exchange (converted into U.S.
dollars at the offer side of the exchange rate for the Swiss franc at the
Evaluation Time and includes the commissions and stamp taxes associated with
acquiring the Securities) on the Initial Date of Deposit. Estimated annual
dividends are based on the most recently paid dividends taking into
consideration Swiss withholding tax (converted into U.S. dollars at the offer
side of the exchange rate for the Swiss franc at the Evaluation Time). Other
information regarding the Securities in the Trust, as of the Initial Date of
Deposit (converted into U.S. dollars at the offer side of the exchange rate
for the Swiss franc at the Evaluation Time), is as follows:
<TABLE>
<CAPTION>
Cost To Profit (Loss) Aggregate
Managing To Managing Estimated Annual
Underwriter Underwriter Dividends
<S> <C> <C>
$ 936,794 $ 6,598 $ 11,301
</TABLE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial
Information 3
The Trust 5
Objective and Securities Selection 5
Trust Portfolio 7
Risk Factors 9
Taxation 14
Trust Operating Expenses 16
Public Offering 18
Rights of Unitholders 21
Trust Administration 23
Other Matters 26
Report of Independent Certified Public
Accountants 27
Statement of Condition 28
Portfolio 29
Notes to Portfolio 30
</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.
PROSPECTUS
May 16, 1995
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
Van Kampen American Capital
Equity Opportunity Trust,Series 12
International Assets Advisory Corp.
250 Park Avenue South
Suite 200
Winter Park, Florida 32789
Please retain this Prospectus for future reference.
This Amendment of Registration Statement comprises the following
papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of Counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of
securites being registered.
4.1 Consent of Interactive Data Services, Inc.
4.2 Consent of Independent Certified Public Acountants.
4.3 Financial Data Schedule.
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
12 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 16th day of May, 1995.
Van Kampen American Capital Equity
Opportunity Trust, Series 12
By Van Kampen American Capital
Distributors, Inc.
By Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on May 16, 1995.
Signature Title
Don G. Powell Chairman and Chief Executive )
Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
Sandra A. Waterworth
(Attorney-in-fact*)
*An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and with the Registration Statement on Form S-6 of Insured Municipals
Income Trust, 170th Insured Multi-Series (File No. 33-55891) and the same
are hereby incorporated herein by this reference.
Exhibit 1.1
Van Kampen American Capital Equity Opportunity Trust
Series 12
Trust Agreement
Dated: May 16, 1995
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.
3. Section 1.01(1) shall be amended to read as follows:
"(1) "Depositor" shall mean Van Kampen American Capital
Distributors, Inc. and its successors in interest, or any
successor depositor appointed as hereinafter provided."
4. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean American Portfolio
Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp. and its successors in
interest, or any successor evaluator appointed as
hereinafter provided."
5. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Van Kampen
American Capital Investment Advisory Corp. and its
successors in interest, or any successor portfolio
supervisor appointed as hereinafter provided."
6. Section 1.01(19) will be inapplicable for this Trust.
7. The Initial Date of Deposit for the Trust is May 16, 1995.
8. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligations requires settlement in a
foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the Trustee
either an amount of such currency sufficient to settle the
contract or a foreign exchange contract in such amount which
settles concurrently with the settlement of the Contract
Obligation and cash or a Letter of Credit in U.S. dollars
sufficient to perform such foreign exchange contract."
9. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Swiss Blue Chip Strategic
Trust, Series 1" will replace "Select Equity Trust."
10. 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."
11. Article III, Section 3.13 of the Standard Terms and
Conditions of Trust is hereby amended by deleting the reference to
"$0.25 per 100 Units" in the first sentence of such Section and
replacing such reference with "$.007 per Unit."
12. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.15.:
"Section 3.15. Foreign Exchange Transactions; Reclaiming
Foreign Taxes. The Trustee shall use reasonable efforts to
reclaim or recoup any amounts of non-U.S. tax paid by the Trust
or withheld from income received by the Trust to which the
Trust may be entitled as a refund."
13. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.16.:
"Section 3.16. Foreign Exchange Transactions; Foreign
Currency Exchange. Unless the Depositor shall otherwise
direct, whenever funds are received by the Trustee in foreign
currency, upon the receipt thereof or, if such funds are to be
received in respect of a sale of Securities, concurrently with
the contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Depositor shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars. The
Depositor shall have no liability for any loss or depreciation
resulting from such action taken."
14. Article IV, Section 4.01(b) of the Standard Terms and
Conditions of Trust is hereby deleted and replaced in its entirety
with the following:
"(b) During the initial offering period such Evaluation
shall be made in the following manner: if the Securities are
listed on a national or foreign securities exchange or the
NASDAQ National Market System, such Evaluation shall generally
be based on the last available sale price on or immediately
prior to the Evaluation Time on the exchange which is the
principal market therefor, which shall be deemed to be the New
York Stock Exchange if the Securities are listed thereon
(unless the Evaluator deems such price inappropriate as a basis
for evaluation) or, if there is no such available sale price on
such exchange at the mean between the last available bid and
ask prices of the Equity Securities. If the Securities are not
so listed or, if so listed, the principal market therefor is
other than on such exchange or there is no such available sale
price on such exchange, such Evaluation shall generally be
based on the following methods or any combination thereof
whichever the Evaluator deems appropriate: (i) in the case of
Equity Securities, on the basis of the current ask price on the
over-the-counter market (unless the Evaluator deems such price
inappropriate as a basis for evaluation), (ii) on the basis of
current offering prices for the Zero Coupon Obligations as
obtained from investment dealers or brokers who customarily
deal in securities comparable to those held by the Fund, (iii)
if offering prices are not available for the Zero Coupon
Obligations or the Equity Securities, on the basis of offering
or ask price for comparable securities, (iv) by determining the
valuation of the Zero Coupon Obligations or the Equity
Securities on the offering or ask side of the market by
appraisal or (v) by any combination of the above. If the Trust
holds Securities denominated in a currency other than U.S.
dollars, the Evaluation of such Security shall be converted to
U.S. dollars based on current offering side exchange rates
(unless the Evaluator deems such prices inappropriate as a
basis for valuation). The Evaluator shall add to the
Evaluation of each Security the amount of any commissions and
relevant taxes associated with the acquisition of the Security.
As used herein, the closing sale price is deemed to mean the
most recent closing sale price on the relevant securities
exchange immediately prior to the Evaluation time. For each
Evaluation, the Evaluator shall also confirm and furnish to the
Trustee and the Depositor, on the basis of the information
furnished to the Evaluator by the Trustee as to the value of
all Trust assets other than Securities, the calculation of the
Trust Fund Evaluation to be computed pursuant to Section 5.01."
15. Article IV, Section 4.01(c) of the Standard Terms and
Conditions of Trust is hereby deleted and replaced in its entirety
with the following:
"(c) After the initial offering period and both during
and after the initial offering period, for purposes of the
Trust Fund Evaluations required by Section 5.01 in determining
Redemption Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section 4.01(b), on
the basis of current bid prices for the Zero Coupon
Obligations, the bid side value of the relevant currency
exchange rate expressed in U.S. dollars and, except in those
cases in which the Equity Securities are listed on a national
or foreign securities exchange or the NASDAQ National Market
System and the last available sale prices are utilized, on the
basis of the mean between the last available bid and ask prices
of the Equity Securities. In addition, the Evaluator shall (i)
not make the addition specified in the fourth sentence of
Section 4.01(b) and (ii) shall reduce the Evaluation of each
Security by the amount of any liquidation costs (other than
brokerage costs incurred on any national securities exchange)
and any capital gains or other taxes which would be incurred by
the Trust upon the sale of such Security, such taxes being
computed as if the Security were sold on the date of the
Evaluation."
16. Article V, Section 5.01 of the Standard Terms and
Conditions of Trust is hereby amended to add the following at the
conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in foreign currency shall
be converted by the Trustee to U.S. dollars based on current
exchange rates, in the same manner as provided in Section
4.01(b) or 4.01(c), as applicable, for the conversion of the
valuation of foreign Equity Securities, and the Evaluator shall
report such conversion with each Evaluation made pursuant to
Section 4.01."
17. Article VI, Section 6.01(e) of the Standard Terms and
Conditions of Trust is hereby amended to read as follows:
"(e) (I) Subject to the provisions of subparagraphs (II)
and (III) of this paragraph, the Trustee may employ agents, sub-
custodians, attorneys, accountants and auditors and shall not
be answerable for the default or misconduct of any such agents,
sub-custodians, attorneys, accountants or auditors if such
agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee
shall be fully protected in respect of any action under this
Indenture taken or suffered in good faith by the Trustee in
accordance with the opinion of counsel, which may be counsel to
the Depositor acceptable to the Trustee, provided, however,
that this disclaimer of liability shall not (i) excuse the
Trustee from the responsibilities specified in subparagraph II
below or (ii) limit the obligation of the Trustee to indemnify
the Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys, accountants
or auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the
affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of an
eligible foreign custodian (which is employed by the Trustee as
a sub-custodian as contemplated by subparagraph (I) of this
paragraph (e) and which may be an affiliate or subsidiary of
the Trustee or any other entity in which the Trustee may have
an ownership interest) the Trust's foreign securities, cash and
cash equivalents in amounts reasonably necessary to effect the
Trust's foreign securities transactions, provided that:
(1) The Trustee shall have:
(i) determined that maintaining the Trust's assets
in a particular country or countries is consistent with
the best interests of the Trust and the
Certificateholders;
(ii) determined that maintaining the Trust's assets
with such eligible foreign custodian is consistent with
the best interests of the Trust and the
Certificateholders; and
(iii) entered into a written contract which is
consistent with the best interests of the Trust and the
Certificateholders and which will govern the manner in
which such eligible foreign custodian will maintain the
Trust's assets and which provides that:
(A) The Trust will be adequately indemnified
and its assets adequately insured in the event of
loss (without regard to the indemnity provided by the
Trustee under Section III hereof);
(B) The Trust's assets will not be subject to
any right, charge, security interest, lien or claim
of any kind in favor of the eligible foreign
custodian or its creditors except a claim for payment
for their safe custody or administration;
(C) Beneficial ownership of the Trust's assets
will be freely transferable without the payment of
money or value other than for safe custody or
administration;
(D) Adequate records will be maintained
identifying the assets as belonging to the Trust;
(E) The Trust's independent public accountants
will be given access to records identifying assets of
the Trust or confirmation of the contents of those
records; and
(F) The Trustee will receive periodic reports
with respect to safekeeping of the Trust's assets,
including, but not necessarily limited to,
notification of any transfer to or from the Trustee's
account.
(2) The Trustee shall establish a system to monitor such
foreign custody arrangements to ensure compliance with the
conditions of this subparagraph.
(3) The Trustee, at least annually, shall review and
approve the continuing maintenance of Trust assets in a
particular country or countries with a particular eligible
foreign custodian or particular eligible foreign custodians as
consistent with the best interests of the Trust and the
Certificateholders.
(4) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of
a particular eligible foreign custodian pursuant to this
subparagraph, and such records shall be available for
inspection by Certificateholders and the Securities and
Exchange Commission at the Trustee's offices at all reasonable
times during its usual business hours.
(5) Where the Trustee has determined that a foreign
custodian may no longer be considered eligible under this
subparagraph or that, pursuant to clause (3) above, continuance
of the arrangement would not be consistent with the best
interests of the Trust and the Certificateholders, the Trust
must withdraw its assets from the care of that custodian as
soon as reasonably practicable, and in any event within 180
days of the date when the Trustee made the determination.
As used in this subparagraph (II),
(1) "foreign securities" include: securities issued
and sold primarily outside the United States by a foreign
government, a national of any foreign country or a corporation
or other organization incorporated or organized under the laws
of any foreign country and securities issued or guaranteed by
the government of the United States or by any state or any
political subdivision thereof or by any agency thereof or by
any entity organized under the laws of the United States or of
any state thereof which have been issued and sold primarily
outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for the
central handling of securities or equivalent book entries
which, by appropriate exemptive order issued by the Securities
and Exchange Commission, have been qualified as eligible
foreign custodians for the Trust but only for so long as such
exemptive order continues in effect: Morgan Guaranty Trust
Company of New York, Brussels, Belgium, in its capacity as
operator of the Euroclear System ("Euroclear"), and Central de
Livraison de Valeurs Mobilires, S.A. ("CEDEL").
(b) Any other entity that shall have been qualified
as an eligible foreign custodian for the foreign securities of
the Trust by the Securities and Exchange Commission by
exemptive order, rule or other appropriate action, commencing
on such date as it shall have been so qualified but only for so
long as such exemptive order, rule or other appropriate action
continues in effect.
The determinations set forth above to be made by the
Trustee should be made only after consideration of all matters
which the Trustee, in carrying out its fiduciary duties, finds
relevant, including, but not necessarily limited to,
consideration of the following:
1. With respect to the selection of the country
where the Trust's assets will be maintained, the Trustee should
consider:
a. Whether applicable foreign law would restrict
the access afforded the Trust's independent public accountants
to books and records kept by an eligible foreign custodian
located in that country;
b. Whether applicable foreign law would restrict
the Trust's ability to recover its assets in the event of the
bankruptcy of an eligible foreign custodian located in that
country;
c. Whether applicable foreign law would restrict
the Trust's ability to recover assets that are lost while under
the control of an eligible foreign custodian located in that
country;
d. The likelihood of expropriation,
nationalization, freezes, or confiscation of the Trust's
assets; and
e. Whether difficulties in converting the Trust's
cash and cash equivalents to U.S. dollars are reasonably
foreseeable.
2. With respect to the selection of an eligible
foreign custodian, the Trustee should consider:
a. The financial strength of the eligible foreign
custodian, its general reputation and standing in the country
in which it is located, its ability to provide efficiently the
custodial services required and the relative cost for those
services;
b. Whether the eligible foreign custodian would
provide a level of safeguards for maintaining the Trust's
assets not materially different from that provided by the
Trustee in maintaining the Trust's securities in the United
States;
c. Whether the eligible foreign custodian has
branch offices in the United States in order to facilitate the
assertion of jurisdiction over and enforcement of judgments
against such custodian; and
d. In the case of an eligible foreign custodian
that is a foreign securities depository, the number of
participants in, and operating history of, the depository.
3. The Trustee should consider the extent of the
Trust's exposure to loss because of the use of an eligible
foreign custodian. The potential effect of such exposure upon
Certificateholders shall be disclosed, if material, by the
Depositor in the prospectus relating to the Trust.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss that shall occur as
the result of the failure of an eligible foreign custodian
holding the foreign securities of the Trust to exercise
reasonable care with respect to the safekeeping of such foreign
securities to the same extent that the Trustee would be
required to indemnify and hold the Trust harmless if the
Trustee were holding such foreign securities in the
jurisdiction of the United States whose laws govern the
indenture, provided, however, that the Trustee will not be
liable for loss except by reason of the gross negligence, bad
faith or willful misconduct of the Trustee or the eligible
foreign custodian."
18. Notwithstanding anything to the contrary, all references
to In-Kind-Distributions as set forth in Sections 5.02 and 8.02 of
the Standard Terms and Conditions of Trust shall be inapplicable to
the Trust.
19. 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.
In Witness Whereof, Van Kampen American Capital Distributors, Inc.
has caused this Trust Agreement to be executed by one of its Vice
Presidents or Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or one of its Vice
Presidents or Assistant Secretaries, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., and Van Kampen American Capital Investment Advisory Corp., have
each caused this Trust Indenture and Agreement to be executed by their
respective President or one of their respective Vice Presidents and the
corporate seal of each to be hereto affixed and attested to by the
Secretary, Assistant Secretary or one of their respective Vice Presidents
or Assistant Vice Presidents and The Bank of New York, has caused this
Trust Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested to by one of its
Assistant Treasurers all as of the day, month and year first above
written.
Van Kampen American Capital
Distributors, Inc.
By Sandra A. Waterworth
Vice President
Attest:
By Gina M. Scumaci
Assistant Secretary
American Portfolio Evaluation
Services, a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
Van Kampen American Capital
Investment Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
The Bank of New York
By Jeffrey Bieselin
Vice President
Attest
By Norbert Loney
Assistant Treasurer
Schedule A to Trust Agreement
Securities Initially Deposited
in
Van Kampen American Capital Equity Opportunity Trust, Series 12
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 16, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 12
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 12 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated May 16, 1995, 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 documentation evidencing
ownership of the Units in the Trust have been duly authorized;
and
2. The documentation evidencing ownership of the Units
in the Trust, when duly executed and delivered by the Depositor
and the Trustee in accordance with the aforementioned Trust
Agreement, will constitute valid and binding obligations of the
Trust and the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-58477) 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/ch
Exhibit 3.2
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 16, 1995
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 12
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 12 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated May 16, 1995 (the "Indenture") among Van Kampen
American Capital Distributors, Inc., as Depositor, Van Kampen American
Capital Investment Advisory Corp., as Evaluator, Van Kampen American
Capital Investment Advisory Corp., as Supervisory Servicer, and The Bank
of New York, as Trustee. The Fund is comprised of one separate unit
investment trust, Swiss Blue Chip Strategic Trust, Series 1.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent.
The assets of the Trust will consist of a portfolio of equity
securities (the "Equity Securities") as set forth in the Prospectus.
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 Federal income tax law:
(i) The 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 received by the Trust. A Unitholder's pro rata portion of
distributions of cash or property by a corporation with respect
to an Equity Security ("dividends" as defined by Section 316 of
the Code ) are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits."
A Unitholder's pro rata portion of dividends which exceed such
current and accumulated earnings and profits will first reduce
the Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in
such Equity Security, shall be treated as gain from the sale or
exchange of property.
(iii) The price a Unitholder pays for his Units, including
sales charges, is allocated among his pro rata portion of each
Equity Security held by the Trust (in the proportion to the
fair market values thereof on the date the Unitholder purchases
his Units), in order to determine his initial cost for his pro
rata portion of the Equity Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder upon
redemption or sale of his Units. 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 is not taxable as ordinary
income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, redemption, payment on maturity or otherwise)
gain or loss will be recognized to the Unitholder and the
amount thereof will be measured by comparing the Unitholder's
aliquot share of the total proceeds from the transaction with
his basis for his fractional interest in the asset disposed of.
Such basis is ascertained by apportioning the tax basis for his
Units (as of the date on which his Units were acquired) among
each of the Trust assets of such Trust (as of the date on which
his Units were acquired) ratably according to their values as
of the valuation date nearest the date on which he purchased
such Units. A Unitholder's basis in his Units and of his
fractional interest in each Trust asset must be reduced, but
not below zero, by the Unitholder's pro rata portion of
dividends with respect to the Equity Security which is not
taxable as ordinary income.
Section 67 of the Code provides that certain itemized deductions,
such as investment expenses, tax return preparation fees and employee
business expenses will be deductible by individuals only to the extent
they exceed 2% of such individual's adjusted gross income. Temporary
regulations have been issued which require Unitholders to treat certain
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.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including foreign, state or
local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
Very truly yours
Chapman and Cutler
MJK/cjw
Exhibit 3.3
Tanner Propp & Farber
99 Park Avenue
New York, NY 10016
May 16, 1995
Van Kampen American Capital Equity
Opportunity Trust, Series 12
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 12 (the "Fund") consisting of Swiss Blue
Chip Strategic Trust, Series 1 (the "Trust") for purposes of determining
the applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen American
Capital Distributors, Inc. (the "Depositor"), American Portfolio
Evaluation Services, a division of a subsidiary of Depositor, as
Evaluator, Van Kampen American Capital Investment Advisory Corp., as
Supervisory Servicer (the "Supervisory Servicer"), and The Bank of New
York, as trustee (the "Trustee"). As described in the prospectus
relating to the Fund dated today to be filed as an amendment to a
registration statement heretofore filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the
"Prospectus") (File number 33-58477), the objectives of the Fund are to
provide the potential for dividend income and capital appreciation
through investment in a fixed portfolio of common stocks of corporations
the securities of which are traded in the Swiss securities markets. It
is noted that no opinion is expressed herein with regard to the Federal
tax aspects of the securities, the Trust, units of Trust (the "Units"),
or any interest, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trust the securities and/or contracts and cash for
the purchase thereof together with an irrevocable letter of credit in the
amount required for the purchase price of the securities comprising the
corpus of the Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities
to be deposited in the Trust, and, upon the receipt thereof, will deliver
to the Depositor a registered certificate for the number of Units
representing the entire capital of the Trust as more fully set forth in
the Prospectus. The Units, which are represented by certificates
("Certificates"), will be offered to the public upon the effectiveness of
the registration statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash
dividends received by the Fund and with the proceeds from the disposition
of securities held in the Fund and the distribution of such cash
dividends and proceeds to the Unitholders. The Trustee will also
maintain records of the registered holders of Certificates representing
an interest in the Fund and administer the redemption of Units by such
Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option.
Generally, equity securities held in the Trust may be removed
therefrom by the Trustee at the direction of the Depositor upon the
occurrence of certain specified events which adversely affect the sound
investment character of the Fund, such as default by the issuer in
payment of declared dividends or of interest or principal on one or more
of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to
sell equity securities designated by the Supervisory Servicer only for
the purpose of redeeming Units tendered to it and of paying expenses for
which funds are not available. The Trustee does not have the power to
vary the investment of any Unitholder 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 trustee, 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 1-2.3(b)(2) (July 11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 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 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 Unitholders 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 Unitholder 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 Unitholder 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 Unitholder in said proportion pursuant to Subpart E of Part I,
Subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings, and court decisions interpreting the laws of the State and City
of New York:
1. Each Trust will not constitute an association taxable as a
corporation under New York law, and, accordingly, will not be
subject to tax on its income under the New York State franchise tax
or the New York City general corporation tax;
2. The income of the Trust will be treated as the income of
the Unitholders under the income tax laws of the State and City of
New York; and
3. Unitholders 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,
MNS:mw
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
May 15, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital Swiss Blue Chip
Strategic Trust, Series 1
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 33-58477
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 Services, Inc.,
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 May 16, 1995 on the statement of
condition and related securities portfolio of Van Kampen American
Capital Equity Opportunity Trust, Series 12 as of May 16, 1995 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
May 16, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 16, 1995 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> IASW
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAY-16-1995
<PERIOD-END> MAY-16-1995
<INVESTMENTS-AT-COST> 943392
<INVESTMENTS-AT-VALUE> 943392
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 943392
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943392
<SHARES-COMMON-STOCK> 100000
<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> 943392
<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>
