File No. 33-58477
CIK #896973
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 12
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on April 24, 1997 pursuant to paragraph (b) of Rule 485.
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 12
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.Please retain both parts of this Prospectus for future reference.
THE TRUST
The Swiss Blue Chip Strategic Trust, Series 1 (the "Trust" or "
Swiss Equity Trust" ) is one unit investment trust in the Van Kampen
American Capital Equity Opportunity Trust, Series 12 (the "Fund" ). The
Swiss Equity 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 were 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 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.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit is equal to the aggregate underlying value
of the Equity Securities plus or minus cash, if any, in the Capital and Income
Accounts, divided by the number of Units outstanding, plus the applicable
sales charge. See "Summary of Essential Financial Information" .
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.
The Date of this Prospectus is April 16, 1997
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 12
Summary of Essential Financial Information
As of March 5, 1997
Managing Underwriter: International Assets Advisory Corp.
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor (1): Van Kampen American Capital Investment Advisory Corp.
(An affiliate of the Sponsor)
Sub-Supervisor (1): Global Assets Advisors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Swiss
Blue Chip
Strategic
Trust
---------------
<S> <C>
General Information
Number of Units....................................................................................... 1,912,500
Fractional Undivided Interest in the Trust per Unit .................................................. 1/1,912,500
Public Offering Price: ...............................................................................
Aggregate Value of Securities in Portfolio <F2>...................................................... $ 23,595,278
Aggregate Value of Securities per Unit (including accumulated dividends)............................. $ 12.53
Sales Charge 5.0% (5.263% of Aggregate Value of Securities excluding principal cash) per Unit <F4>... $ .66
Public Offering Price per Unit <F3><F4>.............................................................. $ 13.19
Redemption Price per Unit............................................................................. $ 12.53
Secondary Market Repurchase Price per Unit............................................................ $ 12.53
Excess of Public Offering Price per Unit Over Redemption Price per Unit............................... $ .66
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.007 per Unit
Evaluator's Annual Fee ...............Maximum of $.0025 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are made as of close
of the relevant stock market (generally 10:00 A.M. New York time.)
Date of Deposit.......................May 16, 1995
Mandatory Termination Date............May 16, 2001
The Trust may be terminated if the net asset value of such Trust is less than $500,000
unless the net asset value of such Trust deposits has exceeded $15,000,000, then the Trust
Minimum Termination Value.............Agreement may be terminated if the net asset value of such Trust is less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Special Information......................................
Calculation of Estimated Net Annual Dividends per Unit...
Estimated Gross Annual Dividends per Unit............... $ .08013
Less: Estimated Expenses per Unit....................... $ .02255
Estimated Net Annual Dividends per Unit................. $ .05758
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee <F5>...........$.008 per Unit
Income Distribution Record Date.....TENTH day of June and December.
Income Distribution Date............TWENTY-FIFTH day of June and December.
Capital Account Record Date.........TENTH day of December.
Capital Account Distribution Date...TWENTY-FIFTH day of December.
- ----------
<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 bid
side value of the currency exchange rate for the Swiss Franc at the Evaluation
Time.
<F3>Anyone ordering Units will have added to the Public Offering Price a pro rata
share of any cash in the Income and Capital Accounts.
<F4>Effective on each May 23, commencing May 23, 1996, the secondary sales charge
will decrease by .5 of 1% to a minimum sales charge of 3.5%. See "Public
Offering-Offering Price" in Part Two.
<F5>In addition, the Trustee will receive additional annual compensation, payable
in monthly installments of $0.30 per $1,000 of market value of Equity
Securities held in a sub-custodian account at month end.
</TABLE>
PORTFOLIO
The Swiss Blue Chip Strategic Trust consists of 11 different issues of Equity
Securities, which are primarily actively traded, common stocks of companies
located in Switzerland which were listed on the Zurich, Basel or Geneva stock
exchanges as of the Initial Date of Deposit.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1995<F1> 1996
------------- -------------
<S> <C> <C>
Net asset value per Unit at beginning of period........................................................ $ 9.43 $ 11.83
============= =============
Net asset value per Unit at end of period.............................................................. $ 11.83 $ 12.05
============= =============
Distributions to Unitholders of investment income including accumulated dividends, paid on Units
redeemed (average Units outstanding for entire period)................................................. $ 0.04 $ 0.12
============= =============
Distributions to Unitholders from Equity Security redemption proceeds (average Units outstanding for
entire period)......................................................................................... $ 0.02 $ 0.01
============= =============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).... $ 1.79 $ 0.14
============= =============
Units outstanding at end of period..................................................................... 2,000,000 1,945,000
</TABLE>
- ----------
For the period from May 16, 1995 (date of deposit) through December 31, 1995.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Swiss Blue Chip Strategic Trust, Series 1 (Van Kampen
American Capital Equity Opportunity Trust, Series 12):
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of the Swiss Blue Chip
Strategic Trust, Series 1 (Van Kampen American Capital Equity Opportunity
Trust, Series 12) as of December 31,1996 and the related statements of
operations and changes in net assets for the period from May 16, 1995 (date of
deposit) through December 31, 1995 and the year ended December 31, 1996. These
statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31,1996 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Swiss Blue Chip Strategic
Trust, Series 1 (Van Kampen American Capital Equity Opportunity Trust, Series
12) as of December 31, 1996, and the results of operations and changes in net
assets for the period from May 16, 1995 (date of deposit) through December 31,
1995 and the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 14, 1997
<TABLE>
SWISS BLUE CHIP STRATEGIC TRUST
SERIES 1
Statements of Condition
December 31, 1996
<CAPTION>
Swiss
Blue Chip
Strategic
Trust
<S> <C>
Trust property
Cash.................................................................................... $ 6,525
Securities at market value, (cost $19,577,098) (note 1)................................. 23,422,685
Accumulated dividends................................................................... --
$ 23,429,210
==============
Liabilities and interest to Unitholders
Interest to Unitholders................................................................. $ 23,429,210
$ 23,429,210
==============
Analyses of Net Assets
Interest of Unitholders (1,945,000 Units of fractional undivided interest outstanding)
Cost to original investors of 2,000,000 Units (note 1).................................. $ 21,229,516
Less initial underwriting commission (note 3)........................................... 1,160,017
--------------
20,069,499
Less redemption of 55,000 Units......................................................... 675,600
--------------
19,393,899
Undistributed net investment income
Net investment income................................................................... 339,149
Less distributions to Unitholders....................................................... 296,348
--------------
42,801
Realized gain (loss) on Security sale or redemption..................................... 192,373
Unrealized appreciation (depreciation) of Securities (note 2)........................... 3,845,587
Distributions to Unitholders of Security sale or redemption proceeds.................... (45,450)
Net asset value to Unitholders.......................................................... $ 23,429,210
==============
Net asset value per Unit (1,945,000 Units outstanding)................................... $ 12.05
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
Statements of Operations
Period from May 16, 1995 (date of deposit) through December 31, 1995
and the year ended December 31, 1996
<CAPTION>
1995 1996
------------- -----------
<S> <C> <C>
Investment income
Dividend income..................................................... $ 119,969 $ 274,937
Expenses.............................................................
Trustee fees and expenses........................................... 8,014 20,776
Evaluator fees...................................................... 1,922 5,175
Supervisory fees.................................................... 5,424 14,445
------------- -----------
Total expenses...................................................... 15,360 40,397
------------- -----------
Net investment income............................................... 104,609 234,540
Realized gain (loss) from Securities sale or redemption
Proceeds............................................................ -- 684,774
Cost................................................................ -- 492,401
------------- -----------
Realized gain (loss)................................................ -- 192,373
Net change in unrealized appreciation (depreciation) of Securities... 3,571,095 274,492
------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......$ 3,675,704 $ 701,405
============= ===========
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Period from May 16, 1995 (date of deposit) through December 31, 1995
and the year ended December 31, 1996
<CAPTION>
1995 1996
-------------- --------------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income............................................................................... $ 104,609 $ 234,540
Realized gain (loss) on Securities sale or redemption............................................... -- 192,373
Net change in unrealized appreciation (depreciation) of Securities.................................. 3,571,095 274,492
-------------- --------------
Net increase (decrease) in net assets resulting from operations..................................... 3,675,704 701,405
Distributions to Unitholders from:
Net investment income............................................................................... (65,836) (230,512)
Securities sale or redemption proceeds.............................................................. (25,600) (19,850)
Redemption of Units.................................................................................. -- (675,600)
-------------- --------------
Total increase (decrease)........................................................................... 3,584,268 (224,557)
Net asset value to Unitholders
Beginning of period................................................................................. 943,392 23,653,767
Additional Securities purchased from proceeds of Unit Sales......................................... 19,126,107 --
-------------- --------------
End of period (including undistributed net investment income of $38,773 and $42,801, respectively).. $ 23,653,767 $ 23,429,210
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
PORTFOLIO as of December 31,
1996
<CAPTION>
Valuation of Securities
Number at December 31,
of Market Value Per 1996
Shares Name of Issuer Share (Note 1)
- ---------- ---------------------------- --------------------- ----------------------------
<S> <C> <C> <C>
2,150 BBC Brown Boveri AG $ 1,240.686 $ 2,667,474
- ------------------------------------------------------------------------------------------
7,800 CS Holdings 102.459 799,180
- ------------------------------------------------------------------------------------------
9,800 Holderbank 143.815 1,409,389
- ------------------------------------------------------------------------------------------
2,350 Nestle SA 1,070.790 2,516,356
- ------------------------------------------------------------------------------------------
5,486 Novartis AG 1,142.325 6,266,795
- ------------------------------------------------------------------------------------------
276 Roche Holdings AG 7,760.805 2,141,982
- ------------------------------------------------------------------------------------------
3,950 Swiss Bank Corporation 189.642 749,087
- ------------------------------------------------------------------------------------------
2,170 Swiss Reinsurance 1,064.829 2,310,678
- ------------------------------------------------------------------------------------------
780 Union Bank of Switzerland 874.069 681,774
- ------------------------------------------------------------------------------------------
2,940 Winterthur 576.751 1,695,648
- ------------------------------------------------------------------------------------------
7,880 Zurich Insurance 277.198 2,184,322
45,582 $ 23,422,685
========== ===========================
</TABLE>
The accompanying notes are an integral part of these statements.
SWISS BLUE CHIP STRATEGIC TRUST SERIES 1
Notes to Financial Statements
December 31, 1995 and 1996
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed are valued at the last closing sales
price of the relevent stock exchanges.
Security Cost - The original cost to the Trust of the Securities was based on
the closing sale prices of the relevent stock exchanges. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income Taxes.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Swiss
Blue Chip
Strategic
Trust
--------------
<S> <C>
Unrealized Appreciation $ 4,255,692
Unrealized Depreciation (410,105)
--------------
$ 3,845,587
==============
</TABLE>
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Managing
Underwriter intends to maintain a market for Units and to continuously offer
to purchase Units at prices, subject to change at any time, based upon the
value of the Securities in the portfolio of the Trust valued as described in
Note 1, plus accumulated dividends to the date of settlement. If the supply of
Units exceeds demand, or for other business reasons, the Managing Underwriter
may discontinue purchases of Units at such prices. In the event that a market
is not maintained for the Units, a Unitholder desiring to dispose of his Units
may be able to do so only by tendering such Units to the Trustee for
redemption at the redemption price.
Cost to Investors - The cost to original investors was based on the underlying
value of the Securities per Unit on the date of an investor's purchase, plus a
sales charge of 5.5% of the public offering price which is equivalent to
5.820% of the aggregate offering price of the Securities. The secondary market
cost to investors is based on the determination of the underlying value of the
Securities per Unit on the date of an investor's purchase plus a sales charge
of 5.5% of the public offering price which is 5.820% of the underlying value
of the Securities. Effective on each May 23, commencing May 23, 1996, the
secondary sales charge will decrease by .5 of 1% to a minimum sales charge of
3.5%.
Compensation of Evaluator and Supervisor - the Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.007 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period ended December 31, 1995 and the year ended December 31,
1996, 0 Units and 55,000 Units, respectively, were presented for redemption.
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
Prospectus Part Two
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 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 date hereof.
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" in Part
One. There is, of course, no guarantee that the objective of the Trust will be
achieved.
Public Offering Price. The secondary market Public Offering Price of the Trust
will include the aggregate underlying value of the Securities in the Trust,
the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The Public Offering
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 Swiss francs
expressed in U.S. dollars. If Units were available for purchase at date
thereof, the Public Offering Price per Unit would have been that amount set
forth under "Summary of Essential Financial Information" in Part One.
The minimum purchase is 500 Units (100 Units for a tax-sheltered retirement
plan). See "Public Offering."
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable Distribution
Date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information" in Part One. Any distribution
of income and/or capital 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."
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part One
accompanying this Prospectus Part Two
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.
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" in Part One.
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 the principal amount invested.
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 as
of the initial date of deposit set forth in the "Summary of Essential
Financial Information" in Part One (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
listed on the Zurich, Basel or Geneva stock exchanges as of the Initial Date
of Deposit and 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" in Part One 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 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
Units of the Trust.
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, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase accordingly, although the actual interest in the Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor or 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.
In recent 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
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The Trust consists of common stocks of companies located in Switzerland listed
on the Zurich, Basel or Geneva stock exchanges as of the Initial Date of
Deposit. In June 1995 Switzerland introduced a new electronic stock exchange
system which has 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 were formerly 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 have closed. The new system should surpass the inefficiencies
experienced with the old structure and should improve valuations of medium and
small capitalization companies. The following is a general description of each
of the companies included in the Trust.
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. The
company intends to merge with Sandoz AG (see below) to become one company
Novartis, pending shareholder and regulatory approval.
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. The company intends to merge with
Ciba-Geigy AG (see above) to become one company, Novartis, pending shareholder
and regulatory approval.
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" in Part One 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.
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. The Managing Underwriter 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.
Foreign Securities. 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 were replaced by a new Federal
Stock Exchange Law. The nationwide electronic exchange began operating in 1995
and connects all market trading and settlements in one computer-based network.
The new Federal Stock Exchange Law took effect in 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 covers 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 Swiss securities markets have historically had 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 long-term 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>
<CAPTION>
FOREIGN EXCHANGE RATES
Range of Fluctuations in
the Swiss franc
- ----------------------------------------------
<S> <C>
Annual Period Swiss franc/U.S. dollar
- ------------------ ---------------------------
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
1995 1.115 - 1.315
1996 1.159 - 1.348
</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 limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of
Section 1221 of the Internal Revenue Code of 1986 ("the Code" ).
Unitholders should consult their tax advisers in determining the federal,
state, local and any other tax consequences of the purchase, ownership and
disposition of Units in the Trust. For purposes of the following discussion
and opinion, it is assumed that each Equity Security is equity for federal
income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise upon the sale or redemption of Units by such Unitholder (except to
the extent an In Kind Distribution of stock is available and received by such
Unitholder from the Trust, as described below). The price a Unitholder pays
for his Units, generally including sales charges, is allocated among his pro
rata portion of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the valuation date closest to the date the
Unitholder purchase his Units) in order to determine his initial tax basis for
his pro rata portion of each Equity Security held by the trust. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Equity Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis.
A Unitholder will be considered to have received all of the dividends paid on
his pro rata portion of each Equity Security when such dividends are received
by the Trust. Unitholders will be taxed in this manner regardless of whether
distributions from the Trust are actually received by the Unitholder or are
automatically reinvested. For federal income tax purposes, a Unitholder's pro
rata portion of dividends as defined by Section 316 of the Code paid with
respect to an Equity Security held by the trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits" . A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the trust will generally
be considered a capital gain (except in the case of a dealer or a financial
institution) and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution) and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the trust (to the
extent such dividends are taxable as ordinary income, as discussed above and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. The limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that own Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as through the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extend they exceed 2% of such individual's
adjusted gross income. Unitholders may be required to treat some or all of the
expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) 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 could affect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that 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.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the trust involved including his
pro rata portion of all the Equity Securities represented by the Unit.
Legislative proposals have been made that would treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain as
constructive sales for purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sale rules.
Special Tax Consequences of In Kind Distributions Upon Redemption or
Termination of the Trust. Under certain circumstances a Unitholder tendering
Units for redemption may be able to request an In Kind Distribution. A
Unitholder may also under certain circumstances be able to request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will not
recognize gain or loss if a Unitholder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held by the
trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount
of cash received by the Unitholder and his tax basis in such fractional share
of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request
and In Kind Distribution are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. the cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date closest to the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number nd
appropriate certification are not provided when requested, distributions by
the trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States person. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of such Trust a statement containing information relating to the dividends
received by the trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
trust will be treated as the income of the Unitholders under the existing come
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 won tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit in the Trust that (s) 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 who are not otherwise subject to Swiss taxation, solely as a
result of their investment in Units of the Trust, should be subject to Swiss
income taxation with regard to their investment in the Trust, based on the
Sponsor's current understanding of Swiss law, 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 foreign or other tax laws.
TRUST OPERATING EXPENSES
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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 an affiliate 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" in Part One, 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) 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" in Part One (which is based on the number of Units of the
Trust outstanding on January 1 of each year for which such compensation
relates) 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 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" in Part One (which is based on the number of Units of the
Trust outstanding on January 1 of each year for which such compensation
relates) and the additional amounts set forth in the footnotes in the "
Summary of Essential Financial Information" in Part One. The Trustee's
fees are payable in monthly installments on or before the twenty-fifth 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, (h) accrual of costs associated with liquidating the Securities and (i)
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
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General. Units are offered at the Public Offering Price. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge (which will be reduced
annually by .5 of 1% to a minimum sales charge of 3.5%), and cash, if any, in
the Income and Capital Accounts held or owned by the Trust. Such underlying
value 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 sales charge applicable to quantity purchases is reduced on a graduated
basis to any person acquiring 10,000 or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number of Sales Charge
Units Purchased Reduction Per Unit
<S> <C>
10,000 - 24,000 0.60%
25,000 - 49,999 0.90%
50,000 - 99,999 1.30%
100,000 or more 2.10%
</TABLE>
Any 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 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.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One 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 bid side value
of the currency exchange rate for the Swiss franc expressed in U.S. dollars
during the secondary market.
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 initially equal to 5.820% of such value and dividing the sum so
obtained by the number of Units in the Trust outstanding. The Public Offering
Price 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 initially 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" in Part One
was made on the basis of an evaluation of the Securities in the Trust prepared
by Interactive Data Corporation, a firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities. 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, President's Day, 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 is determined on each business day by the
Evaluator as described under "Rights of Unitholders--Redemption of
Units."
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. 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. For secondary market transactions, the broker-dealer
concession or agency commission will amount to 65% of the then current maximum
sales charge. 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 initially equal to 5.5% of the Public
Offering Price of the Units, less any reduced sales charge described under
"General" above. Any discount provided to investors will be borne by
the selling dealer or agent.
In addition, the Managing Underwriter has realized a profit or sustained 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.
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 "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 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
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Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by 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" in Part One. 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.
On or before the twenty-fifth 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 unit investment trust division 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 third business day following such tender the Unitholder will 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" in Part One. 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). 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" 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 or by the Trustee when the
value of the Equity Securities owned by a Trust, as shown by any evaluation,
is less than that amount set forth under Minimum Termination Value in the "
Summary of Essential Financial Information" in Part One. The Trust
Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information" in Part One.
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 (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement. The Trustee shall not be liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or
upon the interest thereon or upon it as Trustee under the Trust Agreement or
upon or in respect of the Trust which the Trustee may be required to pay under
any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
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. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ).
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser (MSAM" ), Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment adviser, and Morgan
Stanley International, are engaged in a wide range of financial services.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending. As of September 30,
1996, MSAM, together with its affiliated investment advisory companies, had
approximately $103.5 billion of assets under management and fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
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.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the 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. Kroll & Tract, LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio 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.
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>
The Trust 2
Objective and Securities Selection 2
Trust Portfolio 3
Risk Factors 4
Taxation 7
Trust Operating Expenses 9
Public Offering 10
Rights of Unitholders 11
Trust Administration 12
Other Matters 14
</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.
SWISS BLUE CHIP STRATEGIC TRUST, SERIES 1
PROSPECTUS PART TWO
Van Kampen American Capital Equity Opportunity Trust, Series 12
Note: This Prospectus May Be Used Only
When Accompanied by Part One. Both
Parts of this Prospectus should be
retained for future reference.
Dated as of the date of the Prospectus
Part One accompanying this Prospectus
Part Two.
International Assets Advisory Corp.
250 Park Avenue South, Suite 200
Winter Park, Florida 32789
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
12, certifies that it meets all of the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 24th
day of April, 1997.
Van Kampen American Capital Equity Opportunity
Trust, Series 12
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Depositor)
By: Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 24, 1997 by the following persons who constitute a majority of the
Board of Directors of Van Kampen American Capital Distributors, Inc.:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Molinari President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Sandra A. Waterworth ) (Attorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated March 21, 1997 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity
Trust, Series 12 as of December 31, 1996, and for the period then ended,
contained in this Post-Effective Amendment No. 2 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
April 24, 1997
<TABLE> <S> <C>
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<NUMBER> 1
<NAME> IASW
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19577098
<INVESTMENTS-AT-VALUE> 23422685
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 6525
<TOTAL-ASSETS> 23429210
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23429210
<SHARES-COMMON-STOCK> 1945000
<SHARES-COMMON-PRIOR> 2000000
<ACCUMULATED-NII-CURRENT> 42801
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 146923
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3845587
<NET-ASSETS> 23429210
<DIVIDEND-INCOME> 274937
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 40397
<NET-INVESTMENT-INCOME> 234540
<REALIZED-GAINS-CURRENT> 192373
<APPREC-INCREASE-CURRENT> 274492
<NET-CHANGE-FROM-OPS> 701405
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (230512)
<DISTRIBUTIONS-OF-GAINS> (19850)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 55000
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (224557)
<ACCUMULATED-NII-PRIOR> 38773
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14445
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40397
<AVERAGE-NET-ASSETS> 23541489
<PER-SHARE-NAV-BEGIN> 11.83
<PER-SHARE-NII> 0.121
<PER-SHARE-GAIN-APPREC> 0.24
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.046
<EXPENSE-RATIO> 0.002
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
