File No: 33-
CIK #896977
Securities and Exchange Commission
Washington, D.C. 20549-1004
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 15
B. Name of Depositor: Van Kampen American Capital
Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace Illinois 60181
D. Name and complete address of agents for service:
Chapman And Cutler Van Kampen American Capital
Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: Units of undivided
fractional beneficial interests
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of registration fee: $500.00
H. Approximate date of proposed sale to the public:
As Soon As Practicable After The Effective Date Of The Registration
Statement
________________________________________________________________________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 15
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Underwriting
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trust
trust's securities and ) Federal Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
) Risk Factors
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
) Risk Factors
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses) Prospectus Front Cover
Page
) Summary of Essential Financial
) Information
) Trust Portfolio
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding)
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or) Trust Operating
Expenses
charges payable by holders) Rights of Unitholders
(e) Certain profits to be received) Public Offering
by depositor, principal ) Underwriting
underwriter, trustee or any) Trust Portfolio
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments) *
from purchasers )
16. Acquisition and disposition of ) The Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter)
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's)
securities ) *
52. (a) Provisions of trust agreement)
with respect to replacement) Trust Administration
or elimination portfolio)
securities )
(b) Transactions involving )
elimination of underlying) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Federal Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates)
58. )
59. Financial statements (Instructions ) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Conditions
______________________________________________
* Inapplicable, omitted, answer negative or not required
W O R L D W I D E S E R I E S 2
UTILITY & TELECOMMUNICATIONS
PORTFOLIO
___, 1995
Central Equity Trust
The Fund. Central Equity Trust, Worldwide Series 2, Utility &
Telecommunications Portfolio (the "Central Equity Trust"or "Trust") is a unit
investment trust which comprises Van Kampen American Capital Equity
Opportunity Trust, Series 15 (the "Fund"). The Central Equity Trust offers
investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio of equity securities issued
primarily by domestic and foreign electric, gas, water and telecommunications
companies, certain of which are in American Depositary Receipt form ("ADRs").
The Trust also contains equity securities issued by ___ and real estate
investment trusts ("REITs"). Unless terminated earlier, the Trust will
terminate on ___(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.
Objective of the Trust. The objective of the Central Equity Trust is to
provide investors with a simple and convenient way to receive current and
increasing income and the potential for capital appreciation through a
diversified portfolio primarily consisting of utility and telecommunications
securities issued by both domestic and selected foreign companies (certain of
which may be in ADR form) (the "Equity Securities"or "Securities"). See
"Portfolio."There is, of course, no guarantee that the objective of the Trust
will be achieved.
Public Offering Price. The Public Offering Price per Unit of the Trust is
equal to the aggregate underlying value of the Equity Securities in the
initial offering period (generally determined by the closing sale prices of
listed Equity Securities and the ask prices of over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income Accounts,
divided by the number of Units outstanding, plus a sales charge equal to 4.9%
of the Public Offering Price which is equivalent to 5.152% of the aggregate
value of the Securities. In computing the Public Offering Price, the value of
Securities of foreign issuers is computed on the basis of the offering side
value of the related currency exchange rate expressed in U.S. dollars during
the initial offering period and on the bid side value for secondary market
transactions. During the initial offering period, the sales charge is reduced
on a graduated scale for sales involving at least 2,500 Units. If Units were
available for purchase at the opening of business on the Initial Date of
Deposit, the Public Offering Price per Unit would have been $___. During the
secondary market the Public Offering Price per Unit of the Trust is equal to
the aggregate underlying value of the Equity Securities (generally determined
by the closing sale prices of listed Equity Securities and the closing bid
prices of over-the-counter traded Equity Securities) plus or minus cash, if
any, in the Capital and Income Accounts, divided by the number of Units
outstanding, plus a sales charge equal to 4.9% of the Public Offering Price
which is equal to 5.152% of the aggregate value of the Securities. The minimum
purchase is 75 Units. See "Public Offering."
Additional Deposits. The Sponsor may from time to time deposit additional
Securities in the Trust, provided it maintains, as nearly as is practicable,
the original proportionate relationship of the Equity Securities in the
Trust's portfolio. See "The Trust."
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.
Edward D. Jones & Co.
Dividend and Capital Gains Distributions. Distributions of dividends received,
and realized capital gains, if any, received by the Trust will be paid in cash
on the applicable Distribution Date to Unitholders of record on the record
date as set forth in the "Summary of Essential Financial Information."The
initial estimated distribution will be $___ per Unit and will be made on ___,
1995 to Unitholders of record on ___, 1995. Any distribution of income and/or
capital gains will be net of the expenses of the Trust. See "Federal
Taxation."Additionally, upon termination of the Trust, the Trustee will
distribute, upon surrender of Units for redemption, to each Unitholder his pro
rata share of the Trust's assets, less expenses, in the manner set forth under
"Rights of Unitholders--Distributions of Income and Capital."
Secondary Market for Units. After the initial offering period, although not
obligated to do so, Edward D. Jones & Co. ("EDJ"or the "Underwriter") intends
to maintain a market for Units of the Trust and offer to repurchase such Units
at prices which are based on the aggregate underlying value of Equity
Securities in the Trust (generally determined by the closing sale prices of
listed Securities and the closing bid prices of over-the-counter traded
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is maintained during the initial offering
period, the prices at which Units will be repurchased will be based upon the
aggregate underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and the
closing bid prices of over-the-counter traded Equity 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 through redemption at
prices based upon the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of listed Equity
Securities and the closing bid prices of over-the-counter traded Equity
Securities) plus or minus a pro rata share of cash, if any, in the Capital and
Income Accounts of the Trust. See "Rights of Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. 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. 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."
Reinvestment Option. Unitholders whose accounts are with the Underwriter and
who own 75 or more Units will be provided the opportunity by the Underwriter
to automatically reinvest their distributions into Units at the Public
Offering Price, if Units are available at the time of reinvestment, or into an
open-end management investment company as described herein. See "Rights of
Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the
possible deterioration of either the financial condition of the issuers or the
general condition of domestic or international stock markets, governmental,
political, economic and fiscal policies of foreign countries, small market
capitalization and volatility of certain foreign markets, volatile interest
rates, economic recession, currency exchange fluctuations, foreign tax
withholding, and differences between domestic and foreign legal, auditing,
brokerage and economic standards. The Trust is not actively managed and Equity
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Units of the
Trust are not deposits or obligations of, or guaranteed or endorsed by, any
bank and are not generally insured or otherwise protected by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency
and involve investment risk, including the possible loss of principal. See
"Risk Factors."
<TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
Summary of Essential Financial Information
At the Close of Business on the day before the Initial Date of Deposit: ___, 1995
Underwriter: Edward D. Jones & Co.
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Edward D. Jones & Co.
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
General Information
<S> <C>
Number of Units ............................................................
Fractional Undivided Interest in the Trust per Unit ........................ 1/
Public Offering Price: .....................................................
Aggregate Value of Securities in Portfolio <F1>............................ $
Aggregate Value of Securities per Unit .................................... $
Sales Charge 4.9% (5.152% of the Aggregate Value of Securities per Unit)... $
Public Offering Price per Unit <F2><F3>.................................... $
Redemption Price per Unit <F4>.............................................. $
Initial Secondary Market Repurchase Price per Unit.......................... $
Excess of Public Offering Price per Unit over Redemption Price per Unit .... $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee......................Maximum of $___ per Unit
Evaluator's Annual Evaluation Fee........................Maximum of $___ per Unit
Estimated Annual Organizational Expenses per Unit <F5>...
Evaluation Time..........................................4:00 P.M. New York time
Mandatory Termination Date...............................___(date)___
Minimum Termination Value................................The Trust may be terminated if the net asset value of the Trust
is less than the lower of $___ or ___% of the total value of
Equity Securities deposited in the Trust during the primary
offering period.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Calculation of Estimated Net Annual Dividends per Unit <F6>: ...
Estimated Gross Annual Dividends per Unit...................... $
Less: Estimated Annual Expense per Unit........................ $
Estimated Net Annual Dividends per Unit........................ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee..................... $___ per Unit
Income Distribution Record Date.......... Tenth day of March, June, September and December
Income Distribution Date................. Twenty-fifth day of March, June, September and December
Capital Account Record Date.............. Tenth day of December
Capital Account Distribution Date <F7>... Twenty-fifth day of December
<FN>
<F1>Each Equity Security listed on a national securities exchange or the NASDAQ
National Market System is valued at the closing sale price, or if no such
price exists or if the Equity Security is not listed, at the closing asked
price thereof. The aggregate value of Securities of foreign issuers represents
the U.S. dollar value on the basis of the offering side value of the related
currency exchange rates at the Evaluation Time on the date of this "Summary of
Essential Financial Information."
<F2>On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts. In
connection with Securities issued by foreign issuers, the Public Offering
price per Unit is based on the aggregate value of such Securities computed on
the basis of the offering side value of the related currency exchange rate
expressed in U.S. dollars.
<F3>Effective on each ___, commencing ___, 1996, the secondary sales charge will
decrease by .5 of 1% to a minimum sales charge of 1.9%. See Public
Offering--Offering Price."
<F4>In connection with Securities issued by foreign issuers, the Redemption Price
per Unit is based on the aggregate value of such Securities computed on the
basis of the bid side value of the related currency exchange rate expressed in
U.S. dollars.
<F5>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the Trust
portfolio and the initial fees and expenses of the Trustee but not including
the expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year
period. See "Trust Operating Expenses"and "Statement of
Condition."Historically, the sponsors of unit investment trusts have paid all
of the costs of establishing such trusts.
<F6>Estimated annual dividends are based on annualizing the most recently paid
dividends.
<F7>Distributions from the Capital Account will be made on the Income Distribution
Date to Unitholders of record on the corresponding Income Distribution Record
Date if the amount available for distribution equals at least $1.00 per 100
Units.
</TABLE>
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 15 is comprised
of one unit investment trust, Central Equity Trust, Worldwide Series 2,
Utility & Telecommunications Portfolio. The Trust was created under the laws
of the State of New York pursuant to a Trust Indenture and Agreement (the
"Trust Agreement"), dated the date of this Prospectus (the "Initial Date of
Deposit"), among Van Kampen American Capital Distributors, Inc., as Sponsor,
American Portfolio Evaluation Services, a division of a subsidiary of the
Sponsor, as Evaluator, Edward D. Jones & Co., as Supervisor, and The Bank of
New York, as Trustee.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio"herein, including delivery statements
relating to contracts for the purchase of certain such Securities and an
irrevocable letter of credit issued by a financial institution in the amount
required for such purchases. Thereafter, the Trustee, in exchange for such
Securities (and contracts) so deposited, delivered to the Sponsor
documentation evidencing the ownership of that number of Units of the Central
Equity Trust indicated in "Summary of Essential Financial Information."Unless
otherwise terminated as provided in the Trust Agreement, the Trust will
terminate on the Mandatory Termination Date, and Securities then held will
within a reasonable time thereafter be liquidated or distributed by the
Trustee.
Additional Units of the Trust may be issued at any time by depositing in the
Trust additional Securities or contracts to purchase securities together with
irrevocable letters of credit or cash. As additional Units are issued by the
Trust as a result of the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits of Securities
into the Trust, provided that such additional deposits will be in amounts
which will maintain, as nearly as practicable, the original proportionate
relationship of the Securities in the Trust's portfolio based on the number of
shares of each of the Securities. Any deposit by the Sponsor of additional
Securities will duplicate, as nearly as is practicable, this original
proportionate relationship and not the actual proportionate relationship on
the subsequent date of deposit, since the actual proportionate relationship
may be different than the original proportionate relationship. Any such
difference may be due to the sale, redemption or liquidation of any of the
Securities deposited in the Trust on the Initial, or any subsequent, Date of
Deposit.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in the Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor or the Underwriter,
or until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Central Equity Trust are to provide the potential for
capital appreciation and increasing dividend income through a diversified
portfolio, not less than 65% of the total assets of which at the Initial Date
of Deposit shall consist of utility and telecommunications Securities issued
by both foreign and domestic issuers. In addition, the Trust will also contain
equity securities issued by ___ and real estate investment trusts ("REITs").
The portfolio is described under "Trust Portfolio"and "Portfolio"herein. An
investor will be subjected to taxation on the dividend income received from
the Trust and on gains from the sale or liquidation of Securities (see
"Federal Taxation"). Investors should be aware that there is not any guarantee
that the objectives of the Trust will be achieved because they are subject to
the continuing ability of the respective Security issuers to continue to
declare and pay dividends and because the market value of the Securities can
be affected by a variety of factors. Common stocks may be especially
susceptible to general stock market movements and to volatile increases and
decreases of value as market confidence in and perceptions of the issuers
change. In addition to the risks generally associated with the ownership of
common stock, there are additional risks associated with ownership of foreign
securities and ADRs, including among others, exchange rate fluctuations,
volatile interest rates and foreign economic conditions. Investors should be
aware that there can be no assurance that the value of the underlying
Securities will increase or that the issuers of the Equity Securities will pay
dividends on outstanding common shares. Any distributions of income will
generally depend upon the declaration of dividends by the issuers of the
Securities and the declaration of any dividends depends upon several factors
including the financial condition of the issuers and general economic
conditions.
In selecting particular Equity Securities for the Trust, Edward D. Jones & Co.
considered a number of factors including the extent to which international
utilities will benefit from increasing consumer demand in less developed
countries, historical growth rates and rates of return on capital, financial
condition and resources, management skills, competition, geographic and
industrial diversification and, with respect to electric, gas and water
utilities, certain industry factors such as regulatory environment and energy
sources. The Underwriter also considered the prospective growth in earnings
and dividends in relation to price/earnings ratios, yield and risk.
In selecting the Equity Securities the Underwriter also considered the ability
of the Equity Securities to outpace inflation. While inflation in the United
States is currently relatively low, the United States and other countries have
historically experienced periods of double-digit inflation. While the prices
of equity securities will fluctuate over time, equity securities have
outperformed the rate of inflation and other less risky investments, such as
United States government bonds and United States Treasury bills. Since 1972,
domestic utility stocks have delivered an average annual growth rate of 12.48%
and since 1980 the average annual dividends per share of domestic utility
stocks has grown at a rate of _____% (as measured by the Standard & Poor's
Utilities Index). Past performance is, however, no guarantee of future results.
The following chart shows the average annual compounded rate of return of
selected asset classes from 1972 through 1994 compared to the rate of
inflation over the same period. Of course, this chart represents past
performance of these investment categories and there is no guarantee of future
results, either of these categories or of the Trust. The Trust also has sales
charges and expenses which are not reflected in the chart.
U.S. Utility Stocks (Standard & Poor's Utilities Index)
%
Long-term U.S. Government bonds
%
U.S. Treasury bills (short-term)
%
Inflation (Consumer Price Index)
%
Source: Ibbotson Associates and Micropal, Inc.
As of May 25, 1995, the Standard & Poor's Utilities Index consisted of 48
United States utility stocks: 25 electric company stocks, 14 natural gas
company stocks and 9 telephone company stocks. An investment in the Trust
should be made with an understanding that a significant number of the equities
in the portfolio are not included in the Standard & Poor's Utilities Index.
Furthermore, while the Standard & Poor's Utilities Index includes only United
States issuers, the Trust portfolio also includes a significant number of
foreign issuers. Units are not designed to correlate with this or any other
index, nor are their prices expected to correlate with this or any other index.
Issuers of the Equity Securities included in the Trust are as follows:
[Descriptions to come.]
Investors should note that the above criteria were applied to the Equity
Securities selected 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 such criteria. Should an Equity Security no longer meet such
criteria, such Equity Security will not, simply as a result of such fact, be
removed from the portfolio of the Trust.
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 the Trust to take advantage of market fluctuations or
changes in anticipated rates of appreciation. Investors should note in
particular that the Securities were selected by Edward D. Jones & Co. as of
the date the Securities were purchased by the Trust. The Trust may continue to
purchase or hold Securities originally selected through this process even
though the evaluation of the attractiveness of the Securities may have changed
and, if the evaluation were performed again at that time, the Securities would
not be selected for the Trust.
TRUST PORTFOLIO
The Central Equity Trust consists of several different issues of Equity
Securities, most of which are issued by companies diversified within the
utility and telecommunications industries including common stocks of foreign
issuers, certain of which are ADRs. The Trust also includes equity securities
issued by ___ and REITs. All of the Equity Securities are listed on a national
securities exchange, the NASDAQ National Market System or are traded in the
over-the-counter market.
The Trust consists of (a) the Securities listed under "Portfolio"as may
continue to be held from time to time in the Trust, (b) any additional
Securities acquired and held by the Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Securities. However, should any contract for the purchase of any
of the Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract to all
Unitholders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will in most cases be distributed to Unitholders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the portfolio is not
managed, the Sponsor may instruct the Trustee to sell Equity Securities under
certain limited circumstances. See "Trust Administration--Portfolio
Administration."Equity Securities, however, will not be sold by the Trust to
take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
The Underwriter in its general securities business acts as agent or principal
in connection with the purchase and sale of equity securities, including the
Equity Securities in the Trust, and may act as a market maker in certain of
the Equity Securities. The Underwriter also from time to time may issue
reports on and make recommendations relating to equity securities, which may
include the Equity Securities. From time to time, the Underwriter may act as
investment banker or as an employee or as an affiliate may be a director of a
company whose shares are included among the Equity Securities; nonpublic
information concerning such a company would not be disclosed to the
Underwriter or for the benefit of the Trust under such circumstances.
The Trust contains _____ issues of Securities. On the business day prior to
the Initial Date of Deposit. ____ of the aggregate market value of the
Securities were issued by entities located in _____. Such concentration may
involve more risk than if such Securities were issued by issuers located in
several jurisdictions. On the business day prior to the Initial Date of
Deposit, the aggregate market value of the Securities in the Trust was $_____.
On the Initial Date of Deposit the diversification of Securities by type and
location of issuer was as follows:
RISK FACTORS
The Trust will invest in Securities of domestic and foreign companies in the
electric, gas, water, telecommunications and ___ industries and in Securities
of REITs. In view of this, an investment in the Trust should be made with an
understanding of the risks inherent in those industries.
Utilities Industries. The Trust may invest in both domestic and foreign
electric, gas, water and/or telephone company common stock. In the United
States such companies are considered public utilities and are generally
subject to extensive regulation of certain portions of their business by state
utility commissions which, for example, establish and approve the rates that
may be charged for their services and determine the appropriate rate of return
on an approved asset base. Certain public utilities have difficulty from time
to time persuading regulators to grant the rate increases necessary to
maintain an adequate return on investment and voters in many states have the
ability to impose limits on rate adjustments. There are substantial
differences between the regulatory policies and practices of various
jurisdictions, and any given regulatory agency may make major shifts in policy
from time to time. There is no assurance that regulatory authorities will in
the future grant rate increases or that any such increases will be adequate to
permit the payment of dividends on common stocks. Additionally, existing and
possible future regulatory legislation may make it even more difficult for
these utilities to obtain adequate rate relief. Similar regulations and
considerations and the risk inherent with them may exist with respect to
foreign companies in these industries. However, the Sponsor cannot say to what
extent and/or what countries and jurisdictions such regulations may exist.
Domestic and foreign issuers of public utility securities may face other
problems, including difficulty in financing large construction programs and
raising capital during inflationary periods, rising costs of fuels and the
transportation of fossil fuels, uncertainty of transmission service costs,
changes in tax laws which may adversely affect a utility's ability to operate
in a profitable manner, difficulty in estimating future demand for
electricity, gas, water and telephone in certain regions, restrictions on
operations and increased costs and delays attributable to environmental
regulations and the effects of energy conservation. There may also be risks
associated with a particular type of public utility.
In the United States, governmental authorities may from time to time review
existing requirements and impose additional requirements governing the
licensing, construction and operation of power plants by electric utilities.
On the other hand, electric companies in general have been favorably affected
by the full or near completion of major construction programs, and many
utility companies have generated cash flows in excess of current operating
expenses and some construction expenditures, permitting some degree of
diversification into unregulated businesses. The Energy Policy Act of 1992
(the "Energy Act") provides for, among other things, the promotion of
competition in the electric utility industry. The Energy Act reforms the
Public Utility Holding Company Act of 1935 by lifting restrictions on
independent producers of electric power who build and operate generating
plants in order to produce power for sale to utilities at competitive rates.
Further, the Energy Act provides that transmission lines will now be made
available to any producer, utility or independent entity who is willing to pay
for the transmission of power. This access makes the utility companies'
traditional customer base more uncertain and could have a significant effect
on the accuracy of, and the ability to make, the long-term demand projections
that are necessary to determine the need for new construction of plants and
for other capital expenditures.
Gas pipeline and distribution companies have had difficulties in adjusting to
short and surplus energy supplies, enforcing or being required to comply with
long-term contracts and avoiding litigation from their customers, on the one
hand, or suppliers, on the other. Recent deregulatory efforts by the Federal
Energy Regulatory Commission ("FERC") have resulted in a number of important
changes in the sale, transportation and delivery of natural gas. FERC Orders
have caused pipeline companies to become merely carriers, as opposed to
sellers, of natural gas, which in turn has allowed local distribution
companies ("LDCs") to negotiate purchases directly with producers. These
changes however, have resulted in significant transition costs and increased
competition. For example, LDCs now face the risk of losing major customers who
can fill their requirements through direct negotiation with producers if the
LDCs fail to provide competitive pricing. Finally, although there has been
deregulation by FERC, state regulators retain the power to scrutinize LDC
performance and rate setting. LDCs that may have difficulty adjusting to the
deregulated environment or minimizing the transition costs in connection
therewith risk rejection of rate increases to make up for those costs.
Water companies are subject to federal and state environmental laws and
regulation of water quality. Pending federal and state environmental rules and
regulations may require increased expenditures by the public water utilities
and may increase substantially operating costs and capital requirements for
those companies.
Because certain aspects of telephone company operations are being deregulated,
telephone companies face increasing competitive pressures that require the
commitment of substantial capital, technological and marketing resources.
Foreign utilities may face similar concerns and their securities may,
therefore, be subject to similar risks.
Each of the problems referred to above could adversely affect the ability and
the inclination of these public utilities to declare or to pay dividends or to
pay interest and the ability of holders of common stock to realize any value
from the assets of the issuer upon liquidation or bankruptcy. In the United
States, the electric, gas, water and telephone utilities which are issuers of
the Securities have been experiencing or may experience one or more of these
problems in varying degrees. Moreover, price disparities within selected
utility groups and discrepancies in relation to averages and indices have
occurred frequently for reasons not directly related to the general movement
of price levels of utility common stocks. Causes of these disparities and
discrepancies include changes in the overall demand for or supply of various
securities (including the potentially depressing effect of new stock
offerings), and changes in investment objectives, market expectations or cash
requirements of other purchasers and sellers of securities.
Furthermore, in the United States the Public Utility Holding Company Act of
1935 (the "1935 Act") regulates, among other things, certain acquisitions of
voting securities of electric utility companies and gas utility companies by
anyone who is an "affiliate"of a public utility company (a person or organized
group of persons that directly or indirectly owns, controls or holds with
power to vote 5% or more of the outstanding voting securities of a public
utility company). In addition, the 1935 Act requires a "holding company"(among
other categories, a company which directly or indirectly owns, controls or
holds with power to vote 10% or more of the outstanding voting securities of a
public utility company or a "holding company") to register as such with the
Securities and Exchange Commission and be otherwise subject to certain
restrictions on the acquisition of securities and other interest in public
utility companies. In order to avoid becoming an "affiliate", the Trust has
adopted an investment restriction that it will not purchase securities of a
public electric or gas company if by reason thereof the Trust would hold 5% or
more of the outstanding voting securities of the issuer. Nevertheless, if the
Trust were considered to be a member of an organized group of persons, the
1935 Act might limit the Trust's acquisitions of the voting securities of
public utility companies by reason of the control by the group of 5% or more
of the voting securities of a public utility company. The Sponsor believes
that even if the Trust is appropriately included in a group, it is unlikely
that the holdings of such group will aggregate to as much as 5% of the voting
securities of any public electric or gas utility company.
To the extent the risks and concerns discussed concerning public utilities
reflect United States regulatory matters specifically, similar types of
concerns may exist with respect to foreign public utilities.
The issuers of utility securities have undertaken in the past and may
undertake in the future various types of reorganization, such as spin-offs,
split-offs, mergers, creation of holding companies and asset sales, in order
to, among other things, avoid or minimize the effects of regulatory
activities. Depending on the circumstances, the Sponsor may direct the Trustee
to either hold or sell the Securities that are distributed or otherwise the
subject of such an event. (See "Trust Administration--Portfolio
Administration"herein). In which case the Trust may contain Securities of
issuers not subject to the types of regulatory risks described above, but
subject instead to more general market risks.
Telecommunications Industries. In addition to the stock of companies in the
utilities industries described above, the Sponsor may deposit securities of
telecommunications companies in the Trust.
Telecommunications is defined as the science and technology of communicating
by electronic means. Companies in the telecommunications industry provide
products or services to facilitate the transmission of voice, data and video
communications electronically, such as global telephone service, wireless
communications services and equipment including cellular telephone, microwave
and satellite communications, paging and other emerging wireless technologies,
electric components and communications equipment, video conferencing,
electronic mail, local and wide area networking, and linkage of data and word
processing systems, publishing and information systems, videotext and
teletext, emerging technologies combining television, telephone and computer
systems and broadcasting over all media. Such entities include traditional
telephone companies, long-distance providers, cellular/wireless
telecommunication companies, cable television providers, telecommunications
equipment manufacturers and satellite communications companies. To some
degree, the deregulation of traditional telephone utilities and the growth of
other telecommunications technologies and companies is blurring the
distinction between these two types of companies.
Two key differences between telecommunications companies, as defined above,
and utilities in the electric, gas, water and traditional telephone industries
are the regulatory environment and competition. In the United States, for
example, local telephone service is currently regulated at the state level on
a return-on-equity basis, much like the electric, gas and water utilities.
However, other companies included in the telecommunications industry are not
regulated in the same manner or are not regulated at all. So far as the
competitive environment is concerned utilities have traditionally enjoyed
monopoly positions in their distinct service areas. To a certain degree,
however, telecommunications companies have broken into areas that had been
controlled by telephone company monopolies, such as providing long distance
service. Additionally, because the telecommunications companies do business in
unregulated areas, they are also subjected to greater competition and the
risks that come with the competition, such as pressures on pricing and
operating margins.
Real Estate Investment Trusts. REITs are financial vehicles that have as their
objective the pooling of capital from a number of investors in order to
participate directly in real estate ownership or financing. REITs are general
fully integrated operating companies that have interests in income-producing
real estate. REITs are differentiated by the types of real estate properties
held and the actual geographic location of properties and fall into two major
categories: equity REITs emphasize direct property investment, holding their
invested assets primarily in the ownership of real estate or other equity
interests, while mortgage REITs concentrate on real estate financing, holding
their assets primarily in mortgages secured by real estate. As of the Initial
Date of Deposit, the Trust contains only equity REITs. REITs obtain capital
funds for investment in underlying real estate assets by selling debt or
equity securities on the public or institutional capital markets or by bank
borrowings. Thus, the returns on common equities of the REITs in which the
Trust invests will be significantly affected by changes in costs of capital
and, particularly in the case of highly "leveraged"REITs, i.e. those with
large amounts of borrowings outstanding, by changes in the level of interest
rates. The objective of an equity REIT is to purchase income-producing real
estate properties in order to generate high levels of cash flow from rental
income and a gradual asset appreciation, and they typically invest in
properties such as office, retail, industrial, hotel and apartment buildings
and health care facilities.
Foreign Issuers. Since certain of the Equity Securities in the Trust may
consist of securities of foreign issuers, an investment in the Trust involves
some investment risks that are different in some respects from an investment
in a trust that invests entirely in securities of domestic issuers. Those
investment risks include future political and governmental restrictions which
might adversely affect the payment or receipt of payment of dividends on the
relevant Equity Securities. In addition, for the foreign issuers that are not
subject to the reporting requirements of the Securities Exchange Act of 1934,
there may be less publicly available information than is available from a
domestic issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. However, due
to the nature of the issuers of Equity Securities included in the Trust, the
Sponsor believes that adequate information will be available to allow the
Supervisor to provide portfolio surveillance.
The securities of certain of the foreign issuers in the Trust are in ADR form.
ADRs evidence American Depositary Receipts which represent common stock
deposited with a custodian in a depositary. American Depositary Shares, and
receipts therefor (ADRs), are issued by an American bank or trust company to
evidence ownership of underlying securities issued by a foreign corporation.
These instruments may not necessarily be denominated in the same currency as
the securities into which they may be converted. For purposes of the
discussion herein, the term ADR generally includes American Depositary Shares.
ADRs may be sponsored or unsponsored. In an unsponsored facility, the
depositary initiates and arranges the facility at the request of market makers
and acts as agent for the ADR holder, while the company itself is not involved
in the transaction. In a sponsored facility, the issuing company initiates the
facility and agrees to pay certain administrative and shareholder-related
expenses. Sponsored facilities use a single depositary and entail a
contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In
addition, the depositary bank incurs expenses in connection with the
conversion of dividends or other cash distributions paid in local currency
into United States dollars and such expenses are deducted from the amount of
the dividend or distribution paid to holders, resulting in a lower payout per
underlying share represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices
in the ADR market may also exist with respect to certain ADRs. In varying
degrees, any or all of these factors may affect the value of the ADR compared
with the value of the underlying shares in the local market. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that for
the underlying shares. ADRs are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements of the
Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the United States dollar equivalent of the local currency price of the
underlying domestic share and, as a result, are likely to affect the value of
the ADRs and consequently the value of the Equity Securities. The foreign
issuers of securities that are ADRs may pay dividends in foreign currencies
which must be converted into dollars. Most foreign currencies have fluctuated
widely in value against the United States dollar for many reasons, including
supply and demand of the respective currency, the soundness of the world
economy and the strength of the respective economy as compared to the
economies of the United States and other countries. Therefore, for any
securities of issuers (whether or not they are in ADR form) whose earnings are
stated in foreign currencies, or which pay dividends in foreign currencies or
which are traded in foreign currencies, there is a risk that their United
States dollar value will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies.
On the basis of the best information available to the Sponsor at the 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.
Exchange Rate. Certain of the Securities may be principally traded in foreign
currencies and as such involve 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 relevant currency. 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.
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 Evaluator will estimate current exchange rates based on activity in the
relevant currency exchange market. However, since these markets may be
volatile and are 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 a Trust would
receive had the Trustee sold any particular currency in a market. The foreign
exchange transactions of a 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).
The following table sets forth the high and low United States dollar exchange
rates for the past seven years for the currencies in which foreign Securities
in the Trust Portfolio are denominated. Fluctuations in or stability of rates
during the period shown are not necessarily indicative of fluctuations in or
stability of exchange rates over the term of the Trust. The table shows U.S.
Dollars received for 100 foreign currency units.
<TABLE>
<CAPTION>
Annual CANADIAN HONG KONG MEXICAN SPANISH BRITISH
Period DOLLAR DOLLAR PESO PESETA POUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW
1988
1989
1990
1991
1992
1993
1994
</TABLE>
General. An investment in Units should be made with an understanding of the
risks which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the general
condition of the common stock market may worsen and the value of the Equity
Securities and therefore the value of the Units may decline. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. These perceptions are based on unpredictable factors
including expectations regarding government, economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction, and
global or regional political, economic or banking crises. Shareholders of
common stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or holders of
debt obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding, and
thus the value of the Equity Securities may be expected to fluctuate over the
life of the Fund 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.
The principal trading market for certain of the Equity Securities may be in
the over-the-counter market. As a result, the existence of a liquid trading
market for the Equity Securities may depend on whether dealers will make a
market in the Equity Securities. There can be no assurance that a market will
be made for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity Securities in
any markets made. In addition, the Trust may be restricted under the
Investment Company Act of 1940 from selling Equity Securities to the Sponsor.
The price at which the Equity Securities may be sold to meet redemptions, and
the value of the Trust, will be adversely affected if trading markets for the
Equity Securities are limited or absent.
Unitholders will be unable to dispose of any of the Equity Securities in the
portfolio, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor.
FEDERAL TAXATION
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company"under the
Internal Revenue Code of 1986, as amended (the "Code"). If the Trust so
qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard to its net capital gain, i.e., the excess of its net
long-term capital gain over its net short-term capital loss), it will not be
subject to federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to the
extent the Trust timely distributes to Unitholders at least 98% of its taxable
income (including any net capital gain), it will not be subject to the 4%
excise tax on certain undistributed income of "regulated investment
companies."Because the Trust intends to timely distribute its taxable income
(including any net capital gain), it is anticipated that the Trust will not be
subject to federal income tax or the excise tax. Although all or a portion of
the Trust's taxable income (including any net capital gain) for the taxable
year may be distributed to Unitholders shortly after the end of the calendar
year, such a distribution will be treated for federal income tax purposes as
having been received by Unitholders during the calendar year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the extent
that distributions to a Unitholder in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of capital
and will reduce the Unitholder's basis in his Units and, to the extent that
they exceed his basis, will be treated as a gain from the sale of his Units as
discussed below.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will be a capital
gain or loss, except in the case of a dealer or a financial institution. For
taxpayers other than corporations, net capital gains are presently subject to
a maximum stated marginal tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that affect tax rates
and could affect relative differences at which ordinary income and capital
gains are taxed. A capital loss is long-term if the asset is held for more
than one year and short-term if held for one year or less. If a Unitholder
holds Units for six months or less and subsequently sells such Units at a
loss, the loss will be treated as a long-term capital loss to the extent that
any long-term capital gain distribution is made with respect to such Units
during the six-month period or less that the Unitholder owns the Units.
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. Because some or all capital gains are taxed at a comparatively lower
rate under the Act, the Act includes a provision that would recharacterize
capital gains as ordinary income in the case of certain financial transactions
that are "conversion transactions"effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision on
their investment in Units.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When the units are held
by corporate Unitholders, Trust distributions may qualify for the 70%
dividends-received deduction, subject to the limitations otherwise applicable
to the availability of the deduction, to the extent the distribution is
attributable to dividends received by the Trust from United States
corporations and is designated by the Trust as being eligible for such
deduction. To the extent dividends received by the Trust are attributable to
foreign corporations, a corporation that owns Units will not be entitled to
the dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will
provide each Unitholder with information annually concerning what part of
Trust distributions are eligible for the dividends received deduction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trust and to the tax
treatment of distributions by the Trust to United States. Unitholders that are
not United States citizens or residents should be aware that distributions
from the Trust will generally be subject to a withholding tax of 30%, or a
lower treaty rate, and should consult their own tax advisers to determine
whether investment in the Trust is appropriate. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a
pro rata portion of the ADRs and foreign securities held by the Trust, must
include in their gross income, for federal income tax purposes, both their
portion of dividends received by the Trust and also their portion of the
amount which the Trust deems to be the Unitholders' portion of foreign income
taxes paid with respect to, or withheld from, dividends, interest or other
income of the Trust from its foreign investments. Unitholders may then
subtract from their federal income tax the amount of such taxes withheld, or
else treat such foreign taxes as deductions from gross income; however, as in
the case of investors receiving income directly from foreign sources, the
above described tax credit or deduction is subject to certain limitations.
Unitholders should consult their tax advisers regarding this election and its
consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year.
In the event the Units are held by fewer than 500 persons, additional taxable
income will be realized by the individual (and other noncorporate) Unitholders
in excess of the distributions received by the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons. Such persons should consult their tax
advisers.
Unitholders will be notified annually of the amounts of income dividends
includable in the Unitholder's gross income and amounts of Trust expenses
which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
TRUST OPERATING EXPENSES
Compensation of Sponsor, Evaluator and Underwriter. The Sponsor will not
receive any fees in connection with its activities relating to the Trust. The
Evaluator shall receive that evaluation fee, payable in any month incurred,
set forth under "Summary of Essential Financial Information"(which is based on
the number of Units outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of Units outstanding at the end of the
month of such calculation) for regularly evaluating the Trust portfolio. The
Underwriter 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"(which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which event the calculation is
based on the number of the Units outstanding at the end of the month of such
calculation) for providing portfolio supervisory services for the Trust. Such
fee may exceed the actual cost of providing such supervision services for this
Trust, but at no time will the total amount paid to the Underwriter for
providing portfolio supervision services to unit investment trusts for which
Edward D. Jones & Co. is the principal underwriter in any calendar year exceed
the aggregate cost to the Supervisor of supplying such services in such year.
Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter"in the Consumer Price Index
published by the United States Department of Labor or, if such category is no
longer published, in a comparable category. The Sponsor and the Underwriter
will receive sales commissions and may realize other profits (or losses) in
connection with the sale of Units and the deposit of the Equity Securities as
described under "Public Offering--Sponsor and Underwriter Compensation."
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information"(which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number
of Units outstanding at the end of the month of such calculation). The
Trustee's fees are payable in monthly installments on or before the tenth day
of each month from the Income Account to the extent funds are available and
then from the Capital Account. The Trustee benefits to the extent there are
funds for future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest bearing and
the amounts earned by the Trustee are retained by the Trustee. Part of the
Trustee's compensation for its services to the Trust is expected to result
from the use of these funds. Such fees may be increased without approval of
the Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter"in the Consumer Price Index
published by the United States Department of Labor or, if such category is no
longer published, in a comparable category. For a discussion of the services
rendered by the Trustee pursuant to its obligations under the Trust Agreement,
see "Rights of Unitholders--Reports Provided"and "Trust Administration."
Miscellaneous Expenses. Expenses incurred in establishing the Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and closing documents), federal and
state registration fees, the initial fees and expenses of the Trustee, legal
and accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and amortized over a five year period. The
following additional charges are or may be incurred by the Trust: (a) normal
expenses (including the cost of mailing reports to Unitholders) incurred in
connection with the operation of the Trust, (b) fees of the Trustee for
extraordinary services, (c) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (d) various
governmental charges, (e) expenses and costs of any action taken by the
Trustee to protect the Trust and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of the Trust without negligence, bad faith or wilful
misconduct on its part and (g) 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 "Federal
Taxation."
PUBLIC OFFERING
General. Units are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Equity Securities and includes a sales
charge of 4.9% of the Public Offering Price--which charge is equivalent to
5.152% of the aggregate underlying value of the Securities). Such underlying
value is based on the aggregate value of Securities of foreign issuers
computed on the basis of the offering side value of the related currency
exchange rate expressed in U.S. dollars as of the Evaluation Time during the
initial offering period and on the bid side value for secondary market
transactions. Such underlying value shall include the proportionate share of
any undistributed cash held in the Capital and Income Accounts. The sales
charge applicable to quantity purchases is, during the initial offering
period, reduced on a graduated basis to any person acquiring 2,500 or more
Units as follows:
<TABLE>
<CAPTION>
Percentage
Aggregate Number of Sales Charge
of Units Purchased Reduction Per Unit
<S> <C>
2,500 - 4,999 0.50%
5,000 - 12,499 1.10
12,500 - 24,999 1.70
25,000 - 49,999 2.30
50,000 or more 3.00
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
Underwriter, broker, dealer or agent. Units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser under 21
years of age will be deemed for the purposes of calculating the applicable
sales charge to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary purchasing
securities for one or more trust estate or fiduciary accounts.
The Underwriter intends to permit certain of its partners, officers and
employees and those of its affiliated companies and certain relatives of such
persons to purchase Units of the Trust at the current Public Offering Price
less a $10.00 per 100 Units reduction in the applicable sales charge.
Registered representatives of selling brokers, dealers, or agents may purchase
Units of the Trust at the current Public Offering Price less the dealer's
concession during the initial offering period and for secondary market
transactions.
In addition, Unitholders whose accounts are with the Underwriter and who own
75 or more Units will be provided the opportunity by the Underwriter to
automatically reinvest their distributions into Units at the Public Offering
Price, if Units are available at the time of reinvestment, or into an open-end
management investment company as described herein. See "Rights of
Unitholders--Reinvestment Option,"below.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information"in accordance
with fluctuations in the prices of the underlying Securities in the Trust. The
Public Offering Price per Unit is based on the aggregate value of Securities
of foreign issuers computed on the basis of the offering side or bid side
value of the related currency exchange rate expressed in U.S. dollars during
the initial offering period or secondary market, respectively.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to 5.152% of such value and dividing the sum so obtained by the number
of Units outstanding. Such underlying value shall include the proportionate
share of any cash held in the Capital Account. This computation produced a
gross underwriting profit equal to 4.9% of the Public Offering Price. Such
price determination as of the close of business on the day before the Initial
Date of Deposit was made on the basis of an evaluation of the Securities in
the Trust prepared by Interactive Data Services, Inc., a firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities. After the close of business on the day before the Initial Date of
Deposit, the Evaluator will appraise or cause to be appraised daily the value
of the underlying Securities as of the Evaluation Time on days the New York
Stock Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received prior to the Evaluation Time on each such day. Orders
received by the Trustee, Sponsor or Underwriter for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price. Effective on each
___, commencing ___, 1996, such sales charge will be reduced by .5 of 1% to a
minimum sales charge of 1.9%.
The aggregate underlying value of the Equity Securities during the initial
offering period is determined on each business day by the Evaluator in the
following manner: if the Equity Securities are listed on a national securities
exchange or the NASDAQ National Market System, this evaluation is generally
based on the closing sale prices on that exchange or that system (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 or system, at the closing
asked 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 closing asked price on the over-the-counter
market (unless it is determined that these prices are inappropriate as a basis
for evaluation). If closing asked prices are unavailable, the evaluation is
generally determined (a) on the basis of closing asked prices for comparable
securities, (b) by appraising the value of the Equity Securities on the asked
side of the market or (c) by any combination of the above. The aggregate
underlying value of the Equity Securities in the secondary market is
determined in the same manner except that closing bid prices are used rather
than closing ask prices when necessary. The value of Securities of foreign
issuers during the initial offering period is based on the aggregate value of
such Securities computed on the basis of the offering side value of the
related currency exchange rate expressed in U.S. dollars.
In offering the Units to the public, neither the Underwriter nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the 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.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
of ___% per Unit. Any quantity discount provided to investors will be borne by
the selling dealer or agent as indicated under "General"above. For secondary
market transactions, such concession or agency commission will amount to ___%
of the sales charge applicable to the transaction.
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 75 Units. Lower minimum
purchase amounts maybe available for certain qualified retirement plans. The
Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units and to change the amount of the concession or agency
commission to dealers and others from time to time.
Brokers and dealers of the Trust, banks and/or others are eligible to
participate in a program in which such firms receive from the Underwriter a
nominal award for each of their registered representatives who have sold a
minimum number of units of unit investment trusts created by the Underwriter
during a specified time period. In addition, at various times the Underwriter
may implement other programs under which the sales forces of brokers, dealers,
banks and/or others may be eligible to win other nominal awards for certain
sales efforts, or under which the Underwriter will reallow to any such
brokers, dealers, banks and/or others that sponsor sales contests or
recognition programs conforming to criteria established by the Underwriter, or
participate in sales programs sponsored by the Underwriter, an amount not
exceeding the total applicable sales charges on the sales generated by such
person at the public offering price during such programs. Also, the
Underwriter in its discretion may from time to time pursuant to objective
criteria established by the Underwriter pay fees to qualifying brokers,
dealers, banks and/or others for certain services or activities which are
primarily intended to result in sales of Units of the Trust. Such payments are
made by the Underwriter out of its own assets and not out of the assets of the
Trust. These programs will not change the price Unitholders pay for their
Units or the amount that the Trust will receive from the Units sold.
Sponsor and Underwriter Compensation. The Underwriter will receive a gross
sales commission equal to 4.9% of the Public Offering Price of the Units
(equivalent to 5.152% of the net amount invested), less any reduced sales
charge for quantity purchases (as described under "General"above). The Sponsor
will receive from the Underwriter the excess of such gross sales commission
over the Underwriter's discount. The Underwriter will be allowed a discount in
connection with the distribution of Units of 3.7% for 1 to 1,000,000 Units,
3.8% for 1,000,001 to 1,500,000 Units, 3.9% for 1,500,001 to 2,000,000 Units,
4.0% for 2,000,001 to 2,500,000 Units and 4.1% for more than 2,500,000 Units
underwritten during the initial offering period. Any quantity discount
provided to investors will be borne by the selling Underwriter, dealer or
agent as indicated under "General"above.
In addition, the Sponsor will realize a profit or will sustain a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. See "Portfolio."The
Sponsor has not participated as sole underwriter or as manager or as a member
of the underwriting syndicates or as an agent in a private placement for any
of the Securities in the Trust portfolio. The 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 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 Underwriter
prior to the date of settlement for the purchase of Units may be used in the
Underwriter's business and may be deemed to be a benefit to the Underwriter,
subject to the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market"below, the Underwriter intends to maintain a
secondary market for Units of the Trust. In so maintaining a market, the
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 Underwriter will also realize profits or sustain losses
resulting from a redemption of such repurchased Units at a price above or
below the purchase price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Underwriter intends
to maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trust. The
aggregate underlying value of Securities of foreign issuers is computed on the
basis of the bid side value of the related currency exchange rate (offer side
during the initial offering period) expressed in U.S. dollars. If the supply
of Units exceeds demand or if some other business reason warrants it, the
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 may be able to dispose of such
Units only by tendering them to the Trustee for redemption at the Redemption
Price. See "Rights of Unitholders--Redemption of Units."A Unitholder who
wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for 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.
RIGHTS OF UNITHOLDERS
General. The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee. Ownership
of Units of the Trust will be held in uncertificated or "book entry"form only.
Units are transferable by making a written request to the Trustee. A
Unitholder must sign such written request exactly as his name appears on the
records of the Trustee 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.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account of the Trust. In the
case of Securities of foreign issuers, dividends to be credited to such
accounts are first converted into U.S. dollars at the applicable exchange rate
for the related currency.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary of
Essential Financial Information."Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units
or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account and not distributed until the next distribution date
applicable to such Capital Account. Proceeds received on the sale of any
Equity Securities in the Trust, to the extent not used to meet redemptions of
Units or pay expenses, will, however, be distributed on the Income
Distribution Date to holders of record on the corresponding Income
Distribution Record Date if the amount available for distribution equals at
least $1.00 per 100 Units. The Trustee is not required to pay interest on
funds held in the Capital or Income Accounts (but may itself earn interest
thereon and therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account amounts necessary to pay the expenses of the Trust (as determined on
the basis set forth under "Trust Operating Expenses"). The Trustee 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 such amounts as may be necessary to cover
redemptions of Units.
Reinvestment Option. The Underwriter offers to those Unitholders who own 75 or
more Units in an account with the Underwriter the ability to elect to have
each distribution of income and capital gains on such Units automatically
reinvested in additional Units of the Trust at the Public Offering Price (to
the extent Units may be lawfully offered for sale in the state in which the
Unitholder resides). To participate in the reinvestment plan, a Unitholder
must file a written notice of election with his or her broker at least ten
days prior to the Record Date for which the first distribution is to apply. A
Unitholder's election to participate in the reinvestment plan will apply to
all Units of the Trust owned by such Unitholder and such election will remain
in effect until changed by the Unitholder or until such plan is terminated by
the Underwriter. The Underwriter may suspend or terminate the reinvestment
option at any time without notice.
Under the reinvestment plan, distributions will be used to purchase Units
already held in inventory by the Underwriter or to purchase Units created for
such purpose by the deposit of additional Securities. If the reinvestment
option has been suspended or terminated, which may occur if Units are
unavailable for such purpose, distributions which would otherwise have been
reinvested shall be distributed to the Unitholder on the applicable
Distribution Date.
Purchases of Units made pursuant to the reinvestment plan will be made at the
Public Offering Price as of the Evaluation Time on the related Income or
Capital Distribution Dates. (See "Public Offering"herein). Under the
reinvestment plan, the Underwriter receives the Unitholder's distribution and
purchases for such Unitholder's full and fractional Units of the Trust. The
Unitholder will receive confirmation of such purchases in the next regular
brokerage statement following such investment.
A participating Unitholder may, at any time prior to five days preceding the
next succeeding Distribution Date, by so notifying the Underwriter in writing,
elect to terminate his or her reinvestment plan and receive future
distributions in cash on applicable Distribution Dates. There will be no
charge or other penalty for such termination.
Unitholders of the Trust may also elect to have each distribution of interest
income, capital gains and/or principal on their Units automatically reinvested
in shares of any of the open ended mutual funds (except for B shares) of which
Van Kampen American Capital Distributors, Inc. acts as Advisor, which are
registered in the Unitholder's state of residence. Such mutual funds are
hereinafter collectively referred to as the "Reinvestment Funds".
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trust. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen American
Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois
60181. Texas residents who desire to reinvest may request that a broker-dealer
registered in Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
a net asset value as computed as of the close of trading on the New York Stock
Exchange on such date, plus a sales charge of $1.00 per $100 of reinvestment
except if the participant selects the Van Kampen Merritt Money Market Fund or
the Van Kampen Merritt Tax Free Money Fund in which case no sales charge
applies. A minimum of one-half of such sales charge would be paid to Van
Kampen American Capital Distributors, Inc. for all Reinvestment Funds.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received, deductions for applicable taxes and
for fees and expenses of the Trust, for redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed in each
case both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such calendar
year; (ii) as to the Capital Account: the dates of disposition of any
Securities 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 and the number of Units outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit based
upon the last computation thereof made during such calendar year; and (v)
amounts actually distributed during such calendar year from the Income and
Capital Accounts, separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its corporate trust office at 101 Barclay Street,
20th Floor, New York, New York 10286. No redemption fee will be charged. On
the third business day following such tender the Unitholder will be entitled
to receive in cash an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units
(converted into U.S. dollars as of the Evaluation Time in the case of foreign
Securities). The "date of tender"is deemed to be the date on which Units are
received by the Trustee, except that as regards Units received after the
Evaluation Time the date of tender is the next day on which such Exchange is
open for trading and such Units will be deemed to have been tendered to the
Trustee on such day for redemption at the redemption price computed on that
day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the Supervisor
for this purpose. Units so redeemed shall be cancelled.
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of the Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption.
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. On the Initial Date of Deposit, the Public Offering
Price per Unit (which includes the sales charge) exceeded the values at which
Units could have been redeemed by the amounts shown under "Summary of
Essential Financial Information."While the Trustee has the power to determine
the Redemption Price per Unit when Units are tendered for redemption, such
authority has been delegated to the Evaluator which determines the price per
Unit on a daily basis. The Redemption Price per Unit is the pro rata share of
each Unit in the Trust determined on the basis of (i) the cash on hand in the
Trust, (ii) the value of the Securities in the Trust and (iii) dividends
receivable on the Equity Securities trading ex-dividend as of the date of
computation, less (a) amounts representing taxes or other governmental charges
payable out of the Trust and (b) 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 or the NASDAQ National Market System, this evaluation is generally
based on the closing sale prices on that exchange or that system (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 or system, 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 closing bid price on the over-the-counter
market (unless these prices are inappropriate as a basis for evaluation). If
closing bid prices are unavailable, the evaluation is generally determined (a)
on the basis of closing bid prices for comparable securities, (b) by
appraising the value of the Equity Securities on the bid side of the market or
(c) by any combination of the above. The value of Securities of foreign
issuers in the secondary market is based on the aggregate value of such
Securities computed on the basis of the bid side value of the related currency
exchange rate expressed in U.S. dollars as of the Evaluation Time.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size of the Trust will be, and the diversity of the
Trust may be, reduced. Such sales may be required at a time when Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Underwriter Purchases of Units. The Trustee shall notify the Underwriter of
any tender of Units for redemption. If the 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 Underwriter may be tendered to the
Trustee for redemption as any other Units.
The offering price of any Units acquired by the 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 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, Underwriter or the Trustee; their activities described
herein are governed solely by the provisions of the Trust Agreement.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. While the Trust will not be managed,
the Trust Agreement does provide that the Sponsor may (but need not) direct
the Trustee to dispose of an Equity Security (1) upon default in payment of
dividends, after declared, or interest when either are due and payable, (2) if
any action or proceeding has been instituted at law or equity seeking to
restrain or enjoin the payment of dividends or interest on any such
Securities, or if there exists any legal question or impediment affecting such
Securities or the payment of dividends or interest on any such Securities, or
if there exists any legal question or impediment affecting such Securities or
the payment of dividends or interest on the same, (3) if there has occurred
any breach of covenant or warranty in any document relating to an issuer which
would adversely affect either immediately or contingently the payment of
dividends or interest on such Securities, or the general credit standing of an
issuer or otherwise impair the sound investment character of such Securities,
(4) if there has been a default in the payment of interest or dividends, or
the principal or interest or premium, if any, on any other outstanding
obligations of an issuer (which, for purposes of this clause, shall mean
either or both the issuer of the security underlying an ADR and the depositary
for such ADR), (5) if the price of any such Securities has declined to such an
extent or other such market or credit factors exist that in the opinion of the
Sponsor as evidenced in writing to the Trustee, the retention of such
Securities would be detrimental to the Trust and to the interests of the
Unitholders, (6) if all of the Securities will be sold pursuant to termination
of the Trust as provided in the Trust Agreement, (7) if such sale is required
due to Units tendered for redemption, (8) upon the occurrence of a change in
the business of an issuer (which, for purposes of this clause, shall mean
either or both the issuer of the security underlying an ADR and the depositary
for such ADR) that would have caused the Sponsor not to include the securities
of such issuer in the portfolio had such circumstances existed prior to the
formation of the Trust or (9) to prevent the Trust from becoming subject to
the provisions of the Public Utility Holding Company Act of 1935 and the rules
and regulations promulgated thereunder.
In addition, the Sponsor will instruct the Trustee to dispose of certain
Securities and to take such further action as may be needed from time to time
to ensure that the Trust continues to satisfy the qualifications of a
regulated investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue Code. Pursuant to
the Trust Agreement, the Sponsor is not authorized to direct the reinvestment
of the proceeds of the sale of Securities in replacement securities except in
the event the sale is the direct result of serious adverse credit factors
affecting the issuer of the Security which, in the opinion of the Sponsor,
would make the retention of such Security detrimental to the Trust. If such
factors exist, the Sponsor is authorized, but is not obligated, to direct the
reinvestment of the proceeds of the sale of such Securities in any other
securities which meet the criteria necessary for inclusion in the Trust on the
Initial Date of Deposit (including other Securities already deposited in 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). Therefore, except as stated under "Trust Portfolio"for failed
securities and as provided in this paragraph, the acquisition by the Trust of
any securities other than the Securities is prohibited. Proceeds from the sale
of Securities (or any securities or other property received by the Trust in
exchange for Equity Securities), unless held for reinvestment as herein
provided, are credited to the Capital Account for distribution to Unitholders
or to meet redemptions.
As indicated under "Rights of Unitholders--Redemption of Units"above, the
Trustee may also sell Securities designated by the Supervisor, or if not so
directed, in its own discretion, for the purpose of redeeming Units of 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. To the extent this is not practicable,
the composition and diversity of the Equity Securities may be altered. In
order to obtain the best price for the Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (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 of 51% of the Units then outstanding, provided that no
such amendment or waiver will reduce the interest in the Trust of any
Unitholder without the consent of such Unitholder or reduce the percentage of
Units required to consent to any such amendment or waiver without the consent
of all Unitholders. The Trustee shall advise the Unitholders of any amendment
promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Central Equity Trust Units then outstanding. The Trust will be
liquidated by the Trustee in the event that a sufficient number of Units not
yet sold are tendered for redemption by the Underwriter or the Sponsor so that
the net worth of the Trust would be reduced to less than 40% of the value of
the Securities at the time they were deposited in the Trust. If the Trust is
liquidated because of the redemption of unsold Units by the Underwriters, the
Sponsor will refund to each purchaser of Units the entire purchase price
(including the sales charge) paid by such purchaser. The Trust Agreement will
terminate upon the sale or other disposition of the last Security held
thereunder, but in no event will it continue beyond the Mandatory Termination
Date stated under "Summary of Essential Financial Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Trustee will deduct from the funds of the Trust any accrued
costs, expenses, advances or indemnities provided by the Trust Agreement,
including estimated compensation of the Trustee, costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes
or other governmental charges. Any sale of Equity Securities in the Trust upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time. The Trustee will then distribute to
each Unitholder his pro rata share of the balance of the Income and Capital
Accounts.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor, the
Underwriter 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 wilful misfeasance, bad faith or gross negligence in
the performance of their duties or by reason of their reckless disregard of
their obligations and duties hereunder. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any of
the Securities. In the event of the failure of the Sponsor to act under the
Trust Agreement, the Trustee may act thereunder and shall not be liable for
any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor, Underwriter 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.
Underwriter. EDJ is the Underwriter for the Units. EDJ is a Missouri limited
partnership formed on May 23, 1969. EDJ's principal office is located at 12555
Manchester Road, St. Louis, Missouri, 63131. EDJ is a member of the New York
Stock Exchange, as well as other securities exchanges and the National
Association of Securities Dealers, Inc. EDJ is engaged in the securities
brokerage business as well as underwriting and distributing new issues and
acting as a dealer in unlisted securities and municipal bonds. EDJ purchases
the Units on the date they are issued by the Trust and is entitled to the
benefits thereof, as well as subjected to the risks inherent therein.
Units may also be sold by the Underwriter to dealers who are members of the
National Association of Securities Dealers, Inc. Such dealers, if any, may be
allowed a concession or agency commission by the Underwriter. However, resales
of Units by such dealers to the public will be made at the Public Offering
Price described in the Prospectus. The Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and the
Underwriter reserves the right to change the amount of the concession to
dealers from time to time.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. Van Kampen American Capital Distributors,
Inc. management owns a significant minority equity position. Effective
December 20, 1994, the parent of Van Kampen Merritt Inc. acquired American
Capital Management & Research, Inc. As a result, Van Kampen Merritt Inc., has
changed its name to Van Kampen American Capital Distributors, Inc. Van Kampen
American Capital Distributors, Inc. specializes in the underwriting and
distribution of unit investment trusts and mutual funds. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas, 77056, (713) 993-0500. It maintains a
branch office in Philadelphia and has regional representatives in Atlanta,
Dallas, Los Angeles, New York, San Francisco, Seattle and Tampa.
As of March 31, 1995, the Sponsor and its affiliates managed or supervised
approximately $51.7 billion of investment products, of which over $24.7
billion is invested in municipal securities. The Sponsor and its affiliates
managed $38.9 billion of assets, consisting of $20.3 billion for 42 open end
mutual funds, $9.4 billion for 38 closed-end funds and $5.6 billion for 82
institutional accounts. The Sponsor has also deposited approximately $26
billion of unit investment trusts. Based on cumulative assets deposited, the
Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R) trust. The Sponsor also provides surveillance
and evaluation services at cost for approximately $13 billion of unit
investment trust assets outstanding. Since 1976, the Sponsor has serviced over
one million retail investor accounts, opened through retail distribution
firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or 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 Fund as provided therein
or (iii) continue to act as Trustee without terminating the Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286 (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio. The
Trustee may engage custodians to act as its agents to effectuate certain of
its responsibilities with respect to foreign Securities, including the holding
and disposition of Securities in foreign markets and effecting currency
exchanges.
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 Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided"). The
Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Tanner Propp & Farber has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 15 (Central Equity Trust, Worldwide Series 2, Utility &
Telecommunications Portfolio):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 15
(Central Equity Trust, Worldwide Series 2, Utility & Telecommunications
Portfolio) as of ___, 1995.The statement of condition and portfolio are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of irrevocable letters of credit deposited to
purchase tax-exempt securities by correspondence with the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall financial
statement presentation. We believe our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 15 (Central Equity Trust, Worldwide Series 2,
Utility & Telecommunications Portfolio) as of ___, 1995, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
___, 1995
<TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
STATEMENT OF CONDITION
As of ___, 1995
<CAPTION>
Investment in Securities:
<S> <C>
Securities deposited.................................. $
Contracts to purchase securities <F1>.................
Organizational costs <F2>.............................
...................................................... $
Liability and Interest of Unitholders:
Liability--...........................................
Less: accrued organizational costs <F2>............... $
Interest of Unitholders--.............................
Units of fractional undivided interest outstanding:...
Cost to investors <F2> ...............................
Less: Gross underwriting commission <F2> .............
Net interest to Unitholders <F2>...................... $
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio"herein and their
cost to the Trust are the same. The value of the Securities is determined by
Interactive Data Services, Inc. on the bases set forth under "Public
Offering--Offering Price."The contracts to purchase Securities are
collateralized by an irrevocable letter of credit $___ which has been
deposited with the Trustee.
<F2>The Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over five years. Organizational costs have been
estimated based on a projected trust size of $_____. To the extent the Trust
is larger or smaller, the estimate will vary.
<F3>The aggregate public offering price and the aggregate sales charge of 4.9% are
computed on the bases set forth under "Public Offering--Offering Price"and
"Public Offering--Sponsor and Underwriting Compensation"and assume all single
transactions involve less than 2,500 Units. For single transactions involving
2,500 or more Units, the sales charge is reduced (see "Public
Offering--General") resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
</TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST SERIES 15)
As of the Initial Date of Deposit: ___, 1995
<TABLE>
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends Securities
of Shares Name of Issuer<F1> per Share<F2> per Share<F2> to Trust<F2>
<S> <C> <C>
$
$
</TABLE>
NOTES TO PORTFOLIO
(1)All of the Securities are represented by "regular way"contracts for the
performance of which an irrevocable letter of credit has been deposited with
the Trustee. At the Initial Date of Deposit, Securities may have been
delivered to the Sponsor pursuant to certain of these contracts; the Sponsor
has assigned to the Trustee all of its right, title and interest in and to
such Securities. Contracts to acquire Securities were entered into on ___,
1995 and ___, 1995 and are expected to settle on ___, 1995 and ___, 1995 (see
"The Trust").
(2) The market value of each of the Securities is based on the closing sale
price of each listed Security and the asked price of each over-the-counter
traded Security on the day prior to the Initial Date of Deposit (converted
into U.S. dollars at the offer side of the related exchange rate at the
Evaluation Time in the case of foreign Securities). Estimated annual dividends
are based on annualizing the most recently paid dividends (converted into U.S.
dollars at the offer side of the related exchange rate at the Evaluation Time
in the case of foreign Securities). Other information regarding the Securities
in the Trust, as of the Initial Date of Deposit, is as follows: (a) cost of
the Securities to the Underwriter--$___; (b) profit(loss) to
Underwriter--$___; and (c) estimated aggregate annual dividends--$___.
(3)A Security marked by "+"indicates an American Depositary Receipt.
(4)"**"Indicates that the dividends shown reflect the net amounts after giving
effect to foreign withholding taxes.
(5)A Security marked by "3"indicates an equity security listed on a foreign
securities exchange.
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 or the Sponsor. This Prospectus does not constitute an offer to sell, or
a solicitation of an offer to buy, securities in any state to any person to
whom it is not lawful to make such offer in such state.
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial
Information 3
The Trust 5
Objectives and Securities Selection 5
Trust Portfolio 7
Risk Factors 9
Federal Taxation 15
Trust Operating Expenses 17
Public Offering 19
Rights of Unitholders 22
Trust Administration 26
Other Matters 30
Report of Independent Certified Public
Accountants 31
Statement of Condition 32
Portfolio 33
Notes to Portfolio 33
</TABLE>
TABLE OF CONTENTS
This Prospectus contains information concerning the Trust and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
___ , 1995
Central Equity Trust
W O R L D W I D E S E R I E S 2
UTILITY & TELECOMMUNICATIONS
PORTFOLIO
Van Kampen American CapitalEquity Opportunity Trust, Series 15
Edward D. Jones & Co.
12555 Manchestor Road
St. Louis, Missouri 63131
Please retain this Prospectus for future reference.
Contents Of Registration Statement
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services
and legal counsel
The following exhibits:
1.1 Proposed form of Trust Agreement between Van Kampen American
Capital Distributors, Inc., Depositor, American Portfolio Advisory
Service, a division of Van Kampen American Capital Investment
Advisory Corp., as Evaluator, and The Bank of New York, as Trustee
(to be supplied by amendment).
1.5 Form of Agreement Among Underwriters (to be supplied by amendment).
3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).
3.2 Opinion and consent of counsel as to New York tax status of
securities being registered (to be supplied by amendment).
4.1 Consent of Interactive Data Services, Inc. (to be supplied by
amendment).
4.2 Financial Data Schedule (to be supplied by amendment).
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
15 has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Chicago and
State of Illinois on the 16th day of June, 1995.
Van Kampen American Capital Equity
Opportunity Trust, Series 15
(Registrant)
By Van Kampen American Capital
Distributors, Inc.
(Depositor)
Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on June 16, 1995.
Signature Title
Don G. Powell Chairman, Chief Executive )
Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
Sandra A. Waterworth
(Attorney-in-fact)*
_____________________________________________________________________
*An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and 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.
