File No. 33-60317 CIK #896977
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549-1004
POST-EFFECTIVE AMENDMENT NO. 4 TO FORM S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 15
(Exact Name of Trust)
VAN KAMPEN FUNDS INC.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective on
April 26, 1999 pursuant to paragraph (b) of Rule 485.
Central Equity Trust, Worldwide Series 2
Van Kampen American Capital Equity Opportunity Trust, Series 15
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PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied
by Part Two.
Please retain both parts of this Prospectus for future reference.
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THE TRUST
The Central Equity Trust, Worldwide Series 2 (the "Trust" or "Central
Equity Trust") is one unit investment trust in the Van Kampen American Capital
Equity Opportunity Trust, Series 15 (the "Fund"). The Central Equity Trust,
Worldwide Series 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 real
estate investment trusts ("REITs"). Unless terminated earlier, the Trust will
terminate on July 1, 2002 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.
PUBLIC OFFERING PRICE
The secondary market Public Offering Price of the Trust will include
the aggregate underlying value of the Securities in the Trust, the applicable
sales charge as described herein, and cash, if any, in the Income and Capital
Accounts held or owned by the Trust. See "Summary of Essential Financial
Information" in this Part One.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is April 26, 1999
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
Van Kampen American Capital Equity Opportunity Trust, Series 15
Summary of Essential Financial Information
As of March 4, 1999
Underwriter & Supervisor: Edward Jones
Sponsor: Van Kampen Funds Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Central Equity
Trust
Worldwide
----------------
<S> <C>
General Information
Number of Units 717,514
Fractional Undivided Interest in Trust per Unit 1/717,514
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 18,278,633
Aggregate Value of Securities per Unit (including accumulated dividends) $ 25.47
Sales charge 3.4% (3.520% of Aggregate Value of Securities excluding principal cash)
per Unit (3) $ .91
Public Offering Price per Unit (2)(3) $ 26.38
Redemption Price per Unit $ 25.47
Secondary Market Repurchase Price per Unit $ 25.47
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .91
Supervisor's Annual Supervisory Fee Maximum of $.005 per Unit
Evaluator's Annual Fee Maximum of $.005 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are made
as of 4:00 P.M. Eastern time on days of trading on the New York Stock
Exchange next following receipt of an order for a sale or purchase of
Units or receipt by The Bank of New York of Units tendered for redemption.
Date of Deposit July 25, 1995
Mandatory Termination Date July 1, 2002
Minimum Termination Value
The Trust may be terminated if the net asset value of such Trust
is less than $500,000 unless the net asset value of such Trust
deposits has exceeded $15,000,000, then the Trust Agreement may
be terminated if the net asset value of such Trust is less than
$3,000,000.
Special Information
Calculation of Estimated Net Annual Dividends per Unit
Estimated Gross Annual Dividends per Unit $ .95028
Less: Estimated Expenses per Unit $ .04185
Estimated Net Annual Dividends per Unit $ .90843
Trustee's Annual fee $ .016 per Unit
Estimated Annual Organizational Expenses (5) $ .01441 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 (4) TWENTY-FIFTH day of March, June, September and December.
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(1) Equity Securities listed on a national securities exchange are valued at
the closing sale price, or if no such price exists, or if the Equity
Securities are not listed, at the closing bid price thereof. The aggregate
value of Securities of foreign issuers represents the U.S. dollar value on
the basis of the bid side value of the related currency exchange rates at
the Evaluation Time.
(2) Anyone ordering Units will have added to the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
(3) Effective on each July 28, commencing July 28, 1996, the secondary sales
charge will decrease by .5 of 1% to a minimum sales charge of 1.9%. See
"Public Offering-Offering Price" in Part Two.
(4) 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.
(5) 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 "Expenses of the Trust" in Part
Two and "Statement of Condition." Historically, the sponsors of unit
investment trusts have paid all the costs of establishing such trusts.
</TABLE>
<TABLE>
PORTFOLIO
The Central Equity Trust, Worldwide Series 2 consists of 35 different issues
of Equity Securities, issued primarily by domestic and foreign electric, gas,
water and telecommunications companies.
<CAPTION>
PER UNIT INFORMATION
1995 (1) 1996 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value per Unit at beginning of period............ $ 20.11 $ 21.42 $ 21.33 $ 26.21
============ ============ ============ ============
Net asset value per Unit at end of period.................. $ 21.42 $ 21.33 $ 26.21 $ 27.65
============ ============ ============ ============
Distributions to Unitholders of investment income including
accumulated dividends paid on Units redeemed
(average Units outstanding for entire period)........... $ 0.31 $ 1.29 $ 1.17 $ 1.03
============ ============ ============ ============
Distributions to Unitholders from Equity Security
redemption proceeds (average Units
outstanding for entire period).......................... $ -- $ 1.60 $ 0.12 $ 0.28
============ ============ ============ ============
Unrealized appreciation (depreciation) of Equity Securities
(per Unit outstanding at end of period)................. $ 1.40 $ 1.31 $ 5.06 $ 1.38
============ ============ ============ ============
Units outstanding at end of period......................... 550,000 764,000 751,327 718,834
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(1) For the period from July 25, 1995 (date of deposit) through December 31,
1995.
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of
Central Equity Trust, Worldwide Series 2: (Van Kampen American Capital Equity
Opportunity Trust, Series 15):
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of the Central Equity Trust,
Worldwide Series 2 (Van Kampen American Capital Equity Opportunity Trust, Series
15) as of December 31, 1998, and the related statements of operations and
changes in net assets for the three years ended December 31, 1998. These
statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1998 by correspondence with the
Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee and the Sponsor, as well as evaluating
the overall financial statement presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Central Equity Trust,
Worldwide Series 2 (Van Kampen American Capital Equity Opportunity Trust, Series
15) as of December 31, 1998, and the results of operations and changes in net
assets for the three years ended December 31, 1998 in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 12, 1999
<TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
Statements of Condition
December 31, 1998
<CAPTION>
Central
Equity
Trust
Worldwide
------------
<S> <C>
Trust property
Securities at market value, (cost $13,754,745) (note 1) ............................................ $ 20,330,338
Accumulated dividends .............................................................................. 59,780
Organizational costs ............................................................................... 20,484
------------
$ 20,410,602
============
Liabilities and interest to Unitholders
Cash overdraft ..................................................................................... $ 533,881
Interest to Unitholders ............................................................................ 19,876,721
------------
$ 20,410,602
============
Analyses of Net Assets
Interest of Unitholders (718,834 Units of fractional undivided interest outstanding)
Cost to original investors of 764,000 Units (note 1) ............................................... $ 17,040,719
Less initial underwriting commission (note 3) .................................................. 754,979
------------
16,285,740
Less redemption of 45,166 Units ................................................................ 1,992,700
------------
14,293,040
Undistributed net investment income
Net investment income .......................................................................... 2,493,055
Less distributions to Unitholders .............................................................. 2,694,802
------------
(201,747)
Realized gain (loss) on Security sale or redemption ................................................ 652,817
Unrealized appreciation (depreciation) of Securities (note 2) ...................................... 6,575,593
Distributions to Unitholders of Security sale or redemption proceeds ............................... (1,442,982)
------------
Net asset value to Unitholders ............................................................. $ 19,876,721
============
Net asset value per Unit (718,834 Units outstanding) .................................................. $ 27.65
============
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
Statements of Operations
Years ended December 31,
<CAPTION>
1996 1997 1998
------------ ------------ -----------
<S> <C> <C> <C>
Investment income
Dividend income.......................................................... $ 920,772 $ 769,661 $ 764,100
Expenses
Trustee fees and expenses............................................. 19,632 19,426 11,858
Evaluator fees........................................................ 3,591 4,035 4,057
Supervisory fees...................................................... 2,556 -- 3,005
Organizational fees................................................... 9,457 6,617 7,036
------------ ------------ -----------
Total expenses..................................................... 35,236 30,078 25,956
------------ ------------ -----------
Net investment income................................................. 885,536 739,583 738,144
Realized gain (loss) from Securities sale or redemption
Proceeds................................................................. 1,280,829 980,508 922,475
Cost..................................................................... 1,133,189 767,020 630,786
------------ ------------ -----------
Realized gain (loss).................................................. 147,640 213,488 291,689
Net change in unrealized appreciation (depreciation) of Securities.......... 1,004,611 3,803,220 995,366
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.......... $ 2,037,787 $ 4,756,291 $ 2,025,199
============ ============ ===========
Statements of Changes in Net Assets
Years ended December 31,
1996 1997 1998
------------ ------------ -----------
Increase (decrease) in net assets Operations:
Net investment income.................................................... $ 885,536 $ 739,583 $ 738,144
Realized gain (loss) on Securities sale or redemption.................... 147,640 213,488 291,689
Net change in unrealized appreciation (depreciation) of Securities....... 1,004,611 3,803,220 995,366
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations....... 2,037,787 4,756,291 2,025,199
Distributions to Unitholders from:
Net investment income.................................................... (921,957) (909,590) (760,985)
Securities sale or redemption proceeds................................... (1,141,974) (93,322) (207,686)
Redemption of Units......................................................... -- (1,122,236) (870,464)
------------ ------------ -----------
Total increase (decrease)............................................. (26,144) 2,631,143 186,064
Net asset value to Unitholders
Beginning of period...................................................... 11,779,048 16,297,855 19,690,657
Additional Securities purchased.......................................... 4,544,951 761,659 --
------------ ------------ -----------
End of period (including undistributed (overdistributed) net
investment income of $(8,899), $(178,906), and $(201,747) respectively) $ 16,297,855 $ 19,690,657 $19,876,721
============ ============ ===========
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2 PORTFOLIO as of December 31, 1998
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<CAPTION>
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
- --------------- ------------------------------------------------------------------- --------------- ---------------
<S> <C> <C> <C>
13,304 Ameren Coporation $ 42.6875 $ 567,915
- ----------------------------------------------------------------------------------------------------------------------
27,248 American Water Works Company, Incorporated 33.7500 919,620
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20,310 Ameritech Corporation 63.3750 1,287,146
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39,070 ABB AB 10.7500 420,002
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21,260 Atmos Energy Corporation 32.2500 685,635
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16,590 Cable & Wireless PLC 36.7500 609,683
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20,019 China Light & Power Limited 4.9800 99,695
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22,132 Citizens Utilities Company 8.1250 179,822
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32,464 DPL, Incorporated 21.6250 702,034
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38,746 Empresa Nacional de Electricidad "ENDESA" 27.0000 1,046,142
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31,405 Energen Corporation 19.5000 612,398
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34,030 EnergySouth Incorporated 21,1250 718,884
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5,621 Enron Corporation 57.0625 320,748
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12,849 FPL Group Incorporated 61.6250 791,820
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97,125 Hong Kong Electric Holdings Limited 3.0300 294,289
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24,434 Hyder PLC 12.5289 306,132
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4,784 Hyder PLC Preferred 1.9682 9,416
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10,840 KN Energy, Incorporated 36.3750 394,305
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30,191 LG&E Energy Corporation 28.3125 854,783
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23,520 MCN Corporation 19.0625 448,350
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10,529 Mediaone Group 47.0000 494,863
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9,494 National Grid 39.6900 376,817
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11,987 National Power PLC 36.7500 440,522
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24,183 Piedmont Natural Gas Company, Incorporated 36.1250 873,611
- ----------------------------------------------------------------------------------------------------------------------
8,556 PowerGen PLC 53.5000 457,746
- ----------------------------------------------------------------------------------------------------------------------
13,652 Royal Dutch Petroleum Company 47.8750 653,589
- ----------------------------------------------------------------------------------------------------------------------
20,266 SBC Communications, Incorporated 53.6250 1,086,764
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18,539 Southern Company 29.0625 538,790
- ----------------------------------------------------------------------------------------------------------------------
75,733 Southern Electric PLC 11.2300 850,482
- ----------------------------------------------------------------------------------------------------------------------
24,367 SIGCORP, Incorporated 35.6875 869,597
- ----------------------------------------------------------------------------------------------------------------------
3,803 Telefonica de Argentina 27.9375 106,246
- ----------------------------------------------------------------------------------------------------------------------
37,654 United Dominion Realty Trust 10.3125 388,307
- ----------------------------------------------------------------------------------------------------------------------
11,431 US West, Incorporated 64.6250 738,728
- ----------------------------------------------------------------------------------------------------------------------
14,688 Weingarten Realty Investors 44.6250 655,452
- ----------------------------------------------------------------------------------------------------------------------
15,940 Western Resources, Incorporated 33.2500 530,005
----------- ----------------
826,764 $ 20,330,338
=========== ================
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>
CENTRAL EQUITY TRUST, WORLDWIDE SERIES 2
Notes to Financial Statements
December 31, 1996, 1997 and 1998
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales price or if no such price exists, or if the
Equity Securities are not listed, at the closing bid price thereof. The
aggregate value of Securities of foreign issuers represents the U.S. dollar
value on the basis of the bid side value of the related currency exchange rates
at the Evaluation Time.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange or relevent stock
exchange, on the closing sale prices on the exchange. The cost was determined on
the day of the various Dates of Deposit and in the case of foreign traded
securities included brokerage commissions.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as described
in Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - 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 (the "Code" ). If the Trust
so qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard of 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.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Organizational Costs - The Trust will bear all or a portion of its
organizational costs, which will be deferred and amortized over five years.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1998 is as follows:
Central
Equity
Trust
Worldwide
--------------
Unrealized Appreciation $ 6,899,898
Unrealized Depreciation (324,305)
--------------
$ 6,575,593
==============
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Underwriter
intends to maintain a market for Units and to continuously offer to purchase
Units at prices, subject to change at any time, based upon the value of the
Securities in the portfolio of the Trust valued as described in Note 1, plus
accumulated dividends to the date of settlement. If the supply of Units exceeds
demand, or for other business reasons, the Underwriter may discontinue purchases
of Units at such prices. In the event that a market is not maintained for the
Units, a Unitholder desiring to dispose of his Units may be able to do so only
by tendering such Units to the Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus a sales charge of 4.9% of the public offering price which is
equivalent to 5.152% of the aggregate offering price of the Securities. The
secondary market cost to investors is based on the determination of the
underlying value of the Securities per Unit on the date of an investor's
purchase plus a sales charge of 4.9% of the public offering price which is
5.152% of the underlying value of the Securities. Effective on each July 28,
commencing July 28, 1996, the secondary sales charge will decrease by .5 of 1%
to a minimum sales charge of 1.9%.
Compensation of Evaluator and Supervisor - the Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.005 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the years ended December 31, 1996, 1997 and 1998, 0 Units, 12,673
Units and 32,493 Units, respectively, were presented for redemption.
CENTRAL EQUITY TRUST
WORLDWIDE SERIES 2
UTILITY & TELECOMMUNICATIONS PORTFOLIO
Prospectus Part Two
- --------------------------------------------------------------------------------
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 real estate investment trusts ("REITs"). Unless terminated
earlier, the Trust will terminate on July 1, 2002 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" in Part One. There is, of course, no guarantee that the objective of
the Trust will be achieved.
Public Offering Price. The secondary market Public Offering Price of the
Trust includes the aggregate underlying value of the Securities in the Trust,
the applicable sales charge as described herein, and cash, if any, in the Income
and Capital Accounts held or owned by the Trust.The 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."
Dividend and Capital Distributions. Distributions of dividends received, and
capital, if any, received by the Trust will be paid in cash on the applicable
Distribution Date to Unitholders of record on the record date as set forth in
the "Summary of Essential Financial Information" in Part One. Any distribution
of income and/or capital 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. Although not obligated to do so, Edward Jones
("EJ" 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 or bid prices) 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 or bid prices) plus or minus a pro rata share of
cash, if any, in the Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units."
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should
be retained for future reference. This Prospectus is
dated as of the date of the Prospectus Part I
accompanying this Prospectus Part II.
Edward Jones
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 aggregate
underlying value of the Equity Securities in the Trust, if Units are available
at the time of reinvestment. 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."
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 as of Initial Date of Deposit, among Van Kampen Funds Inc.,
as Sponsor, American Portfolio Evaluation Services, a division of an affiliate
of the Sponsor, as Evaluator, Edward Jones, as Supervisor, and The Bank of New
York, as Trustee, or their predecessors.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities including delivery statements relating to contracts for the purchase
of certain such Securities and an irrevocable letter of credit issued by a
financial institution in the amount required for such purchases. Thereafter, the
Trustee, in exchange for such Securities (and contracts) so deposited, delivered
to the Sponsor documentation evidencing the ownership of Units of the Central
Equity Trust. 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 consisted of utility and telecommunications Securities issued by both
foreign and domestic issuers. In addition, the Trust will also contain equity
securities issued by real estate investment trusts ("REITs"). The portfolio is
described under "Trust Portfolio" herein and " in Part One. 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 Jones
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. Past
performance is, however, no guarantee of future results.
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 Jones 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
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" in Part One
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 an employee or 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.
RISK FACTORS
The Trust will invest in Securities of domestic and foreign companies in the
electric, gas, water, telecommunications 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. Certain LDCs may have difficulty adjusting to the deregulated
environment or minimizing the transition costs in connection therewith and could
therefore 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 two issues of 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).
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.
Year 2000 Readiness Disclosure. These two paragraphs constitute "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem". The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
FEDERAL TAXATION
The Trust has elected and intends to qualify on a continuing basis for
special federal income tax treatment as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). If the Trust so
qualifies and timely distributes to Unitholders 90% or more of its taxable
income (without regard to its net capital gain, i.e., the excess of its net
long-term capital gain over its net short-term capital loss), it will not be
subject to federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unitholders. In addition, to the
extent the Trust timely distributes to Unitholders at least 98% of its taxable
income (including any net capital gain), it will not be subject to the 4% excise
tax on certain undistributed income of "regulated investment companies." Because
the Trust intends to timely distribute its taxable income (including any net
capital gain), it is anticipated that the Trust will not be subject to federal
income tax or the excise tax.
Distributions to Unitholders of the Trust's taxable income, other than
distributions which are designated as capital gain dividends, will be taxable as
ordinary income to Unitholders, except that to the extent that distributions to
a Unitholder in any year exceed the Trust's current and accumulated earnings and
profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholder) on December 31 of the year such distributions are
declared.
Distributions of the Trust's net capital gain which are properly designated
as capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or treated
as arising from) the sale or redemption of Units will generally be a capital
gain or loss, except in the case of a dealer or a financial institution. The
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) is generally subject to a maximum marginal stated tax rate
of 20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income. Note, however, that the 1998 Tax Act and the Taxpayer Relief Act of 1997
(the "1997 Tax Act") provide that the application of the rules described above
in the case of pass-through entities such as the Trust will be prescribed in
future Treasury Regulations. Note that if a Unitholder holds Units for six
months or less and subsequently sells such Units at a loss, the loss will be
treated as a long-term capital loss to the extent that any long-term capital
gain distribution is made with respect to such Units during the six-month period
or less that the Unitholder owns the Units.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units. The 1997 Tax Act includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g. short sales, offsetting notional principal contracts, futures or
forward contracts or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Trust is
deferred. The income (or proceeds from redemption) a Unitholder must take into
account for federal income tax purposes is not reduced by amounts deducted to
pay the deferred sales charge.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than Real
Estate Investment Trusts) and is designated by the Trust as being eligible for
such deduction. To the extent dividends received by the Trust are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a pro
rata portion of the foreign securities held by the Trust, must include in their
gross income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust deems
to be the Unitholders' portion of foreign income taxes paid with respect to, or
withheld from, dividends, interest or other income of the Trust from its foreign
investments. Unitholders may then subtract from their federal income tax the
amount of such taxes withheld, or else treat such foreign taxes as deductions
from gross income; however, as in the case of investors receiving income
directly from foreign sources, the above described tax credit or deduction is
subject to certain limitations. The 1997 Tax Act imposes a required holding
period for such credits. Unitholders should consult their tax advisers regarding
this election and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received from the
Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon redemption of Units or termination of the Trust. Unitholders
electing an in kind distribution of shares of Securities should be aware that
the exchange is subject to taxation and Unitholders will recognize gain or loss
(subject to various nonrecognition provisions of the Code) based on the value of
the Securities received. Investors electing an in kind distribution should
consult their own tax advisors with regard to such transaction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
The foregoing discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to United States
Unitholders.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from the Trust that
are designated by the Trust as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes, if all of the
following conditions are met (i) the capital gain dividend is not effectively
connected with the conduct by the foreign investor of a trade or business within
the United States, (ii) the foreign investor (if an individual) is not present
in the United States for 183 days or more during his or her taxable year, and
(iii) the foreign investor provides all certification which may be required of
his status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers with respect to
United States tax consequences of ownership of Units. Units in the Trust and
Trust distributions may also be subject to state and local taxation and
Unitholders should consult their tax advisers in this regard.
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" in Part One (which is
based on the number of Units outstanding on January 1 of each year for which
such compensation relates) 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" in Part One (which is based on the number of
Units outstanding on January 1 of each year for which such compensation relates)
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 Jones 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"
in Part One (which amount is based on the number of Units outstanding on January
1 of each year for which such compensation relates). 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 Trust may pay the cost of updating its
registration statement each year. Unit investment trust sponsors have
historically paid these costs.
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. The secondary market
public offering price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge (initially 4.9% of the
Public Offering Price which will be reduced by .5 of 1% on each July 28
commencing July 28, 1996, to a minimum sales charge of 1.9%), and cash, if any,
in the Income and Capital Accounts held or owned by the Trust. Such underlying
value is based on the aggregate value of Securities of foreign issuers 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 for secondary market
transactions. Such underlying value shall include the proportionate share of any
undistributed cash held in the Capital and Income 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 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 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 Part One 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 bid side value of the
related currency exchange rate expressed in U.S. dollars during the secondary
market.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
initially 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 initially 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 Corporation 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
July 28, commencing July 28, 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 is determined on each
business day by the Evaluator in the following manner: if the Equity Securities
are listed on a national securities exchange, this evaluation is generally based
on the closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange, at the closing 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 it is determined that 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 is based on the aggregate value of
such Securities computed on the basis 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. 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.
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 may be 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.
Sponsor and Underwriter Compensation. The Underwriter will receive a gross
sales commission initially equal to 4.9% of the Public Offering Price of the
Units (initially equivalent to 5.152% of the net amount invested), less any
reduced sales charge (as described under "General" above). Any discount provided
to investors will be borne by the selling Underwriter, dealer or agent as
indicated under "General" above.
In addition, the Sponsor has realized a profit or sustained a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. The Sponsor has not
participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities in the Trust portfolio. The Underwriter may have further realized
additional profit or loss 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 related currency exchange rate 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. A certificate representing 100% of the fractional undivided interest
in and ownership of the Units will be registered in the name or to the order of
the Underwriter on the books of the depository, The Depository Trust Company
("DTC" or the "Depository"). Accordingly, the Underwriter or its designee will
be the holder of record of the Units.
The Units will be issued in book-entry form only and the Unitholders will not
be entitled to receive physical certificates representing their Units. A
Unitholder's ownership of Units will be recorded on or through the records of
the Underwriter or any other brokerage firm that maintains such Unitholder's
account for such purpose. In turn, the brokerage firm's record ownership of such
Units will be recorded on the records of the Depository (or of a DTC
participating firm that acts as agent for the brokerage firm if a Unitholder's
brokerage firm is not a DTC participant). Therefore, a Unitholder must rely upon
the foregoing procedures to evidence such Unitholder's beneficial ownership of a
Unit. Beneficial ownership of a Unit may only be transferred by compliance with
the procedures of such brokerage firms and DTC participants. Neither the Trustee
nor the Sponsor will have any responsibility or liability for any aspect of the
records relating to or payments made by such brokerage firms or DTC participants
on account of beneficial ownership interests in the Units or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
DTC, which is a New York-chartered limited purpose trust company, performs
services for its participants, some of whom (and/or whose representatives) own
DTC. In accordance with its normal procedures, DTC is expected to record
separately the positions held by each DTC participant in the Units, whether held
for its own account or as a nominee for another person. The Underwriter is a DTC
participant.
Each distribution from the Income Account and payment upon redemption of a
Unit will be paid to the Depository for the benefit of the record holder of the
Units as shown on the books of the Depository. The Depository will be
responsible for crediting the amount of such payments to the accounts of the
applicable DTC participants in accordance with the Depository's normal
procedures. Each DTC participant will be responsible for disbursing such
payments to the beneficial owners of the Units that it represents and to each
brokerage firm for which it acts as agent. Each such brokerage firm will be
responsible for disbursing funds to the beneficial owners of the Units that it
represents.
If the foregoing book-entry procedures are terminated for any reason,
definitive Certificates will be issued in appropriate amounts as requested by
the DTC participants holding the Units.
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. Units are
transferable by presentation of transfer instructions to the Trustee accompanied
by such documents executed by the Unitholder or his authorized attorney and such
Unitholder's brokerage firm as the Trustee deems necessary to establish the
authority of the person making such transfer. 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.
Although no such charge is now made or contemplated, the Trustee may require
a Unitholder to pay a reasonable fee for each Unit transferred and to pay any
governmental charge that may be imposed in connection with each such transfer.
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"in Part One. Proceeds received on the sale of
any Securities in the Trust, to the extent not used to meet redemptions of Units
or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held in
the Capital Account 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 aggregate underlying value of
the Equity Securities (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
aggregate underlying value of the Equity Securities 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.
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. Requests for redemption of a Unit at the option of a
Unitholder must first be presented to the Unitholder's brokerage firm. Such
brokerage firm (if such firm is a DTC participant and, if not, through the DTC
participant acting on behalf of such firm) will present such redemption request
to DTC and DTC, in turn, will present such request to the Trustee for processing
in accordance with the applicable redemption provisions of the Trust Agreement.
The Trustee may require a Unitholder and such Unitholder's brokerage firm to
submit additional information or certifications to the Trustee to evidence
compliance with the applicable redemption provisions of the Trust Agreement.
Units will be deemed to be "tendered" to the Trustee when the Trustee is in
physical possession of transfer instructions and such other documentation as may
be required by the Trustee to effect the redemption of the Units. Compliance
with the foregoing procedures may result in delays in the processing of
redemption requests by Unitholders. No redemption fee will be charged. On the
third business day following such tender the Unitholder will receive in cash an
amount for each Unit equal to the Redemption Price per Unit next computed after
receipt by the Trustee of such tender of Units (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 liquidated 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 date hereof 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" in Part One. 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, this evaluation
is generally based on the closing sale prices on that exchange (unless it is
determined that these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange, at the closing bid prices. If
the Equity Securities are not so listed or, if so listed and the principal
market therefor 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 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, 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 on any
such Securities, or if there exists any legal question or impediment affecting
such Securities or the payment of dividends on any such Securities, or if there
exists any legal question or impediment affecting such Securities or the payment
of dividends 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 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 or by
the Trustee when the value of the Equity Securities owned by the Trust, as shown
by any evaluation, is less than that amount set forth under "Minimum Termination
Value" in the "Summary of Essential Financial Information" in Part One. The
Trust Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the Mandatory
Termination Date stated under "Summary of Essential Financial Information" in
Part One.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. 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 (negligence
in the case of the Trustee) in the performance of their duties or by reason of
their reckless disregard of their obligations and duties hereunder. The Trustee
shall not be liable for depreciation or loss incurred by reason of the sale by
the Trustee of any of the Securities. In the event of the failure of the Sponsor
to act under the Trust Agreement, the Trustee may act thereunder and shall not
be liable for any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the Trust
which the Trustee may be required to pay under any present or future law of the
United States of America or of any other taxing authority having jurisdiction.
In addition, the Trust Agreement contains other customary provisions limiting
the liability of the Trustee.
The Trustee, Sponsor, Supervisor, 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. EJ is the Underwriter for the Units. EJ is a Missouri limited
partnership formed on May 23, 1969. EJ's principal office is located at 12555
Manchester Road, St. Louis, Missouri, 63131. EJ is a member of the New York
Stock Exchange, as well as other securities exchanges and the National
Association of Securities Dealers, Inc. EJ 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. EJ 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 Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van
Kampen Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.,
which in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; asset
management; trading of futures, options, foreign exchange commodities and swaps
(involving foreign exchange, commodities, indices and interest rates); real
estate advice, financing and investing; global custody, securities clearance
services and securities lending; and credit card services.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has offices at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of September 30, 1997, the Sponsor and its Van Kampen affiliates managed
or supervised approximately $65.3 billion of investment products, of which over
$10.85 billion is invested in municipal securities. The Sponsor and its Van
Kampen affiliates managed $54 billion of assets, consisting of $34.3 billion for
55 open-end mutual funds (of which 45 are distributed by Van Kampen Funds Inc.)
$14.2 billion for 37 closed-end funds and $5.5 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen's open-end funds, closed-ended funds and
unit investment trusts are professionally distributed by leading financial firms
nationwide. Based on cumulative assets deposited, the Sponsor believes that it
is the largest sponsor of insured municipal unit investment trusts, primarily
through the success of its Insured Municipals Income Trust(R) or the IM-IT(R)
trust. The Sponsor also provides surveillance and evaluation services at cost
for approximately $13 billion of unit investment trust assets outstanding. Since
1976, the Sponsor has serviced over two million investor accounts, opened
through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio. 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.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in this Prospectus have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
their report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
CONTENTS OF POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement comprises the
following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Van Kampen American Capital Equity Opportunity Trust, Series 15, certifies that
it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to its Registration Statement to be signed
on its behalf by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Chicago and State of Illinois
on the 26th day of April, 1999.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 15
(Registrant)
By VAN KAMPEN FUNDS INC.
(Depositor)
By: Gina Costello
Assistant Secretary
(SEAL)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on April 26, 1999 by the
following persons who constitute a majority of the Board of Directors of Van
Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Gina M. Costello______________
(Attorney in Fact)*
- --------------------
* An executed copy of each of the related powers of attorney is filed herewith
or was filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 12, 1999 accompanying the financial
statements of Van Kampen American Capital Equity Opportunity Trust, Series 15 as
of December 31, 1998, and for the period then ended, contained in this
Post-Effective Amendment No. 4 to Form S-6.
We consent to the use of the aforementioned report in the Post-Effective
Amendment and to the use of our name as it appears under the caption "Auditors".
GRANT THORNTON LLP
Chicago, Illinois
April 26, 1999
