File No: 33-
CIK #896980
Securities and Exchange Commission
Washington, D.C. 20549-1004
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 17
B. Name of Depositor: Van Kampen American Capital
Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace Illinois 60181
D. Name and complete address of agents for service:
Chapman And Cutler Van Kampen American Capital
Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: Units of undivided
fractional beneficial interests
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of registration fee: $500.00
H. Approximate date of proposed sale to the public:
As Soon As Practicable After The Effective Date Of The Registration
Statement
_______________________________________________________________________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 17
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Underwriting
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trust
trust's securities and ) Federal Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
) Risk Factors
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
) Risk Factors
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses) Prospectus Front Cover
Page
) Summary of Essential Financial
) Information
) Trust Portfolio
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or) Trust Operating
Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) Underwriting
underwriter, trustee or any ) Trust Portfolio
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwrite)
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's )
securities ) *
52. (a) Provisions of trust agreement)
with respect to replacement) Trust Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Federal Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Conditions
______________________________________________
* Inapplicable, omitted, answer negative or not required
Preliminary Prospectus Dated August 11, 1995
First of Michigan Financial Institutions Trust, Series 2
The attached final Prospectus for a prior Series of the Fund is
hereby used as a preliminary Prospectus for the above stated Series. The
narrative information and structure of the attached final Prospectus will
be substantially the same as that of the final Prospectus for this
Series. Information with respect to pricing, the number of Units, dates
and summary information regarding the characteristics of securities to be
deposited in this Series is not now available and will be different since
each Series has a unique Portfolio. Accordingly the information
contained herein with regard to the previous Series should be considered
as being included for informational purposes only.
A registration statement relating to the units of this Series will
be filed with the Securities and Exchange Commission but has not yet
become effective. Information contained herein is subject to completion
or amendment. Such Units may not be sold nor may offer to buy be
accepted prior to the time the registration statement becomes effective.
This Prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the Units in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
March 15, 1995
First of Michigan Financial Institutions Trust, Series 1
The Trust. First of Michigan Financial Institutions Trust, Series 1 (the "
Trust") is a unit investment trust which is contained in Van Kampen
American Capital Equity Opportunity Trust, Series 11. The Trust offers
investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio of common stocks issued by
financial institutions headquartered in the states of Michigan, Indiana and
Ohio (the "Equity Securities"). Unless terminated earlier, the Trust
will terminate on March 15, 1999 (the "Mandatory Termination Date")
and any Equity Securities then held will, within a reasonable time thereafter,
be liquidated or distributed by the Trustee. Any Equity Securities liquidated
at termination will be sold at the then current market value for such Equity
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
or her Units.
Objectives of the Trust. The objectives of the Trust are to provide the
potential for capital appreciation and income by investing in a portfolio of
common stocks issued by financial institutions incorporated or headquartered
in the states of Michigan, Indiana and Ohio. See "Portfolio."Each
Unit of the Trust represents an undivided fractional interest in all the
Equity Securities deposited in the Trust. There is, of course, no guarantee
that the objectives of the Trust will be achieved.
Public Offering Price. The Public Offering Price per Unit of the Trust is
equal to the aggregate underlying value of the Equity Securities plus or minus
cash, if any, in the Capital and Income Accounts, divided by the number of
Units outstanding, plus a sales charge equal to 4.5% of the Public Offering
Price which is equivalent to 4.712% of the aggregate value of the Equity
Securities. During the initial offering period, the sales charge is reduced on
a graduated scale for sales involving at least 10,000 Units. If Units were
available for purchase at the close of business on the day before the Initial
Date of Deposit, the Public Offering Price per Unit would have been $10.07.
The minimum purchase is 200 Units (100 Units for a tax-sheltered retirement
plan). See "Public Offering."
Additional Deposits. The Sponsor may, from time to time during a period of up
to approximately 6 months after the Initial Date of Deposit, deposit
additional Equity Securities in the Trust, provided it maintains the same
proportionate relationship among the individual issues of the Equity
Securities in the Trust that existed immediately prior to any such subsequent
deposit. See "The Trust."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable distribution
date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information."The initial estimated
distribution will be $.04 per Unit and will be made on June 30, 1995 to
Unitholders of record on June 15, 1995. Any distribution of income and/or
capital will be net of the expenses of the Trust. See "Tax Status."
Additionally, upon termination of the Trust, the Trustee will distribute, upon
surrender of Units for redemption, to each Unitholder his pro rata share of
the Trust's assets, less expenses, in the manner set forth under "Rights
of Unitholders--Distributions of Income and Capital."
Secondary Market for Units. After the initial offering period, although not
obligated to do so, the Managing Underwriter intends to maintain a market for
Units of the Trust and offer to repurchase such Units at prices which are
based on the aggregate underlying value of Equity Securities in the Trust
(generally determined by the closing sale prices of the listed Equity
Securities and the bid prices of the over-the-counter traded Equity
Securities), plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust. If a secondary market is maintained during
the initial offering period, the prices at which Units will be repurchased
will be based upon the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of the listed
Equity Securities and the ask prices of the over-the-counter traded Equity
Securities), plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust. If a secondary market is not maintained, a
Unitholder may redeem Units through redemption at prices based upon the
aggregate underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of the listed Equity Securities and the
bid prices of the over-the-counter traded Equity Securities), plus or minus a
pro rata share of cash, if any, in the Capital and Income Accounts of the
Trust. See "Rights of Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. At least 60 days prior to the Mandatory Termination Date
the Trustee will provide written notice thereof to all Unitholders and will
include with such notice a form to enable Unitholders to elect a distribution
of shares of Equity Securities if such Unitholder owns at least 2,500 Units of
the Trust rather than to receive payment in cash for such Unitholder's pro
rata share of the amounts realized upon the disposition by the Trustee of
Equity Securities. All Unitholders will receive cash in lieu of any fractional
shares. To be effective, the election form, and other documentation required
by the Trustee, must be returned to the Trustee at least ten business days
prior to the Mandatory Termination Date. Unitholders not electing a
distribution of shares of Equity Securities will receive a cash distribution
from the sale of the remaining Securities within a reasonable time after the
Trust is terminated. See "Trust Administration--Amendment or
Termination."
Reinvestment Option. Unitholders have the opportunity to have their
distributions reinvested into an open-end, management investment company as
described herein. See "Rights of Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the
possible deterioration of either the financial condition of the issuers or the
general condition of the stock market, volatile interest rates, economic
recession, the limited liquidity of certain Securities and potential increased
regulation on banks and thrifts. 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 federally insured or otherwise protected by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency
and involve investment risk, including the possible loss of principal. See
"Risk Factors."
<TABLE>
Summary of Essential Financial Information
As of the Close of Business on the Day Before the Initial Date of
Deposit: March 14, 1995
Managing Underwriter and Supervisor: First of Michigan Corporation
Sponsor: Van Kampen American Capital Distributors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units................................................................... 850,000
Fractional Undivided Interest in the Trust per Unit............................... 1/850,000
Public Offering Price: ...........................................................
Aggregate Value of Equity Securities in Portfolio <F1>............................ $ 8,177,146
Aggregate Value of Equity Securities per Unit..................................... $ 9.62
Sales Charge 4.5% (4.712% of the Aggregate Value of Equity Securities per Unit)... $ .45
Public Offering Price per Unit <F2><F3>........................................... $ 10.07
Redemption Price per Unit......................................................... $ 9.62
Secondary Market Repurchase Price per Unit ....................................... $ 9.62
Excess of Public Offering Price per Unit over Redemption Price per Unit........... $ .45
Supervisor's Annual Supervisory Fee.....Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee.......Maximum of $.0025 per Unit
Evaluation Time.........................4:00 P.M. New York time
Mandatory Termination Date..............March 15, 1999
Minimum Termination Value...............The Trust may be terminated if the net
asset value of the Trust is less than 40%
of the total value of Equity Securities
deposited in the Trust during the primary
offering period.
Calculation of Estimated Net Annual Dividends per Unit <F4>.......................
Estimated Gross Annual Dividends per Unit......................................... $ .29128
Less: Estimated Annual Expense per Unit .......................................... $ .01706
Estimated Net Annual Dividends per Unit .......................................... $ .27422
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee.....................$.008 per Unit
Income Account Record Date...............Fifteenth day of June and December
Income Account Distribution Date.........Last day of June and December
Capital Account Record Date..............Fifteenth day of December
Capital Account Distribution Date <F5>...Last day of December
<FN>
<F1>Each Equity Security listed on a national securities exchange or the NASDAQ
National Market System is valued at the last closing sale price, or if no such
price exists or if the Equity Security is not so listed, at the closing ask
price thereof.
<F2>On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts.
<F3>Effective on each March 22, commencing March 22, 1996, the secondary market
sales charge will decrease by .5 of 1% to a minimum sales charge of 3.5%. See
"Public Offering--Offering Price."
<F4>Estimated annual dividends are based on annualizing the most recently paid
quarterly or semi-annual ordinary dividends.
<F5>Distributions from the Capital Account will be made monthly on the last day of
the month to Unitholders of record on the fifteenth day of such month if the
amount available for distribution equals at least $0.01 per Unit.
</TABLE>
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 11 is comprised
of one unit investment trust, First of Michigan Financial Institutions Trust,
Series 1 (the "Trust"). The Trust was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the "Trust
Agreement"), dated the date of this Prospectus (the "Initial Date of
Deposit"), among Van Kampen American Capital Distributors, Inc., as
Sponsor, American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., as Evaluator, First of Michigan
Corporation, as Supervisor and The Bank of New York, as Trustee.
The Trust may be an appropriate medium for investors who desire to participate
in a diversified portfolio of equity securities issued by financial
institutions headquartered in the states of Michigan, Indiana and Ohio.
Diversification of assets in the Trust will not eliminate the risk of loss
always inherent in the ownership of securities. For a breakdown of the
portfolio see "Trust Portfolio."
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Equity Securities indicated under "Portfolio"herein, including
delivery statements relating to contracts for the purchase of certain such
Equity 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 Equity Securities (and contracts) so deposited,
delivered to the Sponsor documentation evidencing the ownership of that number
of Units of the Trust indicated in "Summary of Essential Financial
Information."Unless otherwise terminated as provided in the Trust
Agreement, the Trust will terminate on the Mandatory Termination Date and
Equity 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 Equity Securities, contracts to purchase securities or
irrevocable letters of credit or cash with instructions to purchase additional
Equity Securities in exchange for the corresponding number of additional
Units. As additional Units are issued by the Trust as a result of the deposit
of additional Equity 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 Equity Securities (or cash or a
letter of credit with instructions to purchase additional Equity Securities)
into the Trust for a period of up to 6 months following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain as nearly as is practicable the same percentage relationship among
the number of shares of each Equity Security in the Trust that existed
immediately prior to any such subsequent deposit. Thus, although additional
Units may be issued, each Unit will continue to represent approximately the
same number of shares of each Equity Security and the percentage relationship
among each Equity Security in the Trust will remain the same. The required
percentage relationship among the Equity Securities will be adjusted to
reflect the occurrence of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of an Equity Security but
which does not affect the Trust's percentage ownership of the common stock
equity of such issuer at the time of such event. The portion of Equity
Securities represented by each Unit will not change as a result of the deposit
of additional Equity Securities in the Trust.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Equity 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 Managing Underwriter, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Trust are to provide investors with the potential for
capital appreciation and income. The portfolio is described under "Trust
Portfolio"and "Portfolio"herein. An investor will be subjected
to taxation on the dividend income received from the Trust and on gains from
the sale or liquidation of Securities (see "Tax Status"). 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 Equity Security issuers to continue to declare and pay
dividends and because the market value of the Equity Securities can be
affected by a variety of factors. Common stocks may be especially susceptible
to general stock market movements and to volatile increases and decreases of
value as market confidence in and perceptions of the issuers change. Investors
should be aware that there can be no assurance that the value of the
underlying Equity 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 Equity Securities and the declaration of any dividends depends
upon several factors including the financial condition of the issuers and
general economic conditions.
In the opinion of the Managing Underwriter, banks and thrifts are generally in
their best financial shape in at least a decade. As a result of recent
improvements in loan demand and an increase in fee-based income, the Managing
Underwriter believes that bank and thrift stocks currently offer investors the
potential for growth and income. In selecting Securities for the Trust, the
following factors, among others, were considered: asset quality, earnings
momentum, management expertise, the financial institution's earnings outlook,
the relative stability and diversity of the Great Lakes Region and the
potential for continued consolidation in the industry. Based upon these
factors, and the decline in prices in certain bank and thrift stocks, the
Managing Underwriter believes that the Securities selected for inclusion in
the Trust are currently undervalued. While past performances of many of the
Equity Securities selected for the Trust has been excellent and dividend
payments have been consistent there is no assurance that such performance or
consistent dividend payments will continue in the future. There is, however,
no assurance that the above mentioned factors will result in increases in the
stock prices of the Securities included in 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,
Equity 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 Equity Securities were selected by the Managing
Underwriter prior to the Initial Date of Deposit. The Trust may continue to
purchase or hold Equity Securities originally selected through this process
even though the evaluation of the attractiveness of the Equity Securities may
have changed and, if the evaluation were performed again at that time, the
Equity Securities would not be selected for the Trust.
TRUST PORTFOLIO
The Trust consists of the following 25 issues of Equity Securities issued by
financial institutions headquartered in the states of Michigan, Indiana and
Ohio (the "Great Lakes Region") and listed on a national securities
exchange, the NASDAQ National Market System or traded in the over-the-counter
market. Each of the companies whose Equity Securities are included in the
portfolio were selected based upon those factors referred to under "
Objectives and Securities Selection"above. The following is a general
description of each of the companies included in the Trust.
MICHIGAN
Banks
NBD Bancorp, Inc., headquartered in Detroit, Michigan, is the 18th largest
bank holding company in the United States as of 1994 year-end, based on assets
in excess of $47 billion. NBD Bancorp, Inc. operates banks with more than 600
offices in key markets in Michigan, Indiana, Illinois, Ohio and Florida. In
January 1995, NBD Bancorp, Inc. completed the acquisition of AmeriFed
Financial and announced merger plans with Deerbank Corporation, which should
be completed by mid-summer 1995. Both banks are located in the greater
Chicago, Illinois market and should add a total of approximately $1.5 billion
in assets.
Comerica, Inc. headquartered in Detroit, Michigan, is the second largest bank
holding company in the State of Michigan with over $33 billion in assets. The
company operates banking affiliates in Michigan, Illinois, Florida, Texas and
California. 1994 was a record year in earnings and the company has paid a
higher dividend each year for more than 25 years.
First of America Bank Corporation, headquartered in Kalamazoo, Michigan, is
the 32nd largest bank holding company in the United States as of 1994
year-end, based on assets of over $24 billion. First of America operates over
600 offices in Michigan, Illinois, Indiana and Florida, serving over 350
communities. The bank engages in commercial banking, retail banking and
mortgage banking and provides trust and other financial services.
Old Kent Financial Corporation, with over $10 billion in assets, is the fourth
largest bank holding company in Michigan. The company, based in Grand Rapids,
Michigan, has 15 affiliate banks and 181 offices throughout Michigan, and six
affiliate banks with 26 offices in Illinois. The company has just completed
the acquisition of First National Bank of Mt. Clemens which had $530 million
in assets and 15 offices, all in Macomb County, Michigan. The company has
reported 22 years of record earnings and dividends since becoming a holding
company in 1972.
Citizens Banking Corporation, headquartered in Flint, Michigan, is the sixth
largest bank holding company in the State. The company is the parent of seven
commercial banks: Citizens Commercial & Savings Bank of Flint, Second National
Bank of Saginaw, National Bank of Royal Oak, Second National Bank of Bay City,
State Bank of Standish, Grayling State Bank and Commercial National Bank of
Berwyn, Illinois. Citizens Banking Corporation has also announced an agreement
to acquire four Michigan banks from Banc One Corporation. 1994 marked the 12th
consecutive year of record net operating income.
First Michigan Bank Corporation, headquartered in Holland, Michigan, is a $2.7
billion diversified financial services company. The corporation is engaged in
commercial and retail banking and other financial services, including trust,
brokerage, and credit insurance. The corporation operates under a "Super
Community Bank"concept with 12 affiliate banks and 76 offices throughout
western Michigan. The corporation has reported 13 consecutive years of record
earnings and dividend increases.
Chemical Financial Corporation, based in Midland, Michigan, is the eighth
largest bank in the State. The parent company has 10 bank subsidiaries and a
data processing services subsidiary. The bank operates 85 banking offices in
23 counties, serving the smaller communities across the mid-section of
Michigan. 1994 marked the 20th consecutive year of increased operating
earnings and dividends.
Republic Bancorp, Inc. is a bank holding company with $1.4 billion in assets.
The company operates two banking entities, Republic Bank based in Ann Arbor,
Michigan with 25 offices in Michigan, and Republic Savings Bank, with 10
offices in Ohio. The company also operates three mortgage banking companies
with over 40 loan production offices in 19 states.
CB Financial Corporation, headquartered in Jackson, Michigan, is the parent
holding company of City Bank and Trust Company (which was founded in 1848 and
is the oldest continuously operating financial institution in Michigan), City
Bank in Lansing/St. Johns and CB North in Charlevoix. CB Financial Corporation
and its banking subsidiaries have 42 banking offices providing commercial,
trust and personal banking services in northwest and mid-central Michigan.
Independent Bank Corporation, headquartered in Ionia, Michigan, was
established as a bank holding company in 1974. The company has four affiliate
banks with 33 branch offices and over $500 million in assets. The parent's
largest affiliate, Independent Bank, was founded in 1864 and is one of the
oldest community banks in the State.
Franklin Bank, N.A. is headquartered in Southfield, Michigan. With assets of
$427 million, the bank is the only independently owned commercial bank
headquartered in Oakland County with assets between $200 million and $9
billion. The bank has three branch offices in Southfield, Birmingham and
Grosse Pointe Woods and an exclusive Business Center located in Southfield.
Thrifts
Standard Federal Bank, headquartered in Troy, Michigan, is the largest thrift
in the Midwest with over $12 billion in assets and is the leading home
mortgage lender in Michigan. The bank operates 170 banking centers, 10 home
lending centers and 295 automated teller machines throughout Michigan, Indiana
and Ohio. The company also operates a network of mortgage origination offices
through its Interfirst wholesale banking division.
FirstFed Michigan Corporation, based in Detroit, Michigan, is the parent of
First Federal of Michigan, which was founded in 1934. With over $8 billion in
assets, First Federal serves the lower peninsula of Michigan through 63
offices.
D&N Financial Corporation, headquartered in Hancock, Michigan, is the parent
of D&N Bank, a federal savings bank, whose roots can be traced back to 1889 as
the Northern Michigan Building & Loan Association. D&N established offices in
Detroit in 1910 (which were later sold in 1983) and started operations in
Flint in 1917. Today, D&N has 41 financial services offices throughout
southeastern Michigan, the upper peninsula of Michigan and northeastern
Wisconsin.
Mutual Savings Bank, F.S.B., headquartered in Bay City, Michigan, is the fifth
largest savings bank in Michigan with over $860 million in assets. The bank
serves central and southern Michigan with 25 full-service retail offices and
one loan production office.
CFSB Bancorp, Inc., headquartered in Lansing, Michigan, is the holding company
for Community First Bank. The company has over $730 million in assets.
Community First Bank specializes in residential mortgage lending and retail
banking services. The bank serves the mid-section of Michigan from 18 branch
locations and three off-site 24-hour ATM banking centers.
Ottawa Financial Corporation, located in Holland, Michigan, is the holding
company for Ottawa Savings Bank, F.S.B., which was originally organized in
1888. The bank converted to a federal savings bank in 1988. The corporation
was formed in 1994 and offered common stock in an initial public offering in
connection with the conversion of Ottawa Savings Bank from a mutual savings
bank to a stock savings bank. Ottawa Savings has 10 retail banking locations
in Kent, Ottawa and Allegan counties.
INDIANA
Fort Wayne National Corporation is the third largest independent bank holding
company in the State of Indiana, with over $2.1 billion in assets. The company
is the parent of Fort Wayne National Bank, which has been providing its
customers with a wide range of personal and commercial banking services for
over 60 years. The company also operates four other bank affiliates and owns
Fort Wayne National Life Insurance Company.
First Indiana Corporation, headquartered in Indianapolis, Indiana, is a
holding company for First Indiana Bank, the largest independently owned bank
based in Indianapolis. The bank operates 29 offices in metropolitan
Indianapolis, Evansville, Franklin, Mooresville, Pendleton, Rushville, and
Waterfield. In addition, First Indiana has six mortgage services offices in
Indiana. Other subsidiaries include One Mortgage Corp. with offices in Florida
and North Carolina; One Insurance Agency, a full-service insurance agency; and
One Investment Corporation, which offers brokerage services.
Indiana Federal Corporation, based in Valparaiso, Indiana, is the holding
company for Indiana Federal Bank for Savings. With over $710 million is
assets, Indiana Federal Corporation operates a network of 13 full-service
offices in northwest Indiana and loan production offices in Valparaiso,
Highland and Mishawaka, Indiana. The company has just completed the
acquisition of NCB Corporation, parent company of NoreCen Bank, headquartered
in Culver, Indiana, with over $50 million in assets and two banking offices.
OHIO
Huntington Bancshares, Inc., headquartered in Columbus, Ohio, is the 4th
largest bank holding company in the State of Ohio, with over $17 billion in
assets. The company's banking subsidiaries operate over 340 offices in Ohio,
Florida, Illinois, Indiana, Kentucky, Michigan, Pennsylvania and West
Virginia. In addition, mortgage, trust investment banking and automotive
finance subsidiaries manage 75 offices in 16 states. The company also provides
international banking services.
Charter One Financial, Inc., headquartered in Cleveland, Ohio, is the holding
company for Charter One Bank, which is the largest thrift and the seventh
largest federally insured financial institution in Ohio, with over $5.8
billion in assets. Charter One converted from a federally chartered mutual
savings bank to a publicly held stock company in 1988. The thrift operates 96
offices in a 13-county area of Ohio. The company has recently acquired ICX
Corporation, a privately held Cleveland-based company specializing in leasing
data processing, telephone and other capital equipment.
FirstMerit Corporation, headquartered in Akron, Ohio, is the new name for the
former First Bancorporation of Ohio, effective March 1, 1995. The company has
6 wholly owned bank subsidiaries that serve Summit, Cuyahoga, Medina, Lorain,
Stark, Wayne, Portage, Erie, Richland, Knox, Ashtabula, Lake and Geauga
counties in Ohio. Bancorp Trust Company, N.A., a subsidiary of FirstMerit
Corporation, serves Naples and Ft. Myers, Florida. Life Savings Bank, FSB,
a subsidiary of the company, serves the Clearwater, Florida market.
CitFed Bancorp, Inc., with over $2.2 billion in assets, is a financial
services company headquartered in Dayton, Ohio. The company was incorporated
in 1991 and is the parent of Citizens Federal Bank, F.S.B., which was founded
in 1934. Citizens Federal has 22 branch offices located in a five-county area.
In addition, Citizens originates one-to-four residential mortgage loans
through its wholly owned subsidiary, CitFed Mortgage Corporation of America,
which has 10 mortgage origination offices in Dayton, Cincinnati and Columbus,
Ohio; Lexington and Louisville, Kentucky; and Virginia Beach, Virginia.
Strongsville Savings Bank is an Ohio-chartered, federally insured savings
association whose principal business activities are conducted from its 10
offices, including its headquarters in Strongsville, Ohio. The bank's branches
are located in Cuyahoga, Lorain and Medina counties.
General. The Trust consists of such of the Equity Securities listed under "
Portfolio"as may continue to be held from time to time in the Trust and
any additional Equity Securities acquired and held by the Trust pursuant to
the provisions of the Trust Agreement together with cash held in the Income
and Capital Accounts. Neither the Sponsor nor the Trustee shall be liable in
any way for any failure in any of the Equity Securities. However, should any
contract for the purchase of any of the Equity Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of the moneys held
in the Trust to cover such purchase are reinvested in substitute Equity
Securities in accordance with the Trust Agreement, refund the cash and sales
charge attributable to such failed contract to all Unitholders on 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 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. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other property 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). 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.
Unitholders will be unable to dispose of any of the Equity Securities as such
and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in the Trust and will vote such stocks in accordance with the
instructions of the Sponsor.
The Managing Underwriter may acquire the Equity Securities for the Sponsor.
The Managing 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 Managing Underwriter may also, from time
to time, issue reports on and make recommendations relating to equity
securities, which may include the Equity Securities. From time to time the
Managing Underwriter may act as investment banker or an employee or 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 Managing Underwriter or for the benefit of the Trust under
such circumstances.
RISK FACTORS
An investment in Units of the Trust should be made with an understanding of
the problems and risks inherent in the financial institutions industry in
general. Banks, thrifts and their holding companies are especially subject to
the adverse effects of economic recession, volatile interest rates, portfolio
concentrations in geographic markets and in commercial and residential real
estate loans, and competition from new entrants in their fields of business.
Banks and thrifts are highly dependent on net interest margin. Recently bank's
profits have benefitted from the yield spread on earning assets in relation to
their cost of funds. There is no certainty that such conditions will continue.
Commercial loan demand for banks has been weak and an increasing number of
commercial loans have been securitized, which could have a potential adverse
effect on the market share of the commercial banking system. Bank and thrift
institutions have received significant consumer mortgage fee income as a
result of recent activity in the mortgage and refinance markets. As initial
home purchasing and refinancing activity subsides, this income is being
diminished. Economic conditions in the real estate markets, which have been
weak in the recent past, can have a substantial effect upon banks and thrifts
because they generally have a portion of their assets invested in loans
secured by real estate, as has recently been the case for a number of banks
and thrifts with respect to commercial real estate in the northeastern and
southwestern regions of the United States. Banks, thrifts and their holding
companies are subject to extensive federal regulation and, when such
institutions are state-chartered, to state regulation as well. Such
regulations impose strict capital requirements and limitations on the nature
and extent of business activities that banks and thrifts may pursue.
Furthermore, bank regulators have a wide range of discretion in connection
with their supervisory and enforcement authority and may substantially
restrict the permissible activities of a particular institution if deemed to
pose significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as increases in
the minimum capital requirements applicable to banks and increases in deposit
insurance premiums required to be paid by banks to the Federal Deposit
Insurance Corporation ("FDIC"), can negatively impact earnings and the
ability of a company to pay dividends. Neither federal insurance of deposits
nor governmental regulations, however, ensure the solvency or profitability of
banks or their holding companies or insure against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of banks,
thrifts and their holding companies have increased significantly and have
undergone substantial changes in recent years. To a great extent, these
changes are embodied in the Financial Institutions Reform, Recovery and
Enforcement Act, enacted in August 1989, the Federal Deposit Insurance
Corporation Improvement Act of 1991, the Resolution Trust Corporation
Refinancing, Restructuring, and Improvement Act of 1991 and the regulations
promulgated under these laws. Many of the regulations promulgated pursuant to
these laws have only recently been finalized and their impact on the business,
financial condition and prospects of the Equity Securities in the Trust's
portfolio cannot be predicted with certainty. Periodic efforts by recent
Administrations to introduce legislation broadening the ability of banks and
thrifts to compete with new products have not been successful, but if enacted
could lead to more failures as a result of increased competition and added
risks. Failure to enact such legislation, on the other hand, may lead to
declining earnings and an inability to compete with unregulated financial
institutions. Efforts to expand the ability of federal thrifts to branch on an
interstate basis have been initially successful through promulgation of
regulations, and legislation to liberalize interstate banking has recently
been signed into law. Under the legislation, banks will be able to purchase or
establish subsidiary banks in any state, one year after the legislation's
enactment. Starting in mid-1997, banks would be allowed to turn existing banks
into branches, though states could pass laws to permit interstate branch
banking before then. Consolidation is likely to continue in both cases. The
Securities and Exchange Commission and the Financial Accounting Standards
Board require the expanded use of market value accounting by banks and have
imposed rules requiring market accounting for investment securities held in
trading accounts or available for sale. Adoption of additional such rules may
result in increased volatility in the reported health of the industry and
mandated regulatory intervention to correct such problems. In late 1993 the
United States Treasury Department proposed a restructuring of the bank
regulatory agencies which, if implemented, may adversely affect certain of the
Equity Securities in the Trust's portfolio. Additional legislative and
regulatory changes may be forthcoming. For example, the bank regulatory
authorities have proposed substantial changes to the Community Reinvestment
Act and fair lending laws, rules and regulations, and there can be no
certainty as to the effect, if any, that such changes would have on the Equity
Securities in the Trust's portfolio. In addition, from time to time the
deposit insurance system is reviewed by Congress and federal regulators, and
proposed reforms of that system could, among other things, further restrict
the ways in which deposited moneys can be used by banks or reduce the dollar
amount or number of deposits insured for any depositor. Such reforms could
reduce profitability as investment opportunities available to bank
institutions become more limited and as consumers look for savings vehicles
other than bank deposits. Banks and thrifts face significant competition from
other financial institutions such as mutual funds, credit unions, mortgage
banking companies and insurance companies, and increased competition may
result from legislative broadening of regional and national interstate banking
powers as has been recently proposed. Among other benefits, proposed
legislation would allow banks and bank holding companies to acquire across
previously prohibited state lines and to consolidate their various bank
subsidiaries into one unit. The Sponsor makes no prediction as to what, if
any, manner of thrift regulatory reform might ultimately be adopted or what
ultimate effect such reform might have on the Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5% of
the outstanding shares of any class of voting securities of a bank or bank
holding company, (2) acquiring control of a bank or another bank holding
company, (3) acquiring all or substantially all the assets of a bank, or (4)
merging or consolidating with another bank holding company, without first
obtaining Federal Reserve Board ("FRB") approval. In considering an
application with respect to any such transaction, the FRB is required to
consider a variety of factors, including the potential anti-competitive
effects of the transaction, the financial condition and future prospects of
the combining and resulting institutions, the managerial resources of the
resulting institution, the convenience and needs of the communities the
combined organization would serve, the record of performance of each combining
organization under the Community Reinvestment Act and the Equal Credit
Opportunity Act, and the prospective availability to the FRB of information
appropriate to determine ongoing regulatory compliance with applicable banking
laws. In addition, the federal Change In Bank Control Act and various state
laws impose limitations on the availability of one or more individuals or
other entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends by bank
holding companies. In the policy statement, the FRB expressed its view that a
bank holding company experiencing earnings weaknesses should not pay cash
dividends which exceed its net income or which could only be funded in ways
that would weaken its financial health, such as by borrowing. The FRB also may
impose limitations on the payment of dividends as a condition to its approval
of certain applications, including applications for approval of mergers and
acquisitions. The Sponsor makes no prediction as to the effect, if any, such
laws will have on the Equity Securities or whether such approvals, if
necessary, will be obtained.
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 Managing
Underwriter or 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.
In the opinion of the Managing Underwriter, certain of the Equity Securities
included in the Trust which may have the highest potential for capital
appreciation also from time to time may experience limited purchase or sale
availability in the market place. In anticipation of this possibility, the
Managing Underwriter intends to make a market in said Equity Securities to
facilitate the creation of subsequent deposits for this Trust which may have
an impact on the price at which Units are valued during the initial offering
period. In addition, upon termination of the Trust, this potential limited
daily trading volume may result in negative market price consequences for the
Trust stemming from the liquidation of a significant amount of these Equity
Securities. The Sponsor will attempt to mitigate these consequences with a
longer liquidation period (not to exceed 30 days) for these Equity Securities
at the Trust's termination than might be required for the other Equity
Securities included in the Trust. However, these procedures may be
insufficient or unsuccessful in avoiding such negative price consequences.
An investment in Units should be made with an understanding of the risks which
an investment in common stocks entail, 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. The 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 Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity,
generally have 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 of liquidation which are senior to those of common stockholders.
TAX STATUS
Federal Taxation. The following is a general discussion of certain of the
federal income tax consequences of the purchase, ownership and disposition of
the Units. The summary is limited to investors who hold the Units as "
capital assets"(generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the "
Code"). Unitholders should consult their tax advisers in determining the
federal, state, local and any other tax consequences of the purchase,
ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of the assets of the Trust under the Code; and the income of the Trust
will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from the Trust asset when such income is received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, redemption, or payment at
maturity) or upon the sale or redemption of Units by such Unitholder. The
price a Unitholder pays for his Units, including sales charges, is allocated
among his pro rata portion of each Equity Security held by the Trust (in
proportion to the fair market values thereof on the date the Unitholder
purchase his Units) in order to determine his initial cost for his pro rata
portion of each Equity Security held by the Trust. For federal income tax
purposes, a Unitholder's pro rata portion of dividends as defined by Section
316 of the Code paid with respect to an Equity Security held by the Trust are
taxable as ordinary income to the extent of such corporation's current and
accumulated "earnings and profits". A Unitholder's pro rata portion of
dividends paid on such Equity Security which exceed such current and
accumulated earnings and profits will first reduce a Unitholder's tax basis in
such Equity Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Equity Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the Trust will generally
be considered a capital gain except in the case of a dealer or a financial
institution and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date") is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the Trust will generally be considered a capital loss
except in the case of a dealer or a financial institution and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purpose.
4. The Code provides that "miscellaneous itemized deductions"are
allowable only to the extent that they exceed two percent of an individual
taxpayer's adjusted gross income. Miscellaneous itemized deductions subject to
this limitation under present law include a Unitholder's pro rata share of
expenses paid by the Trust, including fees of the Trustee, Supervisor and the
Evaluator.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above) in
the same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unitholders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics' and other than for purposes of special taxes such as
the accumulated earnings tax and the personal holding corporation tax).
However, a corporation owning Units should be aware that Sections 246 and 246A
of the Code impose additional limitations on the eligibility of dividends for
the 70% dividends received deduction. These limitations include a requirement
that stock (and therefore Units) must generally be held at least 46 days (as
determined under Section 246(c) of the Code). Proposed regulations have been
issued which address special rules that must be considered in determining
whether the 46 day holding requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable
to indebtedness incurred by such corporation. It should be noted that various
legislative proposals that would affect the dividends received deduction have
been introduced. Unitholders should consult with their tax advisers with
respect to the limitations on and possible modifications to the dividends
received deduction.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that would recharacterize capital gains as ordinary income in the
case of certain financial transactions that are "conversion
transactions"effective for transactions entered into after April 30,
1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment
in Units.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Rights of
Unitholders--Redemption of Units", under certain circumstances a
Unitholder tendering Units for redemption may request an In Kind Distribution.
A Unitholder may also under certain circumstances request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units."As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution would be
deemed an exchange of such Unitholder's pro rata portion of each of the shares
of stock and other assets held by the Trust in exchange for an undivided
interest in whole shares of stock plus, possibly, cash.
There are generally three different potential tax consequences which may occur
under an In Kind Distribution with respect to each Equity Security owned by
the Trust. An "Equity Security"for this purpose is a particular class
of stock issued by a particular corporation. If the Unitholder receives only
whole shares of an Equity Security in exchange for his or her pro rata portion
in each share of such Equity Security held by the Trust, there is not taxable
gain or loss recognized upon such deemed exchange pursuant to Section 1036 of
the Code. If the Unitholder receives whole shares of a particular Equity
Security plus cash in lieu of a fractional share of such Equity Security, and
if the fair market value of the Unitholder's pro rata portion of the shares of
such Equity Security exceeds his tax basis in his pro rata portion of such
Equity Security, taxable gain would be recognized in an amount not to exceed
the amount of such cash received, pursuant to Section 1031(b) of the Code. No
taxable loss would be recognized upon such an exchange pursuant to Section
1031(c) of the Code, whether or not cash is received in lieu of a fractional
share. Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unitholder's tax basis in
the shares of such particular Equity Security which he receives as part of the
In Kind Distribution. Finally, if a Unitholder's pro rata interest in an
Equity Security does not equal a whole share, he may receive entirely cash in
exchange for his pro rata portion of a particular Equity Security. In such
case, taxable gain or loss is measured by comparing the amount of cash
received by the Unitholder with his tax basis in such Equity Security.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request an
In Kind Distribution are advised to consult their tax advisers in this regard.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons. Such persons should consult their tax
advisers.
Unitholders will be notified annually of the amount of income dividends
includable in the Unitholder's gross income and amounts of Trust expenses
which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of Tanner Propp & Farber, special counsel to the Trust for New
York tax matters, the Trust is not an association taxable as a corporation and
the income of the Trust will be treated as the income of the Unitholders under
the existing income tax laws of the State and City of New York.
Michigan Taxation. In the opinion of Miller, Canfield, Paddock and Stone
special counsel to the Trust for Michigan tax matters, under existing Michigan
law:
The Trust and the owners of Units will be treated for purposes of the Michigan
income tax laws and the Single Business Tax in substantially the same manner
as they are for purposes of the federal income tax laws, as currently enacted.
Accordingly, we have relied upon the opinion of Messrs. Chapman and Cutler as
to the applicability of federal income tax under the Internal Revenue Code of
1986 to the Trust and the Unitholders.
Under the income tax laws of the State of Michigan, the Trust is not an
association taxable as a corporation; the income of the Trust will be treated
as the income of the Unitholders and be deemed to have been received by them
when received by the Trust.
For purposes of the foregoing Michigan tax laws, each Unitholder will be
considered to have received his pro rata share of dividends when they are
received by the Trust, and each Unitholder will have a taxable event when the
Trust disposes of an Equity Security (whether by sale, exchange or redemption)
or when the Unitholder redeems or sells his Units to the extent the
transaction constitutes a taxable event for federal income tax purposes. The
tax cost of each Unit to a Unitholder will be established and allocated for
purposes of these Michigan tax laws in the same manner as such cost is
established and allocated for federal income tax purposes.
The Michigan Single Business Tax replaced the tax on corporate and financial
institution income under the Michigan Income Tax and the Intangible Tax with
respect to those intangibles of persons subject to the Single Business Tax the
income from which would be considered in computing the Single Business Tax.
Persons are subject to the Single Business Tax only if they are engaged in
"business activity", as defined in the Act. Under the Single Business
Tax, dividends received by the Trust on the underlying Equity Securities and
any amount distributed from the Trust to a Unitholder, if included in
determining taxable income for federal income tax purposes, is also included
in the adjusted tax base upon which the Single Business Tax is computed, of
either the Trust or the Unitholders. If the Trust or the Unitholders have a
taxable event for federal income tax purposes when the Trust disposes of an
Equity Security (whether by sale, exchange or redemption) or the Unitholder
redeems or sells his Units, an amount equal to any gain realized from such
taxable event which was included in the computation of taxable income for
federal income tax purposes (plus an amount equal to any capital gain of an
individual realized in connection with such event but excluded in computing
that individual's federal taxable income) will be included in the tax base
against which, after allocation, apportionment and other adjustments, the
Single Business Tax is computed. The tax base will be reduced by an amount
equal to any capital loss realized from such a taxable event, whether or not
the capital loss was deducted in computing federal taxable income in the year
the loss occurred. Unitholders should consult their tax advisers as to their
status under Michigan law.
Federal adjusted gross income, the computation base for the Michigan Income
Tax, of a Unitholder is increased to the extent capital gains are realized
when the Trust disposes of an Equity Security or when the Unitholder redeems
or sells a Unit, to the extent such transaction constitutes a taxable event
for federal income tax purposes.
TRUST OPERATING EXPENSES
Initial Costs. All costs and expenses incurred in creating and establishing
the Trust, including the cost of the initial preparation, printing and
execution of the Trust Agreement, legal and accounting expenses, advertising
and selling expenses, expenses of the Trustee, and other out-of-pocket
expenses, including brokerage fees incurred in acquiring Equity Securities for
the Trust, have been borne by the Sponsor and the Managing Underwriter at no
cost to the Trust.
Compensation of Sponsor, Evaluator and Managing Underwriter. The Sponsor will
not receive any fees in connection with its activities relating to the Trust.
The Evaluator shall receive that evaluation fee, payable in any month
incurred, set forth under "Summary of Essential Financial Information"
(which is based on the number of Units outstanding on January 1 of each year
for which such compensation relates except during the initial offering period
in which event the calculation is based on the number of Units outstanding at
the end of the month of such calculation) for regularly evaluating the Trust
portfolio. Such fee may exceed the actual cost of providing such evaluation
services for this Trust, but at no time will the total amount paid to the
Evaluator for providing evaluation services to unit investment trusts of which
Van Kampen American Capital Distributors, Inc. acts as Sponsor in any calendar
year exceed the aggregate cost to the Evaluator of supplying such services in
such year. The Managing Underwriter will receive an annual supervisory fee,
payable in monthly installments, which is not to exceed the amount set forth
under "Summary of Essential Financial Information"(which is based on
the number of Units outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of the Units outstanding at the end of
the month of such calculation) for providing portfolio supervisory services
for the Trust. Such fee may exceed the actual cost of providing such
supervision services for this Trust, but at no time will the total amount paid
to the Managing Underwriter for providing portfolio supervision services to
unit investment trusts for which First of Michigan Corporation 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 Managing 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 Managing Underwriter Compensation."
Trustee's Fee. For its services the Trustee will receive an annual fee from
the Trust as set forth under "Summary of Essential Financial
Information"(which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number
of Units outstanding at the end of the month of such calculation). The
Trustee's fees are payable in monthly installments on or before the fifteenth
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. 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 gross negligence,
bad faith or wilful misconduct on its part and (g) expenditures incurred in
contacting Unitholders upon termination of the Trust.
The fees and expenses set forth herein are payable out of the Trust. When such
fees and expenses are paid by or owing to the Trustee, they are secured by a
lien on the Trust's portfolio. Since the Equity Securities are all common
stocks, and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be sufficient to
meet any or all expenses of the Trust. If the balances in the Income and
Capital Accounts are insufficient to provide for amounts payable by the Trust,
the Trustee has the power to sell Equity Securities to pay such amounts. These
sales may result in capital gains or losses to Unitholders. See "Tax
Status."
PUBLIC OFFERING
General. Units are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Equity Securities and includes a sales
charge of 4.5% of the Public Offering Price which is equivalent to 4.712% of
the aggregate underlying value of the Equity Securities). Such underlying
value shall include the proportionate share of any undistributed cash held in
the Capital and Income Accounts of the Trust.
The sales charge applicable to quantity purchases is, during the initial
offering period, reduced on a graduated basis to any person acquiring 10,000
or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number of
Units Purchased Percentage of Sales
Charge Per Unit
<S> <C>
10,000-24,999......... 4.00%
25,000-49,999......... 3.50%
50,000-74,999......... 2.75%
75,000-99,999......... 2.00%
100,000 or more....... 1.25%
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent. Registered representatives of
the Managing Underwriter may purchase Units of the Trust at the current Public
Offering Price less the underwriting commission during the initial offering
period, and less the dealer's concession for secondary market transactions.
Registered representatives of selling brokers, dealers, or agents may purchase
Units of the Trust at the current Public Offering Price less the dealer's
concession during the initial offering period and for secondary market
transactions.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information"in
accordance with fluctuations in the prices of the underlying Equity Securities
in the Trust.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Equity Securities an
amount equal to 4.712% of such value and dividing the sum so obtained by the
number of Units in the Trust outstanding. Such underlying value shall include
the proportionate share of any cash held in the Income and Capital Accounts.
This computation produced a gross underwriting profit equal to 4.5% 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 Equity Securities in the Trust prepared by Interactive Data
Services, Inc., a firm regularly engaged in the business of evaluating,
quoting or appraising comparable securities. Thereafter, the Evaluator on each
business day will appraise or cause to be appraised the value of the
underlying Equity 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 or Managing 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
March 22 commencing March 22, 1996 such sales charge will be reduced by .5 of
1% to a minimum sales charge of 3.5%.
The value of the Equity Securities during the initial offering period is
determined on each business day by the Evaluator in the following manner: if
the Equity Securities are listed on a national securities exchange or the
NASDAQ National Market System, this evaluation is generally based on the
closing sale prices on that exchange or that system (unless it is determined
that these prices are inappropriate as a basis for valuation) or, if there is
no closing sale price on that exchange or system, at the closing ask 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 current ask prices on the over-the-counter market (unless it
is determined that these prices are inappropriate as a basis for evaluation).
If current ask prices are unavailable, the evaluation is generally determined
(a) on the basis of current ask prices for comparable securities, (b) by
appraising the value of the Equity Securities on the ask side of the market or
(c) by any combination of the above.
In offering the Units to the public, neither the Sponsor, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
Equity Securities in the Trust but rather the entire pool of Equity
Securities, taken as a whole, which are represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Managing Underwriter, broker-dealers and
others at the Public Offering Price. Upon the completion of the initial
offering period, Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in
the manner described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
as shown in the table below:
<TABLE>
<CAPTION>
Aggregate Number of
Units Purchased Dealer Concession
or Agency Commission Per Unit*
<S> <C>
0-9,999 Units........... 3.50%
10,000-24,999 Units..... 3.00%
25,000-49,999 Units..... 2.50%
50,000-74,999 Units..... 1.75%
75,000-99,999 Units..... 1.00%
100,000 or more Units... 1.00%
</TABLE>
*Dealer concession or agency commission from the Public Offering Price
does not include any reduction for quantity purchases--see "General"above.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. Any quantity discount provided to
investors will be borne by the selling dealer, agent, Managing Underwriter or
the Sponsor as indicated under "General"above. For secondary market
transactions, such concession or agency commission will amount to 70% of the
sales charge applicable to the transaction.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 200 Units (100 Units for a
tax-sheltered retirement plan). The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time. Brokers and dealers of the Trust, banks and/or others are
eligible to participate in a program in which such firms receive from the
Managing Underwriter a nominal award for each of their registered
representatives who have sold a minimum number of units of unit investment
trusts created by the Managing Underwriter during a specified time period. In
addition, at various times the Managing Underwriter may implement other
programs under which the sales forces of brokers, dealers, banks and/or others
may be eligible to win other nominal awards for certain sales efforts, or
under which the Managing Underwriter will reallow to any such brokers,
dealers, banks and/or others that sponsor sales contests or recognition
programs conforming to criteria established by the Managing Underwriter, or
participate in sales programs sponsored by the Managing Underwriter, an amount
not exceeding the total applicable sales charges on the sales generated by
such person at the public offering price during such programs. Also, the
Managing Underwriter in its discretion may from time to time pursuant to
objective criteria established by the Managing Underwriter pay fees to
qualifying brokers, dealers, banks and/or others for certain services or
activities which are primarily intended to result in sales of Units of the
Trust. Such payments are made by the Managing Underwriter out of its own
assets and not out of the assets of the Trust. These programs will not change
the price Unitholders pay for their Units or the amount that the Trust will
receive from the Units sold.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive a gross sales commission equal to 4.5% of the Public Offering Price of
the Units, less any reduced sales charge for quantity purchases as described
under "General"above. Any such quantity discounts provided to
investors will be borne by the selling dealer or agent. The Sponsor will
receive from the Managing Underwriter the excess of such gross sales
commission over the Managing Underwriter's discount. The Managing Underwriter
will be allowed a discount in connection with the distribution of Units of
3.5% per Unit on the Units underwritten during the initial offering period.
For individual trades of 100,000 Units or more, the Managing Underwriter will
receive from the Sponsor at the end of the month in which settlement of the
trade occurred a rebate of an additional 0.75% of the Public Offering Price
for each Unit purchased. Any quantity discount provided to investors will
borne by the selling Managing Underwriter, dealer or agent as indicated under
"General"above.
In addition, the Managing Underwriter will realize a profit or will sustain a
loss, as the case may be, as a result of the difference between the price paid
for the Equity Securities by the Managing Underwriter and the cost of such
Equity Securities to the Trust on the Initial Date of Deposit as well as on
subsequent deposits. See "Portfolio."The Sponsor has not participated
as sole underwriter or as manager or as a member of the underwriting
syndicates or as an agent in a private placement for any of the Equity
Securities in the Trust portfolio. The Sponsor and the Managing Underwriter
may further realize additional profit or loss during the initial offering
period as a result of the possible fluctuations in the market value of the
Equity Securities in the Trust after a date of deposit, since all proceeds
received from the sale of Units (excluding dealer concessions and agency
commissions allowed, if any) will be retained by the Sponsor or Managing
Underwriter.
A person will become the owner of the Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor or
Managing Underwriter prior to the date of settlement for the purchase of Units
may be used in the Sponsor's or Managing Underwriter's business and may be
deemed to be a benefit to the Sponsor or Managing Underwriter, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market"below, the Managing Underwriter
intends to maintain a secondary market for Units of the Trust for the period
indicated. In so maintaining a market, the Managing Underwriter or the Sponsor
will also realize profits or sustain losses in the amount of any difference
between the price at which Units are purchased and the price at which Units
are resold (which price includes the applicable sales charge). In addition,
the Managing Underwriter or the Sponsor will also realize profits or sustain
losses resulting from a redemption of such repurchased Units at a price above
or below the purchase price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Managing Underwriter
intends to maintain a secondary market for the Units offered hereby and offer
continuously to purchase Units at prices subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in the Trust
(computed as indicated under "Offering Price"above and "Rights of
Unitholders--Redemption of Units"). If the supply of Units exceeds demand
or if some other business reason warrants it, the Managing Underwriter may
either discontinue all purchases of Units or discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units and
the Unitholder cannot find another purchaser, a Unitholder desiring to dispose
of his Units will be able to dispose of such Units by tendering them to the
Trustee for redemption at the Redemption Price. It is the current intention of
the Managing Underwriter not to maintain a secondary market in the Trust's
final year of existence. A Unitholder who wishes to dispose of his Units
should inquire of his broker as to current market prices in order to determine
whether there is in existence any price in excess of the Redemption Price and,
if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee
Pension Plans for employees, qualified plans for self-employed individuals,
and qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-shelter retirement plan is 100 Units.
RIGHTS OF UNITHOLDERS
General. The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee. Ownership
of Units of the Trust will be in uncertificated or "book entry"form
only. Units are transferable by making a written request to the Trustee. A
Unitholder must sign such written request, exactly as his name appears on the
records of the Trustee with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program in addition to, or in substitution for, STAMP as
may be accepted by the Trustee. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or
certificates of corporate authority.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Equity Securities, etc.) are credited to the Capital Account.
The Trustee will distribute any net income with respect to any of the Equity
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information."Proceeds received on the sale of any
Equity Securities in the Trust, to the extent not used to meet redemptions of
Units or pay expenses, will (except as hereinafter provided) 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 Equity Securities after a record date and prior to
the following distribution date will be held in the Capital Account of the
Trust and not distributed until the next distribution date applicable to 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 last day of each month to holders of
record on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. The Trustee is not required to
pay interest on funds held in the Capital or Income Accounts (but may itself
earn interest thereon and therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the fifteenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account, 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 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. Unitholders of the Trust may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any of the mutual funds of which Van
Kampen American Capital Distributors, Inc. acts as Advisor (except for B
shares) which are registered in the Unitholder's state of residence. Such
mutual funds are hereinafter collectively referred to as the "Reinvestment
Funds."
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trust. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen American
Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois
60181.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
net asset value as computed as of the close of trading on the New York Stock
Exchange on such date, plus a sales charge of $1.00 per $100 of reinvestment
except if the participant selects the Van Kampen Merritt Money Market Fund,
the Van Kampen Merritt Tax Free Money Fund, the Van Kampen Merritt Florida
Insured Tax Free Income Fund, the Van Kampen Merritt New Jersey Tax Free
Income Fund or the Van Kampen Merritt New York Tax Free Income Fund in which
case no sales charge applies. A minimum of one-half of such sales charge would
be paid to Van Kampen American Capital Distributors, Inc. for all Reinvestment
Funds. Confirmations of all reinvestments by a Unitholder into a Reinvestment
Fund will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
The Sponsor, each Reinvestment Fund, and its investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder of the Trust a
statement (i) as to the Income Account: income received, deductions for
applicable taxes and for fees and expenses of the Trust, for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (ii) as to the Capital Account: the
dates of disposition of any Equity 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 Equity Securities held by the
Trust and the number of Units outstanding on the last business day of such
calendar year; (iv) the Redemption Price per Unit based upon the last
computation thereof made during such calendar year; and (v) amounts actually
distributed during such calendar year from the Income and Capital Accounts,
separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his or her
Units by tender to the Trustee at its corporate trust office at 101 Barclay
Street, 20th Floor, New York, New York 10296 of a request for redemption duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as described above and by payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh calendar
day following such tender, or if the seventh calendar day is not a business
day, on the first business day prior thereto, the Unitholder will be entitled
to receive in cash (unless the redeeming Unitholder elects an "In Kind
Distribution"as described below) an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units as of the Evaluation Time set forth under "Summary of
Essential Financial Information."The "date of tender"is deemed
to be the date on which Units are received by the Trustee, except that with
respect to Units received after the applicable Evaluation Time the date of
tender is the next 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 Equity Securities of the Trust in order to
make funds available for redemption if funds are not otherwise available in
the Capital and Income Accounts to meet redemptions. The Equity 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.
Unitholders in the Trust tendering 2,500 or more Units for redemption may
request from the Trustee in lieu of a cash redemption a distribution in kind
("In Kind Distribution") of an amount and value of Equity Securities
per Unit equal to the Redemption Price per Unit as determined as of the next
evaluation following the tender. An In Kind Distribution on redemption of
Units will be made by the Trustee through the distribution of each of the
Equity Securities in book-entry form to the account of the Unitholder's
broker-dealer at Depository Trust Company. The tendering Unitholder will
receive his pro rata number of whole shares of each of the Equity Securities
comprising the Trust portfolio and cash from the Capital Account equal to the
fractional shares to which the tendering Unitholder is entitled. The Trustee
may adjust the number of shares of any issue of Equity Securities included in
a Unitholder's In Kind Distribution to facilitate the distribution of whole
shares, such adjustment to be made on the basis of the value of the Equity
Securities on the date of tender. If funds in the Capital Account are
insufficient to cover the required cash distribution to the tendering
Unitholder, the Trustee may sell Equity Securities according to the criteria
discussed above.
To the extent that Equity Securities are redeemed in kind or sold, the size of
the Trust will be, and the diversity of the Trust may be, reduced. Sales may
be required at a time when the Equity 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 Equity Securities in the portfolio at
the time of redemption. Special federal income tax consequences will result if
a Unitholder requests an In Kind Distribution. See "Tax Status."
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust. On the Initial Date of Deposit, the Public
Offering Price per Unit (which includes the sales charge) exceeded the values
at which Units could have been redeemed by the amounts shown under "
Summary of Essential Financial Information."The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in such Trust, (ii) the value of the Equity Securities in
such Trust and (iii) dividends receivable on the Equity Securities of such
Trust trading ex-dividend as of the date of computation, less (a) amounts
representing taxes or other governmental charges payable out of such Trust and
(b) the accrued expenses of such Trust. The Evaluator may determine the value
of the Equity Securities in the Trust in the following manner: if the Equity
Securities are listed on a national securities exchange or the NASDAQ National
Market System, this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price
on that exchange or system, at the closing bid prices. If the Equity
Securities of the Trust are not so listed or, if so listed and the principal
market therefore is other than on the exchange, the evaluation shall generally
be based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable or inappropriate as a basis for valuation, the evaluations
generally determined (a) on the basis of current bid prices for comparable
securities, (b) by appraising the value of the Equity Securities of such Trust
on the bid side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase such Units by notifying the Trustee
before the close of business on the next succeeding business day and by making
payment therefor to the Unitholder not later than the day on which the Units
would otherwise have been redeemed by the Trustee. Units held by the Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter will be
in accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit resulting from the
resale of such Units will belong to the Managing Underwriter which likewise
will bear any loss resulting from a lower offering or redemption price
subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. While the Trust will not be managed, the Trust Agreement does
provide that the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in certain events such as the issuer having defaulted on
the payment on any of its outstanding obligations or the price of an Equity
Security has declined to such an extent or other such credit factors exist so
that in the opinion of the Sponsor the retention of such Equity Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in such Trust pursuant to the direction of the Sponsor (who
may rely on the advice of the Supervisor). Proceeds from the sale of Equity
Securities (or any securities or other property received by the Trust in
exchange for Equity Securities) are credited to the Capital Account for
distribution to Unitholders or to meet redemptions. Except as stated under
"Trust Portfolio--General"for failed securities and as provided in
this paragraph, the acquisition by the Trust of any securities other than the
Equity Securities is prohibited.
As indicated under "Rights of Unitholders--Redemption of Units"above,
the Trustee may also sell Equity Securities designated by the Supervisor, or
if no such designation has been made, in its own discretion, for the purpose
of redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in such
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units of the Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in such Trust of any Unitholder without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders. The Trustee shall
advise the Unitholders of any amendment promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of such Trust 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."The Trust will be liquidated
by the Trustee in the event that a sufficient number of Units of such Trust
not yet sold are tendered for redemption by the Managing Underwriter or the
Sponsor, so that the net worth of the Trust would be reduced to less than 40%
of the value of the Equity Securities at the time they were deposited in the
Trust. If the Trust is liquidated because of the redemption of unsold Units by
the Sponsor and/or the Managing Underwriter, the Sponsor will refund to each
purchaser of Units the entire sales charge paid by such purchaser. The Trust
Agreement will terminate upon the sale or other disposition of the last Equity
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. At least 60 days before the Mandatory Termination Date the Trustee
will provide written notice of any termination to all Unitholders of the Trust
and will include with such notice a form to enable Unitholders owning 2,500 or
more Units to request an In Kind Distribution rather than payment in cash upon
the termination of the Trust. To be effective, this request must be returned
to the Trustee at least ten business days prior to the Mandatory Termination
Date. On the Mandatory Termination Date (or on the next business day
thereafter if a holiday) the Trustee will deliver each requesting Unitholder's
pro rata number of whole shares of each of the Equity Securities in the Trust
to the account of the broker-dealer or bank designated by the Unitholder at
Depository Trust Company. The value of the Unitholder's fractional shares of
the Equity Securities will be paid in cash. Unitholders with less than 2,500
Units and Unitholders not requesting an In Kind Distribution will receive a
cash distribution from the sale of the remaining Equity Securities within a
reasonable time following the Mandatory Termination Date. Regardless of the
distribution involved, 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 of the Trust his pro rata
share of the balance of the Income and Capital Accounts.
The Sponsor will attempt to sell Securities as quickly as possible commencing
on the Mandatory Termination Date without in the judgment of the Sponsor
materially adversely affecting the market price of the Securities. The Sponsor
does not anticipate that the period will be longer than one month, and it
could be as short as one day, depending on the liquidity of the Securities
being sold. The liquidity of any Security depends on the daily trading volume
of the Security and the amount that the Sponsor has available on any
particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities; for highly liquid Securities,
the Securities will generally be sold on the Mandatory Termination Date; for
less liquid Securities, on each of the first two days subsequent to the
Mandatory Termination Date, the amount of any underlying Securities will
generally be sold at a price no less than 1/2 of one point under the closing
sale price of those Securities on the preceding day. Thereafter, the Sponsor
intends to sell without any price restrictions at least a portion of the
remaining underlying Securities, the numerator of which is one and the
denominator of which is the total number of days remaining (including that
day) in the one month period following the Mandatory Termination Date.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and
duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Equity 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 Equity Securities
or upon the interest thereon or upon it as Trustee under the Trust Agreement
or upon or in respect of the Trust which the Trustee may be required to pay
under any present or future law of the United States of America or of any
other taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor, Supervisor or Unitholders for errors in judgment. This
provision shall not protect the Evaluator in any case of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and
duties.
Managing Underwriter. First of Michigan Corporation, a member of the New York
Stock Exchange, is Michigan's largest full-service securities firm. Founded in
1933, First of Michigan Corporation specializes in a wide range of financial
services that include investment banking; investment products such as stocks,
bonds, unit trusts and mutual funds; and investment services such as
retirement plans, money management, underwriting and trading. First of
Michigan offers these services through its 550 employees located in 32 offices
throughout Michigan, as well as an office at 100 Wall Street, New York, New
York.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. The management of Van Kampen American
Capital Distributors, Inc. owns a significant minority equity position. Van
Kampen American Capital Distributors, Inc. specializes in the underwriting and
distribution of unit investment trusts and mutual funds. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas 77056, (713) 993-0500. It maintains a
branch office in Philadelphia and has regional representatives in Atlanta,
Dallas, Los Angeles, New York, San Francisco, Seattle and Tampa. As of
December 31, 1994 the total stockholders' equity of Van Kampen Merritt Inc.
was $117,357,000 (audited). (This paragraph relates only to the Sponsor and
not to the Van Kampen American Capital Equity Opportunity Trust or to any
series thereof or to any other party. The information is included herein only
for the purpose of informing investors as to the financial responsibility of
the Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor upon
request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286 (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Equity Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided").
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Equity Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Tanner Propp & Farber has acted as counsel for the
Trustee. Miller, Canfield, Paddock and Stone has acted as special counsel to
the Trust for certain Michigan tax matters.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 11 (First of Michigan Financial Institutions Trust, Series 1):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 11
(First of Michigan Financial Institutions Trust, Series 1) as of March 15,
1995. The statement of condition and portfolio are the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of an irrevocable letter of credit deposited
to purchase securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 11 (First of Michigan Financial Institutions
Trust, Series 1) as of March 15, 1995, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 15, 1995
<TABLE>
First of Michigan Financial Institutions Trust
Series 1
STATEMENT OF CONDITION
As of March 15, 1995
<CAPTION>
INVESTMENT IN SECURITIES
<S> <C>
Contracts to purchase Securities <F1>................. $ 8,177,146
Total................................................. $ 8,177,146
INTEREST OF UNITHOLDERS
Interest of Unitholders-- ............................
Units of fractional undivided interest outstanding:...
Cost to investors <F2>................................ $ 8,559,500
Less: Gross underwriting commission <F2>.............. $ 382,354
Net interest to Unitholders <F2>...................... $ 8,177,146
<FN>
<F1>The aggregate value of the Equity Securities listed under "Portfolio"
herein and their cost to the Trust are the same. The value of the Equity
Securities is determined by Interactive Data Services, Inc. on the basis set
forth under "Public Offering--Offering Price."The contracts to
purchase Equity Securities are collateralized by an irrevocable letter of
credit of $8,177,146 which has been deposited with the Trustee.
<F2>The aggregate public offering price and the aggregate sales charge of 4.5% are
computed on the basis set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Managing Underwriter Compensation"
and assume all single transactions involve less than 10,000 Units. For single
transactions involving 10,000 or more Units, the sales charge is reduced (see
"Public Offering--General") resulting in an equal reduction in both
the Cost to investors and the Gross underwriting commission while the Net
interest to Unitholders remains unchanged.
</TABLE>
<TABLE>
FIRST OF MICHIGAN FINANCIAL INSTITUTIONS TRUST, SERIES 1
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 11)
As of the Initial Date of Deposit: March 15, 1995
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends Securities
of Shares Name of Issuer <F1> per Share <F2> per Share <F2> to Trust <F2>
<S> <C> <C> <C> <C>
5,927 CB Financial Corporation $ 31.500 $ 1.20 $ 186,700.50
19,888 CFSB Bancorp, Inc. 20.500 0.44 407,704.00
22,420 Charter One Financial, Inc. 21.625 0.68 484,832.50
8,118 Chemical Financial Corporation 29.000 0.56 235,422.00
11,916 CitFed Bancorp, Inc. 27.250 0.24 324,711.00
15,010 Citizens Banking Corporation 26.500 0.84 397,765.00
12,048 Comerica, Inc. 27.750 1.28 334,332.00
27,439 D&N Financial Corporation 8.875 0.00 243,521.13
11,982 First of America Bank Corporation 34.125 1.68 408,885.75
10,028 First Indiana Corporation 17.000 0.52 170,476.00
15,039 First Michigan Bank Corporation 24.000 0.76 360,936.00
17,948 FirstFed Michigan Corporation 25.125 0.60 450,943.50
13,059 FirstMerit Corporation 23.750 1.00 310,151.25
13,297 Fort Wayne National Corporation 26.250 0.88 349,046.25
35,253 Franklin Bank, N.A. 8.750 0.24 308,463.75
23,289 Huntington Bancshares, Inc. 18.125 0.80 422,113.13
11,928 Independent Bank Corporation 24.750 0.80 295,218.00
12,176 Indiana Federal Corporation 18.000 0.66 219,168.00
35,717 Mutual Savings Bank, F.S.B. 5.000 0.00 178,585.00
10,780 NBD Bancorp, Inc. 31.250 1.32 336,875.00
15,220 Old Kent Financial Corporation 32.000 1.24 487,040.00
20,373 Ottawa Financial Corporation 12.875 0.28 262,302.38
40,235 Republic Bancorp, Inc. 11.500 0.32 462,702.50
13,916 Standard Federal Bank 28.250 0.68 393,127.00
8,118 Strongsville Savings Bank 18.000 0.36 146,124.00
431,124 $ 8,177,145.64
NOTES TO PORTFOLIO
<FN>
<F1>All of the Equity Securities are represented by "regular way"
contracts for the performance of which an irrevocable letter of credit has
been deposited with the Trustee. At the Initial Date of Deposit, the Sponsor
has assigned to the Trustee all of its right, title and interest in and to
such Equity Securities. Contracts to acquire the Equity Securities were
entered into on March 14, 1995 and are expected to settle on March 22, 1995
(see "The Trust").
<F2>The market value of each of the Equity Securities is based on the aggregate
underlying value of the Equity Securities acquired (generally determined by
the closing sale prices of the listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities on the business day prior to the
Initial Date of Deposit). The aggregate value of the Trust, based on the
aggregate underlying value of the Equity Securities therein on the Initial
Date of Deposit, was $8,177,146. Estimated annual dividends are based on
annualizing the most recent quarterly or semi-annual ordinary dividends paid.
Other information regarding the Equity Securities in the Trust, as of the
Initial Date of Deposit, is as follows:
</TABLE>
<TABLE>
<CAPTION>
Cost To Profit (Loss) Aggregate
Managing To Managing Estimated Annual
Underwriter Underwriter Dividends
<S> <C> <C>
$ 8,069,882 $ 107,264 $ 247,585
</TABLE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial 3
Information
The Trust 4
Objective and Securities Selection 4
Trust Portfolio 5
Risk Factors 8
Tax Status 11
Trust Operating Expenses 14
Public Offering 15
Rights of Unitholders 18
Trust Administration 21
Other Matters 24
Report of Independent Certified Public 25
Accountants
Statement of Condition 26
Portfolio 27
Notes to Portfolio 28
</TABLE>
This Prospectus contains information concerning the Trust and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
P R O S P E C T U S
March 15, 1995
FIRST OF MICHIGAN FINANCIAL INSTITUTIONS
TRUST, SERIES 1
Van Kampen American Capital Equity
Opportunity Trust, Series 11
First of Michigan Corporation
100 Renaissance Center
26th Floor
Detroit, Michigan 48243
Please retain this Prospectus for future reference.
Contents Of Registration Statement
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services
and legal counsel
The following exhibits:
1.1 Proposed form of Trust Agreement between Van Kampen American
Capital Distributors, Inc., Depositor, American Portfolio Advisory
Service, a division of Van Kampen American Capital Investment
Advisory Corp., as Evaluator, and The Bank of New York, as Trustee
(to be supplied by amendment).
1.5 Form of Agreement Among Underwriters (to be supplied by amendment).
3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).
3.2 Opinion and consent of counsel as to New York tax status of
securities being registered (to be supplied by amendment).
4.1 Consent of Interactive Data Services, Inc. (to be supplied by
amendment).
4.2 Financial Data Schedule (to be supplied by amendment).
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
17 has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Chicago and
State of Illinois on the 11th day of August, 1995.
Van Kampen American Capital Equity
Opportunity Trust, Series 17
(Registrant)
By Van Kampen American Capital
Distributors, Inc.
(Depositor)
Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on August 11, 1995.
Signature Title
Don G. Powell Chairman, Chief Executive )
Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
Sandra A. Waterworth
(Attorney-in-fact)*
_____________________________________________________________________
_
*An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and and with the Registration Statement on Form S-6 of Insured Municipals
Income Trust, 170th Insured Multi-Series (File No. 33-55891) and the same
are hereby incorporated herein by this reference.
