File No. 33-62131
CIK #896983
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 19
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on April 24, 1997 pursuant to paragraph (b) of Rule 485.
SELECT TECHNOLOGY GROWTH TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 19
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two. Please retain both parts of this Prospectus for future reference.
THE TRUST
The Select Technology Growth Trust, Series 1 (the "Trust") is one
unit investment trust in the Van Kampen American Capital Equity Opportunity
Trust, Series 19 (the "Fund"). The Select Technology Growth Trust
offers investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio common stocks primarily issued by
U.S. based multi-national companies in the high technology industry (the "
Equity Securities"). Any Securities liquidated at termination will be sold
at the then current market value for such Securities; therefore, the amount
distributable in cash to a Unitholder upon termination may be more or less
than the amount such Unitholder paid for his Units.
PUBLIC OFFERING PRICE
The secondary market Public Offering Price of the Trust will include the
aggregate underlying value of the Securities in the Trust, the applicable
sales charge as described herein, and cash, if any, in the Income and Capital
Accounts held or owned by the Trust. See "Public Offering Price" in
Part Two and "Summary of Essential Financial Information".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Date of this Prospectus is April 16, 1997
<TABLE>
SELECT TECHNOLOGY GROWTH TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 19
Summary of Essential Financial Information
As of March 5, 1997
Managing Underwriter and Sub-Supervisor (1):Gruntal & Co., Incorporated
Sponsor:Van Kampen American Capital Distributors, Inc.
Supervisor (1):Van Kampen American Capital Investment Advisory Corp.
(An affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Select
Technology
Growth Trust
---------------
<S> <C>
General Information
Number of Units........................................................................................ 1,413,748
Fractional Undivided Interest in the Trust per Unit ................................................... 1/1,413,748
Public Offering Price: ................................................................................
Aggregate Value of Securities in Portfolio <F2>....................................................... $ 17,674,883
Aggregate Value of Securities per Unit (including accumulated dividends).............................. $ 12.50
Sales Charge 4.4% (4.6030% of Aggregate Value of Securities excluding principal cash per Unit) <F4>... $ .57
Public Offering Price per Unit <F3><F4>............................................................... $ 13.07
Redemption Price per Unit.............................................................................. $ 12.50
Secondary Market Repurchase Price per Unit............................................................. $ 12.50
Excess of Public Offering Price per Unit Over Redemption Price per Unit................................ $ .57
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.0025 per Unit
Evaluator's Annual Fee ...............Maximum of $.0025 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4:00 P.M. Eastern time on days of trading on the
New York Stock Exchange next following receipt of an order for a sale or purchase of Units or receipt by The Bank of New York of
Units tendered for redemption.
Date of Deposit.......................September 21, 1995
Mandatory Termination Date............September 21, 2000
The Trust may be terminated if the net asset value of such Trust is less than 40% of the
Minimum Termination Value.............total value of Equity Securities deposited in the Trust during the primary offering period.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Special Information
Calculation of Estimated Net Annual Dividends per Unit...
Estimated Gross Annual Dividends per Unit............... $ .03911
Less: Estimated Expenses per Unit....................... $ .02310
Estimated Net Annual Dividends per Unit................. $ .01601
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee............................$.008 per Unit
Estimated Annual Organizational Expenses <F6>...$.006 per Unit
Income Record Date..............................TENTH day of March, June, September, and December.
Income Date.....................................TWENTY-FIFTH day of March, June, September and December.
Capital Account Record Date.....................TENTH day of December.
Capital Account Distribution Date <F5>..........TWENTY-FIFTH day of December.
- ----------
<FN>
<F1>Pursuant to a contractual arrangement with the Supervisor, Gruntal & Co.,
Incorporated will provide to the Supervisor on an agency basis supervisory
services in return for the entire supervisory fee.
<F2>Equity Securities listed on a national securities exchange are valued at the
closing sale price or if no such price exists, at the bid price thereof.
<F3>Anyone ordering Units will have added to the Public Offering Price a pro rata
share of any cash in the Income and Capital Accounts.
<F4>Effective on each Setpember 23, commencing September 23, 1996, the secondary
sales charge will decrease by .5 of 1% to a minimum sales charge of 2.9%. See
"Public Offering-Offering Price" in Part Two.
<F5>Distributions from the Capital Account will be made monthly on the
twenty-fifth of the month to Unitholders or record on the tenth day of such
month if the amount available for distribution equals at least $0.01 per Unit.
<F6>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the Trust
portfolio and the initial fees and expenses of the Trustee but not including
the expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year
period. See "Expenses of the Trust" in Part Two and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
</TABLE>
PORTFOLIO
The Select Technology Growth Trust, Series 1 consists of common stocks
primarily issued by U.S. based multi-national companies in the high technology
industry. All of the Equity Securities are listed on a national securities
exchange, the NASDAQ National Market or traded on the Over-the-Counter market.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1995<F1> 1996
------------- -------------
<S> <C> <C>
Net asset value per Unit at beginning of period........................................................ $ 9.78 $ 9.41
============= =============
Net asset value per Unit at end of period.............................................................. $ 9.41 $ 12.37
============= =============
Distributions to Unitholders of investment income paid on Units redeemed (average Units outstanding
for entire period)..................................................................................... $ -- $ (0.01)
============= =============
Distributions to Unitholders from Unit redemption proceeds (average Units outstanding for entire
period)................................................................................................ $ -- $ 0.32
============= =============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).... $ (0.13) $ 3.40
============= =============
Units outstanding at end of period..................................................................... 1,900,000 1,472,750
</TABLE>
- ----------
For the period from September 21, 1995 (date of deposit) through December 31,
1995.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Select Technology Growth Trust, Series 1 (Van Kampen
American Capital Equity Opportunity Trust, Series 19):
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of the Select Technology
Growth Trust, Series 1 (Van Kampen American Capital Equity Opportunity Trust,
Series 19) as of December 31, 1996, and the related statements of operations
and changes in net assets for the period from September 21, 1995 (date of
deposit) through December 31, 1995 and the year ended December 31, 1996. These
statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1996 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Select Technology Growth
Trust, Series 1 (Van Kampen American Capital Equity Opportunity Trust, Series
19) as of December 31, 1996, and the results of operations and changes in net
assets for the period from September 21, 1995 (date of deposit) through
December 31, 1995 and the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 14, 1997
<TABLE>
SELECT TECHNOLOGY GROWTH TRUST
SERIES 1
Statements of Condition
December 31, 1996
<CAPTION>
Select
Technology
Growth
Trust
--------------
<S> <C>
Trust property
Cash.................................................................................... $ --
Securities at market value, (cost $13,697,278) (note 1)................................. 18,446,205
Accumulated dividends................................................................... 7,890
Organizational Costs.................................................................... 30,093
$ 18,484,188
==============
Liabilities and interest to Unitholders
Cash overdraft.......................................................................... $ 266,826
Accrued Organizational Costs............................................................ --
Interest to Unitholders................................................................. 18,217,362
$ 18,484,188
==============
Analyses of Net Assets
Interest of Unitholders (1,472,750 Units of fractional undivided interest outstanding)
Cost to original investors of 2,000,000 Units (note 1).................................. $ 19,472,000
Less initial underwriting commission (note 3)........................................... 393,318
--------------
19,078,682
Less redemption of 527,250 Units........................................................ 5,969,855
--------------
13,108,827
Undistributed net investment income
Net investment income................................................................... 40,042
Less distributions to Unitholders....................................................... (12,310)
--------------
52,352
Realized gain (loss) on Security sale or redemption..................................... 886,470
Unrealized appreciation (depreciation) of Securities (note 2)........................... 4,748,927
Distributions to Unitholders of Security sale or redemption proceeds.................... (579,214)
Net asset value to Unitholders.......................................................... $ 18,217,362
==============
Net asset value per Unit (1,472,750 Units outstanding)................................... $ 12.37
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
SELECT TECHNOLOGY GROWTH TRUST, SERIES 1
Statements of Operations
Period from September 21, 1995 (date of deposit) through December 31, 1995
and the year ended December 31, 1996
<CAPTION>
1995 1996
------------- -------------
<S> <C> <C>
Investment income
Dividend income..................................................... $ 15,902 $ 69,360
Expenses.............................................................
Trustee fees and expenses........................................... 5,362 17,856
Evaluator fees...................................................... 693 4,611
Supervisory fees.................................................... 693 8,024
Organizational fees................................................. 2,948 5,033
------------- -------------
Total expenses...................................................... 9,696 35,524
------------- -------------
Net investment income............................................... 6,206 33,836
Realized gain (loss) from Securities sale or redemption
Proceeds............................................................ -- 6,267,874
Cost................................................................ -- 5,381,404
------------- -------------
Realized gain (loss)................................................ -- 886,470
Net change in unrealized appreciation (depreciation) of Securities... (256,289) 5,005,216
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......$ (250,083) $ 5,925,522
============= =============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Period from September 21, 1995 (date of deposit) through December 31, 1995
and the year ended December 31, 1996
<CAPTION>
1995 1996
-------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income.............................................................................. $ 6,206 $ 33,836
Realized gain (loss) on Securities sale or redemption.............................................. -- 886,470
Net change in unrealized appreciation (depreciation) of Securities................................. (256,289) 5,005,216
-------------- ---------------
Net increase (decrease) in net assets resulting from operations.................................... (250,083) 5,925,522
Distributions to Unitholders from:
Net investment income.............................................................................. -- 12,310
Securities sale or redemption proceeds............................................................. -- (579,214)
Redemption of Units................................................................................. -- (5,969,855)
-------------- ---------------
Total increase (decrease).......................................................................... (250,083) (611,237)
Net asset value to Unitholders
Beginning of period................................................................................ 977,828 17,888,341
Additional Securities purchased from proceeds of Unit Sales........................................ 17,160,596 940,258
-------------- ---------------
End of period (including undistributed net investment income of $6,206 and $52,352, respectively).. $ 17,888,341 $ 18,217,362
============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
SELECT TECHNOLOGY GROWTH TRUST, SERIES 1
PORTFOLIO as of December 31, 1996
<CAPTION>
Valuation of Securities
Number at December 31,
of Market Value Per 1996
Shares Name of Issuer Share (Note 1)
- ---------- ---------------------------------------------- --------------------- ----------------------------
<S> <C> <C> <C>
9,093 Adobe Systems, Incorporated................... $ 37.375 $ 339,851
- ------------------------------------------------------------------------------------------------------------
19,646 Applied Materials, Incorporated............... 35.875 704,800
- ------------------------------------------------------------------------------------------------------------
5,745 Autodesk, Incorporated........................ 28.000 160,860
- ------------------------------------------------------------------------------------------------------------
18,590 Cascade Communications Corporation............ 55.125 1,024,774
- ------------------------------------------------------------------------------------------------------------
33,440 Cisco System, Incorporated.................... 63.625 2,127,620
- ------------------------------------------------------------------------------------------------------------
5,388 Cypress Semiconductor Corporation............. 14.125 76,106
- ------------------------------------------------------------------------------------------------------------
31,094 Hewlett-Packard Company....................... 50.250 1,562,473
- ------------------------------------------------------------------------------------------------------------
17,720 Informix Corporation.......................... 20.375 361,045
- ------------------------------------------------------------------------------------------------------------
15,551 Intel Corporation............................. 130.875 2,035,237
- ------------------------------------------------------------------------------------------------------------
14,441 International Business Machines Corporation... 151.000 2,180,591
- ------------------------------------------------------------------------------------------------------------
3,934 LSI Logic Corporation......................... 26.750 105,235
- ------------------------------------------------------------------------------------------------------------
2,676 Lattice Semiconductor Corporation............. 45.750 122,427
- ------------------------------------------------------------------------------------------------------------
2,348 Linear Technology Corporation................. 43.750 102,725
- ------------------------------------------------------------------------------------------------------------
6,118 Microsoft Corporation......................... 82.625 505,500
- ------------------------------------------------------------------------------------------------------------
15,344 Motorola, Incorporated........................ 61.375 941,738
- ------------------------------------------------------------------------------------------------------------
7,680 National Semiconductor Corporation............ 24.375 187,200
- ------------------------------------------------------------------------------------------------------------
17,585 Netscape Communications Corporation........... 56.750 997,949
- ------------------------------------------------------------------------------------------------------------
15,468 Octel Communications Corporation.............. 17.250 266,823
- ------------------------------------------------------------------------------------------------------------
40,355 Oracle Corporation............................ 41.625 1,679,777
- ------------------------------------------------------------------------------------------------------------
29,784 Seagate Technology, Incorporated.............. 39.500 1,176,468
- ------------------------------------------------------------------------------------------------------------
18,751 Tellabs, Incorporated......................... 37.625 705,506
- ------------------------------------------------------------------------------------------------------------
6,715 Teradyne, Incorporated........................ 24.375 163,678
- ------------------------------------------------------------------------------------------------------------
13,198 Texas Instruments, Incorporated............... 63.750 841,372
- ------------------------------------------------------------------------------------------------------------
3,236 VLSI Technology, Incorporated................. 23.625 76,450
- ---------- ----------------------------
353,900 $ 18,446,205
========== ============================
</TABLE>
The accompanying notes are an integral part of these statements.
SELECT TECHNOLOGY GROWTH TRUST
SERIES 1
Notes to Financial Statements
December 31, 1995 and 1996
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales price or, if not so listed, at the bid price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange on the closing sale
prices on the exchange or, if not so listed, at the asked price. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income Taxes.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Organizational Costs - The Trust will bear all or a portion of its
organizational costs, which will be deferred and amortized over five years.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized Appreciation $ 5,683,332
Unrealized Depreciation (934,405)
-------------
$ 4,748,927
=============
</TABLE>
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Managing
Underwriter intends to maintain a market for Units and to continuously offer
to purchase Units at prices, subject to change at any time, based upon the
value of the Securities in the portfolio of the Trust valued as described in
Note 1, plus accumulated dividends to the date of settlement. If the supply of
Units exceeds demand, or for other business reasons, the Managing Underwriter
may discontinue purchases of Units at such prices. In the event that a market
is not maintained for the Units, a Unitholder desiring to dispose of his Units
may be able to do so only by tendering such Units to the Trustee for
redemption at the redemption price.
Cost to Investors - The cost to original investors was based by adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus an amount equal to the difference between the maximum sales
charge of 4.9% of the public offering price which is equivalent to 5.152% of
the underlying value of the Securities and the maximum deferred sales charge
of ($0.29 per Unit) and were assessed a deferred sales charge. Commencing
September 23, 1996, the secondary sales charge does not includes deferred
payments but will instead include only a one-time initial sales charge of 4.4%
of the public offering price and will decrease by .5 of 1% on each September
23 to a minimum sales charge of 2.9%.
Compensation of Evaluator and Supervisor - the Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not
to exceed the aggregate cost of the Supervisor for providing such services to
all applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period ended December 31, 1995 and the year ended December 31,
1996, 0 Units and 527,250 Units, respectively, were presented for redemption.
- --------------------------------------------------------------------------
Select Technology Growth Trust, Series 1
Prospectus Part Two
The Trust. Select Technology Growth Trust, Series 1 (the "Trust") is a
unit investment trust which is contained in Van Kampen American Capital Equity
Opportunity Trust, Series 19. The Trust offers investors the opportunity to
purchase Units representing proportionate interests in a fixed, diversified
portfolio of common stocks issued by U.S. based multi-national companies in
the high-technology industry (the "Equity Securities"). Unless
terminated earlier, the Trust will terminate on September 21, 2000 (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.
Objective of the Trust. The objective of the Trust is to provide the potential
for capital appreciation by investing in a portfolio of common stocks issued
by U.S. based multi-national companies in the high-technology industry. See
"Portfolio" in Part One. 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 objective of the Trust will
be achieved.
Public Offering Price. The Public Offering Price per Unit is equal to the
aggregate underlying value of the Equity Securities plus or minus cash, if
any, in the Capital and Income Accounts, divided by the number of Units
outstanding, plus the sales charge described herein. If Units were available
for purchase on the date thereof, the Public Offering Price per Unit would
have been that amount set forth under "Summary of Essential Financial
Information" in Part One. The minimum purchase is 100 Units (25 Units for
a tax-sheltered retirement plan).
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable distribution
date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information" in Part One. Any distribution
of income and/or capital will be net of the expenses of the Trust. See "
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. 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 or bid prices of the 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 or bid
prices of the Equity Securities), plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of the Trust. A Unitholder tendering
2,500 Units or more for redemption may request an In Kind Distribution of
shares of Equity Securities (reduced by customary transfer and registration
charges) in lieu of payment in cash. See "Rights of
Unitholders--Redemption of Units."
Note: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part One
accompanying this Prospectus Part Two.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Termination. Commencing on the Mandatory Termination Date, 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 five 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 may have the opportunity to have their
distributions reinvested into additional Units of the Trust. The reinvestment
option will be subject to availability of Units and the Sponsor may suspend or
terminate the reinvestment option at any time. 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, and risks specific to the high-technology industry such as rapid
product obsolescence due to dynamic industry development. 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."
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 19 is comprised
of one unit investment trust, Select Technology Growth 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, Van Kampen American Capital
Investment Advisory Corp., 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 U.S. based
multi-national companies in the high-technology industry. 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 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 Units of the Trust. 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.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase 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 objective of the Trust is to provide investors with the potential for
capital appreciation. The portfolio is described under "Trust
Portfolio" herein and "Portfolio" in Part One. The Trust seeks to
achieve its objective through a portfolio of domestic equity securities of
industry market leaders that present the potential for growth in the expanding
areas of communications, large-scale computers, semiconductors and
semiconductor fabrication equipment. By investing in a number of areas within
the computer industry, the Trust seeks to provide diversity which may help to
minimize the effects of rapidly changing product life cycles and stock market
fluctuations inherent to the high-technology industry. An investor will be
subjected to taxation on the dividend income, if any, received from the Trust
and on gains from the sale or liquidation of Equity Securities (see "Tax
Status"). Investors should be aware that there is not any guarantee that
the objective of the Trust will be achieved 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 Gruntal & Co., Incorporated, the high-technology industry
offers an attractive investment opportunity for investors seeking the
potential for long-term growth. The high-technology industry is currently
dominated worldwide by a relatively small number of U.S. companies that have
created today's technology and are developing the technology of the future.
Gruntal & Co., believes that an expanding worldwide market, lower prices and
increased ease of use should generate substantial growth for personal
computers and all related products. Accordingly, Gruntal & Co. believes that
the computer industry is just entering its adolescence and the universal
appeal of personal computers will continue to drive demand for years to come.
Multitudes of new buyers are seeking new technological products for personal
use and personal computers have become affordably priced systems for many
buyers in less-developed countries. Consumers already use computers for
shopping, paying bills, sending letters, entertainment and education, and as
the industry grows, consumers are likely to buy personal computers to travel
the information highway. Furthermore, companies dedicated to improving
productivity are continually investing in and upgrading computers to remain
competitive--according to industry estimates, there are 50 personal computers
installed per 100 workers in the U.S. compared to 22 in western Europe, 17 in
Japan and even less in other countries, representing an opportunity for
worldwide growth. Because technology has become a vital part of life and a key
to the economic future of businesses and individuals, Gruntal & Co.
anticipates more growth in the high-technology sector than almost any other
industry. In selecting the Equity Securities, Gruntal & Co. considered the
following factors, among others: the company's ability to develop leading-edge
technology, attractiveness of market fundamentals, management's ability to
succeed in a rapidly changing environment, the development of a company's
product line, the company's strength within its sector and maintaining
portfolio diversification within the high-technology industry.
The Equity Securities were selected by Gruntal & Company's high-technology
market analyst team, Roxane Googin and Mona Eraiba. Roxane Googin received her
M.B.A. from the University of Virginia, her B.S. in Engineering from the
University of Tennessee, and she has over 10 years of experience in the
high-technology industry. Ms. Googin recently earned The Wall Street Journal's
top All-Star Analyst ranking in the computer networking stocks sector. In
selecting the Equity Securities, Ms. Googin concentrated on identifying the
growth potential of U.S. computer companies involved in the areas of
communications and large-scale computing. Mona Eraiba received her M.B.A. from
Columbia University in New York, her B.S. in Electrical Engineering from
Washington University and has over 12 years of investment experience,
including a specialization in high-technology issues. In selecting the Equity
Securities, Ms. Eraiba concentrated on the potential growth found in equities
of companies involved in the areas of semiconductors and semiconductor
fabrication equipment. Investors should be aware that members of the Managing
Underwriter's research department, including Ms. Googin and Ms. Eraiba, are
compensated based on brokerage commissions generated from their research and
on the dollar amount of sales of the Trust. In addition, Ms. Googin and Ms.
Eraiba may trade the Equity Securities in their own personal accounts.
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 and the portfolio is designed
to achieve the objective of the Trust over the entire term of the Trust. 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 24 issues of Equity Securities issued by
U.S. based multi-national companies in the high-technology industry. All of
the Equity Securities are 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.
Adobe Systems, Inc. develops, markets and supports computer software product
and technologies. The company's products allow users to create, display, print
and communicate electronic documents. Adobe licenses its technology to major
computer, printing and publishing suppliers and markets a line of products for
home and small business users.
Applied Materials, Inc. develops, manufactures, sells and services
semiconductor wafer fabrication equipment worldwide. The company's products
include deposition, etching and ion implantation systems. Applied Materials
also has an equity interest in Applied Komatsu Technology, Inc., which
produces thin film transistor fabrication systems for float panel displays.
Autodesk, Inc. is a worldwide supplier of design and PC software. The company
develops, markets and supports a family of design and professional multi-media
software and component technologies for use on personal computers and
workstations.
Cascade Communications Corporation designs, develops and maintains a line of
multi-service wide area network (WAN) switches. The switches allow network
users to direct and manage communications across WANs that use different
network services. Cascade markets its products to public network carriers
including, Competitive Access Providers, Regional Bell Operating Companies and
local carriers.
Cisco System, Inc. develops, manufactures, markets and supports multi-protocol
inter-networking systems that enable customers to build large scale computer
networks. The principal products include routers with concurrent bridging and
terminal servers. The company sells its products internationally to system
integrators who then resell the products primarily to government customers.
Cypress Semiconductor Corporation designs and manufactures digital integrated
circuits that are used in applications of proprietary sub-micron complementary
metal oxide silicon technologies. The products are marketed nationwide to
personal computer, mainframe computer, workstation, military and aerospace,
telecommunications and instrumentation markets.
Hewlett-Packard Company designs, manufactures and services electronic
measurement, analysis and computation instruments. The company produces
computers, calculators, workstations, video displays, printers, disc and tape
drives, medical diagnostic and monitoring devices and mass spectrometers.
Hewlett-Packard sells its products in the United States and other countries.
Informix Corporation develops and markets computer software. The company
produces database management programs and combination database management,
word processor and spreadsheet packages which run on minicomputers,
microcomputers and personal computers. Informix sells its software in the
United States, Japan and other countries.
Intel Corporation designs, manufactures and sells microcomputer components and
related products. The company's products include microprocessors, embedded
products, memory chips, computer modules and boards, network and communication
hardware and software products, personal conferencing software and cards and
parallel supercomputers. Intel sells its products worldwide.
International Business Machines Corporation manufactures mainframe computers
and other information processing equipment. The company also supplies micro
and personal computers, software and networking products and peripheral
equipment. Products are sold or leased for use in business, government,
science, education, space, medicine and other areas on a worldwide basis.
LSl Logic Corporation designs, makes, markets and provides service for
application specific integrated circuits, microprocessors and application
specific standard product such as chip sets and graphics board. Products are
primarily marketed to manufacturers in the computer, telecommunications,
consumer and defense industries.
Lattice Semiconductor Corporation designs, develops and markets high speed
programmable logic devices (PLD's). The proprietary PLD's provide electronic
systems customers with quickly designed, easily configured components. The
products are marketed worldwide to original equipment manufacturers of
microcomputers, graphic systems, workstations, telecommunication and
industrial controls.
Linear Technology Corporation manufactures linear integrated circuits. The
company produces operational and instrumentation amplifiers, voltage and
switching regulators, voltage references, monolithic switched-capacitor
filters, high frequency and high current voltage converters and other
circuits. Linear sells its products to original equipment manufacturers in the
United States and other countries.
Microsoft Corporation develops, manufactures, licenses and supports computer
software products. The company offers the "Microsoft MS-DOS" and "
Microsoft Windows" and "Microsoft Windows 95" operating systems.
Microsoft also offers "Microsoft Access" , "Microsoft FoxPro,"
"Microsoft SQL Server" and "Microsoft Excel" networking
database and database management products, "spreadsheet programs, books
and other business and computer products.
Motorola, Inc. designs, manufactures and sells, mainly under the Motorola
brand, a diversified line of electronic equipment and components. These
products include two-way land mobile communications systems, paging and other
electronic communication systems, semiconductors and electronic equipment for
military and aerospace use.
National Semiconductor Corporation designs, develops, manufactures and markets
a variety of semiconductor products. These products include microprocessors,
linear and digital integrated circuits, hybrid circuits and subsystems,
electronic packaging and miscellaneous services and supplies for the
semiconductor industry worldwide.
Netscape Communications Corporation provides software for the exchange of
information and commerce over the internet or private Internet Protocol
networks. The company designs its products for high performance, ease of use
and security. Netscape sells its products worldwide.
Octel Communications Corporation designs, manufactures and markets voice
processing systems which are sold primarily to large corporate customers and
providers of voice information services in the United States and abroad. The
company provides a broad family of products, features, telephone switch
integrations and networking capabilities.
Oracle Corporation designs, develops, markets and supports computer software
products with a variety of uses, including database management, applications
development, decision support, end user applications and office automation.
Oracle's primary product, the Oracle Relational Database Management System,
runs on a broad range of mainframes, minicomputers, microcomputers and PC's.
Seagate Technology, Inc. produces and markets over a 100 rigid disc drive
models with form factors from 2.5 to 5.25 inches and up to 9 Gigabytes. These
drives record, store and retrieve digital information that cannot be stored in
its entirety in the central processing unit. The company's products are
distributed to original equipment manufacturers, value added resellers and
various dealers.
Tellabs, Inc. designs, assembles, markets and services voice and data
networking products used by providers of telecommunications services in public
and private voice data networks worldwide. These products include digital
systems, data communications systems and network access systems. Customers
include Bell companies, independent telephone companies, government agencies
and businesses.
Teradyne, Inc. manufactures electronic systems, software and electronic
connection systems. The company's electronics systems and software are used in
the design and testing of electronic components. Teradyne also manufactures
backplane connection systems, which are used to support circuit boards in an
electronic assembly.
Texas Instruments, Inc. manufactures and sells electronic products. The
company's products include semiconductors, control devices, radar, missile
guidance systems, printers and calculators. Texas Instruments sells to
governmental, industrial and consumer markets.
VLSl Technology, Inc. makes custom and standard semi-conductor products
targeting communications, computing and consumer digital entertainment
markets. The company maintains a worldwide network of design offices, customer
service centers and manufacturing plants.
General. The Trust consists of such of the Equity Securities listed under "
Portfolio" in Part One 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 characteristics of the high-technology industry and the risks which such
an investment may entail. The market for high-technology products is
characterized by rapidly changing technology, rapid product obsolescence,
cyclical market patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Equity Securities depends in
substantial part on the timely and successful introduction of new products. An
unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Equity Securities will be
able to respond timely to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements of new
products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of
high-technology common stocks to fluctuate substantially. In addition,
technology company stocks have experienced extreme price and volume
fluctuations that often have been unrelated to the operating performance of
such companies. This market volatility may adversely affect the market price
of the Equity Securities and therefore the ability of a Unitholder to redeem
Units at a price equal to or greater than the original price paid for such
Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely
and cost effective manner. Accordingly, an issuer's operating results and
customer relationships could be adversely affected by either an increase in
price for, or an interruption or reduction in supply of, any key components.
Additionally, many technology issuers are characterized by a highly
concentrated customer base consisting of a limited number of large customers
who may require product vendors to comply with rigorous industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies are
often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance that
these customers will place additional orders, or that an issuer of Equity
Securities will obtain orders of similar magnitude as past orders from other
customers. Similarly, the success of certain technology companies is tied to a
relatively small concentration of products or technologies. Accordingly, a
decline in demand of such products, technologies or from such customers could
have a material adverse impact on issuers of the Equity Securities.
Certain issuers of the Equity Securities may derive a significant amount of
business in foreign markets. Many countries, especially emerging market
countries, have regulatory requirements that differ from U.S. requirements and
are characterized by less developed and more volatile economies. International
sales and operations are subject to certain risks, including unexpected
changes in regulatory environments, exchange rates, tariffs and other
barriers, political and economic instability and potentially adverse tax
consequences. All of these factors could have a material adverse impact on the
financial condition of certain issuers.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the Equity Securities to protect their
proprietary rights will be adequate to prevent misappropriation of their
technology or that competitors will not independently develop technologies
that are substantially equivalent or superior to such issuer's technology.
An investment in Units should also 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 limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of
Section 1221 of the Internal Revenue Code of 1986 ("the Code").
Unitholders should consult their tax advisers in determining the federal,
state, local and any other tax consequences of the purchase, ownership and
disposition of Units in the Trust. For purposes of the following discussion
and opinion, it is assumed that each Equity Security is equity for federal
income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is available and received by
such Unitholder from the Trust, as described below). The price a Unitholder
pays for his Units, generally including sales charges, is allocated among his
pro rata portion of each Equity Security held by the Trust (in proportion to
the fair market values thereof on the valuation date closest to the date the
Unitholder purchase his Units) in order to determine his initial tax basis for
his pro rata portion of each Equity Security held by the trust. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Equity Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis.
A Unitholder will be considered to have received all of the dividends paid on
his pro rata portion of each Equity Security when such dividends are received
by the Trust. Unitholders will be taxed in this manner regardless of whether
distributions from the Trust are actually received by the Unitholder or are
automatically reinvested. For federal income tax purposes, a Unitholder's pro
rata portion of dividends as defined by Section 316 of the Code paid with
respect to an Equity Security held by the trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits" . A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the trust will generally
be considered a capital gain (except in the case of a dealer or a financial
institution) and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date") is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution) and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the trust (to the
extent such dividends are taxable as ordinary income, as discussed above and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. The limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that own Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as through the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extend they exceed 2% of such individual's
adjusted gross income. Unitholders may be required to treat some or all of the
expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) are subject to a
maximum marginal stated tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that could affect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the trust involved including his
pro rata portion of all the Equity Securities represented by the Unit.
Legislative proposals have been made that would treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain as
constructive sales for purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sale rules.
Special Tax Consequences of In Kind Distributions Upon Redemption or
Termination of the Trust. Under certain circumstances a Unitholder tendering
Units for redemption may be able to request an In Kind Distribution. A
Unitholder may also under certain circumstances be able to request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will not
recognize gain or loss if a Unitholder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held by the
trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount
of cash received by the Unitholder and his tax basis in such fractional share
of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request
and In Kind Distribution are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. the cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date closest to the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number nd
appropriate certification are not provided when requested, distributions by
the trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States person. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of such Trust a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
trust will be treated as the income of the Unitholders under the existing come
tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders") with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit in the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
Compensation of Sponsor, Evaluator, Supervisory Servicer 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" in Part One (which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates) for
regularly evaluating the Trust portfolio. 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 Supervisory Servicer will receive an
annual supervisory fee, payable in monthly installments, which is not to
exceed the amount set forth under "Summary of Essential Financial
Information" in Part One (which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates) for
providing portfolio supervisory services for the Trust. Such fee may exceed
the actual costs of providing such supervisory services for this Trust, but at
no time will the total amount received for portfolio supervisory services
rendered to series of Van Kampen American Capital Equity Opportunity Trust and
to any other unit investment trusts sponsored by the Sponsor for which the
Supervisor provides portfolio supervisory services in any calendar year exceed
the aggregate cost to the Supervisor of supplying such services in such year.
Pursuant to a contract with the Supervisor, the Managing Underwriter, which is
regularly engaged in the business of evaluating, quoting or appraising
comparable securities, provides, for both the initial offering period and
secondary market transactions, portfolio supervisory services for the Trust
and receives for such services the entire supervisory fee paid to the
Supervisor. 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" in Part One (which amount is based on the number of Units
outstanding on January 1 of each year for which such compensation relates).
The Trustee's fees are payable in monthly installments on or before the
twenty-fifth day of each month from the Income Account to the extent funds are
available and then from the Capital Account. The Trustee benefits to the
extent there are funds for future distributions, payment of expenses and
redemptions in the Capital and Income Accounts since these accounts are
non-interest bearing and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds. Such fees may be increased
without approval of the Unitholders by amounts not exceeding proportionate
increases under the category "All Services Less Rent of Shelter" in
the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. For a
discussion of the services rendered by the Trustee pursuant to its obligations
under the Trust Agreement, see "Rights of Unitholders--Reports
Provided" and "Trust Administration."
Miscellaneous Expenses. Expenses incurred in establishing the Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and
state registration fees, the initial fees and expenses of the Trustee, legal
and accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and amortized over the life of the Trust.
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 initially equal to 4.4% of the Public Offering Price which will be
reduced by .5 of 1% on each September 23, commencing September 23, 1997, to a
minimum of 2.9%). The total maximum sales charge assessed to Unitholders on a
per Unit basis will be 4.4% of the Public Offering Price (4.603% of the
aggregate value of the Securities in the Trust). Such underlying value shall
include the proportionate share of any undistributed cash held in the Capital
and Income Accounts.
Any sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent. Registered representatives of
selling brokers, dealers, or agents may purchase Units of the Trust at the
current Public Offering Price less the concession described under "Unit
Distribution" .
A "Qualified Gruntal Purchaser" may purchase Units of the Trust at a
Public Offering Price subject to a one-time secondary market sales charge of
2.9% of the Public Offering Price. The term "Qualified Gruntal
Purchaser" includes (1) employees, officers and directors of Gruntal &
Co., Incorporated, (2) immediate family members thereof (spouses, children,
grandchildren, parents, grandparents, mothers-in-law, fathers-in-law,
sons-in-law and daughters-in-law) and (3) trustees, custodians or fiduciaries
for the benefit of the persons described in (1) and (2).
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One in accordance with fluctuations in the prices of the underlying
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 the sales charge for the Trust (initially 4.4% of the Public
Offering Price) and dividing the sum so obtained by the number of Units
outstanding. Such underlying value shall include the proportionate share of
any cash held in the Income and Capital Accounts. 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. Commencing on September 23, 1996, the secondary market
sales charge will not include deferred payments but will instead include only
a one-time initial sales charge of 4.4% of the Public Offering Price and will
be reduced by .5 of 1% on each subsequent September 23 to a minimum sales
charge of 2.9%.
The value of the Equity Securities during the secondary market is determined
on each business day by the Evaluator as described under "Rights of
Unitholders - Redemption of Units."
In offering the Units to the public, neither the Sponsor, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
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. 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.
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, the 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 100 Units (25 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 initially equal to 4.4% of the Public
Offering Price of the Units, less any reduced sales charge as described under
"General" above. Any discount provided to investors will borne by the
selling Managing Underwriter, dealer or agent as indicated under "
General" above.
In addition, the Managing Underwriter realized a profit or sustained 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. 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 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. 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. 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 individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is 25 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 evidenced by book entry unless a Unitholder or
the Unitholder's registered broker-dealer makes a written request to the
Trustee that ownership be evidenced by certificates. Units are transferable by
making a written request to the Trustee and, in the case of Units evidenced by
a certificate, by presentation and surrender of such certificate to the
Trustee properly endorsed or accompanied by a written instrument or
instruments of transfer. A Unitholder must sign such written request, and such
certificate or transfer instrument, exactly as his name appears on the records
of the Trustee and on the face of any certificate representing the Units to be
transferred with the signature guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP") or such other signature
guarantee program in addition to, or in substitution for, STAMP as may be
accepted by the Trustee. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or
certificates of corporate authority. Certificates will be issued in
denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer of interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. 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" in Part One. 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 twenty-fifth day of each month to holders
of record on the tenth 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.
On or before the twenty-fifth day of each month, the Trustee will deduct from
the Income Account and, to the extent funds are not sufficient therein, from
the Capital Account, 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 income, capital gains and/or capital on their Units
automatically reinvested in additional Units of the Trust subject only to the
remaining deferred sales charge payments (to the extent Units may be lawfully
offered for sale in the state in which the Unitholder resides). To participate
in the reinvestment plan, a Unitholder may either contact his or her broker or
agent or file with the Trustee a written notice of election at least ten days
prior to the Record Date for which the first distribution is to apply. A
Unitholder's election to participate in the reinvestment plan will apply to
all Units of the Trust owned by such Unitholder and such election will remain
in effect until changed by the Unitholder."
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Managing Underwriter (see "Public Offering--Public
Market") or, until such time as additional Units cease to be issued by the
Trust (see "The Trust"), distributions may be reinvested in such
additional Units. If Units are unavailable in the secondary market,
distributions which would otherwise have been reinvested shall be paid in cash
to the Unitholder on the applicable Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will be
made subject only to the remaining deferred sales charge payments on the
related Income or Capital Distribution Dates. Under the reinvestment plan, the
Trust will pay the Unitholder's distributions to the Trustee which in turn
will purchase for such Unitholder Units of the Trust and will send such
Unitholder a statement reflecting the reinvestment.
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 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 unit investment trust division office at
101 Barclay Street, 20th Floor, New York, New York 10286 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 third
business day following such tender the Unitholder will 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" in Part One. The "date of tender" is deemed to be the
date on which Units are received by the Trustee, except that with respect to
Units received after the applicable Evaluation Time the date of tender is the
next day on which the New York Stock 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. 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, this evaluation is generally based
on the closing sale prices on that exchange (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange, at the closing bid prices. If the Equity
Securities 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 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 then outstanding or by the Trustee when the value of the
Equity Securities owned by the Trust, as shown by any evaluation, is less than
that amount set forth under "Minimum Termination Value" in the "
Summary of Essential Financial Information" in Part One. The Trust will be
liquidated by the Trustee in the event that a sufficient number of Units 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" in Part One.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. At least 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 Trustee will attempt to sell Securities, in consultation with the Sponsor,
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 following guidelines will be
followed 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 that
such sales will be made 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 (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the 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. Gruntal & Co., Incorporated is a full-service investment
bank headquartered at 14 Wall Street in New York. Established in 1880, Gruntal
has a proud history of client service, financial stability and growth. Today,
Gruntal has over 2,100 employees in 33 offices across the United States. The
scope of Gruntal's business spans a broad range of financial services
including investment banking, research, trading, asset management and
brokerage services to individuals, institutions and corporations worldwide.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition").
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser (MSAM"), Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment adviser, and Morgan
Stanley International, are engaged in a wide range of financial services.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending. As of September 30,
1996, MSAM, together with its affiliated investment advisory companies, had
approximately $103.5 billion of assets under management and fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of 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. Kroll & Tract LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in this Prospectus have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
their report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
<S> <C>
The Trust 3
Objective and Securities Selection 3
Trust Portfolio 4
Risk Factors 5
Tax Status 6
Trust Operating Expenses 7
Public Offering 8
Rights of Unitholders 10
Trust Administration 12
Other Matters 14
</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.
Prospectus
Part Two
SELECT TECHNOLOGY GROWTH TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 19
Note: This Prospectus May Be Used Only When Accompanied by Part One. Both
Parts of this Prospectus should be retained for future reference.
Dated as of the date of the Prospectus Part One accompanying this Prospectus
Part Two.
Gruntal & Co., Incorporated
14 Wall Street, 20th Floor
New York, New York 10005
1-800-223-7634
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
19, certifies that it meets all of the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 24th
day of April, 1997.
Van Kampen American Capital Equity Opportunity
Trust, Series 19
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Depositor)
By: Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 24, 1997 by the following persons who constitute a majority of the
Board of Directors of Van Kampen American Capital Distributors, Inc.:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Molinari President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Sandra A. Waterworth ) (Attorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated March 21, 1997 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity
Trust, Series 19 as of December 31, 1996, and for the period then ended,
contained in this Post-Effective Amendment No. 2 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
April 24, 1997
<TABLE> <S> <C>
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<NUMBER> 1
<NAME> TECH
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13697278
<INVESTMENTS-AT-VALUE> 18446205
<RECEIVABLES> 0
<ASSETS-OTHER> 7890
<OTHER-ITEMS-ASSETS> 30093
<TOTAL-ASSETS> 18484188
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 266826
<TOTAL-LIABILITIES> 266826
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18217362
<SHARES-COMMON-STOCK> 1472750
<SHARES-COMMON-PRIOR> 2000000
<ACCUMULATED-NII-CURRENT> 52352
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 307256
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4748927
<NET-ASSETS> 18217362
<DIVIDEND-INCOME> 69360
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 35524
<NET-INVESTMENT-INCOME> 33836
<REALIZED-GAINS-CURRENT> 886470
<APPREC-INCREASE-CURRENT> 5005216
<NET-CHANGE-FROM-OPS> 5925522
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12310
<DISTRIBUTIONS-OF-GAINS> (579214)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 527250
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (611237)
<ACCUMULATED-NII-PRIOR> 6206
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5033
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35524
<AVERAGE-NET-ASSETS> 18522981
<PER-SHARE-NAV-BEGIN> 9.41
<PER-SHARE-NII> 0.023
<PER-SHARE-GAIN-APPREC> 4
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.393
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.37
<EXPENSE-RATIO> 0.002
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
