File No. 33-62803
CIK #896984
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 20
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
Chapman and Cutler Van Kampen American Capital Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: An indefinite
number of Units of proportionate interest pursuant to Rule 24f-2
under the Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities
being registered: Indefinite
G. Amount of registration fee: $500 (previously paid)
H. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the
Registration Statement
/ X / Check box if it is proposed that this filing will become
effective on October 17, 1995 at 2:00 P.M. pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 20
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) *
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trust
trust's securities and ) Tax Status
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses ) Prospectus Front Cover
Page
) Summary of Essential Financial
) Information
) Trust Portfolio
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or ) Trust Operating
Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) *
underwriter, trustee or any ) Trust Portfolio
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities ) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's) Cover Page
securities ) Trust Operating Expenses
52. (a) Provisions of trust agreement )
with respect to replacement ) Trust Administration
or elimination portfolio)
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Tax Status
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates)
58. )
59. Financial statements (Instructions ) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
Preliminary Prospectus Dated October 17, 1995
Subject To Completion
October 17, 1995
Van Kampen American Capital
Van Kampen American Capital Equity Opportunity Trust, Series 20
Van Kampen American Capital Brand Name Equity Trust, Series 2
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 20 (the
"Fund" ) is comprised of one unit investment trust, Van Kampen American
Capital Brand Name Equity Trust, Series 2 (the "Brand Name Equity
Trust" or "Trust" ). The Brand Name Equity Trust offers investors
the opportunity to purchase Units representing proportionate interests in a
fixed portfolio of equity securities issued by companies diversified within
the non-durable consumer goods industry including common stocks of foreign
issuers, all of which are in American Depositary Receipt form ("ADRs").
Unless terminated earlier, the Trust will terminate on April 17, 2003 and
any Securities then held will, within a reasonable time thereafter, be
liquidated or distributed by the Trustee. Any Securities liquidated at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder upon termination
may be more or less than the amount such Unitholder paid for his Units.
Objectives of the Trust. The objectives of the Trust are to provide the
potential for capital appreciation and income, consistent with the
preservation of invested capital, by investing in a portfolio of equity
securities of companies engaged in the design, production and distribution of
products diversified within the non-durable consumer goods industry
("Equity Securities" or "Securities"). See "Portfolio." There is, of course,
no guarantee that the objectives of the Trust will be
achieved.
Public Offering Price. The Public Offering Price per Unit of the Trust is
equal to the aggregate underlying value of the Equity Securities plus or minus
cash, if any, in the Capital and Income Accounts, divided by the number of
Units outstanding, plus a sales charge equal to 4.9% of the Public Offering
Price which is equivalent to 5.152% of the aggregate value of the Securities.
During the initial offering period, the sales charge is reduced on a graduated
scale for sales involving at least 5,000 Units. If Units were available for
purchase at the close of business on the day before the Initial Date of
Deposit, the Public Offering Price per Unit would have been $10.00. The
minimum purchase is 100 Units except for certain transactions described under
"Public Offering--Unit Distribution". See "Public Offering."
Additional Deposits. The Sponsor may, from time to time during a period of up
to 12 months after the Initial Date of Deposit, deposit additional Securities
in the Trust, provided it maintains, as nearly as is practicable, the original
proportionate relationship of the Equity Securities in the Trust's portfolio.
See "The Trust."
Dividend and Capital Gains Distributions. Distributions of dividends and
realized capital gains, if any, received by the Trust will be paid in cash on
the applicable Distribution Date to Unitholders of record on the record date
as set forth in the "Summary of Essential Financial Information." The
initial estimated distribution will be $.01 per Unit and will be made on
December 31, 1995 to Unitholders of record on December 15, 1995. Any
distribution of income and/or capital gains will be net of the expenses of the
Trust. See "Federal Taxation." Additionally, upon termination of the
Trust, the Trustee will distribute, upon surrender of Units for redemption, to
each Unitholder his pro rata share of the Trust's assets, less expenses, in
the manner set forth under "Rights of Unitholders--Distributions of Income
and Capital."
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.
Secondary Market for Units. After the initial offering period, although not
obligated to do so, the Sponsor intends to maintain a market for Units of the
Trust and offer to repurchase such Units at prices which are based on the
aggregate underlying value of Equity Securities in the Trust (generally
determined by the closing sale prices of listed Securities and the closing bid
prices of over-the-counter traded Securities) plus or minus cash, if any, in
the Capital and Income Accounts of the Trust. If a secondary market is
maintained during the initial offering period, the prices at which Units will
be repurchased will be based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices of
listed Securities and the closing asked prices of over-the-counter traded
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is not maintained, a Unitholder may redeem
Units through redemption at prices based upon the aggregate underlying value
of the Equity Securities in the Trust plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units."
Unitholders electing a distribution of shares of Equity Securities should be
aware that the transaction is subject to taxation and Unitholders will
recognize gain based on the appreciation in value of the Equity Securities
received. See "Federal Taxation."
Termination. Commencing on the Mandatory Termination Date Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. Written notice of any termination of the Trust specifying
the time or times at which Unitholders may surrender their certificates for
cancellation shall be given by the Trustee to each Unitholder at his address
appearing on the registration books of the Trust maintained by the Trustee. At
least 30 days prior to the Mandatory Termination Date the Trustee will provide
written notice thereof to all Unitholders 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, together with surrendered certificates if
issued, 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 electing a distribution of shares of Equity Securities
should be aware that the transaction is subject to taxation and Unitholders
will recognize gain based on the appreciation in value of the Equity
Securities received. See "Federal Taxation." Unitholders not electing
a distribution of shares of Equity Securities will receive a cash distribution
from the sale of shares of Equity Securities will receive a cash distribution
from the sale of the remaining Securities within a reasonable time after the
Trust is terminated. See "Trust Administration--Amendment or
Termination."
Reinvestment Option. Unitholders have the opportunity to have their
distributions reinvested into additional Units of the Trust, if Units are
available at the time of reinvestment, or into an open-end management
investment company as described herein. See "Rights of Unitholders--
Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including risks specific to the consumer
goods industry, the possible deterioration of either the financial condition
of the issuers or the general condition of the stock market and currency
fluctuations, the lack of adequate financial information concerning an issuer
and exchange control restrictions impacting foreign issuers. See "Risk
Factors" and "Trust Portfolio."
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 20
Summary of Essential Financial Information
At the Close of Business on the day before the Initial Date of Deposit: October 16, 1995
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Van Kampen American Capital Investment Advisory Corp.
(A subsidiary of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
General Information
<S> <C>
Number of Units ............................................................ 300,000
Fractional Undivided Interest in the Trust per Unit ........................ 1/300,000
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>............................ $ 2,853,208
Aggregate Value of Securities per Unit .................................... $ 9.51
Sales Charge 4.9% (5.152% of the Aggregate Value of Securities per Unit)... $ .49
Public Offering Price Per Unit <F2><F3>.................................... $ 10.00
Redemption Price per Unit................................................... $ 9.51
Secondary Market Repurchase Price per Unit.................................. $ 9.51
Excess of Public Offering Price per Unit over Redemption Price per Unit..... $ .49
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee... Maximum of $.0025 per Unit
Evaluator's Annual Evaluation Fee..... Maximum of $.0025 per Unit
Evaluation Time....................... 4:00 P.M. New York time
Mandatory Termination Date............ April 17, 2003
Minimum Termination Value............. The Trust may be terminated if the net asset value of the Trust is less than
$500,000 unless the net asset value of the Trust deposits has exceeded $15,000,000,
then the Trust Agreement may be terminated if the net asset value of the Trust is
less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Calculation of Estimated Net Annual Dividends per Unit <F4>:
Estimated Gross Annual Dividends per Unit...................... $ .19445
Less: Estimated Annual Expense per Unit........................ $ .01929
Estimated Net Annual Dividends per Unit........................ $ .17516
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee................ $.008 per Unit
Estimated Annual Organizational
Expenses <F5>...................... $.00251 per Unit
Income Distribution Record Date..... Fifteenth day of March, June, September and December
Income Distribution Date............ Last day of March, June, September and December
Capital Account Record Date......... Fifteenth day of December
Capital Account Distribution Date... Last day of December
<FN>
<F1> Each Equity Security listed on a national securities exchange is valued at the
closing sale price or, if the Equity Security is not listed, at the closing
ask price thereof.
<F2> On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts.
<F3> Effective on each October 20, commencing October 20, 1996, the secondary sales
charge will decrease by .5 of 1% to a minimum sales charge of 1.5%. See
Public Offering--Offering Price."
<F4> Estimated annual dividends are based on annualizing the most recently paid
dividends.
<F5> The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the
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 material and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year
period. See "Trust Operating Expenses" and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts. Estimated Annual Organizational
Expenses have been estimated based on a projected trust size of $50,000,000.
To the extent the Trust is larger or smaller, the actual organizational
expenses paid by the Trust (and therefore by Unitholders) will vary from the
estimated amount set forth above.
</TABLE>
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 20 is comprised
of one unit investment trust, Van Kampen American Capital Brand Name Equity
Trust, Series 2. 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.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio" herein, including delivery
statements relating to contracts for the purchase of certain such Securities
and an irrevocable letter of credit issued by a financial institution in the
amount required for such purchases. Thereafter, the Trustee, in exchange for
such Securities (and contracts) so deposited, delivered to the Sponsor
documentation evidencing the ownership of that number of Units of the Brand
Name Equity Trust indicated in "Summary of Essential Financial
Information." Unless otherwise terminated as provided in the Trust
Agreement, the Trust will terminate on the Mandatory Termination Date, and
Securities then held will within a reasonable time thereafter be liquidated or
distributed by the Trustee.
Additional Units of the Trust may be issued at any time by depositing in the
Trust additional Securities or contracts to purchase securities together with
irrevocable letters of credit or cash. As additional Units are issued by the
Trust as a result of the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits of Securities
into the Trust for a period of up to 12 months following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain, as nearly as practicable, the original proportionate relationship of
the Equity Securities in the Trust's portfolio based on the number of shares
of each of the Equity Securities. Any deposit by the Sponsor of additional
Equity Securities will duplicate, as nearly as is practicable, this original
proportionate relationship and not the actual proportionate relationship on
the subsequent date of deposit, since the actual proportionate relationship
may be different than the original proportionate relationship. Any such
difference may be due to the sale, redemption or liquidation of any of the
Equity Securities deposited in the Trust on the Initial, or any subsequent,
Date of Deposit.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in the Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Brand Name Equity Trust are to provide the potential for
capital appreciation and income, consistent with the preservation of invested
capital. The portfolio is described below and in "Portfolio" . An
investor will be subjected to taxation on the dividend income received from
the Trust and on gains from the sale or liquidation of Securities (see "
Federal Taxation" ). Investors should be aware that there is not any
guarantee that the objectives of the Trust will be achieved because they are
subject to the continuing ability of the respective Security issuers to
continue to declare and pay dividends and because the market value of the
Securities can be affected by a variety of factors. Common stocks may be
especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Equity Securities will pay dividends on outstanding common shares. Any
distributions of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions.
The Sponsor believes that an investment in common stocks in general, and
non-durable consumer goods companies in particular, can help offset the effect
of inflation and offer the potential for capital appreciation. Over the five
year period from January 1990, through December 1994, the average annual
return on the stocks comprising the Morgan Stanley Consumer Index was 13.26%
and the average annual return on the stocks comprising the Standard & Poor's
500 Index was 5.38%, while the average rate of inflation as measured by the
Consumer Price Index during the same period was 3.49%. The following chart
shows the average annual compounded rate of return of selected asset classes
from 1969 through 1994 compared to the rate of inflation over the same period.
<TABLE>
<CAPTION>
<S> <C>
Common Stocks (Standard & Poor's 500 Index)
10.97%
Long-term U.S. Government bonds
8.87%
U.S. Treasury bills (short term)
7.01%
Consumer Price Index
5.67%
0 2 4 6 8 10 12 14%
Source: Ibbotson Associates and Micropal, Inc.
</TABLE>
The Morgan Stanley Consumer Index is an unmanaged statistical composite
measuring the performance of 30 stocks from 21 consumer-oriented industries.
The Standard & Poor's 500 Index is an unmanaged statistical composite
measuring the performance of 500 stocks from 83 industrial groups. Investors
should note that the Morgan Stanley Consumer Index does not include all of the
Securities in the Trust portfolio and the Trust is not designed to correlate
with this or any other index. Of course, the percentages and chart above
represent past performance of these investment categories and there is no
guarantee of future results, either of these categories or of the Trust. The
Trust also includes a sales charge and expenses which are not reflected in the
percentages and chart.
In selecting Securities for the Brand Name Equity Trust, the following
factors, among others, were considered: (a) the issuer's position within the
industry, (b) breadth and stability of the issuer's business base and (c)
growth potential.
Issuers of the Equity Securities included in the Trust are as follows:
American Home Products Corporation. American Home Products Corporation is a
research-based pharmaceutical and health care products company and is a
developer, manufacturer and marketer of prescription drugs and
over-the-counter medications. The company also produces women's health care
products, vaccines, generic pharmaceuticals, biotechnology, agricultural
products, animal health care, medical devices, infant and food products.
Anheuser-Busch Companies, Inc. Anheuser-Busch Companies, Inc. is a diversified
corporation whose subsidiaries include a brewery organization and a major
producer of fresh baked goods. The company's interests also include snack food
production, can manufacturing, metalized paper printing, barley malting,
international brewing and marketing of beer, theme park operations and
ownership of the St. Louis Cardinals Baseball Club.
Bausch & Lomb, Inc. Bausch & Lomb, Inc. develops, manufactures and markets
products for the personal health, medical and optical health care fields. The
company's products include contact lenses and related accessories, ophthalmic
drugs, dental plaque removal systems, sunglasses and other optical items.
Bausch & Lomb markets its products worldwide.
CPC International, Inc. CPC International, Inc. is a major food company with
operations worldwide including North America, Europe, Latin America, Asia and
South Africa. The company produces a variety of branded foods which include
"Hellman's" mayonnaise, "Skippy" peanut butter, "Knorr's" dehydrated soups,
"Mazola" corn oil, as well as starches, syrups, desserts, bakery products,
pasta and bread spreads.
Campbell Soup Company. Campbell Soup Company is a major manufacturer of canned
soups, both condensed and ready-to-serve. The company also produces other
convenience foods which include "Swanson" frozen dinners, "Prego" spaghetti
sauce, "Pepperidge Farm" bakery products and many other brand name products.
Campbell's distributes its products to chain stores, distributors and
wholesalers worldwide.
The Coca-Cola Company. The Coca-Cola Company manufactures, markets and
distributes soft drinks, foods, soft-drink syrups and concentrates worldwide.
The company's products include "Coca-Cola", "Diet Coke", "Tab", "Sprite",
"Diet Sprite", "Fanta", "Fresca", "Cherry Coke", "Diet Cherry Coke",
"PowerAde", "Fruitopia" and "Minute Maid" sodas; other products include
juices, juice-drinks and mixers sold under the "Minute Maid" , "Hi-C" ,
and "Bacardi" brands.
Colgate-Palmolive Company. Colgate-Palmolive Company is a global consumer
products company whose core products consist of oral care, body care,
household surface care, fabric care and animal nutrition and dietary care.
Colgate-Palmolive markets its products internationally under a variety of
brand names including "Colgate", "Palmolive", "Ajax", "Fab" and "Irish
Spring" as well as "Hill's Science Diet" and "Prescription Diet" .
Eastman Kodak Company. Eastman Kodak Company's activities are divided into the
imaging, information, chemicals and health segments. The various segments
provide a number of products and services including cameras, photofinishing,
film, audiovisual equipment, chemicals, plastics and pharmaceutical and
consumer healthcare products. The company's products and services are offered
worldwide.
Fruit of the Loom, Inc. Fruit of the Loom, Inc. manufactures underwear,
activewear and socks. The company produces men's, boy's, women's and girl's
underwear and T-shirts in a variety of styles under the "Fruit of the
Loom" and "BVD" brand names. Fruit of the Loom sells its products
to retailers in the U.S., Canada, Germany and the United Kingdom.
General Mills, Inc. General Mills, Inc. manufactures and markets consumer food
products. Major U.S. businesses include "Big G" Cereals; "Betty Crocker"
dessert, side dish and dinner mixes; snack products; "Gold Medal" flour and
"Yoplait" and "Columbo" yogurts. General Mills sells its products in the U.S.,
Canada, Europe, Japan and Latin America.
Gillette Company. Gillette Company manufactures shaving, toiletry, stationery
and dental products. The company produces disposable and electric razors,
replacement blades, "Right Guard" and "Soft and Dry" deodorants, "Toni" hair
care products, "Paper Mate", "Flair" and "Waterman" pens, "Liquid Paper"
correction fluid, toothbrushes and toothpaste. Gillette sells its products
internationally.
Hasbro, Inc. Hasbro, Inc. manufactures and sells toys. The company's toys
include "Nerf" sport toys, "Playskool" pre-school toys and infant products.
Hasbro's subsidiaries, Milton Bradley and Parker Brothers, manufacture board
games such as "The Game of Life", "Stratego" and "Candy Land". The company
sells its products internationally.
Heinz (H.J.) Company. Heinz (H.J.) Company maufactures and markets food
products. The company produces ketchup, sauces, vinegar, pickles, canned tuna,
pet food, frozen potatoes, meat products and corn syrup and other items.
Heinz's subsidiary, Weight Watchers International, operates and franchises
weight control centers and licenses diet foods to other manufacturers. The
company sells its products internationally.
Johnson & Johnson. Johnson & Johnson manufactures and sells a broad range of
products in health care and other fields. The company's business is divided
into the consumer, professional and pharmaceutical segments. Products include
contraceptives, therapeutics, veterinary products, dental products, surgical
instruments, dressings and apparel and nonprescription drugs.
Kellogg Company. Kellogg Company manufactures cereal products and convenience
foods. The company produces "Rice Krispies", "Special K", "Frosted Flakes",
"Froot Loops" and other cereals. Other subsidiaries offer dessert mixes,
soup bases, gelatin desserts and yogurt products. Kellogg sells its products
in the U.S. and other countries.
Mattel, Inc. Mattel, Inc. is a worldwide designer, manufacturer and marketer
of children's toys. The company's core product line includes "Barbie Dolls",
"Disney" preschool and infant toys and "Hot Wheels" miniature vehicles.
Other products include activity toys under the "Nickelodeon" brand name and
the "See N Say" line of toys. Mattel sells its products in 140 nations
throughout the world.
McDonald's Corporation. McDonald's Corporation develops, operates, franchises
and services a worldwide system of restaurants. These restaurants prepare,
assemble, package and sell a limited menu of quickly-prepared,
moderately-priced foods. There are over 15,000 restaurants in the U.S. and 80
other countries worldwide. Food items include hamburgers, chicken, salads,
breakfast foods and beverages.
Merck & Company, Inc. Merck & Company, Inc. manufactures and produces a wide
range of human and animal pharmaceuticals. Products include
anti-hypertensives, cardiovasculars, anti-inflammatories, vaccines and
glaucoma treatments. Animal products include preventions for canine heartworm
disease and poultry disease.
Nabisco Holdings Corporation. Nabisco Holdings Corporation manufactures and
sells a variety of packaged foods. Products include candy, cookies, oatmeal,
condiments and dog treats. The company sells its line under a number of brand
names including "Ritz", "Bubble Yum", "Stella D'Oro", "Blue Bonnet" and
"Snackwell's" . Nabisco operates worldwide.
Nestle, S.A. Nestle, S.A.'s principal activities are preparing chocolate and
confectionary products, pet food, pharmaceuticals, cosmetics, milk products
and beverages. Some of Nestle, S.A.'s international brands include Nescafe
coffee, Findus frozen foods, Perrier water, L'Oreal cosmetics and Carnation
milk.
Nike, Inc. Nike, Inc. designs, develops and markets a wide variety of
high-quality footwear and apparel products. Apparel includes tennis, running,
bicycling and fitness wear as well as athletic bags and accessory items. The
company markets its products through retail stores in the U.S. and throughout
the world.
PepsiCo, Inc. PepsiCo, Inc. operates on a worldwide basis in the soft drink,
snack food and restaurant business segments. Some of the company's products
include "Pepsi-Cola", "Slice", and "Mountain Dew" soft drinks and
"Frito-Lay" snack foods. The company also operates "Pizza Hut", "Taco Bell"
and "Kentucky Fried Chicken" restaurants worldwide.
Philip Morris Companies, Inc. Philip Morris Companies, Inc. operates a large
international consumer goods company through its tobacco, food and beer
segments. The company's major subsidiaries include Philip Morris U.S.A.,
Philip Morris International, Inc., Kraft Foods, the Miller Brewing Company,
Kraft Foods International and Phillip Morris Capital Corporation. Philip
Morris also provides real estate services.
Procter & Gamble Company. Procter & Gamble Company manufactures and
distributes household products. Its laundry and cleaning, personal care and
food and beverage segments are distributed primarily through grocery stores
and other retail outlets. Products of the pulp and chemicals segment are sold
directly to the users. The company's products are sold throughout the U.S. and
abroad.
Rubbermaid, Inc. Rubbermaid, Inc. manufactures and distributes plastic and
rubber products which are designed for consumer and industrial markets. The
products include housewares, home horticulture products, microwave cookware,
infants' and children's toys and health care products. The company's
tradenames include "Rubbermaid", "Con-Tact", "LittleTikes", "Seco", "Eldon"
and "Gott".
Sara Lee Corporation. Sara Lee Corporation is a worldwide manufacturer and
marketer of consumer products ranging from brand-name food items to household
and personal care packaged goods. The packaged meats and bakery divisions are
the company's largest sales contributors. Brand names include "Sara
Lee" baked goods, "Hanes" and "L'Eggs" hosiery; "Kiwi" shoecare products and
"Hillshire Farm" meat products.
Schering-Plough. Schering-Plough discovers, develops, manufactures and markets
pharmaceuticals and consumer products. Pharmaceutical products include
prescription drugs, over-the-counter medicines, vision care products and
animal health care products. The consumer products group consists of
cosmetics, proprietary medicines, toiletries and foot care products.
Warner-Lambert Company. Warner-Lambert Company manufactures prescription and
over-the-counter pharmaceuticals. The company produces diagnostic products,
"Procan SR" heart drug, "Centrax" tranquilizer, "Dilatin" epilepsy drug,
"Listermint" mouthwash, "Bromo Seltzer" antacid, "Dentyne" gum and
"Schick" razors.
Wendy's International, Inc. Wendy's International, Inc. operates, develops and
franchises a system of fast food restaurants. The restaurants offer
hamburgers, salads and chicken sandwiches. The company operates or franchises
over 4,400 "Wendy's" restaurants in the U.S. and abroad.
Wrigley (W.M.) Jr. Company. Wrigley (W.M.) Jr. Company manufactures chewing
gum. The company produces and sells gum under the brand names "Wrigley's
Spearmint", "Doublemint", "Juicy Fruit" and "Big Red". Other brand names
include "Freedent", "Orbit", "Hubba Bubba" and "Extra". Wrigley sells its
products in the U.S., Europe, Australia, Canada, the Philippines, Taiwan
and other countries.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust as of the Initial Date of
Deposit. Subsequent to the Initial Date of Deposit, the Securities may no
longer meet such criteria. Should an Equity Security no longer meet such
criteria, such Equity Security will not, simply as a result of such fact, be
removed from the portfolio of the Trust.
Investors should be aware that the Trust is not a "managed" fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Investors should
note in particular that the Securities were selected by the Sponsor as of the
day prior to the Initial Date of Deposit. The Trust may continue to purchase
or hold Securities originally selected through this process even though the
evaluation of the attractiveness of the Securities may have changed and, if
the evaluation were performed again at that time, the Securities would not be
selected for the Trust.
TRUST PORTFOLIO
The Brand Name Equity Trust consists of 30 different issues of Equity
Securities which are primarily issued by established companies with extensive
domestic and international operations that are engaged in the design,
production and distribution of products within the non-durable consumer goods
industry (including common stocks of foreign issuers, all of which are ADRs).
All of the Equity Securities are listed on a national securities exchange, the
NASDAQ National Market System or are traded in the over-the-counter market.
Consumer Products Companies. Investment in securities issued by non-durable
consumer products companies should be made with an understanding of the many
factors which may have an adverse impact on the credit quality of the
particular company or industry. These include cyclicality of revenues and
earnings, changing consumer demands, regulatory restrictions, products
liability litigation and other litigation resulting from accidents, extensive
competition (including that of low-cost foreign companies), unfunded pension
fund liabilities and employee and retiree benefit costs and financial
deterioration resulting from leveraged buy-outs, takeovers or acquisitions. In
general, expenditures on consumer products will be affected by the economic
health of consumers. Various factors such as recession and any related
tightening of consumer credit and spending may have a continuing adverse
effect on the industry. Other factors of particular relevance to the
profitability of the industry are the effects of increasing environmental
regulation on packaging and on waste disposal, the continuing need to conform
with foreign regulations governing packaging and the environment, the outcome
of trade negotiations and their effect on foreign subsidies and tariffs,
foreign exchange rates, the price of oil and its effect on energy costs,
inventory cutbacks by retailers, transportation and distribution costs, health
concerns relating to the consumption of certain products, the effect of
demographics on consumer demand, the availability and cost of raw materials
and the ongoing need to develop new products and to improve productivity.
Companies within the non-durable consumer goods industry are typically
considered growth companies. A growth company is generally defined as a
relatively steady performer over time which provides the potential to sustain
an above-average growth rate during various economic cycles. Because of their
size, resilience and strength, brand name companies appear to be some of the
most favorable growth companies in which to invest. Additionally, the Sponsor
believes that brand name companies are poised to benefit as access to and
consumer demand in developing countries continues to grow.
Many of the companies behind brand name products are industry leaders in both
domestic and international markets. They are established, well-managed,
financially strong and proven performers. Recently, many have undertaken
restructuring and expansion projects which have increased their profit
potential. As large companies, they are able to provide their brands with a
great deal of support, including large advertising budgets able to produce
sales beyond the life of a campaign, research and development prowess
producing high quality and new products, effective distribution and
promotional efforts creating widespread exposure throughout the retail
industry, and exposure to international markets and expansion of operations to
capitalize on growth opportunities in developing countries worldwide. The
Sponsor believes that as cost differences between brand name and generic
products shrink, consumers will be willing to pay a premium for brand name
products they recognize and believe to be of better quality.
The Food and Beverage Industry. The Department of Commerce ranks the food and
beverage industry as the second largest U.S. manufacturing sector. In recent
years, this industry has had consistently positive earnings and has tended to
be recession-resistant. Performance has reflected consumer demand more than
general economic conditions.
Food processing companies include manufacturers of packaged foods such as
canned and frozen foods, baked goods, desserts, jelly, coffee and hot
chocolate, and processors of agricultural products such as fruits, vegetables,
cereals, flour, meat and poultry, including pet food. Distributors include
food wholesalers (companies that distribute food products to retailers,
restaurants and institutions) and retailers, supermarket chains and
restaurants. The beverage companies represented manufacture alcoholic and
non-alcoholic drinks. The issuers in the Trust include companies that have
successfully adapted to new consumer demands such as developing low calorie,
low fat and low sodium products for a public increasingly concerned with
health and fitness. The Sponsor anticipates that continued adaptation will
result in consumer support and lead to continued growth.
Pharmaceutical Industry. The medical sector has historically provided
investors with significant growth opportunities. One of the industries
included in the sector is pharmaceutical companies. Pharmaceutical companies
develop, manufacture and sell prescription and over-the-counter drugs. In
addition, they are well known for the significant amounts of money they spend
on research and development. Pharmaceutical companies have potential risks
unique to their sector of the health care field. Such companies are subject to
governmental regulation of their products and services, a factor which could
have a significant and possibly unfavorable effect on the price and
availability of such products or services. Furthermore, pharmaceutical
companies face the risk of increasing competition from generic drug sales, the
termination of their patent protection for drug products and the risk that
technological advances will render their products or services obsolete. The
research and development costs of bringing a drug to market are substantial
and include lengthy governmental review processes, with no guarantee that the
product will ever come to market. Many of these pharmaceutical companies may
have losses and not offer certain products for several years. Pharmaceutical
companies may also have persistent losses during a new product's transition
from development to production, and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in the
pharmaceutical field will continue to search for and develop new drugs through
advanced technologies and diagnostics. On a world-wide basis, pharmaceutical
companies are involved in the development and distribution of drugs and
vaccines. These activities may make the pharmaceutical sector very attractive
for investors seeking the potential for growth in their investment portfolio.
Legislative proposals concerning health care are under continued consideration
by the Clinton Administration and Congress. These proposals span a wide range
of topics, including cost and price controls (which might include a freeze on
the prices of prescription drugs), national health insurance, incentives for
competition in the provision of health care services, tax incentives and
penalties related to health care insurance premiums and promotion of pre-paid
health care plans. The Sponsor is unable to predict the effect of any of these
proposals, if enacted, on the issuers of Equity Securities in the Trust.
General. The Trust consists of (a) the Securities listed under "
Portfolio" as may continue to be held from time to time in the Trust, (b)
any additional Securities acquired and held by the Trust pursuant to the
provisions of the Trust Agreement and (c) any cash held in the Income and
Capital Accounts. Neither the Sponsor nor the Trustee shall be liable in any
way for any failure in any of the Securities. However, should any contract for
the purchase of any of the Securities initially deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in the Trust to
cover such purchase are reinvested in substitute Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable to such
failed contract to all Unitholders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will in most cases be distributed to Unitholders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the portfolio is not
managed, the Sponsor may instruct the Trustee to sell Equity Securities under
certain limited circumstances. See "Trust Administration--Portfolio
Administration." Equity Securities, however, will not be sold by the Trust
to take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
RISK FACTORS
An investment in Units should be made with an understanding of the risks which
an investment in common stocks entails, including the risk that the financial
condition of the issuers of the Equity Securities or the general condition of
the common stock market may worsen and the value of the Equity Securities and
therefore the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases of value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding, and
thus the value of the Equity Securities in the portfolio may be expected to
fluctuate over the life of the Trust to values higher or lower than those
prevailing on the Initial Date of Deposit or at the time a Unitholder
purchases Units.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor. The price at which
the Equity Securities may be sold to meet redemptions, and the value of the
Trust, will be adversely affected if trading markets for the Equity Securities
are limited or absent.
Unitholders will be unable to dispose of any of the Equity Securities in the
portfolio, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor.
Since certain of the Equity Securities in the Trust consist of securities of
foreign issuers, an investment in the Trust involves some investment risks
that are different in some respects from an investment in a trust that invests
entirely in securities of domestic issuers. Those investment risks include
future political and governmental restrictions which might adversely affect
the payment or receipt of payment of dividends on the relevant Equity
Securities. In addition, for the foreign issuers that are not subject to the
reporting requirements of the Securities Exchange Act of 1934, there may be
less publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. However, due to the nature
of the issuers of Equity Securities included in the Trust, the Sponsor
believes that adequate information will be available to allow the Supervisor
to provide portfolio surveillance.
The securities of the foreign issuers in the Trust are in ADR form. ADRs
evidence American Depository Receipts which represent common stock deposited
with a custodian in a depositary. American Depositary Shares, and receipts
therefor (ADRs), are issued by an American bank or trust company to evidence
ownership of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares. ADRs may
be sponsored or unsponsored. In an unsponsored facility, the depositary
initiates and arranges the facility at the request of market makers and acts
as agent for the ADR holder, while the company itself is not involved in the
transaction. In a sponsored facility, the issuing company initiates the
facility and agrees to pay certain administrative and shareholder-related
expenses. Sponsored facilities use a single depositary and entail a
contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In
addition, the depositary bank incurs expenses in connection with the
conversion of dividends or other cash distributions paid in local currency
into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices
in the ADR market may also exist with respect to certain ADRs. In varying
degrees, any or all of these factors may affect the value of the ADR compared
with the value of the underlying shares in the local market. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that for
the underlying shares. ADRs are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements of the
Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs
and consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including supply and
demand of the respective currency, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries. Therefore, for any securities of issuers (whether
or not they are in ADR form) whose earnings are stated in foreign currencies,
or which pay dividends in foreign currencies or which are traded in foreign
currencies, there is a risk that their United States dollar value will vary
with fluctuations in the United States dollar foreign exchange rates for the
relevant currencies.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trust of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trust. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trust and on the ability of
the Trust to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
FEDERAL TAXATION
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code" ). If the
Trust so qualifies and timely distributes to Unitholders 90% or more of its
taxable income (without regard to its net capital gain, i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to federal income tax on the portion of its taxable income
(including any net capital gain) that it distributes to Unitholders. In
addition, to the extent the Trust timely distributes to Unitholders at least
98% of its taxable income (including any net capital gain), it will not be
subject to the 4% excise tax on certain undistributed income of "regulated
investment companies." Because the Trust intends to timely distribute its
taxable income (including any net capital gain), it is anticipated that the
Trust will not be subject to federal income tax or the excise tax. Although
all or a portion of the Trust's taxable income (including any net capital
gain) for the taxable year may be distributed to Unitholders shortly after the
end of the calendar year, such a distribution will be treated for federal
income tax purposes as having been received by Unitholders during the calendar
year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the extent
that distributions to a Unitholder in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of capital
and will reduce the Unitholder's basis in his Units and, to the extent that
they exceed his basis, will be treated as a gain from the sale of his Units as
discussed below.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will be a capital
gain or loss, except in the case of a dealer or a financial institution. For
taxpayers other than corporations, net capital gains are presently subject to
a maximum stated marginal tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that affect tax rates
and could affect relative differences at which ordinary income and capital
gains are taxed. A capital loss is long-term if the asset is held for more
than one year and short-term if held for one year or less. If a Unitholder
holds Units for six months or less and subsequently sells such Units at a
loss, the loss will be treated as a long-term capital loss to the extent that
any long- term capital gain distribution is made with respect to such Units
during the six-month period or less that the Unitholder owns the Units.
The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate 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.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable
to dividends received by the Trust from United States Corporations (other than
Real Estate Investment Trusts) and is designated by the Trust as being
eligible for such deduction. To the extent dividends received by the Trust are
attributable to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to its pro rata
portion of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations. The
Trust will provide each Unitholder with information annually concerning what
part of the Trust distributions are eligible for the dividends received
deduction.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trust and to the tax
treatment of distributions by the Trust to U.S. Unitholders. Unitholders that
are not United States citizens or residents should be aware that distributions
from the Trust will generally be subject to a withholding tax of 30%, or a
lower treaty rate, and should consult their own tax advisers to determine
whether investment in the Trust is appropriate. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a
pro rata portion of the ADRs held by the Trust, must include in their gross
income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust
deems to be the Unitholders' portion of foreign income taxes paid with respect
to, or withheld from, dividends, interest or other income of the Trust from
its foreign investments. Unitholders may then subtract from their federal
income tax the amount of such taxes withheld, or else treat such foreign taxes
as deductions from gross income; however, as in the case of investors
receiving income directly from foreign sources, the above described tax credit
or deduction is subject to certain limitations. Unitholders should consult
their tax advisers regarding this election and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year.
In the event the Units are held by fewer than 500 persons, additional taxable
income will be realized by the individual (and other noncorporate) Unitholders
in excess of the distributions received by the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
As discussed in "Rights of Unitholders--Redemption of Units" , under
certain circumstances a Unitholder who owns at least 2,500 Units may request
an In Kind Distribution upon the redemption of Units or the termination of the
Trust. Unitholders electing an In Kind Distribution of shares of Equity
Securities (see "Rights of Unitholders--Redemption of Units" ) should
be aware that the transaction is subject to taxation and Unitholders will
recognize gain based on the value of the Equity Securities received.
Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has
not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust will generally
be subject to United States income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or other
non-United States persons. Such persons should consult their tax advisers.
Unitholders will be notified annually of the amounts of income dividends
includable in the Unitholder's gross income and amounts of Trust expenses
which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is a wholly owned subsidiary
of the Sponsor, will receive an annual supervisory fee, payable in monthly
installments, which is not to exceed the amount set forth under "Summary
of Essential Financial Information," for providing portfolio supervisory
services for the Trust. Such fee (which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which event the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) 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 1 and subsequent series of
Van Kampen Merritt Equity Opportunity Trust (and its successors) 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. In
addition, the Evaluator, which is a division of Van Kampen American Capital
Investment Advisory Corp., shall receive the annual per Unit evaluation fee,
payable in monthly installments, set forth under "Summary of Essential
Financial Information" (which amount is based on the number of Units
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which event the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) for regularly evaluating the Trust portfolio. Both of the
foregoing fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services
Less Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor or, if such category is no longer published, in a
comparable category. The Sponsor will receive sales commissions and may
realize other profits (or losses) in connection with the sale of Units and the
deposit of the Securities as described under "Public Offering--Sponsor
Profits."
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" (which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number
of Units outstanding at the end of the month of such calculation). The
Trustee's fees are payable in monthly installments on or before the fifteenth
day of each month from the Income Account to the extent funds are available
and then from the Capital Account. The Trustee benefits to the extent there
are funds for future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest bearing and
the amounts earned by the Trustee are retained by the Trustee. Part of the
Trustee's compensation for its services to the Trust is expected to result
from the use of these funds. Such fees may be increased without approval of
the Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. For a discussion of the
services rendered by the Trustee pursuant to its obligations under the Trust
Agreement, see "Rights of Unitholders--Reports Provided" and "
Trust Administration."
Miscellaneous Expenses. 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 a five year period. The
following additional charges are or may be incurred by the Trust: (a) normal
expenses (including the cost of mailing reports to Unitholders) incurred in
connection with the operation of the Trust, (b) fees of the Trustee for
extraordinary services, (c) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (d) various
governmental charges, (e) expenses and costs of any action taken by the
Trustee to protect the Trust and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of the Trust without negligence, bad faith or wilful
misconduct on its part and (g) expenditures incurred in contacting Unitholders
upon termination of the Trust.
The fees and expenses set forth herein are payable out of the Trust. When such
fees and expenses are paid by or owing to the Trustee, they are secured by a
lien on the Trust's portfolio. Since the Equity Securities are all common
stocks, and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be sufficient to
meet any or all expenses of the Trust. If the balances in the Income and
Capital Accounts are insufficient to provide for amounts payable by the Trust,
the Trustee has the power to sell Equity Securities to pay such amounts. These
sales may result in capital gains or losses to Unitholders. See "Federal
Taxation."
PUBLIC OFFERING
General. Units are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Equity Securities and includes a sales
charge of 4.9% of the Public Offering Price--which charge is equivalent to
5.152% of the aggregate underlying value of the Securities). Such underlying
value shall include the proportionate share of any undistributed cash held in
the Capital and Income Accounts. The sales charge applicable to quantity
purchases is, during the initial offering period, reduced on a graduated basis
to any person acquiring 5,000 or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number Dollar Amount of Sales
of Units Purchased Charge Reduction Per Unit
<S> <C>
5,000-9,999 $0.03
10,000-24,999 $0.05
25,000-49,999 $0.10
50,000-99,999 $0.15
100,000 or more $0.20
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent. This reduced sales charge structure will apply on all
purchases by the same person from any one dealer of units of Van Kampen
American Capital-sponsored unit investment trusts which are being offered in
the initial offering period (a) on any one day (the "Initial Purchase
Date" ) or (b) on any day subsequent to the Initial Purchase Date if (1)
the units purchased are of a unit investment trust purchased on the Initial
Purchase Date, and (2) the person purchasing the units purchased a sufficient
amount of units on the Initial Purchase Date to qualify for a reduced sales
charge on such date. In the event units of more than one trust are purchased
on the Initial Purchase Date, the aggregate dollar amount of such purchases
will be used to determine whether purchasers are eligible for a reduced sales
charge. Such aggregate dollar amount will be divided by the public offering
price per unit (on the day preceding the date of purchase) of each respective
trust purchased to determine the total number of units which such amount could
have purchased of each individual trust. Purchasers must then consult the
applicable trust's prospectus to determine whether the total number of units
which could have been purchased of a specific trust would have qualified for a
reduced sales charge and, if so qualified, the amount of such reduction.
Assuming a purchaser qualifies for a sales charge reduction or reductions, to
determine the applicable sales charge reduction or reductions it is necessary
to accumulate all purchases made on the Initial Purchase Date and all
purchases made in accordance with (b) above. Units purchased in the name of
the spouse of a purchaser or in the name of a child of such purchaser under 21
years of age will be deemed for the purposes of calculating the applicable
sales charge to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary purchasing
securities for one or more trust estate or fiduciary accounts.
Employees of Van Kampen American Capital Distributors, Inc. and its
subsidiaries may purchase Units of the Trust at the current Public Offering
Price less the underwriting commission or the dealer's concession in the
absence of an underwriting commission. Registered representatives of selling
brokers, dealers, or agents may purchase Units of the Trust at the current
Public Offering Price less the dealer's concession during the initial offering
period and for secondary market transactions.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases (see "Public Offering--Unit
Distribution" ) by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their immediate family members (as described above) and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Securities in the
Trust.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to 5.152% of such value and dividing the sum so obtained by the number
of Units outstanding. Such underlying value shall include the proportionate
share of any cash held in the Capital Account. This computation produced a
gross underwriting profit equal to 4.9% of the Public Offering Price. Such
price determination as of the close of business on the day before the Initial
Date of Deposit was made on the basis of an evaluation of the Securities in
the Trust prepared by Interactive Data Services, Inc., a firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities. After the close of business on the day before the Initial Date of
Deposit, the Evaluator will appraise or cause to be appraised daily the value
of the underlying Securities as of the Evaluation Time on days the New York
Stock Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received prior to the Evaluation Time on each such day. Orders
received by the Trustee or Sponsor for purchases, sales or redemptions after
that time, or on a day when the New York Stock Exchange is closed, will be
held until the next determination of price. Effective on each October 20,
commencing October 20, 1996, such sales charge will be reduced by .5 of 1% to
a minimum sales charge of 1.5%.
The value of the Equity Securities during the initial offering period is
determined on each business day by the Evaluator in the following manner: if
the Equity Securities are listed on a national securities exchange 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 ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange, the
evaluation shall generally be based on the current ask price on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the value of
the Equity Securities on the ask side of the market or (c) by any combination
of the above.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Sponsor, broker-dealers and others at the
Public Offering Price. Upon the completion of the initial offering period,
Units repurchased in the secondary market, if any, may be offered by this
Prospectus at the secondary market Public Offering Price in the manner
described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
of 3.70% per Unit. Any quantity discount provided to investors will be borne
by the selling dealer or agent as indicated under "General" above. For
secondary market transactions, such concession or agency commission will
amount to 70% of the sales charge applicable to the transaction.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units except as stated
herein. In connection with fully disclosed transactions with the Sponsor, the
minimum purchase requirement will be that number of Units set forth in the
contract between the Sponsor and the related broker or agent. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase
of Units and to change the amount of the concession or agency commission to
dealers and others from time to time.
Sponsor Compensation. The Sponsor will receive a gross sales commission equal
to 4.9% of the Public Offering Price of the Units (equivalent to 5.152% of the
net amount invested), less any reduced sales charge for quantity purchases (as
described under "General" above). Any quantity discount provided to
investors will be borne by the selling broker, dealer or agent as indicated
under "General" above.
In addition, the Sponsor will realize a profit or will sustain a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. See "
Portfolio." The Sponsor has not participated as sole underwriter or as
manager or as a member of the underwriting syndicates or as an agent in a
private placement for any of the Securities in the Trust portfolio. The
Sponsor may further realize additional profit or loss during the initial
offering period as a result of the possible fluctuations in the market value
of the Securities in the Trust after a date of deposit, since all proceeds
received from purchasers of Units (excluding dealer concessions and agency
commissions allowed, if any) will be retained by the Sponsor. Broker-dealers
or others (each "a distributor" ) who distribute 1,000,000 or more
Units during the initial offering period will receive additional compensation
from the Sponsor, after the close of the initial offering period, of $0.005
for each Unit it distributes; or each distributor who distributes 2,000,000 or
more Units will receive additional compensation of $0.01 for each Unit it
distributes; or each distributor who distributes 3,000,000 or more Units will
receive additional compensation of $0.015 for each Unit it distributes; or
each distributor of 4,000,000 or more Units will receive additional
compensation of $0.02 for each Unit it distributes. However, if the Trust
exceeds 10,000,000 Units at the close of the initial offering period, in lieu
of the additional compensation referred to in the last clause of the preceding
sentence, each distributor of 4,000,000 or more Units will receive additional
compensation from the Sponsor of $0.025 for each Unit it distributes; or each
distributor who distributes 5,000,000 or more Units will receive additional
compensation of $0.035 for each Unit it distributes.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject
to the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain
a secondary market for Units of the Trust. In so maintaining a market, the
Sponsor and 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 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 obligated to do so, the Sponsor intends to
maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trust. If the
supply of Units exceeds demand or if some other business reason warrants it,
the Sponsor may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. In the event that a market is not
maintained for the Units and the Unitholder cannot find another purchaser, a
Unitholder desiring to dispose of his Units may be able to dispose of such
Units only by tendering them to the Trustee for redemption at the Redemption
Price. See "Rights of Unitholders--Redemption of Units." A Unitholder
who wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee
Pension Plans for employees, qualified plans for self-employed individuals,
and qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by certificates unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be in book entry. 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 substituion for, STAMP as may be
accepted by the Trustee. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or
certificates of corporate authority. Certificates will be issued in
denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account of the Trust.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information." Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units
or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account and not distributed until the next distribution date
applicable to such Capital Account. The Trustee is not required to pay
interest on funds held in the Capital or Income Accounts (but may itself earn
interest thereon and therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the fifteenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account amounts necessary to pay the expenses of the Trust (as determined on
the basis set forth under "Trust Operating Expenses" ). The Trustee
also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of
the Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw
from the Income and Capital Accounts such amounts as may be necessary to cover
redemptions of Units.
Reinvestment Option. 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 without a sales
charge (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 Sponsor (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 without a sales charge at the net asset value for Units of the Trust as
of the Evaluation Time 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 full and
fractional Units of the Trust and will send such Unitholder a statement
reflecting the reinvestment.
Unitholders of the Trust may also elect to have each distribution of interest
income, capital gains and/or principal on their Units automatically reinvested
in shares of certain Van Kampen American Capital open ended mutual funds
(except for B shares) which are registered in the Unitholder's state of
residence. Such mutual funds are hereinafter collectively referred to as the
"Reinvestment Funds" .
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trust. The prospectus relating to each Reinvestment
Fund describes the investment policies of such fund and sets forth the
procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Funds from Van Kampen American
Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois
60181. Texas residents who desire to reinvest may request that a broker-dealer
registered in Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
a net asset value as computed as of the close of trading on the New York Stock
Exchange on such date, plus a sales charge of $1.00 per $100 of reinvestment
except if the participant selects the Van Kampen American Capital Reserve Fund
or the Van Kampen American Capital Tax Free Money Fund in which case no sales
charge applies. A minimum of one-half of such sales charge would be paid to
Van Kampen American Capital Distributiors, Inc. for all Reinvestment Funds.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and investment adviser shall have the
right to suspend or terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received, deductions for applicable taxes and
for fees and expenses of the Trust, for redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed in each
case both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such calendar
year; (ii) as to the Capital Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payment of
applicable taxes, fees and expenses of the Trust held for distribution to
Unitholders of record as of a date prior to the determination and the balance
remaining after such distributions and deductions expressed both as a total
dollar amount and as a dollar amount representing the pro rata share of each
Unit outstanding on the last business day of such calendar year; (iii) a list
of the Securities held and the number of Units outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit based
upon the last computation thereof made during such calendar year; and (v)
amounts actually distributed during such calendar year from the Income and
Capital Accounts, separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its corporate trust office at 101 Barclay Street,
20th Floor, New York, New York 10286 and, in the case of Units evidenced by a
certificate, by tendering such certificate to the Trustee, duly endorsed or
accompanied by proper instruments of transfer with signature guaranteed (or by
providing satisfactory indemnity, as in connection with lost, stolen or
destroyed certificates) and by payment of applicable governmental charges, if
any. No redemption fee will be charged. On the third business day following
such tender, the Unitholder will be entitled to receive in cash an amount for
each Unit equal to the Redemption Price per Unit next computed after receipt
by the Trustee of such tender of Units. The "date of tender" is deemed
to be the date on which Units are received by the Trustee, except that as
regards Units received after the Evaluation Time the date of tender is the
next day on which such Exchange is open for trading and such Units will be
deemed to have been tendered to the Trustee on such day for redemption at the
redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the Supervisor
for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 2,500 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distributions" ) of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following
the tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form
to the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering
Unitholder is entitled. In implementing these redemption procedures, the
Trustee shall make any adjustments necessary to reflect differences between
the Redemption Price of the Securities distributed in kind as of 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 Securities
according to the criteria discussed above. For the tax consequences related to
an In Kind Distribution see "Federal Taxation."
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of the Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption. Special federal income tax consequences will result if a
Unitholder requests an In Kind Distribution. See "Federal Taxation."
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts. On the Initial Date of Deposit, the Public Offering
Price per Unit (which includes the sales charge) exceeded the values at which
Units could have been redeemed by the amounts shown under "Summary of
Essential Financial Information." While the Trustee has the power to
determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in the Trust, (ii) the value of the Securities in the Trust
and (iii) dividends receivable on the Equity Securities trading ex-dividend as
of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued expenses of
the Trust. The Evaluator may determine the value of the Equity Securities in
the Trust in the following manner: if the Equity Securities are listed on a
national securities exchange this evaluation is generally based on the closing
sale prices on that exchange (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price
on that exchange, at the closing bid prices. If the Equity Securities are not
so listed or, if so listed and the principal market therefore is other than on
the exchange, the evaluation shall generally be based on the current bid price
on the over-the-counter market (unless these prices are inappropriate as a
basis for evaluation). If current bid prices are unavailable, the evaluation
is generally determined (a) on the basis of current bid prices for comparable
securities, (b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and diversity of the Trust will be reduced. Such
sales may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor'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 Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor 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 Sponsor 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. The Trust, however, will not be managed. The Trust Agreement,
however, provides that the Sponsor may (but need not) direct the Trustee to
dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Securities
would be detrimental to the Trust. In addition, the Sponsor will instruct the
Trustee to dispose of certain Securities and to take such further action as
may be needed from time to time to ensure that the Trust continues to satisfy
the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code. Pursuant to the Trust Agreement, the Sponsor is not authorized
to direct the reinvestment of the proceeds of the sale of Securities in
replacement securities except in the event the sale is the direct result of
serious adverse credit factors affecting the issuer of the Security which, in
the opinion of the Sponsor, would make the retention of such Security
detrimental to the Trust. If such factors exist, the Sponsor is authorized,
but is not obligated, to direct the reinvestment of the proceeds of the sale
of such Securities in any other securities which meet the criteria necessary
for inclusion in the Trust on the Initial Date of Deposit (including other
Securities already deposited in the Trust). Pursuant to the Trust Agreement
and with limited exceptions, the Trustee may sell any securities or other
properties acquired in exchange for Equity Securities such as those acquired
in connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Therefore, except as stated under "
Trust Portfolio" for failed securities and as provided in this paragraph,
the acquisition by the Trust of any securities other than the Securities is
prohibited. Proceeds from the sale of Securities (or any securities or other
property received by the Trust in exchange for Equity Securities), unless held
for reinvestment as herein provided, are credited to the Capital Account for
distribution to Unitholders or to meet redemptions.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if not
so directed, in its own discretion, for the purpose of redeeming Units of the
Trust tendered for redemption and the payment of expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities. To the extent this is not practicable,
the composition and diversity of the Equity Securities may be altered. In
order to obtain the best price for the Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders of 51% of the Units then outstanding, provided that no
such amendment or waiver will reduce the interest in the Trust of any
Unitholder without the consent of such Unitholder or reduce the percentage of
Units required to consent to any such amendment or waiver without the consent
of all Unitholders. The Trustee shall advise the Unitholders of any amendment
promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Brand Name Equity Trust Units then outstanding. The Trust will
be liquidated by the Trustee in the event that a sufficient number of Units
not yet sold are tendered for redemption by the Sponsor so that the net worth
of the Trust would be reduced to less than 40% of the value of the Securities
at the time they were deposited in the Trust. If the Trust is liquidated
because of the redemption of unsold Units 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
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any
are then issued and outstanding, shall be given by the Trustee to each
Unitholder so holding a certificate at his address appearing on the
registration books of the Trust maintained by the Trustee. At least 30 days
before 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 owning 2,500 or more Units to request an In Kind Distribution
rather than payment in cash upon the termination of the related Trust. To be
effective, this request must be returned to the Trustee at least five 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 portfolio 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 those 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 his pro
rata share of the balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and
duties hereunder. The Trustee shall not be liable for depreciation or loss
incurred by reason of the sale by the Trustee of any of the Securities. In the
event of the failure of the Sponsor to act under the Trust Agreement, the
Trustee may act thereunder and shall not be liable for any action taken by it
in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. Van Kampen American Capital Distributors,
Inc. management owns a significant minority equity position. Effective
December 20, 1994, the parent of Van Kampen Merritt Inc. acquired American
Capital Management & Research, Inc. As a result, Van Kampen Merritt Inc., has
changed its name to Van Kampen American Capital Distributors, Inc. Van Kampen
American Capital Distributors, Inc. specializes in the underwriting and
distribution of unit investment trusts and mutual funds. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas, 77056, (713) 993-0500. It maintains a
branch office in Philadelphia and has regional representatives in Atlanta,
Dallas, Los Angeles, New York, San Francisco, Seattle and Tampa. As of
December 31, 1994 the total stockholders' equity of Van Kampen Merritt Inc.
was $117,357,000 (audited). (This paragraph relates only to the Sponsor and
not to the Trust or any series thereof. The information is included herein
only for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor upon
request.)
As of June 30, 1995, the Sponsor and its affiliates managed or supervised
approximately $54 billion of investment products, of which over $25.3 billion
is invested in municipal securities. The Sponsor and its affiliates managed
$40.95 billion of assets, consisting of $25.2 billion for 42 open end mutual
funds, $9.9 billion for 38 closed-end funds and $5.9 billion for 87
institutional accounts. The Sponsor has also deposited approximately $26
billion of unit investment trusts. Based on cumulative assets deposited, the
Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
Unitholders may only invest in the trusts, mutual funds and closed-end funds
which are registered for sale in the state of residence of such Unitholder. In
order for a Unitholder to invest in theses trusts, mutual funds and closed-end
funds, such Unitholder must obtain a prospectus relating to the trust or fund
involved. A prospectus is the only means by which an offer can be delivered to
investors.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286 (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of 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 Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided" ).
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Tanner Propp & Farber has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 20 (Brand Name Equity Trust):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 20
(Brand Name Equity Trust) as of October 17, 1995.The statement of condition
and portfolio are the responsibility of the Sponsor. Our responsibility is to
express an opinion on such financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of an irrevocable letter of credit deposited
to purchase securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 20 (Brand Name Equity Trust) as of October
17, 1995, in conformity with generally accepted accounting principles.
Chicago, Illinois
October 17, 1995 GRANT THORNTON LLP
<TABLE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 20
STATEMENT OF CONDITION
As of October 17, 1995
<CAPTION>
<S> <C>
Investment in Securities:
Contracts to purchase securities <F1>.... $ 2,853,208
Organizational costs <F2>................ 62,835
$ 2,916,043
Liability and Interest of Unitholders:
Liability--
Accrued organizational costs <F2>.......... $ 62,835
Interest of Unitholders--
Cost to investors <F3>................... $ 3,000,000
Less: Gross underwriting commission <F3>. 146,792
Net interest to Unitholders <F3>........... 2,853,208
Total................................... $ 2,916,043
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" and
their cost to the Trust are the same. The value of the Securities is
determined by Interactive Data Services, Inc. on the bases set forth under
"Public Offering--Offering Price" . The contracts to purchase
Securities are collateralized by an irrevocable letter of credit of $2,853,208
which has been deposited with the Trustee.
<F2>The Trust will bear all or a portion of its organizational costs, which will
be deferred and amortized over five years. Organizational costs have been
estimated based on a projected trust size of $50,000,000. To the extent the
Trust is larger or smaller, the estimate will vary.
<F3>The aggregate public offering price and the aggregate sales charge of 4.9% are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor Profits" and assume all single
transactions involve less than 5,000 Units. For single transactions involving
5,000 or more Units, the sales charge is reduced (see "Public
Offering--General" ) resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
</TABLE>
<TABLE>
VAN KAMPEN AMERICAN CAPITAL BRAND NAME EQUITY TRUST, SERIES 2
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 20)
As of October 17, 1995
<CAPTION>
Estimated
Annual Cost of
Number Market Value Dividends Securities
of Shares Name of Issuer<F1> per Share<F2> per Share<F2> to Trust<F2>
<S> <C> <C> <C> <C>
1,084 American Home Products Corporation... $ 88.125 $ 3.00 $ 95,527.50
1,477 Anheuser-Busch Companies, Inc........ 64.000 1.76 94,528.00
2,415 Bausch & Lomb, Inc................... 39.125 1.04 94,486.88
1,399 CPC International, Inc............... 69.000 1.44 96,531.00
1,842 Campbell Soup Company................ 51.500 1.24 94,863.00
1,332 The Coca-Cola Company................ 71.500 0.88 95,238.00
1,419 Colgate-Palmolive Company............ 66.625 1.88 94,540.88
1,672 Eastman Kodak Company................ 57.125 1.60 95,513.00
4,667 Fruit of the Loom, Inc............... 20.250 0.00 94,506.75
1,683 General Mills, Inc................... 56.500 1.88 95,089.50
1,936 Gillette Company..................... 48.625 0.60 94,138.00
3,105 Hasbro, Inc.......................... 30.500 0.32 94,702.50
2,018 Heinz (H.J.) Company................. 47.375 1.59 95,602.75
1,229 Johnson & Johnson.................... 77.625 1.32 95,401.13
1,305 Kellogg Company...................... 72.625 1.56 94,775.63
3,396 Mattel, Inc.......................... 28.250 0.24 95,937.00
2,385 McDonald's Corporation............... 39.750 0.27 94,803.75
1,602 Merck & Company, Inc................. 59.375 1.36 95,118.75
3,352 Nabisco Holdings Corporation......... 28.125 0.55 94,275.00
+ 1,838 Nestle, S.A.......................... 52.375 0.96** 96,265.25
867 Nike, Inc............................ 109.875 1.00 95,261.63
1,842 PepsiCo, Inc......................... 52.000 0.80 95,784.00
1,120 Philip Morris Companies, Inc......... 85.250 4.00 95,480.00
1,202 Procter & Gamble Company............. 79.375 1.60 95,408.75
3,506 Rubbermaid, Inc...................... 27.250 0.50 95,538.50
3,237 Sara Lee Corporation................. 29.375 0.68 95,086.88
1,794 Schering-Plough...................... 52.500 1.16 94,185.00
1,081 Warner-Lambert Company............... 86.625 2.60 93,641.63
4,449 Wendy's International, Inc........... 21.500 0.24 95,653.50
1,897 Wrigley (W.M.) Jr. Company........... 50.250 0.56 95,324.25
62,151 $ 2,853,208.41
</TABLE>
NOTES TO PORTFOLIO
(1) All of the Securities are represented by "regular way" contracts
for the performance of which an irrevocable letter of credit has been
deposited with the Trustee. At the Initial Date of Deposit, Securities may
have been delivered to the Sponsor pursuant to certain of these contracts; the
Sponsor has assigned to the Trustee all of its right, title and interest in
and to such Securities. Contracts to acquire Securities were entered into on
October 16, 1995 and are expected to settle on October 19, 1995 (see "The
Trust" ).
(2) The market value of each of the Securities is based on the closing sale
price of each listed Security and the ask price of each over-the-counter
traded Security on the day prior to the Initial Date of Deposit. Estimated
annual dividends are based on annualizing the most recently paid dividends.
Other information regarding the Securities in the Trust, as of the Initial
Date of Deposit, is as follows:
<TABLE>
<CAPTION>
Estimated
Profit Annual
(Loss) to
Cost to Sponsor Sponsor Dividends
<S> <C> <C>
$2,856,998 $(3,790) $58,334
</TABLE>
A Security marked by "+" indicates an American Depositary Receipt.
"**" Indicates that the dividends shown reflect the net amounts after
giving effect to foreign withholding taxes.
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy securities in any state to any person to whom
it is not lawful to make such offer in such state.
TABLE OF CONTENTS
Title Page
Summary of Essential Financial
Information..................................... 3
The Trust......................................... 5
Objectives and Securities Selection............... 5
Trust Portfolio................................... 10
Risk Factors...................................... 12
Federal Taxation.................................. 14
Trust Operating Expenses.......................... 16
Public Offering................................... 18
Rights of Unitholders............................. 21
Trust Administration.............................. 25
Other Matters..................................... 29
Report of Independent Certified Public
Accountants....................................... 30
Statement of Condition............................ 31
Portfolio......................................... 32
Notes to Portfolio................................ 33
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
October 17, 1995
Van Kampen American Capital Equity Opportunity Trust, Series 20
Van Kampen American Capital
Brand Name Equity Trust, Series 2
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Please retain this Prospectus for future reference.
This Amendment of Registration Statement comprises the following
papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
4.1 Consent of Interactive Data Services, Inc.
4.2 Consent of Independent Certified Public Acountants.
4.3 Financial Data Schedule.
Signatures
The Registrant, Van Kampen American Capital Equity Opportunity
Trust, Series 20, hereby identifies Van Kampen Merritt Equity Opportunity
Trust, Series 4 and Van Kampen American Capital Equity Opportunity Trust,
Series 14 for purposes of the representations required by Rule 487 and
represents the following: (1) that the portfolio securities deposited in
the series as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from those
deposited in such previous series; (2) that, except to the extent
necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect
to the securities of which this Registration Statement is being filed,
this Registration Statement does not contain disclosures that differ in
any material respect from those contained in the registration statements
for such previous series as to which the effective date was determined by
the Commission or the staff; and (3) that it has complied with Rule 460
under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
20 has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Chicago and State of Illinois on the 17th day of October,
1995.
Van Kampen American Capital Equity
Opportunity Trust, Series 20
By Van Kampen American Capital
Distributors, Inc.
By Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on October 17, 1995.
Signature Title
Don G. Powell Chairman and Chief Executive )
Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
Sandra A. Waterworth
(Attorney-in-fact*)
*An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and 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.
Exhibit 1.1
--
Van Kampen American Equity Opportunity Trust
Series 20
Trust Agreement
Dated: October 17, 1995
This Trust Agreement among Van Kampen American Capital Distributors
Inc., as Depositor, American Portfolio Evaluation Services, a division of
Van Kampen American Capital Investment Advisory Corp., as Evaluator, Van
Kampen American Capital Investment Advisory Corp., as Supervisory
Servicer, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Van Kampen Merritt Equity Opportunity Trust, Series 1
and Subsequent Series, Standard Terms and Conditions of Trust, Effective
November 21, 1991" (herein called the "Standard Terms and Conditions of
Trust") and such provisions as are set forth in full and such provisions
as are incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and Sections
of the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee
agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(22), listed in the
Schedule hereto, have been deposited in trust under this Trust
Agreement.
2. The fractional undivided interest in and ownership of the
Trust represented by each Unit is the amount set forth under
"Summary of Essential Financial Information - Fractional Undivided
Interest in the Trust per Unit" in the Prospectus.
3. Section 1.01(19) will be inapplicable for this Trust.
4. "Van Kampen American Capital Brand Name Equity Trust" will
replace "Select Equity Trust" in Section 1.01(23).
5. The second sentence of Section 2.03(b) is hereby deleted
and replaced by the following: "Units will be held in certificated
form unless a Unitholder requests that his or her Units be held in
uncertificated form." A new sentence immediately preceding the last
sentence of Section 2.03(b) shall be added to the effect:
"Notwithstanding anything to the contrary in this Section, all Units
acquired through the Van Kampen American Capital Brand Name Equity
Trust reinvestment plan shall be held only in uncertificated form."
6. Section 3.07(f) and (g) are hereby revised and a new
subsection (h) is hereby added as follows:
"(f) that all of the Securities in the Trust Fund will be
sold pursuant to termination of the Trust pursuant to Section
8.02 hereof;
(g) that such sale is required due to Units tendered for
redemption; and
(h) the sale of a Security is necessary to ensure that
the Van Kampen American Capital Brand Name Equity Trust
continues to satisfy the qualifications of a regulated
investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue
Code."
7. The second sentence in the second paragraph of Section
3.11 shall be revised as follows: "However, should any issuance,
exchange or substitution be effected notwithstanding such rejection
or without an initial offer, any securities, cash and/or property
received shall be deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee unless the Depositor advises
the Trustee to keep such securities, cash or properties."
8. The requisite number of Units needed to be tendered to
exercise an In-Kind-Distribution shall be that number set forth in
the Prospectus.
9. The last sentence of the eighth paragraph of Section 5.02
shall be revised as follows: "Any balance remaining after such
disbursements shall be credited to the Capital Account and may be
used to acquire additional Securities (or, if permitted by
applicable rules and regulations as indicated by an opinion of
counsel, in other securities) or for any of the other purposes set
forth under the Indenture."
10. Section 8.01(a)(ii) shall be revised as follows: "(ii) to
make such other provision regarding matters or questions arising
hereunder as shall not materially adversely affect the interests of
the Unitholders or (iii) to make such amendments as may be
necessary for the Van Kampen American Capital Brand Name Equity
Trust to continue to qualify as a regulated investment company for
federal income tax purposes."
11. Section 8.01(b)(3) shall be revised as follows: "(3)
adversely affect the characterization of the Van Kampen American
Capital Brand Name Equity Trust as a regulated investment company
for federal income tax purposes."
12. The first and current second paragraphs of Section 3.12
shall be revised as subsections by starting the first paragraph with
an "(a)" and the second paragraph with a "(c)" and renumbering the
items (a)-(e) in the first paragraph as (i)-(v). A new second
paragraph shall be added as follows: (b) In the event a Security is
sold pursuant to Section 3.07(e) as a direct result of serious
adverse credit factors affecting the issuer of such Security or
pursuant to Section 3.07(h), the
Sponsor may, but is not obligated, to direct the reinvestment of the
proceeds of, the sale of such Security in any other securities which
meets the criteria necessary for inclusion in the Van Kampen
American Capital Brand Name Equity Trust on the Initial Date of
Deposit.
13. Section 8.02 is hereby revised to require one affirmative
vote of Unitholders representing 66 2/3% of the then outstanding
Units to terminate the Trust rather than the 51% indicated therein.
14. Section 1.01(1) shall be amended to read as follows:
"(1) "Depositor" shall mean Van Kampen American Capital
Distributors, Inc. and its successors in interest, or any
successor depositor appointed as hereinafter provided."
15. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean American Portfolio
Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp. and its successors in
interest, or any successor evaluator appointed as
hereinafter provided."
16. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Van Kampen
American Capital Investment Advisory Corp. and its
successors in interest, or any successor portfolio
supervisor appointed as hereinafter provided."
17. Section 3.01 of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"Section 3.01. Initial Costs. The following
organization and regular and recurring expenses of the
Trust shall be borne by the Trustee: (a) to the extent
not borne by the Depositor, expenses incurred in
establishing a Trust, including the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the
indenture, and other documents relating to the Trust,
Securities and Exchange Commission and state blue sky
registration fees, the costs of the initial valuation of
the portfolio and audit of the Trust, the initial fees and
expenses of the Trustee, and legal and other out-of-pocket
expenses related thereto, but not including the expenses
incurred in the printing of preliminary prospectuses and
prospectuses, expenses incurred in the preparation and
printing of brochures and other advertising materials and
any other selling expenses, (b) the amount specified in
Section 3.05 and Article VIII, (c) to the extent permitted
by Section 6.02, auditing fees and, to the extent not
borne by the Depositor, expenses incurred in connection
with maintaining the Trust's registration statement
current with Federal and State authorities, (d) any
Certificates issued after the Initial Date of Deposit ;
and (e) expenses of any distribution agent. The Trustee
shall be reimbursed for those organizational expenses
referred to in clause (a) as provided in the Prospectus.
18. Section 6.01(i) of the Standard Terms and Conditions of
Trust shall be amended by adding the following to the beginning of
such Section:
"except as provided in Sections 3.01 and 3.05,"
19. Section 8.04 is hereby amended by deleting the first word
of such Section and replacing it with the following:
"Except as provided in Sections 3.01 and 3.05, the"
20. The first paragraph of Section 3.11 is hereby stricken and
replaced by the following:
Section 3.11. Notice to Depositor;. In the event that
the Trustee shall have been notified at any time of any
action to be taken or proposed to be taken with respect to
the Securities (including but not limited to the making of
any demand, direction, request, giving of any notice,
consent or waiver or the voting with respect to any
amendment or supplement to any indenture, resolution,
agreement or other instrument under or pursuant to which
the Zero Coupon Obligations have been issued) the Trustee
shall promptly notify the Depositor and shall thereupon
take such action or refrain from taking any action as the
Depositor shall in writing direct; in the absence of any
such direction the Trustee shall refrain from taking any
action."
21. The second and third sentences of the fourth paragraph of
Section 8.02 are hereby deleted and the following is added to the
end of the first sentence of such paragraph: ", which may include a
complete liquidation of the Securities".
In Witness Whereof, Van Kampen American Capital Distributors Inc.
has caused this Trust Agreement to be executed by one of its Vice
Presidents or Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or one of its Vice
Presidents or Assistant Secretaries, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., and Van Kampen American Capital Investment Advisory Corp., have
each caused this Trust Indenture and Agreement to be executed by their
respective President or one of their respective Vice Presidents and the
corporate seal of Van Kampen American Capital Investment Advisory Corp.
to be hereto affixed and attested to by the Secretary, Assistant
Secretary or one of the Assistant Vice Presidents of Van Kampen American
Capital Investment Advisory Corp. and The Bank of New York, has caused
this Trust Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested to by one of its
Assistant Treasurers all as of the day, month and year first above
written.
Van Kampen American Capital
Distributors Inc.
By Sandra A. Waterworth
Vice President
Attest:
By Gina M. Scumaci
Assistant Secretary
American Portfolio Evaluation
Services, a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
Van Kampen American Capital
Investment Advisory Corp.
By Dennis J. McDonnell
President
Attest
By Scott E. Martin
Assistant Secretary
The Bank of New York
By Jeffrey Bieselin
Vice President
Attest
By Norbert Loney
Assistant Treasurer
Schedule A to Trust Agreement
Securities Initially Deposited
in
Van Kampen American Capital Equity Opportunity Trust, Series 20
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
October 17, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 20
Gentlemen:
We have served as counsel for Van Kampen American Capital
Distributors, Inc. as Sponsor and Depositor of Van Kampen American
Capital Equity Opportunity Trust, Series 20 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated October 17, 1995, among Van Kampen American
Capital Distributors, Inc., as Depositor, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., as Evaluator, Van Kampen American Capital Investment Advisory
Corp., as Supervisory Servicer, and The Bank of New York, as Trustee,
pursuant to which the Depositor has delivered to and deposited the
Securities listed in the Schedule to the Trust Agreement with the Trustee
and pursuant to which the Trustee has provided to or on the order of the
Depositor documentation evidencing ownership of Units of fractional
undivided interest in and ownership of the Trust (hereinafter referred to
as the "Units"), created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to
enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and
the execution and issuance of documentation evidencing
ownership of the Units in the Trust have been duly authorized;
and
2. The documentation evidencing ownership of the Units
in the Trust, when duly executed and delivered by the Depositor
and the Trustee in accordance with the aforementioned Trust
Agreement, will constitute valid and binding obligations of the
Trust and the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62803) relating to the Units referred
to above and to the use of our name and to the reference to our firm in
said Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
MJK/cjw
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
October 16, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital Brand Name EquityTrust, Series 2
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 33-62803
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Services, Inc.,
as the Evaluator, and to the use of the Obligations prepared by us which
are referred to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
Exhibit 4.2
Independent Certified Public Accountants' Consent
We have issued our report dated October 17, 1995 on the statement of
condition and related securities portfolio of Van Kampen American
Capital Equity Opportunity Trust, Series 20 as of October 17, 1995
contained in the Registration Statement on Form S-6 and Prospectus. We
consent to the use of our report in the Registration Statement and
Prospectus and to the use of our name as it appears under the caption
"Other Matters-Independent Certified Public Accountants."
Grant Thornton LLP
Chicago, Illinois
October 17, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on 10/17/95 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> BNET
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> OCT-17-1995
<PERIOD-END> OCT-17-1995
<INVESTMENTS-AT-COST> 2853208
<INVESTMENTS-AT-VALUE> 2853208
<RECEIVABLES> 62835
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2916043
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62835
<TOTAL-LIABILITIES> 62835
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2853208
<SHARES-COMMON-STOCK> 300000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2853208
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
