File No. 333-06143
CIK #897003
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 37
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:
Van Kampen American Capital
Chapman and Cutler 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 July 25, 1996 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 37
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 ) Taxation
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 ) Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
July 25, 1996
Wheat First Strategic Opportunity Unit Trust, Series 1
The Trust. Wheat First Strategic Opportunity Unit Trust, Series 1 (the "
Trust" ) is a unit investment trust included in Van Kampen American Capital
Equity Opportunity Trust, Series 37. The Trust offers investors the
opportunity to purchase Units representing proportionate interests in a fixed,
diversified portfolio of actively traded equity securities issued by small
capitalization companies selected by Wheat First Butcher Singer ("Equity
Securities" or "Securities" ). See "Trust Portfolio."
Unless terminated earlier, the Trust will terminate on July 25, 1997 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 the Units. Upon liquidation,
Unitholders may choose to reinvest their proceeds into the next Series of the
Trust, if available, at a reduced sales charge, to receive a cash distribution
or to receive a pro rata distribution of the Securities then included in the
Trust (if they own the requisite number of Units).
Objective of the Trust. The objective of the Trust is to provide capital
appreciation from a portfolio of equity securities of small capitalization
companies selected by Wheat First Butcher Singer. See "Objectives and
Securities Selection" . There is, of course, no guarantee that the
objective of the Trust will be achieved.
Public Offering Price. The Public Offering Price of the Units of the Trust
during the initial offering period and for secondary market transactions after
the initial offering period includes the aggregate underlying value of the
Securities in the Trust's portfolio, the initial sales charge described below,
and cash, if any, in the Income and Capital Accounts held or owned by the
Trust. The initial sales charge is equal to the difference between the maximum
total sales charge of 2.9% of the Public Offering Price and the maximum
deferred sales charge ($0.19 per Unit). The monthly deferred sales charge
($0.019 per Unit) will begin accruing on a daily basis on July 30, 1996 and
will continue to accrue through May 29, 1997. The monthly deferred sales
charge will be charged to the Trust, in arrears, commencing August 30, 1996
and will be charged on the 30th day of each month thereafter through May 30,
1997. Unitholders will be assessed only that portion of the deferred sales
charge that has accrued from the time they became Unitholders of record. Units
purchased subsequent to the initial deferred sales charge payment will be
subject only to that portion of the deferred sales charge payments not yet
collected. This deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Securities. The total
maximum sales charge assessed to Unitholders on a per Unit basis will be 2.9%
of the Public Offering Price (2.987% of the aggregate value of the Securities
less the deferred sales charge), subject to reduction as set forth in "
Public Offering--General" . During the initial offering period, the sales
charge is reduced on a graduated scale for sales involving at least the lesser
of 5,000 Units or $50,000 of the Trust. 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 that amount set forth under
"Summary of Essential Financial Information" . The minimum purchase is
the lesser of 500 Units or $5,000. See "Public Offering" .
Additional Deposits. The Sponsor may, from time to time after the Initial Date
of Deposit, deposit additional Securities in the Trust as provided under "
The Trust" .
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the Distribution Date to
Unitholders of record on the record date as set forth in the "Summary of
Essential Financial Information" . Gross dividends received by the Trust
will be distributed to Unitholders. Expenses of the Trust will be paid with
proceeds from the sale of Securities. For the consequences of such sales, see
"Taxation" . Additionally, upon surrender of Units for redemption or
termination of the Trust, the Trustee will distribute 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. Although not obligated to do so, the Managing
Underwriter currently intends to maintain a market for Units and offer to
repurchase such Units at prices which are based on the aggregate underlying
value of Equity Securities (generally determined by the closing sale or bid
prices of the 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 at prices based upon the aggregate underlying
value of the Equity Securities plus or minus a pro rata share of cash, if any,
in the Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units" . Units sold or tendered for redemption
prior to such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales charge
at the time of sale or redemption. See "Rights of Unitholders--Redemption
of Units" .
Termination. The Trust will terminate approximately twelve months after the
Initial Date of Deposit regardless of market conditions at that time.
Commencing on the Mandatory Termination Date, 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 Securities. Written notice
of any termination of the Trust shall be given by the Trustee to each
Unitholder at his address appearing on the registration books of the Trust
maintained by the Trustee. 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 the Securities (reduced by customary transfer and
registration charges) if such Unitholder owns at least 2,500 Units, rather
than to receive payment in cash for such Unitholder's pro rata share of the
amounts realized upon the disposition of such Securities. Unitholders will
receive cash in lieu of any fractional shares. To be effective, the election
form, and any other documentation required by the Trustee, must be returned to
the Trustee at least five business days prior to the Mandatory Termination
Date. Unitholders may elect to become Rollover Unitholders as described in
"Special Redemption and Rollover in New Trust" below. Rollover
Unitholders will not receive the final liquidation distribution but will
receive units of a new Series of the Trust, if one is being offered.
Unitholders not electing the Rollover Option or a distribution of shares of
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" .
Special Redemption and Rollover in New Trust. Unitholders will have the option
of specifying by the Rollover Notification Date stated in "Summary of
Essential Financial Information" to have all of their Units redeemed and
the distributed Securities sold by the Trustee, in its capacity as
Distribution Agent, on the Special Redemption Date. (Unitholders so electing
are referred to herein as "Rollover Unitholders" .) The Distribution
Agent will appoint the Sponsor as its agent to determine the manner, timing
and execution of sales of underlying Securities. The proceeds of the
redemption will then be invested in units of a new Series of the Trust (the
"1997 Trust" ), if one is offered, at a reduced sales charge. The
Managing Underwriter and Sponsor may, however, stop offering units of the 1997
Trust at any time in their sole discretion without regard to whether all the
proceeds to be invested have been invested. Cash which has not been invested
on behalf of the Rollover Unitholders in the 1997 Trust will be distributed
shortly after the Special Redemption Date. However, the Managing Underwriter
and Sponsor anticipate that sufficient Units will be available, although
moneys in this Trust may not be fully invested on the next business day. The
1997 Trust will contain a portfolio of common stocks of companies selected by
Wheat First Butcher Singer. Rollover Unitholders will receive the amount of
dividends in the Income Account of the Trust which will be included in the
reinvestment in units of the 1997 Trust.
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers and the general condition of the
stock market. For certain risk considerations related to the Trust, see "
Risk Factors" .
Units of the Trust are not deposits or obligations of, and are not guaranteed
or endorsed by, any bank and are not federally insured or otherwise protected
by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency and involve investment risk, including the possible loss of the
principal amount invested.
<TABLE>
Summary of Essential Financial Information
At the close of business on the day before the Initial Date of Deposit: July 24, 1996
Managing Underwriter and Supervisor: Wheat First Butcher Singer
Sponsor: Van Kampen American Capital Distributors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units <F1>........................................................... 15,000
Fractional Undivided Interest in the Trust per Unit <F1>....................... 1/15,000
Public Offering Price:
Aggregate Value of Securities in Portfolio <F2>...............................$ 149,340
Aggregate Value of Securities per Unit........................................$ 9.96
Maximum Sales Charge <F3>.....................................................$ .29
Less Deferred Sales Charge per Unit...........................................$ .19
Public Offering Price per Unit <F3><F4>.......................................$ 10.06
Redemption Price per Unit <F5>.................................................$ 9.60
Initial Secondary Market Repurchase Price per Unit <F5>........................$ 9.77
Excess of Public Offering Price per Unit over Redemption Price per Unit <F5>...$ .46
Estimated Annual Organizational Expenses per Unit <F6>.........................$ .00885
Estimated Annual Dividends per Unit <F7>.......................................$ .00932
</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
Rollover Notification Date ............June 25, 1997
Special Redemption Date................July 25, 1997
Mandatory Termination Date ............July 25, 1997
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's deposits have exceeded $15,000,000, then the
Trust Agreement may be terminated if the net asset value of the Trust is less than
Minimum Termination Value..............$3,000,000.
Trustee's Annual Fee ..................$.008 per Unit
Income Account Record Dates............January 10, 1997 and July 25, 1997
Income Account Distribution Dates......January 25, 1997 and August 4, 1997
Capital Account Record Date............July 25, 1997
Capital Account Record Date............August 4, 1997
Evaluation Time........................4:00 P.M. New York time
<FN>
<F1>As of the close of business on any day on which the Sponsor is the sole
Unitholder of the Trust, the number of Units of the Trust may be adjusted so
that the Public Offering Price per Unit will equal approximately $10.
Therefore, to the extent of any such adjustment the fractional undivided
interest per Unit will increase or decrease accordingly from the amount
indicated above.
<F2>Each Security listed on a national securities exchange is valued at the
closing sale price or if the Security is not so listed, at the asked price
thereof.
<F3>The Maximum Sales Charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is applicable to all Units and
represents an amount equal to the difference between the Maximum Sales Charge
of 2.9% of the Public Offering Price and the amount of the maximum deferred
sales charge of $0.19 per Unit. Subsequent to the Initial Date of Deposit, the
amount of the initial sales charge will vary with changes in the aggregate
value of the Securities in the Trust. In addition to the initial sales charge,
Unitholders will pay a deferred sales charge of $0.019 per Unit per month
which will begin accruing on a daily basis on July 30, 1996 and will continue
to accrue through May 29, 1997. The monthly deferred sales charge will be
charged to the Trust, in arrears, commencing August 30, 1996 and will be
charged on the 30th day of each month thereafter through May 30, 1997. Units
purchased subsequent to the initial deferred sales charge payment will be
subject only to that portion of the deferred sales charge payments not yet
collected. These deferred sales charge payments will be paid from funds in the
Capital Account, if sufficient, or from the periodic sale of Securities. The
total maximum sales charge will be 2.9% of the Public Offering Price (2.987%
of the aggregate value of the Securities in the Trust less the deferred sales
charge). See the "Fee Table" below and "Public Offering--Offering
Price" .
<F4>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.
<F5>The Redemption Price per Unit and the Initial Secondary Market Repurchase
Price per Unit are reduced by the unpaid portion of the deferred sales charge.
<F6>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the Trust
portfolio and the initial fees and expenses of the Trustee but not including
the expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over the life of the
Trust and paid from funds in the Capital Account or if insufficient, from the
sale of Securities. See "Trust Operating Expenses" and "Statement
of Condition" . Historically, the sponsors of unit investment trusts have
paid all of the costs of establishing such trusts. Estimated Annual
Organizational Expenses per Unit have been estimated based on a projected
trust size of $75,000,000. 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.
<F7>Estimated annual dividends are based on annualizing the most recently declared
dividends. Estimated Annual Dividends per Unit are based on the number of
Units, the fractional undivided interest in the Securities per Unit and the
aggregate value of the Securities per Unit as of the Initial Date of Deposit.
Investors should note that the actual annual dividends received per Unit will
vary from the estimated amount due to changes in the factors described in the
preceding sentence and actual dividends declared and paid by the issuers of
the Securities.
</TABLE>
FEE TABLE
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in the Trust will bear directly or indirectly. See
"Public Offering--Offering Price" and "Trust Operating
Expenses" . Although the Trust has a term of approximately twelve months,
and is a unit investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees. The example below assumes that the
principal amount of and distributions on an investment are rolled over each
year into a new Series of the Trust subject only to the anticipated reduced
sales charge applicable to Rollover Unitholders. See "Right of
Unitholders--Special Redemption and Rollover in New Trust." Investors
should note that while these examples are based on the public offering price
and the estimated fees for the current Trust, the actual public offering
price, sales charges and fees for any new Trust created in the future periods
indicated could vary from those of the current Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
Unitholder Transaction Expenses (as of the Initial Date of Deposit) (as a percentage of
offering price) Amount Per 100 Units
Initial Sales Charge Imposed on Purchase................................................. 1.00 % <F1> $ 10.00
Deferred Sales Charge.................................................................... 1.90 % <F2> 19.00
2.90 % $ 29.00
Estimated Annual Trust Operating Expenses (as of the Initial Date of Deposit) (as a
percentage of net assets)
Trustee's Fee ........................................................................... 0.080 % $ 0.80
Portfolio Supervision and Evaluation Fees ............................................... 0.050 % 0.50
Organizational Costs..................................................................... 0.088 % 0.88
Other Operating Expenses ................................................................ 0.035 % 0.35
Total ................................................................................... 0.253 % $ 2.53
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for
Period of:
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period $ 32 $ 76 N/A N/A
The example assumes rollover of the investment each year into a new series of
the Trust and utilizes a 5% annual rate of return as mandated by Securities
and Exchange Commission regulations applicable to mutual funds. The example
should not be considered representative of past or future expenses or annual
rate of return; the actual expenses and annual rate of return may be more or
less than those assumed for purposes of the example.
<FN>
<F1>The Initial Sales Charge is actually the difference between 2.90% and the
maximum deferred sales charge ($19.00 per 100 Units) and would exceed 1% if
the Public Offering Price exceeds $1,000 per 100 Units.
<F2>The actual fee is $1.90 per month per 100 Units, irrespective of purchase or
redemption price, deducted over the ten months commencing August 30, 1996. If
a holder sells or redeems Units before all of these deductions have been made,
the balance of the deferred sales charge payments remaining will be deducted
from the sales or redemption proceeds. If Unit price exceeds $10 per Unit, the
deferred portion of the sales charge will be less than 1.90%; if Unit price is
less than $10 per Unit, the deferred portion of the sales charge will exceed
1.90%. Units purchased subsequent to the initial deferred sales charge payment
will be subject to only that portion of the deferred sales charge payments not
yet collected.
</TABLE>
THE TRUST
Van Kampen American Capital Equity Opportunity Trust, Series 37 is comprised
of one unit investment trust: Wheat First Strategic Opportunity Unit Trust,
Series 1. The Trust was created under the laws of the State of New York
pursuant to a Trust Indenture and Trust Agreement (the "Trust
Agreement" ), dated the date of this Prospectus (the "Initial Date of
Deposit" ), among Van Kampen American Capital Distributors, Inc., as
Sponsor, Wheat First Butcher Singer, as Supervisor, The Bank of New York, as
Trustee, and American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., as Evaluator.
The Trust may be an appropriate medium for investors who desire to participate
in a diversified portfolio of equity securities issued by small capitalization
companies. In general, these companies, at the Initial Date of Deposit, have a
capitalization of less than $600 million. Diversification of assets in the
Trust will not eliminate the risk of loss always inherent in the ownership of
securities.
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 indicated in
"Summary of Essential Financial Information" . Unless terminated
earlier, the Trust will terminate on the Mandatory Termination Date set forth
under "Summary of Essential Financial Information" 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. Upon liquidation,
Unitholders may choose either to reinvest their proceeds into a subsequent
Series of the Trust, if available, at a reduced sales charge, to receive a pro
rata distribution of the Securities then included in the Trust (if they own
the requisite minimum number of Units) or to receive a cash distribution.
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 following the Initial Date of Deposit provided that such
additional deposits will be in amounts which will maintain, as nearly as
practicable, the original percentage relationship among the Equity Securities
in the Trust's portfolio based on the number of shares of each Security that
existed on the Initial Date of Deposit. 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, 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. The
required percentage relationship among the Securities in the Trust will be
adjusted to reflect the occurrence of a stock dividend, a stock split or a
similar event which affects the capital structure of the issuer of a Security
in the Trust but which does not affect the Trust's percentage ownership of the
common stock equity of such issuer at the time of such event.
Each Unit 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 Managing Underwriter or Sponsor, or until the
termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Trust is to provide capital appreciation from a portfolio
of equity securities of small capitalization companies selected by Wheat First
Butcher Singer. There is, of course, no assurance that the Trust (which
includes expenses and sales charges) will achieve its objective.
The Wheat First Strategic Opportunity Unit Trust, Series 1 is a unit
investment trust containing a fixed portfolio of common stocks selected by Don
R. Hays, Director of Investment Strategy for Wheat First Butcher Singer, a
subsidiary of Wheat First Securities, Inc. This investment is structured with
a mandatory termination date of approximately one year and one day, and is
designed for investors seeking the potential of capital appreciation.
More than 30 years ago, a promising young engineer named Don Hays went to work
for NASA with the legendary Von Braun rocket development team. By adapting the
logic of engineering to the science of aeronautics, the team created the
Saturn rocket that landed Americans on the moon. Like most engineers, Hays was
fascinated with the discipline, logic and indisputable rules of rocket
science. Unlike most engineers, however, he had a hobby that intrigued him as
much as his chosen vocation. That hobby was investing. Since then, Don Hays
has spent more than twenty-five years developing a way to apply science to the
art of investing. As Director of Investment Strategy and a Managing Director
of Wheat First Butcher Singer, he has compiled a longstanding track record of
investment performance based on his keen insight into economics, politics and
finance. Mr. Hay's market outlook is quoted regularly in The Wall Street
Journal, Investor's Daily, USA Today and other major media. He has been a
guest on the PBS series Wall Street Week with Louis Rukeyser and is a featured
strategist consulted by Dow Jones, Reuters and Bloomberg News Services.
In choosing the portfolio for the Trust, Don Hays and his team of analysts
have relied on recommendations from many different industry sources, including
but not limited to those from the Research Department of Wheat First Butcher
Singer. The selection approach started with a large universe of recommended
stocks from many different sources which were then culled down to those
included in the Trust. The methodology used includes a wide range of
technical, quantitative, and fundamental disciplines. In order to be included
in the original basket of prospective purchases, the companies were estimated
to have the potential, in the opinion of Mr. Hays, to sustain an annual
earnings growth rate during the next 3 to 5 years of at least 15%. After
passing that criteria, technical considerations were then examined to
determine if the stock's price performance substantiated the fundamental
estimates. In all cases, the final decision as to which stocks to acquire for
the Trust was determined by a top-down discipline that included a market
analysis, sector evaluation, and then an examination of the fundamental and
technical consideration of the stock itself.
It is the belief of Mr. Hays that the upcoming years have the potential to be
a period of solid economic growth with sustained low inflation. It is his
further belief that based upon long historical examination, small cap stocks
appear to provide the greatest capital appreciation potential in the expected
economic framework. It is also of importance, however, to realize that small
cap stocks, while having greater reward potential, also have higher
volatility, and more inherent risk. See "Risk Factors." Mr. Hays'
expects that the Federal Reserve will cut short-term interest rates during the
fall months of 1996, and that this cut in rates will encourage liquid
financial assets to move into the stock market.
While certain of the selection criteria are based on longer-term economic
considerations, the Trust will terminate approximately one year from the
Initial Date of Deposit. Therefore, there can be no guarantee that the future
growth rates, performance, inflation or economic results described above will
occur during the term of the Trust. The criteria described above were used to
select the Securities for the Trust and are not intended to predict or imply
future performance of the Securities or of the Trust.
General. Investors should be aware that there is not any guarantee that the
objective of the Trust will be achieved because the market value of the
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 Securities will pay dividends on outstanding common shares. Any
distribution 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. See "Risk Factors" .
The above criteria were applied to the Securities 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 the criteria necessary for inclusion on the
Initial Date of Deposit. Should a Security fail to meet such criteria
following the Initial Date of Deposit, such Security will not as a result
thereof be removed from the portfolio.
The Trust is not a "managed" trust, 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. The Securities were selected by the
Managing Underwriter prior to the date the Securities were purchased by the
Trust. The Trust may continue to 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.
Members of the Managing Underwriter's Research Department and Investment
Strategy Department, including Mr. Hays, are compensated based on brokerage
commissions generated from their research and on the dollar amount of sales of
the Trust. In addition, the Research Department may recommend that the Equity
Securities also be bought or that they be sold by their other clients,
including some clients for whom Wheat First Butcher Singer has investment
discretion.
TRUST PORTFOLIO
The Trust consists of a diversified portfolio of 25 different issues of
Securities issued by small capitalization companies selected by Wheat First
Butcher Singer. All of the Securities are listed on a national securities
exchange, the NASDAQ National Market System or are traded in the
over-the-counter market. The following is a general description of the
companies included in the Trust.
Aames Financial Corporation. Aames Financial Corporation is involved in the
mortgage brokerage business through its subsidiary, Aames Home Loan. The
company operates 32 offices in California, Nevada, Colorado, Oregon and
Arizona which arrange mortgage loans between lenders and property owners.
ACC Corporation. ACC Corporation is a telecommunications holding company that
supplies long distance telephone service for voice and data transmission. The
service is provided to commercial and residential customers mainly in the
Northern United States, Canada and the United Kingdom. The company also offers
non-wireline cellular telephone systems in Kentucky and Idaho.
Aspen Technologies, Inc. Aspen Technologies, Inc. supplies computer-aided
chemical engineering software products to the process manufacturing
industries. The company's software allows chemical engineers to create
mathematical models of manufacturing processes and to predict the performance
under varying equipment configurations and conditions.
Benchmark Electronics, Inc. Benchmark Electronics, Inc. provides manufacturing
services to original equipment manufacturers in the electronics industry. The
company specializes in assembling printed circuit boards using surface mount
and pin-thru-hole interconnection technology.
BroadBand Technologies, Inc. BroadBand Technologies, Inc. designs,
manufactures and markets electronic telecommunications systems. The company's
products allow telephone companies to provide services over fiber optic cables
in their local loop which connect residential and small business subscribers
to the local switching office. BroadBand's technology enables companies to
offer more than standard phone services.
Cityscape Financial Corporation. Cityscape Financial Corporation is a mortgage
banker in the business of originating, purchasing, selling and servicing
mortgage loans secured by 1-4 family residences or small multi-family or
mixed-use properties. The majority of the company's loans are made to owners
of single family residences. The company has offices in New York, New Jersey,
Pennsylvania and Virginia and operates in most of the eastern seaboard.
Computer Task Group, Inc. Computer Task Group, Inc. provides computer-related
professional services to commercial clients. These professional services
include systems analysis, programming and design projects. The company also
provides consulting services for the document management and development,
database systems and information engineering industries. The company has
offices in North America and Europe.
Concord EFS, Inc. Concord EFS, Inc. builds electronic payment networks and
sells transaction services and equipment to retailers, financial institutions
and truckers nationwide. Network EFT, Inc., a subsidiary, sells electronic
funds transfer services to financial institutions in Illinois through networks
of terminals in retail stores.
Datastream Systems, Inc. Datastream Systems, Inc. develops, markets, sells and
supports Microsoft Windows based personal computer software for the industrial
automation market. The company's software allows users to schedule preventive
maintenance, record equipment maintenance histories, organize and control
spare parts inventories, schedule equipment and parts inventory purchases and
deploy personnel.
Digital Systems International, Inc. Digital Systems International, Inc.
produces, sells and supports telecommunication systems, mainly telephone call
processing systems. The company's product, "MosAIX" , automates and
synchronizes outbound calling functions. The product and services are marketed
throughout the United States and Canada.
EIS International, Inc. EIS International, Inc., a telecommunications company,
provides outbound call center automation. The company's call center solutions
combine computer and telephone hardware and software systems to meet a variety
of call center applications, including direct consumer marketing, collections,
market research, fund-raising and customer service.
Gentex Corporation. Gentex Corporation manufactures automatic rearview mirrors
for the automotive industry, fire protection equipment and precision glass
components. The company makes a rearview mirror that automatically adjusts to
reduce glare. Gentex's fire protection equipment uses photoconductive cells to
sense fire and is sold to the commercial and residential markets.
HCIA, Inc. HCIA, Inc. develops and markets integrated clinical and financial
information systems and products to providers, payors and suppliers. The
company's products range from standardized data bases to highly focused
decision support systems that assist its customers in selecting the most
cost-effective therapies. HCIA sells to hospital, health insurance companies
and pharmaceutical manufacturers.
MDL Information Systems, Inc. MDL Information Systems, Inc. supplies chemical
information management software, chemical information databases and related
services. The company serves the pharmaceutical, agrochemical and chemical
industries. MDL's products are designed to enable its customers to discover
new products more rapidly by allowing users to access and use scientific
information.
Miller Industries, Inc. Miller Industries, Inc. manufactures towing and
recovery equipment and markets its product under a variety of brand names
including "Century" and "Challenger" . Products constitute the
bodies of wreckers and carriers, which are installed on truck chassis
manufactured by third parties. Miller sells its products in North America and
overseas.
RadiSys Corporation. RadiSys Corporation designs and produces embedded
computer solutions used by OEMs for products in the manufacturing automation,
telecommunications, medical devices, transportation, test and measurement and
retail automation equipment industries.
Regal Cinemas, Inc. Regal Cinemas, Inc. operates a chain of theaters in the
United States. The company primarily shows first run movies and has
approximately 149 multi-screen theaters. The company also owns FunScape
entertainment center. FunScape features a 13 screen movie theater, branded
food court, play area that incorporates physical and creative play, miniature
golf and virtual experiences.
Renal Treatment Center, Inc. Renal Treatment Center, Inc. provides dialysis
treatments to patients suffering from chronic kidney failure, primarily in its
freestanding outpatient dialysis centers or in the patient's home. The company
operates 99 dialysis centers in 21 states and the District of Columbia and one
center in Argentina. Renal Treatment Centers also provides inpatient dialysis
service to 77 hospitals.
SDL, Inc. SDL, Inc. designs, manufactures and markets semiconductor
optoelectronic integrated circuits (OEICs) and high power semiconductor
lasers. OEICs consist of two or more semiconductor lasers or other optical or
electronic elements onto a single chip and are used in telecommunications,
electronics, medical, military, manufacturing and other applications.
Sinter Metals, Inc. Sinter Metals, Inc. designs, engineers and produces
precision pressed metal components for use in the automotive, home appliance,
lawn and garden and power tool industries. The company conducts these
operations through its Pennsylvania Pressed Metals, Inc. subsidiary.
Sitel Corporation. Sitel Corporation is a Nebraska-based company which
provides outsourced telephone-based customer service and sales programs on
behalf of large corporations in the United States and Canada. The company
operates over 3,500 workstations in 37 call centers throughout North America.
Unison Software, Inc. Unison Software, Inc. develops, markets and supports
networked systems management software for distributed, heterogeneous computing
environments. The company's products are used to aid businesses in such tasks
as job scheduling, resources allocation, back-up and report tracking
applications.
Verifone, Inc. Verifone, Inc. is a global provider of Transaction Automation
and Internet commerce solutions. The company's product delivers electronic
payment services to financial institutions, retail merchants and consumers,
government agencies, healthcare providers and benefits recipients. Verifone
has facilities located in North and South America, Europe, Asia, Africa and
Australia.
Veritas Software Corporation. Veritas Software Corporation develops, markets,
and supports advanced storage management and high availability products for
UNIX and Windows environments. The company's products provide performance
improvement and reliability enhancement features that are critical for many
commercial applications, such as protection against data loss and file
corruption, rapid recovery after disk or system failure, the ability to
process large files efficiently and the ability to manage back-up systems
without interrupting users.
West Marine, Inc. West Marine, Inc. is a specialty retailer of recreational
boating supplies and apparel. The company market products including
sophisticated navigational systems, rope and inflatable boats. West Marine
sells merchandise through its retail stores and catalogues in the United
States.
The Trust consists of (a) the Equity Securities (including contracts for the
purchase thereof) listed under the "Portfolio" as may continue to be
held from time to time in the Trust, (b) any additional Equity 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 Equity Securities. However, should any contract for the purchase of any
of the Equity Securities initially deposited hereunder fail, the Sponsor will,
unless substantially all of the moneys held in the Trust to cover such
purchase are reinvested in substitute Equity Securities in accordance with the
Trust Agreement, refund the cash and sales charge attributable to such failed
contract to all Unitholders on or before the next scheduled distribution date.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested, no
assurance can be given that the Trust will retain for any length of time its
present size and composition. Although the portfolio is not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain
limited circumstances. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other property acquired in
exchange for Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
property, the Trustee shall reject the offer. However, in the even such
securities or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee or held in
the Trust pursuant to the direction of the Sponsor (who may rely on the advice
of the Supervisor). See "Trust Administration--Portfolio
Administration." Equity Securities, however, will not be sold by the Trust
to take advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation.
The Managing Underwriter may acquire the Equity Securities for the Sponsor.
The Managing Underwriter in its general securities business acts as agent or
principal in connection with the purchase and sale of equity securities,
including the Equity Securities in the Trust, and may act as a market maker in
certain of the Equity Securities. The Managing Underwriter may also, from time
to time, issue reports on and make recommendations relating to equity
securities, which may include the Equity Securities. From time to time the
Managing Underwriter may act as investment banker or an employee or affiliate
may be a director of a company whose shares are included among the Equity
Securities; nonpublic information concerning such a company would not be
disclosed to the Managing Underwriter or for the benefit of the Trust under
such circumstances.
RISK FACTORS
An investment in Units 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 each issuer's board of directors
and have a right to participate in amounts available for distribution by such
issuer only after all other claims on such 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 a 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.
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.
All of the Securities in the Trust have a market capitalization of less than
$600 million. Accordingly, an investment in Units of the Trust should be made
with an understanding of the risks of small capitalization companies. Smaller
companies often have rates of sales, earnings, growth and share price
appreciation that exceed those of larger companies; however, such companies
also generally have limited product lines, markets or financial resources.
Investors should note that stocks of smaller companies often have limited
marketability and typically experience more market price volatility than
stocks of larger companies. Accordingly, no assurance can be made that upon
redemption or termination of the Trust the value of the Securities (and
therefore the net asset value of Units) will be greater than or equal to the
value at the time a Unitholder purchased Units.
An investment in Units should be made with an understanding of the
characteristics of the computer, telecommunications and electronic technology
industries and the risks which such an investment may entail. Technology
companies generally include companies involved in the development, design,
manufacture and sale of computers, computer related equipment, computer
networks, communications systems, telecommunications products, semiconductors,
electronic products, and other related products, systems and services.
Technology industries are often characterized by rapidly changing technology,
rapid product obsolescence, volatile stock price and trading volume
fluctuations that often have been unrelated to the operating performance of
the related company, cyclical market patterns, evolving industry standards,
frequent new product introductions and a high degree of interdependence among
companies that provide products and technologies that are incorporated into
the products of other technology companies. The success of technology issuers
depends on, among other things, the timely and successful introduction of new
products, the availability to acquire components in a timely and cost
effective manner from a limited number of suppliers and the ability to comply
with rigorous industry standards required by concentrated customer bases of
large customers. All of these factors could have a material adverse impact on
the Securities and Units of the Trust
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.
As described under "Trust Operating Expenses," all of the expenses of
the Trust will be paid from the sale of Securities from the Trust. It is
expected that such sales will be made each month through termination of the
Trust. Such sales will result in capital gains and losses and may be made at
times and prices which adversely affect the Trust. For a discussion of the tax
consequences of such sales, see "Taxation."
Unitholders will be unable to dispose of any of the Equity Securities, as
such, and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in the Trust and will vote such stocks in accordance with the
instructions of the Sponsor. In the absence of any such instructions by the
Sponsor, the Trustee will vote such stocks so as to insure that the stocks are
voted as closely as possible in the same manner and the same general
proportion as are shares held by owners other than the Trust.
TAXATION
General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code" ).
Unitholders should consult their tax advisers in determining the federal,
state, local and any other tax consequences of the purchase, ownership and
disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from the Trust asset when such income is considered to be
received by the Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his pro rata portion of each Equity Security when such dividends are
considered to be received by the Trust regardless of whether such dividends
are used to pay a portion of the deferred sales charge. Unitholders will be
taxed in this manner regardless of whether distributions from the Trust are
actually received by the Unitholder or are automatically reinvested (see "
Rights of Unitholders--Reinvestment Option" ).
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent
an in kind distribution of stock is received by such Unitholder as described
below). The price a Unitholder pays for his Units generally, including sales
charges, is allocated among his pro rata portion of each Security held by the
Trust (in proportion to the fair market values thereof on the valuation date
nearest to the date the Unitholder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Security held by the Trust. For
federal income tax purposes, a Unitholder's pro rata portion of dividends as
defined by Section 316 of the Code paid by a corporation with respect to a
Security held by the Trust is taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits" . A
Unitholder's pro rata portion of dividends paid on such Security which exceed
such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain except in the case of a dealer or a financial
institution and, will generally be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital loss (except in the
case of a dealer or a financial institution) and, in general, will be
long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
gains and losses for federal income tax purposes. In particular, a Rollover
Unitholder should be aware that a Rollover Unitholder's loss, if any, incurred
in connection with the exchange of Units for units in the next Series (the
"1997 Trust" ) will generally be disallowed with respect to the
disposition of any Securities pursuant to such exchange to the extent that
such Unitholder is considered the owner of substantially identical securities
under the wash sale provisions of the Code taking into account such
Unitholder's deemed ownership of the securities underlying the Units in the
1997 Trust in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and ending
30 days after such disposition. However, any gains incurred in connection with
such an exchange by a Rollover Unitholder would be recognized.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes sales
charges, and such charges are not deductible. A portion of the sales charge
for the Trust is deferred. It is possible that for federal income tax purposes
a portion of the deferred sales charge may be treated as interest which would
be deductible by a Unitholder subject to limitations on the deduction of
investment interest. In such a case, the non-interest portion of the deferred
sales charge would be added to the Unitholder's tax basis in his Units. The
deferred sales charge could cause the Unitholder's Units to be considered to
be debt-financed under Section 246A of the Code which would result in a small
reduction of the dividends-received deduction. In any case, the income (or
proceeds from redemption) a Unitholder must take into account for federal
income tax purposes is not reduced by amounts deducted to pay the deferred
sales charge. Unitholders should consult their own tax advisers as to the
income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above, and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Securities paying such dividends (other than
corporate shareholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. These limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been recently issued which address
special rules that must be considered in determining whether the 46 day
holding period requirement is met. Moreover, the allowable percentage of the
deduction will be reduced from 70% if a corporate Unitholder owns certain
stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. It should be noted that various
legislative proposals that would affect the dividends received deduction have
been introduced. Unitholders should consult with their tax advisers with
respect to the limitations on and possible modifications to the dividends
received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit (although losses incurred by Rollover
Unitholders may be subject to disallowance, as discussed above). For taxpayers
other than corporations, net capital gains are subject to a maximum marginal
stated tax rate of 28%. However, it should be noted that legislative proposals
are introduced from time to time that affect tax rates and could affect
relative differences at which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax 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 Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are "
conversion transactions" effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust involved including his
pro rata portion of all Securities represented by a Unit.
Special Tax Consequences of In Kind Distributions Upon Termination of the
Trust. As discussed in "Trust Administration--Amendment or
Termination," under certain circumstances a Unitholder may request an In
Kind Distribution upon the termination of the Trust. The Unitholder requesting
an In Kind Distribution will be liable for expenses related thereto (the "
Distribution Expenses" ) and the amount of such In Kind Distribution will
be reduced by the amount of the Distribution Expenses. See "Trust
Administration--Amendment or Termination." As previously discussed, prior
to the termination of the Trust, a Unitholder is considered as owning a pro
rata portion of each of the Trust assets for federal income tax purposes. The
receipt of an In Kind Distribution will result in a Unitholder receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Security owned by the Trust will depend on whether or not
a Unitholder receives cash in addition to Securities. A "Security" for
this purpose is a particular class of stock issued by a particular
corporation. A Unitholder will not recognize gain or loss if a Unitholder only
receives Securities in exchange for his or her pro rata portion in the
Securities held by the Trust. However, if a Unitholder also receives cash in
exchange for a fractional share of a Security held by the Trust, such
Unitholder will generally recognize gain or loss based upon the difference
between the amount of cash received by the Unitholder and his tax basis in
such fractional share of a Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an In
Kind Distribution will have to analyze the tax consequences with respect to
each Security owned by the Trust. The amount of taxable gain (or loss)
recognized upon such exchange will generally equal the sum of the gain (or
loss) recognized under the rules described above by such Unitholder with
respect to each Security owned by the Trust. Unitholders who request an In
Kind Distribution are advised to consult their tax advisers in this regard.
As discussed in "Rights of Unitholders--Special Redemption and Rollover in
New Trust," a Unitholder may elect to become a Rollover Unitholder. To the
extent a Rollover Unitholder exchanges his Units for Units of the 1997 Trust
in a taxable transaction, such Unitholder will recognize gains, if any, but
generally will not be entitled to a deduction for any losses recognized upon
the disposition of any Securities pursuant to such exchange to the extent that
such Unitholder is considered the owner of substantially identical securities
under the wash sale provisions of the Code taking into account such
Unitholder's deemed ownership of the securities underlying the Units in the
1997 Trust in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and ending
30 days after such disposition under the wash sale provisions contained in
Section 1091 of the Code. In the event a loss is disallowed under the wash
sale provisions, special rules contained in Section 1091(d) of the Code apply
to determine the Unitholder's tax basis in the securities acquired. Rollover
Unitholders are advised to consult their tax advisers.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of
each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary
income as described above.
Other Matters. 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 by the Internal Revenue Service 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 (other than those that are not treated as United
States source income, if any) will generally be subject to United States
income taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States persons.
Such persons should consult their tax advisers. On December 7, 1995, the U.S.
Treasury Department released proposed legislation that, if adopted, could
affect the United States federal income taxation of non-United States
Unitholders and the portion of the Trust's income allocable to non-United
States Unitholders. Similar language which would be effective on the date of
enactment, was included in the Health Insurance Reform Bill passed by the U.S.
Senate on April 23, 1996.
At the termination of the Trust, the Trustee will furnish to each Unitholder a
statement containing information relating to the dividends received by the
Trust on the Securities, the gross proceeds received by the Trust from the
disposition of any Security (resulting from redemption or the sale of any
Security), and the fees and expenses paid by the Trust. The Trustee will also
furnish annual information returns to Unitholders and to the Internal Revenue
Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of Kroll & Tract, special counsel to the Trust for New York tax
matters, the Trust is not an association taxable as a corporation and the
income of the Trust will be treated as the income of the Unitholders under the
existing income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit of the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
Compensation of Sponsor, Managing Underwriter and Evaluator. The Sponsor will
not receive any fees in connection with its activities relating to the Trust.
Wheat First Butcher Singer, the Managing Underwriter, will receive an annual
supervisory fee 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 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
all unit investment trusts 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, American
Portfolio Evaluation Services, which is a division of Van Kampen American
Capital Investment Advisory Corp., shall receive for regularly providing
evaluation services to the Trust the annual per Unit evaluation fee set forth
under "Summary of Essential Financial Information" (which is based on
the number of Units outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of Units outstanding at the end of the
month of such calculation) for regularly evaluating the Trust portfolio. The
fees set forth herein are payable as described under "General" below.
Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor and the Managing
Underwriter will receive sales commissions and may realize other profits (or
losses) in connection with the sale of Units and the deposit of the Securities
as described under "Public Offering--Sponsor and Managing Underwriter
Compensation" .
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" (which is based on the number of Units outstanding at the
close of business on July 29, 1996 at which time such calculation is based on
the number of Units outstanding on such date). The fees set forth herein are
payable as described under "General" below. The Trustee benefits to
the extent there are funds for future distributions, payment of expenses and
redemptions in the Capital and Income Accounts since these Accounts are
non-interest bearing and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds. Such fees may be increased
without approval of the Unitholders by amounts not exceeding proportionate
increases under the category "All Services Less Rent of Shelter" in
the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. For a
discussion of the services rendered by the Trustee pursuant to its obligations
under the Trust Agreement, see "Rights of Unitholders--Reports
Provided" and "Trust Administration" .
Miscellaneous Expenses. Expenses incurred in establishing the Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and closing documents), federal and
state registration fees, the initial fees and expenses of the Trustee, legal
and accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and amortized over the life of the Trust.
The following additional charges are or may be incurred by the Trust: (a)
normal expenses (including the cost of mailing reports to Unitholders)
incurred in connection with the operation of the Trust, (b) fees of the
Trustee for extraordinary services, (c) expenses of the Trustee (including
legal and auditing expenses) and of counsel designated by the Sponsor, (d)
various governmental charges, (e) expenses and costs of any action taken by
the Trustee to protect the Trust and the rights and interests of Unitholders,
(f) indemnification of the Trustee for any loss, liability or expenses
incurred in the administration of the Trust without negligence, bad faith or
wilful misconduct on its part, (g) foreign custodial and transaction fees and
(h) expenditures incurred in contacting Unitholders upon termination of the
Trust. The fees set forth herein are payable as described under "
General" below.
General. All fees and expenses of the Trust will accrue on a daily basis and
will be charged to the Trust, in arrears, on a monthly basis on or before the
tenth day of each month. The fees and expenses are payable out of the Capital
Account 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. If the balance
in the Capital Account is insufficient to provide for amounts payable by the
Trust, the Trustee has the power to sell Equity Securities to pay such
amounts. It is expected that the balance in the Capital Account will be
insufficient to provide for amounts payable by the Trust and that Equity
Securities will be sold from the Trust to pay such amounts. These sales may
result in capital gains or losses to Unitholders. See "Taxation" .
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. During the initial
offering period and for secondary market transactions after the initial
offering period the Public Offering Price is based on the aggregate underlying
value of the Securities in the Trust's portfolio, the initial sales charge
described below, and cash, if any, in the Income and Capital Accounts held or
owned by the Trust. The initial sales charge is equal to the difference
between the maximum total sales charge for the Trust of 2.9% of the Public
Offering Price and the maximum deferred sales charge for the Trust ($0.19 per
Unit). The monthly deferred sales charge ($0.019 per Unit) will begin accruing
on a daily basis on July 30, 1996 and will continue to accrue through May 29,
1997. The monthly deferred sales charge will be charged to the Trust, in
arrears, commencing August 30, 1996 and will be charged on the 30th day of
each month thereafter through May 30, 1997. Unitholders will be assessed only
that portion of the deferred sales charge accrued from the time they became
Unitholders of record. Units purchased subsequent to the initial deferred
sales charge payment will be subject to only that portion of the deferred
sales charge payments not yet collected. This deferred sales charge will be
paid from funds in the Capital Account, if sufficient, or from the periodic
sale of Securities. The total maximum sales charge assessed to Unitholders on
a per Unit basis will be 2.9% of the Public Offering Price (2.987% of the
aggregate value of the Securities in the Trust less the deferred sales
charge). The initial sales charge applicable to quantity purchases is reduced
on a graduated basis to any person acquiring 5,000 Units or that number of
Units with a value of $50,000, whichever is lower.
<TABLE>
<CAPTION>
Aggregate Dollar Amount or Dollar Amount of Sales
Number of Units Purchased Charge Reduction Per Unit
<S> <C>
5,000 Units/$50,000 - 9,999 Units/$99,999................... $ 0.02
10,000 Units/$100,000 - 24,999 Units/$249,999............... 0.04
25,000 Units/$250,000 - 99,999 Units/$999,999............... 0.06
100,000 Units/$1,000,000 Units or more...................... 0.08
</TABLE>
Any sales charge reduction will primarily be the responsibility of the
Managing Underwriter.
Employees of Wheat First Butcher Singer, Inc. and employee related accounts
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.
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 the difference between the maximum total sales charge of 2.9% of the
Public Offering Price and the maximum deferred sales charge ($0.19 per Unit)
and dividing the sum so obtained by the number of Units outstanding. The
Public Offering Price per Unit shall include the proportionate share of any
cash held in the Income and Capital Accounts. Such price determination as of
the close of business on the day before the Initial Day of Deposit was made on
the basis of an evaluation of the Securities prepared by Interactive Data
Corporation, a firm regularly engaged in the business of evaluating, quoting
or appraising comparable securities. Thereafter, the Evaluator on each
business day will appraise or cause to be appraised the value of the
underlying Securities as of the Evaluation Time 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 which is not
a business day for the Trust, will be held until the next determination of
price. Unitholders who purchase Units subsequent to the Initial Date of
Deposit will pay an initial sales charge equal to the difference between the
maximum total sales charge for the Trust of 2.9% of the Public Offering Price
and the maximum deferred sales charge for the Trust ($0.19 per Unit) and will
be assessed a deferred sales charge of $0.019 per Unit on each of the
remaining deferred sales charge payment dates as set forth in "Public
Offering--General" .
The aggregate underlying value of the Equity Securities during the initial
offering period is determined on each business day by the Evaluator in the
following manner: if the Equity Securities are listed on a national securities
exchange, 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 therefore 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, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
Securities 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 Managing Underwriter, broker-dealers and
others at the Public Offering Price. Upon the completion of the initial
offering period, Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in
the manner described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers will be allowed a concession or agency commission in connection
with the distribution of Units of 2.0% of the Public Offering Price per Unit.
In connection with transactions involving Rollover Unitholders, the total
concession or agency commission will amount to 1.0% per Unit. Any quantity
discount provided to investors will be borne by the Managing Underwriter or
the selling dealer or agent.
Certain commercial banks may be making Units 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 the lesser of 500 Units or
$5,000 except as stated herein. The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive the gross sales commission equal to 2.9% of the Public Offering Price
of the Units, less any reduced sales charge for quantity purchases as
described under "General" above. Any such quantity discount provided
to investors will be borne by the Managing Underwriter or the selling dealer
or agent. The Sponsor will receive from the Managing Underwriter the excess of
such gross sales commission over the Managing Underwriter's discount. The
Managing Underwriter will be allowed a discount in connection with the
distribution of Units of 2.2% per Unit for up to $20,000,000 of Units
underwritten and 2.3% per Unit in excess of $20,000,000 of Units underwritten.
In addition, the Managing Underwriter will realize a profit or will sustain a
loss, as the case may be, as a result of the difference between the price paid
for the Securities by the Managing Underwriter and the cost of such Securities
to the Trust on the Initial Date of Deposit as well as on subsequent deposits.
See "Notes to 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 and Managing Underwriter may further realize additional
profit or loss during the initial offering period as a result of the possible
fluctuations in the market value of the Securities 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 and Managing Underwriter.
Cash, if any, made available to the Sponsor and Managing Underwriter prior to
the date of settlement for the purchase of Units may be used in the Sponsor's
or Managing Underwriter's business and may be deemed to be a benefit to the
Sponsor and Managing Underwriter, subject to the limitations of the Securities
Exchange Act of 1934.
As stated under "Public Market" below, the Managing Underwriter
currently intends to maintain a secondary market for Units for the period
indicated. In so maintaining a market, the Managing Underwriter will also
realize profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are resold
(which price includes the applicable sales charge). In addition, the Managing
Underwriter will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Managing Underwriter
currently intends to maintain a market for the Units offered hereby through
December 31, 1996, and offer continuously to purchase Units at prices, subject
to change at any time, based upon the aggregate underlying value of the Equity
Securities (computed as indicated under "Offering Price" above and
"Rights of Unitholders--Redemption of Units" ). If the supply of Units
exceeds demand or if some other business reason warrants it, the Managing
Underwriter may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. In the event that a market is not
maintained for the Units and the Unitholder cannot find another purchaser, a
Unitholder desiring to dispose of his Units will be able to dispose of such
Units by tendering them to the Trustee for redemption at the Redemption Price.
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. Units sold
prior to such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales charge
at the time of sale.
Tax-Sheltered Retirement Plans. Units 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 may be limited by the plans' provisions and does not itself establish
such plans.
RIGHTS OF UNITHOLDERS
General. The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee. Ownership
of Units will be in book entry form only. Certificates representing Units will
not be issued. Units are transferable by making a written request to the
Trustee. A Unitholder must sign such written requests exactly as his name
appears on the records of the Trustee with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP" ) or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each Unit transferred and to pay any
governmental charge that may be imposed in connection with each such transfer
or interchange.
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. Proceeds from the sale
of Securities to meet redemptions shall be segregated within the Capital
Account from proceeds from the sale of Securities made to satisfy the fees,
expenses and charges of the Trust.
The Trustee will distribute any income received with respect to any of the
Securities on or about the Income Account Distribution Dates to Unitholders of
record on the preceding Income Account Record Date. See "Summary of
Essential Financial Information" . Proceeds received on the sale of any
Securities, to the extent not used to meet redemptions of Units, pay the
deferred sales charge 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. Because
dividends are not received by the Trust at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the 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 the Income and Capital 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.
It is anticipated that the deferred sales charge will be collected from the
Capital Account. To the extent that amounts in the Capital Account are
insufficient to satisfy the then current deferred sales charge obligation,
Equity Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made to an
account maintained by the Trustee for purposes of satisfying Unitholders'
deferred sales charge obligations.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder of the Trust a
statement (i) as to the Income Account: income received, deductions for
applicable taxes and for fees and expenses of the Trust, for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (ii) as to the Capital Account: the
dates of disposition of any 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 by the Trust
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) amounts actually distributed
during such calendar year from the Income and Capital Accounts, separately
stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its unit investment trust office at 101 Barclay
Street, 20th Floor, New York, New York 10286. No redemption fee will be
charged. On the third business day following such tender, the Unitholder will
be entitled to receive in cash an amount for each Unit equal to the Redemption
Price per Unit next computed after receipt by the Trustee of such tender of
Units. The "date of tender" is deemed to be the date on which Units
are received by the Trustee, except that with respect to Units received after
the applicable Evaluation Time the date of tender is the next business day as
defined under "Public Offering--Offering Price" 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. Units tendered for
redemption prior to such time as the entire deferred sales charge on such
Units has been collected will be assessed the amount of the remaining deferred
sales charge at the time of redemption.
To the extent that Securities are sold, the size of the Trust will be, and the
diversity of the Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the Unitholder depending on the value of the
Securities in the portfolio at the time of redemption.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities, 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 initial sales charge) exceeded the values at which Units
could have been redeemed by the amounts shown under "Summary of Essential
Financial Information" . The Redemption Price per Unit is the pro rata
share of each Unit in the Trust determined on the basis of (i) the cash on
hand in the Trust, (ii) the value of the Securities 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 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.
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 is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit.
Special Redemption and Rollover in New Trust. It is expected that a special
redemption will be made of all Units held by any Unitholder (a "Rollover
Unitholder" ) who affirmatively notifies the Trustee in writing that he
desires to rollover his Units by the Rollover Notification Date specified in
the "Summary of Essential Financial Information" .
All Units of Rollover Unitholders will be redeemed on the Special Redemption
Date and the underlying Securities will be distributed to the Distribution
Agent on behalf of the Rollover Unitholders. On the Special Redemption Date
(as set forth in "Summary of Essential Financial Information" ), the
Distribution Agent will be required to sell all of the underlying Securities
on behalf of Rollover Unitholders. The sales proceeds will be net of brokerage
fees, governmental charges or any expenses involved in the sales.
The Distribution Agent will attempt to sell the Securities as quickly as is
practicable commencing on the Special Redemption Date. Certain of the factors
discussed under "Risk Factors" could affect the ability of the Sponsor
to sell the Securities and thereby affect the length of the sale period
somewhat. The liquidity of any Security depends on the daily trading volume of
the Security and the amount that the Sponsor has available for sale on any
particular day.
The Rollover Unitholders' proceeds will be invested in the next subsequent
Series of the Trust (the "1997 Trust" ), if then being offered, which
will contain a portfolio of common stocks of companies selected by the
Managing Underwriter. The proceeds of redemption will be used to buy 1997
Trust units in the portfolio as the proceeds become available.
The Managing Underwriter intends to create the 1997 Trust shortly prior to the
Special Redemption Date, dependent upon the availability and reasonably
favorable prices of the securities included in the 1997 Trust portfolio, and
it is intended that Rollover Unitholders will be given first priority to
purchase the 1997 Trust units. There can be no assurance, however, as to the
exact timing of the creation of the 1997 Trust units or the aggregate number
of 1997 Trust units which the Managing Underwriter will create. The Managing
Underwriter may, in its sole discretion, stop creating new units in a trust
portfolio at any time it chooses, regardless of whether all proceeds of the
Special Redemption have been invested on behalf of Rollover Unitholders. Cash
which has not been invested on behalf of the Rollover Unitholders in 1997
Trust units will be distributed shortly after the Special Redemption Date.
Any Rollover Unitholder may thus be redeemed out of the Trust and become a
holder of an entirely different unit investment trust in the 1997 Trust with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold on the Special
Redemption Date. In accordance with the Rollover Unitholders' offer to
purchase the 1997 Trust units, the proceeds of the sales (and any other cash
distributed upon redemption) will be invested in the 1997 Trust at the public
offering price, including the applicable sales charge per Unit.
This process of redemption and rollover into a new trust is intended to allow
for the fact that the portfolio selected by the Managing Underwriter is chosen
on the basis of growth potential only for a year, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption
and rollover in a new unit investment trust will be available for the 1997
Trust and each subsequent series of the Trust, approximately a year after that
Series' creation.
There can be no assurance that the redemption and rollover in the Trust will
avoid any negative market price consequences stemming from the trading of
large volumes of securities and of the underlying Securities. The above
procedures may be insufficient or unsuccessful in avoiding such price
consequences. In fact, market price trends may make it advantageous to sell or
buy more quickly or more slowly than permitted by these procedures.
It should also be noted that Rollover Unitholders may realize taxable capital
gains on the Special Redemption and Rollover but, in certain circumstances,
will not be entitled to a deduction for certain capital losses and, due to the
procedures for investing in the next subsequent Series of the Trust, no cash
would be distributed at that time to pay any taxes. Included in the cash for
the Special Redemption and Rollover will be any amount of cash attributable to
the last distribution of dividend income; accordingly, Rollover Unitholders
also will not have such cash distributed to pay any taxes. See "
Taxation" . Unitholders who do not inform the Distribution Agent that they
wish to have their Units so redeemed and liquidated will not realize capital
gains or losses due to the Special Redemption and Rollover and will not be
charged any additional sales charge.
The Managing Underwriter may for any reason, in its sole discretion, decide
not to sponsor the 1997 Trust or any subsequent Series of the Trust, without
penalty or incurring liability to any Unitholder. If the Managing Underwriter
so decides, the Managing Underwriter shall notify the Unitholders before the
Special Redemption Date. The Managing Underwriter may modify the terms of the
1997 Trust or any subsequent Series of the Trust. The Managing Underwriter may
also modify the terms of the Special Redemption and Rollover in the 1997 Trust
upon notice to the Unitholders prior to the Rollover Notification Date
specified in the related "Summary of Essential Financial Information" .
TRUST ADMINISTRATION
Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase such Units by notifying the Trustee
before the close of business on the next succeeding business day and by making
payment therefor to the Unitholder not later than the day on which the Units
would otherwise have been redeemed by the Trustee. Units held by the Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter will be
in accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit resulting from the
resale of such Units will belong to the Managing Underwriter which likewise
will bear any loss resulting from a lower offering or redemption price
subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed trust 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.
However, the Sponsor may (but need not) direct the Trustee to dispose of an
Equity Security if the issuer has defaulted on the payment on any of its
outstanding obligations or the credit worthiness or economic viability of the
issuer of the Equity Security in question is, in the opinion of the
Supervisor, seriously in doubt. 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). Proceeds from the sale of Securities
(or any securities or other property received by the Trust in exchange for
Equity Securities) are credited to the Capital Account for distribution to
Unitholders, pay any accrued deferred sales charge, to meet redemptions or to
pay certain costs or expenses of the Trust. 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.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in the
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units 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 Units then outstanding or by the Trustee when the value of the
Equity Securities owned by the Trust, as shown by any evaluation, is less than
that amount set forth under Minimum Termination Value in the "Summary of
Essential Financial Information" . 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 by the Sponsor, 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. The Sponsor shall direct the liquidation of the Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. At least 30 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination 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 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 Securities in the Trust to the
account of the broker-dealer or bank designated by the Unitholder at
Depository Trust Company. The value of the Unitholder's fractional shares of
the Securities will be paid in cash. Unitholders with less than 2,500 Units,
Unitholders with 2,500 or more Units not requesting an In Kind Distribution
and Unitholders who do not elect the Rollover Option will receive a cash
distribution from the sale of the remaining 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 Securities 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.
The Managing Underwriter currently intends to, but is not obligated to, offer
for sale units of a subsequent Series of the Trust pursuant to the Rollover
Option (see "Rights of Unitholders--Special Redemption and Rollover in New
Trust" ). There is, however, no assurance that units of any new Series will
be offered for sale at that time, or if offered, that there will be sufficient
units available for sale to meet the requests of any or all Unitholders.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the 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.
Managing Underwriter. Founded in 1934, Wheat First Butcher Singer provides
full-service brokerage, investment banking and asset-management services. The
firm is 100 percent owned by its employees and has over 100 offices with 2,800
associates in 17 states and the District of Columbia. Today, Wheat First has
more than $25 billion in client assets--making it one of the leading
securities brokerage and investment banking firms in the United States.
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. On June 21, 1996
VK/AC Holding, Inc., the indirect corporate parent of the Sponsor entered into
an Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and VK/AC Holding, Inc. will be the surviving corporation. MSAM
Acquisition Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.,
which, in turn, is a wholly owned subsidiary of Morgan Stanley Group Inc.
Subject to a number of conditions being met, it is currently anticipated that
a closing will occur in November of 1996. Thereafter, VK/AC Holding, Inc. and
its affiliated entities, including the Sponsor shall be part of the Morgan
Stanley Group Inc. Van Kampen American Capital Distributors, Inc. specializes
in the underwriting and distribution of unit investment trusts and mutual
funds with roots in money management dating back to 1926. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (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 June
30, 1996 the total stockholders' equity of Van Kampen American Capital
Distributors, Inc. was $123,020,000 (unaudited). (This paragraph relates only
to the Sponsor and not to the Managing Underwriter, the Trust or to 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.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its 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 held
by, every Unitholder of the Trust. Such books and records shall be open to
inspection by any Unitholder at all reasonable times during the usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided" ). The
Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Kroll & Tract 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 37 (Wheat First Strategic Opportunity Unit Trust, Series 1):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 37
(Wheat First Strategic Opportunity Unit Trust, Series 1) as of July 25, 1996.
The statement of condition and portfolio are the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of irrevocable letters of credit deposited to
purchase 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 37 (Wheat First Strategic Opportunity Unit
Trust, Series 1) as of July 25, 1996, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
July 25, 1996
<TABLE>
WHEAT FIRST STRATEGIC OPPORTUNITY UNIT TRUST, SERIES 1
STATEMENT OF CONDITION
As of July 25, 1996
<CAPTION>
INVESTMENT IN SECURITIES
<S> <C>
Contracts to purchase Securities <F1>...........$ 149,340
Organizational costs <F2>....................... 66,351
Total..........................................$ 215,691
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--...................................
Accrued organizational costs <F2>..............$ 66,351
Deferred sales charge liability <F3>........... 2,850
Interest of Unitholders-- ......................
Cost to investors <F4>......................... 150,900
Less: Gross underwriting commission <F4><F5>... 4,410
Net interest to Unitholders <F4>............... 146,490
Total..........................................$ 215,691
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" herein
and their cost to the Trust are the same. The value of the Securities is
determined by Interactive Data Corporation on the bases set forth under "
Public Offering--Offering Price" . The contracts to purchase Securities are
collateralized by a letter of credit of $149,340 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 to interest to Unitholders over the life of the
Trust. Organizational costs have been estimated based on a projected Trust
size of $75,000,000. To the extent the Trust is larger or smaller, the
estimate will vary.
<F3>Represents the amount of mandatory distributions from the Trust on the bases
set forth under "Public Offering" .
<F4>The aggregate public offering price and the aggregate initial sales charge are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Managing Underwriter Compensation"
and assume all single transactions involve less than 5,000 Units or $50,000.
For single transactions involving 5,000 or more Units or $50,000 or more, 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.
<F5>Assumes the maximum sales charge.
</TABLE>
<TABLE>
WHEAT FIRST STRATEGIC OPPORTUNITY UNIT TRUST, SERIES 1
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 37)
as of the Initial Date of Deposit: July 25, 1996
<CAPTION>
Estimated
Annual Cost of
Number of Market Value Dividends per Securities
Shares Name of Issuer <F1> per Share <F2> Share <F2> to Trust <F2>
<S> <C> <C> <C> <C>
193 Aames Financial Corporation $ 34.875 $ 0.20 $ 6,730.88
133 ACC Corporation 51.000 0.12 6,783.00
133 Aspen Technology, Inc. 50.750 0.00 6,749.75
253 Benchmark Electronics, Inc. 29.125 0.00 7,368.63
273 BroadBand Technologies, Inc. 24.250 0.00 6,620.25
233 Cityscape Financial Corporation 28.250 0.00 6,582.25
213 Computer Task Group, Inc. 27.000 0.40 5,751.00
243 Concord EFS, Inc. 25.750 0.00 6,257.25
253 Datastream Systems, Inc. 24.500 0.00 6,198.50
429 Digital Systems International, Inc. 14.375 0.00 6,166.88
343 EIS International, Inc. 19.250 0.00 6,602.75
345 Gentex Corporation 18.750 0.00 6,468.75
113 HCIA, Inc. 57.750 0.00 6,525.75
233 MDL Information Systems, Inc. 27.250 0.00 6,349.25
163 Miller Industries, Inc. 26.375 0.00 4,299.13
53 RadiSys Corporation 26.000 0.00 1,378.00
175 Regal Cinemas, Inc. 38.000 0.00 6,650.00
113 Renal Treatment Centers, Inc. 27.375 0.00 3,093.38
263 SDL, Inc. 25.750 0.00 6,772.25
313 Sinter Metals, Inc. Class A 17.875 0.00 5,594.88
113 Sitel Corporation 33.000 0.00 3,729.00
313 Unison Software, Inc. 20.000 0.00 6,260.00
173 Verifone, Inc. 39.750 0.00 6,876.75
213 Veritas Software Company 28.250 0.00 6,017.25
133 West Marine, Inc. 56.500 0.00 7,514.50
5,415 149,340.03
NOTES TO PORTFOLIO
<FN>
<F1>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, 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 July 24, 1996 and are
expected to settle on July 30, 1996. (see "The Trust" ).
<F2>The market value of each of the Equity Securities is based on the closing sale
price of each listed Security on the applicable exchange, or on the asked
price if not so listed, on the day prior to the Initial Date of Deposit.
Estimated annual dividends are based on the most recently declared dividends.
The aggregate value of the Securities on the day prior to the Initial Date of
Deposit based on the closing sale price of each listed Security and on the bid
price if not so listed (which is the basis on which the Redemption Price per
Unit will be determined) was $146,877. The ask price of the applicable
Securities (the basis on which the Public Offering Price per Unit will be
determined during the initial offering period) is greater than the bid price
of such Securities. Other information regarding the Securities in the Trust,
as of the Initial Date of Deposit is as follows:
</TABLE>
<TABLE>
<CAPTION>
Aggregate
Cost To Profit (Loss) Estimated
Managing To Managing Annual
Underwriter Underwriter Dividends
<S> <C> <C>
$ 147,454 $ 1,886 $ 140
</TABLE>
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial Information........... 3
Fee Table............................................ 5
The Trust............................................ 5
Objectives and Securities Selection.................. 6
Trust Portfolio...................................... 8
Risk Factors......................................... 11
Taxation............................................. 12
Trust Operating Expenses............................. 16
Public Offering...................................... 17
Rights of Unitholders................................ 20
Trust Administration................................. 24
Other Matters........................................ 27
Report of Independent Certified Public Accountants... 28
Statement of Condition .............................. 29
Portfolio............................................ 30
Notes to Portfolio................................... 31
</TABLE>
This Prospectus contains information concerning the Trust and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
July 25, 1996
WHEAT FIRST STRATEGIC
OPPORTUNITY UNIT TRUST,
SERIES 1
Van Kampen American Capital
Equity Opportunity Trust,
Series 37
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219
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.
3.2 Opinion of Counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of
securites being registered.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Acountants.
Financial Data Schedule.
Signatures
The Registrant, Van Kampen American Capital Equity Opportunity
Trust, Series 37, hereby identifies Van Kampen Merritt Equity Opportunity
Trust, Series 4 and Van Kampen American Capital Equity Opportunity Trust,
Series 13 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
37 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 25th day of July, 1996.
Van Kampen American Capital Equity
Opportunity Trust, Series 37
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 July 25, 1996.
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 Capital Equity Opportunity Trust
Series 37
Trust Agreement
Dated: July 25, 1996
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,
Wheat First Butcher Singer, 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. Such fractional
undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03,(b) increased or
decreased in connection with an adjustment to the number of Units
pursuant to Section 2.03, or (c) decreased by the number of Units
redeemed pursuant to Section 5.02.
3. 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."
4. 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."
5. Section 1.01(4) shall be amended to read as follows:
"(4) "Supervisory Servicer" shall mean Wheat First
Butcher Singer and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
6. Section 1.01(19) shall be amended to read as follows:
"(19) "Percentage Ratio" shall mean, for each Trust which
will issue additional Units pursuant to Section 2.03
hereof, (a) the percentage relationship among the Equity
Securities based on the number of shares of each Equity
Security existing on the Initial Date of Deposit
with respect to the Select Equity Trust and (b) the
percentage relationship existing on the Initial Date of
Deposit among the maturity value per Unit of the Zero
Coupon Obligations, each Equity Security per Unit as a
percent of all shares of Equity Securities and the sum of
the maturity value per Unit of the Zero Coupon Obligations
and all Equity Securities attributable to each Unit with
respect to the Select Equity and Treasury Trust. The
Percentage Ratio shall be adjusted to the extent
necessary, and may be rounded, to reflect the occurrence
of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of an
Equity Security.
7. Section 1.01(34) shall be amended to read as follows:
"(34) The term "Rollover Unitholder" shall be defined as
set forth in Section 5.05, herein."
8. Section 1.01(35) shall be amended to read as follows:
"(35) The "Rollover Notification Date" shall be defined
as set forth in the Prospectus under "Summary of Essential
Information."
9. Section 1.01(36) shall be amended to read as follows:
"(36) The term "Rollover Distribution" shall be defined
as set forth in Section 5.05, herein."
10. Section 1.01(37) shall be amended to read as follows:
"(37) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.05 herein."
11. Section 1.01(38) shall be amended to read as follows:
"(38) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information - Special Redemption
Date."
12. The Initial Date of Deposit for the Trust is July 25,
1996.
13. Notwithstanding anything to the contrary appearing in the
Standard Terms and Conditions of Trust, "Van Kampen American Capital
Equity Opportunity Trust" will replace "Select Equity Trust."
14. 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."
15. Article III of the Standard Terms and Conditions of Trust
is hereby amended by inserting the following paragraph which shall
be entitled Section 3.17.:
"Section 3.17. Deferred Sales Charge. If the prospectus
related to the Trust specifies a deferred sale charge, the
Trustee shall, on the dates specified in and as permitted
by such Prospectus, withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit
such amount to a special non-Trust account maintained at
the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the
Capital Account is insufficient to make any such
withdrawal, the Trustee shall, as directed by the
Depositor, either advance funds in an amount equal to the
proposed withdrawal and be entitled to reimbursement of
such advance upon the deposit of additional monies in the
Capital Account, sell Securities and credit the proceeds
thereof to such special Depositor's account or credit (if
permitted by law) Securities in kind to such special
Depositor's Account. If a Unitholder redeems Units prior
to full payment of the deferred sales charge, the Trustee
shall, if so provided in the related Prospectus, on the
Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid
portion of the deferred sales charge and distribute such
amount to such special Depositor's Account. The Depositor
may at any time instruct the Trustee in writing to
distribute to the Depositor cash or Securities previously
credited to the special Depositor's Account."
16. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the Depositor shall
offer a subsequent series of the Trust (the "New Series"), the
Trustee shall, at the Depositor's sole cost and expense, include in
the notice sent to Unitholders specified in Section 8.02 a form of
election whereby Unitholders, whose redemption distribution would be
in an amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Units(s) redeemed in kind in the
manner provided in Section 5.02, the Securities included in the
redemption distribution sold, and the cash proceeds applied by the
Distribution Agent to purchase Units of the New Series, all as
hereinafter provided. The Trustee shall honor properly completed
election forms returned to the Trustee, accompanied by any
Certificate evidencing Units tendered for redemption or a properly
completed redemption request with respect to uncertificated Units,
by its close of business on the Rollover Notification Date.
All Units so tendered by a Unitholder (a "Rollover Unitholder")
shall be redeemed and cancelled on the Rollover Notification Date.
Subject to payment by such Rollover Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption
is to be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the Rollover
Notification Date of the net asset value (determined on the basis of
the Trust Fund Evaluation as of the Rollover Notification Date in
accordance with Section 4.01) multiplied by the number of Units
being redeemed (herein called the "Rollover Distribution"). Any
Securities that are made part of the Rollover Distribution shall be
valued for purposes of the redemption distribution as of the
Rollover Notification Date.
All Securities included in a Unitholder's Rollover Distribution
shall be sold by the Distribution Agent on the Special Redemption
Date specified in the Prospectus pursuant to the Depositor's
direction, and the Distribution Agent shall employ the Depositor as
broker in connection with such sales. For such brokerage services,
the Depositor shall be entitled to compensation at its customary
rates, provided however, that its compensation shall not exceed the
amount authorized by applicable Securities laws and regulations.
The Depositor shall direct that sales be made in accordance with the
guidelines set forth in the Prospectus under the heading "Special
Redemption and Rollover in New Fund." Should the Depositor fail to
provide direction, the Distribution Agent shall sell the Securities
in the manner provided in the prospectus for "less liquid Equity
Securities." The Distribution Agent shall have no responsibility
for any loss or depreciation incurred by reason of any sale made
pursuant to this Section.
Upon each trade date for sales of Securities included in the
Rollover Unitholder's Rollover Distribution, the Distribution Agent
shall, as agent for such Rollover Unitholder, enter into a contract
with the Depositor to purchase from the Depositor Units of the New
Series (if any), at the Depositor's public offering price for such
Units on such day, and at such reduced sales charge as shall be
described in the prospectus for the Trusts. Such contract shall
provide for purchase of the maximum number of Units of the New
Series whose purchase price is equal to or less than the cash
proceeds held by the Distribution Agent for the Unitholder on such
day (including therein the proceeds anticipated to be received in
respect of Securities traded on such day net of all brokerage fees,
governmental charges and any other expenses incurred in connection
with such sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included in the
Rollover Unitholder's redemption distribution shall not be
consummated in accordance with its terms, the Distribution Agent
shall apply the cash proceeds held for such Unitholder as of the
settlement date for the purchase of Units of the New Series to
purchase the maximum number of units which such cash balance will
permit, and the Depositor agrees that the settlement date for Units
whose purchase was not consummated as a result of insufficient funds
will be extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such purchase. If
the Unitholder's Rollover Distribution will produce insufficient
cash proceeds to purchase all of the Units of the New Series
contracted for, the Depositor agrees that the contract shall be
rescinded with respect to the Units as to which there was a cash
shortfall without any liability to the Rollover Unitholder or the
Distribution Agent. Any cash balance remaining after such purchase
shall be distributed within a reasonable time to the Rollover
Unitholder by check mailed to the address of such Unitholder on the
registration books of the Trustee. Units of the New Series will be
uncertificated unless and until the Rollover Unitholder requests a
certificate. Any cash held by the Distribution Agent shall be held
in a non-interest bearing account which will be of benefit to the
Distribution Agent in accordance with normal banking procedures.
Neither the Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation resulting from
any reinvestment made in accordance with this paragraph, or for any
failure to make such reinvestment in the event the Depositor does
not make Units available for purchase.
(b) Notwithstanding the foregoing, the Depositor may, in its
discretion at any time, decide not to offer a New Series in the
future, and if so, this Section 5.05 concerning the Rollover of
Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent shall,
however, be entitled to receive reimbursement from the Trust for any
and all expenses and disbursements to the same extent as the Trustee
is permitted reimbursement hereunder."
(d) Notwithstanding the foregoing, in lieu of selling
Securities through the Depositor on the open market the Distribution
Agent may sell Securities from a terminating Trust into the
corresponding New Series if those Securities continue to meet the
New Series' strategy. The price for those Securities will be the
closing sale price on the sale date on the exchange where the
Securities are principally traded, as certified by the Sponsor.
17. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the requisite number of Units needed
to be tendered to exercise an In Kind Distribution as set forth in
Sections 5.02 and 8.02 shall be that number set forth in the
Prospectus and such In Kind Distributions shall be available only in
connection with a distribution to Unitholders upon termination of
the Trust.
18. Section 8.02 is hereby revised to require an affirmative
vote of Unitholders representing 66 2/3% of the then outstanding
Units to terminate the Trust rather than the 51% indicated therein.
19. 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.
20. 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,"
21. 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"
22. Notwithstanding anything to the contrary herein, the
annual audit of the Trust's accounts described in Section 6.02 shall
not be required.
23. Section 2.03(a) shall be amended by adding the following
sentence immediately after the first sentence of such Section: "The
number of Units may be increased through a split of the Units or
decreased through a reverse split thereof, as directed by the
Depositor, on any day on which the Depositor is the only Unitholder,
which revised number of Units shall be recorded by the Trustee on
its books."
24. Sections 4.01(b) and (c) are hereby replaced with the
following:
"(b) During the initial offering period such Evaluation
shall be made in the following manner: if the Securities are
listed on a national securities exchange, such Evaluation shall
generally be based on the last available sale price on or
immediately prior to the Evaluation Time on the exchange which
is the principal market therefor, which shall be deemed to be
the New York Stock Exchange if the Securities are listed
thereon (unless the Evaluator deems such price inappropriate as
a basis for evaluation) or, if there is no such available sale
price on such exchange. If the Securities are not so listed
or, if so listed, the principal market therefor is other than
on such exchange or there is no such available sale price on
such exchange, such Evaluation shall generally be based on the
following methods or any combination thereof whichever the
Evaluator deems appropriate: (i) in the case of Equity
Securities, on the basis of the current ask price (unless the
Evaluator deems such price inappropriate as a basis for
evaluation), (ii) on the basis of current offering prices for
the Zero Coupon Obligations as obtained from investment dealers
or brokers who customarily deal in securities comparable to
those held by the Fund, (iii) if offering or ask prices are not
available for the Zero Coupon Obligations or the Equity
Securities, on the basis of offering or ask price for
comparable securities, (iv) by determining the valuation of the
Zero Coupon Obligations or the Equity Securities on the
offering or ask side of the market by appraisal or (v) by any
combination of the above. For each Evaluation, the Evaluator
shall also confirm and furnish to the Trustee and the
Depositor, on the basis of the information furnished to the
Evaluator by the Trustee as to the value of all Trust assets
other than Securities, the calculation of the Trust Fund
Evaluation to be computed pursuant to Section 5.01.
(c) For purposes of the Trust Fund Evaluations required
by Section 5.01 in determining Redemption Value and Unit Value,
Evaluation of the Securities shall be made in the manner
described in 4.01(b), on the basis of current bid prices for
the Zero Coupon Obligations and, except in those cases in which
the Equity Securities are listed on a national securities
exchange and the last available sale prices are utilized, on
the basis of the last available bid prices of the Equity
Securities."
25. Section 3.05(a) is hereby replaced with the following:
"(a) On or immediately after the tenth the day of each
month, the Trustee shall satisfy itself as to the adequacy of
the Reserve Account, making any further credits thereto as may
appear appropriate in accordance with Section 3.04 and shall
then with respect to each Trust:
(i) deduct from the Capital Account and pay to
itself individually the amounts that it is at the time
entitled to receive pursuant to Section 6.04;
(ii) deduct from the Capital Account and pay to, or
reserve for, the Evaluator the amount that it is at the
time entitled to receive pursuant to Section 4.03;
(iii) deduct from the Capital Account and pay to
counsel, as hereinafter provided for, an amount equal to
unpaid fees and expenses, if any, of such counsel pursuant
to Section 3.08, as certified to by the Depositor; and
(iv) deduct from the Capital Account and pay to, or
reserve for, the Supervisory Servicer the amount that it
is entitled to receive pursuant to Section 3.13."
26. The fourth paragraph of Section 8.05 is hereby replaced
with the following:
"Any notice, demand, direction or instruction to be given to
the Supervisory Servicer shall be in writing and shall be duly
given if mailed or delivered to the Supervisory Servicer at 901
East Byrd Street, Richmond, Virginia 23219 or at such other
address as shall be specified by the Supervisory Servicer to
the other parties in writing."
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 each to be hereto affixed and attested to by the
Secretary, Assistant Secretary or one of their respective Vice Presidents
or Assistant Vice Presidents 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 37
(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
July 25, 1996
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen American Capital Equity Opportunity Trust, Series 37
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 37 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery
of a Trust Agreement dated July 25, 1996, 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, Wheat First Butcher Singer, 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. 333-06143) 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 3.2
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
July 25, 1996
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen American Capital Equity Opportunity Trust, Series 37
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Van Kampen American Capital Equity
Opportunity Trust, Series 37 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a
Trust Agreement dated July 25, 1996 (the "Indenture") among Van Kampen
American Capital Distributors, Inc., as Depositor, Van Kampen American
Capital Investment Advisory Corp., as Evaluator, Wheat First Butcher
Singer, as Supervisory Servicer, and The Bank of New York, as Trustee.
The Fund is comprised of one unit investment trust, Wheat First Strategic
Opportunity Unit Trust, Series 1.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent.
The assets of each Trust will consist of a portfolio of equity
securities (the "Equity Securities") as set forth in the Prospectus.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing United States Federal income tax law:
(i) Each Trust is not an association taxable as a
corporation but will be governed by the provisions of
subchapter J (relating to Trusts) of chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata
share of each asset of the particular Trust in the proportion
that the number of Units held by him bears to the total number
of Units outstanding. Under subpart E, subchapter J of chapter
1 of the Code, income of a Trust will be treated as income of
each Unitholder in the proportion described, and an item of
Trust income will have the same character in the hands of a
Unitholder as it would have in the hands of the Trustee. Each
Unitholder will be considered to have received his pro rata
share of income derived from each Trust asset when such income
is considered to be received by a Trust. A Unitholder's pro
rata portion of distributions of cash or property by a
corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code ) are taxable as ordinary
income to the extent of such corporation's current and
accumulated "earnings and profits." A Unitholder's pro rata
portion of dividends which exceed such current and accumulated
earnings and profits will first reduce the Unitholder's tax
basis in such Equity Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity
Security, shall be treated as gain from the sale or exchange of
property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata
portion of each Security held by a Trust (in the proportion to
the fair market values thereof on the valuation date closest to
the date the Unitholder purchases his Units), in order to
determine his tax basis for his pro rata portion of each
Security held by a Trust.
(iv) Gain or loss will be recognized to a Unitholder
(subject to various nonrecognition provisions under the code)
upon redemption or sale of his Units, except to the extent an
in kind distribution of stock is received by such Unitholder
from a Trust as discussed below. Such gain or loss is measured
by comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis
would normally be cost if the Unitholder had acquired his units
by purchase. Such basis will be reduced, but not below zero,
by the Unitholder's pro rata portion of dividends with respect
to each Equity Security which are not taxable as ordinary
income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder
(subject to various nonrecognition provisions under the Code)
and the amount thereof will be measured by comparing the
Unitholder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning
the tax basis for his Units (as of the date on which his Units
were acquired) among each of the Trust assets of such Trust (as
of the date on which his Units were acquired) ratably according
to their values as of the valuation date nearest the date on
which he purchased such Units. A Unitholder's basis in his
Units and of his fractional interest in each Trust asset must
be reduced, but not below zero, by the Unitholder's pro rata
portion of dividends with respect to each Security which are
not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in
kind distribution of Securities upon the redemption of Units or
upon the termination of the Trust. As previously discussed,
prior to the redemption of Units or the termination of a Trust,
a Unitholder is considered as owning a pro rata portion of each
of the particular Trust's assets. The receipt of an in kind
distribution will result in a United States Unitholder
receiving an undivided interest in whole shares of stock and
possibly cash. The potential federal income tax consequences
which may occur under an in kind distribution with respect to
each Security owned by the United States Trust will depend upon
whether or not a United States Uniholder receives cash in
addition to Securities. A "Security" for this purpose is a
particular class of stock issued by a particular corporation.
A Unitholder will not recognize gain or loss if a Unitholder
only receives Securities in exchange for his or her pro rata
portion in the Securities held by the Trust. However, if a
Unitholder also receives cash in exchange for a fractional
share of a Security held by the Trust, such Unitholder will
generally recognize gain or loss based upon the difference
between the amount of cash received by the Unitholder and his
tax basis in such fractional share of a Security held by the
Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of
the gain (or loss) recognized under the rules described above
by the redeeming Unitholder with respect to each Security owned
by a Trust.
Dividends received by a Trust which are attributable to a
corporation owning Units in a Trust and which are taxable as ordinary
income may be eligible for the 70% dividends received deduction pursuant
to Section 243(a) of the Code, subject to the limitations imposed by
Sections 246 and 246A of the Code. It should be noted that various
legislative proposals that would affect the dividend received deduction
have been introduced.
Section 67 of the Code provides that certain 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 such individual's adjusted gross income. Temporary
regulations have been issued which require Unitholders to treat certain
expenses of a Trust as miscellaneous itemized deductions subject to this
limitation.
A Unitholder will recognize taxable gain (or loss) when all or part
of the pro rata interest in a Security is either sold by the Trust or
redeemed or when a Unitholder disposes of his Units in a taxable
transaction, in each case for an amount greater (or less) than his tax
basis therefor, subject to various non-recognition provisions of the
Code.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including state or local taxes
or collateral tax consequences with respect to the purchase, ownership
and disposition of Units.
Very truly yours
Chapman and Cutler
MJK/cjw
Exhibit 3.3
Kroll & Tract
520 Madison Avenue
New York, New York 10022
July 25, 1996
Van Kampen American Capital Equity
Opportunity Trust, Series 37
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen American Capital
Equity Opportunity Trust, Series 34 (the "Fund") consisting of Wheat
First Strategic Opportunity Unit Trust, Series 1 (individually a "Trust")
for the purposes of determining the applicability of certain New York
taxes under the circumstances hereinafter described.
The Fund is created pursuant to a Trust Agreement (the
"Indenture"), dated as of today (the "Date of Deposit") among Van Kampen
American Capital Distributors, Inc. (the "Depositor"), American Portfolio
Evaluation Services, a division of a subsidiary of Depositor, as
Evaluator, Wheat First Butcher Singer, as Supervisory Servicer (the
"Supervisory Servicer"), and The Bank of New York as Trustee (the
"Trustee"). As described in the prospectus relating to the Fund dated
today to be filed as an amendment to a registration statement heretofore
filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Prospectus") (File Number 333-06143), the
objectives of the Fund are to provide the potential for capital
appreciation from a portfolio of equity securities involved in either the
enabling technology or commnications services areas of the Internet. It
is noted that no opinion is expressed herein with regard to the Federal
tax aspects of the securities, units of the Trust (the "Units"), or any
interest, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trust the securities and/or contracts and cash for
the purchase thereof together with an irrevocable letter of credit in the
amount required for the purchase price of the securities comprising the
corpus of the Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities
to be deposited in the Trust, and, upon the receipt thereof, will deliver
to the Depositor a registered certificate for the number of Units
representing the entire capital of the Trust as more fully set forth in
the Prospectus. The Units, which are represented by certificates
("Certificates"), will be offered to the public upon the effectiveness of
the Registration Statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash
dividends received by the Fund and with the proceeds from the disposition
of securities held in the Fund and the proceeds of the treasury
obligation on maturity and the distribution of such cash dividends and
proceeds to the Unitholders. The Trustee will also maintain records of
the registered holders of Certificates representing an interest in the
Fund and administer the redemption of Units by such Certificateholders
and may perform certain administrative functions with respect to an
automatic investment option.
Generally, equity securities held in the Trust may be removed
therefrom by the Trustee at the direction of the Depositor upon the
occurrence of certain specified events which adversely affect the sound
investment character of the Fund, such as default by the issuer in
payment of declared dividends or of interest or principal on one or more
of its debt obligations..
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(l)
defines the term "corporation" to include, among other things, "any
business conducted by a trustee or trustees wherein interest or ownership
is evidenced by certificate or other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in
which interest or ownership is evidenced by
certificate or other written instrument. includes,
but is not limited to, an association commonly
referred to as a "business trust" or "Massachusetts
trust". In determining whether a trustee or trustees
are conducting a business, the form of the agreement
is of significance but is not controlling. The
actual activities of the trustee or trustees, not
their purposes and powers, will be regarded as
decisive factors in determining whether a trust is
subject to tax under Article 9-A. The mere
investment of funds and the collection of income
therefrom, with incidental replacement of securities
and reinvestment of funds, does not constitute the
conduct of a business in the case of a business
conducted by the trustee or trustees. 20 NYCRR 1-
2.3(b)(2) (July 11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 1073, 85 N.Y.S.2d 705 (1949).
An opinion of the Attorney General of the State of New York, 47 N.Y.
Atty. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee
of an unincorporated investment trust was without authority to reinvest
amounts received upon the sales of securities and could dispose of
securities making up the trust only upon the happening of certain
specified events or the existence of certain specified conditions, the
trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to sell
obligations contained in the corpus of the Fund and reinvest the proceeds
therefrom. Further, the power to sell such obligations is limited to
circumstances in which the creditworthiness or soundness of the issuer of
such equity security is in question or in which cash is needed to pay
redeeming Unit holders or to pay expenses, or where the Fund is
liquidated pursuant to the termination of the Indenture. In substance,
the Trustee will merely collect and distribute income and will not
reinvest any income or proceeds, and the Trustee has no power to vary the
investment of any Unit holder in a Trust.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust
will be deemed to be the owner of the trust under certain circumstances,
and therefore taxable on his proportionate interest in the income
thereof. Where this Federal tax rule applies, the income attributed to
the grantor will also be income to him for New York income tax purposes.
See TSB-M-78(9)(c), New York Department of Taxation and Finance June 23,
1978.
By letter, dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be
considered as owning a share of each asset of a Trust in the proportion
that the number of Units held by such holder bears to the total number of
Units outstanding and the income of a Trust will be treated as the income
of each Unit holder in said proportion pursuant to Subpart E of Part 1,
subchapter J of Chapter 1 of the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings and court decisions interpreting the laws of the State and City
of New York.
1. Each Trust will not constitute an association taxable as a
corporation under New York law and, accordingly, will not be subject to
tax on its income under the New York State franchise tax or the New York
City general corporation tax.
2. The income of the Trust will be treated as the income of the
Unit holders under the income tax laws of the State and City of New York,
and
3. Unit holders who are not residents of the State of New York are
not subject to the income tax laws thereof with respect to any interest
or gain derived from the Fund or any gain from the sale or other
disposition of the Units, except to the extent that such interest or gain
is from property employed in a business trade profession or occupation
carried on in the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name
and the reference to our firm in the Registration Statement and in the
Prospectus.
Very truly yours,
Kroll & Tract
MNS:ac
Exhibit 4.1
Interactive Data
14 West Street
New York, NY 10005
July 24, 1996
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Wheat First Strategic Opportunity Unit Trust, Series 1
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-06143
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 evaluations 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 July 25, 1996 on the statement of
condition and related securities portfolios of Van Kampen American
Capital Equity Opportunity Trust, Series 37 as of July 25, 1996 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
July 25, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on July 25, 1996 it is
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