File No. 333-10295 CIK #897007
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 41
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on November 20, 1997 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 41
Global Energy Trust, Series 2
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.Please retain both parts of this Prospectus for future reference.
THE TRUST
Global Energy Trust, Series 2 (the "Trust" ) is a unit investment trust
in Van Kampen American Capital Equity Opportunity Trust, Series 41. The Trust
offers investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio of actively traded equity
securities primarily issued by companies diversified within the energy
industry, including common stocks of foreign issuers (all of which are in ADR
form). Unless terminated earlier, the Trust will terminate on September 10,
2001 ("Mandatory Termination Date" ) and any securities then held will,
within a reasonable time thereafter, be liquidated or distributed by the
Trustee. Any Securities liquidated at termination will be sold at the then
current market value for such Securities; therefore, the amount distributable
in cash to a Unitholder upon termination may be more or less than the amount
such Unitholder paid for his Units.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit is equal to the aggregate underlying value
of the Equity Securities plus or minus cash, if any, in the Capital and Income
Accounts, plus the applicable sales charge as described herein divided by the
number of Units outstanding. See "Summary of Essential Financial
Information" in this Part One.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Date of this Prospectus is November 21, 1997
Van Kampen American Capital
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 41
Global Energy Trust, Series 2
Summary of Essential Financial Information
As of August 29, 1997
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Van Kampen American Capital Investment Advisory Corp.
(An Affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Global
Energy
Trust
-------------------
<S> <C>
General Information
Number of Units........................................................... 2,892,628.485
Fractional Undivided Interest in Trust per Unit........................... 1/2,892,628.485
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>.......................... $36,866,023
Aggregate Value Securities per Unit (including accumulated dividends).... $12.79
Maximum Sales charge..................................................... $.60
Less Deferred Sales Charge............................................... $(.01)
Public Offering Price per Unit <F2><F3>.................................. $13.38
Redemption Price per Unit<F4>............................................. $12.77
Secondary Market Repurchase Price per Unit<F4>............................ $12.77
Excess of Public Offering Price per Unit over Redemption Price per Unit... $.61
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.0025 per Unit
Evaluator's Annual Fee................Maximum of $.0025 per Unit
Evaluation Time.......................Close of the New York Stock Exchange
Date of Deposit.......................September 11, 1996
Mandatory Termination Date............September 10, 2001
The Trust may be terminated if the net asset value of such Trust is less than $500,000
unless the net asset value of such Trust deposits has exceeded $15,000,000, then the Trust
Minimum Termination Value.............Agreement may be terminated if the net asset value of such Trust is less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Estimated Annual Dividends per Unit... $.28781
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee............................$.008 per Unit
Estimated Annual Organizational Expenses <F5>...$.00285 per Unit
Income Distribution Record Date.................TENTH day of March, June, September and December.
Income Distribution Date........................TWENTY-FIFTH day of March, June, September and December.
Capital Account Record Date.....................TENTH day of December.
Capital Account Distribution Date...............TWENTY-FIFTH day of December.
<FN>
<F1>Equity Securities listed on a national securities exchange are valued at the
closing sale price, or if no such price exists, or if the Equity Securities
are not listed, at the closing bid price thereof.
<F2>Anyone ordering Units will have added to the Public Offering Price a pro rata
share of any cash in the Income and Capital Accounts.
<F3>The Maximum Sales Charge consists of an initial 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 4.5% of the Public Offering
Price and the amount of the maximum deferred sales charge of $0.20 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 as
deferred sales charge of $0.0333 per Unit per month which will begin accruing
on a daily basis on March 11, 1997 and will continue to accrue through
September 11, 1997. The monthly deferred sales charge will be charged to the
Trust, in arrears, commencing April 11, 1997 and will be charged on the 5th
day of each month thereafter through September 11, 1997. Units purchased
subsequent to the initial deferred sales charge payment will be subject only
to the 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 4.5% of the Public Offering Price (4.712% of the
aggregate value of the Securities in the Trust less the deferred sales
charge). Commencing on September 11, 1997, the secondary market sales charge
will not include deferred payments but will instead include only a one-time
initial sales charge of 4.0% of the Public Offering Price and will be reduced
by .5 of 1% on each subsequent September 11, to a minimum sales charge of
3.0%."
<F4>The Redemption Price per Unit and the Secondary Market Repurchase Price per
Unit are reduced by the unpaid portion of the deferred sales charge.
<F5>The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration statement,
the trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states the initial audit of the 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 exchanges) as is common for mutual
funds. Total organizational expenses will be amortized over the life of the
Trust. See "Expenses of the Trust" in Part Two and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
</TABLE>
PORTFOLIO
The Global Energy Trust consists of 24 different issues of Equity Securities,
which are primarily actively traded equity securities of companies diversified
within the energy industry, including common stocks of foreign issuers (all of
which are in ADR form). All of the Equity Securities are listed on a national
securities exchange, or are traded in the over-the-counter market as of the
Initial Date of Deposit.
<TABLE>
<CAPTION>
1997<F1>
-------------
<S> <C>
Net asset value per Unit at beginning of period...................................................................... $ 9.77
=============
Net asset value per Unit at end of period............................................................................ $ 12.67
=============
Distributions to Unitholders of investment income including accrued dividends paid on Units redeemed (average Units
outstanding for entire period)....................................................................................... $ 0.37
=============
Distributions to Unitholders from Security sale proceeds (average Units outstanding for entire period)............... $ --
=============
Unrealized appreciation (depreciation) of Securities (per Unit outstanding at end of period)......................... $ 2.21
=============
Distributions of investment income by frequency of payment...........................................................
Quarterly........................................................................................................... $ 0.17
Units outstanding at end of period................................................................................... 2,985,960
</TABLE>
PER UNIT INFORMATION
- ----------
For the period from September 11, 1996 (date of deposit) through July 31, 1997.
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 41 (Global Energy Trust, Series 2):
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of Van Kampen American
Capital Equity Opportunity Trust, Series 41 (Global Energy Trust, Series 2) as
of July 31, 1997 and the related statements of operations and changes in net
assets for the period from September 11, 1996 (date of deposit) through July
31, 1997. These statements are the responsibility of the Trustee and the
Sponsor. Our responsibility is to express an opinion on such statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at July 31, 1997by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 41 (Global Energy Trust, Series 2) as of July
31, 1997, and the related statements of operations and changes in net assets
for the period from September 11, 1996 (date of deposit) through July 31,
1997, in conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
September 19, 1997
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST SERIES 41
Statements of Condition
July 31, 1997
<CAPTION>
Global
Energy
Trust
--------------
<S> <C>
Trust property
Cash.................................................................................... $ 782
Securities at market value, (cost $31,100,489) (note 1)................................. 37,712,972
Accumulated dividends................................................................... 55,877
Receivable for securities sold.......................................................... 196,269
Organizational costs.................................................................... 37,928
$ 38,003,828
==============
Liabilities and interest to Unitholders
Redemptions payable..................................................................... $ 170,828
Interest to Unitholders................................................................. 37,833,000
$ 38,003,828
==============
Analysis of Net Assets
Interest of Unitholders (2,985,960 Units of fractional undivided interest outstanding)
Cost to original investors of 15,000 Units (note 1)..................................... $ 35,319,936
Less initial underwriting commission (note 3)........................................... 1,602,204
--------------
33,717,732
Less redemption of 230,919 Units........................................................ 2,687,221
--------------
31,030,511
Undistributed net investment income
Net investment income................................................................... 577,520
Less distributions to Unitholders....................................................... 938,984
--------------
(361,464)
Realized gain (loss) on Security sale................................................... 551,470
Unrealized appreciation (depreciation) of Securities (note 2)........................... 6,612,483
Distributions to Unitholders of Security sale proceeds.................................. --
Net asset value to Unitholders.......................................................... $ 37,833,000
==============
Net asset value per Unit (2,985,960 Units outstanding)................................... $ 12.67
==============
</TABLE>
The accompanying notes are an integral part of this statement.
<TABLE>
GLOBAL ENERGY TRUST, SERIES 2
Statements of Operations
Period from September 11, 1996 (date of deposit) through July 31, 1997
<CAPTION>
1997
-------------
<S> <C>
Investment income
Dividend income..................................................... $ 616,476
Expenses
Trustee fees and expenses........................................... 20,649
Evaluator fees...................................................... 5,032
Supervisory fees.................................................... 4,761
Organizational fees................................................. 8,514
-------------
Total expenses...................................................... 38,956
-------------
Net investment income............................................... 577,520
Realized gain (loss) from Securities sale or redemption
Proceeds............................................................ 3,168,713
Cost................................................................ 2,617,243
-------------
Realized gain (loss)................................................ 551,470
Net change in unrealized appreciation (depreciation) of Securities... 6,612,483
-------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......$ 7,741,473
=============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Period from September 11, 1996 (date of deposit) through July 31, 1997
<CAPTION>
1997
---------------
<S> <C>
Increase (decrease) in net assets
Operations:
Net investment income........................................................ $ 577,520
Realized gain (loss) on Securities sale or redemption........................ 551,470
Net change in unrealized appreciation (depreciation) of Securities........... 6,612,483
---------------
Net increase (decrease) in net assets resulting from operations.............. 7,741,473
Distributions to Unitholders from:
Net investment income........................................................ (938,984)
Securities sale or redemption proceeds....................................... --
Redemption of Units (2,687,221)
---------------
Total increase (decrease).................................................... 4,115,268
Net asset value to Unitholders
Beginning of period.......................................................... 146,483
Additional Securities purchased from proceeds of Unit Sales.................. 33,571,249
---------------
End of period (including undistributed net investment income of $(361,464)... $ 37,833,000
===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
GLOBAL ENERGY TRUST, SERIES 2
PORTFOLIO as of July 31, 1997
<CAPTION>
Valuation of Securities
at
Number July 31,
of Market Value 1997
Shares Name of Issuer Per Share (Note 1)
- ---------- ----------------------------------------- ----------------- ----------------------------
<S> <C> <C> <C>
26,873 Amerada Hess Corporation $ 58.8125 $ 1,580,468
- ---------------------------------------------------------------------------------------------------
20,274 Amoco Corporation 94.0000 1,905,756
- ---------------------------------------------------------------------------------------------------
23,228 Atlantic Richfield Company 74.8125 1,737,745
- ---------------------------------------------------------------------------------------------------
23,584 British Petroleum Company Plc. 82.4375 1,944,206
- ---------------------------------------------------------------------------------------------------
32,286 Burlington Resources, Incorporated 47.2500 1,525,513
- ---------------------------------------------------------------------------------------------------
23,397 Chevron Corporation 79.1250 1,851,288
- ---------------------------------------------------------------------------------------------------
34,587 Coflexip SA 34.0000 1,175,958
- ---------------------------------------------------------------------------------------------------
34,052 Exxon Corporation 64.2500 2,187,841
- ---------------------------------------------------------------------------------------------------
12,563 Louisiana Land and Exploration Company 70.6250 887,262
- ---------------------------------------------------------------------------------------------------
18,566 Lukoil Holding 90.6000 1,682,080
- ---------------------------------------------------------------------------------------------------
23,941 Mobil Corporation 76.5000 1,831,486
- ---------------------------------------------------------------------------------------------------
17,623 Noble Affiliates, Incorporated 41.5000 731,354
- ---------------------------------------------------------------------------------------------------
30,525 Occidental Petroleum Corporation 25.0625 765,033
- ---------------------------------------------------------------------------------------------------
34,760 Phillips Petroleum Company 46.0625 1,601,132
- ---------------------------------------------------------------------------------------------------
20,513 Pogo Producing Company 40.8750 838,469
- ---------------------------------------------------------------------------------------------------
43,652 Repsol SA 40.2500 1,756,993
- ---------------------------------------------------------------------------------------------------
37,046 Royal Dutch Petroleum Company 55.9375 2,072,261
- ---------------------------------------------------------------------------------------------------
32,891 Schlumberger, Ltd. 76.3750 2,512,050
- ---------------------------------------------------------------------------------------------------
15,272 Texaco, Incorporated 116.0625 1,772,506
- ---------------------------------------------------------------------------------------------------
42,943 Tosco Corporation 31.3125 1,344,653
- ---------------------------------------------------------------------------------------------------
129,805 Total Petroleum, Ltd. 10.5000 1,362,953
- ---------------------------------------------------------------------------------------------------
39,057 Unocal Corporation 40.0000 1,562,280
- ---------------------------------------------------------------------------------------------------
32,643 USX-Marathon Group 32.1875 1,050,697
- ---------------------------------------------------------------------------------------------------
62,795 YPF Sociedad Anonima 32.3750 2,032,988
- ---------- ----------------------------
812,876 $ 37,712,972
========== ===========================
</TABLE>
The accompanying notes are an integral part of this statement.
Van Kampen American Capital Equity Opportunity Trust Series 41
Notes to Financial Statements
July 31, 1997
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the closing sales price or, if no such price exists, or if the
Equity Securities are not listed at the bid price thereof.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange or the relevant stock
exchanges on the closing sale prices on the exchange or, if not so listed on
the asked price thereof. The cost was determined on the day of the various
Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income Taxes.
Organizational Costs - The Trust will bear all or a portion of its
organizational costs, which will be deferred and amortized over the life of
the Trust.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at July 31, 1997 is as follows:
<TABLE>
<CAPTION>
Global
Energy
Trust
----------------
<S> <C>
Unrealized Appreciation $ 6,764,647
Unrealized Depreciation (152,164)
----------------
$ 6,612,483
================
</TABLE>
NOTE 3 - OTHER
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus a sales charge of 4.5% of the Public Offering Price which is
equivalent to 4.712% of the aggregate offering price of the Securities. The
secondary market cost to investors is based on the determination of the
underlying value of the Securities per Unit on the date of an investor's
purchase plus a sales charge equal to the difference between the maximum total
sales charge of 4.5% of the Public Offering Price and the maximum deferred
sales charge for the Trust ($0.20 per Unit) and will be assessed a deferred
sales charge of $0.0333 per Unit on each of the remaining deferred sales
charge payment dates. Commencing on September 11, 1997, the secondary sales
charge will instead include only a one-time initial sales charge of 4.0% of
the Public Offering Price and will be reduced by .5 of 1% on each subsequent
September 11, to a minimum sales charge of 3.0%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not
to exceed the aggregate cost of the Supervisor for providing such services to
all applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period ended July 31, 1997, 230,919 Units, were presented for
redemption.
VAN KAMPEN AMERICAN CAPITAL
GLOBAL ENERGY TRUST
PROSPECTUS PART TWO
The Fund. Van Kampen Merritt Equity Opportunity Trust or Van Kampen American
Capital Equity Opportunity Trust (the "Fund" ) is comprised of separate
and distinct unit investment trusts including series of the Global Energy
Trust (the "Trust" or the "Global Energy Trust" ). The Global
Energy Trust offers investors the opportunity to purchase Units representing
proportionate interests in a fixed, diversified portfolio of equity securities
issued by companies diversified within the energy industry including common
stocks of foreign issuers, all of which are in American Depositary Receipt
form ("ADRs" ) ("Equity Securities" ). See "Portfolio"
in Part One of this Prospectus. Unless terminated earlier, the Trust will
terminate on the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus and any
securities then held will, within a reasonable time thereafter, be liquidated
or distributed by the Trustee. Any Securities liquidated at termination will
be sold at the then current market value for such Securities; therefore, the
amount distributable in cash to a Unitholder upon termination may be more or
less than the amount such Unitholder paid for his Units.
Objective of the Trust. The objective of the Global Energy Trust is to provide
the potential for capital appreciation and income, consistent with the
preservation of capital, by investing in a portfolio of equity securities
diversified within the energy industry. There is, of course, no guarantee that
the objective of the Trust will be achieved.
Public Offering Price. The secondary market Public Offering Price of the Trust
will include the aggregate underlying value of the Securities in the Trust,
the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The minimum purchase
is 500 Units (100 Units for a tax sheltered retirement plan) for Series 1 and
100 Units for Series 2 and subsequent Series. See "Public Offering" .
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of a Trust, with changes
in dividends received and with the sale or liquidation of Securities;
therefore, there is no assurance that the annual dividend distribution will be
realized in the future.
Distributions. Distributions of dividends received and capital, if any,
received by the Trust will be paid in cash on the applicable Distribution Date
to Unitholders of record on the record date as set forth in the "Summary
of Essential Financial Information" in Part One of this Prospectus. For
Series 1, any distribution of income and/or capital will be net of the
expenses of the Trust. For all other Series, gross dividends received by a
Trust will be distributed to Unitholders. Expenses of such a Trust will be
paid with proceeds from the sale of Securities. See "Federal Taxation."
Additionally, upon termination of the Trust, the Trustee will distribute,
upon surrender of Units for redemption, to each Unitholder his pro rata share
of the Trust asset, less expenses, in the manner set forth under "Rights
of UnitholdersDistributions of Income and Capital" .
Termination. Commencing on the Mandatory Termination Date as specified in Part
One for the Trust, Equity Securities will begin to be sold in connection with
the termination of the Trust. The Sponsor will determine the manner, timing
and execution of the sale of the Equity Securities. Written notice of any
termination of the Trust specifying the time or times at which Unitholders may
surrender their certificates for cancellation shall be given by the Trustee to
each Unitholder at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date for the Trust the Trustee will provide written notice thereof
to all Unitholders and will include with such notice a form to enable
Unitholders to elect a distribution of shares of Equity Securities if such
Unitholder owns at least 1,000 Units of the Trust, rather than to receive
payment in cash for such Unitholder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. All Unitholders will
receive cash in lieu of any fractional shares. To be effective, the election
form, together with surrendered certificates if issued, and other
documentation required by the Trustee, much be returned to the Trustee at
least five business days prior to the Mandatory Termination Date. Unitholders
not electing a distribution of shares of Equity Securities will receive a cash
distribution from the sale of the remaining Securities within a reasonable
time after the Trust is terminated. See "Trust Administration--Amendment
or Termination" .
Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases). Unitholders have the opportunity to have their
distributions reinvested into an open-end, management investment company as
described herein. Unitholders also have the option of having distributions
reinvested into additional Units of the Trust if Units are available at the
time of reinvestment as described herein. See "Rights of
UnitholdersReinvestment Option."
Units of a Trust are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by, any depository institution or any government
agency and are subject to investment risk, including possible loss of the
principal amount invested.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part I accompanying
this Prospectus Part II.
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.
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 or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. See "Risk Factors" .
THE TRUST
Van Kampen Merritt Equity Opportunity Trust and Van Kampen American Capital
Equity Opportunity Trust (the "Fund" ) is comprised of separate and
distinct unit investment trusts including series of the Global Energy Trust.
The Fund was created under the laws of the State of New York pursuant to a
Trust Indenture and Agreement (the "Trust Agreement" ), among Van
Kampen American Capital Distributors, Inc., as Sponsor, American Portfolio
Evaluation Services, a division of Van Kampen American Capital Investment
Advisory Corp., as Evaluator, Van Kampen American Capital Investment Advisory
Corp., as Supervisor, and The Bank of New York, as Trustee.
The Trust may be an appropriate medium for investors who desire to participate
in a portfolio of equity securities with greater diversification than they
might be able to acquire individually. Diversification of assets in the Trust
will not eliminate the risk of loss always inherent in the ownership of
securities. For a breakdown of the portfolio see "Portfolio" in Part
One of this Prospectus.
Each Unit represents a fractional undivided interest in the Trust. To the
extent that any Units are redeemed by the Trustee, the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Trust is to provide investors with the potential for
capital appreciation and income. The portfolio of the Trust is described under
"Trust Portfolio" herein and under "Portfolio" in Part One of
this Prospectus. An investor will be subjected to taxation on the dividend
income received from the Fund and on gains from the sale or liquidation of
Securities (see "Federal Taxation" ). Investors should be aware that
there is not any guarantee that the objective of the Trust will be achieved
because it is subject to the continuing ability of the respective Security
issuers to continue to declare and pay dividends and because the market value
of the Securities can be affected by a variety of factors. Common stocks may
be especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Equity Securities will pay dividends on outstanding common shares. Any
distributions of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions.
In selecting Securities for the Trust, the following factors, among others,
were considered: (a) the issuer's position within the industry, (b) breadth
and stability of the issuer's business base and (c) growth potential.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust as of the date the Trust was created.
Subsequent thereto, the Equity Securities may no longer meet such criteria.
Should an Equity Security no longer meet such criteria, such Equity Security
will not as a result thereof be removed from the portfolio of the Trust.
Investors should be aware that the Fund 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 AdministrationPortfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Investors should
note in particular that the securities were selected by the Sponsor as of the
date the Securities were purchased by the Trust. The Trust may continue to
purchase or hold Securities originally selected through this process even
though the evaluation of the attractiveness of the Securities may have changed
and, if the evaluation were performed again at that time, the Securities would
not be selected for such Trust.
TRUST PORTFOLIO
The Global Energy Trust initially consisted of several different issues of
Equity Securities, all of which are issued by companies diversified within the
energy industry including common stocks of foreign issuers, all of which are
ADRs. The Equity Securities in the portfolio are listed on a national
securities exchange, the NASDAQ National Market System or are traded in the
over-the-counter market.
The Trust consists of such of the Securities listed under "Portfolio"
in Part One of this Prospectus as may continue to be held from time to time in
the Trust together with cash held in the Income and Capital Accounts. Neither
the Sponsor nor the Trustee shall be liable in any way for any failure in any
of the Securities.
Because certain of the 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 Securities under certain limited circumstances.
Securities, however, will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation or depreciation.
RISK FACTORS
Equity Securities. 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 Fund have a right to
receive dividends only when and if, and in the amounts declared by the
issuer's board of directors and have a right to participate in amounts
available for distribution by the issuer only after all other claims on the
issuer have been paid or provided for. Common stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income
or provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will create prior
claims for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends
on its common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities may be
expected to fluctuate over the life of the Fund to values higher or lower than
those prevailing on the date of purchase by a Unitholder.
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.
Energy Industry. The Global Energy Trust may include securities which are
issued by companies engaged in refining and marketing oil and related
products. According to the U.S. Department of Commerce, the factors which will
most likely shape the industry in the future include the price and
availability of oil from the Middle East, changes in United States
environmental policies and the continued decline in U.S. production of crude
oil. Possible effects of these factors may be increased U.S. and world
dependence on oil from the Organization of Petroleum Exporting Countries ("
OPEC" ) and highly uncertain and potentially more volatile oil prices.
Factors which the Sponsor believes may increase the profitability of oil and
petroleum operations include increasing demand for oil and petroleum products
as a result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the
two principal requirements for stable crude oil markets. Without excess
capacity, supply disruptions in some countries cannot be compensated for by
others. Surplus capacity in Saudi Arabia and a few other countries and the
utilization of that capacity prevented during the Persian Gulf crisis, and
continue to prevent, severe market disruption. Although unused capacity
contributed to market stability in 1990 and 1991, it ordinarily creates
pressure to overproduce and contributes to market uncertainty. The likely
restoration of a large portion of Kuwait's and Iraq's production and export
capacity could lead to such a development in the absence of substantial growth
in world oil demand. Formerly, OPEC members attempted to exercise control over
production levels in each country through a system of mandatory production
quotas. Because of the crisis in the Middle East, the mandatory system has
since been replaced with a voluntary system. Production under the new system
has had to be curtailed on at least one occasion as a result of weak prices,
even in the absence of supplies from Kuwait and Iraq. The pressure to deviate
from mandatory quotas, if they are reimposed, is likely to be substantial and
could lead to a weakening of prices. In the longer term, additional capacity
and production will be required to accommodate the expected large increases in
world oil demand and to compensate for expected sharp drops in U.S. crude oil
production and exports from the former Soviet Union. Only a few OPEC
countries, particularly Saudi Arabia, have the petroleum reserves that will
allow the required increase in production capacity to be attained. Given the
large-scale financing that is required, the prospect that such expansion will
occur soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased dependence
on OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments in order to comply with increasingly stringent environmental
legislation, such as the 1990 amendments to the Clean Air Act. If the cost of
these changes is substantial enough to cut deeply into profits, smaller
refiners may be forced out of the industry entirely. Moreover, lower consumer
demand due to increases in energy efficiency and conservation, due to gasoline
reformulations that call for less crude oil, due to warmer winters or due to a
general slowdown in economic growth in this country and abroad, could
negatively affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will increase or
that any increases will not be marked by great volatility. Some oil companies
may incur large cleanup and litigation costs relating to oil spills and other
environmental damage. Oil production and refining operations are subject to
extensive federal, state and local environmental laws and regulations
governing air emissions and the disposal of hazardous materials. Increasingly
stringent environmental laws and regulations are expected to require companies
with oil production and refining operations to devote significant financial
and managerial resources to pollution control. General problems of the oil and
petroleum products industry include the ability of a few influential producers
significantly to affect production, the concomitant volatility of crude oil
prices and increasing public and governmental concern over air emissions,
waste product disposal, fuel quality and the environmental effects of
fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of energy
and fuels or legislative changes relating to the energy industry or the
environment could have a negative impact on the petroleum products industry.
While legislation has been enacted to deregulate certain aspects of the oil
industry, no assurances can be given that new or additional regulations will
not be adopted. Each of the problems referred to could adversely affect the
financial stability of the issuers of any petroleum industry stocks in the
Global Energy Trust. The Global Energy Trust may also include securities which
are issued by companies engaged in the exploration for and mining of various
minerals, including coal, and/or the manufacture, transportation, or marketing
of chemical products and plastics. The problems faced by such companies are
similar to those discussed with regard to petroleum companies.
The Global Energy Trust may include securities which are issued by companies
that own or operate nuclear generating facilities. Governmental authorities
may from time to time review existing, and impose additional, requirements
governing the licensing, construction and operation of nuclear power plants.
Nuclear generating projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing difficulties.
These have been caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic conditions.
This experience indicates that the risk of significant cost increases, delays
and licensing difficulties remains present through the completion and
achievement of commercial operation of any nuclear project. Also, nuclear
generating units in service have experienced unplanned outages or extensions
of scheduled outages due to equipment problems or new regulatory requirements
sometimes followed by a significant delay in obtaining regulatory approval to
return to service. A major accident at a nuclear plant anywhere, such as the
accident at the plant in Chernobyl, could cause the imposition of limits or
prohibitions on the operation, construction or licensing of nuclear units in
the United Sates.
In view of the uncertainties discussed above, there can be no assurance that
any company's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a company
could earn an adequate return on its investment in such Units. The likelihood
of a significantly adverse event occurring in any of the areas of concern
described above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse events
could occur and individually or collectively could have a material adverse
impact on the financial condition or the results of operations of a company.
The Global Energy Trust may include securities which are issued by companies
whose revenues are primarily derived from the sale of electric energy. The
problems faced by such issuers include the difficulty in obtaining approval
for timely and adequate rate increases from the applicable public utility
commissions, the difficulty of financing large construction programs,
increased competition, reductions in estimates of future demand for
electricity in certain areas of the country, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
difficulty of the capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy conservation. All
of such issuers have been experiencing certain of these problems in varying
degrees. In addition, federal, state and municipal governmental authorities
may from time to time review existing, and impose additional, regulations
governing the licensing, construction and operation of nuclear power plants,
which may adversely affect the financial condition or the results of
operations of such issuers.
The Global Energy Trust may include securities which are issued by companies
engaged in the exploration, drilling, production, refining, transmission,
marketing or distribution of natural gas. The problems faced by such issuers
include many of those faced by electric utilities discussed above, and, in
addition, rising costs of rail transportation to transport fossil fuels,
availability and costs of natural gas for resale and difficulties of gas
pipeline and distribution companies in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers and suppliers. All of such issuers
have been experiencing certain of these problems in varying degrees.
Foreign Issuers. Since certain of the Equity Securities in certain of the
Trusts are securities of foreign issuers, an investment in these Trusts
involves some investment risks that are different in some respects from an
investment in a trust that invests entirely in securities of domestic issuers.
Those investment risks include future political and governmental restrictions
which might adversely affect the payment or receipt of dividends on the
relevant Equity Securities. In addition, for the foreign issuers that are not
subject to the reporting requirements of the Securities Exchange Act of 1934,
there may be less publicly available information than is available from a
domestic issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. However, due
to the nature of the issuers of Equity Securities included in the Trusts, the
Sponsor believes that adequate information will be available to allow the
Supervisor to provide portfolio surveillance.
The securities of the foreign issuers in the Trusts are in ADR form. ADRs
evidence American Depository Receipts which represent common stock deposited
with a custodian in a depositary. American Depositary Shares, and receipts
therefore (ADRs), are issued by an American bank or trust company to evidence
ownership of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares. ADRs may
be sponsored or unsponsored. In an unsponsored facility, the depositary
initiates and arranges the facility at the request of market makers and acts
as agent for the ADR holder, while the company itself is not involved in the
transaction. In a sponsored facility, the issuing company initiates the
facility and agrees to pay certain administrative and shareholder-related
expenses. Sponsored facilities use a single depositary and entail a
contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In
addition, the depositary bank incurs expenses in connection with the
conversion of dividends or other cash distributions paid in local currency
into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices
in the ADR market may also exist with respect to certain ADRs. In varying
degrees, any or all of these factors may affect the value of the ADR compared
with the value of the underlying shares in the local market. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that for
the underlying shares. ADRs are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements of the
Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs
and consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including supply and
demand of the respective currency, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries. Therefore, for any securities of issuers (whether
or not they are in ADR form) whose earnings are stated in foreign currencies,
or which pay dividends in foreign currencies or which are traded in foreign
currencies, there is a risk that their United States dollar value will vary
with fluctuations in the United States dollar foreign exchange rates for the
relevant currencies.
On the basis of the best information available to the Sponsor at the Initial
Date of Deposit, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trusts of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trusts. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trusts and on the ability of
the Trusts to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
General. The Trust consists of such of the Securities listed under "
Portfolio" as may continue to be held from time to time in such Trust in
Part One of this Prospectus together with cash held in the Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for
any failure in any of the Securities.
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 a Trust will retain for any length of time its
present size and composition. Although the portfolios are not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain
limited circumstances. See "Trust Administration." Equity Securities,
however, will not be sold by a Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
Unitholders will be unable to dispose of any of the Equity Securities as such,
and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in a Trust and will vote such stocks in accordance with the
instructions of the Sponsor.
FEDERAL TAXATION
Global Energy Trust, Series 1. The Trust has elected and intends to qualify on
a continuing basis for special federal income tax treatment as a "
regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code" ). If the Trust so qualifies and timely distributes
to Unitholders 90% or more of its taxable income (without regard to its net
capital gain, i.e., the excess of its net long-term capital gain over its net
short-term capital loss), it will not be subject to federal income tax on the
portion of its taxable income (including any net capital gain) that it
distributes to Unitholders. In addition, to the extent the Trust timely
distributes to Unitholders at least 98% of its taxable income (including any
net capital gain), it will not be subject to the 4% excise tax on certain
undistributed income of "regulated investment companies." Because the
Trust intends to timely distribute its taxable income (including any net
capital gain), it is anticipated that the Trust will not be subject to federal
income tax or the excise tax. Although all or a portion of the Trust's taxable
income (including any net capital gain) for the taxable year may be
distributed to Unitholders shortly after the end of the calendar year, such a
distribution will be treated for federal income tax purposes as having been
received by Unitholders during the calendar year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the extent
that distributions to a Unitholder in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of capital
and will reduce the Unitholder's basis in his Units and, to the extent that
they exceed his basis, will be treated as a gain from the sale of his Units as
discussed below.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will generally be a
capital gain or loss, except in the case of a dealer or a financial
institution. For taxpayers other than corporations, net capital gains are
presently subject to a maximum stated marginal tax rate of 28%. However, it
should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed. A capital loss is long-term if the asset
is held for more than one year and short-term if held for one year or less. If
a Unitholder holds Units for six months or less and subsequently sells such
Units at a loss, the loss will be treated as a long-term capital loss to the
extent that any long- term capital gain distribution is made with respect to
such Units during the six-month period or less that the Unitholder owns the
Units.
The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable
to dividends received by the Trust from United States corporations (other than
Real Estate Investment Trusts) and is designated by the Trust as being
eligible for such deduction. To the extent dividends received by the Trust are
attributable to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to its pro rata
portion of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations. The
Trust will provide each Unitholder with information annually concerning what
part of the Trust distributions are eligible for the dividends received
deduction.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a
pro rata portion of the ADRs held by the Trust, must include in their gross
income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust
deems to be the Unitholders' portion of foreign income taxes paid with respect
to, or withheld from, dividends, interest or other income of the Trust from
its foreign investments. Unitholders may then subtract from their federal
income tax the amount of such taxes withheld, or else treat such foreign taxes
as deductions from gross income; however, as in the case of investors
receiving income directly from foreign sources, the above described tax credit
or deduction is subject to certain limitations. Unitholders should consult
their tax advisers regarding this election and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions received from
the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an In Kind
Distribution upon the redemption of Units or the termination of the Trust. See
"Rights of Unitholders--Redemption of Units." Unitholders electing an
In Kind Distribution of shares of Equity Securities should be aware that the
exchange is subject to taxation and Unitholders will recognize gain or loss
based on the value of the Equity Securities received.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trust and to the tax
treatment of distributions by the Trust to United States Unitholders.
Distributions by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons. Such
persons should consult their tax advisers. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e. an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gains
dividends) will be subject to United States income taxes, including
withholding taxes. However, distributions received by a foreign investor from
the Trust that are designated by the Trust as capital gain dividends should
not be subject to United States income taxes, including withholding taxes, if
all of the following conditions are met: (i) the capital gain dividend is not
effectively connected with the conduct by the foreign investor of a trade or
business within the United States, (ii) the foreign investor (if an
individual) is not present in the United States for 183 days or more during
his or her taxable year, and (iii) the foreign investor provides all
certification which may be required of his or her status. Foreign investors
should consult their tax advisers with respect to United States tax
consequences of ownership of Units.
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.
Global Energy Trust, Series 2. The following is a general discussion of
certain of the federal income tax consequences of the purchase, ownership and
disposition of the Units. The summary limited to investors who hold the Units
as "capital assets" (generally, property held for investment) within
the meaning of Section 1221 of the Internal Revenue Code of 1986 ("the
Code" ). Unitholders should consult their tax advisers in determining the
federal, state, local and any other tax consequences of the purchase,
ownership and disposition of Units in the Trust. For purposes of the following
discussion and opinion, it is assumed that each Equity Security is equity for
federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is available and received by
such Unitholder from the Trust, as described below). The price a Unitholder
pays for his Units, generally including sales charges, is allocated among his
pro rata portion of each Equity Security held by the Trust (in proportion to
the fair market values thereof on the valuation date closest to the date the
Unitholder purchase his Units) in order to determine his initial tax basis for
his pro rata portion of each Equity Security held by the trust. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Equity Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis.
A Unitholder will be considered to have received all of the dividends paid on
his pro rata portion of each Equity Security when such dividends are received
by the Trust. Unitholders will be taxed in this manner regardless of whether
distributions from the Trust are actually received by the Unitholder or are
automatically reinvested. For federal income tax purposes, a Unitholder's pro
rata portion of dividends as defined by Section 316 of the Code paid with
respect to an Equity Security held by the trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits" . A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the trust will generally
be considered a capital gain (except in the case of a dealer or a financial
institution) and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution) and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the trust (to the
extent such dividends are taxable as ordinary income, as discussed above and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. The limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that own Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as through the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extend they exceed 2% of such individual's
adjusted gross income. Unitholders may be required to treat some or all of the
expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) are subject to a
maximum marginal stated tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that could affect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the trust involved including his
pro rata portion of all the Equity Securities represented by the Unit.
Legislative proposals have been made that would treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain as
constructive sales for purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sale rules.
Special Tax Consequences of In Kind Distributions Upon Redemption or
Termination of the Trust. Under certain circumstances a Unitholder tendering
Units for redemption may be able to request an In Kind Distribution. A
Unitholder may also under certain circumstances be able to request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will not
recognize gain or loss if a Unitholder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held by the
trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount
of cash received by the Unitholder and his tax basis in such fractional share
of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request
and In Kind Distribution are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. the cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date closest to the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number nd
appropriate certification are not provided when requested, distributions by
the trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States person. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of such Trust a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
trust will be treated as the income of the Unitholders under the existing come
tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit in the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee, payable as described under
"General" , which is not to exceed the amount set forth under "
Summary of Essential Financial Information" in Part One of this
Prospectus, 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) may exceed the actual costs of providing such supervisory services for
this Fund, but at no time will the total amount received for portfolio
supervisory services rendered to Series 1 and subsequent series of the Fund in
any calendar year exceed the aggregate cost to the Supervisor of supplying
such services in such year. In addition, the Evaluator, which is a division of
Van Kampen American Capital Distributors Inc., shall receive as an annual per
Unit evaluation fee, payable as described under "General" , for
regularly evaluating each Trust's portfolio that amount set forth under "
Summary of Essential Financial Information" in Part One of this Prospectus
(which is based on the outstanding number of Units on January 1 of each year).
Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor and dealers will
receive sales commissions and may realize other profits (or losses) in
connection with the sale of Units as described under "Public
OfferingSponsor and Dealer Compensation" .
Trustee's Fee. For its services the Trustee will receive as an annual per
Unit fee from the Trust that amount set forth under "Summary of Essential
Information" in Part One of this Prospectus (which is based on the
outstanding number of units on January 1 of each year). The Trustee's fees
are payable as described under "General" . 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 UnitholdersReports Provided"
and "Trust Administration" .
Miscellaneous Expenses. Expenses incurred in establishing Series 2 and
subsequent Series, including the cost of the initial preparation of documents
relating to the Trust (including the Prospectus, Trust Agreement and
certificates), federal and state registration fees, the initial fees and
expenses of the Trustee, legal and accounting expenses, payment of closing
fees and any other out-of-pocket expenses, will be paid by the respective
Trust and amortized over the life of such 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 a 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 a Trust without
negligence, bad faith or wilful misconduct on its part and (g) expenditures
incurred in contacting Unitholders upon termination of the Trust.
General. All of the fees and expenses of each Trust will accrue on a daily
basis and will be charged to such Trust, in arrears, on a monthly basis on or
before the tenth day of each month. The fees and expenses of Series 1 are
payable out of the Income Account or, if insufficient, out of the Capital
Account of such Trust. The fees and expenses of Series 2 and subsequent Series
are payable out of the Capital Account of such Trust. When such fees and
expenses are paid by or owning to the Trustee, they are secured by a lien on
the portfolio of the Trust. Since the Securities are all common stocks, and
the income stream produced by dividend payments is unpredictable, the Sponsor
cannot provide any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. If the balances in the Income and Capital Accounts
are insufficient to provide for amounts payable by the Trust, the Trustee has
the power to sell Securities to pay such amounts. These sales may result in
capital gains or losses to Unitholders. See "Federal Taxation" .
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge (which will be reduced
annually by .5 of 1% to a minimum sales charge of 1.5% (3.0% for Series 2 and
subsequent Series)), and cash, if any, in the Income and Capital Accounts held
or owned by the Trust.
Employees of Van Kampen American Capital Distributors, Inc. and its affiliates
may purchase Units of each Trust at the current Public Offering Price less the
dealer's concession described below. Registered representatives of selling
underwriters, brokers, dealers, or agents may purchase Units of the Fund at
the current Public Offering Price less the dealer's concession described
below.
Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Trust Administration--General--Unit
Distribution" ) by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management services, or provide such
services in connection with the establishment of an investment account for
which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their immediate family members (as described above) and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One of this Prospectus in accordance with fluctuations in the prices of
the underlying Securities in the Trust.
The price of the Units as of the opening of business on the date stated in the
"Summary of Essential Financial Information" in Part One of this
Prospectus was established by adding to the determination of the aggregate
underlying value of the Securities that amount specified under "Summary of
Essential Financial Information" in Part One and dividing the sum so
obtained by the number of Units outstanding. The Public Offering Price shall
include the proportionate share of any cash held in the Capital Account. This
computation produced a gross sales commission initially equal to that amount
specified under "Summary of Essential Financial Information" in Part
One. The Evaluator will appraise or cause to be appraised daily the value of
the underlying Securities as of the close of trading on the New York Stock
Exchange (which is presently 4:00 P.M. New York time) on days the New York
Stock Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day. Orders received by the Trustee, Sponsor or
any dealer for purchases, sales or redemptions after that time, or on a day
when the New York Stock Exchange is closed, will be held until the next
determination of price. Such sales charge will be reduced annually, as set
forth in "Summary of Essential Financial Information" in Part One of
this Prospectus, by .5 of 1% to a minimum sales charge of 1.5% (3.0% for
Series 2 and subsequent Series).
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made
for Securities listed on a national stock exchange or, if no such price
exists, at the bid prices on the day the valuation is made.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. 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.
Broker-dealers or others will be allowed a concession or agency commission of
70% of the sale charge in connection with the distribution of Units.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting 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 500 Units and 100 Units for a
tax-sheltered retirement plan. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public OfferingGeneral"
above. Cash, if any, made available to the Sponsor prior to the date of
settlement for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the limitations
of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to, and
certain dealers may, maintain a secondary market for Units of each Trust. In
so maintaining a market, the Sponsor and any such dealers 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. In
addition, the Sponsor and any such dealers 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 they are not obligated to do so, the Sponsor intends
to maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trust. The Sponsor
does not intend to maintain a market for Units of Series 2 after March 20,
2001. If the supply of Units exceeds demand or if some other business reason
warrants it, the Sponsor may either discontinue all purchases of Units or
discontinue purchases of Units at such prices. In the event that a market is
not maintained for the Units and the Unitholder cannot find another purchaser,
a Unitholder desiring to dispose of his Units may be able to dispose of such
Units only by tendering them to the Trustee for redemption at the Redemption
Price. See "Rights of UnitholdersRedemption of Units" . A Unitholder
who wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is 100 Units of the Trust.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust is evidenced by separate registered
certificates executed by the Trustee and the Sponsor. Certificates are
transferable by presentation and surrender to the Trustee properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unitholder
must sign exactly as his name appears on the face of the certificate with the
signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP" ) or such other signature guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by the
Trustee. In certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of corporate
authority. Certificates will be issued in denominations of one Unit or any
multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, return of principal, etc.) are credited to the Capital Account.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information" in Part One of the Prospectus.
Proceeds received on the sale of any Securities in the Trust, to the extent
not used to meet redemptions of Units or pay expenses, will be distributed
annually on the Capital Account Distribution Date to Unitholders of record on
the preceding Capital Account Record Date. Proceeds received from the
disposition of any of the Securities after a record date and prior to the
following distribution date will be held in the Capital Account and not
distributed until the next distribution date applicable to such Capital
Account. The Trustee is not required to pay interest on funds held in the
Capital or Income Accounts (but may itself earn interest thereon and therefore
benefits from the use of such funds).
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share
of the cash in the Income Account after deducting estimated expenses, if
applicable. 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. A person will become the owner of Units, and thereby a Unitholder of
record, on the date of settlement provided payment has been received.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
On or before the tenth day of each month, the Trustee will deduct from the
Income Account and, to the extent funds are not sufficient therein, from the
Capital Account amounts necessary to pay the expenses of the Trust (as
determined on the basis set forth under "Trust Operating Expenses" ).
The Trustee will deduct amounts necessary to pay the expenses of Series 2 and
subsequent Series from the Capital Account only. The Trustee also may withdraw
from said accounts such amounts, if any, as it deems necessary to establish a
reserve for any governmental charges payable out of the Trust. Amounts so
withdrawn shall not be considered a part of a Trust's assets until such time
as the Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Income and Capital
Accounts such amounts as may be necessary to cover redemptions of Units.
Reinvestment Option. Unitholders may elect to have each distribution of
interest income, capital gains and/or principal on their Units automatically
reinvested in shares of any Van Kampen American Capital mutual funds (except
for B shares) which are registered in the Unitholder's state of residence.
Such mutual funds are hereinafter collectively referred to as the "
Reinvestment Funds" .
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets
forth the procedures to follow to commence reinvestment. A Unitholder may
obtain a prospectus for the respective Reinvestment Funds from Van Kampen
American Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181. Texas residents who desire to reinvest may request that a
broker-dealer registered in Texas send the prospectus relating to the
respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
a net asset value as computed as of the close of trading on the New York Stock
Exchange on such date. Unitholders with an existing Guaranteed Reinvestment
Option (GRO) Program account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new GRO
account which allows purchases of Reinvestment Fund shares at net asset value
as described above.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. A participant may
at any time prior to five days preceding the next succeeding distribution
date, by so notifying the Trustee in writing, elect to terminate his or her
reinvestment plan and receive future distributions of his or her Units in
cash. There will be no charge or other penalty for such termination. Each
Reinvestment Fund, its sponsor and investment adviser shall have the right to
terminate at any time the reinvestment plan relating to such fund.
Unitholders of the Trust may elect to have each distribution of income,
capital gains and/or capital on their Units automatically reinvested in
additional Units of such Trust without a sales charge (to the extent Units may
be lawfully offered for sale in the state in which the Unitholder resides). To
participate in the reinvestment plan, a Unitholder may either contact his or
her broker or agent or file with the Trustee a written notice of election at
least ten days prior to the Record Date for which the first distribution is to
apply. A Unitholder's election to participate in the reinvestment plan will
apply to all Units of the applicable Trust owned by such Unitholder and such
election will remain in effect until changed by the Unitholder.
Reinvestment plan distributions may be reinvested in Units of the Trust
already held in inventory by the Sponsor (see "Public OfferingPublic
Market'') or, until such time as additional Units cease to be issued by the
Trust (see "The Trust" ), distributions may be reinvested in such
additional Units. If Units are unavailable in the secondary market,
distributions which would otherwise have been reinvested shall be paid in cash
to the Unitholder on the applicable Distribution Date.
Purchases made pursuant to the reinvestment plan will be made without a sales
charge at the net asset value for Units of the Trust as of the Evaluation Time
on the related Income or Capital Distribution Dates. Under the reinvestment
plan, the Trust will pay the Unitholder's distributions to the Trustee which
in turn will purchase for such Unitholder full and fractional Units of the
Trust and will send such Unitholder a statement reflecting the reinvestment.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and its investment adviser shall have the
right to terminate at any time the reinvestment plan relating to such
Reinvestment Fund and the Sponsor shall have the right to suspend or terminate
the reinvestment plan for reinvestment in additional Units of the Trust at any
time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received, deductions for applicable taxes and
for fees and expenses of the Trust, for redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed in each
case both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such calendar
year; (ii) as to the Capital Account: the dates of disposition of any
Securities (other than pursuant to In Kind Distributions) and the net proceeds
received therefrom, the results of In Kind Distributions in connection with
redemptions of Units, if any, deductions for payment of applicable taxes and
fees and expenses of the Trust held for distribution to Unitholders of record
as of a date prior to the determination and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) amounts actually distributed
during such calendar year from the Income and Capital Accounts, separately
stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in a 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 Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 of the certificates representing
the Units to be redeemed, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates) and by payment
of applicable governmental charges, if any. No redemption fee will be charged.
On the third business day following such tender the Unitholder will be
entitled to receive in cash (unless the redeeming Unitholder elects an In Kind
Distribution as indicated below) an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units. The "date of tender" is deemed to be the date on
which Units are received by the Trustee, except that as regards Units received
after the close of trading on the New York Stock Exchange (which is currently
4:00 P.M. New York time) the date of tender is the next day on which such
Exchange is open for trading and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption price
computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distributions" ) of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following
the tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form
to the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering
Unitholder is entitled. In implementing these redemption procedures, the
Trustee shall make any adjustments necessary to reflect differences between
the Redemption Price of the Securities distributed in kind as of the date of
tender. If funds in the Capital Account are insufficient to cover the required
cash distribution to the tendering Unitholder, the Trustee may sell Securities
according to the criteria discussed above. For the tax consequences related to
an In Kind Distribution see "Federal Taxation."
To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of such Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption. Special federal income tax consequences will result if a
Unitholder requests an In Kind Distribution. See "Federal Taxation" .
The Redemption Price per Unit will be determined on the basis of the aggregate
underlying value of the Equity Securities in the Trust plus or minus cash, if
any, in the Income and Capital Accounts. While the Trustee has the power to
determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in such Trust or monies in the process of being collected and
(ii) the value of the Securities in the Trust, less (a) amounts representing
taxes or other governmental charges payable out of such Trust, (b) any amount
owing to the Trustee for its advances and (c) the accrued expenses of such
Trust. The Evaluator may determine the value of a Securities in the Trust in
the following manner: if the Securities are listed on a national securities
exchange, the evaluation will generally be based on the last available sale
price on the exchange (unless the Evaluator deems the price inappropriate as a
basis for evaluation) or, if there is no last available sale price on an
exchange, at the last available bid prices.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and the diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not otherwise be
sold and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Fund are not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. The Trust
Agreement provides that the Sponsor may (but need not) direct the Trustee to
dispose of an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action or proceeding
has been instituted restraining the payment of dividends or there exists any
legal question or impediment affecting such Equity Security, that the issuer
of the Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the sound
investment character of the Equity Security, that the issuer has defaulted on
the payment on any other of its outstanding obligations, that the price of the
Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Equity
Securities would be detrimental to a Trust. In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that the Trust continues
to satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code. Except as stated under "Trust PortfolioGeneral" for
failed securities, the acquisition by the Fund of any securities other than
the Securities is prohibited. 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 a Trust, they may be
accepted for deposit in such Trust and either sold by the Trustee or held in
such Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Supervisor). Proceeds from the sale of Securities (or any
securities or other property received by the Fund in exchange for Equity
Securities) are credited to the applicable Capital Account for distribution to
Unitholders or to meet redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also
sell Securities designated by the Supervisor, or if not so directed, in its
own discretion, for the purpose of redeeming Units of a Trust tendered for
redemption and the payment of expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities. To the extent this is not practicable,
the composition and diversity of the Equity Securities may be altered. In
order to obtain the best price for the Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, (as determined in good faith by the Sponsor
and the Trustee) provided, however, that the Trust Agreement may not be
amended to increase the number of Units. The Trust Agreement may also be
amended in any respect by the Trustee and Sponsor, or any of the provisions
thereof may be waived, with the consent of the holders of 51% of the Units
then outstanding, provided that no such amendment or waiver will reduce the
interest in the Trust of any Unitholder without the consent of such Unitholder
or reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.
A Trust may be liquidated (1) at any time by consent of Unitholders
representing 66 2/3% of the Units then outstanding, or (2) by the Trustee when
the value of the Trust, as shown by any evaluation, is less than that
indicated under "Summary of Essential Financial Information" in Part
One of the Prospectus. The Trust Agreement will terminate upon the sale or
other disposition of the last Security held thereunder, but in no event will
it continue beyond the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any
are then issued and outstanding, shall be given by the Trustee to each
Unitholder so holding a certificate at his address appearing on the
registration books of the Fund maintained by the Trustee. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice
thereof to all Unitholders and will include with such notice a form to enable
Unitholders owning 1,000 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 Equity Securities in the portfolio to the account of the broker-dealer
or bank designated by the Unitholder at Depository Trust Company. The value of
the Unitholder's fractional shares of the Equity Securities will be paid in
cash. Unitholders with less than 1,000 Units and those not requesting an In
Kind Distribution will receive a cash distribution from the sale of the
remaining Equity Securities within a reasonable time following the Mandatory
Termination Date. The Trustee will deduct from the funds of the Trust any
accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of
liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of Equity
Securities in the Trust upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time. The
Trustee will then distribute to each Unitholder his pro rata share of the
balance of the Income and Capital Accounts.
Within 60 days of the final distribution, Unitholders will be furnished a
final distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or 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.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ).
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser (MSAM" ), Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment adviser, and Morgan
Stanley International, are engaged in a wide range of financial services.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending. As of September 30,
1996, MSAM, together with its affiliated investment advisory companies, had
approximately $103.5 billion of assets under management and fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of December 31, 1996, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $59 billion of investment
products, of which over $11.88 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $48 billion
of assets, consisting of $29.9 billion for 59 open end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.), $13.1
billion for 38 closed-end funds and $4.99 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-end funds and unit investment trusts are professionally distributed by
leading financial firms nationwide. Based on cumulative assets deposited, the
Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or 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 Fund as provided therein
or (iii) continue to act as Trustee without terminating the Trust Agreement.
All costs and expenses incurred in creating and establishing Series 1,
including the cost of the initial preparation, printing and execution of the
Trust Agreement and the certificates, legal and accounting expenses,
advertising and selling expenses, expenses of the Trustee, initial evaluation
fees and other out-of-pocket expenses have been borne by the Sponsor at no
cost to such Trust.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of the Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of such 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 UnitholdersReports Provided" ). The
Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus, and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in Part One of this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as
set forth in their report in Part One of this Prospectus, and are included
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or dealers. This Prospectus does not constitute an offer to
sell, or a solicitation of any offer to buy, securities in any state to any
persons to whom it is not lawful to make such offer in such state.
<TABLE>
<CAPTION>
Table of Contents Page
<S> <C>
The Trust............................. 2
Objectives and Securities Selection... 2
Trust Portfolio....................... 2
Risk Factors.......................... 2
Federal Taxation...................... 4
Trust Operating Expenses.............. 5
Public Offering....................... 6
Rights of Unitholders................. 7
Trust Administration.................. 9
Other Matters......................... 11
</TABLE>
This Prospectus does not contain all the information set forth in the
registration statements and exhibits relating thereto, which the Fund has
filed with 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.
GLOBAL ENERGY TRUST
PROSPECTUS PART TWO
Note: This Prospectus May Be Used Only
When Accompanied by Part One. Both
Parts of this Prospectus should be
retained for future reference.
Dated as of the date of the Prospectus
Part One accompanying this Prospectus
Part Two.
Sponsor: VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
41, certifies that it meets all of the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 20th
day of November, 1997.
Van Kampen American Capital Equity Opportunity
Trust, Series 41
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Depositor)
By Gina Costello
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on November
20, 1997 by the following persons who constitute a majority of the Board
of Directors of Van Kampen American Capital Distributors, Inc.:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Molinari President and Chief Operating)
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Gina Costello (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 Van Kampen American Capital
Equity Opportunity Trust, Series 64 (File No. 333-33087) and the
same are hereby incorporated herein by this reference.
Consent of Independent Certified Public Accountants
We have issued our report dated September 19, 1997 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity
Trust, Series 41 as of July 31, 1997, and for the period then ended,
contained in this Post-Effective Amendment No. 1 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
November 20, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> GENT
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> SEP-11-1996
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 31100489
<INVESTMENTS-AT-VALUE> 37712972
<RECEIVABLES> 196269
<ASSETS-OTHER> 93805
<OTHER-ITEMS-ASSETS> 782
<TOTAL-ASSETS> 38003828
<PAYABLE-FOR-SECURITIES> 170828
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 170828
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37833000
<SHARES-COMMON-STOCK> 2985960
<SHARES-COMMON-PRIOR> 3216879
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (361464)
<ACCUMULATED-NET-GAINS> 551470
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6612483
<NET-ASSETS> 37833000
<DIVIDEND-INCOME> 616476
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 38956
<NET-INVESTMENT-INCOME> 577520
<REALIZED-GAINS-CURRENT> 551470
<APPREC-INCREASE-CURRENT> 6612483
<NET-CHANGE-FROM-OPS> 7741473
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (938984)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 230919
<SHARES-REINVESTED> 0
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</TABLE>
