MEMORANDUM OF CHANGES
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
The Prospectus filed with Amendment No. 1 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen American Capital Equity Opportunity Trust, Series 102 on June 2, 1998. An
effort has been made to set forth below each of the major changes and also to
reflect the same by blacklining the marked counterparts of the Prospectus
submitted with the Amendment.
Page 4. "The Summary of Essential Financial Information" section
has been completed.
Pages 37-41. The Report of Independent Certified Public Accountants'
and Statements of Condition have been completed.
The "Portfolios" and the "Notes to Portfolios" sections have been
completed.
Back Cover. The date has been completed.
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FILE NO. 333-52561
CIK #1025248
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY
TRUST, SERIES 102
B. Name of Depositor: VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
CHAPMAN AND CUTLER VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of proportionate interest
F. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT
/ X / Check box if it is proposed that this filing will become effective on
- ---- June 2, 1998 at 2:00 P.M. pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE>
<TABLE>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST
SERIES 102
CROSS REFERENCE SHEET
PURSUANT TO RULE 404(C) OF REGULATION C
UNDER THE SECURITIES ACT OF 1933
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTION
1 AS TO PROSPECTUS ON FORM S-6)
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FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) *
underwriter
5. Organization of trust ) The Trusts
6. Execution and termination of ) The Trusts
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
<PAGE>
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II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
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10. General information regarding ) The Trusts
trust's securities and ) Federal Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trusts
) Trust Portfolios
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Portfolios
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or ) Trust Operating Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) *
underwriter, trustee or any ) Trust Portfolios
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trusts
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special Trusts ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolios
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
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III. ORGANIZATION, PERSONNEL AND AFFILIATED
PERSONS OF DEPOSITOR
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25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
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IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
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35. Distribution of trust's securities ) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
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V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
<S> <C>
48. Organization and regulation of ) Trust Administration
Trustee )
49. Fees and expenses of Trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
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VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
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51. Insurance of holders of trust's ) Cover Page
securities ) Trust Operating Expenses
52. (a) Provisions of trust agreement )
with respect to replacement ) Trust Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Trustamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Federal Taxation
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VII. FINANCIAL AND STATISTICAL INFORMATION
<S> <C>
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Report of Independent Certified
1(c) to Form S-6) ) Public Accountants
) Statements of Condition
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* Inapplicable, omitted, answer negative or not required
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June 2, 1998
VAN KAMPEN AMERICAN CAPITAL
BLUE CHIP OPPORTUNITY TRUST, SERIES 4
BLUE CHIP OPPORTUNITY AND TREASURY TRUST, SERIES 6
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THE FUND. Van Kampen American Capital Equity Opportunity Trust, Series 102
(the "Fund") is comprised of two separate and distinct unit investment trusts,
Blue Chip Opportunity Trust, Series 4 (the "Blue Chip Opportunity Trust") and
Blue Chip Opportunity and Treasury Trust, Series 6 (the "Blue Chip Opportunity
and Treasury Trust") (collectively, the "Trusts"). The Blue Chip Opportunity
Trust offers investors the opportunity to purchase Units representing
proportionate interests in a fixed, diversified portfolio of the 30 actively
traded "blue chip" equity securities which are current components of the Dow
Jones Industrial Average.* The Blue Chip Opportunity and Treasury Trust offers
investors the opportunity to purchase Units representing proportionate interests
in a fixed, diversified portfolio of the 30 actively traded "blue chip" equity
securities which are components of the Dow Jones Industrial Average* as of the
Initial Date of Deposit plus zero coupon U.S. Treasury obligations. Dow Jones &
Company, Inc. has not participated in any way in the creation of the Trusts or
in the selection of stocks included in the Trusts and has not approved any
information herein relating thereto. Unless terminated earlier, each Trust will
terminate on the Mandatory Termination Date described in the "Summary of
Essential Financial Information" and any Securities then held will, within a
reasonable time thereafter, be liquidated or distributed by the Trustee. Any
Securities liquidated at termination will be sold at the then current market
value for such Securities; therefore, the amount distributable in cash to a
Unitholder upon termination may be more or less than the amount such Unitholder
paid for his Units.
ATTENTION FOREIGN INVESTORS. If you are not a United States citizen or
resident, distributions from the Trusts will generally be subject to U.S.
Federal withholding taxes; however, under certain circumstances treaties between
the United States and other countries may reduce or eliminate such withholding
tax. See "Federal Taxation." Such investors should consult their tax advisers
regarding the imposition of U.S. withholding on distributions.
OBJECTIVES OF THE FUND. The objective of the Blue Chip Opportunity Trust
is to provide the potential for capital appreciation and income by investing in
a portfolio of actively traded, New York Stock Exchange listed equity securities
which are current components of the Dow Jones Industrial Average ("Equity
Securities"). The objectives of the Blue Chip Opportunity and Treasury Trust are
to provide the potential for capital appreciation and income, consistent with
the preservation of invested capital, by investing in a portfolio of actively
traded, New York Stock Exchange listed equity securities which are components of
the Dow Jones Industrial Average* as of the Initial Date of Deposit ("Equity
Securities") and to protect Unitholders' capital by investing a portion of its
portfolio in "zero coupon" U.S. Treasury obligations ("Treasury Obligations").
Collectively, the Treasury Obligations and the Equity Securities are referred to
herein as the "Securities." See "Portfolios." There is, of course, no guarantee
that the objectives of the Trusts will be achieved. Units are not designed so
that their prices will parallel or correlate with movements in the Dow Jones
Industrial Average, and it is expected that their prices will not parallel or
correlate with such movements. The Treasury Obligations evidence the right to
receive a fixed payment at a future date from the U.S. Government and are backed
by the full faith and credit of the U.S. Government. The guarantee of the U.S.
Government does not apply to the market value of the Treasury Obligations or the
Units of the Blue Chip Opportunity and Treasury Trust whose net asset value will
fluctuate and may be worth more or less than a purchaser's acquisition cost. It
is anticipated that upon maturity the Treasury Obligations will represent an
amount of at least $11.00 per Unit.
Units of the Trusts 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.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
* The Dow Jones Industrial Average is the property of Dow Jones &
Company, Inc. Dow Jones & Company, Inc. has not granted to the Trusts or the
Sponsor a license to use the Dow Jones Industrial Average.
PUBLIC OFFERING PRICE. The Public Offering Price of the Units of each
Trust during the initial offering period includes the aggregate underlying value
of the Equity Securities (and, in the case of the Blue Chip Opportunity and
Treasury Trust, the aggregate offering price of the Treasury Obligations), a
sales charge equal to 4.5% of the Pubic Offering Price (which is equivalent to
4.712% of the aggregate value of the Securities), and cash, if any, in the
Income and Capital Accounts held or owned by such Trust. During the initial
offering period, the sales charge is reduced on a graduated scale for sales
involving at least 5,000 Units. If Units were available for purchase at the
close of business on the day before the Initial Date of Deposit, the Public
Offering Price per Unit would have been that amount set forth under "Summary of
Essential Financial Information". For sales charges in the secondary market, see
"Public Offering." The minimum purchase is 100 Units (25 Units for qualified
retirement plans) but may vary by selling firm.
PRINCIPAL PROTECTION. The Blue Chip Opportunity and Treasury Trust has
been organized so that purchasers of Units should receive, at the termination of
such Trust, an amount per Unit at least equal to $11.00 (which is equal to the
per Unit value upon maturity of the Treasury Obligations), even if such Trust
never paid a dividend and the value of the Equity Securities were to decrease to
zero, which the Sponsor considers highly unlikely. This feature of the Blue Chip
Opportunity and Treasury Trust provides Unitholders who purchase Units at the
price of $11.00 per Unit or less with total principal protection, including any
sales charges paid, although they might forego any earnings on the amount
invested. To the extent that Units are purchased at a price less than $11.00 per
Unit, this feature may also provide a potential for capital appreciation.
The Treasury Obligations will mature on August 15, 2013. The Treasury
Obligations have a maturity value equal to or greater than the aggregate Public
Offering Price (which includes the sales charge) of the Units of Blue Chip
Opportunity and Treasury Trust on the Initial Date of Deposit; however, the
value of the Treasury Obligations may fluctuate before maturity due to
fluctuations in interest rates. The Equity Securities deposited in the Blue Chip
Opportunity and Treasury Trust's portfolio have no fixed maturity date and the
value of these underlying Equity Securities will fluctuate with changes in the
values of stocks in general and with changes in the conditions and performance
of the specific Securities owned by such Trust. See "Trust Portfolios."
ADDITIONAL DEPOSITS. The Sponsor may, from time to time during a period
of up to approximately 12 months after the Initial Date of Deposit, deposit
additional Securities in the Trusts as provided under "The Trusts."
DIVIDEND AND CAPITAL DISTRIBUTIONS. Distributions of dividends and
capital, if any, received by the Trust will be paid in cash on the applicable
Distribution Date to Unitholders of record on the record date as set forth in
the "Summary of Essential Financial Information." The initial estimated
distribution will be $.03 and $.02 for the Blue Chip Opportunity Trust and the
Blue Chip Opportunity and Treasury Trust, respectively, and will be made on
September 25, 1998 to Unitholders of record on September 10, 1998. INCOME WITH
RESPECT TO THE AMORTIZATION OF ORIGINAL ISSUE DISCOUNT ON THE TREASURY
OBLIGATIONS IN THE BLUE CHIP OPPORTUNITY AND TREASURY TRUST WILL NOT BE
DISTRIBUTED CURRENTLY, ALTHOUGH UNITHOLDERS WILL BE SUBJECT TO INCOME TAX AT
ORDINARY INCOME RATES AS IF A DISTRIBUTION HAD OCCURRED. Upon termination of
each Trust, the Trustee will distribute, upon surrender of Units for redemption,
to each Unitholder his pro rata share of each Trust's assets, less expenses, in
the manner set forth under "Rights of Unitholders--Distributions of Income and
Capital."
SECONDARY MARKET FOR UNITS. After the initial offering period, although
not obligated to do so, the Sponsor intends to maintain a market for Units of
each Trust and offer to repurchase such Units at prices which are based on the
aggregate underlying value of Equity Securities in each Trust (generally
determined by the closing sale or bid prices of the Equity Securities) plus, in
the case of the Blue Chip Opportunity and Treasury Trust, the aggregate bid side
evaluation of the Treasury Obligations, plus or minus cash, if any, in the
Capital and Income Accounts of such Trust. If a secondary market is maintained
during the initial offering period, the prices at which Units will be
repurchased will be based upon the aggregate underlying value of the Securities
in each Trust (generally determined by the closing sale or asked prices of the
Equity Securities and, in the case of the Blue Chip Opportunity and Treasury
Trust, the aggregate offer side evaluation of the Treasury Obligations) plus or
minus cash, if any, in the Capital and Income Accounts of such Trust. If a
secondary market is not maintained, a Unitholder may redeem Units through
redemption at prices based upon the aggregate underlying value of the Equity
Securities in each Trust plus, in the case of the Blue Chip Opportunity and
Treasury Trust, the aggregate bid side evaluation of the Treasury Obligations,
plus or minus a pro rata share of cash, if any, in the Capital and Income
Accounts of such Trust. A Unitholder tendering 1,000 or more Units for
redemption may request a distribution of shares of Equity Securities (reduced by
customary transfer and registration charges) in lieu of payment in cash.
Unitholders of the Blue Chip Opportunity and Treasury Trust will receive their
pro rata portion of the Treasury Obligations in cash upon redemption. See
"Rights of Unitholders--Redemption of Units." Unitholders of the Blue Chip
Opportunity Trust electing a distribution of shares of Equity Securities should
be aware that the transaction is subject to taxation and Unitholders will
recognize gain based on any appreciation in value of the Equity Securities. See
"Federal Taxation."
TERMINATION. Commencing on the Mandatory Termination Date Equity
Securities will begin to be sold in connection with the termination of the
related Trust. The Sponsor will determine the manner, timing and execution of
the sale of the Equity Securities. Written notice of any termination of a 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 such Trust maintained by
the Trustee. At least 30 days prior to the Mandatory Termination Date the
Trustee will provide written notice thereof to all Unitholders and will include
with such notice a form to enable Unitholders to elect a distribution of shares
of Equity Securities if such Unitholder owns at least 1,000 Units, 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. Unitholders
will receive cash in lieu of any fractional shares and cash representing their
pro rata portion of any Treasury Obligations. To be effective, the election
form, together with surrendered certificates if issued, and other documentation
required by the Trustee, must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date. Unitholders 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 a 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 also have the opportunity to have
their distributions reinvested into additional Units of the Trusts, if Units are
available at the time of reinvestment, or into an open-end management investment
company as described herein. See "Rights of Unitholders--Reinvestment Option."
RISK FACTORS. An investment in the Trusts should be made with an
understanding of the risks associated therewith, including the possible
deterioration of the financial condition of the issuers, the general condition
of the stock market and volatile interest rates. See Factors" and "Trust
Portfolios."
<PAGE>
<TABLE>
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VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AT THE CLOSE OF BUSINESS ON THE DAY BEFORE THE INITIAL DATE OF DEPOSIT: JUNE 1, 1998
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
BLUE CHIP
OPPORTUNITY
BLUE CHIP AND
OPPORTUNITY TREASURY
TRUST TRUST
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<S> <C> <C> <C>
Aggregate Maturity Value of Treasury Obligations Initially Deposited -- $ 165,000
Number of Units (1) 14,962 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/14,962 1/15,000
Public Offering Price:
Aggregate Value of Securities in Portfolio (2) $ 142,883 $ 143,329
Aggregate Value of Securities per Unit $ 9.55 $ 9.56
Sales Charge 4.5% (4.712% of the Aggregate Value of Securities per Unit) $ .45 $ .45
Public Offering Price Per Unit (3)(4) $ 10.00 $ 10.01
Redemption Price per Unit (4) $ 9.55 $ 9.54
Secondary Market Repurchase Price per Unit $ 9.55 $ 9.56
Excess of Public Offering Price per Unit over Redemption Price per Unit $ .45 $ .47
Excess of Sponsor's Initial Repurchase Price per Unit over Redemption Price per Unit $ -- $ .02
Calculation of Estimated Net Annual Dividends per Unit (5):
Estimated Gross Annual Dividends per Unit $ .15990 $ .08406
Less: Estimated Annual Expense per Unit (Including Organizational Expenses) $ .02198 --
Estimated Net Annual Dividends per Unit $ .13792 --
Estimated Annual Organizational Expenses per Unit (6) $ .00503 $ .00540
Mandatory Termination Date - Blue Chip Opportunity Trust June 2, 2008
Mandatory Termination Date - Blue Chip Opportunity
and Treasury Trust August 15, 2013
Trustee's Annual Fee $.008 per Unit
Supervisors Annual Supervisory Fee Maximum of $.0025 perUnit
Evaluators Annual Evaluation Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock Exchange
Minimum Termination Value Each 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 Agreement may be terminated if the
net asset value of such Trust is less than $3,000,000.
Income Distribution Record Date Tenth day of March, June, September and December
Income Distribution Date Twenty-fifth of March, June, September and December
Capital Account Record Date Tenth day of December
Capital Account Distribution Date Twenty-fifth day of December
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(1) As of the close of business on any day on which the Sponsor is the sole
Unitholder of the Blue Chip Opportunity Trust, the number of Units of such
Trust may be adjusted so that the Public Offering Price per Unit will equal
approximately $10. Therefore, to the extent of any such adjustment the
fractional undivided interest per Unit of such Trust will increase or
decrease from the amount indicated above.
(2) Each Equity Security listed on a national securities exchange is valued at
the closing sale price or, if the Equity Security is not listed, at the
closing ask price thereof. The Treasury Obligations are valued at the
offering side evaluation.
(3) On the Initial Date of Deposit there will be no cash in the Income or
Capital Accounts. Anyone ordering Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
(4) Effective on each June 2, commencing June 2, 1999, the secondary market
sales charge will decrease by .3 of 1% to a minimum sales charge of 1.5%.
See "Public Offering."
(5) Estimated annual dividends are based on annualizing the most recently
declared dividends. Estimated annual dividends per Unit are based on the
number of Units, the fractional undivided interest in the Securities per
Unit and the aggregate value of the Securities per Unit as of the Initial
Date of Deposit. Investors should note that the actual annual dividends
received per Unit will vary from the estimated amount due to changes in the
factors described in the preceding sentence and actual dividends declared
and paid by the issuers of the Securities. Estimated Net Annual Dividends
per Unit are not shown for the Blue Chip Opportunity and Treasury Trust
because gross dividends received by such Trust will be distributed to
Unitholders and the expenses of such Trust will be paid from the Capital
Account or from the periodic sale of Securities.
(6) Each Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the initial
audit of the portfolio and the initial fees and expenses of the Trustee but
not including the expenses incurred in the preparation and printing of
brochures and other advertising material and any other selling expenses) as
is common for mutual funds. Total organizational expenses will be amortized
over a five year period. See "Trust Operating Expenses" and "Statements of
Condition." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
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THE TRUSTS
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Van Kampen American Capital Equity Opportunity Trust, Series 102 is
comprised of two separate and distinct unit investment trusts, Blue Chip
Opportunity Trust, Series 4 and Blue Chip Opportunity and Treasury Trust, Series
6. The Trusts were created under the laws of the State of New York pursuant to a
Trust Indenture and Agreement (the "Trust Agreement"), dated the date of this
Prospectus (the "Initial Date of Deposit"), among Van Kampen American Capital
Distributors, Inc., as Sponsor, American Portfolio Evaluation Services, a
division of Van Kampen American Capital Investment Advisory Corp., as Evaluator,
Van Kampen American Capital Investment Advisory Corp., as Supervisor, and The
Bank of New York, as Trustee.
The Blue Chip Opportunity 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. The Blue Chip
Opportunity and Treasury Trust may be an appropriate medium for investors who
desire to participate in a portfolio of equity securities and zero-coupon U.S.
Treasury obligations with greater diversification than they might be able to
acquire individually. Diversification of assets in a Trust will not eliminate
the risk of loss always inherent in the ownership of securities. For a breakdown
of the portfolios, see "Portfolios."
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolios" herein, including delivery statements
relating to contracts for the purchase of certain such Securities and an
irrevocable letter of credit issued by a financial institution in the amount
required for such purchases. Thereafter, the Trustee, in exchange for such
Securities (and contracts) so deposited, delivered to the Sponsor documentation
evidencing the ownership of that number of Units of each Trust indicated in
"Summary of Essential Financial Information." Unless otherwise terminated as
provided in the Trust Agreement, each Trust will terminate on the Mandatory
Termination Date and Securities then held will within a reasonable time
thereafter be liquidated or distributed by the Trustee.
Additional Units of a Trust may be issued at any time by depositing in
such Trust (i) additional Securities, (ii) contracts to purchase securities
together with cash or irrevocable letters of credit or (iii) cash (including a
letter of credit) with instructions to purchase additional Securities. As
additional Units are issued by a Trust as a result of the deposit of additional
Securities by the Sponsor, the aggregate value of the Securities in such Trust
will be increased and the fractional undivided interest in such Trust
represented by each Unit will be decreased.
The Sponsor may continue to make additional deposits of Securities into
the Blue Chip Opportunity Trust following the Initial Date of Deposit, provided
that such additional deposits will be in amounts which will maintain, as nearly
as practicable, an equal proportionate relationship among each Equity Security
in such Trust's portfolio based on market value. Thus, although additional Units
will be issued by the Blue Chip Opportunity Trust, each Unit will continue to
represent a dollar weighting of the then current components of the Dow Jones
Industrial Average. Precise duplication of the relationship among the Equity
Securities in the Blue Chip Opportunity Trust may not be achieved because it may
be economically impracticable as a result of certain procedural policies of such
Trust and other factors such as (1) price movements of the various Equity
Securities will not duplicate one another, (2) the Sponsor's current intention
to purchase shares of the Equity Securities in round lot quantities only, (3)
reinvestment of excess proceeds not needed to meet redemptions may not be
sufficient to acquire round lots of all the Equity Securities in the Trust and
(4) reinvestment of proceeds received from Equity Securities which are no longer
components of the Dow Jones Industrial Average might not result in the purchase
of an equal number of shares in any replacement Security.
The Sponsor may continue to make additional deposits of Securities into
the Blue Chip Opportunity and Treasury Trust following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain the same percentage relationship among the number of shares of each
Equity Security in the Trust and par value of the Treasury Obligations that
existed immediately prior to any such subsequent deposit. Such deposits of
additional Securities into the Blue Chip Opportunity and Treasury Trust will,
therefore, be done in such a manner that the maturity value of the Treasury
Obligations represented by each Unit should always be an amount at least equal
to $11.00. Thus, although additional Units will be issued, each Unit will
continue to represent approximately the same number of shares of each Equity
Security and the same percentage relationship among the number of shares of
Equity Securities and par value of Treasury Obligations. The required percentage
relationship among the Securities will be adjusted to reflect the occurrence of
a stock dividend, a stock split or a similar event which affects the capital
structure of the issuer of a Security but which does not affect the Trust's
percentage ownership of the common stock equity of such issuer at the time of
such event. On a cost basis to the Trust, the original percentage relationship
on the Initial Date of Deposit was approximately 48% Treasury Obligations and
approximately 52% Equity Securities. Since the prices of the underlying Treasury
Obligations and Equity Securities will fluctuate daily, the ratio, on a market
value basis, will also change daily. The maturity value of the Treasury
Obligations and the portion of Equity Securities represented by each Unit will
not change as a result of the deposit of additional Securities in the Trust.
If the Sponsor deposits cash, existing and new investors may experience a
dilution of their investments and a reduction in their anticipated income
because of fluctuations in the prices of the Securities between the time of the
cash deposit and the purchase of the Securities and because the Trusts will pay
associated brokerage fees.
Each Unit of a Trust initially offered represents an undivided interest in
such Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being deposited
by the Sponsor, the fractional undivided interest in a Trust represented by each
unredeemed Unit will increase or decrease accordingly, although the actual
interest in such 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
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The objective of the Blue Chip Opportunity Trust is to provide investors
with the potential for capital appreciation and income. The objectives of the
Blue Chip Opportunity and Treasury Trust are to provide the potential for
capital appreciation and income and to protect Unitholders' capital. The
portfolios are described under "Trust Portfolios" and in "Portfolios". The Blue
Chip Opportunity and Treasury Trust has been organized so that investors would
receive, at termination, an amount per Unit at least equal to $11.00 (which is
equal to the per Unit value upon maturity of the Treasury Obligations), even if
the Trust never paid a distribution and the value of the Equity Securities were
to decrease to zero, which the Sponsor considers highly unlikely.
In selecting the Equity Securities for the Blue Chip Opportunity Trust and
the percentage of the portfolio represented by each such Equity Security, the
Sponsor selected those equity securities that currently are components of the
Dow Jones Industrial Average and the dollar value of the shares of such
securities with the intent to have approximately equal dollar amounts invested
in each such security.
In selecting Securities for the Blue Chip Opportunity and Treasury Trust,
the following factors were considered: (a) for the portion of the Securities
that are Equity Securities, the Sponsor selected those Equity Securities that
are components of the Dow Jones Industrial Average as of the Initial Date of
Deposit and the dollar value of the shares of such securities with the intent to
have approximately equal dollar amounts initially invested in each such
security, and (b) for the portion of the Securities that are Treasury
Obligations, the Sponsor selected securities which evidence the right to receive
a fixed payment at a future date from the U.S. Government, backed by the full
faith and credit of the U.S. Government.
The following chart shows $1 invested in selected asset classes over the
period 1926 - 1997, compared to inflation (as measured by the Consumer Price
Index) over the same period. As the chart indicates, common stocks may offer the
potential to keep ahead of inflation over time. Of course, this chart represents
past performance of these investment categories and there is no guarantee of
future results, either of these categories or of the Trust.
Unitholders will be subject to sales charges, expenses and taxes which are not
reflected in the chart.
Stocks (Dow Jones Industrial Average)
$1 $1,828.33
Long-term U.S. Government Bonds
$1 $39.07
U.S. Treasury bills (short term)
$1 $14.25
Consumer Price Index
$1 $9.00
Source: Ibbotson Associates, Inc.
GENERAL. An investor will be subject to taxation on the dividend income
received from the Trusts and on gains from the sale or liquidation of Securities
(see "Federal Taxation"). Investors should be aware that there is not any
guarantee that the objectives of the Trusts will be achieved because they are
subject to the continuing ability of the respective Security issuers to continue
to declare and pay dividends and because the market value of the Securities can
be affected by a variety of factors. Common stocks may be especially susceptible
to general stock market movements and to volatile increases and decreases of
value as market confidence in and perceptions of the issuers change. Investors
should be aware that there can be no assurance that the value of the underlying
Securities will increase or that the issuers of the Equity Securities will pay
dividends on outstanding common shares. Any distributions of income will
generally depend upon the declaration of dividends by the issuers of the Equity
Securities and the declaration of any dividends depends upon several factors
including the financial condition of the issuers and general economic
conditions.
Investors should note that the above criteria were applied to the
Securities selected for inclusion in the Trusts as of the Initial Date of
Deposit. Subsequent to the Initial Date of Deposit, the Securities may no longer
meet such criteria and the Equity Securities may no longer be included in the
Dow Jones Industrial Average. Should an Equity Security no longer be included in
the Dow Jones Industrial Average, such Equity Security will as a result thereof
be removed from the portfolio of such Trust and the proceeds received from the
sale of such Equity Security will be used to acquire as many round lots as
possible of the security which has replaced such removed Equity Security in the
Dow Jones Industrial Average (or, if not replaced, to acquire such other
securities as may be included in the Dow Jones Industrial Average at such time
or distributed to Unitholders). However, with respect to the Blue Chip
Opportunity and Treasury Trust, should a Security no longer meet the original
selection criteria or not be included in the Dow Jones Industrial Average, such
Security will not, simply as a result of such fact, be removed from the
portfolio of such Trust.
Investors should be aware that the Trusts are not "managed" funds and as a
result the adverse financial condition of a company will not result in its
elimination from a portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by the Trusts 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 Initial Date of Deposit. The
Trusts may continue to purchase or hold Securities originally selected through
this process even though the evaluation of the attractiveness of the Securities
may have changed and, if the evaluation were performed again at that time, the
Securities would not be selected for the Trusts.
TRUST PORTFOLIOS
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The Blue Chip Opportunity Trust consists of 30 different issues of Equity
Securities, all of which are actively traded, blue-chip securities of large,
well established corporations and all of which, taken together, currently are
components of the Dow Jones Industrial Average. The Blue Chip Opportunity and
Treasury Trust consists of (a) 30 different issues of Equity Securities, all of
which are actively traded, blue-chip securities issued by large, well
established corporations and all of which, taken together, were components of
the Dow Jones Industrial Average as of the Initial Date of Deposit and (b)
zero-coupon U.S. Treasury Obligations. Each Equity Security in each Trust, as of
the Initial Date of Deposit, represented approximately the same dollar value of
the portfolio since the Sponsor utilized a dollar weighted average approach in
acquiring such Equity Securities. Dow Jones & Company, Inc., owner of the Dow
Jones Industrial Average, has not granted to the Fund or the Sponsor a license
to use the Dow Jones Industrial Average. Units are not designed so that their
prices will parallel or correlate with movements in the Dow Jones Industrial
Average, and it is expected that their prices will not parallel or correlate
with such movements. Dow Jones & Company, Inc. has not participated in any way
in the creation of the Trusts or in the selection of stocks included in the
Trusts and has not approved any information herein relating thereto.
The Dow Jones Industrial Average is composed of 30 common stocks chosen by
the editors of The Wall Street Journal, a publication of Dow Jones & Company,
Inc. The companies are major factors in their industries and their stocks are
widely held by individuals and industrial investors. Changes in the components
are made entirely by the editors of The Wall Street Journal without consultation
with the companies, the stock exchange or any official agency. Dow Jones &
Company, Inc. expressly reserves the right to change the components of the Dow
Jones Industrial Average at any time for any reason. Any changes in the
components of the Dow Jones Industrial Average after the Initial Date of Deposit
will cause a change in the identity of the common stocks included in the Blue
Chip Opportunity Trust but will not cause a change in the identity of the common
stocks included in the Blue Chip Opportunity and Treasury Trust. The following
is a general description of the Equity Securities contained in the Dow Jones
Industrial Average as of the Initial Date of Deposit.
AlliedSignal, Inc. AlliedSignal Inc. and its subsidiaries manufacture
aerospace and automotive products and engineered materials. The Company's
products include chemicals, fibers, plastics, and advanced materials.
AlliedSignal's aerospace products include engines and electronic and avionics
systems. The Company's automotive products include truck brake systems and
turbocharging systems.
Aluminum Company of America (ALCOA). ALCOA is an integrated aluminum
company. The Company produces alumina with close proximity of bauxite mines to
its refineries in Australia, Jamaica, Suriname, and Brazil. Alcoa has over 180
operating locations in 28 countries and serves markets in developing and
industrialized economies.
American Express Company. American Express Company, through its
subsidiaries, provides travel related services, financial advisory services, and
international banking services throughout the world. The Company provides the
"American Express" Card and the "Optima" Card, the "American Express" Travelers
Cheque, and other products and services.
A T & T Corporation. AT&T Corp. offers communication services and
products. The Company provides voice, data, and video telecommunications
services to consumers, large and small businesses, and government entities. AT&T
and its subsidiaries furnish regional, domestic, international, and local
telecommunication services. The Company also provides cellular telephone and
wireless services, as well as other services.
Boeing Company. The Boeing Company, together with its subsidiaries,
develops, produces, and markets commercial jet aircraft, and provides related
support services to the commercial airline industry worldwide. The Company also
researches, develops, produces, modifies, and supports information, space, and
defense systems, including military aircraft, helicopters, space and missile
systems, and others.
Caterpillar, Inc. Caterpillar Inc. designs, manufactures, and markets
earthmoving and construction machines, as well as mining and agricultural
machinery. The Company provides financing alternatives for its equipment.
Caterpillar's machines are distributed through 65 dealers in the United States
and 132 internationally. Machines are used for marine, agricultural, petroleum,
industrial, and other applications.
Chevron Corporation. Chevron Corporation explores for, develops, and
produces crude oil and natural gas. The Company also refines crude oil into
finished petroleum products, as well as markets and transports crude oil,
natural gas, and petroleum products. Chevron manufactures and markets a variety
of chemicals for industrial use and mines for coal. The Company operates in the
US and approximately 90 countries.
Coca-Cola Company. The Coca-Cola Company manufactures, markets, and
distributes soft drink concentrates and syrups. The Company manufactures and
sells soft drink and noncarbonated beverages, including fountain syrups, some
finished beverages, and certain juice and juice-drink products. Coca-Cola sells
its concentrates and syrups for bottled and canned beverages to authorized
bottling and canning operations.
Du Pont (E.I.) de Nemours and Company. Du Pont (E.I.) de Nemours and
Company operates in six industry segments which include chemicals, fibers,
polymers, petroleum, life sciences, and diversified businesses. The Company,
through its subsidiaries, conducts fully integrated petroleum operations and
produces petroleum liquids. Du Pont and its subsidiaries operate in
approximately 70 countries.
Eastman Kodak Company. Eastman Kodak Company develops, manufactures, and
markets consumer and commercial imaging products. The Company's imaging systems
include films, photographic papers, processing services, photographic chemicals,
cameras, and projectors. Kodak also develops digital camera systems which do not
use silver halide film technology.
Exxon Corporation. Exxon Corporation explores for and produces crude oil
and natural gas; manufactures petroleum products; and transports and sells crude
oil, natural gas, and petroleum products. The Company also manufactures and
markets basic petrochemicals, including olefins and aromatics, as well as
supplies specialty rubbers and additives for fuels and lubricants.
General Electric Company. General Electric Company is a diversified
manufacturing, technology and services company. Operations include appliance
manufacturing, capital services, information services, and electrical
distribution. General Electric also owns the National Broadcasting Company.
General Motors Corporation. General Motors Corporation manufactures and
sells vehicles worldwide under the "Chevrolet," "Buick," "Cadillac,"
"Oldsmobile," "Pontiac," "Saturn," and "GMC" names. The Company also offers
financing, insurance, and mortgage banking, as well as manufactures satellites,
locomotives, and heavy-duty transmissions.
Goodyear Tire & Rubber Company. The Goodyear Tire & Rubber Company
manufactures tires and rubber automotive parts. The Company produces new and
retread tires, inner tubes, automotive belts and hoses, molded parts, and foam
cushioning. Goodyear sells its tires to automobile manufacturers and through
retail stores to the replacement market.
Hewlett-Packard Company. Hewlett-Packard Company designs, manufactures,
and services products and systems for measurement, computation, and
communications. The Company's products include computers, calculators,
workstations, printers, disc and tape drives, and medical diagnostic and
monitoring devices. Hewlett-Packard sells its products around the world.
International Business Machines Corporation (IBM). IBM manufactures micro
and personal computers. The Company also supplies mainframe computers and other
information processing equipment, software and networking products and
peripheral equipment. Products are sold or leased for use in business,
government, science, education, space, medicine, and other areas on a worldwide
basis.
International Paper Company. International Paper Company manufactures
printing and writing paper, pulp, tissue, paperboard, packaging, and wood
products. The Company also manufactures nonwoven papers, specialty chemicals,
and specialty panels and laminated products. International Paper sells its
products primarily in the United States, Europe, and the Pacific Rim.
Johnson & Johnson. Johnson & Johnson manufactures and sells a broad range
of products in health care and other fields. The Company's business is divided
into the consumer, professional, and pharmaceutical segments. Products include
contraceptives, therapeutics, veterinary products, dental products, surgical
instruments, dressings apparel, and nonprescription drugs.
J.P. Morgan & Company, Inc. J.P. Morgan & Company, Inc., through
subsidiaries, offers financial services to corporations, governments, financial
institutions, institutional investors, professional firms, privately-held
companies and individuals. The Company offers loans, advises on mergers,
acquisitions and privatizations, underwrites debt and equity issues and deals in
government-issued securities worldwide.
McDonald's Corporation. McDonald's Corporation develops, operates,
franchises and services a worldwide system of restaurants. These restaurants
prepare, assemble, package and sell a limited menu of quickly-prepared,
moderately-priced foods. There are over 22,000 restaurants in the United States
and 109 countries worldwide. Food items include hamburgers, chicken, salads,
breakfast foods and beverages.
Merck & Company, Inc. Merck & Company, Inc. is a worldwide
research-intensive health products company. The Company operates through five
divisions: human health, managed pharmaceutical care, manufacturing, research,
and vaccine. Merck's products include treatments for osteoporosis and high blood
pressure. The Company markets its products under brand names such as "Cozar,"
"Fosamax," "Trusopt," and "Pepcid AC."
Minnesota Mining and Manufacturing Company (3M). Minnesota Mining and
Manufacturing Company is a diversified manufacturer of industrial, commercial
and health care products. The Company produces and markets more than 60,000
products worldwide. Minnesota's products include "Post-it" Notes, "Wetordry"
sandpaper, "Scotchgard" fabric, film and photo protectors, "Thinsulate"
insulation products and "Alge Block" copper roofing.
Philip Morris Companies, Inc. Philip Morris Companies, Inc. is a consumer
packaged goods company. The Company operates through five subsidiaries. Philip
Morris' products include "Bull's-Eye," "Breakstone's," "Kraft," "Cambridge" and
"Marlboro" cigarettes, "Craker Barrel" and "Polly-O" cheeses, "Crystal Light,"
"Maxwell House," and "Miller," "Milwaukee's Best" and "Meister Brau" beer.
Procter & Gamble Company. Procter & Gamble Company manufactures and
markets consumer products throughout the world. The Company operates through
five business segments: laundry and cleaning, paper, beauty care, food and
beverages and health care. Brand names include "Tide," "Dawn," "Bounty,"
"Charmin," "Pampers," "Vidal Sassoon," "Cover Girl," "Folgers," "Jif," "Scope,"
"Vicks" and others.
Sears, Roebuck & Company. Sears, Roebuck & Company retails a wide array of
merchandise and services worldwide. The Company's operations include full-line
and specialty stores, home services, direct response marketing, and credit.
Sears's stores offer apparel, appliances, electronics, sporting goods, tools,
furniture, automotive merchandise, and other products.
Travelers Group, Inc. Travelers Group, Inc. is a diversified financial
services holding company that provides investment services, including asset
management; consumer finance services; property and casualty insurance services;
and life insurance services. The Company's subsidiaries include Salomon Smith
Barney Holdings Inc., Commercial Credit Company, Travelers Property & Casualty
Corp., and other companies.
Union Carbide Corporation. Union Carbide Corporation manufactures
chemicals and plastics. The Company converts basic and intermediate chemicals
into a diverse portfolio of chemicals and polymers serving industrial customers
in many markets. Union Carbide also converts hydrocarbon feedstocks into
polyethylene, polypropylene, ehtylene oxide, and ethylene glycol for sale to
third-party customers.
United Technologies Corporation. United Technologies Corporation
manufactures and sells products and services to the aerospace, building, and
automotive industries. The Company's products include "Pratt & Whitney" jet
engines, "Sikorsky" helicopters, "Otis" elevators, "Carrier" air conditioners,
"Hamilton Standard" flight systems, and automotive systems and components.
Wal-Mart Stores, Inc. Wal-Mart Stores, Inc. is a discount retailer. The
Company's stores sell apparel, automotive supplies, housewares, sporting goods,
hardware, health and beauty aids, and toys. Wal-Mart operates "Wal-Mart" stores,
"Wal-Mart Supercenters," and "Sam's Clubs,"in eight international markets.
Walt Disney Company. Walt Disney Company is a diversified worldwide
entertainment company. The Company and its subsidiaries owns and operates theme
parks and resorts, film studios, television networks, radio networks, cable
networks, and newspapers and magazines, as well as sells consumer products.
Disney owns, among others, ABC Television, ABC Radio, The Disney Channel, Disney
Land and Disney-MGM Studios.
GENERAL. Each Trust consists of (a) the Securities listed under the
related "Portfolio" as may continue to be held from time to time in such Trust,
(b) any additional Securities acquired and held by such Trust pursuant to the
provisions of the Trust Agreement and (c) any cash held in the Income and
Capital Accounts. Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Securities. However, should any contract for the
purchase of any of the Securities initially deposited in a Trust hereunder fail,
the Sponsor will, unless substantially all of the moneys held in such Trust to
cover such purchase are reinvested in substitute Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable to such
failed contract to all Unitholders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds from such
events will generally be distributed to Unitholders and will generally not be
reinvested, no assurance can be given that the Trusts will retain for any length
of time their present size and composition. Although the portfolios are not
managed, the Sponsor may instruct the Trustee to sell Securities under certain
limited circumstances. See "Trust Administration--Portfolio Administration."
Securities, however, will not be sold by the Trusts to take advantage of market
fluctuations or changes in anticipated rates of appreciation or depreciation.
RISK FACTORS
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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, global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the issuers
of those common stocks that are generally subordinate to those of creditors of,
or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared by the issuer's
board of directors and have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. Certain of the issuers may currently be in arrears with
respect to preferred stock dividend payments. Common stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will create prior
claims for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends on
its common stock or the rights of holders of common stock with respect to assets
of the issuer upon liquidation or bankruptcy. The value of common stocks is
subject to market fluctuations for as long as the common stocks remain
outstanding, and thus the value of the Equity Securities in the portfolio may be
expected to fluctuate over the life of the Trusts to values higher or lower than
those prevailing on the Initial Date of Deposit or at the time a Unitholder
purchases Units.
Holders of common stocks incur more risk than holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
TREASURY OBLIGATIONS. The Treasury Obligations deposited in the Blue Chip
Opportunity and Treasury Trust consist of U.S. Treasury bonds which have been
stripped of their unmatured interest coupons. The Treasury Obligations evidence
the right to receive a fixed payment at a future date from the U.S. Government
and are backed by the full faith and credit of the U.S. Government. The
guarantee of the U.S. Government does NOT apply to the market value of the
Treasury Obligations or to Units of the Blue Chip Opportunity and Treasury
Trust. Treasury Obligations are purchased at a deep discount because the buyer
obtains only the right to a fixed payment at a fixed date in the future and does
not receive any periodic interest payments. The effect of owning deep discount
bonds which do not make current interest payments (such as the Treasury
Obligations) is that a fixed yield is earned not only on the original
investment, but also, in effect on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same time eliminates
the risk of being unable to reinvest the income on such obligations at a rate as
high as the implicit yield on the discount obligation, but at the same time
eliminates the holder's ability to reinvest at higher rates in the future. For
this reason, the Treasury Obligations are subject to substantially greater price
fluctuations during periods of changing interest rates than are securities of
comparable quality which make regular interest payments. The effect of being
able to acquire the Treasury Obligations at a lower price is to permit more of
the Blue Chip Opportunity and Treasury Trust's portfolio to be invested in
Equity Securities.
GENERAL. Whether or not the Securities are listed on a national securities
exchange, the principal trading market for the Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Securities may depend on whether dealers will make a market in the
Securities. There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet redemptions,
and the value of the Trusts, will be adversely affected if trading markets for
the Securities are limited or absent.
The Trust Agreement authorizes the Sponsor to increase the size of each
Trust and the number of Units thereof by the deposit of additional Securities,
or cash (including a letter of credit) with instructions to purchase additional
Securities, in such Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their anticipated
income because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the Trusts
will pay associated brokerage fees.
As described under "Trust Operating Expenses," all of the expenses of the
Blue Chip Opportunity and Treasury Trust will be paid from the sale of
Securities from such Trust. It is expected that such sales will be made at the
end of the initial offering period and each month thereafter through termination
of such Trust. Such sales will result in capital gains and losses and may be
made at times and prices which adversely affect such Trust. For a discussion of
the tax consequences of such sales, see "Federal Taxation."
Unitholders will be unable to dispose of any of the Securities in a
portfolio, as such, and will not be able to vote the Securities. As the holder
of the Securities, the Trustee will have the right to vote all of the voting
stocks in the Trusts and to decide matters relating to the Treasury Obligations
and will do so in accordance with the instructions of the Sponsor. In the
absence of any such instructions by the Sponsor, the Trustee will vote so as to
insure that the Securities are voted as closely as possible in the same manner
and the same general proportion as are securities held by owners other than the
Trusts.
Like other investment companies, financial and business organizations and
individuals around the world, the Trusts could be adversely affected if the
computer systems used by the Sponsor, Evaluator, Supervisor or Trustee or other
service providers to the Trusts do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Sponsor, Evaluator, Supervisor
and Trustee are taking steps that they believe are reasonably designed to
address the Year 2000 Problem with respect to computer systems that they use and
to obtain reasonable assurances that comparable steps are being taken by the
Trusts' other service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact to the
Trusts. The Year 2000 Problem is expected to impact corporations, which may
include issuers of the Securities, to varying degrees based upon various
factors, including, but not limited to, their industry sector and degree of
technological sophistication. The Sponsor is unable to predict what impact, if
any, the Year 2000 Problem will have on issuers of the Securities.
FEDERAL TAXATION
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THE BLUE CHIP OPPORTUNITY TRUST. The Blue Chip Opportunity Trust intends
to elect and 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. Unitholders should consult their own tax advisors with
regard to calculation of basis.
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. The
Taxpayer Relief Act of 1997 (the "1997 Act") provides that for taxpayers other
than corporations, net capital gain (which is defined as net long-term capital
gain over net short-term capital loss for the taxable year) is subject to a
maximum marginal stated tax rate of either 28% or 20%, depending upon the
holding periods of the capital assets. Capital gain or loss is long-term if the
holding period for the asset is more than one year, and is short-term if the
holding period for the asset is one year or less. The date on which a Unit is
acquired (i.e., the "trade date") is excluded for purposes for determining the
holding period of the Unit. Generally, capital gains realized from assets held
for more than one year but not more than 18 months are taxed at a maximum
marginal stated tax rate of 28% and capital gains realized from assets (with
certain exclusions) held for more than 18 months are taxed at a maximum marginal
stated tax rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Further, capital gains realized from assets held for one year or less
are taxed at the same rates as ordinary income. Legislation is currently pending
that provides the appropriate methodology that should be applied in netting the
realized capital gains and losses. Such legislation is proposed to be effective
retroactively for tax years ending after May 6, 1997. Note, however, that the
1997 Act provides that the application of the rules described above in the case
of pass-through entities such as the Trust will be prescribed in future Treasury
Regulations. The Internal Revenue Service has released preliminary guidance
which provides that, in general, pass-through entities such as the Trust may
designate their capital gains dividends as either a 20% rate gain distribution
or a 28% rate gain distribution, depending on the nature of the gain received by
the pass-through entity. Unitholders should consult their own tax advisors as to
the tax rate applicable to capital gain dividends. 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. It should be noted
that legislative proposals are introduced from time to time that affect tax
rates and could affect the relative differences at which ordinary income and
capital gains are taxed.
The 1997 Act includes provisions that treat certain transactions designed
to reduce or eliminate risk of loss and opportunities for gain (e.g., short
sales, offsetting notional principal contracts, futures or forward contracts or
similar transactions) as constructive sales for purposes of recognition of gain
(but not of loss). Unitholders should consult their own advisors with regard to
any such constructive sale rules.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "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.
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 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. 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.
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.
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.
Units in the Trust and Trust distributions may also be subject to state and
local taxation and Unitholders should consult their tax advisers in this regard.
Distributions reinvested into additional Units 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).
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.
THE BLUE CHIP OPPORTUNITY AND TREASURY TRUST. The following is a general
discussion of certain of the Federal income tax consequences of the purchase,
ownership and disposition of the Units of the Blue Chip Opportunity and Treasury
Trust. The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust. For purposes of the following discussions and opinion, it is assumed
that the Equity Securities are equity for Federal income tax purposes, the
interest on the Treasury Obligations is included in gross income for Federal
income tax purposes and that the Treasury Obligations are debt 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 a
Security (whether by sale, exchange, liquidation, redemption, payment at
maturity or otherwise) or upon the sale or redemption of Units by such
Unitholder. The price a Unitholder pays for his Units, generally including sales
charges, is allocated among his pro rata portion of each Security held by the
Trust (in proportion to the fair market values thereof on the valuation date
closest to the date the Unitholder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Security held by the Trust.
Unitholders should consult their own tax advisors with regard to calculation of
basis. The Treasury Obligations are treated as stripped bonds and may be treated
as bonds issued at an original issue discount as of the date a Unitholder
purchases his Units. Because the Treasury Obligations represent interests in
"stripped" U.S. Treasury bonds, a Unitholder's tax basis for his pro rata
portion of each Treasury Obligation held by the Trust (determined at the time he
acquires his Units, in the manner described above) shall be treated as its
"purchase price" by the Unitholder. Original issue discount is effectively
treated as interest for federal income tax purposes and the amount of original
issue discount in this case is generally the difference between the bond's
purchase price and its stated redemption price at maturity. A Unitholder will be
required to include in gross income for each taxable year the sum of his daily
portions of original issue discount attributable to the Treasury Obligations
held by the Trust as such original issue discount accrues and will in general be
subject to federal income tax with respect to the total amount of such original
issue discount that accrues for such year even though the income is not
distributed to the Unitholders during such year to the extent it is not less
than a "de minimis" amount as determined under Treasury Regulations relating to
stripped bonds. To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount is generally treated as zero. In
general, original issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding of accrued interest.
In the case of the Treasury Obligations, this method will generally result in an
increasing amount of income to the Unitholders each year. Unitholders should
consult their tax advisers regarding the federal income tax consequences and
accretion of original issue discount. For federal income tax purposes, a
Unitholder's pro rata portion of dividends as defined by Section 316 of the Code
paid by a corporation with respect to 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, the
holding period of such capital gain will be determined by the period of time a
Unitholder has held his Units.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain, except in the case of a dealer or a financial
institution. A Unitholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will generally be
considered a capital loss (except in the case of a dealer or a financial
institution). Unitholders should consult their tax advisers regarding the
recognition of such capital gains and losses for federal income tax purposes.
Dividends Received Deduction. 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. 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 shareholders, such
as "S" corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax). However, a
corporation owning Units should be aware that Sections 246 and 246A of the Code
impose additional limitations on the eligibility of dividends for the 70%
dividends received deduction. These limitations include a requirement that stock
(and therefore Units) must generally be held at least 46 days (as determined
under Section 246(c) of the Code). Final regulations have been issued which
address special rules that must be considered in determining whether the 46 day
holding requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by such
corporation. It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced. Unitholders should
consult with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deductions.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. The Taxpayer Relief Act of 1997 (the "1997 Act")
provides that for taxpayers other than corporations, net capital gain (which is
defined as net long-term capital gain over net short-term capital loss for the
taxable year) is subject to a maximum marginal stated tax rate of either 28% or
20%, depending upon the holding periods of the capital assets. Capital gain or
loss is long-term if the holding period for the asset is more than one year, and
is short-term if the holding period for the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for purposes
for determining the holding period of the Unit. Generally, capital gains
realized from assets held for more than one year but not more than 18 months are
taxed at a maximum marginal stated tax rate of 28% and capital gains realized
from assets (with certain exclusions) held for more than 18 months are taxed at
a maximum marginal stated tax rate of 20% (10% in the case of certain taxpayers
in the lowest tax bracket). Further, capital gains realized from assets held for
one year or less are taxed at the same rates as ordinary income. Legislation is
currently pending that provides the appropriate methodology that should be
applied in netting the realized capital gains and losses. Such legislation is
proposed to be effective retroactively for tax years ending after May 6, 1997.
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.
In addition, please note that capital gains may be recharacterized 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.
The 1997 Act includes provisions that treat certain transactions designed
to reduce or eliminate risk of loss and opportunities for gain (e.g., short
sales, offsetting notional principal contracts, futures or forward contracts or
similar transactions) as constructive sales for purposes of recognition of gain
(but not loss). Unitholders should consult their own advisors with regard to any
such constructive sale rules.
Limitation on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by such Unitholder. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
If a Unitholder disposes of a Unit, he is deemed thereby to dispose of his
entire pro rata interest in all assets of the Trust involved, including his pro
rata portion of all Securities represented by a Unit.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units
or Termination of the Trust. As discussed in "Rights of Unitholders--Redemption
of Units", under certain circumstances a Unitholder tendering Units for
redemption may request an In Kind Distribution of Equity Securities. A
Unitholder may also under certain circumstances request an In Kind Distribution
of Equity Securities upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." Treasury Obligations will not be distributed
to a Unitholder as part of an In Kind Distribution. The tax consequences
relating to the sale of Treasury Obligations are discussed above. 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 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 (and does not include the Treasury
Obligations). A Unitholder will not recognize gain or loss with respect to the
Equity Security if a Unitholder only receives Equity Securities in exchange for
his pro rata portion in each share of 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 for the fractional share and his tax basis in such
fractional share of an Equity Security held by the Trust. In either case, a
Unitholder who receives cash in exchange for his interest in the Treasury
Obligations will generally recognize gain or loss based upon the difference
between the amount of cash received by the Unitholder for the Treasury
Obligations and his tax basis in such Treasury Obligations.
Because the Trust will own many Equity Securities, a Unitholder who
requests an In Kind Distribution will have to analyze the tax consequences with
respect to each Equity Security owned by the Trust. The amount of taxable gain
(or loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request an
In Kind Distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder for
his Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of an
Equity Security 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 and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons (accrual of original issue discount on the Treasury Obligations
may not be subject to taxation or withholding provided certain requirements are
met). Such persons should consult their tax advisers.
Unitholders will be notified annually of the amounts of original issue
discount, income, dividends and long-term capital gain distributions includable
in the Unitholder's gross income and amounts of Trust expenses which may be
claimed as itemized deductions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker 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 income
tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders with regard to federal and certain aspects of New York State and
City income taxes. Unitholders may be subject to state and local taxation in
other jurisdictions. Unitholders should consult their tax advisers regarding
potential foreign, state or local taxation with respect to the Units. The term
U.S. Unitholder means an owner of a Unit of the Trust that (a) is (i) for United
States federal income tax purposes a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or under
the laws of the United States or of any political subdivision thereof, or (iii)
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source or (b) does not qualify as a U.S.
Unitholder in paragraph (a) but whose income from a Unit is effectively
connected with such Unitholder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States whose income
and gain on the Units will be taxable.
TRUST OPERATING EXPENSES
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COMPENSATION OF SPONSOR AND EVALUATOR. The Sponsor will not receive any
fees in connection with its activities relating to the Trusts. However, Van
Kampen American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee which is not to exceed the
amount set forth under "Summary of Essential Financial Information," for
providing portfolio supervisory services for the Trusts. Such fee (which is
based on the number of Units outstanding on January 1 of each year for which
such compensation relates except during the initial offering period in which
event the calculation is based on the number of Units outstanding at the end of
the month of such calculation) may exceed the actual costs of providing such
supervisory services for these Trusts, but at no time will the total amount
received for portfolio supervisory services rendered to all Series of the Fund
and to any other unit investment trusts sponsored by the Sponsor for which the
Supervisor provides portfolio supervisory services in any calendar year exceed
the aggregate cost to the Supervisor of supplying such services in such year. In
addition, the Evaluator, which is a division of Van Kampen American Capital
Investment Advisory Corp., shall receive the annual per Unit evaluation fee set
forth under "Summary of Essential Financial Information" (which amount is based
on the number of Units outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of Units outstanding at the end of the
month of such calculation) for regularly evaluating the Trust portfolios. The
foregoing fees are payable as described under "General" below. Both of the
foregoing fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category. The Sponsor will receive sales commissions and may realize other
profits (or losses) in connection with the sale of Units and the deposit of the
Securities as described under "Public Offering--Sponsor Compensation."
TRUSTEE'S FEE. For its services the Trustee will receive the annual per
Unit fee from each Trust set forth under "Summary of Essential Financial
Information" (which amount is based on the number of Units outstanding on
January 1 of each year for which such compensation relates except during the
initial offering period in which event the calculation is based on the number of
Units outstanding at the end of the month of such calculation). The Trustee's
fees are payable as described under "General" below. The Trustee benefits to the
extent there are funds for future distributions, payment of expenses and
redemptions in the Capital and Income Accounts since these Accounts are
non-interest bearing to Unitholders and the amounts earned by the Trustee are
retained by the Trustee. Part of the Trustee's compensation for its services to
the Trusts is expected to result from the use of these funds. Such fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of Shelter"
in the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. For a
discussion of the services rendered by the Trustee pursuant to its obligations
under the Trust Agreement, see "Rights of Unitholders--Reports Provided" and
"Trust Administration."
MISCELLANEOUS EXPENSES. Expenses incurred in establishing the Trusts,
including the cost of the initial preparation of documents relating to the
Trusts (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 related Trust and amortized over a five year
period. The following additional charges are or may be incurred by the Trusts:
(a) normal expenses (including the cost of mailing reports to Unitholders)
incurred in connection with the operation of the Trusts, (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 Trusts and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of the Trusts without negligence, bad faith or wilful
misconduct on its part, (g) accrual of costs associated with liquidating the
securities and (h) expenditures incurred in contacting Unitholders upon
termination of a Trust. The expenses set forth herein are payable as described
under "General" below.
GENERAL. The fees and expenses of the Blue Chip Opportunity Trust will
accrue on a daily basis and will be charged to such Trust, in arrears, on a
monthly basis as of the tenth day of the month. The fees and expenses of the
Blue Chip Opportunity Trust are payable out of the Income Account or, if
insufficient, from the Capital Account. During the initial offering period of
the Blue Chip Opportunity and Treasury Trust, all of the fees and expenses will
accrue on a daily basis and will be charged to such Trust, in arrears, at the
end of the initial offering period. After the initial offering period of the
Blue Chip Opportunity and Treasury Trust, all of the fees and expenses of such
Trust will accrue on a daily basis and will be charged to such Trust, in
arrears, on a monthly basis as of the tenth day of each month. The fees and
expenses of the Blue Chip Opportunity and Treasury Trust are payable out of the
Capital Account. When such fees and expenses are paid by or owing to the
Trustee, they are secured by a lien on the related Trust's portfolio. If the
balance in the Income or Capital Account is insufficient to provide for amounts
payable by a Trust, the Trustee has the power to sell Equity Securities (but not
Treasury Obligations unless the maturity value of the Treasury Obligations is
not less than $11.00 per Unit) to pay such amounts. These sales may result in
capital gains or losses to Unitholders. See "Federal Taxation."
PUBLIC OFFERING
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GENERAL. Units are offered at the Public Offering Price. The Public
Offering Price is based on the aggregate underlying value of the Securities, a
sales charge of 4.5% of the Public Offering Price which is equivalent to 4.712%
of the aggregate underlying value of the Securities, and cash, if any, in the
Income and Capital Accounts held or owned by a Trust. The sales charge for
secondary market transactions is described under "Offering Price" below. The
sales charge applicable to quantity purchases is, during the initial offering
period, reduced on a graduated basis to any person acquiring Units as follows:
AGGREGATE DOLLAR AMOUNT SALES
OF UNITS PURCHASED* CHARGE
------------------------ -----------
$ 50,000-$ 99,999 4.20%
$100,000-$249,999 4.00
$250,000-$499,999 3.50
$500,000-$999,999 3.00
$1,000,000 or more 2.50
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*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
The sales charge reduction will primarily be the responsibility of the
selling broker, dealer or agent. This reduced sales charge structure will apply
on all purchases by the same person from any one dealer of units of Van Kampen
American Capital-sponsored unit investment trusts which are being offered in the
initial offering period (a) on any one day (the "Initial Purchase Date") or (b)
on any day subsequent to the Initial Purchase Date if (1) the units purchased
are of a unit investment trust purchased on the Initial Purchase Date, and (2)
the person purchasing the units purchased a sufficient amount of units on the
Initial Purchase Date to qualify for a reduced sales charge on such date. In the
event units of more than one trust are purchased on the Initial Purchase Date,
the aggregate dollar amount of such purchases will be used to determine whether
purchasers are eligible for a reduced sales charge. Such aggregate dollar amount
will be divided by the public offering price per unit (on the day preceding the
date of purchase) of each respective trust purchased to determine the total
number of units which such amount could have purchased of each individual trust.
Purchasers must then consult the applicable trust's prospectus to determine
whether the total number of units which could have been purchased of a specific
trust would have qualified for a reduced sales charge and, if so qualified, the
amount of such reduction. Assuming a purchaser qualifies for a sales charge
reduction or reductions, to determine the applicable sales charge reduction or
reductions it is necessary to accumulate all purchases made on the Initial
Purchase Date and all purchases made in accordance with (b) above. Units
purchased in the name of the spouse of a purchaser or in the name of a child of
such purchaser ("immediate family members") will be deemed for the purposes of
calculating the applicable sales charge to be additional purchases by the
purchaser. The reduced sales charges will also be applicable to a trustee or
other fiduciary purchasing securities for one or more trust estate or fiduciary
accounts.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law and daughters-in-law, and trustees, custodians or fiduciaries for
the benefit of such persons) of Van Kampen American Capital Distributors, Inc.
and its affiliates, dealers and their affiliates, and vendors providing services
to the Sponsor may purchase Units at the Public Offering Price less the
applicable dealer concession.
A purchaser desiring to purchase during a 13 month period $500,000 or more
of any combination of series of Van Kampen American Capital unit investment
trusts may qualify for a reduced sales charge by signing a nonbinding Letter of
Intent with any single broker-dealer. After signing a Letter of Intent, at the
date total purchases, less redemptions, of units of any combination of series of
Van Kampen American Capital unit investment trusts by a purchaser (including
units purchased in the name of the spouse of a purchaser or in the name of a
child of such purchaser under 21 years of age) exceed $500,000, the selling
broker-dealer, bank or other will credit the unitholder with cash as a
retroactive reduction of the sales charge on such units equal to the amount
which would have been paid for the total aggregated sale amount. If a purchaser
does not complete the required purchases under the Letter of Intent within the
13 month period, no such retroactive sales charge reduction shall be made. To
qualify under a Letter of Intent each purchase of units of Van Kampen American
Capital unit investment trusts must equal or exceed $100,000.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge reduction
for quantity purchases) less the concession the Sponsor typically allows to
brokers and dealers for purchases (see "Public Offering--Unit Distribution") by
(1) investors who purchase Units through registered investment advisers,
certified financial planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or asset
management service, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed, (2) bank trust departments investing funds over which they
exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, custodial or similar capacity, (3) any person who for at
least 90 days, has been an officer, director or bona fide employee of any firm
offering Units for sale to investors or their immediate family members (as
described above) and (4) officers and directors of bank holding companies that
make Units available directly or through subsidiaries or bank affiliates.
Notwithstanding anything to the contrary in this Prospectus, such investors,
bank trust departments, firm employees and bank holding company officers and
directors who purchase Units through this program will not receive sales charge
reductions for quantity purchases.
OFFERING PRICE. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in accordance
with fluctuations in the prices of the underlying Securities in the Trusts.
As indicated above, the price of the Units was established by adding to
the determination of the aggregate underlying value of the Securities an amount
equal to 4.712% of such value and dividing the sum so obtained by the number of
Units outstanding. The Public Offering Price shall also include the
proportionate share of any cash held in the Income and Capital Accounts. This
computation produced a gross underwriting profit equal to 4.5% of the Public
Offering Price. Such price determination as of the close of business on the day
before the Initial Date of Deposit was made on the basis of an evaluation of the
Securities in each Trust prepared by Interactive Data Corporation, a firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities. After the close of business on the day before the Initial
Date of Deposit, the Evaluator will appraise or cause to be appraised daily the
value of the underlying Securities as of the Evaluation Time on days the New
York Stock Exchange is open and will adjust the Public Offering Price of the
Units commensurate with such valuation. Such Public Offering Price will be
effective for all orders received prior to the Evaluation Time on each such day.
Orders received by the Trustee or Sponsor for purchases, sales or redemptions
after that time, or on a day when the New York Stock Exchange is closed, will be
held until the next determination of price. Effective on each June 2, commencing
June 2, 1999, the secondary market sales charge will be reduced by .3 of 1% to a
minimum sales charge of 1.5%.
The underlying value of the Equity Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Equity Securities are listed on a national securities exchange
this evaluation is generally based on the closing sale prices on that exchange
(unless it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Equity Securities are not so listed or, if so listed
and the principal market therefor is other than on the exchange, the evaluation
shall generally be based on the current ask price on the over-the-counter market
(unless it is determined that these prices are inappropriate as a basis for
evaluation). If current ask prices are unavailable, the evaluation is generally
determined (a) on the basis of current ask prices for comparable securities, (b)
by appraising the value of the Equity Securities on the ask side of the market
or (c) by any combination of the above. During the initial offering period, the
underlying value of the Treasury Obligations will be their net offering prices.
If net offering prices are not available for the Treasury Obligations, then such
evaluations will be based on (1) offering prices for comparable securities, (2)
by determining the value of the Treasury Obligations on the offer side of the
market by appraisal or (3) by any combination of the above. After the completion
of the initial offering period, the Securities will be valued on the bid prices
thereof. The offering price of the Treasury Obligations may be expected to be
greater than the bid price of the Treasury Obligations by less than 2%.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trusts
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
UNIT DISTRIBUTION. During the initial offering period, Units will be
distributed to the public by the Sponsor, broker-dealers and others at the
Public Offering Price. Upon the completion of the initial offering period, Units
repurchased in the secondary market, if any, may be offered by this Prospectus
at the secondary market Public Offering Price in the manner described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units on the Initial Date of Deposit of
3.60%. After the Initial Date of Deposit, broker-dealers or others will be
allowed a concession or agency commission in connection with the distribution of
Units during the initial offering period of 3.20% per Unit; volume concessions
or agency commissions of an additional .30% of the Public Offering Price will be
given to any broker/dealer or bank, who purchases from the Sponsor at least
$100,000 on the Initial Date of Deposit or $250,000 on any day thereafter of any
combination of the Blue Chip Opportunity Trust and the Blue Chip Opportunity and
Treasury Trust. Any quantity discount provided to investors will be borne by the
selling dealer or agent as indicated under "General" above. For secondary market
transactions, such concession or agency commission will amount to 70% of the
sales charge applicable to the transaction. The breakpoint concessions or agency
commissions are applied on either a Unit basis or a dollar basis utilizing a
breakpoint equivalent of $10 per Unit and will be applied on whichever basis is
more favorable to the broker-dealer. The breakpoints will be adjusted to take
into consideration orders stated in dollars which cannot be completely fulfilled
due to the requirement that only whole Units be issued.
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge (equal to the agency
commission referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust Units; however,
the Glass-Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions are not
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
To facilitate the handling of transactions, sales of Units shall normally
be limited to transactions involving a minimum of 100 Units (25 Units for
qualified retirement plans) but may vary by selling firm. In connection with
fully disclosed transactions with the Sponsor, the minimum purchase requirement
will be that number of Units set forth in the contract between the Sponsor and
the related broker or agent. The Sponsor reserves the right to reject, in whole
or in part, any order for the purchase of Units and to change the amount of the
concession or agency commission to dealers and others from time to time.
SPONSOR COMPENSATION. The Sponsor will receive a gross sales commission
equal to 4.5% of the Public Offering Price of the Units (equivalent to 4.712% of
the aggregate value of Securities), less any reduced sales charge for quantity
purchases (as described under "General" above). Any quantity discount provided
to investors will be borne by the selling broker, dealer or agent as indicated
under "General" above.
In addition, the Sponsor will realize a profit or will sustain a loss, as
the case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trusts on the
Initial Date of Deposit as well as on subsequent deposits. See "Notes to
Portfolios." The Sponsor has not participated as sole underwriter or as manager
or as a member of the underwriting syndicates or as an agent in a private
placement for any of the Securities in the Trust portfolios. The Sponsor may
further realize additional profit or loss during the initial offering period as
a result of the possible fluctuations in the market value of the Securities in
the Trusts after a date of deposit, since all proceeds received from purchasers
of Units (excluding dealer concessions and agency commissions allowed, if any)
will be retained by the Sponsor. Broker-dealers or others (each "a distributor")
who distribute 1,000,000 - 1,999,999 Units during the initial offering period
will receive additional compensation from the Sponsor, after the close of the
initial offering period, of $0.01 for each Unit it distributes; or each
distributor who distributes 2,000,000 - 2,999,999 Units will receive additional
compensation of $0.015 for each Unit it distributes; or each distributor who
distributes 3,000,000 or more Units will receive additional compensation of
$0.02 for each Unit it distributes. The breakpoints above are applied on either
a Unit basis or a dollar basis utilizing a breakpoint equivalent of $10 per Unit
and will be applied on whichever basis is more favorable to the distributor. The
breakpoints will be adjusted to take into consideration orders stated in dollars
which cannot be completely fulfilled due to the requirement that only whole
Units be issued.
Broker-dealers of the Trusts, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trusts. These programs will not change the price
Unitholders pay for their Units or the amount that the Trusts will receive from
the Units sold.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior to
the date of settlement for the purchase of Units may be used in the Sponsor's
business and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain a
secondary market for Units of the Trusts. In so maintaining a market, the
Sponsor will also realize profits or sustain losses in the amount of any
difference between the price at which Units are purchased and the price at which
Units are resold (which price includes the applicable sales charge). In
addition, the Sponsor will also realize profits or sustain losses resulting from
a redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
PUBLIC MARKET. Although it is obligated to do so, the Sponsor intends to
maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Equity Securities in the Trusts, plus, in the
case of the Blue Chip Opportunity and Treasury Trust, the aggregate bid price of
the Treasury Obligations (offer price during the initial offering period). If
the supply of Units exceeds demand or if some other business reason warrants it,
the Sponsor may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. In the event that a market is not maintained
for the Units and the Unitholder cannot find another purchaser, a Unitholder
desiring to dispose of his Units may be able to dispose of such Units only by
tendering them to the Trustee for redemption at the Redemption Price. See
"Rights of Unitholders--Redemption of Units." A Unitholder who wishes to dispose
of his Units should inquire of his broker as to current market prices in order
to determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
TAX-SHELTERED RETIREMENT PLANS. Units of the Trusts 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 Trusts may be limited by the plans' provisions and does not
itself establish such plans. The minimum purchase for qualified retirement plans
is 25 Units but may vary by selling firm.
RIGHTS OF UNITHOLDERS
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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 Trusts will be evidenced by certificates unless a
Unitholder or the Unitholder's registered broker-dealer makes a written request
to the Trustee that ownership be in book entry form. Units are transferable by
making a written request to the Trustee and, in the case of Units evidenced by a
certificate, by presentation and surrender of such certificate to the Trustee
properly endorsed or accompanied by a written instrument or instruments of
transfer. A Unitholder must sign such written request, and such certificate or
transfer instrument, exactly as his name appears on the records of the Trustee
and on the face of any certificate representing the Units to be transferred with
the signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program in
addition to, or in substitution for, STAMP as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may
require a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer 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 a Trust
with respect to the Equity Securities therein are credited by the Trustee to the
Income Account for such Trust. Other receipts (e.g., capital gains, proceeds
from the sale of Securities, return of principal, etc.) are credited to the
Capital Account of a Trust. Proceeds from the sale of Securities made to meet
redemptions of Units shall be segregated within the Capital Account of the Blue
Chip Opportunity and Treasury Trust from proceeds from the sale of Securities
made to satisfy the fees, expenses and charges of such Trust.
The Trustee will distribute any net income received with respect to any of
the Equity Securities in the Blue Chip Opportunity Trust and will distribute any
income received with respect to any of the Securities in the Blue Chip
Opportunity and Treasury Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary of
Essential Financial Information." Proceeds received on the sale of any
Securities in a Trust, to the extent not used to meet redemptions of Units or
pay fees and expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Income with respect to the original issue discount on the Treasury
Obligations in the Blue Chip Opportunity and Treasury Trust will not be
distributed currently, although Unitholders in such Trust will be subject to
federal income tax as if a distribution had occurred. See "Federal Taxation."
Proceeds received from the disposition of any of the Securities after a record
date and prior to the following distribution date will be held in the Capital
Account and not distributed until the next distribution date applicable to such
Capital Account. The Trustee is not required to pay interest on funds held in
the Capital or Income Accounts (but may itself earn interest thereon and
therefore benefits from the use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
any applicable expenses. Because dividends are not received by the Trusts at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
With respect to the Blue Chip Opportunity Trust, as of 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 such Trust, and with respect to the Blue Chip Opportunity
and Treasury Trust, at the end of the initial offering period and on or before
the tenth day of each month thereafter, the Trustee will deduct from the Capital
Account amounts necessary to pay the expenses of such Trust (as determined on
the basis set forth under "Trust Operating Expenses"). The Trustee also may
withdraw from the Income and Capital Accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of the
Trusts. 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
income, capital gains and/or capital on their Units automatically reinvested in
additional Units of the Trusts without a sales charge pursuant to the "Automatic
Reinvestment Option" (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 five 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 a Trust owned by
such Unitholder and such election will remain in effect until changed by the
Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Sponsor (see "Public Offering--Public Market") or, until such
time as additional Units cease to be issued by a Trust (see "The Trusts"),
distributions may be reinvested in such additional Units. If Units are
unavailable in the secondary market, distributions which would otherwise have
been reinvested shall be paid in cash to the Unitholder on the applicable
Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will
be made based on the net asset value for Units of the related Trust as of the
Evaluation Time on the related Distribution Dates. Under the reinvestment plan,
the related Trust will pay the Unitholder's distributions to the Trustee which
in turn will purchase for such Unitholder full and fractional Units of such
Trust and will send such Unitholder a statement reflecting the reinvestment.
Unitholders may also elect to have each distribution of income, capital
gains and/or capital on their Units automatically reinvested in shares of
certain Van Kampen American Capital or Margan Stanley mutual funds 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
income, capital gains and/or capital 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 on his
or her Units in cash. There will be no charge or other penalty for such
termination. The Sponsor, each Reinvestment Fund, and its investment adviser
shall have the right to suspend or terminate the reinvestment plan at any time.
REPORTS PROVIDED. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit outstanding. For as long as the Sponsor deems it to be in the best
interest of the Unitholders, the accounts of each 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 (including amortization of original issue discount with
respect to the Treasury Obligations, if applicable), deductions for applicable
taxes and for fees and expenses of the Trust, for redemptions of Units, if any,
and the balance remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (ii) as to the Capital Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payment of
applicable taxes, fees and expenses of a Trust held for distribution to
Unitholders of record as of a date prior to the determination and the balance
remaining after such distributions and deductions expressed both as a total
dollar amount and as a dollar amount representing the pro rata share of each
Unit outstanding on the last business day of such calendar year; (iii) a list of
the Securities held and the number of Units outstanding on the last business day
of such calendar year; (iv) the Redemption Price per Unit based upon the last
computation thereof made during such calendar year; and (v) amounts actually
distributed during such calendar year from the Income and Capital Accounts,
separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trusts 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 and, in the case of Units evidenced
by a certificate, by tendering such certificate to the Trustee, duly endorsed or
accompanied by proper instruments of transfer with signature guaranteed (or by
providing satisfactory indemnity, as in connection with lost, stolen or
destroyed certificates) and by payment of applicable governmental charges, if
any. No redemption fee will be charged. On the third business day following such
tender, the Unitholder will be entitled to receive in cash an amount for each
Unit equal to the Redemption Price per Unit next computed after receipt by the
Trustee of such tender of Units. The "date of tender" is deemed to be the date
on which Units are received by the Trustee, except that as regards Units
received after the Evaluation Time the date of tender is the next day on which
the New York Stock Exchange is open for trading and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at the redemption
price computed on that day.
The Trustee is empowered to sell Securities in order to make funds
available for redemption if funds are not otherwise available in the Capital and
Income Accounts to meet redemptions. The Securities to be sold will be selected
by the Trustee from those designated on a current list provided by the
Supervisor for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from
the Trustee a distribution in kind ("In Kind Distribution") of an amount and
value of Equity Securities (and cash representing Treasury Obligations in the
Blue Chip Opportunity and Treasury Trust) 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 Equity 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 Equity Securities comprising the related portfolio and cash from the Capital
Account equal to the fractional shares and the pro rata portion of the Treasury
Obligations (in the case of the Blue Chip Opportunity and Treasury Trust) 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 a
Trust will be, and the diversity of a 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 a portfolio at the time of redemption.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate underlying
value of the Equity Securities in the Trusts plus the bid price of the Treasury
Obligations (in the case of the Blue Chip Opportunity and Treasury Trust), plus
or minus cash, if any, in the Income and Capital Accounts. On the Initial Date
of Deposit, the Public Offering Price per Unit (which includes the sales charge)
exceeded the values at which Units could have been redeemed by the amounts shown
under "Summary of Essential Financial Information." While the Trustee has the
power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in a Trust determined on the basis of (i) the cash on
hand in such Trust, (ii) the value of the Securities in such Trust and (iii)
dividends receivable on the Equity Securities trading ex-dividend as of the date
of computation, less (a) amounts representing taxes or other governmental
charges payable out of such Trust and (b) the accrued fees, charges and expenses
of such Trust. The Evaluator may determine the value of the Equity Securities in
the Trusts in the following manner: If the Equity Securities are listed on a
national securities exchange this evaluation is generally based on the closing
sale prices on that exchange (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price on
that exchange, at the closing bid prices. If the Equity Securities are not so
listed or, if so listed and the principal market therefore is other than on the
exchange, the evaluation shall generally be based on the current bid price on
the over-the-counter market (unless these prices are inappropriate as a basis
for evaluation). If current bid prices are unavailable, the evaluation is
generally determined (a) on the basis of current bid prices for comparable
securities, (b) by appraising the value of the Equity Securities on the bid side
of the market or (c) by any combination of the above. See "Public
Offering--Offering Price" for a description of the method of evaluating the
Treasury Obligations..
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 Trusts is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
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SPONSOR PURCHASES OF UNITS. 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 portfolios of the Trusts are not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. Traditional methods of
investment management for a managed fund typically involve frequent changes in a
portfolio of securities on the basis of economic, financial and market analyses.
The Trusts, however, will not be managed. The Trust Agreement, however, provides
that the Sponsor may (but need not) direct the Trustee to dispose of an Equity
Security in certain events such as the issuer having defaulted on the payment on
any of its outstanding obligations or the price of an Equity Security has
declined to such an extent or other such credit factors exist so that in the
opinion of the Sponsor, the retention of such Securities would be detrimental to
a Trust.
With respect to the Blue Chip Opportunity Trust, as a general rule the
only purchases and sales that will be made with respect to such Trust's
portfolio will be those necessary to maintain, to the extent feasible, a
portfolio which reflects the current components of the Dow Jones Industrial
Average, taking into consideration redemptions, sales of additional Units and
the other adjustments referred to elsewhere in this prospectus (see "The
Trusts"). 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 Blue Chip Opportunity 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,
and to avoid imposition of any excise tax. The Blue Chip Opportunity Trust
requires the Sponsor, as a part of its administrative function, to instruct the
Trustee to reinvest the net proceeds of the sale of Securities in additional
Securities to the extent that such proceeds are not required for the redemption
of Units. As a policy matter, the Sponsor currently intends to direct the
Trustee to acquire round lots of shares of the Securities rather than odd lot
amounts. Any funds not used to acquire round lots will be held for future
purchases of shares, for redemptions of Units or for distributions to
Unitholders. In the event the Trustee receives any securities or other
properties relating to the Securities (other than normal dividends) acquired in
exchange for Securities in the Blue Chip Opportunity Trust such as those
acquired in connection with a merger, a spinoff of a subsidiary or other
transaction, the Trustee is directed to sell such securities or other property
and reinvest the proceeds in shares of the Security for which such securities or
other property relates, or if such Security is thereafter removed from the Dow
Jones Industrial Average, in any new security which is added as a component of
the Dow Jones Industrial Average. Proceeds from the sale of Securities (or any
securities or other property received by the Blue Chip Opportunity Trust in
exchange for Securities) are credited to the Capital Account for reinvestment
into new securities which are added as components of the Dow Jones Industrial
Average or into additional shares of the Security as indicated in the preceding
sentence, for distribution to Unitholders or to meet redemptions. Pursuant to
the Trust Agreement, the Sponsor is authorized to direct the reinvestment of the
proceeds of the sale of Securities in replacement securities in the event the
sale is the direct result of serious adverse credit factors affecting the issuer
of the Security which, in the opinion of the Sponsor, would make the retention
of such Security detrimental to the Blue Chip Opportunity Trust.
Pursuant to the Trust Agreement and with limited exceptions, the Trustee
may sell any securities or other properties acquired in exchange for Equity
Securities in the Blue Chip Opportunity and Treasury Trust such as those
acquired in connection with a merger or other transaction. If offered such new
or exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless acquired by
the Blue Chip Opportunity and Treasury 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).
Treasury Obligations may be sold by the Trustee only pursuant to the liquidation
of the Blue Chip Opportunity and Treasury Trust, to meet redemption requests or
to pay expenses provided that the maturity value of the Treasury Obligations is
not less than $11 per Unit.
Therefore, except as stated under "Trust Portfolios" for failed securities
and as provided herein, the acquisition by the Trusts of any securities other
than the Securities is prohibited. Proceeds from the sale of Securities (or any
securities or other property received by the Trusts in exchange for Equity
Securities), unless held for reinvestment as herein provided, are credited to
the Capital Account for distribution to Unitholders, to meet redemptions or to
pay charges and expenses of the related Trust.
As indicated under "Rights of Unitholders--Redemption of Units" above, the
Trustee may also sell Securities designated by the Supervisor, or if not so
directed, in its own discretion, for the purpose of redeeming Units of the
Trusts tendered for redemption and the payment of expenses; provided, however,
that in the case of Securities sold to meet redemption requests, Treasury
Obligations may only be sold if the Blue Chip Opportunity and Treasury Trust is
assured of retaining a sufficient principal amount of Treasury Obligations to
provide funds upon maturity of such Trust at least equal to $11.00 per Unit.
To the extent practicable, the Supervisor may (but is not obligated to)
designate Equity Securities to be sold by the Trustee, in order to maintain the
proportionate relationship among the number of shares of individual issues of
Securities. To the extent this is not practicable, the composition and diversity
of the Securities may be altered. In order to obtain the best price for the
Trusts, it may be necessary for the Supervisor to specify minimum amounts
(generally 100 shares) in which blocks of Equity Securities are to be sold. The
Sponsor may consider sales of units of unit investment trusts it sponsors in
selecting broker/dealers to execute the Trusts portfolio transactions.
AMENDMENT OR TERMINATION. The Trust Agreement may be amended by the
Trustee and the Sponsor without the consent of any of the Unitholders (1) to
cure any ambiguity or to correct or supplement any provision thereof which may
be defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor and
the Trustee), provided, however, that the Trust Agreement may not be amended to
increase the number of Units (except as provided in the Trust Agreement). The
Trust Agreement may also be amended in any respect by the Trustee and Sponsor,
or any of the provisions thereof may be waived, with the consent of the holders
of 51% of the Units then outstanding, provided that no such amendment or waiver
will reduce the interest in a 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.
Each Trust may be liquidated at any time by consent of Unitholders
representing 66 2/3% of such Trust Units then outstanding or by the Trustee when
the value of such Trust, as shown by any evaluation, is less than that amount
set forth under Minimum Termination Value in "Summary of Essential Financial
Information." A Trust will be liquidated by the Trustee in the event that a
sufficient number of Units not yet sold are tendered for redemption by the
Sponsor so that the net worth of such Trust would be reduced to less than 40% of
the value of the Securities at the time they were deposited in such Trust. If a
Trust is liquidated because of the redemption of unsold Units the Sponsor will
refund to each purchaser of Units the entire sales charge paid by such
purchaser. The Trust Agreement will terminate upon the sale or other disposition
of the last Security held thereunder, but in no event will it continue beyond
the Mandatory Termination Date stated under "Summary of Essential Financial
Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin
to be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of the Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the event
the Sponsor does not so direct, the Securities shall be sold within a reasonable
period and in such manner as the Trustee, in its sole discretion, shall
determine. 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
Trusts 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 of the Equity
Securities rather than payment in cash upon the termination of a 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 related 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 and the pro rata
portion of the Treasury Obligations (in the case of the Blue Chip Opportunity
and Treasury Trust) 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 and the pro rata
portion of the Treasury Obligations (in the case of the Blue Chip Opportunity
and Treasury Trust) within a reasonable time following the Mandatory Termination
Date. Regardless of the distribution involved, the Trustee will deduct from the
funds of the Trusts 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 Trusts upon termination may result in a lower amount
than might otherwise be realized if such sale were not required at such time.
The Trustee will then distribute to each Unitholder his pro rata share of the
balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion will determine that any amounts held in reserve are no
longer necessary, it will make distribution thereof to Unitholders in the same
manner.
LIMITATIONS ON LIABILITIES. The Sponsor, the Evaluator, the Supervisor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (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. VK/AC Holding, Inc. is a wholly owned subsidiary of MSAM
Holdings II, Inc., which in turn is a wholly owned subsidiary of Morgan Stanley
Dean Witter & Co. ("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
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; global custody, securities clearance
services and securities lending; and credit card services.
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. 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 Trusts 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 September 30, 1997, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $65.3 billion of investment
products, of which over $10.85 billion is invested in municipal securities. The
Sponsor and its Van Kampen American Capital affiliates managed $54 billion of
assets, consisting of $34.3 billion for 55 open-end mutual funds (of which 45
are distributed by Van Kampen American Capital Distributors, Inc.) $14.2 billion
for 37 closed-end funds and $5.5 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-ended 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 shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolios.
In accordance with the Trust Agreement, the Trustee shall keep proper
books of record and account of all transactions at its office for the Trusts.
Such records shall include the name and address of, and the number of Units of
the Trusts held by, every Unitholder of the Fund. Such books and records shall
be open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Securities held in each 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. Winston &Strawn has acted as counsel for the Trustee.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. The statements of condition and
the related securities portfolios at the Initial Date of Deposit included in
this Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors,
Inc. and the Unitholders of Van Kampen American Capital Equity Opportunity
Trust, Series 102:
We have audited the accompanying statements of condition and the related
portfolios of Van Kampen American Capital Equity Opportunity Trust, Series 102
as of June 2, 1998. The statements of condition and portfolios are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit deposited to purchase securities
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation. We believe our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 102 as of June 2, 1998, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
June 2, 1998
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST,
SERIES 102
STATEMENTS OF CONDITION
AS OF JUNE 2, 1998
BLUE CHIP
OPPORTUNITY
BLUE CHIP AND
OPPORTUNITY TREASURY
TRUST TRUST
----------- -----------
INVESTMENT IN SECURITIES:
<S> <C> <C>
Contracts to purchase securities (1) $ 142,883 $ 143,329
Organizational costs (2) 37,718 40,468
----------- -----------
$ 180,601 $ 183,797
=========== ===========
LIABILITIES AND INTEREST OF UNITHOLDERS:
Liabilities--
Accrued organizational costs (2) $ 37,718 $ 40,468
Interest of Unitholders--
Cost to investors (3) 149,620 150,000
Less: Gross underwriting commission (3) (4) 6,737 6,671
----------- -----------
Net Interest to Unitholders (3) 142,883 143,329
----------- -----------
Total $ 180,601 $ 183,797
=========== ===========
- --------------------------------------------------------------------------------------------------------------------
(1)The aggregate value of the Securities listed under "Portfolios" and their
cost to the Trust are the same. The value of the Securities is determined by
Interactive Data Corporation on the bases set forth under "Public
Offering--Offering Price." The contracts to purchase Securities are
collateralized by irrevocable letters of credit of $142,883 and $143,329 for
the Blue Chip Opportunity Trust and Blue Chip Opportunity and Treasury Trust,
respectively, which have been deposited with the Trustee.
(2)Each Trust will bear all or a portion of its organizational costs, which
will be deferred and amortized over five years. Organizational costs have
been estimated based on a projected trust size of $15,000,000 for the Blue
Chip Opportunity Trust and the Blue Chip Opportunity and Treasury Trust. To
the extent a Trust is larger or smaller, the estimate will vary.
(3)The aggregate public offering price and the aggregate sales charge of 4.5%
are computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor Compensation" and assume all single
transactions involve less than 5,000 Units. For single transactions involving
5,000 or more Units, the sales charge is reduced (see "Public
Offering--General") resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net interest to
Unitholders remains unchanged.
</TABLE>
<TABLE>
<CAPTION>
BLUE CHIP OPPORTUNITY TRUST, SERIES 4
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102)
AS OF THE INITIAL DATE OF DEPOSIT: JUNE 2, 1998
- ----------------------------------------------------------------------------------------------------------------
ESTIMATED
ANNUAL COST OF
NUMBER MARKET VALUE DIVIDENDS SECURITIES
OF SHARES NAME OF ISSUER (1) PER SHARE (2) PER SHARE (2) TO TRUST (2)
- ----------- --------------------------------------------------------------- --------------- -------------
<S> <C> <C> <C> <C>
109 Allied Signal, Inc. $ 43.6875 $ 0.60 $ 4,761.94
68 Aluminum Company of America 68.6250 1.00 4,666.50
46 American Express Company 103.8125 0.90 4,775.38
80 A T & T Corporation 59.1250 1.32 4,730.00
101 Boeing Company 47.6250 0.56 4,810.13
85 Caterpillar, Inc. 55.2500 1.00 4,696.25
60 Chevron Corporation 79.0000 2.44 4,740.00
60 Coca-Cola Company 79.5000 0.60 4,770.00
63 Du Pont (E.I) de Nemours and Company 75.4375 1.40 4,752.56
66 Eastman Kodak Company 72.5625 1.76 4,789.13
68 Exxon Corporation 70.6875 1.64 4,806.75
57 General Electric Company 82.8750 1.20 4,723.88
66 General Motors Corporation 71.1250 2.00 4,694.25
66 Goodyear Tire & Rubber Company 72.8125 1.20 4,805.63
77 Hewlett Packard Company 61.5000 0.64 4,735.50
41 International Business Machines Corporation 117.2500 0.88 4,807.25
102 International Paper Company 46.9375 1.00 4,787.63
68 Johnson & Johnson 68.9375 1.00 4,687.75
38 J. P. Morgan & Company, Inc. 124.0625 3.80 4,714.38
72 McDonald's Corporation 67.1875 0.36 4,837.50
41 Merck & Company, Inc. 116.5000 1.80 4,776.50
51 Minnesota Mining and Manufacturing Company 94.1250 2.20 4,800.38
127 Phillip Morris Companies, Inc. 37.6875 1.60 4,786.31
56 Procter & Gamble Company 85.5000 1.01 4,788.00
77 Sears, Roebuck & Co. 63.1250 0.92 4,860.63
77 Travelers Group, Inc. 62.7500 0.50 4,831.75
95 Union Carbide Corporation 49.3750 0.90 4,690.63
51 United Technologies Corporation 94.0625 1.44 4,797.19
85 Wal-Mart Stores, Inc. 56.4375 0.31 4,797.19
42 Walt Disney Company 111.0000 0.63 4,662.00
- ------------- -------------
2,095 $142,882.99
============= =============
<CAPTION>
BLUE CHIP OPPORTUNITY TRUST, SERIES 6
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102)
AS OF THE INITIAL DATE OF DEPOSIT: JUNE 2, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
ESTIMATED
ANNUAL COST OF
NUMBER MARKET VALUE DIVIDENDS SECURITIES
OF SHARES NAME OF ISSUER (1) PER SHARE (2) PER SHARE (2) TO TRUST (2)
- ----------- --------------------------------------------------------------- --------------- -------------
<S> <C> <C> <C> <C>
57 Allied Signal, Inc. $ 43.6875 $ 0.60 $ 2,490.19
36 Aluminum Company of America 68.6250 1.00 2,470.50
24 American Express Company 103.8125 0.90 2,491.50
42 A T & T Corporation 59.1250 1.32 2,483.25
53 Boeing Company 47.6250 0.56 2,524.13
45 Caterpillar, Inc. 55.2500 1.00 2,486.25
32 Chevron Corporation 79.0000 2.44 2,528.00
32 Coca-Cola Company 79.5000 0.60 2,544.00
33 Du Pont (E.I) de Nemours and Company 75.4375 1.40 2,489.44
35 Eastman Kodak Company 72.5625 1.76 2,539.69
36 Exxon Corporation 70.6875 1.64 2,544.75
30 General Electric Company 82.8750 1.20 2,486.25
35 General Motors Corporation 71.1250 2.00 2,489.38
35 Goodyear Tire & Rubber Company 72.8125 1.20 2,548.44
40 Hewlett Packard Company 61.5000 0.64 2,460.00
21 International Business Machines Corporation 117.2500 0.88 2,462.25
54 International Paper Company 46.9375 1.00 2,534.63
36 Johnson & Johnson 68.9375 1.00 2,481.75
20 J. P. Morgan & Company, Inc. 124.0625 3.80 2,481.25
38 McDonald's Corporation 67.1875 0.36 2,553.13
21 Merck & Company, Inc. 116.5000 1.80 2,446.50
27 Minnesota Mining and Manufacturing Company 94.1250 2.20 2,541.38
67 Phillip Morris Companies, Inc. 37.6875 1.60 2,525.06
29 Procter & Gamble Company 85.5000 1.01 2,479.50
41 Sears, Roebuck & Co. 63.1250 0.92 2,588.13
40 Travelers Group, Inc. 62.7500 0.50 2,510.00
50 Union Carbide Corporation 49.3750 0.90 2,468.75
27 United Technologies Corporation 94.0625 1.44 2,539.69
45 Wal-Mart Stores, Inc. 56.4375 0.31 2,539.69
22 Walt Disney Company 111.0000 0.63 2,442.00
- ------------- -------------
1,103 $ 75,169.48
=============
MATURITY
VALUE NAME OF ISSUER AND TITLE OF SECURITY (1)(3)
- ---------- ---------------------------------------------------------------------------
$ 165,000 "Zero coupon" U.S. Treasury bonds maturing August 15, 2013 $ 68,159.52
============= -------------
$ 143,329.00
=============
NOTES TO PORTFOLIOS
- --------------------------------------------------------------------------------
(1) All of the Securities are represented by "regular way" contracts
for the performance of which an irrevocable letter of credit has been
deposited with the Trustee. At the Initial Date of Deposit, Securities may
have been delivered to the Sponsor pursuant to certain of these contracts;
the Sponsor has assigned to the Trustee all of its right, title and
interest in and to such Securities. Contracts to acquire Securities were
entered into on June 1, 1998 and are expected to settle on June 2 and June
4, 1998 (see "The Trusts").
(2) The market value of each of the Equity Securities is based on the
closing sale price of each listed Equity Security on the applicable
exchange, or if not so listed, on the ask price on the day prior to the
Initial Date of Deposit. The cost of the Treasury Obligations represents
the offering side evaluation as determined by Interactive Data
Corporation. The offering side evaluation of the Treasury Obligations is
greater than the bid side evaluation of such Treasury Obligations which is
the basis on which the Redemption Price per Unit will be determined. The
aggregate value of the Blue Chip Opportunity and Treasury Trust, based on
the bid side evaluation of the Treasury Obligations and the aggregate
underlying value of the Equity Securities therein on the Initial Date of
Deposit, was $143,128. Estimated annual dividends are based on annualizing
the most recently declared dividends. Other information regarding the
Securities in the Trusts, as of the Initial Date of Deposit, is as
follows:
<CAPTION>
PROFIT ESTIMATED
COST TO (LOSS) TO ANNUAL
SPONSOR SPONSOR DIVIDENDS
--------- ---------- -----------
<S> <C> <C> <C>
Blue Chip Opportunity Trust $ 142,812 $ 71 $ 2,392
Blue Chip Opportunity and Treasury Trust $ 143,365 $ (36) $ 1,261
(3) The Treasury Obligations are being purchased at a discount
from their par value because there is no stated interest income thereon
(such securities are often referred to as zero coupon bonds). Over the
life of the Treasury Obligations the value increases, so that upon
maturity the holders will receive 100% of the principal amount thereof.
-------------------------------------------------
</TABLE>
An affiliate of the Sponsor may have participated as issuer, sole
underwriter, managing underwriter or member of an underwriting syndicate
in a public offering of one or more of the stocks in the Trusts. An
affiliate of the Sponsor may serve as a specialist in the stocks in the
Trusts on one or more stock exchanges and may have a long or short
position in any of these stocks or in options on any of these stocks, and
may be on the opposite side of public orders executed on the floor of an
exchange where such stocks are listed. An officer, director or employee of
the Sponsor or an affiliate may be an officer or director of one or more
of the issuers of the stocks in the Trusts. An affiliate of the Sponsor
may trade for its own account as an odd-lot dealer, market maker, block
positioner and/or arbitrageur in any stocks or options relating thereto.
The Sponsor, its affiliates, directors, elected officers and employee
benefit programs may have either a long or short position in any stock or
option of the issuers.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy securities in any state to any person to whom it
is not lawful to make such offer in such state.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
TITLE PAGE
Summary of Essential Financial
Information........................... 4
The Trusts.................................. 6
Objectives and Securities Selection......... 7
Trust Portfolios............................ 9
Risk Factors................................ 13
Federal Taxation............................ 15
Trust Operating Expenses.................... 21
Public Offering............................. 23
Rights of Unitholders....................... 27
Trust Administration........................ 32
Other Matters............................... 37
Report of Independent Certified Public
Accountants.............................. 38
Statements of Condition..................... 39
Portfolios.................................. 40
Notes to Portfolios......................... 42
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and exhibits relating thereto, which the Fund has filed with the Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.
PROSPECTUS
-----------------------------
JUNE 2, 1998
VAN KAMPEN
AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
BLUE CHIP OPPORTUNITY TRUST, SERIES 4
BLUE CHIP OPPORTUNITY
AND TREASURY TRUST,
SERIES 6
------ A Wealth of Knowledge o Knowledge of Wealth(sm) ------
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Please retain this Prospectus for future reference.
S-1
CONTENTS OF REGISTRATION PAGE
This Amendment of Registration Statement comprises the following papers
and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of Counsel as to the Federal Income tax status of securities being
registered.
3.3 Opinion and consent of counsel as to New York tax status of securites being
registered.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Acountants.
EX-27 Financial Data Schedule.
<PAGE>
SIGNATURES
The Registrant, Van Kampen American Capital Equity Opportunity Trust,
Series 102, hereby identifies Van Kampen Merritt Equity Opportunity Trust,
Series 1, Series 2, Series 4 and Series 7 and Van Kampen American Capital Equity
Opportunity Trust, Series 13, Series 14 and Series 57 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series 102 has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago and
State of Illinois on the 2nd day of June, 1998.
Van Kampen American Capital Equity Opportunity Trust, Series 102 By Van
Kampen American Capital Distributors, Inc.
By GINA M. COSTELLO
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on June 2, 1998 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 )
John H. Zimmerman President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
GINA M. COSTELLO
(Attorney-in-fact*)
- --------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney is filed
herewith or 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 Van Kampen American
Capital Equity Opportunity Trust, Series 87 (File No. 333-44581) and the same
are hereby incorporated herein by this reference.
<PAGE>
EXHIBIT 1.1
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST
SERIES 102
TRUST AGREEMENT
Dated: June 2, 1998
This Trust Agreement among Van Kampen American Capital Distributors,
Inc., as Depositor, American Portfolio Evaluation Services, a division of Van
Kampen American Capital Investment Advisory Corp., as Evaluator, Van Kampen
American Capital Investment Advisory Corp., as Supervisory Servicer, and The
Bank of New York, as Trustee, sets forth certain provisions in full and
incorporates other provisions by reference to the document entitled "Van Kampen
American Capital Equity Opportunity Trust, Series 87 and Subsequent Series,
Standard Terms and Conditions of Trust, Effective January 27, 1998" (herein
called the "Standard Terms and Conditions of Trust") and such provisions as are
set forth in full and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and Sections
are to Articles and Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(24), listed in the
Schedule hereto, have been deposited in trust under this Trust
Agreement.
2. The fractional undivided interest in and ownership of
each Trust represented by each Unit is the amount set forth under
"Summary of Essential Financial Information - Fractional Undivided
Interest in the Trust per Unit" in the Prospectus. Such fractional
undivided interest may be (a) increased by the number of any additional
Units issued pursuant to Section 2.03, (b) increased or decreased in
connection with an adjustment to the number of Units pursuant to
Section 2.03, or (c) decreased by the number of Units redeemed pursuant
to Section 5.02.
3. The terms "Capital Account Record Date" and "Income Account
Record Date" shall mean the "Income and Capital Account Record Dates" set forth
under "Summary of Essential Financial Information" in the Prospectus.
4. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Income and Capital Account Distribution
Dates" set forth under "Summary of Essential Financial Information" in the
Prospectus.
5. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial Information"
in the Prospectus.
<PAGE>
IN WITNESS WHEREOF, Van Kampen American Capital Distributors, Inc. has
caused this Trust Agreement to be executed by one of its Vice Presidents or
Assistant Vice Presidents and its corporate seal to be hereto affixed and
attested by its Secretary or one of its Vice Presidents or Assistant
Secretaries, American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., and Van Kampen American Capital
Investment Advisory Corp., have each caused this Trust Indenture and Agreement
to be executed by their respective President or one of their respective Vice
Presidents and the corporate seal of each to be hereto affixed and attested to
by the Secretary, Assistant Secretary or one of their respective Vice Presidents
or Assistant Vice Presidents and The Bank of New York, has caused this Trust
Agreement to be executed by one of its Vice Presidents and its corporate seal to
be hereto affixed and attested to by one of its Assistant Treasurers all as of
the day, month and year first above written.
Van Kampen American Capital Distributors, Inc.
By JAMES J. BOYNE
Vice President, Associate General Counsel
and Assistant Secretary
Attest:
By CATHY NAPOLI
Assistant Secretary
American Portfolio Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp.
By DENNIS J. MCDONNELL
President
Attest
By JAMES J. BOYNE
Assistant Secretary
Van Kampen American Capital Investment Advisory Corp.
By DENNIS J. MCDONNELL
President
Attest
By JAMES J. BOYNE
Assistant Secretary
The Bank of New York
By JEFFREY BIESELIN
Vice President
Attest
By JEFFREY COHEN
Assistant Treasurer
<PAGE>
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus.)
<PAGE>
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 2, 1998
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
----------------------------------------------------------------
Gentlemen:
We have served as counsel for Van Kampen American Capital Distributors,
Inc. as Sponsor and Depositor of Van Kampen American Capital Equity Opportunity
Trust, Series 102 (hereinafter referred to as the "Trust"), in connection with
the preparation, execution and delivery of a Trust Agreement dated June 2, 1998
among Van Kampen American Capital Distributors, Inc., as Depositor, American
Portfolio Evaluation Services, a division of Van Kampen American Capital
Investment Advisory Corp., as Evaluator, Van Kampen American Capital Investment
Advisory Corp., as Supervisory Servicer, and The Bank of New York, as Trustee,
pursuant to which the Depositor has delivered to and deposited the Securities
listed in the Schedule to the Trust Agreement with the Trustee and pursuant to
which the Trustee has provided to or on the order of the Depositor documentation
evidencing ownership of Units of fractional undivided interest in and ownership
of the Trust (hereinafter referred to as the "Units"), created under said Trust
Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreemen and the
execution and issuance of certificates evidencing the Units in the
Trust have been duly authorized; and
2. The certificates evidencing the Units in the Trust, when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will constitute
valid and binding obligations of such Trust and the Depositor in
accordance with the terms thereof.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-52561) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE>
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 2, 1998
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
----------------------------------------------------------------
Gentlemen:
We have acted as counsel for Van Kampen American Capital Distributors,
Inc., Depositor of Van Kampen American Capital Equity Opportunity Trust, Series
102 (the "Fund"), in connection with the issuance of Units of fractional
undivided interest in the Fund, under a Trust Agreement dated June 2, 1998 (the
"Indenture") between Van Kampen American Capital Distributors, Inc., as
Depositor, Van Kampen American Capital Investment Advisory Corp., as Evaluator,
Van Kampen American Capital Investment Advisory Corp., as Supervisory Servicer,
and The Bank of New York, as Trustee. The Fund is comprised of two separate unit
investment trusts, Blue Chip Opportunity and Treasury Trust, Series 6 and Blue
Chip Opportunity Trust, Series 4. The following discussion applies only to Van
Kampen American Capital Blue Chip Opportunity and Treasury Trust, Series 6 (the
"Trust").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of equity
securities (the "Equity Securities") and "Zero coupon" U.S. Treasury bonds (the
"Treasury Obligations") (collectively, the "Securities") as set forth in the
Prospectus. For purposes of the following discussion and opinion, it is assumed
that the Equity Securities are equity for Federal income tax purposes, the
interest on the Treasury Obligations is included in gross income for Federal
income tax purposes and that the Treasury Obligations are debt for Federal
income tax purposes.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) 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 asset of the Trust under the
Internal Revenue Code of 1986, as amended (the "Code"); the income of
the Trust will be treated as income of each Unitholder thereof under
the Code, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the Trustee.
Each Unitholder will be considered to have received his pro rata share
of income derived from each Trust asset when such income is considered
to be received by the Trust.
(ii) Each Unitholder will have a taxable event when the Trust
disposes of a Security (whether by sale, exchange, liquidation,
redemption, payment at maturity or otherwise) or upon the sale or
redemption of Units by such Unitholder. The price a Unitholder pays for
his Units, generally including sales charges, is allocated among his
pro rata portion of each Security held by the Trust (in proportion to
the fair market values thereof on the valuation date closest to the
date the Unitholder purchases his Units) in order to determine his tax
basis for his pro rata portion of each Security held by the Trust. The
Treasury Obligations are treated as stripped bonds and may be treated
as bonds issued at an original issue discount as of the date a
Unitholder purchases his Units. Because the Treasury Obligations
represent interests in "stripped" U.S. Treasury bonds, a Unitholder's
tax basis for his pro rata portion of each Treasury Obligation held by
the Trust (determined at the time he acquires his Units, in the manner
described above) shall be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as interest
for federal income tax purposes and the amount of original issue
discount in this case is generally the difference between the bond's
purchase price and its stated redemption price at maturity. A
Unitholder will be required to include in gross income for each taxable
year the sum of his daily portions of original issue discount
attributable to the Treasury Obligations held by the Trust as such
original issue discount accrues and will in general be subject to
federal income tax with respect to the total amount of such original
issue discount that accrues for such year even though the income is not
distributed to the Unitholders during such year to the extent it is not
less than a "de minimis" amount as determined under Treasury
Regulations relating to stripped bonds. To the extent the amount of
such discount is less than the respective "de minimis" amount, such
discount is generally treated as zero. In general, original issue
discount accrues daily under a constant interest rate method which
takes into account the semi-annual compounding of accrued interest. In
the case of the Treasury Obligations, this method will generally result
in an increasing amount of income to the Unitholders each year. For
federal income tax purposes, a Unitholder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a corporation
with respect to 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, the holding period of such
capital gain will be determined by the period of time a Unitholder has
held his Units.
(iii) A Unitholder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust
will generally be considered a capital gain, except in the case of a
dealer or a financial institution. A Unitholder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of
Securities held by the Trust will generally be considered a capital
loss, except in the case of a dealer or a financial institution.
(iv) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or upon
the termination of the Trust. As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust's assets.
The receipt of an in kind distribution will result in Unitholders
receiving an undivided interest in whole shares of stock and possibly
cash. The potential federal income tax consequences which may occur
under an in kind distribution with respect to each Equity Security
owned by the Trust will depend upon 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 with respect
to an Equity Security if a Unitholder only receives Equity Securities
in exchange for his pro rata portion of 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 for the fractional share
by the Unitholder and his tax basis in such fractional share of an
Equity Security held by the Trust. In either case, a Unitholder who
receives cash in exchange for his interest in the Treasury Obligations
will generally recognize gain or loss based upon the difference between
the amount of cash received by the Unitholder for the Treasury
Obligations and his tax basis in such Treasury Obligations. The total
amount of taxable gains (or losses) recognized upon such redemption
will generally equal the sum of the gain (or loss) recognized under the
rules described above by the redeeming Unitholder with respect to each
Equity Security owned by a Trust.
A domestic corporation owning Units in the Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the Code with
respect to such Unitholders, 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), subject to the
limitations imposed by Sections 246 and 246A of the Code.
Section 67 of the Code provides that 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 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.
A Unitholder will recognize taxable gain (or loss) when all or part of
the pro rata interest in a Security is either sold by the Trust or redeemed or
when a Unitholder disposes of his Units in a taxable transaction, in each case
for an amount greater (or less) than his tax basis therefor subject to various
non-recognition provisions of the Code.
Any gain or loss recognized on a sale or exchange will, under current
law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
<PAGE>
EXHIBIT 3.3
June 1, 1998
WINSTON & STRAWN
200 Park Avenue
New York, New York 10166-4193
June 2, 1998
Van Kampen American Capital
Blue Chip Opportunity and Treasury
Trust, Series 6
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen American Capital
Blue Chip Opportunity and Treasury Trust, Series 6 (the "Trust") for the
purposes of determining the applicability of certain New York taxes under the
circumstances hereinafter described.
The Trust is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen American Capital
Distributors, Inc. (the "Depositor"), American Portfolio Evaluation Services, a
division of an affiliate of the Depositor, as Evaluator, Van Kampen American
Capital Investment Advisory Corp., an affiliate of the Depositor, as Supervisory
Servicer (the "Supervisory Servicer"), and The Bank of New York, as trustee (the
"Trustee"). As described in the prospectus relating to the Trust dated today to
be filed as an amendment to a registration statement heretofore filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Prospectus") (File Number 333-52561), the objectives of the Fund are to
provide the potential for dividend income capital appreciation through
investment in a fixed portfolio of actively traded equity securities of
companies engaged in, providing services to companies in, the industry
identified in Trust's name, or are the type of securities identified in the name
of the Trust. It is noted that no opinion is expressed herein with regard to the
Federal tax aspects of securities, the Trust, units of the Trust (the "Units"),
or any income, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to the Trust the securities and/or contracts and cash for the
purchase thereof together with an irrevocable letter of credit in the amount
required for the purchase price of the securities comprising the corpus of the
Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities to
be deposited in the Trust, and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Trust as more fully set forth in the Prospectus. The
Units, which are represented by certificates ("Certificates"), will be offered
to the public upon the effectiveness of the Registration Statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash dividends and
interest received by the Trust and with the proceeds from the disposition of
securities held in the Trust and the distribution of such cash dividends,
interest and proceeds to the Unit holders. The Trustee will also maintain
records of the registered holders of Certificates representing an interest in
the Trust and administer the redemption of Units by such Certificate holders and
may perform certain administrative functions with respect to an automatic
investment option.
Generally, securities held in the Trust may be removed therefrom by the
Trustee at the direction of the Depositor upon the occurrence of certain
specified events which adversely affect the sound investment character of the
Trust, such as default by the issuer in payment of declared dividends or of
interest or principal on one or more of its debt obligations.
Prior to the termination of the Trust, the Trustee is empowered to sell
securities designated by the Supervisor only for the purpose of redeeming Units
tendered to it and of paying expenses for which funds are not available. The
Trustee does not have the power to vary the investment of any Unit holder in the
Trust, and under no circumstances may the proceeds of sale of any securities
held by the Trust be used to purchase new securities to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on business
corporations, and, for purposes of that Article, Section 208(l) defines the term
"corporation" to include, among other things, "any business conducted by a
trustee or trustees wherein interest or ownership is evidenced by certificate or
other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which
interest or ownership is evidenced by certificate or other
written instrument includes, but is not limited to, an
association commonly referred to as a "business trust" or
"Massachusetts trust". In determining whether a trustee or
trustees are conducting a business, the form of the agreement
is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and
powers, will be regarded as decisive factors in determining
whether a trust is subject to tax under Article 9-A. The mere
investment of funds and the collection of income therefrom,
with incidental replacement of securities and reinvestment of
funds, does not constitute the conduct of a business in the
case of a business conducted by a trustee or trustees. 20
NYCRR 1-2.5(b)(2) (July 11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that where a
trustee merely invests funds and collects and distributes the income therefrom,
the trust is not engaged in business and is not subject to the franchise tax.
BURRELL v. LYNCH, 274 A.D. 347, 84 N.Y.S.2d 171 (3rd Dept. 1948), ORDER
RESETTLED, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47 N.Y.
Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee of an
unincorporated investment trust was without authority to reinvest amounts
received upon the sales of securities and could dispose of securities making up
the trust only upon the happening of certain specified events or the existence
of certain specified conditions, the trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell securities contained in the corpus of the Trust and
reinvest the proceeds therefrom. Further, the power to sell such securities is
limited to circumstances in which the credit-worthiness or soundness of the
issuer of such security is in question or in which cash is needed to pay
redeeming Unit holders or to pay expenses, or where the Trust is liquidated
subsequent to the termination of the Indenture. In substance, the Trustee will
merely collect and distribute income and will not reinvest any income or
proceeds, and the Trustee has no power to vary the investment of any Unit holder
in the Trust.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust will be
deemed to be the owner of the trust under certain circumstances, and therefore
taxable on his proportionate interest in the income thereof. Where this Federal
tax rule applies, the income attributed to the grantor will also be income to
him for New York income tax purposes. See TSB-M-78(9)(c), New York Department of
Taxation and Finance, June 23, 1978.
By letter, dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be considered as
owning a share of each asset of a Trust in the proportion that the number of
Units held by such holder bears to the total number of Units outstanding and the
income of a Trust will be treated as the income of each Unit holder in said
proportion pursuant to Subpart E of Part I, Subchapter J of Chapter 1 of the
Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we specifically rely,
we are of the opinion that under existing laws, rulings and court decisions
interpreting the laws of the State and City of New York:
1. The Trust will not constitute an association taxable as a
corporation under New York law, and, accordingly, will not be subject to tax on
its income under the New York State franchise tax or the New York City general
corporation tax;
2. The income of the Trust will be treated as the income of the Unit
holders under the income tax laws of the State and City of New York; and
3. Unit holders who are not residents of the State of New York are
not subject to the income tax laws thereof with respect to any interest or gain
derived from the Trust or any gain from the sale or other disposition of the
Units, except to the extent that such interest or gain is from property employed
in a business, trade, profession or occupation carried on in the State of New
York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name and the
reference to our firm in the Registration Statement and in the Prospectus.
Very truly yours,
WINSTON & STRAWN
<PAGE>
EXHIBIT 4.1
June 1, 1998
Interactive Data
14 West Street
New York, NY 10005
June 1, 1998
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen American Capital Blue Chip Opportunity and Treasury Trust,
Series 6 and
Van Kampen American Capital Blue Chip Opportunity Trust, Series 4
(A Unit Investment Trust)
Registered Under the Securities Act of 1933, File No. 333-52561
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as the
Evaluator, and to the use of the Obligations prepared by us which are referred
to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
EXHIBIT 4.2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We have issued our report dated June 2, 1998 on the statements of condition
and related securities portfolios of Van Kampen American Capital Equity
Opportunity Trust, Series 102 as of June 2, 1998 contained in the Registration
Statement on Form S-6 and Prospectus. We consent to the use of our report in the
Registration Statement and Prospectus and to the use of our name as it appears
under the caption "Other Matters-Independent Certified Public Accountants."
GRANT THORNTON LLP
Chicago, Illinois
June 2, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current time period taken from 487 on June 2, 1998
It is unaudited
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> BCOT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-2-1998
<PERIOD-END> JUN-2-1998
<INVESTMENTS-AT-COST> 142,883
<INVESTMENTS-AT-VALUE> 142,883
<RECEIVABLES> 0
<ASSETS-OTHER> 37,718
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180,601
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37,718
<TOTAL-LIABILITIES> 37,718
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 142,883
<SHARES-COMMON-STOCK> 14,962
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
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<NET-ASSETS> 142,883
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current time period taken from 487 on June 2, 1998
It is unaudited
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> BCAT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-2-1998
<PERIOD-END> JUN-2-1998
<INVESTMENTS-AT-COST> 143,329
<INVESTMENTS-AT-VALUE> 143,329
<RECEIVABLES> 0
<ASSETS-OTHER> 40,468
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 183,797
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 40,468
<TOTAL-LIABILITIES> 40,468
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 143,329
<SHARES-COMMON-STOCK> 15,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
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<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
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<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
