<PAGE>
File No. 333-52561 CIK #1025248
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 2 to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 102
(Exact Name of Trust)
Van Kampen Funds Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
(X) Check if it is proposed that this filing will become effective
on September 25, 2000 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102 Blue Chip
Opportunity Trust, Series 4 Blue Chip Opportunity and Treasury Trust, Series 6
--------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied
by Part Two.
Please retain both parts of this Prospectus for future reference.
--------------------------------------------------------------------------------
THE TRUST
Van Kampen American Capital 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"). The Blue Chip Opportunity Trust offers investors the
opportunity to purchase Units representing proportionate interests in a
diversified portfolio of the 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 actively traded "blue chip" equity securities which were current 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.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THE UNITS OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is September 25, 2000
Van Kampen
Focus PortfoliosSM
A Division of Van Kampen Funds Inc.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
Blue Chip Opportunity Trust, Series 4
Blue Chip Opportunity and Treasury Trust, Series 6
Summary of Essential Financial Information
As of July 5, 2000
Sponsor: Van Kampen Funds Inc
Supervisor: Van Kampen Investment Advisory Corp.
(An affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Blue Chip
Blue Chip Opportunity
Opportunity & Treasury
Trust Trust
---------------- ----------------
General Information
<S> <C> <C>
Number of Units 336,403.547 662,734.437
Fractional Undivided Interest in Trust per Unit 1/336,403.547 1/662,734.437
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 3,460,027.02 $ 6,857,084.49
Aggregate Value of Securities per Unit (including accumulated dividends) $ 10.2853 $ 10.3467
Sales Charge 3.9% (4.058% of Aggregate Value of Securities excluding
principal cash per Unit) (3) $ .4169 $ .4181
Public Offering Price per Unit (2)(3) $ 10.7022 $ 10.7648
Redemption Price per Unit $ 10.2853 $ 10.3467
Secondary Market Repurchase Price per Unit $ 10.2853 $ 10.3467
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .4169 $ .4181
Mandatory Termination Dates June 2, 2008 August 15, 2013
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock Exchange
Initial Date of Deposit June 2, 1998
Minimum Termination Value...................The Trust may be terminated if
the net asset value of such Trust is less than $500,000 unless the net
asset value of such Trust deposits has exceeded $15,000,000, then the
Trust Agreement may be terminated if the net asset value of such Trust
is less than $3,000,000.
<CAPTION>
<S> <C> <C>
Estimated Net Annual Dividends per Unit $ .11341 $ .09468
Trustee's Annual fee $.008 per Unit
Estimated Annual Organizational Expenses per Unit (4) $ .02346 $ .01352
</TABLE>
Income Distribution Record Date TENTH day of March, June,
September and December.
Income Distribution Date TWENTY-FIFTH day of March,
June, September and December.
Capital Account Record Date TENTH day of December.
Capital Account Distribution Date TWENTY-FIFTH day of December.
--------------------------------------------------------------------------------
(1) Equity Securities listed on a national securities exchange are value
at the closing sale price, or if no such price exists, or if the
Equity Securities are not listed, at the closing bid price thereof.
The Treasury Obligations are valued at the last available bid price.
(2) Anyone ordering Units will have added to the Public Offering Price a
pre rata share of any cash in the Income and Capital Accounts.
(3) Effective on each June 2, the secondary sales charge will decrease by
.3 of 1% to a minimum sales charge of 1.5%. See "Public Offering -
Offering Price" in Part Two.
(4) 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 Trust portfolio and
the initial fees and expenses of the Trustee but not including the
expenses incurred in the preparation and printing of brochures and
other advertising materials and any other selling expenses) as is
common for mutual funds. Total organizational expenses will be
amortized over a five year period.
PORTFOLIO
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, are current
components of the Dow Jones Industrial Average. 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. 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 Trust or in
the selection of stocks included in the Trust and has not approved any
information herein relating thereto.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1999 (1) 2000
------------ ------------
<S> <C> <C>
Net asset value per Unit at beginning of period......................................... $ 9.55 $ 10.95
============ ============
Net asset value per Unit at end of period............................................... $ 10.95 $ 10.44
============ ============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)...................... $ 0.11 $ 0.14
============ ============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)....................................................... $ -- $ 0.63
============ ============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at
end of period)....................................................................... $ 2.16 $ (0.74)
============ ============
Distributions of investment income by frequency of payment
Quarterly............................................................................ $ 0.10 $ 0.12
Units outstanding at end of period...................................................... 481,042 335,854
</TABLE>
--------------------------------------------------------------------------------
(1) For the period from June 2, 1998 (date of deposit) through May 31, 1999.
PORTFOLIO
The Blue Chip Opportunity and Treasury 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, were
components of the Dow Jones Industrial Average on the initial Date of Deposit
plus zero coupon U.S. Treasury obligations. 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. 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 Trust or in
the selection of stocks included in the Trust and has not approved any
information herein relating thereto.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1999 (1) 2000
------------ ------------
<S> <C> <C>
Net asset value per Unit at beginning of period......................................... $ 9.56 $ 10.34
============ ============
Net asset value per Unit at end of period............................................... $ 10.34 $ 10.37
============ ============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)...................... $ 0.07 $ 0.10
============ ============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)....................................................... $ -- $ --
============ ============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at
end of period)....................................................................... $ 2.48 $ (2.05)
============ ============
Distributions of investment income by frequency of payment
Quarterly............................................................................ $ 0.06 $ 0.09
Units outstanding at end of period...................................................... 959,959 681,304
</TABLE>
--------------------------------------------------------------------------------
(1) For the period from June 2, 1998 (date of deposit) through May 31, 1999.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen American Capital Equity Opportunity Trust, Series 102 (Blue Chip
Opportunity Trust, Series 4 and Blue Chip Opportunity and Treasury Trust, Series
6):
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of Van Kampen American Capital
Equity Opportunity Trust, Series 102 (Blue Chip Opportunity Trust, Series 4 and
Blue Chip Opportunity and Treasury Trust, Series 6) as of May 31, 2000 and the
related statements of operations and changes in net assets for the period from
June 2, 1998 (date of deposit) through May 31, 1999 and the year ended May 31,
2000. These statements are the responsibility of the Trustee and the Sponsor.
Our responsibility is to express an opinion on such statements based on our
audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurances about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at May 31, 2000 by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Trustee and the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 102 (Blue Chip Opportunity Trust, Series 4 and
Blue Chip Opportunity and Treasury Trust, Series 6) as of May 31, 2000 and the
related statements of operations and changes in net assets for the period from
June 2, 1998 (date of deposit) through May 31, 1999 and the year ended May 31,
2000. in conformity with accounting principles generally accepted in the United
States of America.
GRANT THORNTON LLP
Chicago, Illinois
July 14, 2000
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
Statements of Condition
May 31, 2000
<TABLE>
<CAPTION>
Blue Chip
Blue Chip Opportunity
Opportunity & Treasury
Trust Trust
------------------- -----------------
Trust property
<S> <C> <C>
Securities at market value, (cost $2,758,697 and $6,064,877) (note 1) $ 3,549,095 $ 7,046,459
Organizational Expense 25,867 28,554
Dividends Receivable 6,223 9,099
Receivables for securities sold -- --
------------------- -----------------
$ 3,581,185 $ 7,084,112
=================== =================
Liabilities and interest to Unitholders
Cash Overdraft $ 69,096 $ 5,802
Redemptions payable 4,288 14,801
Interest to Unitholders 3,507,801 7,063,509
------------------- -----------------
$ 3,581,185 $ 7,084,112
=================== =================
Analyses of Net Assets
Interest of Unitholders (335,854 and 681,304 Units of fractional
undivided interest outstanding)
Cost to original investors of 727,211 and 1,225,037 Units (note 1) $ 6,997,483 $ 8,811,972
Less initial underwriting commission (note 3) 315,078 391,898
------------------- -----------------
6,682,405 8,420,074
Less redemption of 380,170 and 545,610 Units 4,166,192 5,592,421
------------------- -----------------
2,516,213 2,827,653
Undistributed net investment income
Net Investment Income 128,724 917,514
Less distributions to Unitholders 123,794 151,457
------------------- -----------------
4,930 766,057
Realized gain (loss) on Securities sale 440,736 2,488,217
Unrealized appreciation (depreciation) of Securities (note 2) 790,398 981,582
Distributions to Unitholders of Security sale proceeds (244,476) --
------------------- -----------------
Net asset value to Unitholders $ 3,507,801 $ 7,063,509
=================== =================
Net asset value per Unit (335,854 and 681,304 Units outstanding) $ 10.44 $ 10.37
=================== =================
The accompanying notes are an integral part of these statements.
</TABLE>
BLUE CHIP OPPORTUNITY TRUST, SERIES 4
Statement of Operations
Period from June 2, 1998 (date of deposit) through May 31, 1999
and the year ended May 31, 2000
<TABLE>
<CAPTION>
1999 2000
------------- -------------
Investment income
<S> <C> <C>
Dividend income.................................................................. $ 96,542 $ 67,355
Expenses
Trustee fees and expenses..................................................... 7,080 9,047
Evaluator fees................................................................ 1,319 1,324
Organizational fees........................................................... 7,544 6,155
Supervisory fees.............................................................. 1,319 1,385
------------- -------------
Total expenses............................................................. 17,262 17,911
------------- -------------
Net investment income......................................................... 79,280 49,444
Realized gain (loss) from Security sale
Proceeds......................................................................... 2,418,707 2,377,789
Cost............................................................................. 2,320,200 2,035,560
------------- -------------
Realized gain (loss).......................................................... 98,507 342,229
Net change in unrealized appreciation (depreciation) of Securities.................. 1,038,429 (248,031)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............... $ 1,216,216 $ 143,642
============= =============
Statements of Changes in Net Assets
Period from June 2, 1998 (date of deposit) through May 31, 1999
and the year ended May 31, 2000
1999 2000
------------- -------------
Increase (decrease) in net assets Operations:
Net investment income............................................................ $ 79,280 $ 49,444
Realized gain (loss) on Securities sales......................................... 98,507 342,229
Net change in unrealized appreciation (depreciation) of Securities............... 1,038,429 (248,031)
------------- -------------
Net increase (decrease) in net assets resulting from operations............... 1,216,216 143,642
Distributions to Unitholders from:
Net investment income............................................................ (69,687) (54,107)
Security sale or redemption proceeds............................................. -- (244,476)
Redemption of Units.............................................................. (2,432,335) (1,733,857)
------------- -------------
Total increase (decrease)..................................................... (1,285,806) (1,888,798)
Net asset value to Unitholders
Beginning of period.............................................................. 3,957,692 5,269,325
Additional Securities purchased from the proceeds of Unit Sales.................. 2,597,439 127,274
------------- -------------
End of period (including undistributed net investment income of $9,593
and $4,930, respectively)..................................................... $ 5,269,325 $ 3,507,801
============= =============
The accompanying notes are an integral part of these statements.
</TABLE>
BLUE CHIP OPPORTUNITY AND TREASURY TRUST, SERIES 6
Statements of Operations
Period from June 2, 1998 (date of deposit) through May 31, 1999
and the year ended May 31, 2000
<TABLE>
<CAPTION>
1999 2000
------------- -------------
Investment income
<S> <C> <C>
Dividend income.................................................................. $ 85,550 $ 74,521
Interest income.................................................................. 326,325 477,308
------------- -------------
Expenses
Trustee fees and expenses..................................................... 9,155 11,142
Evaluator fees................................................................ 2,298 2,474
Organizational fees........................................................... 8,328 7,913
Supervisory fees.............................................................. 2,298 2,582
------------- -------------
Total expenses............................................................. 22,079 24,111
------------- -------------
Net investment income......................................................... 389,796 527,718
Realized gain (loss) from Security sale
Proceeds......................................................................... 2,726,543 2,908,668
Cost............................................................................. 1,190,162 1,956,832
------------- -------------
Realized gain (loss).......................................................... 1,536,381 951,836
Net change in unrealized appreciation (depreciation) of Securities.................. 2,376,491 (1,394,909)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............... $ 4,302,668 $ 84,645
============= =============
Statements of Changes in Net Assets
Period from June 2, 1998 (date of deposit) through May 31, 1999
and the year ended May 31, 2000
1999 2000
------------- -------------
Increase (decrease) in net assets Operations:
Net investment income............................................................ $ 389,796 $ 527,718
Realized gain (loss) on Securities sales......................................... 1,536,381 951,836
Net change in unrealized appreciation (depreciation) of Securities............... 2,376,491 (1,394,909)
------------- -------------
Net increase (decrease) in net assets resulting from operations............... 4,302,668 84,645
Distributions to Unitholders from:
Net investment income............................................................ (71,858) (79,599)
Security sale or redemption proceeds............................................. -- --
Redemption of Units.............................................................. (2,707,231) (2,885,191)
------------- -------------
Total increase (decrease)..................................................... 1,523,579 (2,880,145)
Net asset value to Unitholders
Beginning of period.............................................................. 3,581,907 9,924,457
Additional Securities purchased from the proceeds of Unit Sales.................. 4,818,971 19,197
------------- -------------
End of period (including undistributed net investment income of $317,938
and $766,057 respectively).................................................... $ 9,924,457 $ 7,063,509
============= =============
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
BLUE CHIP OPPORTUNITY TRUST, SERIES 4 PORTFOLIO as of May 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
--------------- ------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
3,483 Alcoa, Incorporated $ 58.4375 $ 203,538
--------------------------------------------------------------------------------------------------------------------------
3,180 American Express Company 53.8125 171,124
--------------------------------------------------------------------------------------------------------------------------
2,811 AT&T Corporation 34.6875 97,507
--------------------------------------------------------------------------------------------------------------------------
2,094 Boeing Company 39.0625 81,797
--------------------------------------------------------------------------------------------------------------------------
1,821 Caterpillar, Incorporated 38.2500 69,653
--------------------------------------------------------------------------------------------------------------------------
2,617 CitiGroup, Incorporated 62.1875 162,745
--------------------------------------------------------------------------------------------------------------------------
913 Coca Cola Company 53.3750 48,731
--------------------------------------------------------------------------------------------------------------------------
1,258 DuPont (E.I.) de Nemours and Company 49.0000 61,642
--------------------------------------------------------------------------------------------------------------------------
971 Eastman Kodak Company 59.7500 58,017
--------------------------------------------------------------------------------------------------------------------------
1,332 Exxon Mobil Corporation 83.3125 110,972
--------------------------------------------------------------------------------------------------------------------------
3,699 General Electric Company 52.6250 194,660
--------------------------------------------------------------------------------------------------------------------------
1,847 General Motors Corporation 70.6250 130,444
--------------------------------------------------------------------------------------------------------------------------
1,967 Hewlett-Packard Company 120.1250 236,286
--------------------------------------------------------------------------------------------------------------------------
1,550 Home Depot Incorporated 48.8125 75,659
--------------------------------------------------------------------------------------------------------------------------
2,692 Honeywell International 54.6875 147,219
--------------------------------------------------------------------------------------------------------------------------
1,021 Intel Corporation 124.6250 127,242
--------------------------------------------------------------------------------------------------------------------------
2,020 International Business Machines Corporation 107.3125 216,771
--------------------------------------------------------------------------------------------------------------------------
2,169 International Paper Company 34.8125 75,508
--------------------------------------------------------------------------------------------------------------------------
834 J.P. Morgan & Company, Incorporated 128.7500 107,378
--------------------------------------------------------------------------------------------------------------------------
1,382 Johnson & Johnson 89.5000 123,689
--------------------------------------------------------------------------------------------------------------------------
3,229 McDonald's Corporation 35.8125 115,639
--------------------------------------------------------------------------------------------------------------------------
1,584 Merck & Company, Incorporated 74.6250 118,206
--------------------------------------------------------------------------------------------------------------------------
866 Microsoft Corporation 62.5625 54,179
--------------------------------------------------------------------------------------------------------------------------
1,095 Minnesota Mining and Manufacturing Company 85.7500 93,896
--------------------------------------------------------------------------------------------------------------------------
1,967 Philip Morris Companies, Incorporated 26.1250 51,388
--------------------------------------------------------------------------------------------------------------------------
1,156 Proctor & Gamble Company 66.5000 76,874
--------------------------------------------------------------------------------------------------------------------------
1,508 SBC Communications Incorporated 43.6875 65,881
--------------------------------------------------------------------------------------------------------------------------
2,629 United Technologies Corporation 60.4375 158,890
--------------------------------------------------------------------------------------------------------------------------
3,770 Wal-Mart Stores, Incorporated 57.6250 217,246
--------------------------------------------------------------------------------------------------------------------------
2,283 Walt Disney Company 42.1875 96,314
--------------- ---------------
59,748 $ 3,549,095
=============== ===============
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BLUE CHIP OPPORTUNITY AND TREASURY TRUST, SERIES 6 PORTFOLIO as of May 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
--------------- ------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C>
3,199 Alcoa, Incorporated $ 58.4375 $ 186,942
--------------------------------------------------------------------------------------------------------------------------
3,254 American Express Company 53.8125 175,106
--------------------------------------------------------------------------------------------------------------------------
2,816 AT&T Corporation 34.6875 97,680
--------------------------------------------------------------------------------------------------------------------------
2,368 Boeing Company 39.0625 92,500
--------------------------------------------------------------------------------------------------------------------------
2,006 Caterpillar, Incorporated 38.2500 76,729
--------------------------------------------------------------------------------------------------------------------------
1,444 Chevron Corporation 92.4375 133,480
--------------------------------------------------------------------------------------------------------------------------
2,688 CitiGroup, Incorporated 62.1875 167,160
--------------------------------------------------------------------------------------------------------------------------
1,444 Coca Cola Company 53.3750 77,073
--------------------------------------------------------------------------------------------------------------------------
1,121 Delphi Automotive Systems Corporation 18.0625 20,248
--------------------------------------------------------------------------------------------------------------------------
1,486 DuPont (E.I.) de Nemours and Company 49.0000 72,814
--------------------------------------------------------------------------------------------------------------------------
1,575 Eastman Kodak Company 59.7500 94,106
--------------------------------------------------------------------------------------------------------------------------
1,615 Exxon Mobil Corporation 83.3125 134,550
--------------------------------------------------------------------------------------------------------------------------
4,051 General Electric Company 52.6250 213,184
--------------------------------------------------------------------------------------------------------------------------
1,579 General Motors Corporation 70.6250 111,517
--------------------------------------------------------------------------------------------------------------------------
1,575 Goodyear Tire & Rubber Company 24.8750 39,178
--------------------------------------------------------------------------------------------------------------------------
1,793 Hewlett-Packard Company 120.1250 215,384
--------------------------------------------------------------------------------------------------------------------------
2,530 Honeywell International 54.6875 138,359
--------------------------------------------------------------------------------------------------------------------------
1,891 International Business Machines Corporation 107.3125 202,928
--------------------------------------------------------------------------------------------------------------------------
2,416 International Paper Company 34.8125 84,107
--------------------------------------------------------------------------------------------------------------------------
910 J.P. Morgan & Company, Incorporated 128.7500 117,162
--------------------------------------------------------------------------------------------------------------------------
1,613 Johnson & Johnson 89.5000 144,363
--------------------------------------------------------------------------------------------------------------------------
3,373 McDonaldis Corporation 35.8125 120,796
--------------------------------------------------------------------------------------------------------------------------
1,880 Merck & Company, Incorporated 74.6250 140,295
--------------------------------------------------------------------------------------------------------------------------
1,217 Minnesota Mining and Manufacturing Company 85.7500 104,358
--------------------------------------------------------------------------------------------------------------------------
2,981 Philip Morris Companies, Incorporated 26.1250 77,879
--------------------------------------------------------------------------------------------------------------------------
1,308 Proctor & Gamble Company 66.5000 86,982
--------------------------------------------------------------------------------------------------------------------------
1,842 Sears Roebuck & C0mpany 36.9375 68,039
--------------------------------------------------------------------------------------------------------------------------
2,233 Union Carbide Corporation 54.6875 122,117
--------------------------------------------------------------------------------------------------------------------------
2,418 United Technologies Corporation 60.4375 146,138
--------------------------------------------------------------------------------------------------------------------------
3,992 Wal-Mart Stores, Incorporated 57.6250 230,039
--------------------------------------------------------------------------------------------------------------------------
2,936 Walt Disney Company 42.1875 123,863
--------------- ---------------
67,554 $ 3,815,076
===============
Maturity
Value Name of Issuer and Title of Security
$ 7,516,000 "Zero coupon" U.S. Treasury bonds maturing August 15, 2013 3,231,383
--------------- ---------------
$ 7,046,459
===============
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 102
Notes to Financial Statements
May 31, 1999 and 2000
-------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales price or, if no such price exists, or if the
Equity Securities are not listed at the closing bid price thereof. Treasury
obligations are valued at the closing bid price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange on the closing sale
prices on the exchange. The original cost of the Treasury obligations was based
on the closing offer price. In each case, the costs were determined on the day
of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as described
in Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Federal Income Taxes - Each Unitholder of the Blue
Chip Opportunity and Treasury Trust is considered to be the owner of a pro rata
portion of the trust and, accordingly, no provision has been made for Federal
Income Taxes. The Blue Chip Opportunity Trust has elected and intends to qualify
on a continuing basis for special federal income tax treatment as a "regulated
investment company" under the Internal Revenue Code (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. Distributions to
Unitholders of such Trust's taxable income will be taxable as ordinary or
capital income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Organizational Costs - The trust will bear all or a portion of its
organizational costs, which will be deferred and amortized over a five year
period.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at May 31, 2000 is as follows:
Blue Chip
Blue Chip Opportunity
Opportunity & Treasury
Trust Trust
---------------- ----------------
Unrealized Appreciation $ 955,811 $ 1,745,714
Unrealized Depreciation (165,413) (764,132)
---------------- ----------------
$ 790,398 $ 981,582
================ ================
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities in
the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such units to the Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus a sales charge of 4.5% of the public offering price which is
equivalent to 4.712% of the aggregate underlying value of the Securities.
Effective on each June 2, commencing June 2, 1999, the secondary sales charge
will decrease by .3 of 1% to a minimum sales charge of 1.5%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives and annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
Units were presented for redemption as follows:
Periods ended May 31,
1999 2000
--------- ---------
Blue Chip Opportunity Trust 234,982 156,375
Blue Chip Opportunity & Treasury Trust 265,078 280,532
Blue Chip Opportunity Trust
Prospectus Part Two
--------------------------------------------------------------------------------
The Fund. The Blue Chip Opportunity Trust (the "Trust") is one of several
unit investment trusts created under separate series of Van Kampen Merritt
Equity Opportunity Trust, Van Kampen American Capital Equity Opportunity Trust,
Van Kampen Equity Opportunity Trust or Van Kampen Focus Portfolios (the "Fund").
The Blue Chip Opportunity Trust offers investors the opportunity to purchase
Units representing proportionate interests in a fixed, diversified portfolio of
the actively traded "blue chip" equity securities which currently are components
of the Dow Jones Industrial Average.* Dow Jones & Company, Inc. has not
participated in any way in the creation of the Trust or in the selection of
stocks included in the Trust and has not approved any information herein
relating thereto. Unless terminated earlier, the Trust will terminate on the
Mandatory Termination Date and any securities then held will, within a
reasonable time thereafter, be liquidated or distributed by the Trustee. Any
Securities liquidated at termination will be sold at the then current market
value for such Securities; therefore, the amount distributable in cash to a
Unitholder upon termination may be more or less than the amount such Unitholder
paid for his Units.
Objective of the Trust. 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 equity securities which are current components of
the Dow Jones Industrial Average* ("Equity Securities"). 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. There is, of course, no guarantee that the
objective of the Trust will be achieved.
Public Offering Price. The secondary market Public Offering Price of the
Trust will include the aggregate underlying value of the Securities in the
Trust, the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. See "Public Offering".
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of the Trust, with changes
in dividends received and with the sale or liquidation of Securities; therefore,
there is no assurance that the annual dividend distribution will be realized in
the future.
Distributions. Distributions of dividends received, and capital, if any,
received by the Trust will be paid in cash on the applicable Distribution Date
to Unitholders of record on the record date as set forth in the "Summary of
Essential Financial Information" in Part One. Any distribution of income and/or
capital will be net of the expenses of the Trust. See "Federal Taxation."
Additionally, upon termination of the Trust, the Trustee will distribute, upon
surrender of Units for redemption, to each Unitholder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights of
Unitholders--Distributions of Income and Capital".
Secondary Market for Units. Although not obligated to do so, the Sponsor
intends to maintain a market for Units of the Trust and offer to repurchase such
Units at prices which are based on the aggregate underlying value of Equity
Securities in the Trust (generally determined by the last available sale prices
of listed Equity Securities on or immediately prior to the Evaluation Time),
plus or minus cash, if any, in the Capital and Income Accounts of the Trust. If
a secondary market is not maintained, a Unitholder may redeem Units through
redemption at prices based upon the aggregate underlying value of the Equity
Securities in the Trust, plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust. See "Rights of Unitholders--Redemption
of Units".
Units of the Trust are not deposits or obligations of, and are not guaranteed
or endorsed by, any bank and are not federally insured or otherwise protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency and involve investment risk, including loss of principal.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part I accompanying
this Prospectus Part II.
--------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION 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 Trust or the Sponsor a
license to use the Dow Jones Industrial Average.
Termination. Commencing on the Mandatory Termination Date as specified in
"Summary of Essential Financial Information" in Part One, Equity Securities will
begin to be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the Equity
Securities. Written notice of any termination of the Trust specifying the time
or times at which Unitholders may surrender their certificates for cancellation
shall be given by the Trustee to each Unitholder at his address appearing on the
registration books of the Trust maintained by the Trustee. At least 30 days
prior to the Mandatory Termination Date for the Trust, the Trustee will provide
written notice thereof to all Unitholders. Unitholders will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
after the Trust is terminated. See "Trust Administration--Amendment or
Termination."
Reinvestment Option. Unitholders may utilize their redemption or termination
proceeds to purchase units of any other Van Kampen trust in the initial offering
period accepting rollover investments subject to a reduced sales charge to the
extent stated in the related prospectus (which may be deferred in certain
cases). Unitholders have the opportunity to have their distributions reinvested
into an open-end, management investment company as described herein or into
additional Units of the Trust. See "Rights of Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the possible
deterioration of either the financial condition of the issuers or the general
condition of the stock market, volatile interest rates or an economic recession.
See "Trust Portfolio--Risk Factors".
THE TRUST
The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture and Agreement (the "Trust Agreement"), among Van Kampen Funds
Inc., as Sponsor, American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator, Van Kampen Investment Advisory
Corp., as Supervisor, and The Bank of New York, as Trustee or their
predecessors.
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. Diversification
of assets in the Trust will not eliminate the risk of loss always inherent in
the ownership of securities. For a breakdown of the portfolio see "Portfolio" in
Part One.
Each Unit represents a fractional undivided interest in the Trust. To the
extent that any Units are redeemed by the Trustee the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase although
the actual interest in the Trust represented by such fraction will remain
unchanged. Units will remain outstanding until redeemed upon tender to the
Trustee by Unitholders, which may include the Sponsor, or until the termination
of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Blue Chip Opportunity Trust is to provide investors with
the potential for capital appreciation and income. The portfolio of the Trust is
described under "Trust Portfolio" herein and under "Portfolio" in Part One. An
investor will be subjected to taxation on the dividend income received from the
Trust and on gains from the sale or liquidation of Securities (see "Federal
Taxation"). Investors should be aware that there is not any guarantee that the
objectives of the Trust will be achieved because they are subject to the
continuing ability of the respective Security issuers to continue to declare and
pay dividends and because the market value of the Securities can be affected by
a variety of factors. Common stocks may be especially susceptible to general
stock market movements and to volatile increases and decreases of value as
market confidence in and perceptions of the issuers change. Investors should be
aware that there can be no assurance that the value of the underlying Securities
will increase or that the issuers of the Equity Securities will pay dividends on
outstanding common shares. Any distributions of income will generally depend
upon the declaration of dividends by the issuers of the Securities and the
declaration of any dividends depends upon several factors including the
financial condition of the issuers and general economic conditions.
In determining Equity Securities for deposit in the Blue Chip Opportunity
Trust and the percentage of the portfolio represented by each such Equity
Security, the Sponsor selected those Equity Securities that are current
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.
Investors should note that the above criteria were initially applied to the
Equity Securities selected for inclusion in the Trust as of the Initial Date of
Deposit. Subsequent to the Initial Date of Deposit, the Securities may no longer
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 the Trust and the
proceeds received from the sale of such Security will be used to acquire as many
round lots as possible of the security which has replaced such removed Security
in the Dow Jones Industrial Average.
Investors should be aware that the Trust is not a "managed" trust and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that the
securities were selected by the Sponsor as of the date the Securities were
purchased by the Trust. The Trust may continue to purchase or hold Securities
originally selected through this process even though the evaluation of the
attractiveness of the Securities may have changed and, if the evaluation were
performed again at that time, the Securities would not be selected for the
Trust.
TRUST PORTFOLIO
The Blue Chip Opportunity Trust consists of a number of 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, are
currently components of the Dow Jones Industrial Average. Each issue, as of the
Initial Date of Deposit, represented approximately the same dollar value of a
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 Trust 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 Trust or in the selection of stocks included in the Trust
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 institutional 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.
Risk Factors. The Trust consists of different issues of Equity Securities,
all of which are listed on the New York Stock Exchange. An investment in Units
should be made with an understanding of the risks which an investment in common
stocks entails, including the risk that the financial condition of the issuers
of the Equity Securities or the general condition of the common stock market may
worsen and the value of the Equity Securities and therefore the value of the
Units may decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. These perceptions are based
on unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the issuers
of those common stocks that are generally subordinate to those of creditors of
or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts declared by the issuer's
board of directors and have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. Common stocks do not represent an obligation of the issuer
and, therefore, do not offer any assurance of income or provide the same degree
of protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of principal,
interest and dividends which could adversely affect the ability and inclination
of the issuer to declare or pay dividends on its common stock or the rights of
holders of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for as
long as the common stocks remain outstanding, and thus the value of the Equity
Securities may be expected to fluctuate over the life of the Trust to values
higher or lower than those prevailing on the date of purchase by a Unitholder.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
General. The Trust consists of such of the Securities listed under
"Portfolio" in Part One as may continue to be held from time to time in the
Trust together with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of the
Securities.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events might be distributed to Unitholders and might not be reinvested, no
assurance can be given that the Trust will retain for any length of time its
present size and composition. Although the portfolio is not managed, the Sponsor
may instruct the Trustee to sell Equity Securities under certain limited
circumstances. See "Trust Administration." Equity Securities, however, will not
be sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation or depreciation.
Unitholders will be unable to dispose of any of the Equity Securities as
such, and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in the Trust and will vote such stocks in accordance with the
instructions of the Sponsor. Unitholders, however, may be able upon request to
receive an "in kind" distribution of these Securities evidenced by the Units
(see "Rights of Unitholders--Redemption of Units").
FEDERAL TAXATION
The 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.
Distributions to Unitholders of the Trust's income, other than distributions
which are designated as capital gain dividends, will be taxable as ordinary
income to Unitholders, except that 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.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholder) on December 31 of the year such distributions are
declared.
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
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
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) realized from property (with certain exceptions) is
generally subject to a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). 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. Capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary income. Note
that 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. 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.
The Taxpayer Relief Act of 1997 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) and for purposes of determining the holding
period. Unitholders should consult their tax advisers with regard to any such
constructive sales rules.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Trust may be
deferred. The income (or proceeds from redemption) a Unitholder must take into
account for federal income tax purposes is not reduced by amounts deducted to
pay any deferred sales charge.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than real
estate investment Trusts) and is designated by the Trust as being eligible for
such deduction. To the extent dividends received by the Trust are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a pro
rata portion of the foreign Securities held by the Trust, must include in their
gross income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust deems
to be the Unitholders' portion of foreign income taxes paid with respect to, or
withheld from, dividends, interest or other income of the Trust from its foreign
investments. Unitholders may then subtract from their federal income tax the
amount of such taxes withheld, or else treat such foreign taxes as deductions
from gross income; however, as in the case of investors receiving income
directly from foreign sources, the above described tax credit or deduction is
subject to certain limitations. A required holding period for such credits is
imposed. Unitholders should consult their tax advisers regarding this election
and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received from the
Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon termination of the Trust. Unitholders electing an in kind
distribution of stock should be aware that the exchange is subject to taxation
and Unitholders will recognize gain or loss based on the value of the Securities
received. Investors electing an in kind distribution should consult their own
tax advisers with regard to such transactions.
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 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
your 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 a Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from a Trust that
are designated by the Trust as capital gain dividends should not be subject to
United States Federal 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 status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). 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.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
Investment Advisory Corp., an affiliate of the Sponsor, will receive an annual
supervisory fee, payable in monthly installments, which is not to exceed the
amount set forth under "Summary of Essential Financial Information" in Part One,
for providing portfolio supervisory services for the Trust. Such fee (which is
based on the number of Units outstanding on January 1 of each year) may exceed
the actual costs of providing such supervisory services for this Fund, but at no
time will the total amount received for portfolio supervisory services rendered
to 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 Investment Advisory
Corp., shall receive as an annual per Unit evaluation fee, payable in monthly
installments, for regularly evaluating the Trust's portfolio, that amount set
forth under "Summary of Essential Financial Information" in Part One (which is
based on the outstanding number of Units on January 1 of each year). Both of the
foregoing fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category. The Sponsor and dealers will receive sales commissions and may realize
other profits (or losses) in connection with the sale of Units as described
under "Public Offering--Sponsor and Dealer Compensation".
Trustee's Fee. For its services the Trustee will receive as an annual per
Unit fee from the Trust that amount set forth under "Summary of Essential
Information" in Part One (which is based on the number of Units outstanding on
January 1 of each year). The Trustee's fees are payable monthly on or before the
tenth day of each month from the Income Account to the extent funds are
available and then from the Capital Account. The Trustee benefits to the extent
there are funds for future distributions, payment of expenses and redemptions in
the Capital and Income Accounts since these Accounts are non-interest bearing
and the amounts earned by the Trustee are retained by the Trustee. Part of the
Trustee's compensation for its services to the Trust is expected to result from
the use of these funds. Such fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index published by the
United States Department of Labor or, if such category is no longer published,
in a comparable category. For a discussion of the services rendered by the
Trustee pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration".
Miscellaneous Expenses. Expenses incurred in establishing a Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses ("organizational costs"), may be paid by the Trust and amortized over a
five year period or over the life of the Trust if less than five years. The
following additional charges are or may be incurred by the Trust: (a) normal
expenses (including the cost of mailing reports to Unitholders) incurred in
connection with the operation of the Trust, (b) fees of the Trustee for
extraordinary services, (c) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (d) various
governmental charges, (e) expenses and costs of any action taken by the Trustee
to protect the Trust and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of the Trust without negligence, bad faith or wilful
misconduct on its part and (g) expenditures incurred in contacting Unitholders
upon termination of the Trust. The Trust may pay the cost of updating its
registration statement each year. Unit investment trust sponsors have
historically paid these costs.
The fees and expenses set forth herein are payable out of the Trust. When
such fees and expenses are paid by or owning to the Trustee, they are secured by
a lien on the portfolio of the Trust. Since the Securities are all common
stocks, and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be sufficient to
meet any or all expenses of the Trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by the Trust, the
Trustee has the power to sell Securities to pay such amounts. These sales may
result in capital gains or losses to Unitholders. See "Federal Taxation".
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The current sales charge
applicable to Units is described in Part One of this Prospectus under "Summary
of Essential Financial Information".
Any sales charge reduction will primarily be the responsibility of the
selling broker, dealer or agent.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law and trustees, custodians or difuciaries for the
benefit of such persons) of Van Kampen Funds 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.
Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "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 fida employee of any firm offering Units for sale
to investors or their spouses or children and (4) officers and directors of bank
holding companies that make Units available directly or through subsidiaries or
bank affiliates. Notwithstanding anything to the contrary in this Prospectus,
such investors, bank trust departments, firm employees and bank holding company
officers and directors who purchase Units through this program will not receive
sales charge reductions for quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in Part One in
accordance with fluctuations in the prices of the underlying Securities in the
Trust.
The price of the Units as of the opening of business on the date stated in
the "Summary of Essential Financial Information" in Part One was established by
adding to the determination of the aggregate underlying value of the Securities
an amount equal to the original sales charge and dividing the sum so obtained by
the number of Units outstanding. The Public Offering Price shall include the
proportionate share of any cash held in the Income and Capital Accounts. The
Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of the close of trading on the New York Stock Exchange
(which is presently 4:00 P.M. New York time) on days the New York Stock Exchange
is open and will adjust the Public Offering Price of the Units commensurate with
such valuation. Such Public Offering Price will be effective for all orders
received at or prior to the close of trading on the New York Stock Exchange on
each such day. Orders received by the Trustee, Sponsor or any dealer for
purchases, sales or redemptions after that time, or on a day when the New York
Stock Exchange is closed, will be held until the next determination of price.
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made or,
if no such price exists, at the bid prices on the day the valuation is made.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in the
manner described above.
The Sponsor intends to qualify the Units for sale in a number of states. Any
discount provided to investors will be borne by the selling dealer or agent as
indicated under "General" above. For secondary market transactions, the
broker-dealer concession or agency commission will amount to 70% of the sales
charge applicable to the transaction.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the agency
commission referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust Units; however,
the Glass-Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions are not
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units (25 Units for a
tax-sheltered retirement plan). The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor will receive a gross sales
commission initially equal to the total sales charge applicable to a transaction
of the Units less any reduced sales charges. The Sponsor will receive from the
dealers the excess of such gross sales commission over the concession or agency
concession described above.
In addition, the Sponsor has realized a profit or sustained a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. The Sponsor has not
participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities in the Trust portfolio. The Sponsor may have further realized
additional profit or loss during the initial offering period as a result of the
possible fluctuations in the market value of the Securities in the Trust after a
date of deposit, since all proceeds received from purchasers of Units (excluding
dealer concessions and agency commissions allowed, if any) will be retained by
the Sponsor.
Cash, if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain a
secondary market for Units of the Trust. In so maintaining a market, the Sponsor
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.
Public Market. Although they are not obligated to do so, the Sponsor intends
to maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust. If the supply of Units
exceeds demand or if some other business reason warrants it, the Sponsor and/or
dealers 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 by tendering them to
the Trustee for redemption at the Redemption Price. See "Rights of
Unitholders--Redemption of Units". A Unitholder who wishes to dispose of his
Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The purchase
of Units of the Trust may be limited by the plans' provisions and does not
itself establish such plans. The minimum purchase in connection with a
tax-sheltered retirement plan is 25 Units of the Trust.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust is evidenced by separate registered certificates
executed by the Trustee and the Sponsor. Certificates are transferable by
presentation and surrender to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer. A Unitholder must sign exactly as
his name appears on the face of the certificate with the signature guaranteed by
a participant in the Securities Transfer Agents Medallion Program ("STAMP") or
such other signature guarantee program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances the Trustee may
require additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or certificates
of corporate authority. Certificates will be issued in denominations of one Unit
or any multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require
a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, return of principal, etc.) are credited to the Capital Account.
After making provisions for the distribution of amounts in respect of income and
capital gain so the Trust shall not be subject to Federal income tax, the
Trustee will then distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to Unitholders
of record on the preceding Income Record Dates. See "Summary of Essential
Financial Information" in Part One. Proceeds received on the sale of any
Securities in a Trust, to the extent (1) not used to purchase new Securities,
meet redemptions of Units or pay expenses or (2) not retained in reserve to pay
any applicable taxes, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held in
the Capital Account and not distributed until the next distribution date
applicable to such Capital Account. The Trustee is not required to pay interest
on funds held in the Capital or Income Accounts (but may itself earn interest
thereon and therefore benefits from the use of such funds).
The distribution to the Unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share of
the cash in the Income Account after deducting estimated expenses. Because
dividends are not received by the Trust at a constant rate throughout the year,
such distributions to Unitholders are expected to fluctuate from distribution to
distribution. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. Notification to the Trustee of
the transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account amounts necessary to pay the expenses of the Trust (as determined on the
basis set forth under "Trust Operating Expenses"). The Trustee also may withdraw
from said accounts such amounts, if any, as it deems necessary to establish a
reserve for any governmental charges payable out of the Trust. Amounts so
withdrawn shall not be considered a part of a Trust's assets until such time as
the Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Income and Capital
Accounts such amounts as may be necessary to cover redemptions of Units.
Reinvestment Option. Unitholders may elect to have each distribution of
interest income, capital gains and/or principal on their Units automatically
reinvested in shares of certain Van Kampen mutual funds which are registered in
the Unitholder's state of residence. Such mutual funds are hereinafter
collectively refereed 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 Funds Inc. at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, Illinois 60181-5555. Texas
residents who desire to reinvest may request that a broker-dealer registered in
Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units will,
on the applicable distribution date, automatically be applied, as directed by
such person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such date.
Unitholders with an existing Guaranteed Reinvestment Option (GRO) Program
account (whereby a sales charge is imposed on distribution reinvestments) may
transfer their existing account into a new GRO account which allows purchases of
Reinvestment Fund shares at net asset value as described above.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. A participant may at
any time prior to five days preceding the next succeeding distribution date, by
so notifying the Trustee in writing, elect to terminate his or her reinvestment
plan and received future distributions of his or her Units in cash.
Unitholders may elect to have each distribution of income, capital gains
and/or capital on their Units automatically reinvested in additional Units of
the Trust without a sales charge (to the extent Units may be lawfully offered
for sale in the state in which the Unitholder resides).To participate in the
reinvestment plan, a Unitholder may either contact his or her broker or agent or
file with the Trustee a written notice of election at least ten days prior to
the Record Date for which the first distribution is to apply. A Unitholder's
election to participate in the reinvestment plan will apply to all Units of the
Trust owned by such Unitholder and such election will remain in effect until
changed by the Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Sponsor (see "Public Offering--Public Market") or, until such
time as additional Units cease to be issued by the Trust, 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.
Under the reinvestment plan, the Trust will pay the Unitholder's
distributions to the Trustee which in turn will purchase for such Unitholder
full and fractional Units of the Trust and will send such Unitholder a statement
reflecting the reinvestment.
A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its sponsor and its investment adviser
shall have the right to terminate at any time the reinvestment plan relating to
such Reinvestment Fund and the Sponsor shall have the right to suspend or
terminate the reinvestment plan for reinvestment in additional Units of the
Trust at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit outstanding. For as long as the Sponsor deems it to be in the best
interest of the Unitholders, the accounts of the Trust shall be audited, not
less frequently than annually, by independent certified public accountants, and
the report of such accountants shall be furnished by the Trustee to Unitholders
upon request. Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each person who at any time during the
calendar year was a registered Unitholder a statement (i) as to the Income
Account: income received, deductions for applicable taxes and for fees and
expenses of the Trust, for redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed in each case both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; (ii) as
to the Capital Account: the dates of disposition of any Securities (other than
pursuant to In Kind Distributions) and the net proceeds received therefrom, the
results of In Kind Distributions in connection with redemptions of Units, if
any, deductions for payment of applicable taxes and fees and expenses of the
Trust held for distribution to Unitholders of record as of a date prior to the
determination and the balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (iii) a list of the Securities held and the number of Units
outstanding on the last business day of such calendar year; (iv) the Redemption
Price per Unit based upon the last computation thereof made during such calendar
year; and (v) amounts actually distributed during such calendar year from the
Income and Capital Accounts, separately stated, expressed as total dollar
amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286 of the certificates representing the Units
to be redeemed, duly endorsed or accompanied by proper instruments of transfer
with signature guaranteed (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender an amount for each Unit equal to
the Redemption Price per Unit next computed after receipt by the Trustee of such
tender of Units. The "date of tender" is deemed to be the date on which Units
are received by the Trustee, except that as regards Units received after the
close of trading on the New York Stock Exchange (which is currently 4:00 P.M.
New York time) the date of tender is the next day on which such Exchange is open
for trading and such Units will be deemed to have been tendered to the Trustee
on such day for redemption at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by the
Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
To the extent that Securities are sold, the size of the Trust will be, and
the diversity of such Trust may be, reduced. Sales may be required at a time
when Securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the Unitholder depending on the value of the
Securities in the portfolio at the time of redemption. Special federal income
tax consequences will result if a Unitholder requests an In Kind Distribution.
See "Federal Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) any unpaid deferred sales charge payments. During
the initial offering period, the redemption price and the secondary market
repurchase price will include estimated organizational and offering costs. For
these purposes, the Evaluator may determine the value of the Securities in the
following manner: If the Securities are listed on a national or foreign
securities exchange or the Nasdaq Stock Market, Inc., this evaluation is
generally based on the closing sale prices on that exchange or market (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 or market, at the closing bid
prices. If the Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange or market, the evaluation may be
based on the current bid price on the over-the-counter market. If current bid
prices are unavailable or inappropriate, the evaluation may be determined (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
Securities on the bid side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Securities
in the Trust is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any
tender of Units for redemption. If the Sponsor's bid in the secondary market at
that time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by the
Trustee. Units held by the Sponsor may be tendered to the Trustee for redemption
as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord
with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Sponsor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.
Portfolio Administration. The portfolio of the Trust is not "managed" by the
Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. Traditional methods of
investment management for a managed fund typically involve frequent changes in a
portfolio of securities on the basis of economic, financial and market analyses.
The Trust, however, will not be managed. Instead, as a general rule the only
purchases and sales that will be made with respect to the 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 Trust"). The Trust Agreement,
however, does provide that the Sponsor may (but need not) direct the Trustee to
dispose of a Security in certain events such as the issuer having defaulted on
the payment on any of its outstanding obligations or the price of the Security
has declined to such an extent or other such credit factors exist so that in the
opinion of the Sponsor, the retention of such Securities would be detrimental to
the Trust. In addition, the Sponsor will instruct the Trustee to dispose of
certain Securities and to take such further action as may be needed from time to
time to ensure that the Trust continues to satisfy the qualifications of a
regulated investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue Code. The Trust
requires the Sponsor, as 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. Except as provided in this paragraph, the acquisition by the Trust
of any securities other than the Securities is prohibited. In the event the
Trustee receives any securities or other properties relating to the Securities
(other than normal dividends) acquired in exchange for Securities such as those
acquired in connection with a merger, a spin-off 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 Trust in exchange for Securities)
are credited to the Capital Account for reinvestment into new securities which
are added as components of the Dow Industrial Average or into additional shares
of the Security as indicated in the preceding sentence, for distribution to
Unitholders or to meet redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also sell
Securities designated by the Supervisor, or if not so directed, in its own
discretion, for the purpose of redeeming Units of the Trust tendered for
redemption and the payment of expenses; provided, however, that in the case of
Securities sold to meet redemption requests.
When the Trust sells Securities, the composition and diversity of the Equity
Securities may be altered. In order to obtain the best price for the Trust, it
may be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, (as determined in good faith by the Sponsor
and the Trustee) provided, however, that the Trust Agreement may not be amended
to increase the number of Units. The Trust Agreement may also be amended in any
respect by the Trustee and Sponsor, or any of the provisions thereof may be
waived, with the consent of the holders of 51% of the Units then outstanding,
provided that no such amendment or waiver will reduce the interest in the Trust
of any Unitholder without the consent of such Unitholder or reduce the
percentage of Units required to consent to any such amendment or waiver without
the consent of all Unitholders. The Trustee shall advise the Unitholders of any
amendment promptly after execution thereof.
The Trust may be liquidated (1) at any time by consent of Unitholders
representing 51% of the Units then outstanding or (2) by the Trustee when the
value of the Trust, as shown by any evaluation, is less than that indicated
under "Summary of Essential Financial Information" in Part One. The Trust
Agreement will terminate upon the sale or other disposition of the last Security
held thereunder, but in no event will it continue beyond the Mandatory
Termination Date stated under "Summary of Essential Financial Information" in
Part One.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any are
then issued and outstanding, shall be given by the Trustee to each Unitholder so
holding a certificate at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days before the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. The Trustee will deduct from the funds of the Trust any
accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of liquidation
and any amounts required as a reserve to provide for payment of any applicable
taxes or other governmental charges. Any sale of Equity Securities in the Trust
upon termination may result in a lower amount than might otherwise be realized
if such sale were not required at such time. The Trustee will then distribute to
each Unitholder his pro rata share of the balance of the Income and Capital
Accounts.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion will determine that any amounts held in reserve are no
longer necessary, it will make distribution thereof to Unitholders in the same
manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or negligence (gross negligence in the case of
the Sponsor) 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,
Supervisor or Unitholders for errors in judgment. This provision shall not
protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van
Kampen Investments 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 Funds 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 1 Parkview Plaza, P.O. Box 5555, Oakbrook
Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999, the total
stockholders' equity of Van Kampen Funds Inc. was $141,554,861 (audited). (This
paragraph relates only to the Sponsor and not to the Trust or to any other
Series thereof. The information is included herein only for the purpose of
informing investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. More detailed financial
information will be made available by the Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen'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 or evaluation services at cost for approximately $13.4
billion of unit investment trust assets outstanding. Since 1976, the Sponsor has
serviced over two million investor accounts, opened through retail distribution
firms.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its Unit Investment Trust
Division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of the Banks of the State of New York and the Board of Governors
of the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Securities held the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus, and undivided
profits of not less than $5,000,000.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in this Prospectus have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
their report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Trust,
the Sponsor or dealers. This Prospectus does not constitute an offer to sell, or
a solicitation of any offer to buy, securities in any state to any persons to
whom it is not lawful to make such offer in such state.
Table of Contents Page
----------------- ------
Introduction 1
The Trust 2
Objectives and Securities Selection 2
Trust Portfolio 2
Federal Taxation 3
Trust Operating Expenses 4
Public Offering 5
Rights of Unitholders 6
Trust Administration 8
Other Matters 10
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.
BLUE CHIP OPPORTUNITY TRUST
PROSPECTUS
PART TWO
Note: This Prospectus May Be Used Only
When Accompanied by Part One. Both
Parts of this Prospectus should be
retained for future reference.
Dated as of the date
of the Prospectus
Part One accompanying
this prospectus
Part Two.
Sponsor:
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
SELECT EQUITY AND TREASURY TRUST
AND
BLUE CHIP OPPORTUNITY AND TREASURY TRUST
Prospectus Part Two
--------------------------------------------------------------------------------
The Fund. The Select Equity and Treasury Trust (the "Select Equity and
Treasury Trust") and the Blue Chip Opportunity and Treasury Trust (the "Blue
Chip Opportunity and Treasury Trust") is one of several unit investment trusts
created under separate series of Van Kampen Merritt Equity Opportunity Trust,
Van Kampen American Capital Equity Opportunity Trust, Van Kampen Equity
Opportunity Trust or Van Kampen Focus Portfolios (the "Fund"). The Select Equity
and Treasury Trust and the Blue Chip Opportunity and Treasury Trust each offer
investors the opportunity to purchase Units representing proportionate interests
in a fixed, diversified portfolio primarily consisting of the 30 actively traded
"blue chip" equity securities which were components of the Dow Jones Industrial
Average on the original date of creation of the Trust plus "zero coupon" U.S.
Treasury obligations. Dow Jones & Company, Inc. has not participated in any way
in the creation of the Fund 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 stated
under "Summary of Essential Financial Information" in Part One of this
Prospectus and any securities then held will, within a reasonable time
thereafter, be liquidated or distributed by the Trustee. Any Securities
liquidated at termination will be sold at the then current market value for such
Securities; therefore, the amount distributable in cash to a Unitholder upon
termination may be more or less than the amount such Unitholder paid for his
Units.
Objectives of the Trusts. The objectives of the Select Equity and Treasury
Trust and the Blue Chip Opportunity and Treasury Trust are to protect
Unitholders' capital and provide the potential for capital appreciation and
income by investing a portion of its portfolio in "zero coupon" U.S. Treasury
obligations ("Treasury Obligations") and the remainder of the Trust's portfolio
primarily consisting of actively traded, New York Stock Exchange listed equity
securities which were components of the Dow Jones Industrial Average on the
original date of creation of the Trust ("Equity Securities"). Collectively, the
Treasury Obligations and the Equity Securities are referred to herein as the
"Securities." See "Portfolio" in Part One of this Prospectus. 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 in the
Select Equity and Treasury Trust and the Blue Chip Opportunity and Treasury
Trust 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 of the Units of the Select Equity and Treasury
Trust or the Blue Chip Opportunity and Treasury Trust, whose net asset value
will fluctuate and, prior to maturity, may be worth more or less than a
purchaser's acquisition cost. There is, of course, no guarantee that the
objectives of the Trusts will be achieved.
Public Offering Price. The secondary market Public Offering Price of the
Trust will include the aggregate underlying value of the Securities in the
Trust, the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. See "Public Offering".
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of a Trust, with changes in
dividends received and with the sale or liquidation of Securities; therefore,
there is no assurance that the annual dividend distribution will be realized in
the future.
Principal Protection. The Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust were both organized so that purchasers of Units
should receive, at the termination of such Trusts, an amount per Unit at least
equal to $10.00 ($11.00 for Blue Chip Opportunity and Treasury Trust, Series 5
and subsequent series) (which is equal to the per Unit value upon maturity of
the Treasury Obligations), even if the respective 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 Select Equity and
Treasury Trust and the Blue Chip Opportunity and Treasury Trust provides
Unitholders who purchase Units at the price of $10.00 ($11.00 for Blue Chip
Opportunity and Treasury Trust, Series 5 and subsequent series) or less per Unit
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 lower price, this feature may also provide a potential for
capital appreciation. It should be remembered, however, that the value of the
Treasury Obligations may fluctuate before maturity due to fluctuations in
interest rates.
Units of the Fund are not deposits or obligations of, and are not guaranteed
or endorsed by, any bank, and are not federally insured or otherwise protected
by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency, and involve investment risk, including the possible loss of
principal.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference. This
Prospectus is dated as of the date of the Prospectus Part I accompanying this
Prospectus Part II.
--------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Distributions. Distributions of dividends received, and capital, if any,
received by each Trust will be paid in cash on the applicable Distribution Date
to Unitholders of record on the record date as set forth in the "Summary of
Essential Financial Information" in Part One of this Prospectus. Income with
respect to the amortization of original issue discount on the Treasury
Obligations in the Select Equity and Treasury Trust and 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. Any distribution of income and/or capital will be net
of the expenses of the applicable Trust. See "Federal Taxation." Additionally,
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".
Termination. Commencing on the Mandatory Termination Date as specified in
Part One for each Trust, Equity Securities will begin to be sold in connection
with the termination of a 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 the Trust
maintained by the Trustee. At least 30 days prior to the Mandatory Termination
Date for the respective Trusts 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 the required number of Units of a Trust rather than to receive
payment in cash for such Unitholder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. All Unitholders will
receive cash in lieu of any fractional shares and cash representing their pro
rata portion of the Treasury Obligations, if any. 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 the
Trust terminated. See "Trust Administration--Reinvestment Option."
Reinvestment Option. Unitholders of any Van Kampen-sponsored unit investment
trust may utilized their redemption or termination proceeds to purchase units of
any other Van Kampen trust in the initial offering period accepting rollover
investments subject to a reduced sales charge to the extent stated in the
related prospectus (which may be deferred in certain cases). Unitholders have
the opportunity to have their distributions reinvested into an open-end,
management investment company as described herein. See "Rights of
Unitholders--Reinvestment Option."
Risk Factors. An investment in a Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. See "Risk Factors".
THE TRUSTS
The Fund was created under the laws of the State of New York pursuant to a
Trust Indenture and Agreement (the "Trust Agreement"), among Van Kampen Funds
Inc., as Sponsor, American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator, Van Kampen Investment Advisory
Corp., as Supervisor, and The Bank of New York, as Trustee, or their
predecessors.
The Select Equity and Treasury Trust and the Blue Chip Opportunity and
Treasury Trust may be appropriate mediums for investors who desire to
participate in a portfolio of equity securities and zero-coupon U.S. Treasury
obligations with greater diversification with regard to the equity securities
than they might be able to acquire individually. Diversification of assets in
the Trusts will not eliminate the risk of loss always inherent in the ownership
of securities. For a breakdown of the portfolio see "Portfolio" in Part One of
this Prospectus.
Each Unit represents a fractional undivided interest in the Trust involved.
To the extent that any Units are redeemed by the Trustee, the fractional
undivided interest in a Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust are to protect Unitholders' capital and provide
investors with the potential for capital appreciation and income. The portfolio
of each Trust is described under "Trust Portfolios" herein and under "Portfolio"
in Part One of this Prospectus. An investor will be subjected to taxation on the
dividend income received from the Fund and on gains from the sale or liquidation
of Securities (see "Federal TaxationInvestors should be aware that there is not
any guarantee that the objectives of any 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. The Select
Equity and Treasury Trust and the Blue Chip Opportunity and Treasury Trust,
however, were both organized so that investors should receive, at termination of
such Trusts, an amount per Unit at least equal to $10.00 ) $11.00 for Blue Chip
Opportunity and Treasury Trust, Series 5 and subsequent series) (which is equal
to the per Unit value upon maturity of the Treasury Obligations), even if such
Trusts never paid a distribution and the value of the Equity Securities were to
decrease to zero, which the Sponsor considers highly unlikely. Any distributions
of income will generally depend upon the declaration of dividends by the issuers
of the Securities and the declaration of any dividends depends upon several
factors including the financial condition of the issuers and general economic
conditions.
In selecting Securities for the Select Equity and Treasury Trust and the Blue
Chip Opportunity and Treasury Trust, the following factors, among others, were
considered by the Sponsor: (a) for the portion of the Securities that are Equity
Securities, the Sponsor selected those Equity Securities that were, at the date
of creation of the Fund, 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, and (b) for
the portion of the Securities that are Treasury Obligations, the evidence of the
right to receive a fixed payment at a future date from the U.S. Government,
backed by the full faith credit of the U.S. Government.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trusts as of the date the Trusts were created.
Subsequent thereto, the Equity Securities may no longer meet such criteria.
Should an Equity Security no longer meet such criteria, such Equity Security
will not as a result thereof be removed from the portfolio of a Trust.
Investors should be aware that the Fund is not a "managed" trust and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that the
securities were selected by the Sponsor as of the date the Securities were
purchased by the Trust involved. Each Trust may continue to purchase or hold
Securities originally selected through this process even though the evaluation
of the attractiveness of the Securities may have changed and, if the evaluation
were performed again at that time, the Securities would not be selected for such
Trust.
TRUST PORTFOLIOS
Each Trust consists of a number of 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 on the date of creation of such Trust plus
zero-coupon U.S. Treasury Obligations. Each Equity Security, as of such date,
represented approximately the same dollar value of a portfolio since the Sponsor
utilized a dollar weighted average approach in acquiring such Equity Securities.
Consistent with the Trust's investment objective, a change in components of the
Dow Jones Industrial Average will not result in a change to the Trust portfolio.
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 Fund or in
the selection of stocks included in any of 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 institutional 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 date the Fund was
created will not cause a change in the identity of the common stocks included in
any of the Trusts.
The Trusts consist of such of the Securities listed under "Portfolio" in Part
One of this Prospectus as may continue to be held from time to time in the
Trusts together with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of the
Securities.
Because certain of the Securities from time to time may be sold under certain
circumstances described herein, and because the proceeds from such events will
be distributed to Unitholders and will not be reinvested, no assurance can be
given that the Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor may instruct the
Trustee to sell Securities under certain limited circumstances. Securities,
however, will not be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
RISK FACTORS
Equity Securities. An investment in Units should be made with an
understanding of the risks which an investment in common stocks entails,
including the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market may worsen and
the value of the Equity Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market confidence
in and perceptions of the issuers change. These perceptions are based on
unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the issuers
of those common stocks that are generally subordinate to those of creditors of
or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Fund have a right to
receive dividends only when and if, and in the amounts declared by the issuer's
board of directors and have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. Common stocks do not represent an obligation of the issuer
and, therefore, do not offer any assurance of income or provide the same degree
of protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of principal,
interest and dividends which could adversely affect the ability and inclination
of the issuer to declare or pay dividends on its common stock or the rights of
holders of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for as
long as the common stocks remain outstanding, and thus the value of the Equity
Securities may be expected to fluctuate over the life of the Fund to values
higher or lower than those prevailing on the date of purchase by a Unitholder.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
Treasury Obligations. The Treasury Obligations deposited in the Select Equity
and Treasury Trust and 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. 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 rate
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 such Trusts' portfolio to be invested in Equity Securities.
General. Each Trust consists of such of the Securities listed under
"Portfolio" as may continue to be held from time to time in such Trust in Part
One of this Prospectus together with cash held in the Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Securities.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested, no
assurance can be given that a Trust will retain for any length of time its
present size and composition. Although the portfolios are not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain limited
circumstances. See "Trust Administration." Equity Securities, however, will not
be sold by a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation or depreciation.
Unitholders will be unable to dispose of any of the Equity Securities as
such, and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in a Trust and will vote such stocks in accordance with the instructions
of the Sponsor. Actions required to be taken with respect to the Treasury
Obligations will be in accordance with the instruction of the Sponsor.
Unitholders of the Trusts may, however, be able upon request to receive an "in
kind" distribution of these Securities evidenced by the Units (see "Rights of
Unitholders--Redemption of Units").
FEDERAL TAXATION
The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary 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 opinions, it is assumed that
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 and that the Equity Securities are equity for Federal income
tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of the
Trust will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Trust asset when such income is considered to be received by
the Trust.
2. Each Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Equity Security when such dividends are
considered to be received by the Trust. Unitholders will be taxed in this manner
regardless of whether distributions from the Trust are actually received by the
Unitholder or are automatically reinvested.
3. 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 (except to the extent of an In-Kind distribution of stocks is
received by such Unitholder as described below). The price a Unitholder pays for
his Units, generally including sales charges, is allocated among his pro rata
portion of each Security held by the Trust (in proportion to the fair market
values thereof on the valuation date nearest to the date the Unitholder
purchases his Units) in order to determine his initial tax basis for his pro
rata portion of each Security held by the Trust. A Unitholder's tax basis in his
Units will equal his tax basis in his pro rata portion of all the assets of the
Trust. Such basis is determined (before adjustments described below) by
apportioning the tax basis for the Units among each of the Trust's assets,
according to the value as of the valuation date nearest the date of acquisition
of the Units. 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 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 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.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss (except in the case of a dealer or a
financial institution) and, in general, will be long-term if the Unitholder has
held his Units for more than one year. Unitholders should consult their tax
advisers regarding the recognition of such capital gains and losses for federal
income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other than corporate
Unitholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. 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 period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. Unitholders should consult with their
tax advisers with respect to the limitations on the dividends received
deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss upon Disposition of Securities by a Trust
or Disposition of Units. The Internal Revenue Service Restructuring and Reform
Act of 1998 (the "1998 Tax 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) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax rate of
20% (10% in the case of certain taxpayers in the lowest tax bracket). 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. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income.
The Revenue Reconciliation Act of 1993 recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and their prospective investors should consult with their
tax advisers regarding the potential effect of this provision on their
investment in Units.
If the Unitholder disposes of a Unit, he or she is deemed thereby to have
disposed of his or her entire pro rata interest in all assets of the Trust
involved, including his or her pro rata portion of all the Securities
represented by the Unit. The Taxpayer Relief Act of 1997 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, forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not loss). Unitholders should
consult their own tax advisers with regard to any such constructive sales rules.
Special Tax Consequences of In Kind Distributions upon Redemption of Units or
Termination of a 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. A Unitholder may also under certain
circumstances request an In Kind Distribution 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 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 (and does not include the Treasury
Obligations). A Unitholder will not recognize gain or loss with respect to the
Equity Securities if a Unitholder only receives Equity Securities in exchange
for his or her 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 and his tax basis in such fractional share of
the 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 and his tax basis in the 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 his pro rata portion of 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
Security are received by the Trust which are not taxable as ordinary income as
described above. A Unitholder's tax basis in his Units and his pro rata portion
of a Treasury Obligation is increased by the amount of original issue discount
thereon property included in the Unitholder's gross income for federal income
tax purposes.
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 by the Internal Revenue Service that payments to the
Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by the Trust (other than those that are not treated as United
States source income, if any) will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons (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, dividend income 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-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unitholders under the existing 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 is (a) is (i) for
United States federal income tax purposes a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political subdivision thereof,
or (iii) an estate or trust the income of which is subject to United States
federal income taxation regardless of its source or (b) does not qualify as a
U.S. Unitholder in paragraph (a) but whose income from a Unit is effectively
connected with such Unitholder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States whose income
and gain on the Units will be taxable.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trusts. However, Van Kampen
Investment Advisory Corp., which is an affiliate of the Sponsor, will receive an
annual supervisory fee, payable in monthly installments, which is not to exceed
the amount set forth under "Summary of Essential Financial Information" in Part
One of this Prospectus, for providing portfolio supervisory services for each
Trust. Such fee (which is based on the number of Units outstanding on January 1
of each year) may exceed the actual costs of providing such supervisory services
for this Fund, but at no time will the total amount received for portfolio
supervisory services rendered to Series 1 and subsequent series of the Fund in
any calendar year exceed the aggregate cost to the Supervisor of supplying such
services in such year. In addition, the Evaluator, which is a division of Van
Kampen Investment Advisory Corp. shall receive as an annual per Unit evaluation
fee, payable in monthly installments, for regularly evaluating each Trust's
portfolio that amount set forth under "Summary of Essential Financial
Information" in Part One of this Prospectus (which is based on the outstanding
number of Units on January 1 of each year). Both of the foregoing fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of Shelter"
in the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. The
Sponsor and dealers will receive sales commissions and may realize other profits
(or losses) in connection with the sale of Units as described under "Public
Offering--Sponsor and Dealer Compensation".
Trustee's Fee. For its services the Trustee will receive as an annual per
Unit fee from the Trusts that amount set forth under "Summary of Essential
Information" in Part One of this Prospectus (which is based on the outstanding
number of units on January 1 of each year). The Trustee's fees are payable
monthly on or before the twenty-fifth day of each month from the Income Account
to the extent funds are available and then from the Capital Account. The Trustee
benefits to the extent there are funds for future distributions, payment of
expenses and redemptions in the Capital and Income Accounts since these Accounts
are non-interest bearing and the amounts earned by the Trustee are retained by
the Trustee. Part of the Trustee's compensation for its services to a Trust is
expected to result from the use of these funds. Such fees may be increased
without approval of the Unitholders by amounts not exceeding proportionate
increases under the category "All Services Less Rent of Shelter" in the Consumer
Price Index published by the United States Department of Labor or, if such
category is no longer published, in a comparable category. For a discussion of
the services rendered by the Trustee pursuant to its obligations under the Trust
Agreement, see "Rights of Unitholders--Reports Provided" and "Trust
Administration".
Miscellaneous Expenses. Expenses incurred in establishing a Trust, including
the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses ("organizational costs"), may be paid by the Trust and amortized over a
five year period or over the life of the Trust if less than five years. The
following additional charges are or may be incurred by a Trust: (a) normal
expenses (including the cost of mailing reports to Unitholders) incurred in
connection with the operation of a Trust, (b) fees of the Trustee for
extraordinary services, (c) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (d) various
governmental charges, (e) expenses and costs of any action taken by the Trustee
to protect a Trust and the rights and interests of Unitholders, (f)
indemnification of the Trustee for any loss, liability or expenses incurred in
the administration of a Trust without negligence, bad faith or wilful misconduct
on its part and (g) expenditures incurred in contacting Unitholders upon
termination of the Trusts. The Trust may pay the cost of updating its
registration statement each year. Unit investment trust sponsors have
historically paid these costs.
The fees and expenses set forth herein are payable out of each Trust. When
such fees and expenses are paid by or owning to the Trustee, they are secured by
a lien on the portfolio of each Trust. Since the Securities are all common
stocks, and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be sufficient to
meet any or all expenses of a Trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by a Trust, the Trustee
has the power to sell Securities to pay such amounts. These sales may result in
capital gains or losses to Unitholders. See "Federal Taxation".
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The current sales charge
applicable to Units is described in Part One of this Prospectus under "Summary
of Essential Financial Information".
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law and trustees, custodians or fiduciaries for the
benefit of such persons) of Van Kampen Funds 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.
Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Trust Administration--General--Unit Distribution")
by (1) investors who purchase Units through registered investment advisers,
certified financial planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or asset
management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed, (2) bank trust departments investing funds over which they
exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, custodial or similar capacity, (3) any person who for at
least 90 days, has been an officer, director or bona fide employee of any firm
offering Units for sale to investors or their spouses or children and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything to
the contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive sales charge reductions for quantity
purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in Part One of
this Prospectus in accordance with fluctuations in the prices of the underlying
Securities in a Trust.
The price of the Units as of the opening of business on the date stated in
the "Summary of Essential Financial Information" in Part One of this Prospectus
was established by adding to the determination of the aggregate underlying value
of the Securities an amount equal to the original sales charge and dividing the
sum so obtained by the number of Units outstanding. The Public Offering Price
shall include the proportionate share of any cash held in the Capital Account.
The Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of the close of trading on the New York Stock Exchange
(which is presently 4:00 P.M. New York time) on days the New York Stock Exchange
is open and will adjust the Public Offering Price of the Units commensurate with
such valuation. Such Public Offering Price will be effective for all orders
received at or prior to the close of trading on the New York Stock Exchange on
each such day. Orders received by the Trustee, Sponsor or any dealer for
purchases, sales or redemptions after that time, or on a day when the New York
Stock Exchange is closed, will be held until the next determination of price.
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made or,
if no such price exists, at the bid prices on the day the valuation is made. The
Treasury Obligations will be valued on the bid prices thereof.
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in the
manner described.
Broker-dealers or others will be allowed a concession or agency commission of
70% of the sale charge in connection with the distribution of Units.
Certain commercial banks are making Units of each Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the agency
commission referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Units; however, the
Glass-Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions are not
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units and 25 Units for a
tax-sheltered retirement plan. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public Offering--General" above.
Cash, if any, made available to the Sponsor prior to the date of settlement for
the purchase of Units may be used in the Sponsor's business and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to, and certain
dealers maintain a secondary market for Units of each Trust. In so maintaining a
market, the Sponsor and any such dealers will also realize profits or sustain
losses in the amount of any difference between the price at which Units are
purchased and the price at which Units are resold. In addition, the Sponsor and
any such dealers will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
Public Market. Although its is not obligated to do so, the Sponsor intends to
maintain a market for the Units offered hereby and offer continuously to
purchase Units at prices subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in each Trust plus the aggregate bid
price of the Treasury Obligations. 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 a Trust may be limited by the plans' provisions and does not itself
establish such plans. The minimum purchase in connection with a tax-sheltered
retirement plan is 25 Units of an individual Trust.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of each Trust is evidenced by separate registered
certificates executed by the Trustee and the Sponsor. Certificates are
transferable by presentation and surrender to the Trustee properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unitholder
must sign exactly as his name appears on the face of the certificate with the
signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program in
addition to, or in substitution for STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require
a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
Distributions of Income and Capital. Any dividends received by each Trust
with respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, return of principal, etc.) are credited to the Capital Account. The
Trustee will distribute any net income other than accreted interest received
with respect to any of the Securities in the Trust on or about the Income
Distribution Dates to Unitholders of record on the preceding Income Record
Dates. See "Summary of Essential Financial Information" in Part One of the
Prospectus. Proceeds received on the sale of any Securities in the Trust, to the
extent not used to meet redemptions of Units or pay expenses, will be
distributed annually on the Capital Account Distribution Date to Unitholders of
record on the preceding Capital Account Record Date. Income with respect to the
original issue discount on the Treasury Obligations will not be distributed
currently, although Unitholders in the 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 the Unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share of
the cash in the Income Account after deducting estimated expenses. 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. A person will become the owner of
Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the transfer of Units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
On or before the tenth day of each month, the Trustee will deduct from the
Income Account and, to the extent funds are not sufficient therein, from the
Capital Account amounts necessary to pay the expenses of each Trust (as
determined on the basis set forth under "Trust Operating Expenses"). The Trustee
also may withdraw from said accounts such amounts, if any, as it deems necessary
to establish a reserve for any governmental charges payable out of a Trust.
Amounts so withdrawn shall not be considered a part of a Trust's assets until
such time as the Trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the Trustee may withdraw from the Income and
Capital Accounts such amounts as may be necessary to cover redemptions of Units.
Reinvestment Option. Unitholders may elect to have each distribution of
interest income, capital gains and/or principal on their Units automatically
reinvested in shares of certain Van Kampen 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 Funds Inc. at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, Illinois 60181-5555. Texas
residents who desire to reinvest may request that a broker-dealer registered in
Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units will,
on the applicable distribution date, automatically be applied, as directed by
such person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such date.
Unitholders with an existing Guaranteed Reinvestment Option (GRO) Program
account (whereby a sales charge is imposed on distribution reinvestments) may
transfer their existing account into a new GRO account which allows purchases of
Reinvestment Fund shares at net asset value as described above.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. A participant may at
any time prior to five days preceding the next succeeding distribution date, by
so notifying the Trustee in writing, elect to terminate his or her reinvestment
plan and receive future distributions of his or her Units in cash. There will be
no charge or other penalty for such termination. Each Reinvestment Fund, its
sponsor and investment adviser shall have the right to terminate at any time the
reinvestment plan relating to such fund.
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 a 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 in Select Equity and Treasury Trust and Blue Chip
Opportunity and Treasury Trust), deductions for applicable taxes and for fees
and expenses of a Trust, for redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed in each case both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; (ii) as
to the Capital Account: the dates of disposition of any Securities (other than
pursuant to In Kind Distributions) and the net proceeds received therefrom, the
results of In Kind Distributions in connection with redemptions of Units, if
any, deductions for payment of applicable taxes and fees and expenses of the
related Trust held for distribution to Unitholders of record as of a date prior
to the determination and the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (iii) a list of the Securities held and the number of
Units outstanding on the last business day of such calendar year; (iv) the
Redemption Price per Unit based upon the last computation thereof made during
such calendar year; and (v) amounts actually distributed during such calendar
year from the Income and Capital Accounts, separately stated, expressed as total
dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in a Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286 of the certificates representing the Units
to be redeemed, duly endorsed or accompanied by proper instruments of transfer
with signature guaranteed (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender the Unitholder will be entitled to
receive in cash (unless the redeeming Unitholder elects an In Kind Distribution
as indicated below) an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units. The
"date of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the close of trading on the
New York Stock Exchange (which is currently 4:00 P.M. New York time) the date of
tender is the next day on which such Exchange is open for trading and such Units
will be deemed to have been tendered to the Trustee on such day for redemption
at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by the
Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
Unitholders tendering 1,000 Units or more for redemption may request from the
Trustee in lieu of a cash redemption a distribution in kind ("In Kind
Distribution") of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the evaluation next following the
tender. An In Kind Distribution on redemption of Units will be made by the
Trustee through the distribution of each of the Securities in book-entry form to
the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. The tendering Unitholder will receive his pro rata number of whole
shares of each of the Securities comprising the portfolio and cash from the
Capital Account equal to the fractional shares (and in the case of the Select
Equity and Treasury Trust and the Blue Chip Opportunity and Treasury Trust the
pro rata portion of the Treasury Obligations) 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.
To the extent that Securities are redeemed in kind or sold, the size of a
Trust will be, and the diversity of such Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result in
lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder depending
on the value of the Securities in the portfolio at the time of redemption.
Special federal income tax consequences will result if a Unitholder requests an
In Kind Distribution. See "Federal Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) any unpaid deferred sales charge payments. During
the initial offering period, the redemption price and the secondary market
repurchase price will include estimated organizational and offering costs. For
these purposes, the Evaluator may determine the value of the Securities in the
following manner: If the Securities are listed on a national or foreign
securities exchange or the Nasdaq Stock Market, Inc., this evaluation is
generally based on the closing sale prices on that exchange or market (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 or market, at the closing bid
prices. If the Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange or market, the evaluation may be
based on the current bid price on the over-the-counter market. If current bid
prices are unavailable or inappropriate, the evaluation may be determined (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
Securities on the bid side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate as of the Evaluation Time. See "Public Offering" for a description of the
method of evaluating the Treasury Obligations in the Select Equity and Treasury
Trust and the Blue Chip Opportunity and Treasury Trust.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and the diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Securities
in a Trust is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any
tender of Units for redemption. If the Sponsor's bid in the secondary market at
that time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by the
Trustee. Units held by the Sponsor may be tendered to the Trustee for redemption
as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord
with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Sponsor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.
Portfolio Administration. The portfolios of the Fund are not "managed" by the
Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. The Trust Agreement
provides that the Sponsor may (but need not) direct the Trustee to dispose of an
Equity Security in the event that an issuer defaults in the payment of a
dividend that has been declared, that any action or proceeding has been
instituted restraining the payment of dividends or there exists any legal
question or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments of
dividends, the credit standing of the issuer or otherwise impair the sound
investment character of the Equity Security, that the issuer has defaulted on
the payment on any other of its outstanding obligations, that the price of the
Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Equity
Securities would be detrimental to a Trust. Treasury Obligations may be sold by
the Trustee only pursuant to the liquidation of a Trust or to meet redemption
requests. Except as stated under "Trust Portfolios -- General" for failed
securities, the acquisition by the Fund of any securities other than the
Securities is prohibited. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
property, the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by a Trust, they may be accepted
for deposit in such Trust and either sold by the Trustee or held in such Trust
pursuant to the direction of the Sponsor (who may rely on the advice of the
Supervisor). Proceeds from the sale of Securities (or any securities or other
property received by the Fund in exchange for Equity Securities) are credited to
the applicable Capital Account for distribution to Unitholders or to meet
redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also sell
Securities designated by the Supervisor, or if not so directed, in its own
discretion, for the purpose of redeeming Units of a Trust tendered for
redemption and the payment of expenses; provided, however, that in the case of
Securities sold to meet redemption requests, Treasury Obligations may only be
sold if the Select Equity and Treasury Trust and 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
$10.00 per Unit ($11.00 per Unit for Blue Chip Opportunity and Treasury Trust,
Series 5 and subsequent series).
When the Trust sells Securities, the composition and diversity of the Equity
Securities may be altered. In order to obtain the best price for a Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, (as determined in good faith by the Sponsor
and the Trustee) provided, however, that the Trust Agreement may not be amended
to increase the number of Units. The Trust Agreement may also be amended in any
respect by the Trustee and Sponsor, or any of the provisions thereof may be
waived, with the consent of the holders of 51% of the Units then outstanding,
provided that no such amendment or waiver will reduce the interest in 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.
A Trust may be liquidated (1) at any time by consent of Unitholders
representing 100% of the Units then outstanding or (2) by the Trustee when the
value of such Trust, as shown by any evaluation, is less than that indicated
under "Summary of Essential Financial Information" in Part One of the
Prospectus. The Trust Agreement will terminate upon the sale or other
disposition of the last Security held thereunder, but in no event will it
continue beyond the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any are
then issued and outstanding, shall be given by the Trustee to each Unitholder so
holding a certificate at his address appearing on the registration books of the
Fund maintained by the Trustee. At least 30 days before the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders and will include with such notice a form to enable Unitholders
owning the applicable number of Units of a Trust to request an In Kind
Distribution rather than payment in cash upon the termination of the related
Trust. To be effective, this request must be returned to the Trustee at least
five business days prior to the Mandatory Termination Date. On the Mandatory
Termination Date (or on the next business day thereafter if a holiday) the
Trustee will deliver each requesting Unitholder's pro rata number of whole
shares of each of the Equity Securities in the 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 will be paid in
cash. Unitholders not requesting an In Kind Distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
following the Mandatory Termination Date. Regardless of the distribution
involved, the Trustee will deduct from the funds of each Trust any accrued
costs, expenses, advances or indemnities provided by the Trust Agreement,
including estimated compensation of the Trustee, costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Equity Securities in a Trust upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time. The Trustee will then distribute to
each Unitholder his pro rata share of the balance of the Income and Capital
Accounts.
Within 60 days of the final distribution, Unitholders will be furnished a
final distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion will determine that any amounts held in reserve are no
longer necessary, it will make distribution thereof to Unitholders in the same
manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (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 a 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 Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van
Kampen Investments 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 Funds 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 1 Plaza, P.O. Box 5555, Oakbrook Terrace,
Illinois 60181-5555, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas
77056, (713) 993-0500. As of November 30, 1999, the total stockholders' equity
of Van Kampen Funds Inc. was $141,554,861 (audited). (This paragraph relates
only to the Sponsor and not to the Trust or to any other Series thereof. The
information is included herein only for the purpose of informing investors as to
the financial responsibility of the Sponsor and its ability to carry out its
contractual obligations. More detailed financial information will be made
available by the Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen'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 or evaluation services at cost for approximately $13.4
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 the Banks of the State of New York and the Board of Governors
of the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the trust 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 Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of such Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation (see "Rights of 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.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in Part One of this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as set
forth in their report in Part One of this Prospectus, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Trust,
the Sponsor or dealers. This Prospectus does not constitute an offer to sell, or
a solicitation of any offer to buy, securities in any state to any persons to
whom it is not lawful to make such offer in such state.
Table of Contents Page
----------------- ------
The Trusts 2
Objectives and Securities Selection 2
Trust Portfolios 3
Risk Factors 3
Federal Taxation 4
Trust Operating Expenses 5
Public Offering 6
Rights of Unitholders 7
Trust Administration 9
Other Matters 11
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.
EMSPRO102
SELECT EQUITY AND
TREASURY TRUST
AND
BLUE CHIP OPPORTUNITY
AND TREASURY TRUST
PROSPECTUS
PART TWO
Note: This Prospectus May Be Used Only
When Accompanied by Part One. Both
Parts of this Prospectus should be
retained for future reference.
Dated as of the date
of the Prospectus
Part One accompanying
this prospectus
Part Two.
Sponsor:
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement comprises the
following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Van Kampen American Capital Equity Opportunity Trust, Series 102, certifies that
it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to its Registration Statement to be signed
on its behalf by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Chicago and State of Illinois
on the 25th day of September, 2000.
Van Kampen American Capital Equity Opportunity
Trust, Series 102
(Registrant)
By Van Kampen Funds Inc.
(Depositor)
By: Christine K. Putong
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on August 25, 2000 by the
following persons who constitute a majority of the Board of Directors of Van
Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive Officer )
John H. Zimmermann III President )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President and Chief Operations )
and Technology Officer )
Christine K. Putong______________
(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 Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
