File No. 333-57401 CIK #1025253
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 1 to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 107
(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 October 25, 1999 pursuant to paragraph (b) of Rule 485.
Global Transport Growth Trust, Series 1
Van Kampen Equity Opportunity Trust, Series 107
- --------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part I of this Prospectus may not be distributed unless accompanied by
Part II. Please retain both parts of this Prospectus for future reference.
- --------------------------------------------------------------------------------
THE TRUST
Van Kampen Equity Opportunity Trust, Series 107 is comprised of one
unit investment trust, Global Transport Growth Trust, Series 1 (the "Trust").
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a fixed portfolio of equity securities issued by
companies within the transportation industry.
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 October 25, 1999
Global Transport Growth Trust, Series 1
Van Kampen Equity Opportunity Trust, Series 107
Summary of Essential Financial Information
As of August 10, 1999
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>
Global Transport
Growth
Trust
----------------
General Information
<S> <C>
Number of Units 536,340.959
Fractional Undivided Interest in Trust per Unit 1/536,340.959
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 5,785,200.17
Aggregate Value of Securities per Unit (including accumulated dividends) $ 10.79
Sales charge 4.0% (4.167% of Aggregate Value of Securities excluding
principal cash) per Unit (3) $ .45
Public Offering Price per Unit (2)(3) $ 11.24
Redemption Price per Unit $ 10.79
Secondary Market Repurchase Price per Unit $ 10.79
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .45
</TABLE>
Supervisor's Annual Supervisory Fee Maximum of $.007 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock Exchange
Initial Date of Deposit July 28, 1998
Mandatory Termination Date July 18, 2002
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.
Estimated Net Annual Dividends per Unit $.09077
Trustee's Annual fee $.008 per Unit
Income Distribution Record Date TENTH day of March, June,
September and December.
Income Distribution Date TWENTY-FIFTH day of March,
June, September and
December.
Capital Account Record Date TENTH day of December.
Capital Account Distribution Date TWENTY-FIFTH day of December.
- --------------------------------------------------------------------------------
(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.
(2) Anyone ordering Units will have added to the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
(3) Effective on each July 28, the secondary sales charge will decrease by .5
of 1% to a minimum sales charge of 3.0%. See "Public Offering - Offering
Price" in Part Two.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1999 (1)
------------
<S> <C>
Net asset value per Unit at beginning of period........................................................ $ 10.00
============
Net asset value per Unit at end of period.............................................................. $ 12.12
============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)..................................... $ 0.09
============
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)...................................................................................... $ 2.65
============
Distributions of investment income by frequency of payments
Quarterly........................................................................................... $ 0.08
Units outstanding at end of period..................................................................... 564,737
</TABLE>
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(1) For the period from July 28, 1998 (date of deposit) through June 30, 1999.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Global
Transport Growth Trust, Series 1 (Van Kampen Equity Opportunity Trust, Series
107):
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of Global Transport Growth
Trust, Series 1 (Van Kampen Equity Opportunity Trust, Series 107) as of June 30,
1999 and the related statements of operations and changes in net assets for the
period from July 28, 1998 (date of deposit) through June 30, 1999. These
statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at June 30, 1999 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 Global Transport Growth Trust,
Series 1 (Van Kampen Equity Opportunity Trust, Series 107) as of June 30, 1999
and the results of operations and changes in net assets for the period from July
28, 1998 (date of deposit) through June 30, 1999, in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
August 20, 1999
<TABLE>
<CAPTION>
GLOBAL TRANSPORT GROWTH TRUST, SERIES 1
Statements of Condition
June 30, 1999
Global Transport
Growth
Trust
---------------
Trust property
<S> <C>
Securities at market value, (cost $5,321,196) (note 1) $ 6,815,082
Accumulated dividends 5,287
Receivable for securities sold 63,788
Organizational Expense 32,834
---------------
$ 6,916,991
===============
Liabilities and interest to Unitholders
Cash overdraft $ 70,314
Interest to Unitholders 6,846,677
---------------
$ 6,916,991
===============
Analyses of Net Assets
Interest of Unitholders (564,737 Units of fractional undivided interest outstanding)
Cost to original investors of 902,905 Units (note 1) $ 8,305,759
Less initial underwriting commission (note 3) 403,991
---------------
7,901,768
Less redemption of 338,168 Units 3,377,813
---------------
4,523,955
Undistributed net investment income
Net investment income 39,613
Less distributions to Unitholders 64,526
---------------
(24,913)
Realized gain (loss) on Security sale 256,748
Unrealized appreciation (depreciation) of Securities (note 2) 1,493,886
Distributions to Unitholders of Security sale proceeds --
Additional Securities purchased from the proceeds of Unit Sales 877,093
Deferred Sales Charge (280,092)
---------------
Net asset value to Unitholders $ 6,846,677
===============
Net asset value per Unit (564,737 Units outstanding) $ 12.12
===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
GLOBAL TRANSPORT GROWTH TRUST, SERIES 1
Statements of Operations
Period from July 28, 1998 (date of deposit) through June 30, 1999
1999
--------------
Investment income
<S> <C>
Dividend income.................................................................................. $ 61,097
Expenses
Trustee fees and expenses..................................................................... 6,949
Evaluator fees................................................................................ 1,795
Organizational fees........................................................................... 10,945
Supervisory fees.............................................................................. 1,795
--------------
Total expenses............................................................................ 21,484
--------------
Net investment income......................................................................... 39,613
Realized gain (loss) from Securities sales
Proceeds......................................................................................... 3,714,677
Cost............................................................................................. 3,457,929
--------------
Realized gain (loss).......................................................................... 256,748
Net change in unrealized appreciation (depreciation) of Securities.................................. 1,493,886
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ 1,790,247
==============
Statements of Changes in Net Assets
Period from July 28, 1998 (date of deposit) through June 30, 1999
1999
--------------
Increase (decrease) in net assets Operations:
Net investment income............................................................................ $ 39,613
Realized gain (loss) on Securities sales......................................................... 256,748
Net change in unrealized appreciation (depreciation) of Securities............................... 1,493,886
--------------
Net increase (decrease) in net assets resulting from operations............................... 1,790,247
Distributions to Unitholders from:
Net investment income............................................................................ (64,526)
Security sale or redemption proceeds............................................................. --
Redemption of Units................................................................................. (3,377,813)
Deferred Sales Charge............................................................................... (280,092)
--------------
Total increase (decrease)..................................................................... (1,932,184)
Net asset value to Unitholders
Beginning of period.............................................................................. 7,901,768
Additional Securities purchased from the proceeds of Unit Sales.................................. 877,093
--------------
End of period (including undistributed net investment income of $(24,913))....................... $ 6,846,677
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
GLOBAL TRANSPORT GROWTH TRUST, SERIES 1 PORTFOLIO as of June 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
- --------------- ------------------------------------------------------------------------------------ ---------------
Airlines and Railroads
<S> <C> <C> <C>
4,117 Kansas City Southern Industries, Incorporated $ 63.8125 $ 262,718
- --------------------------------------------------------------------------------------------------------------------------
10,466 Southwest Airlines Company 31.1250 325,757
- --------------------------------------------------------------------------------------------------------------------------
5,364 Union Pacific Corporation 58.3125 312,789
- --------------------------------------------------------------------------------------------------------------------------
1,515 AMR Corporation 68.2500 103,399
- --------------------------------------------------------------------------------------------------------------------------
1,074 British Airways Plc 71.4375 76,724
- --------------------------------------------------------------------------------------------------------------------------
3,202 Burlington Northern Santa Fe Corporation 31.0000 99,263
- --------------------------------------------------------------------------------------------------------------------------
1,993 Canadian National Railway Company 67.0000 133,532
- --------------------------------------------------------------------------------------------------------------------------
2,614 CSX Corporation 45.3125 118,448
- --------------------------------------------------------------------------------------------------------------------------
2,563 KLM Royal Dutch Airlines 28.5625 73,207
- --------------------------------------------------------------------------------------------------------------------------
3,714 Norfolk Southern Corporation 30.1250 111,886
- --------------------------------------------------------------------------------------------------------------------------
1,474 US Airways Group, Incorporated 43.5625 64,212
- --------------------------------------------------------------------------------------------------------------------------
1,364 UAL Corporation 65.0000 88,660
- --------------------------------------------------------------------------------------------------------------------------
Orbital Transportation
5,657 Boeing Company 44.1875 249,970
- --------------------------------------------------------------------------------------------------------------------------
3,239 Lockheed Martin Corporation 37.2500 120,653
- --------------------------------------------------------------------------------------------------------------------------
2,943 Raytheon Company - Class A 68.8750 202,700
- --------------------------------------------------------------------------------------------------------------------------
2,908 TRW, Incorporated 54.8750 159,577
- --------------------------------------------------------------------------------------------------------------------------
3,678 AlliedSignal, Incorporated 63.0000 231,715
- --------------------------------------------------------------------------------------------------------------------------
14,004 British Aerospace Plc 6.4924 90,920
- --------------------------------------------------------------------------------------------------------------------------
4,030 Loral Space & Communications Limited 18.0000 72,541
- --------------------------------------------------------------------------------------------------------------------------
3,789 Orbital Sciences Corporation 23.6250 89,516
- --------------------------------------------------------------------------------------------------------------------------
659 Societe Europeenne des Satellites 145.3097 95,751
- --------------------------------------------------------------------------------------------------------------------------
1,476 TDK Corporation 92.0625 135,885
- --------------------------------------------------------------------------------------------------------------------------
Transport Systems & Suppliers
5,733 ABR Information Services, Incorporated 83.1875 476,914
- --------------------------------------------------------------------------------------------------------------------------
4,704 Ballard Power Systems, Incorporated 31.7500 149,353
- --------------------------------------------------------------------------------------------------------------------------
3,420 BE Aerospace, Incorporated 18.6875 63,912
- --------------------------------------------------------------------------------------------------------------------------
1,106 DaimlerChrysler AG 88.8750 98,297
- --------------------------------------------------------------------------------------------------------------------------
1,218 General Electric Company 113.0000 137,634
- --------------------------------------------------------------------------------------------------------------------------
1,770 International Business Machines Corporation 129.2500 228,773
- --------------------------------------------------------------------------------------------------------------------------
511 Leap Wireless International Incorporated 20.2500 10,348
- --------------------------------------------------------------------------------------------------------------------------
3,540 QUALCOMM, Incorporated 143.5000 507,990
- --------------------------------------------------------------------------------------------------------------------------
2,689 Sabre Group Holdings, Incorporated 68.7500 184,869
- --------------------------------------------------------------------------------------------------------------------------
1,961 SAP AG 34.6250 67,900
- --------------------------------------------------------------------------------------------------------------------------
1,227 Sony Corporation 110.3750 135,451
- --------------------------------------------------------------------------------------------------------------------------
Trucks, Integrators, Forwarders, Logistics
10,212 Expeditors International of Washington, Inc. 27.2500 278,266
- --------------------------------------------------------------------------------------------------------------------------
19,048 Rollins Truck Leasing Corporation 11.1250 211,914
- --------------------------------------------------------------------------------------------------------------------------
12,811 Yellow Corporation 17.4375 223,392
- --------------------------------------------------------------------------------------------------------------------------
3,640 Airborne Freight Corporation 27.6875 100,784
- --------------------------------------------------------------------------------------------------------------------------
2,502 CNF Transportation, Incorporated 38.3750 96,015
- --------------------------------------------------------------------------------------------------------------------------
9,142 Consolidated Freightways Corporation 12.8125 117,132
- --------------------------------------------------------------------------------------------------------------------------
3,272 Eagle USA Airfreight, Incorporated 42.2500 138,242
- --------------------------------------------------------------------------------------------------------------------------
3,466 FDX Corporation 54.2500 188,032
- --------------------------------------------------------------------------------------------------------------------------
8,207 Swift Transportation Company, Incorporated 21.9375 180,041
- --------------------------------------------------------------------------------------------------------------------------
182,023 $ 6,815,082
=============== ===============
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
GLOBAL TRANSPORT GROWTH TRUST, SERIES 1
Notes to Financial Statements
June 30, 1999
- --------------------------------------------------------------------------------
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.
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 or the closing asked prices if not listed. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as described
in Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the trust and, accordingly, no provision has been made for
Federal Income Taxes.
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.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at June 30, 1999 is as follows:
Global
Transport
Growth
Trust
-------------
Unrealized Appreciation $ 1,850,252
Unrealized Depreciation (356,366)
-------------
$ 1,493,886
=============
NOTE 3- OTHER
Marketability - Although it is not obligated to do so, the Sponsor and/or the
Managing Underwriter 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 or Managing
Underwriter 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 an amount equal to the maximum sales charge of 3.8% of the public
offering price which is equivalent to 3.950% of the aggregate underlying value
of the Securities. Effective on each July 28, commencing July 28, 1999, the
secondary sales charge will decrease by .5 of 1% to a minimum sales charge of
3.0%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives 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
During the period ended June 30, 1999, 338,168 Units were presented for
redemption.
Gruntal &Co.
L.L.C.
Investment Advice Since 1880
Global Transport Growth Trust, Series 1
- --------------------------------------------------------------------------------
Van Kampen Equity Opportunity Trust, Series 107 includes the unit investment
trust described above (the "Trust"). The Trust seeks to increase the value of
your Units by investing in a diversified portfolio of common stocks of companies
within the transportation industry. Of course, we cannot guarantee that the
Trust will achieve its objective.
Prospectus Part II
You should read this prospectus and retain it for future reference.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
This Prospectus is dated as of the date of the
Prospectus Part I accompanying this Prospectus Part II.
- --------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved
of the Units or passed upon the adequacy or accuracy of this prospectus. Any
contrary representation is a criminal offense.
THE TRUST
- --------------------------------------------------------------------------------
The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the Initial
Date of Deposit, among Van Kampen Funds Inc., as Sponsor, Van Kampen Investment
Advisory Corp., as Supervisor, The Bank of New York, as Trustee, and American
Portfolio Evaluation Services, a division of Van Kampen Investment Advisory
Corp., as Evaluator.
The Trust offers the opportunity to purchase Units representing proportionate
interests in a portfolio of actively traded equity securities. The Trust may be
an appropriate medium for investors who desire to participate in a portfolio of
common stocks with greater diversification than they might be able to acquire
individually.
On the Initial Date of Deposit, the Sponsor deposited delivery statements
relating to contracts for the purchase of the Securities and an irrevocable
letter of credit in the amount required for these purchases with the Trustee. In
exchange for these contracts the Trustee delivered to the Sponsor documentation
evidencing the ownership of Units of the Trust. Unless otherwise terminated as
provided in the Trust Agreement, the Trust will terminate on the Mandatory
Termination Date and any remaining Securities will be liquidated or distributed
by the Trustee within a reasonable time. As used in this Prospectus the term
"Securities" means the securities (including contracts to purchase these
securities) listed in "Portfolio" in Part One any additional securities
deposited into the Trust.
Additional Units may be issued at any time by depositing in the Trust (i)
additional Securities, (ii) contracts to purchase Securities together with cash
or irrevocable letters of credit or (iii) cash (or a letter of credit or the
equivalent) with instructions to purchase additional Securities. As additional
Units are issued by the Trust, the aggregate value of the Securities will be
increased and the fractional undivided interest represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits into the Trust
following the Initial Date of Deposit provided that the additional deposits will
be in amounts which will maintain, as nearly as practicable, the same percentage
relationship among the number of shares of each Security in the Trust's
portfolio that existed immediately prior to the subsequent deposit. Investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the deposit and the purchase of the Securities and because
the Trust will pay the associated brokerage or acquisition fees.
Each Unit initially offered represents an undivided interest in the Trust. To
the extent that any Units are redeemed by the Trustee or additional Units are
issued as a result of additional Securities being deposited by the Sponsor, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase or decrease accordingly, although the actual interest in the Trust
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.
The Trust consists of (a) the Securities (including contracts for the
purchase thereof) listed under the "Portfolio" in Part One as may continue to be
held from time to time in the Trust, (b) any additional Securities acquired and
held by the Trust pursuant to the provisions of the Trust Agreement and (c) any
cash held in the related Income and Capital Accounts. Neither the Sponsor nor
the Trustee shall be liable in any way for any failure in any of the Securities.
OBJECTIVES AND SECURITIES SELECTION
- --------------------------------------------------------------------------------
The objective of the Trust is to provide capital appreciation by investing in
a portfolio of actively traded equity securities of companies within the
transportation industry. We cannot guarantee that the Trust will achieve its
objective. The Securities were selected by Gruntal & Co., L.L.C. (the
"Underwriter"). In selecting the Securities, the Underwriter selected companies
which, in its opinion, are well-positioned for future growth and represented
above average investment opportunities in the transportation sector. The
Securities were selected by Steven Lewins, Vice President, Investment Research
with Gruntal. Mr. Lewins has 25 years of experience as an investment
professional, has been named a Wall Street Journal #1 All-Star Analyst, has been
cited in the Bloomberg Annual Analyst Survey and is listed in "Who's Who in
America". Mr. Lewins earned his B.A. in History-Physics from Queens College and
his M.A. in Economic Theory and M.B.A. in Finance from CUNY(NYC). He also
possesses an advanced certificate in Public Administration. Mr. Lewins has
appeared on NBC, CNBC and CNN.
The Trust seeks to offer diversification and to increase the value of your
Units over time by investing in transportation companies. As of the Initial Date
of Deposit Gruntal & Co., L.L.C. believed that three forces may create growth
opportunities in the transportation sector:
Consolidation and Restructuring of Transportation Companies. Past economic
deregulation of airlines, railroads and truckers motivated synergistic
consolidations, deep cost-cutting and changes in labor relations and management
styles. Gruntal believes that these trends may persist in the future. In
Gruntal's opinion, these changes are also dampening inflation and negative
inventory cycles while permitting the U.S. to become the center of world trade
in the future. Unique technologies and additional consolidations may have a
positive impact on stocks of companies with low price-earnings ratios. In
addition, opportunities in orbital space transit may evolve in the future as the
cost of launch platforms declines fifty percent as mandated by the U.S.
government. North American railroads have undergone substantial consolidation
since 1980 and seek to develop profitable, single line, high-speed,
time-definite transcontinental service to widen market share against trucking
companies. In Gruntal's opinion, many U.S. airlines have overcome costly market
share competition in the 1980s and have become more efficient. Gruntal believes
that airlines are changing into a cyclical growth industry with favorable
demographics, advances in travel safety and efficient, customer-friendly
aircraft. International treaties and alliances may also help cross-border air
transport markets.
Time-Definite Globalizations and Favorable Economics. The movement of air
cargo, time-definite and express freight, parcels and documents in the U.S. is
spreading worldwide. Gruntal believes that advanced Internet-based systems are
evolving to spur growth of international freight companies into new markets. The
less-than-truckload (LTL) industry is undergoing major restructurings and
technological changes to offer premium-priced, highly profitable
business-to-business time-sensitive service. The maritime industry has exhibited
overcapacity and apprehension regarding potential deregulation. However, the
industry is promoting service-sensitive operations by stimulating evolution of
the doublestack (two stacked containers on a railcar) and intermodal transport
(combined use of railroad, trucks and ships).
Low Valuations and Deregulated Growth. Changes in the transportation industry
may offer growth-oriented opportunities. Price-earnings ratios, while improving,
generally remain at a discount to the overall stock market. Combined with
secular income growth and potential upward revisions in capitalization,
transport stocks may offer potential long-term total return opportunities.
Of course, we cannot guarantee that the Trust will achieve its objective or
that expectations of the transportation industry will be realized. The value of
your Units may fall below the price you paid for the Units. You should read the
"Risk Factors" section before you invest. This section describes the risks of
investing in stocks and of investing in a single market sector.
The Underwriter uses the list of Securities in its independent capacity as an
investment adviser and distributes this information to various individuals and
entities. The Underwriter may recommend or effect transactions in the
Securities. This may have an adverse effect on the prices of the Securities.
This also may have an impact on the price the Trust pays for the Securities and
the price received upon Unit redemptions or Trust termination.
The Underwriter has acquired or may acquire the Securities for the Sponsor
and may benefit from doing so. The Underwriter acts as agent or principal in
connection with the purchase and sale of equity securities, including the
Securities, and may act as a market maker in the Securities. The Underwriter
also issues reports and makes recommendations on the Securities. The
Underwriter's research department, including Mr. Lewins, will receive
compensation based on the broker commissions generated by research and/or sales
of Units. Mr. Lewins may trade the Securities in his personal accounts.
Investors should note that the above criteria were applied to the Securities
for inclusion in the Trust as of the Initial Date of Deposit. Subsequent to this
date, the Securities may no longer meet the above criteria. Should a Security no
longer meet the selection criteria, the Security generally will not be removed
from the Trust portfolio as a result thereof.
RISK FACTORS
- --------------------------------------------------------------------------------
Price Volatility. The Trust invests in common stocks. The value of Units will
fluctuate with the value of these stocks and may be more or less than the price
you originally paid for your Units. The market value of common stocks sometimes
moves up or down rapidly and unpredictably. Because the Trust is unmanaged, the
Trustee will not sell stocks in response to market fluctuations as is common in
managed investments. As with any investment, we cannot guarantee that the
performance of the Trust will be positive over any period of time.
Dividends. Common stocks represent ownership interests in the issuers and are
not obligations of the issuers. Accordingly, common stockholders have a right to
receive dividends only after the company has provided for payment of its
creditors, bondholders and preferred stockholders. Common stocks do not assure
dividend payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
Transportation Companies. The portfolio only includes issuers from the
transportation industry. Any negative impact on this industry will have a
greater impact on the value of Units than on a portfolio diversified over
several industries. The transportation companies in the portfolio include
airlines, railroads, trucking companies, courier services and manufacturers of
aircraft, motor vehicles and space vehicles and parts and equipment for these
vehicles.
You should understand the risks of these companies before you invest.
Government authorities impose a variety of regulations on transportation
companies. These regulations address issues such as driver/pilot qualifications,
safety standards, rates, routes and vehicle maintenance and operational
standards. Any change or increase in regulations could negatively impact the
operating results of these companies. As many governments increasingly focus on
environmental issues, transportation companies could also face increased costs
associated with complying with reduced emissions requirements or environmental
cleanup. On the other hand, any future deregulation could result in increased
competition which could limit profitability within the industry.
The earnings of transportation companies are highly dependent on the price
and availability of fuel. A significant increase in the price of fuel could
negatively impact these companies. Transportation companies can face significant
liabilities resulting from accidents which injure passengers or damage cargo or
other property. While companies may be insured against these liabilities, any
accident could have a significantly negative impact on a company. Many
transportation companies have been subject to seasonal trends due to customer
demands. These companies may exhibit especially strong results during certain
seasons of the year but may exhibit especially weak results during others. In
addition, the United States government is a significant customer of many
aerospace companies. As a result, these companies may be particularly dependent
on Congressional appropriations, administrative allotment of funds and changes
in government policies that may reflect military and political developments.
Foreign Stocks. Because the Trust invests in common stocks of foreign
companies, it involves additional risks that differ from an investment only in
domestic stocks. These risks include the risk of losses due to future political
and economic developments, international trade conditions, foreign withholding
taxes and restrictions on foreign investments and exchange of securities. The
Trust also involves the risk that fluctuations in exchange rates between the
U.S. dollar and foreign currencies may negatively affect the value of the
stocks. The Trust involves the risk that information about the stocks is not
publicly available or is inaccurate due to the absence of uniform accounting and
financial reporting standards. In addition, some foreign securities markets are
less liquid than U.S. markets. This could cause the Trust to buy stocks at a
higher price or sell stocks at a lower price than would be the case in a highly
liquid market. Foreign securities markets are often more volatile and involve
higher trading costs than U.S. markets, and foreign companies, securities
markets and brokers are also generally not subject to the same level of
supervision and regulation as in the U.S. Certain stocks may be held in the form
of American Depositary Receipts or other similar receipts ("ADRs"). ADRs
represent receipts for foreign common stock deposited with a custodian (which
may include the Trustee). The ADRs in the Trust trade in the U.S. in U.S.
dollars and are registered with the Securities and Exchange Commission. ADRs
generally involve the same types of risks as foreign common stock held directly.
Some ADRs may experience less liquidity than the underlying common stocks traded
in their home market.
Year 2000 Readiness Disclosure. The following two paragraphs constitute "Year
2000 Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem". The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the sales charge, and cash, if any, in the
Income and Capital Accounts. The initial maximum sales charge assessed to each
Unitholder is 4.50% of the Public Offering Price (4.712% of the aggregate value
of the Securities). Beginning on July 28, 1999, the secondary market sales
charge will be 4.00%. This sales charge will reduce by 0.5% on each following
July 28 to a minimum of 3.00%.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. Units may be purchased in the primary or secondary market at
the Public Offering Price less the concession the Sponsor typically allows to
brokers and dealers for purchases by (1) investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, (2) bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, (3) any person who for at least 90 days, has been an officer, director
or bona fide employee of any firm offering Units for sale to investors or their
spouses or children under 21 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.
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.
The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
Offering Price. The Public Offering Price of 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 initial price of the Securities was determined by Interactive Data
Corporation, a firm regularly engaged in the business of evaluating, quoting or
appraising comparable securities. The Evaluator will generally determine the
value of the Securities as of the Evaluation Time on each business day and will
adjust the Public Offering Price of Units accordingly. This Public Offering
Price will be effective for all orders received prior to the Evaluation Time on
each business day. The Evaluation Time is the close of the New York Stock
Exchange on each Trust business day. Orders received by the Trustee or Sponsor
for purchases, sales or redemptions after that time, or on a day which is not a
business day, will be held until the next determination of price. The term
"business day", as used herein and under "Rights of Unitholders--Redemption of
Units", excludes Saturdays, Sundays and holidays observed by the New York Stock
Exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange, this evaluation is generally based on the closing sale prices on that
exchange (unless it is determined that these prices are inappropriate as a basis
for valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Securities are not listed on a national or foreign
securities exchange or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based on the current ask
price on the over-the-counter market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value of the
Securities on the ask 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 in U.S. dollars as of the Evaluation Time. The value of the Securities for
purposes of secondary market transactions and redemptions is described under
"Rights of Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities in a Trust, taken as a whole, which are represented by
the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. 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 Units for sale in a number of states. Brokers,
dealers and others will be allowed a concession or agency commission in
connection with the distribution of Units equal to 70% of the applicable sales
charge.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. Notwithstanding anything to the
contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual transaction
exceed the total sales charge applicable to such transaction. 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.
Broker-dealers of the Trust, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of any Trust. These programs will not change the price Unitholders
pay for their Units or the amount that a Trust will receive from the Units sold.
Sponsor and Underwriter Compensation. The Underwriter will receive a gross
sales commission equal to the total sales charge applicable to each transaction.
Any sales charge discount provided to investors will be borne by the selling
dealer or agent. In addition, the Sponsor will realize a profit or loss as a
result of the difference between the price paid for the Securities by the
Sponsor and the cost of the Securities to each 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. The Sponsor may
realize profit or loss as a result of the possible fluctuations in the market
value of the Securities, since all proceeds received from purchasers of Units
are retained by the Underwriter. In maintaining a secondary market, the
Underwriter will realize profits or 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) or from a redemption
of repurchased Units at a price above or below the purchase price. 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.
An affilliate of the Sponsor may have participated in a public offering of
one or more of the Securities. The Sponsor, an affiliate or their employees may
have a long or short position in these Securities. An affiliate may act as a
specialist or market marker for these Securities. An officer, director or
employee of the Sponsor or an affiliate may be an officer or director for
issuers of the Securities.
Market for Units. Although it is not obligated to do so, the Underwriter
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Underwriter may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market.
Units sold prior to the time the entire deferred sales charge has been collected
will be assessed the amount of any remaining deferred sales charge at the time
of sale. The Trustee will notify the Underwriter of any tendered of Units for
redemption. If the Underwriter's bid in the secondary market equals or exceeds
the Redemption Price per Unit, it may purchase the Units not later than the day
on which Units would have been redeemed by the Trustee. The Underwriter may sell
repurchased Units at the secondary market Public Offering Price per Unit.
Tax-Sheltered Retirement Plans. Units are available for purchase in
connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The minimum
purchase for these accounts is reduced to 25 Units but may vary by selling firm.
The purchase of Units may be limited by the plans' provisions and does not
itself establish such plans.
RIGHTS OF UNITHOLDERS
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Distributions. Dividends and any net proceeds from the sale of Securities
received by a Trust will be distributed to Unitholders on each Distribution Date
to Unitholders of record on the preceding Record Date and as determined by the
Trustee. These dates are listed under "Summary of Essential Financial
Information" in Part One. A person becomes a Unitholder of record on the date of
settlement (generally three business days after Units are ordered). Unitholders
may elect to receive distributions in cash or to have distributions reinvested
into additional Units. See "Rights of Unitholders--Reinvestment Option".
Dividends received by a Trust are credited to the Income Account of the
Trust. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds received on the
sale of any Securities, to the extent not used to meet redemptions of Units or
pay deferred sales charges, fees or expenses, will be distributed to
Unitholders. Any distribution to Unitholders consists of each Unitholder's pro
rata share of the available cash in the Income and Capital Accounts as of the
related Record Date.
Reinvestment Option. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option (to the
extent Units may be lawfully offered for sale in the state in which the
Unitholder resides). Unitholders will be subject to the remaining deferred sales
charge payments due on Units. To participate in this reinvestment option, a
Unitholder should purchase Units with the Automatic Reinvestment Option CUSIP
number. A Unitholder's election will apply to all Units owned by the Unitholder
and will remain in effect until changed by the Unitholder. If Units are
unavailable for reinvestment, distributions will be paid in cash. Purchases of
additional Units made pursuant to the reinvestment plan will be made at the net
asset value for Units as of the Evaluation Time on the Distribution Date.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor shall have the right to
suspend or terminate the reinvestment plan at any time.
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. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Trust business day, the date of tender is deemed
to be the next business day.
Unitholders tendering 2,500 or more Units of a Trust for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. The Trust will not make in kind distributions of
stocks held in foreign securities markets. An in kind distribution 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 broker-dealer at Depository Trust
Company. Amounts representing fractional shares will be distributed in cash. The
Trustee may adjust the number of shares of any Security included in a
Unitholder's in kind distribution to facilitate the distribution of whole
shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of a Trust will be, and
the diversity of a Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
at the time of redemption. Special federal income tax consequences will result
if a Unitholder requests an in kind distribution. See "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 also include estimated organizational 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, this evaluation is generally based on the closing sale
prices on that exchange (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price on
that exchange, at the closing bid prices. If the Securities are not so listed
or, if so listed and the principal market therefore is other than on the
exchange, 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 in U.S. dollars 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 SEC determines that
trading on that Exchange is restricted or an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
for other periods as the SEC may permit.
Certificates. Ownership of Units is evidenced in book-entry form unless a
Unitholder makes a written request to the Trustee that ownership be in
certificate form. Units are transferable by making a written request to the
Trustee and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program 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. Fractional certificates
will not be issued. 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 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.
Reports Provided. Unitholders will receive a statement of dividends and other
amounts received by the Trust for each distribution. Within a reasonable time
after the end of each year, each person who was a Unitholder during that year
will receive a statement describing dividends and capital received, actual Trust
distributions, Trust expenses, a list of the Securities and other Trust
information. Unitholders may obtain the Evaluator's evaluations of the
Securities upon request.
TRUST ADMINISTRATION
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Portfolio Administration. The Trust is not managed funds and, except as
provided in the Trust Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Trust based on advice from the Supervisor.
These situations may include events such as the issuer having defaulted on
payment of any of its outstanding obligations or the price of a Security has
declined to such an extent or other credit factors exist so that in the opinion
of the Sponsor retention of the Security would be detrimental to the Trust. In
addition, the Trustee may sell Securities to redeem Units or pay Trust expenses
or deferred sales charges. The Trustee must reject any offer for securities or
property in exchange for the Securities. If securities or property are
nonetheless acquired by the Trust, the Sponsor may direct the Trustee to sell
the securities or property and distribute the proceeds to Unitholders or to
accept the securities or property for deposit in the Trust. Should any contract
for the purchase of any of the Securities fail, the Sponsor will (unless
substantially all of the moneys held in the Trust to cover the purchase are
reinvested in substitute Securities in accordance with the Trust Agreement)
refund the cash and sales charge attributable to the failed contract to all
Unitholders on or before the next distribution date.
When the Trust sells Securities, the composition and diversity of the
Securities in the Trust may be altered. In order to obtain the best price for
the Trust, it may be necessary for the Supervisor to specify minimum amounts
(generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of the Trust's portfolio securities, the Sponsor
may direct that orders be placed with and brokerage commissions be paid to
brokers, including brokers which may be affiliated with the Trust, the Sponsor
or dealers participating in the offering of Units. In addition, in selecting
among firms to handle a particular transaction, the Sponsor may take into
account whether the firm has sold or is selling units of unit investment trusts
which it sponsors.
Amendment of the Trust Agreement. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
Termination. The Trust will terminate on the Mandatory Termination Date or
upon the sale or other disposition of the last Security held in the Trust. The
Trust may be terminated at any time with consent of Unitholders representing
two-thirds of the outstanding Units or by the Trustee when the value of the
Trust is less than $500,000 ($3,000,000 if the value of the Trust has exceeded
$15,000,000) (the "Minimum Termination Value"). Unitholders will be notified of
any termination. The Trustee may begin to sell Securities in connection with a
Trust termination during a period beginning nine business days before, and no
later than, the Mandatory Termination Date. Approximately thirty days before
this date, the Trustee will notify Unitholders of the termination and provide a
form enabling qualified Unitholders to elect an in kind distribution of
Securities. See "Rights of Unitholders--Redemption of Units". This form must be
returned at least five business days prior to the Mandatory Termination Date.
Unitholders will receive a final cash distribution within a reasonable time
after the Mandatory Termination Date. All distributions will be net of Trust
expenses and costs. Unitholders will receive a final distribution statement
following termination. The Information Supplement contains further information
regarding termination of the Trust. See "Additional Information".
Limitations on Liabilities. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability 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 is 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 is not be liable for any action taken by it in good faith under
the Trust Agreement. The Trustee is not liable for any taxes or other
governmental charges imposed on the Securities, on it as Trustee under the Trust
Agreement or on 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
and Supervisor may rely on any evaluation furnished by the Evaluator and have no
responsibility for the accuracy thereof. Determinations by the Evaluator shall
be made in good faith upon the basis of the best information available to it.
The Underwriter. Gruntal & Co., L.L.C. is a full-service investment bank
headquartered at 14 Wall Street in New York, New York. Established in 1880,
Gruntal has a proud history of client service, financial stability and growth.
Today, Gruntal has over 2,100 employees in 29 offices across the United States.
The scope of Gruntal's business spans a broad range of financial services
including investment banking, research, trading, asset management and brokerage
services to individuals, institutions and corporations worldwide.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Morgan Stanley Dean Witter & Co.
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 One Parkview Plaza, Oakbrook Terrace, Illinois 60181,
(630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). The Information Supplement contains
additional information about the Sponsor.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. Additional information
regarding the Trustee is set forth in the Information Supplement, including the
Trustee's qualifications and duties, its ability to resign, the effect of a
merger involving the Trustee and the Sponsor's ability to remove and replace the
Trustee. See "Additional Information".
Performance Information. The Sponsor may from time to time in its advertising
and sales materials compare the then current estimated returns on the Trust and
returns over specified time periods on other similar trusts (which may show
performance net of expenses and charges which the Trust would have charged) with
returns on other taxable investments such as the common stocks comprising the
Dow Jones Industrial Average, the S&P 500, other investment indices, corporate
or U.S. government bonds, bank CDs, money market accounts or money market funds,
or with performance data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc. or various publications, each of which has characteristics
that may differ from those of the Trust. Information on percentage changes in
the dollar value of Units may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective Unitholders. Total return figures may not be averaged and may not
reflect deduction of the sales charge, which would decrease return. No provision
is made for any income taxes payable. Past performance may not be indicative of
future results. The Trust portfolio is not managed and Unit price and return
fluctuate with the value of common stocks in the portfolios, so there may be a
gain or loss when Units are sold. As with other performance data, performance
comparisons should not be considered representative of the Trust's relative
performance for any future period.
TAXATION
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General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust.
For purposes of the following discussion and opinions, it is assumed that
each Security is equity for federal income tax purposes. In the opinion of
Chapman and Cutler, special counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of the
Trust will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Security when such income is considered to be received by the
Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his or her pro rata portion of each Security when such dividends are
considered to be received by the Trust regardless of whether such dividends are
used to pay a portion of any expenses or deferred sales charge imposed.
Unitholders will be taxed in this manner regardless of whether distributions
from the Trust are actually received by the Unitholder.
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder from the Trust as
described below). The price a Unitholder pays for his Units, generally including
sales charges, is allocated among his pro rata portion of each Security held by
the Trust (in proportion to the fair market values thereof on the valuation date
closest to the date the Unitholder purchases his Units) in order to determine
his initial tax basis for his pro rata portion of each Security held by the
Trust. Unitholders should consult their own tax advisers with regard to the
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of the dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to a Security held by the Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings and
profits". A Unitholder's pro rata portion of dividends paid on such Security
which exceed such current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, the holding period for 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). Unitholders should consult their tax advisers regarding
the recognition of gains and losses for federal income tax purposes. Unitholders
should consult their tax advisers regarding the recognition of 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 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). 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 and possible modifications to
the dividends received deduction.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes
sales charges, and such charges are not deductible. A portion of the sales
charge for the Trust is deferred. The income a Unitholder must take into account
for federal income tax purposes is not reduced by amounts deducted to pay the
deferred sales charge. Unitholders should consult their own tax advisors as to
the income tax consequences of the deferred sales charge.
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 a
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. The Internal Revenue Service Restructuring and
Reform Act of 1998 (the "1998 Tax Act") provides that for tax-payers 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.
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.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust including his pro rata
portion of all Securities represented by a Unit. The Taxpayer Relief Act of 1997
(the "1997 Tax Act") includes provisions that treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain (e.g.,
short sales, offsetting notional principal contracts, futures or forward
contracts, or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. 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 the Trust. As discussed in "Rights of Unitholders--Redemption of
Units," under certain circumstances a Unitholder tendering Units for redemption
may request an in kind distribution of the Securities in the Trust. A Unitholder
may also under certain circumstances request an in kind distribution of the
Securities in the Trust upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units". The Unitholder requesting an in kind
distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such in kind distribution will be reduced by the
amount of the Distribution Expenses. See "Rights of Unitholders--Redemption of
Units". As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unitholder is considered as owning a pro rata
portion of each of the Trust's assets for federal income tax purposes. The
receipt of an in kind distribution will result in a Unitholder receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an in kind distribution
with respect to each Security owned by the Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by the Trust, such Unitholder will generally
recognize gain or loss based upon the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an in
kind distribution will have to analyze the tax consequences with respect to each
Security owned by the Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss) recognized
under the rules described above by such Unitholder with respect to each Security
owned by the Trust.
Unitholders who request an in kind distribution are advised to consult their
tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder for
his Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary income
as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The Trustee
will also furnish annual information returns to Unitholders and to the Internal
Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel for New York tax matters, the Trust is not
an association taxable as a corporation and the income of the Trust will be
treated as the income of the Unitholders under the existing income tax laws of
the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
in the Trust that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unitholder in paragraph (a) but whose
income from a Unit is effectively connected with such Unitholder's conduct of a
United States trade or business. The term also includes certain former citizens
of the United States whose income and gain on the Units will be taxable.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.
TRUST OPERATING EXPENSES
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Compensation of Sponsor, Supervisor and Evaluator. The Sponsor will not
receive any fees in connection with its activities relating to the Trust.
However, the Supervisor and Evaluator, which are affiliates of the Sponsor, will
receive the annual fee for portfolio supervisory and evaluation services set
forth under "Summary of Essential Financial Information" in Part One. These fees
may exceed the actual costs of providing these services to the Trust but at no
time will the total amount received for supervisory and evaluation services
rendered to all Van Kampen unit investment trusts in any calendar year exceed
the aggregate cost of providing these services in that year.
Trustee's Fee. For its services the Trustee will receive the fee from the
Trust set forth in the under "Summary of Essential Financial Information" in
Part One (which includes the estimated amount of miscellaneous Trust expenses).
The Trustee benefits to the extent there are funds in the Capital and Income
Accounts since these Accounts are non-interest bearing to Unitholders and the
amounts earned by the Trustee are retained by the Trustee. Part of the Trustee's
compensation for its services to the Trust is expected to result from the use of
these funds.
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the Trust,
(b) fees of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any action
taken by the Trustee to protect the Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities held in the Trust
portfolio and (i) expenditures incurred in contacting Unitholders upon
termination of the Trust.
General. The fees and expenses of the Trust will accrue on a daily basis.The
fees and expenses are paid out of the Capital Account. When these amounts are
paid by or owing to the Trustee, they are secured by a lien on the Trust's
portfolio. It is expected that Securities will be sold to pay these amounts
which will result in capital gains or losses to Unitholders. See "Taxation". The
Supervisor's, Evaluator's and Trustee's 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 or, if
this category is not published, in a comparable category.
OTHER MATTERS
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Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
Independent Certified Public Accountants. The statement of condition and the
related 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.
ADDITIONAL INFORMATION
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This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Trust with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Trust. The Information Supplement may be obtained by contacting the
Trustee at (800) 856-8487 or is available along with other related materials at
the SEC's internet site (http://www.sec.gov).
TABLE OF CONTENTS
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Title Page
----- ----
The Trust................................... A-2
Objectives and Securities Selection......... A-2
Risk Factors................................ A-4
Public Offering............................. A-5
Rights of Unitholders....................... A-8
Trust Administration........................ A-10
Taxation.................................... A-12
Trust Operating Expenses.................... A-15
Other Matters............................... A-16
Additional Information...................... A-16
PROSPECTUS
PART TWO
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Global Transport
Growth Trust, Series 1
Gruntal &Co.
L.L.C.
Investment Advice Since 1880
14 Wall Street, 20th Floor
New York, NY 10005
(800) 223-7634
Please retain this prospectus for future reference.
Information Supplement
Van Kampen Equity Opportunity Trust, Series 107
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This Information Supplement provides additional information concerning the
risks and operations of the Trust which is not described in the Prospectus. This
Information Supplement should be read in conjunction with the Prospectus. This
Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in the Trust and
may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181 or by contacting your broker. This Information
Supplement is dated as of the date of the Prospectus and all capitalized terms
have been defined in the Prospectus.
Table of Contents
Page
Risk Factors 2
Sponsor Information 5
Trustee Information 5
Trust Termination 6
RISK FACTORS
Price Volatility. Because the Trust invests in common stocks, you should
understand the risks of investing in common stocks before purchasing Units.
These risks include the risk that the financial condition of the company or the
general condition of the stock market may worsen and the value of the stocks
(and therefore Units) will fall. Common stocks are especially susceptible to
general stock market movements. The value of common stocks often rises or falls
rapidly and unpredictably as market confidence and perceptions of companies
change. These perceptions are based on factors including expectations regarding
government economic policies, inflation, interest rates, economic expansion or
contraction, political climates and economic or banking crises. The value of
Units will fluctuate with the value of the stocks in the Trust and may be more
or less than the price you originally paid for your Units. As with any
investment, we cannot guarantee that the performance of the Trust will be
positive over any period of time. Because the Trust is unmanaged, the Trustee
will not sell stocks in response to market fluctuations as is common in managed
investments.
Dividends. Common stocks represent ownership interests in a company and are
not obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means that
common stockholders have a right to receive dividends only if a company's board
of directors declares a dividend and the company has provided for payment of all
of its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.
Transportation Companies. Transportation companies are affected by changes
in the price and availability of fuel. In order to provide a measure of control
over price and supply, many companies trade and ship fuel and maintain fuel
storage facilities to support their operations. These companies may also manage
the price risk of fuel costs by utilizing fuel swap and fuel option contracts.
The price of fuel is impacted by political conditions in oil producing regions,
the actions of the Organization of Petroleum Exporting Countries, supply of oil,
the price and availability of alternative fuels, government regulation and
consumer demand. Any substantial increase in the price of fuel could have a
significant negative impact on the Securities.
The Department of Transportation ("DOT") and the Federal Aviation
Administration ("FAA") exercise regulatory authority over air operations of
transportation companies in the United States. The DOT's jurisdiction extends to
aviation route authority and to other regulatory matters, including the transfer
of route authority between carriers. The DOT regulates international routes and
practices and is authorized to investigate and take action against
discriminatory treatment of United States air carriers abroad. The right of a
United States carrier to serve foreign points is subject to the DOT's approval
and generally requires a bilateral agreement between the United States and the
foreign government. The carrier must then be granted the permission of such
foreign government to provide specific flights and services. The regulatory
environment for global aviation rights may from time to time impair the ability
of a company to operate in the most efficient manner. The FAA's regulatory
authority relates primarily to safety and operational aspects of air
transportation, including aircraft standards and maintenance, personnel and
ground facilities, which may from time to time affect a company's operations.
The enactment of the Federal Aviation Administration Authorization Act of 1994
("the 1994 Act") abrogated the authority of states to regulate the rates, routes
or services of intermodal all-cargo air carriers and most motor carriers. States
may now only exercise jurisdiction over safety and insurance.
The U.S. Congress passed two pieces of legislation in 1994 that affected
the trucking industry. The Trucking Industry Regulatory Reform Act ("TIRRA")
reduced the Interstate Commerce Commission's authority over motor carriers by
eliminating the tariff-filing requirement for motor common carriers using
individually determined rates, classifications, rules or practices. Under TIRRA,
motor carriers are still required to provide shippers, if requested, with a copy
of the rate, classification, rules or practices of the carrier. Also, the 1994
Act effectively prohibited state economic regulation of all trucking operations
for motor carriers. In late 1995, the Interstate Commerce Commission Termination
Act of 1995 ("ICCTA") abolished the ICC as of January 1, 1996 and transferred
its residual functions to the Federal Highway Administration and a newly created
Surface Transportation Board within the U. S. Department of Transportation.
Congress has prescribed a transition period during which regulations
implementing the ICCTA including insurance and safety issues must be promulgated
by the Secretary of Transportation. The trucking industry remains subject to the
possibility of regulatory and legislative changes that can influence operating
practices and the demands for and the costs of providing services to shippers.
Transportation companies are subject to various domestic and foreign laws
regulating the discharge of materials into the environment or otherwise for the
protection of the environment and for the management of hazardous waste. These
regulations identify a wide range of industrial by-products and residues as
hazardous waste, and specify requirements for "cradle-to-grave" management of
such waste from the time of generation through the time of disposal and beyond.
Many governments are becoming increasingly sensitive to environmental issues,
and we cannot predict what impact future environmental regulations may have on
its business. Certain regulations require responsible parties to clean up
facilities at which hazardous waste or other subtances have created actual or
potential environmental hazards. Compliance with environmental regulations or
clean-up of hazardous sites can be very costly.
Historically, the operating results of many transportation companies have
been subject to seasonal trends when measured on a quarterly basis. This pattern
is the result of, or is influenced by, numerous factors including climate,
national holidays, consumer demand, economic conditions and a myriad of other
similar and subtle forces. We cannot accurately forecast many of these factors
and, as a result, there can be no assurance that historical patterns, if any,
will continue in future periods.
Transportation companies can face significant liabilities arising from
accidents which injure passengers or damage cargo or other property. Companies
generally maintain insurance covering these liabilities or self-insure to
protect against any liabilities that arise, however, there is no assurance that
any insurance will be sufficient to satisfy all claims arising from any accident
if one occurs. Any accident that involves significant loss of life or property
can also result in substantial negative publicity which can negatively impact a
company, the demand for its products or services and the value of its
securities.
Certain transportation companies do a substantial amount of their business
with the United States government. Companies engaged in United States government
contracting are subject to certain unique business risks, including dependence
on Congressional appropriations and administrative allotment of funds, changes
in Government policies that may reflect military and political developments,
time required for design and development, significant changes in contract
scheduling, complexity of designs and the rapidity with which they become
obsolete, necessity of design improvements, difficulty in forecasting costs and
schedules when bidding on developmental and highly sophisticated technical work
and other factors characteristic of the industry. The United States Department
of Defense and other federal agencies have the authority, under certain
circumstances, to suspend or debar a contractor or organizational parts of a
contractor from further Government contracting for a certain period "to protect
the Government's interest." Any suspension or debarment could have a material
adverse impact on a company's operations.
Foreign Stocks. Because the Trust invests in foreign common stocks, it
involves additional risks that differ from an investment in domestic stocks.
Investments in foreign securities may involve a greater degree of risk than
those in domestic securities. There is generally less publicly available
information about foreign companies in the form of reports and ratings similar
to those that are published about issuers in the United States. Also, foreign
issuers are generally not subject to uniform accounting, auditing and financial
reporting requirements comparable to those applicable to United States issuers.
With respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation,
nationalization or confiscatory taxation, limitations on the removal of funds or
other assets of the Trust, political or social instability, or diplomatic
developments which could affect United States investments in those countries.
Moreover, industrial foreign economies may differ favorably or unfavorably from
the United States' economy in terms of growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Foreign securities markets are generally not as developed or
efficient as those in the United States. While growing in volume, they usually
have substantially less volume than the New York Stock Exchange, and securities
of some foreign issuers are less liquid and more volatile than securities of
comparable United States issuers. Fixed commissions on foreign exchanges are
generally higher than negotiated commissions on United States exchanges. There
is generally less government supervision and regulation of securities exchanges,
brokers and listed issuers than in the United States.
Foreign Currencies. The Trust also involves the risk that fluctuations in
exchange rates between the U.S. dollar and foreign currencies may negatively
affect the value of the stocks. For example, if a foreign stock rose 10% in
price but the U.S. dollar gained 5% against the related foreign currency, a U.S.
investor's return would be reduced to about 5%. This is because the foreign
currency would "buy" fewer dollars or, conversely, a dollar would buy more of
the foreign currency. Many foreign currencies have fluctuated widely against the
U.S. dollar for a variety of reasons such as supply and demand of the currency,
investor perceptions of world or country economies, political instability,
currency speculation by institutional investors, changes in government policies,
buying and selling of currencies by central banks of countries, trade balances
and changes in interest rates. The Trust's foreign currency transactions will be
conducted with foreign exchange dealers acting as principals on a spot (i.e.,
cash) buying basis. These dealers realize a profit based on the difference
between the price at which they buy the currency (bid price) and the price at
which they sell the currency (offer price). The Evaluator will estimate the
currency exchange rates based on current activity in the related currency
exchange markets, however, due to the volatility of the markets and other
factors, the estimated rates may not be indicative of the rate the Trust might
obtain had the Trustee sold the currency in the market at that time.
Liquidity. Whether or not the stocks in the Trust are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
Additional Units. The Sponsor may create additional Units of the Trust by
depositing into the Trust additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Trust will pay brokerage fees.
Voting. Only the Trustee may sell or vote the stocks in the Trust. While
you may sell or redeem your Units, you may not sell or vote the stocks in the
Trust. The Sponsor will instruct the Trustee how to vote the stocks. The Trustee
will vote the stocks in the same general proportion as shares held by other
shareholders if the Sponsor fails to provide instructions.
Year 2000. The Trust could be negatively impacted if computer systems used
by the Sponsor, Evaluator, Supervisor or Trustee or other service providers to
the Trusts do not properly process date-related information after January 1,
2000. This is commonly known as the "Year 2000 Problem". The Sponsor, Evaluator,
Supervisor and Trustee are taking steps to address this problem and to obtain
reasonable assurances that other service providers to the Trust are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trust. This problem is expected to impact
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. We cannot predict what impact, if any,
this problem will have on the issuers of stocks in the Trust.
SPONSOR INFORMATION
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 One Parkview Plaza, Oakbrook Terrace, Illinois
60181, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (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 Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE INFORMATION
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust division
offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust 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. 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. The Trustee is required to keep a certified copy or duplicate
original of the Trust Agreement on file in its office available for inspection
at all reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
TRUST TERMINATION
The Trust may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units of such Trust then outstanding or by the
Trustee when the value of the Securities owned by the Trust, as shown by any
evaluation, is less than $500,000 ($3,000,000 if the value of the Trust has
exceeded $15,000,000). The Trust will be liquidated by the Trustee in the event
that a sufficient number of Units of the Trust not yet sold are tendered for
redemption by the Sponsor, so that the net worth of such Trust would be reduced
to less than 40% of the value of the Securities at the time they were deposited
in the Trust. If the Trust is liquidated because of the redemption of unsold
Units by the Sponsor, the Sponsor will refund to each purchaser of Units the
entire sales charge paid by such purchaser. The Trust Agreement will terminate
upon the sale or other disposition of the last Security held thereunder, but in
no event will it continue beyond the Mandatory Termination Date.
Commencing during the period beginning nine business days prior to, and no
later than, the Mandatory Termination Date, Securities may 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 Securities. The Sponsor shall
direct the liquidation of the Securities in such manner as to effectuate orderly
sales and a minimal market impact. In the event the Sponsor does not so direct,
the Securities shall be sold within a reasonable period and in such manner as
the Trustee, in its sole discretion, shall determine. At least 30 days before
the Mandatory Termination Date the Trustee will provide written notice of any
termination to all Unitholders of the appropriate Trust and in the case of a
Trust will include with such notice a form to enable Unitholders owning the
minimum number of Units described in the Prospectus to request an in kind
distribution of the Securities. 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 previous business day if a
holiday) the Trustee will deliver each requesting Unitholder's pro rata number
of whole shares of the Securities in the Trust to the account of the
broker-dealer or bank designated by the Unitholder at Depository Trust Company.
The value of the Unitholder's fractional shares of the Securities will be paid
in cash. Unitholders 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 the Trust any accrued costs,
expenses, advances or indemnities provided by the Trust Agreement, including
estimated compensation of the Trustee, costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Securities 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 of
each Trust 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 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.
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
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Van Kampen American Capital Equity Opportunity Trust, Series 107, 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 October, 1999.
Van Kampen American Capital Equity Opportunity
Trust, Series 107
(Registrant)
By Van Kampen Funds Inc.
(Depositor)
By Gina Costello
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on October 25, 1999 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. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Gina M. Costello______________
(Attorney in Fact)*
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* 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.
Consent of Independent Certified Public Accountants
We have issued our report dated August 20, 1999 accompanying the financial
statements of Van Kampen American Capital Equity Opportunity Trust, Series 107
as of June 30, 1999, and for the period then ended, contained in this
Post-Effective Amendment No. 1 to Form S-6.
We consent to the use of the aforementioned report in the Post-Effective
Amendment and to the use of our name as it appears under the caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
October 25, 1999
