MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 120
The Prospectus filed with Amendment No. 2 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 120 on December 7, 1998. An effort has been made
to set forth below each of the major changes from the material previously
submitted and also to reflect the same by blacklining the marked counterparts of
the Prospectus submitted with the Amendment.
Cover Page. The date of the Prospectus has been completed.
Pages 2-3. "The Summary of Essential Financial Information" section and
"Fee Table" have been completed.
Pages 4-6. The portfolio has been completed and various information has
been updated.
Pages 7-8. The descriptions of the issuers of the Securities have been
revised.
Pages 9-10. The Report of Independent Certified Public Accountants and
Statement of Condition have been completed.
File No. 333-60701
CIK #1025269
Securities and Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: Van Kampen Focus Portfolios, Series 120
B. Name of Depositor: Van Kampen Funds Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
Chapman and Cutler Van Kampen Funds Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of undivided beneficial interest
F. Approximate date of proposed sale to the public:
As Soon As Practicable After the Effective Date of the Registration Statement
/ X / Check box if it is proposed that this filing will become effective at
2:00 p.m. on December 7, 1998 pursuant to Rule 487.
Janney Montgomery Scott Inc.
Peroni Top Ten Growth Trust, 1999 Series
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Van Kampen Focus Portfolios, Series 120 (Peroni Top Ten Growth Trust, 1999
Series) (the "Trust") seeks to increase the value of your Units by investing in
a portfolio of ten common stocks comprised of the Top Ten Picks of Eugene E.
Peroni, Jr. for 1999. Mr. Peroni is Director of Technical Research for Janney
Montgomery Scott Inc. Of course, we cannot guarantee that the Trust will achieve
its objective.
The Units are not deposits or obligations of any bank or government agency
and are not guaranteed.
December 7, 1998
You should read this prospectus and retain it for future reference.
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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.
Summary of Essential Financial Information
December 7, 1998
Public Offering Price
Aggregate value of Securities per Unit (1) $ 9.900
Sales charge 0.295
Less deferred sales charge 0.195
Public offering price per Unit (2) $ 10.000
Trust Information
Initial number of Units (3) 15,057
Aggregate value of Securities (1) $ 149,059
Redemption price per Unit (4) $ 9.700
General Information
Initial Date of Deposit December 7, 1998
Rollover Notification Date December 1, 1999
Rollover Period December 6, 1999 to January 11, 2000
Mandatory Termination Date January 11, 2000
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(1)Each Security is valued at the opening sale price on its principal trading
exchange or, if not listed, at the opening asked price on the Initial Date of
Deposit. You will bear all or a portion of the expenses incurred in
organizing the Trust and offering its Units for sale. The Public Offering
Price includes the estimated amount of these costs. The Trustee will deduct
these expenses from your Trust at the end of the initial offering period. The
estimated amount is described on the next page.
(2)The Public Offering Price will include any accumulated dividends or cash in
the Income or Capital Accounts.
(3)The number of Units may be adjusted so that the Public Offering Price per
Unit equals $10 at the Evaluation Time on the Initial Date of Deposit. The
number of Units and fractional interest of each Unit will increase or
decrease to the extent of any adjustment.
(4)The redemption price is reduced by any remaining deferred sales charge. The
redemption price includes the estimated organizational and offering costs.
The redemption price will not include these costs after the initial offering
period. See "Rights of Unitholders--Redemption of Units."
Fee Table
Transaction Fees (as % of offering price)
Initial sales charge (1)......................................... 1.00%
Deferred sales charge (2)........................................ 1.95%
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Maximum sales charge ............................................ 2.95%
==========
Estimated Organizational Costs per Unit (3)...................... $ 0.02127
==========
Estimated Annual Expenses per Unit
Trustee's fee and operating expenses............................. $ 0.00739
Evaluation fees.................................................. $ 0.00200
Supervisory fees................................................. $ 0.00350
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Estimated annual expenses per Unit............................... $ 0.01289
==========
Estimated Costs Over TIme
One year......................................................... $ 33
Three years...................................................... $ 80
Five years....................................................... N/A
Ten years........................................................ N/A
This fee table is intended to assist you in understanding the costs that you
will bear and to permit a comparison of fees with those associated with other
investments. The "Estimated Costs Over Time" example illustrates the expenses
you would pay on a $1,000 investment assuming a 5% annual return and redemption
at the end of each period. This example assumes that you reinvest your Trust
distributions into a new series of the Trust at the end of each year. Of course,
you should not consider this example a representation of actual past or future
expenses or annual rate of return which may differ from those assumed in this
example. The sales charge and expenses are described under "Public Offering" and
"Trust Operating Expenses."
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(1)The initial sales charge is the difference between the maximum sales charge
and the deferred sales charge.
(2)The deferred sales charge is actually equal to $0.195 per Unit. This amount
will exceed the percentage above if the Public Offering Price per Unit falls
below $10 and will be less than the percentage above if the Public Offering
Price per Unit exceeds $10. The deferred sales charge accrues daily and is
assessed from April 8, 1999 through October 8, 1999.
(3)You will bear all or a portion of the expenses incurred in organizing the
Trust and offering the Units for sale. The Trustee will deduct the actual
amount of these expenses from your Trust at the end of the initial offering
period.
Peroni Top Ten Growth Trust
The Trust seeks to increase the value of your investment by investing in a
fixed portfolio of common stocks comprised of the Top Ten Picks of Eugene E.
Peroni, Jr. for 1999. Mr. Peroni has selected his Top Ten Picks each year since
1988. The Trust offers a convenient way to invest in Mr. Peroni's Top Ten Picks.
In about one year, you will have the opportunity to redeem your investment and
reinvest the proceeds into a new series of the Trust, if available.
Successful investing may be elusive no matter how compelling the fundamentals
are. Fundamental factors (such as price-earnings ratios and dividend/earnings
growth) can motivate investors to purchase stocks. It is essential, however, to
ascertain whether investors recognize a company's fundamental value on a timely
basis. This may be determined, in part, by evaluating a stock's accumulation
characteristics. Price action alone can be deceiving. For instance, sellers can
dominate a stock on light volume days. In some cases this can mask a longer-term
accumulation trend of a stock. Identification of a stock's accumulation
characteristics can go a long way toward notably enhancing portfolio returns,
but it is only one of many factors that is considered in choosing the portfolio
for the Trust. Stocks are selected for the Trust on their individual technical
merits as well as their complementary and focused diversification in the
portfolio. Technical analysis is usually contrasted with fundamental analysis.
Fundamental analysis takes account of a company's revenues, earnings, dividends,
price-earnings ratio, debt service coverage ratio, debt to equity ratio and
similar factors.
As with any investment, no one can guarantee that the Trust will achieve its
objective. 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.
About Mr. Peroni. Mr. Peroni, Director of Technical Research for Janney
Montgomery Scott Inc., has been with Janney Montgomery Scott Inc. since 1986.
Mr. Peroni authors the Peroni Report, a daily and weekly stock market advisory
that offers a stock market outlook and specific stock recommendations for both
short and longer-term investments. Mr. Peroni began training in the field of
technical research at age 16 with his father, Eugene E. Peroni, Sr., who founded
the Peroni Method. The Peroni Method is heavily--but not exclusively--based on
proprietary technical analysis. Using technical analysis, Mr. Peroni studies an
individual stock's accumulation characteristics, price momentum and relative
strength to determine subtle changes in historical trading behavior. His
bottoms-up approach to market timing and stock selection is based on the theory
that each stock has its own fingerprint in the market. Mr. Peroni blends
technical analysis with economic, monetary, political and psychological factors
in an effort to uncover stocks whose trading behavior provides clues of future
upside potential. Mr. Peroni graduated from the University of Vermont in 1973.
He has more than 20 years experience in the field. Portfolio. The Trust was
initially capitalized with the following securities (the "Securities"):
<TABLE>
<CAPTION>
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Current Cost of
Number Market Value Dividend Securities
of Shares Name of Issuer (1) per Share (2) Yield (3) to Trust (2)
- ---------- ----------------------------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
348 Dycom Industries, Inc. $ 43.500 0.00% $ 15,138.00
188 EMC Corporation 78.313 0.00% 14,722.75
155 Lucent Technologies Inc. 97.188 0.16% 15,064.06
156 The McGraw-Hill Companies, Inc. 95.250 1.64% 14,859.00
240 MCI WorldCom, Inc. 62.750 0.00% 15,060.00
211 Solectron Corporation 70.375 0.00% 14,849.13
140 Time Warner Inc. 107.188 0.34% 15,006.25
220 Tyco International Ltd. 67.750 0.15% 14,905.00
273 Walgreen Co. 55.063 0.47% 15,032.06
189 Warner-Lambert Company 76.313 0.84% 14,423.06
- ---------- -------------
2,120 $ 149,059.31
========== =============
</TABLE>
See "Notes to Portfolio" on page 6.
Comparative Performance
The table below compares the actual performance of the yearly Top Ten Picks
with the stocks in the Dow Jones Industrial Average from December 16, 1988
through December 4, 1998.
Performance Calculations. In calculating the performance information, the
Sponsor assumed that it purchased the Top Ten Picks in equal dollar amounts at
the closing sale price for each stock on its consolidated trading exchange on
the last trade date before Janney Montgomery Scott Inc. published the Top Ten
Picks report. The Sponsor then assumed that it sold each stock at its closing
sale price on its consolidated trading exchange on the last trade date before
Janney Montgomery Scott Inc. published the following year's Top Ten Picks
report. The Sponsor assumed that it reinvested the proceeds of each sale in the
new Top Ten Picks. No commissions, dividends or taxes were included in the
calculations for the Top Ten Picks or the Dow Jones Industrial Average.
About Past Performance. These returns are not guarantees of future
performance. These returns show the performance of the stocks included in the
Top Ten Picks for each period. These returns are not returns of past unit
investment trusts. The Top Ten Picks have only been offered in a unit investment
trust beginning in 1995. You should not view the performance information as a
predictor of returns. Both stock prices and dividends will affect the Trust's
actual return. Stock prices will rise and fall and a company may increase,
decrease or eliminate dividends. The performance of the Trust will differ from
the results you would obtain if you bought the stocks directly. In addition, the
performance of the Trust will differ from the performance of the stocks because
the availability of the Trust will not coincide exactly with the publication of
the Top Ten Picks report. The performance figures do not reflect the sales
charge or expenses you will pay if you own Units of the Trust.
[CHART APPEARS HERE]
The chart that appears here shows the comparative performance of Peroni's Top
Ten Picks versus DJIA. The chart is based on a $10,000 initial investment (not
the Trust). As of 12/8/89, the Top Ten Picks were +24.93% and the DJIA was
+27.00%. As of 12/7/90, the Top Ten Picks were +0.74% and the DJIA was -5.17%.
As of 12/6/91, the Top Ten Picks were +40.21% and the DJIA was +11.44%. As of
12/4/92, the Top ten Picks were +19.15% and the DJIA was +13.94%. As of 12/3/93,
the Top Ten Picks were +28.82% and the DJIA was +12.63%. As of 12/2/94, the Top
Ten Picks were +4.37% and the DJIA was +1.12%. As of 12/1/95, the Top Ten Picks
were +51.05% and the DJIA was +35.82%. As of 12/6/96, the Top Ten Picks were
+10.74% and the DJIA was +25.45%. As of 12/5/97, the Top Ten Picks were +54.89%
and the DJIA was +27.69%. As of 12/4/98, the Top Ten Picks were 10.64% and the
DJIA was 12.32%. The Top Ten Picks as of 12/4/98 were $82,262.01 and the DJIA
was $41,921.69.
Notes to Portfolio
(1) The Securities are initially represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been deposited with
the Trustee. Contracts to acquire Securities were entered into on December 7,
1998 and have a settlement date of December 10, 1998 (see "The Trust").
(2) The market value of each Security is based on the opening sale price on
the applicable exchange or, if not listed, the opening asked price on the
Initial Date of Deposit. Other information regarding the Securities, as of the
Initial Date of Deposit, is as follows:
Profit
Cost to (Loss) To
Sponsor Sponsor
-------------- --------------
$ 148,677 $ 382
(3)Current Dividend Yield for each Security is based on the estimated annual
dividends per share and the Security's market value as of the opening of trading
on the Initial Date of Deposit. Estimated annual dividends per share are
calculated by annualizing the most recently declared dividends or by adding the
most recent interim and final dividends declared and reflect any foreign
withholding taxes.
The Peroni Top Ten Picks
A brief description of each of the issuers of the Securities is listed below.
Dycom Industries, Inc. Dycom Industries, Inc. provides engineering,
construction, and maintenance services to telecommunications providers in the
United States. In addition to its primary services, the company performs
underground utility locating and electric utility contracting services. Dycom
also provides services related to the installation of integrated voice, data,
and video networks in office buildings.
EMC Corporation. EMC Corporation designs, manufactures, markets, and supports
products that store, retrieve, manage, protect, and share information from all
major computing environments, including "UNIX," "Windows NT," and mainframe
platforms. The company has offices worldwide.
Lucent Technologies Inc. Lucent Technologies Inc. designs, develops, and
manufactures communications systems, software, and products. The company sells
public communications systems and supplies systems and software worldwide.
Lucent's research and development arm is Bell Laboratories.
The McGraw-Hill Companies, Inc. The McGraw-Hill Companies, Inc. is a global
information services company. The company operates in the aviation,
broadcasting, business and economics, communications and computers, education,
finance, governments, and medical and professional markets. McGraw-Hill's brands
include "Standard & Poors," "Business Week" and "McGraw-Hill."
MCI WorldCom, Inc. MCI WorldCom, Inc. provides facilities-based and fully
integrated local, long distance, international, and Internet services. The
Company also provides end-to-end high-capacity connectivity to more than 35,000
buildings worldwide. MCI WorldCom operates in more than 65 countries including
the Americas, Europe, and the Asia-Pacific regions.
Solectron Corporation. Solectron Corporation provides integrated solutions
that span the entire product life cycle for electronics original equipment
manufacturers located worldwide. The company provides pre-production planning
and design, manufacturing, distribution, and end-of-life product service and
support. Solectron has associates in 21 manufacturing facilities worldwide.
Time Warner Inc. Time Warner Inc. is a media and entertainment company with
operations in entertainment, cable networks, publishing, and cable. The company
has interests in filmed entertainment, television production, broadcasting,
recorded music, music publishing, cable television programming, magazine and
book publishing, and cable television systems.
Tyco International Ltd. Tyco International Ltd. is a diversified
manufacturing and service company. The company manufactures and installs fire
protection systems; provides electronic security services; and manufactures flow
control valves, medical products, plastics and adhesives, electrical and
electronic components, and underwater telecommunications systems. Tyco operates
in more than 80 countries.
Walgreen Co. Walgreen Co. operates retail drugstores. The company's stores
sell prescription and nonprescription drugs, general merchandise, liquor and
beverages, cosmetics, and tobacco products. Walgreen operates approximately
2,582 stores in 36 states and Puerto Rico.
Warner-Lambert Company. Warner-Lambert Company discovers, develops,
manufactures, and markets pharmaceutical, consumer health care and confectionary
products. The company's products include "Listerine" mouthwash, "Trident" gum,
"Schick" razors, "Tetra" fish food, "Sudafed" decongestant, "Lubriderm" body
bar, "Dilantin" epilepsy drug, "Centrax" tranquilizer, "Neosporin" topical
antibiotic, and other products.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen Focus Portfolios, Series 120:
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 120 as of December 7, 1998. The
statement of condition and portfolio are the responsibility of the Sponsor. Our
responsibility is to express an opinion on such financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit deposited with the Trustee to
purchase securities. An audit also includes assessing the accounting principles
used and significant estimates made by the Sponsor, as well as evaluating the
overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Focus Portfolios, Series
120 as of December 7, 1998, in conformity with generally accepted accounting
principles.
GRANT THORNTON LLP
Chicago, Illinois
December 7, 1998
STATEMENT OF CONDITION
As of December 7, 1998
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 149,059
-----------
Total $ 149,059
===========
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 320
Deferred sales charge liability (3) 2,936
Interest of Unitholders--
Cost to investors (4) 150,570
Less: Gross underwriting commission and organizational
costs (2)(4)(5) 4,767
-----------
Net interest to Unitholders (4) 145,803
-----------
Total $ 149,059
===========
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(1)The value of the Securities is determined by Interactive Data Corporation on
the bases set forth under "Public Offering--Offering Price". The contracts to
purchase Securities are collateralized by an irrevocable letter of credit
which has been deposited with the Trustee.
(2)A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the Trust. The
amount of these costs are set forth in the "Fee Table". A distribution will
be made as of the close of the initial offering period to an account
maintained by the Trustee from which this obligation of the investors will be
satisfied.
(3)Represents the amount of mandatory distributions from the Trust on the bases
set forth under "Public Offering".
(4)The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering--Offering Price".
(5)Assumes the maximum sales charge.
THE TRUST
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The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the date of
this Prospectus (the "Initial Date of Deposit"), among Van Kampen Funds Inc., as
Sponsor, Janney Montgomery Scott Inc., 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" and 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. Units will remain outstanding until
redeemed upon tender to the Trustee by Unitholders, which may include the
Sponsor and Underwriter, 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" 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
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The objective of the Trust is to provide capital appreciation by investing in
a portfolio of equity securities. No one can guarantee that the Trust will
achieve its objective. The Securities were selected by Eugene E. Peroni, Jr. of
Janney Montgomery Scott Inc. (the "Underwriter"). In selecting the Securities,
Mr Peroni considered the factors described under "Peroni Top Ten Growth Trust."
The Underwriter uses the list of Securities in its business and distributes
this information to various individuals and entities. The Underwriter may
recommend or effect transactions in some or all of the Securities. These
practices may have an adverse effect on the prices of the Securities. These
practices also may affect the prices the Trust pays for the Securities and the
prices received upon Unit redemptions or Trust termination.
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 may receive compensation
based on commissions generated by research and/or sales of Units.
You should note that Mr. Peroni applied the selection criteria to the
Securities for inclusion in the Trust as of the date that he published the
Peroni Top Ten Picks report. After this date, the Securities may no longer meet
the selection criteria. However, even if a Security no longer meets the
selection criteria, it will not be removed from the portfolio.
RISK FACTORS
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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, no one can 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.
Technology Issuers. The Trust portfolio includes a significant number of
technology companies. These companies face risks related to rapidly changing
technology, rapid product obsolescence, cyclical market patterns, evolving
industry standards and frequent new product introductions. An unexpected change
in technology can have a significant negative impact on a company. The failure
of a company to introduce new products or technologies or keep pace with rapidly
changing technology, can have a negative impact on the company's results.
Technology stocks tend to experience substantial price volatility and
speculative trading. Announcements about new products, technologies, operating
results or marketing alliances can cause stock prices to fluctuate dramatically.
At times, however, extreme price and volume fluctuations are unrelated to the
operating performance of a company. This can impact your ability to redeem your
Units at a price equal to or greater than what you paid.
The market for certain products may have only recently begun to develop, is
rapidly evolving or is characterized by increasing suppliers. Key components of
some technology products are available only from limited sources. This can
impact the cost of and ability to acquire these components. Some technology
companies serve highly concentrated customer bases with a limited number of
large customers. Any failure to meet the standard of these customers can result
in a significant loss or reduction in sales. Many products and technologies are
incorporated into other products. As a result, some companies are highly
dependent on the performance of other technology companies. We cannot guarantee
that these customers will continue to place additional orders or will place
orders in similar quantities as in the past.
Telecommunications Issuers. The Trust portfolio includes a significant number
of telecommunications companies. These companies are subject to substantial
governmental regulation. For example, the United States government and state
governments regulate permitted rates of return and the kinds of services that a
company may offer. This industry has experienced substantial deregulation in
recent years. Deregulation may lead to fierce competition for market share and
can have a negative impact on certain companies. Competitive pressures are
intense and telecommunications stocks can experience rapid volatility. Certain
telecommunications products may become outdated very rapidly. A company's
performance can be hurt if the company fails to keep pace with technological
advances.
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the initial sales charge, and cash, if any,
in the Income and Capital Accounts. The initial sales charge is equal to the
difference between the maximum sales charge (2.95% of the Public Offering Price)
and the deferred sales charge ($0.195 per Unit). You will pay a deferred sales
charge of $0.195 per Unit as described in the "Fee Table". If any deferred sales
charge payment date is not a business day, the Trustee will charge the payment
to the Trust on the next business day. If you purchase Units after the initial
deferred sales charge payment, you will only pay the remaining portion of the
deferred sales charge. The maximum sales charge assessed to each Unitholder is
2.95% of the Public Offering Price (3.040% of the aggregate value of the
Securities less the deferred sales charge). A portion of the Public Offering
Price includes an amount of Securities to pay for all or a portion of the costs
incurred in establishing your Trust, including the cost of preparing documents
relating to the Trust (such as the prospectus, trust agreement and closing
documents), federal and state registration fees, the initial fees and expenses
of the Trustee and legal and audit expenses. The initial offering period sales
charge is reduced as follows:
Aggregate
Dollar Amount
of Units Purchased* Sales Charge
--------------------- ----------------
$50,000 - $99,999 2.65%
$100,000 - $149,999 2.30
$150,000 or more 1.95
- ---------------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. The reduced sales charge structure will apply on all purchases
of Units in the Trust by the same person on any one day from the Underwriter.
Units purchased in the name of the spouse of a purchaser or in the name of a
child of such purchaser ("immediate family members") will be deemed to be
additional purchases by the purchaser for the purposes of calculating the
applicable sales charge. The reduced sales charges will also be applicable to a
trustee or other fiduciary purchasing securities for one or more trust estate or
fiduciary accounts.
During the initial offering period, unitholders of Peroni Top Ten Growth
Trust, 1998 Series may use proceeds received upon such trust's termination or
upon redemption in contemplation of such trust's termination to purchase Units
of the Trust at the Public Offering Price per Unit less 1%.
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, Janney
Montgomery Scott Inc. and its 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 250 Units. 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 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 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 asked 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
asked price on the over-the-counter market (unless it is determined that these
prices are inappropriate as a basis for evaluation). If current asked prices are
unavailable, the evaluation is generally determined (a) on the basis of current
asked prices for comparable securities, (b) by appraising the value of the
Securities on the asked 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, taken as a whole, which are represented by the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor and
the Underwriter 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 during the initial offering period as
described below.
Aggregate Concession
Dollar Amount or Agency
of Units Distributed* Commission
--------------------- ----------------
Up to $49,999 2.10%
$50,000 - $99,999 1.80
$100,000 - $149,999 1.45
$150,000 or more 1.10
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*The breakpoint concessions or agency commissions are also applied on a Unit
basis using a breakpoint equivalent of $10 per Unit and will be applied on
whichever basis is more favorable to the distributor.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For transactions involving unitholders
of Peroni Top Ten Growth Trust, 1998 Series who use proceeds received upon
termination or upon redemption in contemplation of termination of such trust to
purchase Units of the Trust, the total concession or agency commission will
amount to 1.10% per Unit. For all secondary market transactions the total
concession or agency commission will amount to 70% of the applicable sales
charge. 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, 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
Trust. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trust. These programs will not change the price Unitholders
pay for their Units or the amount that the 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.
The Sponsor will receive from the Underwriter the difference between the gross
sales commission and an amount equal to the concession allowed to broker-dealers
described under "Unit Distribution". In addition, the Underwriter will receive
additional compensation during the initial offering period of 0.25% of the
Public Offering Price per Unit if it distributes less than $100 million, 0.30%
of the Public Offering Price per Unit if it distributes $100 million but less
than $125 million, 0.35% of the Public Offering Price per Unit if it distributes
$125 million but less than $150 million, 0.40% of the Public Offering Price per
Unit if it distributes $150 million or more. 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
the Trust on the Initial Date of Deposit as well as on subsequent deposits. See
"Notes to Portfolio". The Sponsor has not participated as sole underwriter or as
manager or as a member of the underwriting syndicates or as an agent in a
private placement for any of the Securities. If the Sponsor or Underwriter owns
Units, the Sponsor or Underwriter may realize profit or loss as a result of the
possible fluctuations in the market value of the Securities, because all
proceeds received from purchasers of Units are retained by the Sponsor or
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 different from the purchase price. Cash, if any, made available to
the Sponsor or Underwriter prior to the date of settlement for the purchase of
Units may be used in the Sponsor's or Underwriter's business and may be deemed
to be a benefit to the Sponsor or Underwriter, subject to the limitations of the
Securities Exchange Act of 1934.
An affiliate 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 tender 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 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 qualified retirement plans is 250 Units. 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 generally be distributed to Unitholders at the
termination of the Trust. A person becomes a Unitholder of record on the date of
settlement (generally three business days after Units are ordered).
Dividends received by the 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 such proceeds shall be distributed to Unitholders within a
reasonably prompt time following such sale. 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 Mandatory Termination Date or other record date.
Rollover. The Trust offers the flexibility to follow the Peroni Top Ten Picks
on an annual basis. The Underwriter currently intends to offer a subsequent
series of the Trust during the Rollover Period which would allow you to redeem
your Units and reinvest the proceeds in the Peroni Top Ten Picks for the Year
2000. If you notify us by the Rollover Notification Date, you will have the
option to participate in the Rollover and have your Units reinvested into a
subsequent Trust series, if available. If you elect to participate in the
Rollover, the Trustee will redeem your Units on the date instructed. As the
redemption proceeds become available, the Trustee will reinvest the proceeds
(including dividends) in a new Trust series as you direct at the public offering
price applicable to rollover purchases for the new trust. The Trustee will
attempt to sell Securities to satisfy the redemption as quickly as practicable
on your rollover date. The Sponsor does not anticipate that the sale period will
be longer than one day; however, certain factors could affect the ability to
sell the Securities and could affect the length of the sale period. The
liquidity of any Security depends on the daily trading volume of the Security
and the amount available for redemption and reinvestment on any day.
Of course, no one can guarantee that a subsequent trust or sufficient units
will be available or that any subsequent trusts will offer the same investment
strategies or objectives as the current Trust. No one can guarantee that the
Rollover will avoid any negative market price consequences resulting from
trading large volumes of securities. Market price trends may make it
advantageous to sell or buy securities more quickly or more slowly than
permitted by the Trust procedures. The Underwriter may, in its sole discretion,
modify the Rollover or stop creating units of a trust at any time regardless of
whether all proceeds of Unitholders have been reinvested in the Rollover. If the
Underwriter decides not to offer a subsequent series of the Trust, we will
notify you prior to the Rollover Period. Cash which has not been reinvested in
the Rollover will be distributed to you shortly after the Trust terminates. If
you participate in the Rollover, you may receive taxable dividends or realize
taxable capital gains which are reinvested in the Rollover but you may not be
entitled to a deduction for capital losses due to the "wash sale" tax rules. Due
to the reinvestment in a subsequent trust, the Trust will not distribute cash to
pay any taxes. See "Taxation".
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 the Trust for redemption may
request an in kind distribution of Securities. 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 the Trust will 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 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 and (b) the accrued expenses and
sales charges of the Trust. 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, 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 or her 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 another 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 a managed fund 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's having defaulted on
payment of any of its outstanding obligations or the price of a Security having
declined to such an extent or the occurrence of other credit factors so that in
the opinion of the Supervisor 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.
To the extent practicable, the Supervisor may (but is not obligated to)
designate Securities to be sold by the Trustee in order to maintain the
proportionate relationship among the number of shares of individual issues of
Securities in the Trust. To the extent this is not practicable, 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 the Underwriter. 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 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
Underwriter 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 in the performance of their duties or by reason of
their reckless disregard of their obligations and duties hereunder. The Trustee,
except by reason of its own negligence or willful misconduct, is generally under
no liability for any action taken by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon it by the
Trust Agreement. The Trustee will 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 will not be 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.
Janney Montgomery Scott Inc. Janney Montgomery Scott Inc., headquartered at
1801 Market Street, Philadelphia, Pennsylvania 19103, is the Underwriter and
Supervisor of the Trust. Janney Montgomery Scott Inc. is a full-service
securities firm with more than 55 offices in the eastern United States. A
wholly-owned subsidiary of Penn Mutual Life Insurance Company, Janney Montgomery
Scott Inc. is a member of the New York Stock Exchange and other major exchanges,
the National Association of Securities Dealers, Inc. (NASD) and the Securities
Investors Protection Corporation (SIPC). You can contact the Underwriter by
calling (800) JANNEYS (526-6397).
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, 1997, the total stockholders' equity of Van Kampen
Funds Inc. was $132,381,000 (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. We may from time to time in advertising and sales
materials compare the current 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
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 portfolio, 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 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 the deferred sales charge. Unitholders will be taxed in this manner
regardless of whether distributions from the Trust are actually received by the
Unitholder or are considered to be automatically reinvested (see "Rights of
Unitholders--Reinvestment Option").
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder 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. In
particular, a Unitholder's loss, if any, incurred in connection with the
exchange of Units for units in the next new series of the Trust (the "New
Trust"), (the Sponsor intends to create a separate New Trust in conjunction with
the termination of the Trust) will generally be disallowed with respect to the
disposition of any Securities pursuant to such exchange to the extent that such
Unitholder is considered the owner of substantially identical securities under
the wash sale provisions of the Code taking into account such unitholder's
deemed ownership of the securities underlying the units in a New Trust in the
manner described above, if such substantially identical securities are acquired
within a period beginning 30 days before and ending 30 days after such
disposition. However, any gains incurred in connection with such an exchange by
a Unitholder would be recognized. Unitholders should consult their tax advisors
regarding the recognition of gains and losses for Federal income tax purposes.
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 (or proceeds from redemption) a
Unitholder must take into account for Federal income tax purposes is not reduced
by amounts deducted to pay the deferred sales charge. Unitholders should consult
their own tax advisers as to the income tax consequences of the deferred sales
charge.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends (other than corporate
Unitholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Final regulations have
been issued which address special rules that must be considered in determining
whether the 46 day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. It should be noted that various
legislative proposals that would affect the dividends received deduction have
been introduced. Unitholders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends received
deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of 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 involved 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.
As discussed in "Rights of Unitholders-Rollover," a Unitholder may elect to
exchange Units for units in a new series of the Trust. To the extent a
Unitholder exchanges his or her Units for units of a New Trust in a taxable
transaction, such Unitholder will recognize gains, if any, but generally will
not be entitled to a deduction for any losses recognized upon the disposition of
any Securities pursuant to such exchange to the extent that such Unitholder is
considered the owner of substantially identical securities under the wash sale
provisions of the Code taking into account such Unitholder's deemed ownership of
the securities underlying the units in such New Trust in the manner described
above, if such substantially identical securities were acquired within a period
beginning 30 days before and ending 30 days after such disposition under the
wash sale provisions contained in Section 1091 of the Code. In the event a loss
is disallowed under the wash sale provisions, special rules contained in Section
1091(d) of the Code apply to determine the Unitholder's tax basis in the
securities acquired. Unitholders are advised to consult their tax advisors.
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 (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
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 Evaluator, which is an affiliate of the Sponsor, will receive the
annual fee for evaluation services set forth in the "Fee Table". The Supervisor
will receive the annual fee described in the "Fee Table" for portfolio
supervisory services for the Trust. These fees may exceed the actual costs of
providing these services to the Trust but at no time will the total amount
received for 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 or will the total amount received for supervisory services
rendered to all unit investment trusts for which the Supervisor acts as
principal underwriter 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 "Fee Table" (which includes the estimated amount of
miscellaneous Trust expenses). The Trustee benefits to the extent there are
funds in the Capital and Income Accounts because 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 willful 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. During the initial offering period, all of the fees and expenses of
the Trust will accrue on a daily basis and will be charged to the Trust at the
end of the initial offering period. After the initial offering period, all of
the fees and expenses of the Trust will accrue on a daily basis and will be
charged to the Trust on a monthly basis.
The deferred sales charge, 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 to the Trust for New York tax matters. Certain matters
will be passed upon on behalf of Janney Montgomery Scott Inc. by Mesirov Gelman
Jaffe Cramer & Jamieson, LLP, 1735 Market Street, 38th Floor, Philadelphia,
Pennsylvania 19103.
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
- ----- ----
Summary of Essential Financial Information............................... 2
Fee Table................................................................ 3
Peroni Top Ten Growth Trust.............................................. 4
Notes to Portfolio....................................................... 6
The Peroni Top Ten Picks................................................. 7
Report of Independent Certified Public Accountants....................... 8
Statement of Condition .................................................. 9
The Trust................................................................ A-1
Objectives and Securities Selection...................................... A-1
Risk Factors............................................................. A-2
Public Offering.......................................................... A-3
Rights of Unitholders.................................................... A-6
Trust Administration..................................................... A-8
Taxation................................................................. A-10
Trust Operating Expenses................................................. A-14
Other Matters............................................................ A-15
Additional Information................................................... A-15
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When Units of the Trust are no longer available, this prospectus may be used as
a preliminary prospectus for a future Trust. If this prospectus is used for a
future Trust you should note the following:
The information in this prospectus is not complete with respect to future Trust
series and may be changed. No person may sell Units of a future Trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell Units and is not
soliciting an offer to buy Units in any state where the offer or sale is not
permitted.
PROSPECTUS
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December 7, 1998
Peroni Top Ten Growth Trust, 1999 Series
Janney Montgomery Scott Inc.
1801 Market Street
Philadelphia, Pennsylvania 19103
Telephone (800) JANNEYS
(800) 526-6397
Please retain this prospectus for future reference.
Van Kampen
Information Supplement
Van Kampen Focus Portfolios, Series 120
(Peroni Top Ten Growth Trust, 1999 Series)
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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 the Underwriter at 1801 Market
Street, Philadelphia, Pennsylvania 19103. 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
The Trust 2
Risk Factors 2
Sponsor Information 4
Trustee Information 5
Trust Termination 6
THE TRUST
The "buy and hold" philosophy of a unit investment trust maintains that a
well-chosen portfolio of stocks can reward investors with above-average results
over a period of time. This philosophy relies on patience and discipline, and
eliminates the temptation to respond hastily to factors outside the investor's
control: the volatility of the stock market; interest rates; inflation and the
overall economy; political elections; or the latest investment fad. "Buy and
hold" advocates believe that there are long-term benefits of this philosophy for
those looking to avoid the trading activity involved in "playing" the short-term
market. In addition, you may benefit, by remaining invested over the long-term.
For example, if you invested $1 in the Standard & Poor's 500 Index stocks in
1926, that dollar would have grown to approximately $1,828 by the end of 1997.
Had you tried to time the market and not been invested on the top 30 days (the
30 days that the S&P 500 Index experienced the greatest increase in value), that
dollar would only have grown to $25.98.
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.
Legislative proposals concerning healthcare are proposed in Congress from
time to time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of prescription
drugs), national health insurance, incentives for competition in the provision
of healthcare services, tax incentives and penalties related to healthcare
insurance premiums and promotion of pre-paid healthcare plans. The Sponsor is
unable to predict the effect of any of these proposals, if enacted, on the
issuers of Securities in the Trust.
Technology Issuers. The Trust portfolio includes a significant number of
technology companies. Technology companies generally include companies involved
in the development, design, manufacture and sale of computers, computer related
equipment, computer networks, communications systems, telecommunications
products, electronic products, and other related products, systems and services.
The market for technology products and services, especially those specifically
related to the Internet, is characterized by rapidly changing technology, rapid
product obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the Securities
depends in substantial part on the timely and successful introduction of new
products. An unexpected change in one or more of the technologies affecting an
issuer's products or in the market for products based on a particular technology
could have a material adverse affect on an issuer's operating results.
Furthermore, there can be no assurance that the issuers of the Securities will
be able to respond timely to compete in the rapidly developing marketplace.
The market for certain technology products and services may have only
recently begun to develop, is rapidly evolving and is characterized by an
increasing number of market entrants. Additionally, certain technology companies
may have only recently commenced operations or offered equity securities to the
public. Such companies are in the early stage of development and have a limited
operating history on which to analyze future operating results. It is important
to note that following its initial public offering a security is likely to
experience substantial stock price volatility and speculative trading.
Accordingly, no one can guarantee that you will receive an amount greater than
or equal to the your initial investment when you redeem Units or when the Trust
terminates.
Based on trading history, factors such as announcements of new products or
development of new technologies and general conditions of the industry have
caused and are likely to cause the market price of technology common stocks to
fluctuate substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to the
operating performance of such companies. This market volatility may adversely
affect the market price of the Securities and therefore the ability of a
Unitholder to redeem units, or roll over Units into a new trust, at a price
equal to or greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the future
suppliers will be able to meet the demand for components in a timely and cost
effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for, or
and interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous and constantly developing industry standards.
Any failure to comply with such standards may result in a significant loss
or reduction of sales. Because many products and technologies are incorporated
into other related products, certain companies are often highly dependent on the
performance of other computer, electronics and communications companies. There
can be no assurance that these customers will place additional orders, or that
an issuer of Securities will obtain orders of similar magnitude as past orders
form other customers. Similarly, the success of certain companies is tied to a
relatively small concentration of products or technologies with intense
competition between companies. Accordingly, a decline in demand of such
products, technologies or from such customers could have a material adverse
impact on issuers of the Securities.
Telecommunications Issuers. Because the Trust includes a concentration in
telecommunications issuers, the value of the Units may be susceptible to factors
affecting the telecommunications industry. The telecommunications industry is
subject to governmental regulation and the products and services of
telecommunications companies may be subject to rapid obsolescence. These factors
could affect the value of Units. Telephone companies in the United States, for
example, are subject to both state and federal regulations affecting permitted
rates of returns and the kinds of services that may be offered. Certain types of
companies represented in the Trust portfolio are engaged in fierce competition
for a share of the market of their products. As a result, competitive pressures
are intense and the stocks are subject to rapid price volatility.
Liquidity. Whether or not the stocks in the Trust are listed on a stock
exchange at the time you purchase Units, 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. No one can 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 affected if computer systems used
by the Sponsor, Evaluator, Supervisor or Trustee or other service providers to
the Trust do not properly process date-related information after December 31,
1999. 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 affect
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. No one can 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, 1997, the total stockholders' equity of Van Kampen
Funds Inc. was $132,381,000 (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 September 30, 1997, the Sponsor and its Van Kampen affiliates managed
or supervised approximately $65.3 billion of investment products, of which over
$10.85 billion is invested in municipal securities. The Sponsor and its Van
Kampen affiliates managed $54 billion of assets, consisting of $34.3 billion for
55 open-end mutual funds (of which 45 are distributed by Van Kampen Funds Inc.)
$14.2 billion for 37 closed-end funds and $5.5 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen's open-end funds, closed-ended funds and
unit investment trusts are professionally distributed by leading financial firms
nationwide. Based on cumulative assets deposited, the Sponsor believes that it
is the largest sponsor of insured municipal unit investment trusts, primarily
through the success of its Insured Municipals Income Trust(R) or the IM-IT(R)
trust. The Sponsor also provides surveillance and evaluation services at cost
for approximately $13 billion of unit investment trust assets outstanding. Since
1976, the Sponsor has serviced over two million investor accounts, opened
through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the 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 next business day thereafter
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 REGISTRATION STATEMENT
This Amendment No. 2 of Registration Statement comprises the following
papers and documents:
The facing sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to the Federal income tax status of securities being
registered.
3.3 Opinion and consent of counsel as to New York tax status of securities being
registered.
4.1 Consent of Interactive Data Corporation
4.2 Consent of Independent Certified Public Accountants.
SIGNATURES
The Registrant, Van Kampen Focus Portfolios, Series 120, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7 and Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 120 has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and State of
Illinois on the 7th day of December, 1998.
Van Kampen Focus Portfolios, Series 120
By Van Kampen Funds Inc.
By Gina M. Costello
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed below on December
7, 1998 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.
SIGNATURE TITLE
Don G. Powell Chairman and Chief Executive )
Officer )
John H. Zimmerman President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
Gina M. Costello ) (Attorney-in-fact*)
- --------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of Van Kampen American Capital Equity Opportunity Trust,
Series 64 (file No. 33-33087) and Van Kampen American Capital Equity Opportunity
Trust, Series 87 (file No. 333-44581) and are incorporated herein by reference.
EXHIBIT 1.1
VAN KAMPEN FOCUS PORTFOLIOS
SERIES 120
TRUST AGREEMENT
Dated: December 7, 1998
This Trust Agreement among Van Kampen Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Van Kampen Investment
Advisory Corp., as Evaluator, Janney Montgomery Scott Inc., as Supervisory
Servicer, and The Bank of New York, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the document entitled
"Van Kampen American Capital Equity Opportunity Trust, Series 87 and Subsequent
Series, Standard Terms and Conditions of Trust, Effective January 27, 1998"
(herein called the "Standard Terms and Conditions of Trust") and such provisions
as are set forth in full and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and Sections
are to Articles and Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(24), listed in the Schedule
hereto, have been deposited in trust under this Trust Agreement.
2. The fractional undivided interest in and ownership of the Trust
represented by each Unit is an amount the numerator of which is one and the
denominator of which is the amount set forth under "Summary of Essential
Financial Information - Initial Number of Units" in the Prospectus. Such
fractional undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03, (b) increased or decreased in
connection with an adjustment to the number of Units pursuant to Section 2.03,
or (c) decreased by the number of Units redeemed pursuant to Section 5.02.
3. The terms "Income Account Record Date" and "Income Account
Distribution Date" shall not apply to the Trust.
4. The term "Capital Account Record Date" shall mean any date on which
the balance of the Capital Account exceeds $0.01 per Unit and, pursuant to the
instruction of the Depositor, the Trustee declares that date a record date for
the purpose of distributing amounts in the Capital Account to Unitholders.
5. The term "Capital Account Distribution Date" shall mean a date
within a reasonably prompt time following any Capital Account Record Date.
6. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial Information"
in the Prospectus.
7. Sections 1.01 (1), (3) and (4) shall be replaced in their entirety
by the following:
(1) "Depositor" shall mean Van Kampen Funds Inc. and its
successors in interest, or any successor depositor appointed as hereinafter
provided.
(3) "Evaluator" shall mean American Portfolio Evaluation
Services (a division of a Van Kampen Investment Advisory Corp.) and its
successors in interest, or any successor evaluator appointed as hereinafter
provided.
(4) "Supervisory Servicer" shall mean Janney Montgomery Scott
Inc. and its successors in interest, or any successor portfolio supervisor
appointed as hereinafter provided.
8. Section 1.01(25) shall be replaced in its entirety by the
following:
(25) "Special Redemption Period" shall mean the "Rollover
Period" set forth under "Summary of Essential Financial Information" in
the Prospectus.
9. The term "Rollover Notification Date" shall mean the "Rollover
Notification Date" set forth under "Summary of Essential Financial Information"
in the Prospectus.
10. The first paragraph of Section 3.13 shall be replaced in its
entirety by the following:
"Section 3.13. Supervisory Servicer. Subject to
Section 3.14 hereof, as compensation for providing supervisory
portfolio services under this Indenture, the Supervisory Servicer shall
receive, in arrears, against a statement or statements therefor
submitted to the Trustee monthly or annually an aggregate annual fee in
an amount which shall not exceed $0.35 per 100 Units outstanding as of
January 1 of such year except for a Trust during the year or years in
which an initial offering period as determined in Section 4.01 of this
Indenture occurs, in which case the fee for a month is based on the
number of Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Supervisory Servicer
provides services during less than the whole of such year), but in no
event shall such compensation when combined with all compensation
received for providing such supervisory services to all unit investment
trusts for which the Supervisory Servicer also acts as principal
underwriter in any calendar year exceed the aggregate cost to the
Supervisory Servicer for providing such services. Such compensation
may, from time to time, be adjusted provided that the total adjustment
upward does not, at the time of such adjustment, exceed the percentage
of the total increase, after the date hereof, in consumer prices for
services as measured by the United States Department of Labor Consumer
Price Index entitled "All Services Less Rent of Shelter" or similar
index, if such index should no longer be published. The consent or
concurrence of any Unitholder hereunder shall not be required for any
such adjustment or increase. Such compensation shall be paid by the
Trustee, upon receipt of invoice therefor from the Supervisory
Servicer, upon which, as to the cost incurred by the Supervisory
Servicer of providing services hereunder the Trustee may rely, and
shall be charged against the Income and/or Capital Accounts, in
accordance with Section 3.05."
11. The first three paragraphs of Section 5.05 shall be replaced in
their entirety by the following:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Trusts (the "New
Series"), the Trustee shall, thirty days prior to the first day of the
Special Redemption Period, include a form of election (which may be
included in the notice sent to Unitholders specified in Section 8.02)
whereby Unitholders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New Series, may
elect to have their Units redeemed in kind in the manner provided in
Section 5.02, the Securities included in the redemption distribution
sold, and the cash proceeds applied by the Distribution Agent to
purchase Units of the New Series, all as hereinafter provided. The
Trustee shall honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units tendered for
redemption or a properly completed redemption request with respect to
uncertificated Units, by its close of business on the Rollover
Notification Date.
All Units so tendered by a Unitholder (a "Rollover
Unitholder") shall be redeemed and canceled on the date during the
Special Redemption Period instructed by such Rollover Unitholder
provided that such Rollover Unitholder has properly tendered such Units
for redemption pursuant to Section 5.02. Subject to payment by such
Rollover Unitholder of any tax or other governmental charges which may
be imposed thereon, such redemption is to be made in kind pursuant to
Section 5.02 by distribution of cash and/or Securities to the
Distribution Agent on the date instructed by such Rollover Unitholder
of the net asset value (determined on the basis of the Trust Evaluation
as of such date in accordance with Section 4.01) multiplied by the
number of Units being redeemed (herein called the "Rollover
Distribution"). Any Securities that are made part of the Rollover
Distribution shall be valued for purposes of the redemption
distribution as of the date of the Rollover Distribution.
All Securities included in a Unitholder's Rollover
Distribution shall be sold by the Distribution Agent during the Special
Redemption Period specified in the Prospectus pursuant to the
Depositor's direction, and the Distribution Agent may employ the
Depositor as broker or agent in connection with such sales. For such
brokerage services, the Depositor shall be entitled to compensation at
its customary rates, provided however, that its compensation shall not
exceed the amount authorized by applicable Securities laws and
regulations. In the event the Depositor does not direct the manner in
which Securities are to be sold, the Securities shall be sold in such
manner as the Distribution Agent, in its sole discretion, shall
determine. The Distribution Agent shall have no responsibility for any
loss or depreciation incurred by reason of any sale made pursuant to
this Section."
12. Section 6.01(e) is hereby replaced with the following:
(e) (1) Subject to the provisions of subparagraph (2) of this
paragraph, the Trustee may employ agents, sub-custodians, attorneys,
accountants and auditors and shall not be answerable for the default or
misconduct of any such agents, sub-custodians, attorneys, accountants
or auditors if such agents, sub-custodians, attorneys, accountants or
auditors shall have been selected with reasonable care. The Trustee
shall be fully protected in respect of any action under this Indenture
taken or suffered in good faith by the Trustee in accordance with the
opinion of counsel, which may be counsel to the Depositor acceptable to
the Trustee, provided, however that this disclaimer of liability shall
not excuse the Trustee from the responsibilities specified in
subparagraph (2) below. The fees and expenses charged by such agents,
sub-custodians, attorneys, accountants or auditors shall constitute an
expense of the Trust reimbursable from the Income and Capital Accounts
of the affected Trust as set forth in section 6.04 hereof.
(2) The Trustee may place and maintain in the care of an
Eligible Foreign Custodian (which is employed by the Trustee as a
sub-custodian as contemplated by subparagraph (1) of this paragraph (e)
and which may be an affiliate or subsidiary of the Trustee or any other
entity in which the Trustee may have an ownership interest) any
investments (including foreign currencies) for which the primary market
is outside the United States, and such cash and cash equivalents in
amounts reasonably necessary to effect the Trust's transactions in such
investments, provided that:
(a) The Trustee shall perform all duties assigned to
the Foreign Custody Manager by Rule 17f-5 under the Investment
Company Act of 1940 (17 CFR ss. 270.17f-5) ("Rule 17f-5"), as
now in effect or as such rule may be amended in the future.
The Trustee shall not delegate such duties.
(b) The Trustee shall exercise reasonable care,
prudence and diligence such as a person having responsibility
for the safekeeping of Trust assets would exercise, and shall
be liable to the Trust for any loss occurring as a result of
its failure to do so.
(c) The Trustee shall indemnify the Trust and hold
the Trust harmless from and against any risk of loss of Trust
assets held in accordance with the foreign custody contract.
(d) The Trustee shall maintain and keep current
written records regarding the basis for the choice or
continued use of a particular Eligible Foreign Custodian
pursuant to this subparagraph for a period of not less than
six years from the end of the fiscal year in which the Trust
was terminated, the first two years in an easily accessible
place. Such records shall be available for inspection by
Unitholders and the Securities and Exchange Commission at the
Trustee's offices at all reasonable times during its usual
business hours.
(3) "Eligible Foreign Custodian" shall have the meaning
assigned to it in Rule 17f-5.
(4) "Foreign Custody Manager" shall have the meaning assigned
to it in Rule 17f-5.
13. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust and subject to the requirements set forth in this paragraph,
unless the Prospectus otherwise requires, the Sponsor may, on any Business Day
(the "Trade Date"), subscribe for additional Units as follows:
(a) Prior to the Evaluation Time on such Business Day, the
Sponsor shall provide notice (the "Subscription Notice") to the Trustee, by
telephone or by written communication, of the Sponsor's intention to subscribe
for additional Units. The Subscription Notice shall identify the additional
Securities to be acquired (unless such additional Securities are a precise
replication of the then existing portfolio) and shall either (i) specify the
quantity of additional Securities to be deposited by the Sponsor on the
settlement date for such subscription or (ii) instruct the Trustee to purchase
additional Securities with an aggregate value as specified in the Subscription
Notice.
(b) Promptly following the Evaluation Time on such Business Day,
the Sponsor shall verify with the Trustee the number of additional Units to be
created.
(c) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver or assign the additional Units
created hereby, the Sponsor shall deposit with the Trustee (i) any additional
Securities specified in the Subscription Notice (or contracts to purchase such
additional Securities together with cash or a letter of credit in the amount
necessary to settle such contracts) or (ii) cash or a letter of credit in an
amount equal to the aggregate value of the additional Securities specified in
the Subscription Notice, and adding and subtracting the amounts specified in the
first and second sentences of Section 5.01, computed as of the Evaluation Time
on the Business Day preceding the Trade Date divided by the number of Units
outstanding as of the Evaluation Time on the Business Day preceding the Trade
Date, times the number of additional Units to be created.
(d) On the settlement date for such subscription, the Trustee
shall, in exchange for the Securities and cash or letter of credit described
above, deliver to, or assign in the name of or on the order of, the Sponsor the
number of Units verified by the Sponsor with the Trustee.
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to
be executed and their corporate seals to be hereto affixed and attested; all as
of the day, month and year first above written.
VAN KAMPEN FUNDS INC.
By James J. Boyne
Vice President
(SEAL)
Attest:
By Nicholas Dalmaso
Assistant Secretary
AMERICAN PORTFOLIO EVALUATION SERVICES,
a division of Van Kampen Investment
Advisory Corp.
By James J. Boyne
Vice President
(SEAL)
Attest
By Nicholas Dalmaso
Assistant Secretary
JANNEY MONTGOMERY SCOTT INC.
By Alan M. Schankel
Senior Vice President
(SEAL)
Attest
By James A. McCrea
First Vice President
THE BANK OF NEW YORK
By Jeffrey Cohen
Vice President
(SEAL)
Attest
By Robert Weir
Assistant Treasurer
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 120
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus.)
` Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
December 7, 1998
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen Focus Portfolios, Series 120
Gentlemen:
We have served as counsel for Van Kampen Funds Inc. as Sponsor and Depositor of
Van Kampen Focus Portfolios, Series 120 (hereinafter referred to as the
"Trust"), in connection with the preparation, execution and delivery of a Trust
Agreement dated December 7, 1998, among Van Kampen Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Van Kampen Investment
Advisory Corp., as Evaluator, Janney Montgomery Scott Inc., as Supervisory
Servicer, and The Bank of New York, as Trustee, pursuant to which the Depositor
has delivered to and deposited the Securities listed in the Schedule to the
Trust Agreement with the Trustee and pursuant to which the Trustee has provided
to or on the order of the Depositor documentation evidencing ownership of Units
of fractional undivided interest in and ownership of the Trust (hereinafter
referred to as the "Units"), created under said Trust Agreement. In connection
therewith we have examined such pertinent records and documents and matters of
law as we have deemed necessary in order to enable us to express the opinions
hereinafter set forth. Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the execution
and issuance of certificates evidencing the Units in the Trust have been
duly authorized; and
2. The certificates evidencing the Units in the Trust, when duly
executed and delivered by the Depositor and the Trustee in accordance with the
aforementioned Trust Agreement, will constitute valid and binding obligations of
such Trust and the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-60701) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
Chapman And Cutler
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
December 7, 1998
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen Focus Portfolios, Series 120
---------------------------------------
Gentlemen:
We have acted as counsel for Van Kampen Funds Inc., Depositor of Van
Kampen Focus Portfolios, Series 120 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a Trust
Agreement dated December 7, 1998 (the "Indenture") among Van Kampen Funds Inc.,
as Depositor, Van Kampen Investment Advisory Corp., as Evaluator, Janney
Montgomery Scott Inc., as Supervisory Servicer, and The Bank of New York, as
Trustee. The Fund is comprised of one unit investment trust described in the
prospectus for the Fund (the "Trust").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of securities (the
"Securities") as set forth in the Prospectus. For purposes of this opinion, it
is assumed that each Security is equity for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
United States Federal income tax law:
(i) The Trust is not an association taxable as a corporation
for Federal income tax purposes but will be governed by the provisions
of subchapter J (relating to trusts) of chapter 1, Internal Revenue
Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata
share of each asset of the Trust in the proportion that the number of
Units held by him bears to the total number of Units outstanding. Under
subpart E, subchapter J of chapter 1 of the Code, income of the Trust
will be treated as income of each Unitholder in the proportion
described, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the Trustee.
Each Unitholder will be considered to have received his pro rata share
of income derived from each Trust asset when such income is considered
to be received by the Trust. A Unitholder's pro rata portion of
distributions of cash or property by a corporation with respect to a
Security ("dividends" as defined by Section 316 of the Code) 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 which exceeds such current and accumulated earnings and
profits will first reduce the Unitholder's tax basis in such Security,
and to the extent that such dividends exceed a Unitholder's tax basis
in such Security, shall be treated as gain from the sale or exchange of
property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of
each Security held by the Trust (in proportion to the fair market
values thereof on the valuation date closest to the date the Unitholder
purchases his Units), in order to determine his tax basis for his pro
rata portion of each Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder (subject
to various nonrecognition provisions under the Code) upon redemption or
sale of his Units, except to the extent an in kind distribution of
stock is received by such Unitholder from the Trust as discussed below.
Such gain or loss is measured by comparing the proceeds of such
redemption or sale with the adjusted basis of his Units. Before
adjustment, such basis would normally be cost if the Unitholder had
acquired his Units by purchase. Such basis will be reduced, but not
below zero, by the Unitholder's pro rata portion of dividends with
respect to each Security which is not taxable as ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, taxable exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder (subject
to various nonrecognition provisions under the Code) and the amount
thereof will be measured by comparing the Unitholder's aliquot share of
the total proceeds from the transaction with his basis for his
fractional interest in the asset disposed of. Such basis is ascertained
by apportioning the tax basis for his Units (as of the date on which
his Units were acquired) among each of the Trust assets (as of the date
on which his Units were acquired) ratably according to their values as
of the valuation date nearest the date on which he purchased such
Units. A Unitholder's basis in his Units and of his fractional interest
in each Trust asset must be reduced, but not below zero, by the
Unitholder's pro rata portion of dividends with respect to each
Security which are not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of 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. As
previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unitholder is considered as owning a pro
rata portion of each of the Trust's assets. The receipt of an in kind
distribution will result in a Unitholder receiving an undivided
interest in whole shares of stock and possibly cash. The potential
federal income tax consequences which may occur under an in kind
distribution with respect to each Security owned by the Trust will
depend upon 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 of 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 such Trust. The total amount of
taxable gains (or losses) recognized upon such redemption will
generally equal the sum of the gain (or loss) recognized under the
rules described above by the redeeming Unitholder with respect to each
Security owned by the Trust.
A domestic corporation owning Units in the Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the Code with
respect to such Unitholder's pro rata portion of dividends received by the Trust
(to the extent such dividends are taxable as ordinary income and are
attributable to domestic corporations), subject to the limitations imposed by
Sections 246 and 246A of the Code.
To the extent dividends received by the Trust are attributable to
foreign corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
It should be noted that payments to the Trust of dividends on
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because under the grantor
trust rules, an investor is deemed to have paid directly his share of foreign
taxes that have been paid or accrued, if any, an investor may be entitled to a
foreign tax credit or deduction for United States tax purposes with respect to
such taxes. A required holding period is imposed for such credits.
Section 67 of the Code provides that certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by individuals only to the extent
they exceed 2% of such individual's adjusted gross income. Unitholders may be
required to treat some or all of the expenses of a Trust as miscellaneous
itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of
the pro rata interest in a Security is either sold by the Trust or redeemed or
when a Unitholder disposes of his Units in a taxable transaction, in each case
for an amount greater (or less) than his tax basis therefor, subject to various
non-recognition provisions of the Code.
Any gain or loss recognized on a sale or exchange will, under current
law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours,
CHAPMAN AND CUTLER
MJK/md
EXHIBIT 3.3
WINSTON & STRAWN
200 Park Avenue
New York, NY 10166-4193
December 7, 1998
Van Kampen Focus Portfolios, Series 120
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen Focus Portfolios,
Series 120 (the "Fund") consisting of Peroni Top Ten Growth Trust, 1999 Series
(individually a "Trust" and, in the aggregate, the "Trusts") for purposes of
determining the applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen Funds Inc. (the
"Depositor"), American Portfolio Evaluation Services, a division of an affiliate
of Depositor, as Evaluator, Janney Montgomery Scott Inc., as Supervisory
Servicer (the "Supervisory Servicer"), and The Bank of New York, as trustee (the
"Trustee"). As described in the prospectus relating to the Fund dated today to
be filed as an amendment to a registration statement heretofore filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Prospectus") (File Number 333-60701), the objectives of the Fund are to
provide the potential for dividend income and capital appreciation through
investment in a fixed portfolio of actively traded equity securities of
companies engaged in, providing services to companies in, the industry
identified in Trust's name, or are the type of securities identified in the name
of the Trusts. It is noted that no opinion is expressed herein with regard to
the Federal tax aspects of the securities, the Trusts, units of the Trusts (the
"Units"), or any interest, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trust the securities and/or contracts and cash for the
purchase thereof together with an irrevocable letter of credit in the amount
required for the purchase price of the securities comprising the corpus of the
Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities to
be deposited in the Trusts, and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Trusts as more fully set forth in the Prospectus. The
Units, which are represented by certificates ("Certificates"), will be offered
to the public upon the effectiveness of the registration statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash dividends
received by the Fund and with the proceeds from the disposition of securities
held in the Fund and the proceeds of the treasury obligation on maturity and the
distribution of such cash dividends and proceeds to the Unit holders. The
Trustee will also maintain records of the registered holders of Certificates
representing an interest in the Fund and administer the redemption of Units by
such Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option.
Generally, equity securities held in the Trusts may be removed
therefrom by the Trustee at the direction of the Depositor upon the occurrence
of certain specified events which adversely affect the sound investment
character of the Fund, such as default by the issuer in payment of declared
dividends or of interest or principal on one or more of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to sell
equity securities designated by the Supervisory Servicer only for the purpose of
redeeming Units tendered to it and of paying expenses for which funds are not
available. The Trustee does not have the power to vary the investment of any
Unit holder in the Fund, and under no circumstances may the proceeds of sale of
any equity securities held by the Fund be used to purchase new equity securities
to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on business
corporations, and, for purposes of that Article, Section 208(1) defines the term
"corporation" to include, among other things, "any business conducted by a
trustee or trustees wherein interest or ownership is evidenced by certificate or
other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which interest or
ownership is evidenced by certificate or other written instrument
includes, but is not limited to, an association commonly referred to as
a "business trust" or "Massachusetts trust". In determining whether a
trustee or trustees are conducting a business, the form of the
agreement is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and powers,
will be regarded as decisive factors in determining whether a trust is
subject to tax under Article 9-A. The mere investment of funds and the
collection of income therefrom, with incidental replacement of
securities and reinvestment of funds, does not constitute the conduct
of a business in the case of a business conducted by a trustee or
trustees. 20 NYCRR 1-2.5(b)(2) (July 11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that where a
trustee merely invests funds and collects and distributes the income therefrom,
the trust is not engaged in business and is not subject to the franchise tax.
Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171 (3rd Dept. 1948), order
resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47 N.Y.
Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee of an
unincorporated investment trust was without authority to reinvest amounts
received upon the sales of securities and could dispose of securities making up
the trust only upon the happening of certain specified events or the existence
of certain specified conditions, the trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell equity securities contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such equity
securities is limited to circumstances in which the credit-worthiness or
soundness of the issuer of such equity security is in question or in which cash
is needed to pay redeeming Unit holders or to pay expenses, or where the Fund is
liquidated subsequent to the termination of the Indenture. In substance, the
Trustee will merely collect and distribute income and will not reinvest any
income or proceeds, and the Trustee has no power to vary the investment of any
Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust will be
deemed to be the owner of the trust under certain circumstances, and therefore
taxable on his proportionate interest in the income thereof. Where this Federal
tax rule applies, the income attributed to the grantor will also be income to
him for New York income tax purposes. See TSB-M-78(9)(c), New York Department of
Taxation and Finance, June 23, 1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be considered as
owning a share of each asset of a Trust in the proportion that the number of
Units held by such holder bears to the total number of Units outstanding and the
income of a Trust will be treated as the income of each Unit holder in said
proportion pursuant to Subpart E of Part I, Subchapter J of Chapter 1 of the
Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we specifically rely,
we are of the opinion that under existing laws, rulings, and court decisions
interpreting the laws of the State and City of New York:
1. Each of the Trusts will not constitute an association
taxable as a corporation under New York law, and, accordingly, will not
be subject to tax on its income under the New York State franchise tax
or the New York City general corporation tax.
2. The income of the Trusts will be treated as the income of
the Unit holders under the income tax laws of the State and City of New
York.
3. Unit holders who are not residents of the State of New
York are not subject to the income tax laws thereof with respect to any
interest or gain derived from the Fund or any gain from the sale or
other disposition of the Units, except to the extent that such interest
or gain is from property employed in a business, trade, profession or
occupation carried on in the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name and the
reference to our firm in the Registration Statement and in the Prospectus.
Very truly yours,
WINSTON & STRAWN
EXHIBIT 4.1
Interactive Data
14 West Street
New York, NY 10005
December 7, 1998
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen Focus Portfolios, Series 120
Peroni Top Ten Growth Trust, 1999 Series
(A Unit Investment Trust) Registered Under the Securities
Act of 1933, File No. 333-60701
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as the
Evaluator, and to the use of the Obligations prepared by us which are referred
to in such Prospectus and Registration Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
EXHIBIT 4.2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We have issued our report dated December 7, 1998 on the statement of
condition and related securities portfolio of Van Kampen Focus Portfolios,
Series 120 as of December 7, 1998 contained in the Registration Statement on
Form S-6 and Prospectus. We consent to the use of our report in the Registration
Statement and Prospectus and to the use of our name as it appears under the
caption "Other Matters-Independent Certified Public Accountants."
GRANT THORNTON LLP
Chicago, Illinois
December 7, 1998
