File No: 333-
CIK #1025298
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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 139
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 fractional
beneficial interests
F. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
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The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
Preliminary Prospectus Dated January 6, 1999
Subject To Completion
Van Kampen
Focus Portfolio
Roaring 2000sTM Trust, Series 1
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Van Kampen Focus Portfolios, Series 139 includes the unit investment trust
described above (the "Trust"). The Trust invests in a portfolio of stocks
selected based on concepts outlined in The Roaring 2000s written by Harry S.
Dent, Jr. The Trust seeks to increase the value of your Units. 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.
March 2, 1999
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
March _____, 1999
Public Offering Price
Aggregate value of Securities per Unit (1) $ 10.000
Sales charge
Less deferred sales charge
Public offering price per Unit (2) $ 10.000
Trust Information
Initial number of Units (3)
Aggregate value of Securities (1) $
Estimated initial distribution per Unit (4) $
Estimated annual dividends per Unit (4) $
Redemption price per Unit (5) $
General Information
Initial Date of Deposit March 2, 1999
Mandatory Termination Date ____________ , 2000
Record Dates
Distribution Dates
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(1)Each Security is valued at the last closing sale price on its principal
trading exchange or, if not listed, at the last asked price on the day before
the Initial Date of Deposit. You will bear all or a portion of the expenses
incurred in organizing and offering your Trust. 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
(approximately three months). 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)This estimate is based on the most recently declared quarterly dividends or
interim and final dividends accounting for any foreign withholding taxes.
Actual dividends may vary due to a variety of factors. See "Risk Factors".
(5)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 %
Deferred sales charge (1) %
----------
Maximum sales charge %
==========
Maximum sales charge on reinvested dividends %
==========
Estimated Organizational Costs per Unit (2) $
==========
Estimated Annual Expenses per Unit
Trustee's fee and operating expenses $
Supervisory and evaluation fees $ 0.00500
----------
Estimated annual expenses per Unit $
==========
Estimated Costs Over TIme
One year $
Three years $
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 present a comparison of fees. 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 roll your investment into a new series of the Trust 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 for
this example. The sales charge and expenses are described under "Public
Offering" and "Trust Operating Expenses".
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(1)The deferred sales charge is actually equal to $ _______ 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 __________ , 1999 through __________ , 1999.
(2)You will bear all or a portion of the expenses incurred in organizing and
offering your Trust. The Trustee will deduct the actual amount of these
expenses from your Trust at the end of the initial offering period.
The Roaring 2000sTM Trust
The Trust invests in a portfolio of stocks selected using concepts outlined
in The Roaring 2000s written by Harry S. Dent, Jr. The Trust seeks to increase
the value of your investment over its life.
The Roaring 2000s is the third book written by Harry S. Dent, Jr. analyzing
economic, technological and demographic trends in society. We designed the Trust
to take advantage of the insights, philosophies and strategies discussed in this
book. The Trust seeks to leverage demographic, economic and lifestyle trends
over the next fifteen years. According to Mr. Dent, some significant changes
that may potentially impact the future economy include:
o Aging Baby Boomers reaching their peak spending years
o Internet usage and new technologies becoming more mainstream
o A shift in the business and organizational structure brought on by the
Information Age
o Rising importance of small- to medium-sized, high growth companies
o Growth opportunities from continued global economic development
Mr. Dent believes that the coming years will bring an era of economic
prosperity and lifestyle changes. For instance, Mr. Dent believes that the
Internet may be as important a catalyst for change in business as the
assembly-line once was for production. Mr. Dent applies the principle of the
"S-curve" in analyzing technologies and social trends in the economy. This
concept shows how products move into mainstream acceptance. The S-curve shows
how products develop in three stages over time: Innovation, Growth and Maturity.
Of course, we cannot 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. Dent. Using exciting research, developed from years of hands-on
business experience, Mr. Dent seeks to offer a positive and understandable view
of trends in society. He proposes practical applications at all levels: from
personal investments, to business strategies, to jobs and changes in the
workplace, to growth areas for real estate.
Mr. Dent received his MBA from Harvard Business School, where he was a Baker
Scholar. He graduated number one in his class at the University of South
Carolina with a degree in accounting and finance. Mr. Dent has worked as a
consultant with several Fortune 100 companies to develop and innovate
competitive business strategies. He has been CEO of several growth companies and
has acted as consultant to several leading edge companies.
Mr. Dent is the author of the successful 1993 book, The Great Boom Ahead
(revised in 1995). His second book, Job Shock: Four New Principles Transforming
Our Work and Business, was published in 1995 and then re-released in 1996 in
soft cover as The Great Jobs Ahead. The Roaring 2000s updates key principles in
his past two books, as well as focuses on the Internet's rapid move into the
mainstream and how our work, organizations, and living circumstances will
change. Mr. Dent also publishes the H.S. Dent Forecast newsletter. Since 1988 he
has been speaking to executives around the world. He has appeared on "Good
Morning America", PBS, CNBC, "The Business Channel", and has been featured in
Fortune, Success, The Wall Street Journal, and Omni.
The Sponsor selected the portfolio based on concepts presented in The
Roaring 2000s and research compiled by Mr. Dent. Mr. Dent did not select the
stocks for the portfolio and will not supervise the portfolio. The Roaring
2000TM is the exclusive property of The H.S. Dent Foundation. The Roaring
2000sTM is a trademark of the H.S. Dent Foundation. The Trust has licensed the
use of this trademark from the H.S. Dent Foundation.
<TABLE>
<CAPTION>
Portfolio
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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>
- ---------- -------------
$
========== =============
</TABLE>
See "Notes to Portfolio".
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 November 19,
1998 and have settlement dates ranging from __________, 1999 to __________, 1999
(see "The Trust").
(2) The market value of each Security is based on the closing sale price on
the applicable exchange or, if not listed, the last asked price on the day prior
to 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
-------------- -------------
$ $
(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 close of trading
on the day prior to 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 Securities. A brief description of each of the issuers of the Securities
is listed below.
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 139:
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 139 as of March _____, 1999.
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 to purchase securities
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Focus Portfolios, Series
139 as of March _____, 1999, in conformity with generally accepted accounting
principles.
GRANT THORNTON LLP
Chicago, Illinois
March _____, 1999
STATEMENT OF CONDITION
As of March _____, 1999
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $
-------------
Total $
-------------
-------------
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $
Deferred sales charge liability (3)
Interest of Unitholders--
Cost to investors (4)
Less: Gross underwriting commission and organizational costs (2)(4)(5)
-------------
Net interest to Unitholders (4)
-------------
Total $
-------------
-------------
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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, Van Kampen Investment Advisory Corp., as Supervisor, The Bank of New
York, as Trustee, and American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator.
The Trust offers investors 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 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" for the Trust and any additional securities
deposited into the Trust.
Additional Units of the Trust 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)
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 of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being deposited
by the Sponsor, the fractional undivided interest in the Trust represented by
each unredeemed Unit will increase or decrease accordingly, although the actual
interest in the Trust will remain unchanged. Units will remain outstanding until
redeemed upon tender to the Trustee by Unitholders, which may include the
Sponsor, or until the termination of the Trust Agreement.
The Trust consists of (a) the Securities (including contracts for the
purchase thereof) listed under the applicable "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 actively traded equity securities selected based on concepts
outlined in The Roaring 2000s written by Harry S. Dent, Jr. There is no
assurance that the Trust will achieve its objective. The Trust selection
criteria is described in "Roaring 2000sTM Trust".
Harry S. Dent, Jr. has not participated in any way in the creation of
the Trust or in the selection of stocks included in the Trust and has not
approved any information herein relating thereto.
A balanced investment portfolio incorporates various style and capitalization
characteristics. The Sponsor offers unit trusts with a variety of styles and
capitalizations to meet your needs. The Sponsor determines style characteristics
(growth and value) based on the criteria used in selecting the Trust portfolio.
Generally, a growth portfolio includes companies in a growth phase of their
business with increasing earnings. A value portfolio generally includes
companies with low relative price-earnings ratios that the Sponsor believes are
undervalued. The Sponsor determines market capitalizations as follows based on
the weighted median market capitalization of a portfolio: Small-Cap -- less than
$1 billion; Mid-Cap -- $1 billion to $5 billion; and Large-Cap -- over $5
billion. The Sponsor determines all style and capitalization characteristics as
of the Initial Date of Deposit and the characteristics may vary thereafter. The
Sponsor will not remove a Security from the Trust as a result of any change in
characteristics.
Investors should note that the above criteria were applied to the
Securities for inclusion in the Trust as of the Initial Date of Deposit.
Subsequent to this date, the Securities may no longer meet the above
criteria. Should a Security no longer meet the selection criteria, the Security
will not as a result thereof be removed from the Trust portfolio.
RISK FACTORS
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Price Volatility. The Trust invests in 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 stocks sometimes moves
up or down rapidly and unpredictably. Because the Trust is unmanaged, the
Trustee will not sell stocks in response to market fluctuations as is common in
managed investments. As with any investment, we cannot guarantee that the
performance of the Trust will be positive over any period of time.
Dividends. Stocks represent ownership interests in the issuers and are not
obligations of the issuers. 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.
Year 2000 Readiness Disclosure. These two paragraphs constitute "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem". The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for
the Securities. Improperly functioning trading systems may result in
settlement problems and liquidity issues. Moreover, corporate and governmental
data processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, and cash, if any, in the Income and Capital
Accounts. The "Fee Table" describes the sales charge in detail. If any deferred
sales charge payment date is not a business day, we will charge the payment on
the next business day. If you purchase Units after the initial deferred sales
charge payment, you will only pay that portion of the payments not yet
collected. 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. These costs include 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 will be reduced as follows:
Aggregate Amount
of Units Purchased* Sales Charge
- --------------------- ----------------
$50,000 - $99,999 %
$100,000 - $249,999
$250,000 - $499,999
$500,000 - $999,999
$1,000,000 or more
- ---------------
*The breakpoint sales charges are also applied on a Unit basis using 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. An investor may aggregate purchases of Units of the Trust for
purposes of qualifying for volume purchase discounts listed above. The reduced
sales charge structure will also apply on all purchases by the same person from
any one dealer of units of Van Kampen-sponsored unit investment trusts which are
being offered in the initial offering period (a) on any one day (the "Initial
Purchase Date") or (b) on any day subsequent to the Initial Purchase Date if the
units purchased are of a unit investment trust purchased on the Initial Purchase
Date. In the event units of more than one trust are purchased on the Initial
Purchase Date, the aggregate dollar amount of such purchases will be used to
determine whether purchasers are eligible for a reduced sales charge. Such
aggregate dollar amount will be divided by the public offering price per unit of
each respective trust purchased to determine the total number of units which
such amount could have purchased of each individual trust. Purchasers must then
consult the applicable trust's prospectus to determine whether the total number
of units which could have been purchased of a specific trust would have
qualified for a reduced sales charge and the amount of such reduction. To
determine the applicable sales charge reduction it is necessary to accumulate
all purchases made on the Initial Purchase Date and all purchases made in
accordance with (b) above. Units purchased in the name of the spouse of a
purchaser or in the name of a child of such purchaser ("immediate family
members") will be deemed 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.
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 immediate family members (as
described above) and (4) officers and directors of bank holding companies that
make Units available directly or through subsidiaries or bank affiliates.
Notwithstanding anything to the contrary in this Prospectus, such investors,
bank trust departments, firm employees and bank holding company officers and
directors who purchase Units through this program will not receive sales charge
reductions for quantity purchases.
A purchaser desiring to purchase during a 13 month period $500,000 or more of
any combination of series of Van Kampen unit investment trusts may qualify for a
reduced sales charge by signing a nonbinding Letter of Intent with any single
broker-dealer. After signing a Letter of Intent, at the date total purchases,
less redemptions, of units of any combination of series of Van Kampen unit
investment trusts by a purchaser (including units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser under 21 years
of age) exceed $500,000, the selling broker-dealer, bank or other will credit
the unitholder with cash as a retroactive reduction of the sales charge on such
units equal to the amount which would have been paid for the total aggregated
sales amount. If a purchase does not complete the required purchases under the
Letter of Intent within the 13 month period, no such retroactive sales charge
reduction shall be made.
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 the Van Kampen Funds Inc. and its affiliates,
dealers and their affiliates and vendors providing services to the Sponsor may
purchase Units at the Public Offering Price less the applicable dealer
concession.
During the initial offering period, unitholders of any Van Kampen-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase Units of the Trust at the Public Offering Price per Unit less 1%.
The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
Offering Price. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in 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 term "business
day" also excludes any day on which more than 33% of the Securities are not
traded on their principal trading exchange due to a customary business holiday
on that exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange, this evaluation is generally based on the closing sale prices on that
exchange (unless it is determined that these prices are inappropriate as a basis
for valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Securities are not listed on a national or foreign
securities exchange or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based on the current ask
price on the over-the-counter market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value of the
Securities on the ask side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate as of the Evaluation Time. The value of the Securities for purposes of
secondary market transactions and redemptions is described under "Rights of
Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities in the Trust, taken as a whole, which are represented
by the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. Units repurchased in the
secondary market, if any, may be offered by this Prospectus at the secondary
market Public Offering Price in the manner described above.
The Sponsor intends to qualify Units for sale in a number of states. Brokers,
dealers and others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
equal to _____% of the Public Offering Price per Unit.
For transactions involving unitholders of other unit investment trusts who
use their redemption or termination proceeds to purchase Units of the Trust, the
total concession or agency commission will equal _____% per Unit. For all
secondary market transactions the total concession or agency commission will
amount to 70% of the 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. The breakpoint concessions or agency commissions are also applied
on a Unit basis utilizing a breakpoint equivalent of $10 per Unit and will be
applied on whichever basis is more favorable to the broker, dealer or agent.
Broker-dealers of the Trust, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
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 Compensation. The Sponsor will receive a gross sales commission equal
to the total sales charge applicable to each transaction. Any sales charge
discount provided to investors will be borne by the selling dealer or agent. In
addition, the Sponsor will realize a profit or loss as a result of the
difference between the price paid for the Securities by the Sponsor and the cost
of the Securities to 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. The Sponsor may
realize profit or loss as a result of the possible fluctuations in the market
value of the Securities, since all proceeds received from purchasers of Units
are retained by the Sponsor. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the Sponsor's
business and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934.
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 or related securities. An affiliate
may act as a specialist or market maker 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. The Sponsor does not currently intend to maintain a market
for Units or to purchase Units at any secondary market repurchase price. A
Unitholder may, however, 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 Sponsor
of any tendered of Units for redemption. The Sponsor may purchase the Units not
later than the day on which Units would have been redeemed by the Trustee. If
the Sponsor decides to maintain a secondary market, the Sponsor may sell
repurchased Units at the secondary market Public Offering Price per Unit.
Tax-Sheltered Retirement Plans. Units are available for purchase in
connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The minimum
purchase for these accounts is reduced to 25 Units but may vary by selling firm.
The purchase of Units may be limited by the plans' provisions and does not
itself establish such plans.
RIGHTS OF UNITHOLDERS
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Distributions. Dividends and any net proceeds from the sale of Securities
received by the Trust will be distributed to Unitholders on each Distribution
Date to Unitholders of record on the preceding Record Date. These dates appear
under "Summary of Essential Financial Information". A person becomes a
Unitholder of record on the date of settlement (generally three business days
after Units are ordered). Unitholders may elect to receive distributions in cash
or to have distributions reinvested into additional Units. Distributions may
also be reinvested into Van Kampen mutual funds. See "Rights of
Unitholders--Reinvestment Option".
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. Proceeds received from the disposition of any Securities after a
record date and prior to the following distribution date will be held in the
Capital Account and not distributed until the next distribution date. Any
distribution to Unitholders consists of each Unitholder's pro rata share of the
available cash in the Income and Capital Accounts as of the related Record Date.
Reinvestment Option. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option (to the
extent Units may be lawfully offered for sale in the state in which the
Unitholder resides) through two options. Brokers and dealers can use the
Dividend Reinvestment Service through Depository Trust Company or purchase the
Automatic Reinvestment Option CUSIP. Unitholders will be subject to the
remaining deferred sales charge payments due on Units. To participate in this
reinvestment option, a Unitholder must file with the Trustee a written notice of
election, together with any certificate representing Units and other
documentation that the Trustee may then require, at least five days prior to the
related Record Date. A Unitholder's election will apply to all Units owned by
the Unitholder and will remain in effect until changed by the Unitholder. If
Units are unavailable for reinvestment, distributions will be paid in cash.
Purchases of additional Units made pursuant to the reinvestment plan will be
made at the net asset value for Units as of the Evaluation Time on the
Distribution Date.
In addition, under the Guaranteed Reinvestment Option Unitholders may elect
to have distributions automatically reinvested in certain Van Kampen mutual
funds (the "Reinvestment Funds"). Each Reinvestment Fund has investment
objectives which differ from those of the Trust. The prospectus relating to each
Reinvestment Fund describes its investment policies and how to begin
reinvestment. A Unitholder may obtain a prospectus for the Reinvestment Funds
from the Sponsor. Purchases of shares of a Reinvestment Fund will be made at a
net asset value computed on the Distribution Date. Unitholders with an existing
Guaranteed Reinvestment Option account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new
account which allows purchases of Reinvestment Fund shares at net asset value.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor, each Reinvestment Fund, and
its investment adviser shall have the right to suspend or terminate these
reinvestment plans at any time.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Trust business day, the date of tender is deemed
to be the next business day.
Unitholders tendering 1,000 or more Units of the Trust for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. The Trust generally does not offer in kind
distributions of portfolio securities that are held in foreign markets. An in
kind distribution will be made by the Trustee through the distribution of each
of the Securities in book-entry form to the account of the Unitholder's
broker-dealer at Depository Trust Company. Amounts representing fractional
shares will be distributed in cash. The Trustee may adjust the number of shares
of any Security included in a Unitholder's in kind distribution to facilitate
the distribution of whole shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of the Trust will be, and
the diversity of the Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
at the time of redemption. Special federal income tax consequences will result
if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit determined on the basis of (i)
the cash on hand in the Trust, (ii) the value of the Securities in the Trust and
(iii) dividends receivable on the Securities in the Trust trading ex-dividend as
of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust, (b) the accrued expenses of the
Trust and (c) any unpaid deferred sales charge payments. During the initial
offering period, the redemption price and the secondary market repurchase price
will include estimated organizational and offering costs. For these purposes,
the Evaluator may determine the value of the Securities in the following manner:
If the Securities are listed on a national or foreign securities exchange, this
evaluation is generally based on the closing sale prices on that exchange
(unless it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at the
closing bid prices. If the Securities are not so listed or, if so listed and the
principal market therefore is other than on the exchange, the evaluation may be
based on the current bid price on the over-the-counter market. If current bid
prices are unavailable or inappropriate, the evaluation may be determined (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
Securities on the bid side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate 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.
Special Redemption and Rollover. We currently intend to offer a subsequent
series of the Trust for a Rollover when the Trust terminates.
On the Mandatory Termination Date you will have the option to (1) participate
in the Rollover and have your Units reinvested into a subsequent trust series,
(2) receive an in kind distribution of Securities (if applicable) or (3) receive
a cash distribution.
If you elect to participate in the Rollover, your Units will be redeemed on
the Mandatory Termination Date. As the redemption proceeds become available, the
proceeds (including dividends) will be invested in a new trust series at the
public offering price for the new trust. The Trustee will attempt to sell
Securities to satisfy the redemption as quickly as practicable on the Mandatory
Termination Date. We do 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 impact 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.
We intend to make subsequent trust series available for sale at various times
during the year. Of course, we cannot 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. We cannot
guarantee that a 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. We may, in our sole discretion, modify a
Rollover or stop creating units of a trust at any time regardless of whether all
proceeds of Unitholders have been reinvested in a Rollover. If we decide not to
offer a subsequent series, Unitholders will be notified prior to the Mandatory
Termination Date. Cash which has not been reinvested in a Rollover will be
distributed to Unitholders shortly after the Mandatory Termination Date.
Rollover participants may receive taxable dividends or realize taxable capital
gains which are reinvested in connection with a Rollover but 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, no cash will be distributed to pay any
taxes. See "Taxation".
Certificates. Ownership of Units is evidenced in book-entry form unless a
Unitholder makes a written request to the Trustee that ownership be in
certificate form. Units are transferable by making a written request to the
Trustee and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not limited
to, trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Fractional certificates
will not be issued. The Trustee may require a Unitholder to pay a reasonable fee
for each certificate reissued or transferred and to pay any governmental charge
that may be imposed in connection with each transfer or interchange. Destroyed,
stolen, mutilated or lost certificates will be replaced upon delivery to the
Trustee of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Reports Provided. Unitholders will receive a statement of dividends and
other amounts received by the Trust for each distribution. Within a reasonable
time after the end of each year, each person who was a Unitholder during that
year will receive a statement describing dividends and capital received, actual
Trust distributions, Trust expenses, a list of the Securities and other Trust
information. Unitholders may obtain the Evaluator's evaluations of the
Securities upon request.
TRUST ADMINISTRATION
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Portfolio Administration. The Trust is not 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 having defaulted on
payment of any of its outstanding obligations or the price of a Security has
declined to such an extent or other credit factors exist so that in the opinion
of the Sponsor retention of the Security would be detrimental to the Trust. In
addition, the Trustee may sell Securities to redeem Units or pay Trust expenses
or deferred sales charges. The Trustee must reject any offer for securities or
property in exchange for the Securities. If securities or property are
nonetheless acquired by the Trust, the Sponsor may direct the Trustee to sell
the securities or property and distribute the proceeds to Unitholders or to
accept the securities or property for deposit in the Trust. Should any contract
for the purchase of any of the Securities fail, the Sponsor will (unless
substantially all of the moneys held in the Trust to cover the purchase are
reinvested in substitute Securities in accordance with the Trust Agreement)
refund the cash and sales charge attributable to the failed contract to all
Unitholders on or before the next distribution date.
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 dealers participating in the offering of Units. In addition, in
selecting among firms to handle a particular transaction, the Sponsor may take
into account whether the firm has sold or is selling units of unit investment
trusts which it sponsors.
Pursuant to an exemptive order, a terminating Trust is permitted to sell
Securities to a new trust series if those Securities meet the investment
strategy of the new trust. The exemption enables the Trust to eliminate
commission costs on these transactions. The price for those securities will be
the closing sale price on the sale date on the exchange where the Securities are
principally traded, as certified by the Sponsor.
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 nine business days before, and no later than, the Mandatory
Termination Date. Approximately thirty days before this date, the Trustee will
notify Unitholders of the termination and provide a form enabling qualified
Unitholders to elect an in kind distribution of Securities. See "Rights of
Unitholders--Redemption of Units". This form must be returned at least five
business days prior to the Mandatory Termination Date. Unitholders will receive
a final cash distribution within a reasonable time after the Mandatory
Termination Date (unless the Unitholder has elected an in kind distribution or
is a participant in the final Rollover). 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 Trusts. See "Additional Information".
Limitations on Liabilities. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability for taking any action or for refraining from taking any
action in good faith pursuant to the Trust Agreement, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad faith or gross
negligence (negligence in the case of the Trustee) in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder. The Trustee is not 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 liable for any action taken by it in good faith under the Trust
Agreement. The Trustee is not liable for any taxes or other governmental charges
imposed on the Securities, on it as Trustee under the Trust Agreement or on a
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee. The Trustee, Sponsor 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.
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. The Sponsor may from time to time in its
advertising and sales materials compare the then current estimated returns on
the Trust and returns over specified time periods on other similar Van Kampen
trusts or investment strategies utilized by the Trusts (which may show
performance net of expenses and charges which the Trust would have charged)
with returns on other taxable investments such as the common stocks comprising
the Dow Jones Industrial Average, the S&P 500, other investment indices,
corporate or U.S. government bonds, bank CDs, money market accounts or money
market funds, or with performance data from Lipper Analytical Services,
Inc., Morningstar Publications, Inc. or various publications, each of which
has characteristics that may differ from those of the Trust. Information on
percentage changes in the dollar value of Units may be included from time
to time in advertisements, sales literature, reports and other information
furnished to current or prospective Unitholders. Total return figures may not
be averaged and may not reflect deduction of the sales charge, which would
decrease return. No provision is made for any income taxes payable. Past
performance may not be indicative of future results. The Trust portfolio
is not managed and Unit price and return fluctuate with the value of common
stocks in the 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 any deferred sales charge imposed. Unitholders will be taxed in this
manner regardless of whether distributions from the Trust are actually received
by the Unitholder or are 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 Rollover Unitholder should be aware that a Rollover 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 Fund") 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 the New
Fund 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. However, any gains incurred in connection with such an
exchange by a Rollover Unitholder would be recognized. Unitholders should
consult their tax advisers 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. 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 any deferred sales charge
imposed.
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.
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.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Unitholders should consult their tax advisers regarding the limitation on
deductibility of Trust expenses.
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 (although
losses incurred by Rollover Unitholders may be subject to disallowance, as
discussed above). The Internal Revenue Service Restructuring and Reform Act of
1998 (the "1998 Tax Act") provides that for taxpayers other than corporations,
net capital gain (which is defined as net long-term capital gain over net
short-term capital loss for the taxable year) realized from property (with
certain exclusions) is subject to a maximum marginal stated tax rate of 20% (10%
in the case of certain taxpayers in the lowest tax bracket). Capital gain or
loss is long-term if the holding period for the asset is more than one year, and
is short-term if the holding period for the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for purposes
for determining the holding period of the Unit. Capital gains realized from
assets held for one year or less are taxed at the same rates as ordinary income.
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 certain Securities in the Trust. A
Unitholder may also under certain circumstances request an in kind distribution
of certain Securities in the Trust upon the termination of the Trust. A
Unitholder will receive cash representing his pro rata portion of the foreign
Securities in the Trust. See "Rights of Unitholders--Redemption of UnitsThe
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 or for a foreign 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 or such foreign 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.
Rollover Unitholders. As discussed in "Rights of Unitholders--Special
Redemption and Rollover," a Unitholder may elect to become a Rollover
Unitholder. To the extent a Rollover Unitholder exchanges his Units for Units of
the New Fund 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 the New
Fund 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. Rollover Unitholders are
advised to consult their tax advisers.
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.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporation for a three-year period ending with the close
of its taxable year preceding payment was not effectively connected to the
conduct of a trade or business within the United States. In addition, such
earnings may be exempt from U.S. withholding pursuant to a specific treaty
between the United States and a foreign country. Non-U.S. Unitholders should
consult their own tax advisers regarding the imposition of U.S. withholding on
distributions from a Trust.
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.
The 1997 Tax Act imposes a required holding period for such credits. Investors
should consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of 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 to the Fund for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unitholders under the existing income tax
laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
in the Trust that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S.
Unitholder in paragraph (a) but whose income from a Unit is effectively
connected with such Unitholder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States whose income
and gain on the Units will be taxable. Unitholders should consult their tax
advisers regarding potential foreign, state or local taxation with respect to
the Units.
TRUST OPERATING EXPENSES
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Compensation of Sponsor, Supervisor and Evaluator. The Sponsor will not
receive any fees in connection with its activities relating to the Trust.
However, the Supervisor and Evaluator, which are affiliates of the Sponsor, will
receive the annual fee for portfolio supervisory and evaluation services set
forth in the "Fee Table". These fees may exceed the actual costs of providing
these services to the Trust but at no time will the total amount received for
supervisory and evaluation services rendered to all Van Kampen unit investment
trusts in any calendar year exceed the aggregate cost of providing these
services in that year.
Trustee's Fee. For its services the Trustee will receive the fee from the
Trust set forth in the "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 since these Accounts are non-interest
bearing to Unitholders and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds.
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the Trust,
(b) fees of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any action
taken by the Trustee to protect the Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities held in the Trust
portfolio and (i) expenditures incurred in contacting Unitholders upon
termination of the Trust. The Trust wil also pay a license fee to the Harry S.
Dent Foundation for use of certain trademarks.
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 of the Trust. When these amounts are paid by or owing to the Trustee,
they are secured by a lien on the Trust's portfolio. It is expected that
Securities will be sold to pay these amounts which will result in capital gains
or losses to Unitholders. See "Taxation". The Supervisor's, Evaluator's and
Trustee's fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index or, if this category is not published,
in a comparable category.
OTHER MATTERS
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Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
Independent Certified Public Accountants. The statement of condition and the
related portfolio included in this Prospectus have been audited by Grant
Thornton LLP, independent certified public accountants, as set forth in their
report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
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This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Trust with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Trust. The Information Supplement may be obtained by contacting the
Trustee at (800) 856-8487 or is available along with other related materials at
the SEC's internet site (http://www.sec.gov).
TABLE OF CONTENTS
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Title Page
Summary of Essential Financial Information.. 2
Fee Table................................... 3
The Roaring 2000sTM Trust .................. 4
Notes to Portfolio.......................... 5
The Securities.............................. 6
Report of Independent Certified
Public Accountants....................... 9
Statement of Condition ..................... 10
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-9
Taxation.................................... A-11
Trust Operating Expenses.................... A-15
Other Matters............................... A-16
Additional Information...................... A-16
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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 future
Trusts 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 future Trusts 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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March _____ , 1999
The Roaring 2000sTM Trust, Series 1
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Please retain this prospectus for future
reference.
Van Kampen
Information Supplement
Van Kampen Focus Portfolios, Series 139
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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. You
should read this Information Supplement in conjunction with the Prospectus. This
Information Supplement is not a prospectus. It does not include all of the
information that you should consider before investing in the Trust. This
Information Supplement may not be used to offer or sell Units without the
Prospectus. You can obtain copies of the Prospectus by contacting the Sponsor at
One Parkview Plaza, Oakbrook Terrace, Illinois 60181 or by contacting your
broker. This Information Supplement is dated as of the date of the Prospectus.
All capitalized terms have been defined in the Prospectus.
Table of Contents
Page
Risk Factors 2
The Trust 3
Sponsor Information 4
Trustee Information 5
Trust Termination 5
RISK FACTORS
Price Volatility. Because the Trust invests in stocks of foreign companies,
you should understand the risks of investing in 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. 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 a 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. Stocks represent ownership interests in a company and are not
obligations of the company. 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.
Foreign Stocks. Because the Trust invests in foreign stocks, it involves
additional risks that differ from an investment in domestic stocks. Investments
in foreign securities may involve a greater degree of risk than those in
domestic securities. There is generally less publicly available information
about foreign companies in the form of reports and ratings similar to those that
are published about issuers in the United States. Also, foreign issuers are
generally not subject to uniform accounting, auditing and financial reporting
requirements comparable to those applicable to United States issuers. With
respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation,
nationalization or confiscatory taxation, limitations on the removal of funds or
other assets of the Trust, political or social instability, or diplomatic
developments which could affect United States investments in those countries.
Moreover, industrial foreign economies may differ favorably or unfavorably from
the United States' economy in terms of growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Foreign securities markets are generally not as developed or
efficient as those in the United States. While growing in volume, they usually
have substantially less volume than the New York Stock Exchange, and securities
of some foreign issuers are less liquid and more volatile than securities of
comparable United States issuers. Fixed commissions on foreign exchanges are
generally higher than negotiated commissions on United States exchanges. There
is generally less government supervision and regulation of securities exchanges,
brokers and listed issuers than in the United States.
Foreign Currencies. The Trust also involves the risk that fluctuations in
exchange rates between the U.S. dollar and foreign currencies may negatively
affect the value of the stocks. For example, if a foreign stock rose 10% in
price but the U.S. dollar gained 5% against the related foreign currency, a U.S.
investor's return would be reduced to about 5%. This is because the foreign
currency would "buy" fewer dollars or, conversely, a dollar would buy more of
the foreign currency. Many foreign currencies have fluctuated widely against the
U.S. dollar for a variety of reasons such as supply and demand of the currency,
investor perceptions of world or country economies, political instability,
currency speculation by institutional investors, changes in government policies,
buying and selling of currencies by central banks of countries, trade balances
and changes in interest rates. The Trust's foreign currency transactions will be
conducted with foreign exchange dealers acting as principals on a spot (i.e.,
cash) buying basis. These dealers realize a profit based on the difference
between the price at which they buy the currency (bid price) and the price at
which they sell the currency (offer price). The Evaluator will estimate the
currency exchange rates based on current activity in the related currency
exchange markets, however, due to the volatility of the markets and other
factors, the estimated rates may not be indicative of the rate the Trust might
obtain had the Trustee sold the currency in the market at that time.
Liquidity. Whether or not the stocks in the Trust are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
Additional Units. The Sponsor may create additional Units of the Trust by
depositing into the Trust additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Trust will pay brokerage fees.
Voting. Only the Trustee may sell or vote the stocks in the Trust. While
you may sell or redeem your Units, you may not sell or vote the stocks in your
Trust. The Sponsor will instruct the Trustee how to vote the stocks. The Trustee
will vote the stocks in the same general proportion as shares held by other
shareholders if the Sponsor fails to provide instructions.
Year 2000. The Trust could be negatively impacted if computer systems used
by the Sponsor, Evaluator, Supervisor or Trustee or other service providers to
the Trusts do not properly process date-related information after January 1,
2000. This is commonly known as the "Year 2000 Problem". The Sponsor, Evaluator,
Supervisor and Trustee are taking steps to address this problem and to obtain
reasonable assurances that other service providers to the Trust are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trust. This problem is expected to impact
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. We cannot predict what impact, if any,
this problem will have on the issuers of stocks in the Trust.
THE TRUST
The Roaring 2000sTM is the exclusive property of The H.S. Dent Foundation.
The Roaring 2000sTM is a trademark of the H.S. Dent Foundation and has been
licensed for use by Van Kampen Funds Inc.
This fund is not sponsored, endorsed, sold or promoted by the H.S. Dent
Foundation. The H.S. Dent Foundation makes no representation or warranty,
express or implied, to the owners of this fund or any member of the public
regarding the advisability of investing in funds generally or in this fund
particularly. The H.S. Dent Foundation is the licensor of certain trademarks,
service marks and trade names of the H.S. Dent Foundation. The H.S. Dent
Foundation is not responsible for and has not participated in the determination
of the timing of, prices at, or quantities of this fund to be issued. The H.S.
Dent Foundation has no obligation or liability to owners of this fund in
connection with the administration, marketing or trading of this fund.
NEITHER THE H.S. DENT FOUNDATION NOR ANY OTHER RELATED PARTY GUARANTEES THE
ACCURACY AND/OR THE COMPLETENESS OF ANY DATA INCLUDED THEREIN. NEITHER THE H.S.
DENT FOUNDATION NOR ANY OTHER RELATED PARTY MAKES ANY WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND
COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF ANY DATA INCLUDED HEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR
FOR ANY OTHER USE. NEITHER THE H.S. DENT FOUNDATION NOR ANY OTHER RELATED PARTY
MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND THE H.S. DENT FOUNDATION HEREBY
EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO ITS TRADEMARKS. WITHOUT LIMITING ANY OF THE
FORE-GOING, IN NO EVENT SHALL THE H.S. DENT FOUNDATION OR ANY OTHER RELATED
PARTY HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
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 the 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 the 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 will begin to be sold in
connection with the termination of the Trust. The Sponsor will determine the
manner, timing and execution of the sales of the 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 Trust and in the case of the Trust will
include with such notice a form to enable Unitholders owning 1,000 or more Units
to request an in kind distribution of the U.S.-traded 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 U.S.-traded
Securities in the Trust to the account of the broker-dealer or bank designated
by the Unitholder at Depository Trust Company. A Unitholder electing an in kind
distribution will not receive a distribution of shares of the foreign
exchange-traded Securities but will instead receive cash representing his pro
rata portion of such Securities. The value of the Unitholder's fractional shares
of the Securities will be paid in cash. Unitholders with less than 1,000 Units,
Unitholders in the Trust with 1,000 or more Units not requesting an in kind
distribution and Unitholders who do not elect the Rollover Option 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 a Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. The Trustee will then distribute to the Unitholder of the
Trust his pro rata share of the balance of the Income and Capital Accounts of
the Trust.
The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent series of the Trust pursuant to the Rollover Option. There
is, however, no assurance that units of any new series of the Trust will be
offered for sale at that time, or if offered, that there will be sufficient
units available for sale to meet the requests of any or all Unitholders.
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 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 Proposed form of Trust Agreement (to be supplied by amendment).
3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).
3.2 Opinion and consent of counsel as to New York tax status of securities
being registered (to be supplied by amendment).
4.1 Consent of Interactive Data Corporation (to be supplied by amendment).
4.2 Consent of Grant Thornton LLP (to be supplied by amendment).
The information in this prospectus is not complete and may be changed. No
person may sell Units of the Trusts until the registration statement filed with
the Securities and Exchange Commission 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 139 has duly caused this
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 6th day of
January, 1999.
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 139
(Registrant)
By VAN KAMPEN FUNDS INC.
(Depositor)
Gina Costello______________________________
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 6, 1999 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 Costello (Attorney-in-fact*)
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*An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of Van Kampen American Capital Equity Opportunity Trust,
Series 64 (File No. 333-33087) Van Kampen American Capital Equity Opportunity
Trust, Series 87 (File No. 333-44581) and the same are hereby incorporated
herein by this reference.
