File No. 333-83001 CIK #1025320
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 1 to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen Focus Portfolios, Series 168
(Exact Name of Trust)
Van Kampen Funds Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on November 22, 2000 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 168
THE DOW 30SM INDEX TRUST, SERIES 8
THE DOW 30SM INDEX & TREASURY TRUST, SERIES 10
--------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part I of this Prospectus may not be distributed unless accompanied
by Part II.
Please retain both parts of this Prospectus for future reference.
--------------------------------------------------------------------------------
THE TRUST
Van Kampen Focus Portfolios, Series168 includes the separate underlying
unit investment trusts described above (the "Trusts"). Each Trust seeks to
increase the value of your investment and provide dividend income by investing
in a diversified portfolio of stocks. The Dow 30SM Index & Treasury Trust also
seeks to preserve capital by investing a portion of its portfolio in U.S.
Treasury obligations.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THE
UNITS OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 22, 2000
VAN KAMPEN
FOCUS PORTFOLIOSSM
A DIVISION OF VAN KAMPEN FUNDS INC.
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 168
THE DOW 30SM INDEX TRUST, SERIES 8
THE DOW 30SM INDEX & TREASURY TRUST, SERIES 10
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF SEPTEMBER 5, 2000
SPONSOR: VAN KAMPEN FUNDS INC.
SUPERVISOR: VAN KAMPEN INVESTMENT ADVISORY CORP.
(AN AFFILIATE OF THE SPONSOR)
EVALUATOR: AMERICAN PORTFOLIO EVALUATION SERVICES
(A DIVISION OF AN AFFILIATE OF THE SPONSOR)
TRUSTEE: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
THE DOW
THE DOW 30SM INDEX
30SM INDEX & TREASURY
TRUST TRUST
---------------- ----------------
GENERAL INFORMATION
<S> <C> <C>
Number of Units 1,530,414.561 136,816.071
Fractional Undivided Interest in Trust per Unit 1/1,530,414.561 1/136,816.071
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 15,112,822.35 $ 1,403,404.75
Aggregate Value of Securities per Unit (including accumulated dividends) $ 9.8750 $ 10.2576
Sales Charge 4.00% ( 4.167% of Aggregate Value of Securities excluding
principal cash) for the Dow 30SM Index Trust and 4.20% (4.384% of
Aggregate Value of Securities excluding principal cash) for the Dow 30SM
Index & Treasury Trust per Unit(3) $ .4097 $ .4486
Public Offering Price per Unit (2) $ 10.2847 $ 10.7062
Redemption Price per Unit $ 9.8750 $ 10.2576
Secondary Market Repurchase Price per Unit $ 9.8750 $ 10.2576
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .4097 $ .4486
Mandatory Termination Dates August 3, 2004 August 15, 2013
<CAPTION>
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock Exchange
Initial Date of Deposit August 3, 1999
Minimum Termination Value................. The Trust may be terminated if the
net asset value of such Trust is less than $500,000 unless the net asset value
of such Trust deposits has exceeded $15,000,000, then the Trust Agreement may be
terminated if the net asset value of such Trust is less than $3,000,000.
<S> <C> <C>
Estimated Net Annual Dividends per Unit $ .15361 $ .0876
</TABLE>
Trustee's Annual fee $.008 per Unit
<TABLE>
<CAPTION>
<S> <C>
Income Distribution Record Date..................... TENTH day of March, June, September and December.
Income Distribution Date............................ TWENTY-FIFTH day of March, June, September and December.
Capital Account Record Date......................... TENTH day of March, June, September and December.
Capital Account Distribution Date................... TWENTY-FIFTH day of March, June, September and December.
</TABLE>
--------------------------------------------------------------------------------
(1)Equity Securities are valued at the closing sale price, or if no such price
exists, at the closing bid price thereof.
(2)Anyone ordering Units will have added to the Public Offering Price a pre
rata share of any cash in the Income and Capital Accounts.
(3)Effective on each August 3, the secondary sales charge will decrease by .3
of 1% to a minimum sales charge of 1.5%.
THE DOW 30SM INDEX TRUST, SERIES 8
PER UNIT INFORMATION
<TABLE>
<CAPTION>
2000 (1)
------------
<S> <C>
Net asset value per Unit at beginning of period........................................................ $ 9.90
============
Net asset value per Unit at end of period.............................................................. $ 9.30
============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)..................................... $ 0.13
============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)...................................................................... $ --
============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).... $ (0.49)
============
Distributions of investment income by frequency of payment
Quarterly........................................................................................... $ 0.13
Units outstanding at end of period..................................................................... 1,559,381
--------------------------------------------------------------------------------
(1) For the period from August 3, 1999 (date of deposit) through July 31,
2000.
<CAPTION>
THE DOW 30SM INDEX & TREASURY TRUST, SERIES 10
PER UNIT INFORMATION
2000 (1)
------------
<S> <C>
Net asset value per Unit at beginning of period........................................................ $ 9.40
============
Net asset value per Unit at end of period.............................................................. $ 9.71
============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)..................................... $ 0.08
============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)...................................................................... $ --
============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).... $ 0.31
============
Distributions of investment income by frequency of payment
Quarterly........................................................................................... $ 0.07
Units outstanding at end of period..................................................................... 146,252
--------------------------------------------------------------------------------
(1) For the period from August 3, 1999 (date of deposit) through July 31,
2000.
</TABLE>
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 168 (THE DOW 30SM INDEX TRUST, SERIES 8 AND THE
DOW 30SM INDEX & TREASURY TRUST, SERIES 10):
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of Van Kampen Focus
Portfolios, Series 168 (The Dow 30SM Index Trust, Series 8 and The Dow 30SM
Index & Treasury Trust, Series 10) as of July 31, 2000 and the related
statements of operations and changes in net assets for the period from August 3,
1999 (date of deposit) through July 31, 2000. These statements are the
responsibility of the Trustee and the Sponsor. Our responsibility is to express
an opinion on such statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at July 31,
2000 by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and the
Sponsor, as well as evaluating the overall financial statement presentation. We
believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen Focus Portfolios,
Series 168 (The Dow 30SM Index Trust, Series 8 and The Dow 30SM Index & Treasury
Trust, Series 10) as of July 31, 2000 and the results of operations and changes
in net assets for the period from August 3, 1999 (date of deposit) through July
31, 2000, in conformity with accounting principles generally accepted in the
United States of America.
GRANT THORNTON LLP
Chicago, Illinois
September 15, 2000
<TABLE>
<CAPTION>
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 168
STATEMENTS OF CONDITION
JULY 31, 2000
THE DOW
THE DOW 30SM INDEX
30SM INDEX & TREASURY
TRUST TRUST
------------------- -----------------
Trust property
<S> <C> <C>
Cash $ -- $ --
Securities at market value, (cost $15,304,207 and $1,376,650) (note 1) 14,541,412 1,422,428
Accumulated dividends 10,069 419
Receivables for securities sold 519,268 --
------------------- -----------------
$ 15,070,749 $ 1,422,847
=================== =================
Liabilities and interest to Unitholders
Cash Overdraft $ 51,001 $ 2,831
Redemptions payable -- --
Payable for securities purchased 514,381 --
Interest to Unitholders 14,505,367 1,420,016
------------------- -----------------
$ 15,070,749 $ 1,422,847
=================== =================
ANALYSES OF NET ASSETS
Interest of Unitholders (1,559,381 and 146,252 Units of fractional
undivided interest outstanding)
Cost to original investors of 1,845,470 and 242,394 Units (note 1) $ 19,138,696 $ 2,461,049
Less initial underwriting commission (note 3) 896,653 153,996
------------------- -----------------
18,242,043 2,307,053
Less redemption of 286,089 and 96,142 Units 2,703,996 913,861
------------------- -----------------
15,538,047 1,393,192
(Overdistributed) Undistributed net investment income
Net Investment Income 164,818 8,124
Less distributions to Unitholders 198,397 15,003
------------------- -----------------
(33,579) (6,879)
Realized gain (loss) on Securities sale 333,166 (12,075)
Unrealized appreciation (depreciation) of Securities (note 2) (762,795) 45,778
Distributions to Unitholders of Security sale proceeds -- --
Deferred sales charge (569,472) --
------------------- -----------------
Net asset value to Unitholders $ 14,505,367 $ 1,420,016
=================== =================
Net asset value per Unit (1,559,381 and 146,252 Units outstanding) $ 9.30 $ 9.71
=================== =================
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE DOW 30SM INDEX TRUST, SERIES 8
STATEMENTS OF OPERATIONS
PERIOD FROM AUGUST 3, 1999 (DATE OF DEPOSIT) THROUGH JULY 31, 2000
2000
--------------
Investment income
<S> <C>
Dividend income.................................................................................. $ 227,938
Expenses
Trustee fees and expenses..................................................................... 18,358
Evaluator fees................................................................................ 3,312
Organizational fees........................................................................... 38,112
Supervisory fees.............................................................................. 3,338
--------------
Total expenses............................................................................. 63,120
--------------
Net investment income......................................................................... 164,818
Realized gain (loss) for Securities sale
Proceeds......................................................................................... 7,674,495
Cost............................................................................................. 7,341,329
--------------
Realized gain (loss).......................................................................... 333,166
Net change in unrealized appreciation (depreciation) of Securities.................................. (762,795)
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ (264,811)
==============
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD FROM AUGUST 3, 1999 (DATE OF DEPOSIT) THROUGH JULY 31, 2000
2000
--------------
Increase (decrease) in net assets Operations:
Net investment income............................................................................ $ 164,818
Realized gain (loss) on Securities............................................................... 333,166
Net change in unrealized appreciation (depreciation) of Securities............................... (762,795)
--------------
Net increase (decrease) in net assets resulting from operations............................... (264,811)
Distributions to Unitholders from:
Net investment income............................................................................ (198,397)
Security sale proceeds........................................................................... --
Redemption of Units.............................................................................. (2,703,996)
Deferred sales charge............................................................................ (569,472)
--------------
Total increase (decrease)..................................................................... (3,736,676)
Net asset value to Unitholders
Beginning of period.............................................................................. 139,808
Additional Securities purchased from the proceeds of Unit Sales.................................. 18,102,235
--------------
End of period (including (overdistributed) undistributed net investment income of $(33,579))..... $ 14,505,367
==============
The accompanying notes are an integral part of these statements.
<CAPTION>
THE DOW 30SM INDEX & TREASURY TRUST, SERIES 10
STATEMENTS OF OPERATIONS
PERIOD FROM AUGUST 3, 1999 (DATE OF DEPOSIT) THROUGH JULY 31, 2000
2000
--------------
Investment income
<S> <C>
Dividend income.................................................................................. $ 16,580
Expenses
Trustee fees and expenses..................................................................... 3,204
Evaluator fees................................................................................ 429
Organizational fees........................................................................... 4,389
Supervisory fees.............................................................................. 434
--------------
Total expenses............................................................................. 8,456
--------------
Net investment income......................................................................... 8,124
Realized gain (loss) for Securities sale
Proceeds......................................................................................... 919,986
Cost............................................................................................. 932,061
--------------
Realized gain (loss).......................................................................... (12,075)
Net change in unrealized appreciation (depreciation) of Securities.................................. 45,778
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ 41,827
==============
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD FROM AUGUST 3, 1999 (DATE OF DEPOSIT) THROUGH JULY 31, 2000
2000
--------------
Increase (decrease) in net assets Operations:
Net investment income............................................................................ $ 8,124
Realized gain (loss) on Securities............................................................... (12,075)
Net change in unrealized appreciation (depreciation) of Securities............................... 45,778
--------------
Net increase (decrease) in net assets resulting from operations............................... 41,827
Distributions to Unitholders from:
Net investment income............................................................................ (15,003)
Security sale proceeds........................................................................... --
Redemption of Units.............................................................................. (913,861)
Deferred sales charge............................................................................ --
--------------
Total increase (decrease)..................................................................... (887,037)
Net asset value to Unitholders
Beginning of period.............................................................................. 140,614
Additional Securities purchased from the proceeds of Unit Sales.................................. 2,166,439
--------------
End of period (including (overdistributed) undistributed net investment income of $(6,879))...... $ 1,420,016
==============
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE DOW 30SM INDEX TRUST, SERIES 8 PORTFOLIO AS OF JULY 31, 2000
--------------------------------------------------------------------------------------------------------------------------
VALUATION OF
NUMBER MARKET VALUE SECURITIES
OF SHARES NAME OF ISSUER PER SHARE (NOTE 1)
--------------- ------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
8,320 Alcoa, Incorporated $ 30.2500 $ 251,680
--------------------------------------------------------------------------------------------------------------------------
8,320 American Express Company 56.6875 471,640
--------------------------------------------------------------------------------------------------------------------------
8,320 AT&T Corporation 30.9375 257,400
--------------------------------------------------------------------------------------------------------------------------
8,320 Boeing Company 49.0000 407,680
--------------------------------------------------------------------------------------------------------------------------
8,320 Caterpillar, Incorporated 34.0625 283,400
--------------------------------------------------------------------------------------------------------------------------
8,320 Citigroup, Incorporated 70.5625 587,080
--------------------------------------------------------------------------------------------------------------------------
8,320 Coca Cola Company 61.3125 510,120
--------------------------------------------------------------------------------------------------------------------------
8,320 DuPont (E.I.) de Nemours and Company 45.3125 377,000
--------------------------------------------------------------------------------------------------------------------------
8,320 Eastman Kodak Company 54.8750 456,560
--------------------------------------------------------------------------------------------------------------------------
8,320 Exxon Mobil Corporation 80.0000 665,600
--------------------------------------------------------------------------------------------------------------------------
8,320 General Electric Company 51.4375 427,960
--------------------------------------------------------------------------------------------------------------------------
8,320 General Motors Corporation 56.9375 473,720
--------------------------------------------------------------------------------------------------------------------------
8,320 Hewlett-Packard Company 109.1875 908,440
--------------------------------------------------------------------------------------------------------------------------
8,320 Home Depot Incorporated 51.7500 430,560
--------------------------------------------------------------------------------------------------------------------------
8,320 Honeywell International 33.6250 279,760
--------------------------------------------------------------------------------------------------------------------------
8,320 Intel Corporation 66.7500 555,360
--------------------------------------------------------------------------------------------------------------------------
8,320 International Business Machines Corporation 112.4375 935,480
--------------------------------------------------------------------------------------------------------------------------
8,320 International Paper Company 34.0000 282,880
--------------------------------------------------------------------------------------------------------------------------
5,349 J.P. Morgan & Company, Incorporated 133.5000 714,092
--------------------------------------------------------------------------------------------------------------------------
8,320 Johnson & Johnson 93.0625 774,280
--------------------------------------------------------------------------------------------------------------------------
8,320 McDonald's Corporation 31.5000 262,080
--------------------------------------------------------------------------------------------------------------------------
8,320 Merck & Company, Incorporated 71.6875 596,440
--------------------------------------------------------------------------------------------------------------------------
8,320 Microsoft Corporation 69.8125 580,840
--------------------------------------------------------------------------------------------------------------------------
8,320 Minnesota Mining and Manufacturing Company 90.0625 749,320
--------------------------------------------------------------------------------------------------------------------------
8,320 Philip Morris Companies, Incorporated 25.2500 210,080
--------------------------------------------------------------------------------------------------------------------------
8,320 Proctor & Gamble Company 56.8750 473,200
--------------------------------------------------------------------------------------------------------------------------
8,320 SBC Communications 42.5625 354,120
--------------------------------------------------------------------------------------------------------------------------
8,320 United Technologies Corporation 58.3750 485,680
--------------------------------------------------------------------------------------------------------------------------
8,320 Wal-Mart Stores, Incorporated 54.9375 457,080
--------------------------------------------------------------------------------------------------------------------------
8,320 Walt Disney Company 38.6875 321,880
--------------- ---------------
246,629 $ 14,541,412
=============== ===============
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
THE DOW 30SM INDEX & TREASURY TRUST, SERIES 10 PORTFOLIO AS OF JULY 31, 2000
--------------------------------------------------------------------------------------------------------------------------
VALUATION OF
NUMBER MARKET VALUE SECURITIES
OF SHARES NAME OF ISSUER PER SHARE (NOTE 1)
--------------- ------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C>
132 Agilent Technologies Incorporated $ 40.7500 $ 5,379
--------------------------------------------------------------------------------------------------------------------------
692 Alcoa, Incorporated 30.2500 20,933
--------------------------------------------------------------------------------------------------------------------------
1,038 American Express Company 56.6875 58,842
--------------------------------------------------------------------------------------------------------------------------
346 AT&T Corporation 30.9375 10,704
--------------------------------------------------------------------------------------------------------------------------
346 Boeing Company 49.0000 16,954
--------------------------------------------------------------------------------------------------------------------------
346 Caterpillar, Incorporated 34.0625 11,786
--------------------------------------------------------------------------------------------------------------------------
346 Chevron Corporation 79.0000 27,334
--------------------------------------------------------------------------------------------------------------------------
346 Citigroup, Incorporated 70.5625 24,415
--------------------------------------------------------------------------------------------------------------------------
346 Coca Cola Company 61.3125 21,214
--------------------------------------------------------------------------------------------------------------------------
346 DuPont (E.I.) de Nemours and Company 45.3125 15,678
--------------------------------------------------------------------------------------------------------------------------
346 Eastman Kodak Company 54.8750 18,987
--------------------------------------------------------------------------------------------------------------------------
346 Exxon Mobil Corporation 80.0000 27,680
--------------------------------------------------------------------------------------------------------------------------
1,092 General Electric Company 51.4375 56,170
--------------------------------------------------------------------------------------------------------------------------
346 General Motors Corporation 56.9375 19,700
--------------------------------------------------------------------------------------------------------------------------
346 Goodyear Tire & Rubber Company 19.9375 6,898
--------------------------------------------------------------------------------------------------------------------------
346 Hewlett-Packard Company 109.1875 37,779
--------------------------------------------------------------------------------------------------------------------------
346 Honeywell International 33.6250 11,634
--------------------------------------------------------------------------------------------------------------------------
346 International Business Machines Corporation 112.4375 38,903
--------------------------------------------------------------------------------------------------------------------------
346 International Paper Company 34.0000 11,764
--------------------------------------------------------------------------------------------------------------------------
346 J.P. Morgan & Company, Incorporated 133.5000 46,191
--------------------------------------------------------------------------------------------------------------------------
346 Johnson & Johnson 93.0625 32,200
--------------------------------------------------------------------------------------------------------------------------
346 McDonald's Corporation 31.5000 10,899
--------------------------------------------------------------------------------------------------------------------------
346 Merck & Company, Incorporated 71.6875 24,804
--------------------------------------------------------------------------------------------------------------------------
346 Minnesota Mining and Manufacturing Company 90.0625 31,162
--------------------------------------------------------------------------------------------------------------------------
346 Philip Morris Companies, Incorporated 25.2500 8,735
--------------------------------------------------------------------------------------------------------------------------
346 Proctor & Gamble Company 56.8750 19,679
--------------------------------------------------------------------------------------------------------------------------
346 Sears Roebuck & Company 29.8750 10,337
--------------------------------------------------------------------------------------------------------------------------
346 Union Carbide Corporation 44.8125 15,505
--------------------------------------------------------------------------------------------------------------------------
346 United Technologies Corporation 58.3750 20,198
--------------------------------------------------------------------------------------------------------------------------
346 Wal-Mart Stores, Incorporated 54.9375 19,008
--------------------------------------------------------------------------------------------------------------------------
346 Walt Disney Company 38.6875 13,386
--------------- ---------------
12,296 $ 694,858
=============== ===============
MATURITY
VALUE NAME OF ISSUER AND TITLE OF SECURITY
$ 1,609,000 "Zero coupon" U.S. Treasury bonds maturing August 15, 2013 $ 727,570
=============== ---------------
$ 1,422,428
===============
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 168
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
--------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities are valued at the last closing sales price
or, if no such price exists, at the closing bid price thereof. Treasury
Obligations are valued at the closing bid price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange on the closing sale
prices on the exchange or the closing asked prices if not listed. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as described
in Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Each Unitholder of the Dow 30SM Index & Treasury Trust
is considered to be the owner of a pro rata portion of the trust and,
accordingly, no provision has been made for Federal Income Taxes. The Dow 30SM
Index Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under the
Internal Revenue Code (the "Code"). If the Trust so qualifies and timely
distributes to Unitholders 90% or more of its taxable income (without regard to
its net capital gain, i.e. , the excess of its net long-term capital gain over
its net short-term capital loss), it will not be subject to federal income tax
on the portion of its taxable income (including any net capital gain) that it
distributes to Unitholders.
Distributions to Unitholders of such Trust's taxable income will be taxable
as ordinary or capital income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at July 31, 2000 is as follows:
THE DOW
THE DOW 30SM INDEX
30SM INDEX & TREASURY
TRUST TRUST
---------------- ----------------
Unrealized Appreciation $ 931,397 $ 138,248
Unrealized Depreciation (1,694,192) (92,470)
---------------- ----------------
$ (762,795) $ 45,778
================ ================
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities in
the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such units to the Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus an amount equal to the difference between the maximum sales
charge of 4.5% of the public offering price which is equivalent to 4.712% of the
aggregate underlying value of the Securities for the Dow 30SM Index Trust and
4.4% of the public offering price which is equivalent to 4.603% of the aggregate
underlying value of the Securities for the Dow 30SM Index & Treasury Trust.
Effective August 3, commencing August 3, 2000, the secondary sales charge will
decrease by .3 of 1% to a minimum sales charge of 1.50%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
Units were presented for redemption as follows:
PERIOD ENDED
JULY 31, 2000
--------------------
The Dow 30SM Index Trust 286,089
The Dow 30SM Index & Treasury Trust 96,142
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
THE DOW 30SM INDEX TRUST
THE DOW 30SM INDEX & TREASURY TRUST
PROSPECTUS PART II
YOU SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
THIS PROSPECTUS IS DATED AS OF THE DATE OF THE PROSPECTUS PART I ACCOMPANYING
THIS PROSPECTUS PART II.
--------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved of the
Units or passed upon the adequacy or accuracy of this prospectus.
Any contrary representation is a criminal offense.
THE TRUSTS
--------------------------------------------------------------------------------
The Trusts were created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the Initial
Date of Deposit, among Van Kampen Funds Inc., as Sponsor, Van Kampen Investment
Advisory Corp., as Supervisor, The Bank of New York, as Trustee, and American
Portfolio Evaluation Services, a division of Van Kampen Investment Advisory
Corp., as Evaluator.
The Trusts offer investors the opportunity to purchase Units representing
proportionate interests in portfolios of actively traded securities. A Trust may
be an appropriate medium for investors who desire to participate in a portfolio
of securities 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 Trusts. Unless otherwise terminated as
provided in the Trust Agreement, the Trusts will terminate on the Mandatory
Termination Date and any remaining Securities will be liquidated or distributed
by the Trustee within a reasonable time. As used in this Prospectus the term
"Securities" means the securities (including contracts to purchase these
securities) listed in "Portfolio" in Part One for each Trust and any additional
securities deposited into each Trust.
Additional Units of a 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 a 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 a 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 (or percentage of par value) 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 Trusts will pay the associated brokerage or acquisition fees.
Each Unit of a Trust initially offered represents an undivided interest in
that 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 that 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.
Each Trust consists of (a) the Securities (including contracts for the
purchase thereof) listed under the applicable "Portfolio" in Part One as may
continue to be held from time to time in the Trust, (b) any additional
Securities acquired and held by the Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the related Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Securities.
OBJECTIVES AND SECURITIES SELECTION
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Each Trust seeks to increase the value of your investment and provide
dividend income by investing in a diversified portfolio of stocks. The Dow 30SM
Index & Treasury Trust also seeks to preserve capital by investing a portion of
its portfolio in U.S. Treasury obligations. We cannot guarantee that a Trust
will achieve its objective.
THE DOW 30SM INDEX TRUST. The Trust seeks to increase the value of your Units
over time and provide dividend income by investing in a portfolio of common
stocks of the companies in the Dow Jones Industrial AverageSM. These stocks are
some of the most widely-held and well-capitalized companies in the world. We
believe that The Dow 30SM stocks have historically provided a consistent and
more conservative source of dividend income and capital appreciation than many
other types of equity securities.
o Portfolio of "blue chip" stocks
o Cross section of American industrial companies
o May help outpace inflation
The Trust initially includes a portfolio that replicates the Dow Jones
Industrial AverageSM except to the extent necessary to comply with applicable
regulatory requirements. During the Trust's life, we will change the portfolio
to reflect any change in the component stocks in The DowSM. We will not change
the portfolio to reflect any change in the weightings of the components within
The DowSM during the Trust's life. However, the Dow Jones Industrial AverageSM
has always been based on one share of each component stock. Due to regulatory
restrictions, the Trust may not be permitted to replicate the index weighting of
certain issuers in the securities industry.
As with any investment, 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. The performance of the Trust will differ from the performance of The
DowSM because the Trust includes expenses and a sales charge. You should read
the "Risk Factors" section before you invest.
THE DOW JONES INDUSTRIAL AVERAGESM. Charles H. Dow first unveiled his
industrial stock average on May 26, 1896. Dow Jones & Company, Inc. first
published the Dow Jones Industrial AverageSM in The Wall Street Journal on
October 7, 1896. Initially consisting of just 12 stocks, The DowSM expanded to
20 stocks in 1916 and its present size of 30 stocks on October 1, 1928. The
companies included in The DowSM have remained relatively constant over time.
The DowSM stocks are all major factors in their industries and are widely
held by individuals and institutions. The stocks represent about one-fifth of
the market value of all U.S. stocks. All of The DowSM stocks currently trade on
the New York Stock Exchange. These stocks represent about one-fourth of the
value of all stocks listed on the Exchange. The value of The DowSM at the
beginning of 1929 was 248.8 and had risen to a level of 10,970.80 by the end of
June 30, 1999.
The editors of The Wall Street Journal select the components of The DowSM.
The editors have traditionally considered all companies that are not in the
transportation or utilities sectors for inclusion in the index. In choosing a
new component, the editors look among substantial industrial companies with a
history of successful growth and wide interest among investors. They believe
that stability of composition enhances the index. Whenever the editors change
one stock, they typically review the other stocks. Of course, we cannot
guarantee that they will follow this process or consider these factors in the
future.
"Dow JonesSM", "Dow Jones Industrial AverageSM", "The Dow 30SM", "The DowSM"
and "DJIASM" are proprietary to and service marks of Dow Jones & Company, Inc.
and have been licensed for use for certain purposes by the Trust. The Trust is
not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no
representation regarding the advisability of investing in the Trust.
THE DOW 30SM INDEX & TREASURY TRUST. The Trust seeks to increase the value of
your Units over time and provide dividend income while also providing protection
of principal. The Trust invests in a portfolio of common stocks of the companies
in the Dow Jones Industrial AverageSM on the day before the Initial Date of
Deposit and U.S. Treasury obligations. The Trust seeks to provide protection of
your principal by combining an investment in blue chip stocks with U.S. Treasury
obligations.
THE DOW JONES INDUSTRIAL AVERAGESM. The DowSM stocks are all major factors in
their industries and are widely held by individuals and institutions. These
stocks are some of the most widely-held and well-capitalized companies in the
world. We believe that The DowSM stocks have historically provided a consistent
and more conservative source of dividend income and capital appreciation than
many other types of equity securities. All of The DowSM stocks currently trade
on the New York Stock Exchange. More information about The DowSM is presented
under "The Dow 30SM Index Trust".
Approximately half of the initial portfolio replicates the Dow Jones
Industrial AverageSM on the day before the Initial Date of Deposit. The
component stocks or the weightings of the stocks in The DowSM may change from
time to time. We will not change the Trust portfolio to reflect any change in
The DowSM.
"Dow JonesSM", "Dow Jones Industrial AverageSM", "The Dow 30SM", "The DowSM"
and "DJIASM" are proprietary to and service marks of Dow Jones & Company, Inc.
and have been licensed for use for certain purposes by the Trust. The Trust is
not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no
representation regarding the advesability of investing in the Trust.
PRINCIPAL PROTECTION. By investing approximately half of the initial
portfolio in U.S. Treasury obligations, the Trust offers an investment similar
to The Dow 30SM Index Trust while also seeking protection of principal. We
structured the portfolio so that you should receive at least $11 per Unit if you
hold your Units through maturity of the Treasury obligations. This feature
provides you with total principal protection if you purchase Units for $11 or
less (including any sales charge).
The Treasury obligations do not pay interest while they are outstanding.
However, you will be subject to tax with respect to amortization of original
issue discount on the Treasury obligations as if a distribution had occurred.
You should read the "Taxation" section for more information.
As with any investment, 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.
You should note that we applied the selection criteria to the Securities for
inclusion in the Trusts as of the Initial Date of Deposit. After this date, the
Securities may no longer meet the selection criteria. Should a Security no
longer meet the selection criteria, we will generally not remove the Security
from its Trust portfolio. However, we will adjust the portfolio of The Dow 30SM
Index Trust to reflect changes in the components of the Dow Jones Industrial
AverageSM.
A balanced investment portfolio incorporates various style and capitalization
characteristics. We offer unit trusts with a variety of styles and
capitalizations to meet your needs. We determine style characteristics (growth
or 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 we believe are
undervalued. We determine 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.
We determine all style and capitalization characteristics as of the Initial Date
of Deposit and the characteristics may vary thereafter. We will not remove a
Security from a Trust as a result of any change in characteristics.
RISK FACTORS
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PRICE VOLATILITY. The Trusts invest primarily in stocks of U.S. companies.
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 Trusts
are 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 a 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.
TREASURY OBLIGATIONS. The U.S. Treasury obligations in The Dow 30SM Index &
Treasury Trust are U.S. Treasury Strips. These are bonds that have been stripped
of their unmatured interest coupons. These bonds represent the right to receive
a fixed payment from the U.S. government at the bond's maturity date. These
securities are backed by the full faith and credit of the U.S. government. This
guarantee does not apply to the market value of the Treasury obligations or
Units of the Trust. The U.S. government issues these Treasury obligations at a
deep discount to par value because the obligations do not make periodic interest
payments. In effect, these obligations implicitly reinvest earnings during their
life at a fixed yield. This eliminates the ability to reinvest earnings at
higher rates in the future, if available. The value of the Treasury obligations
may also fluctuate to a greater extent than securities that make regular
interest payments.
NO FDIC GUARANTEE. An investment in your Trust is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
YEAR 2000 READINESS DISCLOSURE. The following two paragraphs constitute
"Year 2000 Readiness Disclosure" within the meaning of the Year 2000 Information
and Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor or Trustee or other service providers to the Trusts do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trusts. 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 Trusts are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trusts.
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 issuers could adversely
affect the Securities and the Trusts.
PUBLIC OFFERING
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GENERAL. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the sales charge, and cash, if any, in the
Income and Capital Accounts. The "Summary of Essential Financial Information" in
Part One describes the sales charge in detail.
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.
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.
The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
OFFERING PRICE. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in Part One in
accordance with fluctuations in the prices of the underlying Securities in the
Trusts. The initial price of the Securities was determined by Interactive Data
Corporation, a firm regularly engaged in the business of evaluating, quoting or
appraising comparable securities. The Evaluator will generally determine the
value of the Securities as of the Evaluation Time on each business day and will
adjust the Public Offering Price of Units accordingly. This Public Offering
Price will be effective for all orders received prior to the Evaluation Time on
each business day. The Evaluation Time is the close of the New York Stock
Exchange on each Trust business day. Orders received by the Trustee or Sponsor
for purchases, sales or redemptions after that time, or on a day which is not a
business day, will be held until the next determination of price. The term
"business day", as used herein and under "Rights of Unitholders--Redemption of
Units", excludes Saturdays, Sundays and holidays observed by the New York Stock
Exchange. The 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 equity securities in a Trust during the
initial offering period is determined on each business day by the Evaluator in
the following manner: If the equity securities are listed on a national 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 equity 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 equity securities on the ask side of the market
or (c) by any combination of the above. The aggregate underlying value of U.S.
Treasury obligations during the initial offering period is determined on each
business day by the Evaluator based on their net offering prices. If net
offering prices are unavailable, then the evaluations will be based on (1)
offering prices for comparable securities, (2) by determining the value of the
obligations on the offer side of the market or (3) 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 a Trust, taken as a whole, which are represented by
the Units.
UNIT DISTRIBUTION. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price.
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 of 70% of the sales charge.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. Notwithstanding anything to the
contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual transaction
exceed the total sales charge applicable to such transaction. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units and to change the amount of the concession or agency commission to dealers
and others from time to time.
Broker-dealers of the Trusts, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of any Trust. These programs will not change the price Unitholders
pay for their Units or the amount that a Trust will receive from the Units sold.
SPONSOR 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 each Trust on the Initial Date of Deposit as well as on
subsequent deposits. The Sponsor has not participated as sole underwriter or as
manager or as a member of the underwriting syndicates or as an agent in a
private placement for any of the Securities. The Sponsor may realize profit or
loss as a result of the possible fluctuations in the market value of the
Securities, since all proceeds received from purchasers of Units are retained by
the Sponsor. In maintaining a secondary market, the Sponsor will realize profits
or losses in the amount of any difference between the price at which Units are
purchased and the price at which Units are resold (which price includes the
applicable sales charge) or from a redemption of repurchased Units at a price
above or below the purchase price. Cash, if any, made available to the Sponsor
prior to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject to
the limitations of the Securities Exchange Act of 1934.
An 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. Although it is not obligated to do so, the Sponsor
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Sponsor may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market. The
Trustee will notify the Sponsor of any tendered of Units for redemption. If the
Sponsor's bid in the secondary market equals or exceeds the Redemption Price per
Unit, it may purchase the Units not later than the day on which Units would have
been redeemed by the Trustee. The 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 a Trust will generally be distributed to Unitholders on each
Distribution Date to Unitholders of record on the preceding Record Date. These
dates are listed under "Summary of Essential Financial Information" in Part One.
A person becomes a Unitholder of record on the date of settlement (generally
three business days after Units are ordered). Unitholders may elect to receive
distributions in cash or to have distributions reinvested into additional Units.
Distributions may also be reinvested into Van Kampen mutual funds. See "Rights
of Unitholders--Reinvestment Option".
Dividends received by a Trust are credited to the Income Account of the
Trust. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds received on the
sale of any Securities, to the extent not used to meet redemptions of Units or
pay deferred sales charges, fees or expenses, will be distributed to
Unitholders. 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 rate 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, if available. Unitholders will be subject
to any 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 Trusts. 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 a Trust for redemption may
request an in kind distribution of equity securities equal to the Redemption
Price per Unit on the date of tender. Trusts generally do not offer in kind
distributions of portfolio securities that are held in foreign markets or U.S.
Treasury obligations. An in kind distribution will be made by the Trustee
through the distribution of each of the equity securities in book-entry form to
the account of the Unitholder's broker-dealer at Depository Trust Company.
Amounts representing fractional shares or U.S. Treasury obligations will be
distributed in cash. The Trustee may adjust the number of shares of any Security
included in a Unitholder's in kind distribution to facilitate the distribution
of whole shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of a Trust will be, and
the diversity of a Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
at the time of redemption. Special federal income tax consequences will result
if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rate share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) any unpaid deferred sales charge payments. During
the initial offering period, the redemption price and the secondary market
repurchase price will also include estimated organizational costs. For these
purposes, the Evaluator may determine the value of equity securities in the
following manner: If the equity 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 equity 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 equity securities on the bid side
of the market or (c) by any combination of the above. The Evaluator may
determine the value of U.S. Treasury obligations for these purposes in the same
manner as described under "Public Offering--Offering Price" on the bid side of
the market. 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.
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 a 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 Trusts are not managed funds and, except as
provided in the Trust Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Trust based on advice from the Supervisor.
These situations may include events such as the issuer having defaulted on
payment of any of its outstanding obligations or the price of a Security has
declined to such an extent or other credit factors exist so that in the opinion
of the Sponsor retention of the Security would be detrimental to the Trust. In
addition, the Trustee may sell Securities to redeem Units or pay Trust expenses
or deferred sales charges. The Trustee must reject any offer for securities or
property in exchange for the Securities. If securities or property are
nonetheless acquired by a 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.
With respect to The Dow 30SM Index Trust, purchases and sales of Securities
will generally be made in an effort to maintain, to the extent practical, a
portfolio that reflects the current components of the Dow Jones Industrial
AverageSM. If this Trust receives any securities or other property relating to
the Securities in the Trust (such as those acquired in a merger or spin-off),
the Trustee will sell the securities or other property and reinvest the proceeds
in shares of the Security related to the transaction. If a Security is removed
from the Dow Jones Industrial AverageSM, the Trustee will sell the Security and
may reinvest the proceeds into any new securities added as components of the Dow
Jones Industrial AverageSM or into the other Securities if a new component is
not added.
With respect to The Dow 30SM Index Trust, the Sponsor may direct the
reinvestment of proceeds of the sale of Securities if the sale is the direct
result of serious adverse credit factors which, in the opinion of the Sponsor,
would make retention of the Securities detrimental to the Trust. In such as
case, the Sponsor may, but is not obligated to, direct the reinvestment of sale
proceeds in any other securities that meet the criteria for inclusion in these
Trusts on the Initial Date of Deposit. The Sponsor may also instruct the Trustee
to take action necessary to ensure that these Trusts continue to satisfy the
qualifications of a regulated investment company and to avoid imposition of tax
on undistributed income of these Trusts.
When your Trust sells Securities, the composition and diversity of the
Securities in the Trust may be altered. In order to obtain the best price for a
Trust, it may be necessary for the Supervisor to specify minimum amounts
(generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of a 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 Trusts, the Sponsor or
dealers participating in the offering of Units. In addition, in selecting among
firms to handle a particular transaction, the Sponsor may take into account
whether the firm has sold or is selling units of unit investment trusts which it
sponsors.
AMENDMENT OF THE TRUST AGREEMENT. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
TERMINATION. Each Trust will terminate on the Mandatory Termination Date or
upon the sale or other disposition of the last Security held in the Trust. A
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 be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Securities. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and is not be liable for any action taken by it in good faith under
the Trust Agreement. The Trustee is not liable for any taxes or other
governmental charges imposed on the Securities, on it as Trustee under the Trust
Agreement or on 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 1 Parkview Plaza, P.O. Box 5555, Oakbrook Terrace,
Illinois 60181-5555, (630) 684-6000. As of November 30, 1999, the total
stockholders' equity of Van Kampen Funds Inc. was $141,554,861 (audited). 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 Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. 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 Trusts and
returns over specified time periods on other trusts (which may show performance
net of expenses and charges which the Trusts 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 Trusts. 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 portfolios are not managed and Unit price and return
fluctuate with the value of common stocks in the portfolios, so there may be a
gain or loss when Units are sold. As with other performance data, performance
comparisons should not be considered representative of the Trust's relative
performance for any future period.
TAXATION
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THE DOW 30SM INDEX TRUST. The Trust intends to elect and qualify on a
continuing basis for special federal income tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Trust so qualifies and timely distributes to Unitholders 90% or
more of its taxable income (without regard to its net capital gain, i.e., the
excess of its net long-term capital gain over its net short-term capital loss),
it will not be subject to federal income tax on the portion of its taxable
income (including any net capital gain) that it distributes to Unitholders. In
addition, to the extent the Trust timely distributes to Unitholders at least 98%
of its taxable income (including any net capital gain), it will not be subject
to the 4% excise tax on certain undistributed income of "regulated investment
companies." Because the Trust intends to timely distribute its taxable income
(including any net capital gain), it is anticipated that the Trust will not be
subject to federal income tax or the excise tax.
Distributions to Unitholders of the Trust's taxable income, other than
distributions which are designated as capital gain dividends, will be taxable as
ordinary income to Unitholders, except that to the extent that distributions to
a Unitholder in any year exceed the Trust's current and accumulated earnings and
profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholder) on December 31 of the year such distributions are
declared.
Distributions of the Trust's net capital gain which are properly designated
as capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or treated
as arising from) the sale or redemption of Units will generally be a capital
gain or loss, except in the case of a dealer or a financial institution. The
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) is generally subject to a maximum marginal stated tax rate
of 20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income. Note that if a Unitholder holds Units for six months or less and
subsequently sells such Units at a loss, the loss will be treated as a long-term
capital loss to the extent that any long-term capital gain distribution is made
with respect to such Units during the six-month period or less that the
Unitholder owns the Units.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units. The Taxpayer Relief Act of 1997 (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.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Trust is
deferred. The income (or proceeds from redemption) a Unitholder must take into
account for federal income tax purposes is not reduced by amounts deducted to
pay the deferred sales charge.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Trust from United States corporations (other than real
estate investment trusts) and is designated by the Trust as being eligible for
such deduction. To the extent dividends received by the Trust are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. The Trust will provide
each Unitholder with information annually concerning what part of the Trust
distributions are eligible for the dividends received deduction.
The Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of the Trust, because they are deemed to own a pro
rata portion of the foreign securities held by the Trust, must include in their
gross income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust deems
to be the Unitholders' portion of foreign income taxes paid with respect to, or
withheld from, dividends, interest or other income of the Trust from its foreign
investments. Unitholders may then subtract from their federal income tax the
amount of such taxes withheld, or else treat such foreign taxes as deductions
from gross income; however, as in the case of investors receiving income
directly from foreign sources, the above described tax credit or deduction is
subject to certain limitations. The 1997 Tax Act imposes a required holding
period for such credits. Unitholders should consult their tax advisers regarding
this election and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received from the
Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
The foregoing discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to United States
Unitholders.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from the Trust that
are designated by the Trust as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes, if all of the
following conditions are met (i) the capital gain dividend is not effectively
connected with the conduct by the foreign investor of a trade or business within
the United States, (ii) the foreign investor (if an individual) is not present
in the United States for 183 days or more during his or her taxable year, and
(iii) the foreign investor provides all certification which may be required of
his status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers with respect to
United States tax consequences of ownership of Units. Units in the Trust and
Trust distributions may also be subject to state and local taxation and
Unitholders should consult their tax advisers in this regard.
THE DOW 30SM INDEX & TREASURY TRUST. The following is a general discussion of
certain of the federal income tax consequences of the purchase, ownership and
disposition of the Units. The summary is limited to investors who hold the Units
as "capital assets" (generally, property held for investment) within the meaning
of Section 1221 of the Internal Revenue Code of 1986 (the "Code"). Unitholders
should consult their tax advisers in determining the federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust. For purposes of the following discussions and opinions, it is
assumed that interest on the Treasury Obligations is included in gross income
for Federal income tax purposes and that the Treasury Obligations are debt for
Federal income tax purposes and that the Equity Securities are equity for
Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of the
Trust will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Trust asset when such income is considered to be received by
the Trust.
2. Each Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Equity Security when such dividends are
considered to be received by the Trust. Unitholders will be taxed in this manner
regardless of whether distributions from the Trust are actually received by the
Unitholder or are automatically reinvested.
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, payment at
maturity or otherwise) or upon the sale or redemption of Units by such
Unitholder (except to the extent of an In-Kind distribution of stocks is
received by such Unitholder as described below). The price a Unitholder pays for
his Units, generally including sales charges, is allocated among his pro rata
portion of each Security held by the Trust (in proportion to the fair market
values thereof on the valuation date nearest to the date the Unitholder
purchases his Units) in order to determine his initial tax basis for his pro
rata portion of each Security held by the Trust. A Unitholder's tax basis in his
Units will equal his tax basis in his pro rata portion of all the assets of the
Trust. Such basis is determined (before adjustments described below) by
apportioning the tax basis for the Units among each of the Trust's assets,
according to the value as of the valuation date nearest the date of acquisition
of the Units. Unitholders should consult their own tax advisors with regard to
calculation of basis. The Treasury Obligations are treated as stripped bonds and
may be treated as bonds issued at an original issue discount as of the date a
Unitholder purchases his Units. Because the Treasury Obligations represent
interests in "stripped" U.S. Treasury bonds, a Unitholder's tax basis for his
pro rata portion of each Treasury Obligation held by the Trust shall be treated
as its "purchase price" by the Unitholder. Original issue discount is
effectively treated as interest for federal income tax purposes and the amount
of original issue discount in this case is generally the difference between the
bond's purchase price and its stated redemption price at maturity. A Unitholder
will be required to include in gross income for each taxable year the sum of his
daily portions of original issue discount attributable to the Treasury
Obligations held by the Trust as such original issue discount accrues and will
in general be subject to federal income tax with respect to the total amount of
such original issue discount that accrues for such year even though the income
is not distributed to the Unitholders during such year to the extent it is not
less than a "de minimis" amount as determined under Treasury Regulations
relating to stripped bonds. To the extent the amount of such discount is less
than the respective "de minimis" amount, such discount is generally treated as
zero. In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual compounding of
accrued interest. In the case of Treasury Obligations, this method will
generally result in an increasing amount of income to the Unitholders each year.
Unitholders should consult their tax advisers regarding the federal income tax
consequences and accretion of original issue discount. For federal income tax
purposes, a Unitholder's pro rata portion of dividends as defined by Section 316
of the Code paid by a corporation with respect to an Equity Security held by the
Trust are taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits." A Unitholder's pro rata portion of
dividends paid on such Equity Security which exceed such current and accumulated
earnings and profits will first reduce a Unitholder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unitholder's tax basis
in such Equity Security shall generally be treated as capital gain. In general,
the holding period of such capital gain will be determined by the period of time
a Unitholder has held his Units.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss (except in the case of a dealer or a
financial institution) and, in general, will be long-term if the Unitholder has
held his Units for more than one year. Unitholders should consult their tax
advisers regarding the recognition of such capital gains and losses for federal
income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other than corporate
Unitholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Final regulations have
been issued which address special rules that must be considered in determining
whether the 46-day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. Unitholders should consult with their
tax advisers with respect to the limitations on the dividends received
deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. As a result of the Tax Reform Act of 1986, certain miscellaneous
itemized deductions, such as investment expenses, tax return preparation fees
and employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss upon Disposition of Securities by a Trust
or Disposition of Units. The Internal Revenue Service Restructuring and Reform
Act of 1998 (the "1998 Tax Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as net long-term capital gain
over net short-term capital loss for the taxable year) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax rate of
20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income.
The Revenue Reconciliation Act of 1993 recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and their prospective investors should consult with their
tax advisers regarding the potential effect of this provision on their
investment in Units.
If the Unitholder disposes of a Unit, he or she is deemed thereby to have
disposed of his or her entire pro rata interest in all assets of the Trust
involved, including his or her pro rata portion of all the Securities
represented by the Unit. The Taxpayer Relief Act of 1997 includes provisions
that treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures, forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not loss). Unitholders should
consult their own tax advisers with regard to any such constructive sales rules.
Special Tax Consequences of In Kind Distributions upon Redemption of Units or
Termination of a Trust. As discussed in "Rights of Unitholders-Redemption of
Units," under certain circumstances a Unitholder tendering Units for redemption
may request an In Kind Distribution. A Unitholder may also under certain
circumstances request an In Kind Distribution upon the termination of the Trust.
See "Rights of Unitholders-Redemption of Units." Treasury Obligations will not
be distributed to a Unitholder as part of an In Kind Distribution. The tax
consequences relating to the sale of Treasury Obligations are discussed above.
As previously discussed, prior to the redemption of Units or the termination of
the Trust, a Unitholder is considered as owning a pro rata portion of each of
the Trust assets for federal income tax purposes. The receipt of an In Kind
Distribution will result in a Unitholder receiving an undivided interest in
whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular class of stock
issued by a particular corporation (and does not include the Treasury
Obligations). A Unitholder will not recognize gain or loss with respect to the
Equity Securities if a Unitholder only receives Equity Securities in exchange
for his or her pro rata portion in each share of the Equity Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the Trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount of
cash received by the Unitholder and his tax basis in such fractional share of
the Equity Security held by the Trust. In either case, a Unitholder who receives
cash in exchange for his interest in the Treasury Obligations will generally
recognize gain or loss based upon the difference between the amount of cash
received by the Unitholder and his tax basis in the Treasury Obligations.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or loss)
recognized upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Equity Security owned by the Trust. Unitholders who request an In Kind
Distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among his pro rata portion of the
Securities held in the Trust in accordance with the proportion of the fair
market values of such Securities on the valuation date nearest the date the
Units are purchased in order to determine such Unitholder's tax basis for his
pro rata portion of each Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security will be reduced to the extent dividends paid with respect to such
Security are received by the Trust which are not taxable as ordinary income as
described above. A Unitholder's tax basis in his Units and his pro rata portion
of a Treasury Obligation is increased by the amount of original issue discount
thereon property included in the Unitholder's gross income for federal income
tax purposes.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified by the Internal Revenue Service that payments to the
Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
Distributions by the Trust (other than those that are not treated as United
States source income, if any) will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons (accrual of
original issue discount on the Treasury Obligations may not be subject to
taxation or withholding provided certain requirements are met). Such persons
should consult their tax advisers.
Unitholders will be notified annually of the amounts of original issue
discount, dividend income and long-term capital gain distributions includable in
the Unitholder's gross income and amounts of Trust expenses which may be claimed
as itemized deductions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unitholders under the existing income tax
laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders with regard to federal and certain aspects of New York State and
City income taxes. Unitholders may be subject to state and local taxation in
other jurisdictions. Unitholders should consult their tax advisers regarding
potential foreign, state or local taxation with respect to the Units. The term
U.S. Unitholder means an owner of a Unit of the Trust that is (a) is (i) for
United States federal income tax purposes a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political subdivision thereof,
or (iii) an estate or trust the income of which is subject to United States
federal income taxation regardless of its source or (b) does not qualify as a
U.S. Unitholder in paragraph (a) but whose income from a Unit is effectively
connected with such Unitholder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States whose income
and gain on the Units will be taxable.
TRUST OPERATING EXPENSES
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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 Trusts.
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 "Summary of Essential Financial Information" in Part One. These
fees may exceed the actual costs of providing these services to the Trusts 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 each
Trust set forth in the "Summary of Essential Financial Information" in Part One.
(which includes the estimated amount of miscellaneous Trust expenses). The
Trustee benefits to the extent there are funds in the Capital and Income
Accounts since these Accounts are non-interest bearing to Unitholders and the
amounts earned by the Trustee are retained by the Trustee. Part of the Trustee's
compensation for its services to each Trust is expected to result from the use
of these funds.
MISCELLANEOUS EXPENSES. The following additional charges are or may be
incurred by a Trust: (a) normal expenses (including the cost of mailing reports
to Unitholders) incurred in connection with the operation of such Trust, (b)
fees of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any action
taken by the Trustee to protect a Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of a Trust without negligence, bad faith
or wilful misconduct on its part, (g) foreign custodial and transaction fees,
(h) costs associated with liquidating the securities held in a Trust portfolio,
(i) any offering costs incurred after the end of the initial offering period and
(j) expenditures incurred in contacting Unitholders upon termination of a Trust.
The Trusts will also pay a license fee to Dow Jones & Company, Inc. for use of
certain service marks. Your Trust may pay the expenses of updating its
registration statements each year. Unit investment trust sponsors have
historically paid these expenses.
GENERAL. The fees and expenses of a Trust will accrue on a daily basis. The
fees and expenses are generally paid out of the Capital Account of the related
Trust. When these amounts are paid by or owing to the Trustee, they are secured
by a lien on the related 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 Trustee may not sell U.S. Treasury obligations
in The Dow 30SM Index & Treasury Trust to pay expenses unless the maturity value
of the U.S. Treasury obligations remaining in the portfolio after the sale
equals at least $11 per Unit. 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
--------------------------------------------------------------------------------
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 statements of condition and the
related portfolios 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
--------------------------------------------------------------------------------
This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Trusts 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 Trusts. The Information Supplement may be obtained by contacting the
Trustee at (800) 856-8487 or is available along with other related materials at
the SEC's internet site (http://www.sec.gov).
TABLE OF CONTENTS
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TITLE PAGE
----- ----
The Trusts.................................. 2
Objectives and Securities Selection......... 2
Risk Factors................................ 4
Public Offering............................. 5
Rights of Unitholders....................... 8
Trust Administration........................ 10
Taxation.................................... 12
Trust Operating Expenses.................... 18
Other Matters............................... 19
Additional Information...................... 19
PROSPECTUS
PART TWO
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AUGUST 3, 1999
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
THE DOW 30SM INDEX TRUST
THE DOW 30SM INDEX & TREASURY TRUST
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
Please retain this prospectus for future reference.
VAN KAMPEN
INFORMATION SUPPLEMENT
THE DOW 30SM INDEX TRUST
THE DOW 30SM INDEX & TREASURY TRUST
--------------------------------------------------------------------------------
This Information Supplement provides additional information concerning the
risks and operations of the Trust which is not described in the Prospectus. This
Information Supplement should be read in conjunction with the Prospectus. This
Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in a Trust and may
not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at 1 Parkview Plaza, P.O.
Box 5555, Oakbrook Terrace, Illinois 60181-5555 or by contacting your broker.
This Information Supplement is dated as of the date of the Prospectus and all
capitalized terms have been defined in the Prospectus.
TABLE OF CONTENTS
PAGE
Risk Factors 2
The Trusts 3
Sponsor Information 3
Trustee Information 4
Trust Termination 5
RISK FACTORS
PRICE VOLATILITY. Because the Trusts invest in stocks of U.S. and foreign
companies, you should understand the risks of investing in common stocks before
purchasing Units. These risks include the risk that the financial condition of
the company or the general condition of the stock market may worsen and the
value of the stocks (and therefore Units) will fall. Stocks are especially
susceptible to general stock market movements. The value of 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 a 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 Trusts are unmanaged, the Trustee will not
sell stocks in response to market fluctuations as is common in managed
investments. In addition, because some Trusts hold a relatively small number of
stocks, you may encounter greater market risk than in a more diversified
investment.
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.
LIQUIDITY. Whether or not the stocks in a 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 a 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 a 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 Trusts 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 Trusts are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trusts. 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 Trusts.
THE TRUSTS
In seeking the Trusts' objectives, the Sponsor considered the ability of the
Securities to outpace inflation. While inflation is currently relatively low,
the United States has historically experienced periods of double-digit
inflation. While the prices of securities will fluctuate, over time securities
have outperformed the rate of inflation, and other less risky investments, such
as government bonds and U.S. Treasury bills. Past performance is, however, no
guarantee of future results.
Investors should note that the selection criteria were applied to the
Securities for inclusion in the Trusts as of the Initial Date of Deposit. Should
a Security no longer meet the criteria used for selection for a Trust, such
Security will not as a result thereof be removed from a Trust portfolio.
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, 1999, the total stockholders' equity of Van Kampen
Funds Inc. was $141,554,861 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen's open-end funds, closed-ended funds and unit investment trusts are
professionally distributed by leading financial firms nationwide. Based on
cumulative assets deposited, the Sponsor believes that it is the largest sponsor
of insured municipal unit investment trusts, primarily through the success of
its Insured Municipals Income Trust(R) or the IM-IT(R) trust. The Sponsor also
provides surveillance or evaluation services at cost for approximately $13.4
billion of unit investment trust assets outstanding. Since 1976, the Sponsor has
serviced over two million investor accounts, opened through retail distribution
firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE 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 portfolios.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for each Trust. Such
records shall include the name and address of, and the number of Units of each
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 each Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
TRUST TERMINATION
A Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of such Trust then outstanding or by the Trustee when the
value of the Securities owned by a 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). A
Trust will be liquidated by the Trustee in the event that a sufficient number of
Units of such Trust not yet sold are tendered for redemption by the Sponsor, so
that the net worth of such Trust would be reduced to less than 40% of the value
of the Securities at the time they were deposited in such Trust. If a 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 Trusts. The Sponsor will determine the
manner, timing and execution of the sales of the Securities. The Sponsor shall
direct the liquidation of the Securities in such manner as to effectuate orderly
sales and a minimal market impact. In the event the Sponsor does not so direct,
the Securities shall be sold within a reasonable period and in such manner as
the Trustee, in its sole discretion, shall determine. At least 30 days before
the Mandatory Termination Date the Trustee will provide written notice of any
termination to all Unitholders of the appropriate Trust and in the case of a
Trust will include with such notice a form to enable Unitholders owning 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 previous business day if a holiday) the Trustee will
deliver each requesting Unitholder's pro rata number of whole shares of the
U.S.-traded Securities in a Trust to the account of the broker-dealer or bank
designated by the Unitholder at Depository Trust Company. The value of the
Unitholder's fractional shares of the Securities will be paid in cash.
Unitholders with less than 1,000 Units, Unitholders in a Trust with 1,000 or
more Units not requesting an in kind distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
following the Mandatory Termination Date. Regardless of the distribution
involved, the Trustee will deduct from the funds of the appropriate 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
each Unitholder of each Trust his pro rata share of the balance of the Income
and Capital Accounts of such Trust.
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.
EMSPRO168
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Van Kampen Focus Portfolios, Series 168, certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 22nd day of
November, 2000.
Van Kampen Focus Portfolios, Series 168
(Registrant)
By Van Kampen Funds Inc.
(Depositor)
By: Christine K. Putong
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on August 25, 2000 by the
following persons who constitute a majority of the Board of Directors of Van
Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive Officer )
John H. Zimmermann III President )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President and Chief Operations )
and Technology Officer )
Christine K. Putong______________
(Attorney in Fact)*
--------------------
* An executed copy of each of the related powers of attorney is filed herewith
or was filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
