<PAGE>
Registration Number: 333-49917
Filer: MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
Investment Company Act No. 811-5065
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
to
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST,
REIT PORTFOLIO SERIES 98
B. Name of Depositor:
DEAN WITTER REYNOLDS INC.
C. Complete address of Depositor's principal executive office:
DEAN WITTER REYNOLDS INC.
Two World Trade Center
New York, New York 10048
D. Name and complete address of agent for service:
MR. MICHAEL D. BROWNE
DEAN WITTER REYNOLDS INC.
Unit Trust Department
Two World Trade Center - 59th Floor
New York, New York 10048
Copy to:
KENNETH W. ORCE, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
<PAGE>
E. Total and amount of securities being registered:
An indefinite number of Units of Beneficial Interest pursu-
ant to Rule 24f-2 promulgated under the Investment Company
Act of 1940, as amended
F. Proposed maximum offering price to the public of the
securities being registered:
Indefinite
G. Amount of filing fee:
N/A
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST,
REIT PORTFOLIO SERIES 98
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Table of Contents
3. Name and address of Trustee ) Table of Contents
4. Name and address of principal ) Table of Contents
Underwriter )
5. Organization of Trust ) Introduction
6. Execution and termination of ) Introduction; Amendment
Indenture ) and Termination of the
) Indenture
7. Changes of name ) Included in Form
N-8B-2
8. Fiscal Year ) Included in Form
N-8B-2
9. Litigation ) *
__________
* Not applicable, answer negative or not required.
<PAGE>
II. GENERAL DESCRIPTION OF THE TRUST
AND SECURITIES OF THE TRUST
10. General Information regarding )
Trust's Securities and Rights )
of Holders )
(a) Type of Securities ) Rights of Unit Holders
(Registered or Bearer) )
(b) Type of Securities ) Administration of the
(Cumulative or Distribu- ) Trust - Distribution
tive) )
(c) Rights of Holders as to ) Redemption; Public Offer-
withdrawal or redemption ) ing of Units -Secondary
) Market
(d) Rights of Holders as to ) Public Offering of Units
conversion, transfer, par- ) - Secondary Market; Ex-
tial redemption and simi- ) change Option; Redemp-
lar matters ) tion; Rights of Unit
) Holders -Certificates
)
(e) Lapses or defaults with ) *
respect to periodic pay- )
ment plan certificates )
(f) Voting rights as to Secu- ) Rights of Unit Holders -
rities under the Indenture ) Certain Limitations;
) Amendment and Termination
) of the Indenture
(g) Notice to Holders as to )
change in: )
(1) Composition of assets ) Administration of the
of Trust ) Trust - Reports to Unit
) Holders; The Trust - Sum-
) mary Description of the
) Portfolios
(2) Terms and Conditions ) Amendment and Termination
of Trust's Securities ) of the Indenture
__________
* Not applicable, answer negative or not required.
<PAGE>
(3) Provisions of Inden- ) Amendment and Termination
ture ) of the Indenture
(4) Identity of Depositor ) Sponsor; Trustee
and Trustee )
(h) Security Holders Consent )
required to change:
(1) Composition of assets ) Amendment and Termination
of Trust ) of the Indenture
(2) Terms and conditions ) Amendment and Termination
of Trust's Securities ) of the Indenture
(3) Provisions of Inden- ) Amendment and Termination
ture ) of the Indenture
(4) Identity of Depositor ) *
and Trustee )
(i) Other principal features ) Cover of Prospectus; Tax
of the Trust's Securities ) Status
11. Type of securities comprising ) The Trust - Summary De-
units ) scription of the Portfo-
) lios; Objectives and Se-
) curities Selection; The
) Trust - Special Consid-
) erations
12. Type of securities comprising ) *
periodic payment certificates )
13. (a) Load, fees, expenses, etc. ) Summary of Essential In-
) formation; Public Offer-
) ing of Units - Public Of-
) fering Price; - Profit of
) Sponsor;
) - Volume Discount; Ex-
) penses and Charges
(b) Certain information re- ) *
garding periodic payment )
certificates )
__________
* Not applicable, answer negative or not required.
<PAGE>
(c) Certain percentages ) Summary of Essential In
) formation; Public Offer-
) ing of Units - Public Of-
) fering Price; - Profit of
) Sponsor; - Volume Dis-
) count
(d) Price differentials ) Public Offering of Units
) - Public Offering Price
(e) Certain other loads, fees, ) Rights of Unit Holders -
expenses, etc. payable by ) Certificates
holders
(f) Certain profits receivable ) Redemption - Purchase by
by depositor, principal ) the Sponsors of Units
underwriters, trustee or ) Tendered for Redemption
affiliated persons )
(g) Ratio of annual charges to ) *
income )
14. Issuance of trust's securities ) Introduction; Rights of
) Unit Holders - Certifi-
) cates
15. Receipt and handling of pay- ) Public Offering of Units
ments from purchasers ) - Profit of Sponsor
)
16. Acquisition and disposition of ) Introduction; Amendment
underlying securities ) and Termination of the
) Indenture; Objectives and
) Securities Selection; The
) Trust - Summary Descrip-
) tion of the Portfolio;
) Sponsor - Responsibility
)
)
17. Withdrawal or redemption ) Redemption; Public Offer-
) ing of Units - Secondary
) Market
__________
* Not applicable, answer negative or not required.
<PAGE>
18. (a) Receipt and disposition of ) Administration of the
income ) Trust; Reinvestment Pro-
) grams
(b) Reinvestment of distribu- ) Reinvestment Programs
tions )
(c) Reserves or special fund ) Administration of the
) Trust - Distribution
(d) Schedule of distribution ) *
19. Records, accounts and report ) Administration of the
) Trust - Records and Ac-
) counts; - Reports to Unit
) Holders
20. Certain miscellaneous provi- ) Amendment and Termination
sions of the trust agreement ) of the Indenture; Sponsor
) - Limitation on Liability
) - Resignation; Trustee
) - Limitation on Liability
) - Resignation
21. Loans to security holders ) *
22. Limitations on liability of de- ) Sponsor, Trustee; Evalua-
positor, trustee, custodian, ) tor - Limitation on Li-
etc. ) ability
23. Bonding arrangements ) Included on Form
) N-8B-2
24. Other material provisions of ) *
the trust agreement )
III. ORGANIZATION PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Expenses and Charges -
) fees; Public Offering of
) Units - Profit of Sponsor
)
__________
* Not applicable, answer negative or not required.
<PAGE>
27. Business of Depositor ) Sponsor and Included in
) Form N-8B-2
28. Certain information as to offi- ) Included in Form
cials and affiliated persons of ) N-8B-2
Depositor )
29. Voting securities of Depositor ) Included in Form
) N-8B-2
30. Persons controlling Depositor ) *
31. Compensation of Officers and ) *
Directors of Depositor )
32. Compensation of Directors of ) *
Depositor )
33. Compensation of employees of ) *
Depositor )
34. Remuneration of other persons ) *
for certain services rendered )
to trust )
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's securi- ) Public Offering of Units
ties by states ) - Public Distribution
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to dis- ) *
tribute )
38. (a) Method of distribution ) Public Offering of Units
(b) Underwriting agreements )
(c) Selling agreements )
39. (a) Organization of principal ) Sponsor
underwriter )
(b) N.A.S.D. membership of )
principal underwriter )
__________
* Not applicable, answer negative or not required.
<PAGE>
40. Certain fees received by prin- ) Public Offering of Units
cipal underwriter ) - Profit of Sponsor
)
41. (a) Business of principal un- ) Sponsor
derwriter )
(b) Branch offices of princi- ) *
pal underwriter )
(c) Salesman of principal un- ) *
derwriter )
42. Ownership of trust's securities ) *
by certain persons )
43. Certain brokerage commissions ) *
received by principal under- )
writer )
44. (a) Method of valuation ) Public Offering of Units
(b) Schedule as to offering ) *
price )
(c) Variation in offering ) Public Offering of Units
price to certain persons ) - Volume Discount; Ex-
) change Option
45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Public Offering of Units
) - Secondary Market; Re-
) demption
(b) Schedule as to redemption ) *
price )
47. Maintenance of position in un- ) See items 10(d), 44 and
derlying securities ) 46
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of ) Trustee
Trustee )
49. Fees and expenses of Trustee ) Expenses and Charges
50. Trustee's lien ) Expenses and Charges
__________
* Not applicable, answer negative or not required.
<PAGE>
VI. INFORMATION CONCERNING INSURANCE
OF HOLDERS OF SECURITIES
51. (a) Name and address of Insur- ) *
ance Company )
(b) Type of policies ) *
(c) Type of risks insured and ) *
excluded )
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of can- ) *
cellation )
(g) Method of determining pre- ) *
miums )
(h) Amount of aggregate premi- ) *
ums paid )
(i) Persons receiving any part ) *
of premiums )
(j) Other material provisions ) *
of the Trust relating to )
insurance )
VII. POLICY OF REGISTRANT
52. (a) Method of selecting and ) Introduction; Objectives
eliminating securities ) and Securities Selection;
from the Trust ) The Trust - Summary De-
) scription of the Portfo-
) lio; Sponsor - Responsi-
) bility
(b) Elimination of securities ) *
from the Trust )
(c) Substitution and elimina- ) Introduction; Objectives
tion of securities from ) and Securities Selection;
the Trust ) Sponsor - Responsibility
(d) Description of any funda- ) *
mental policy of the Trust )
53. Taxable status of the Trust ) Cover of Prospectus; Tax
) Status
__________
* Not applicable, answer negative or not required.
<PAGE>
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Information regarding the ) *
Trust's past ten fiscal years )
55. Certain information regarding ) *
periodic payment plan certifi- )
cates )
56. Certain information regarding ) *
periodic payment plan certifi- )
cates )
57. Certain information regarding ) *
periodic payment plan certifi- )
cates )
58. Certain information regarding ) *
periodic payment plan certifi- )
cates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to Form S-6) ) Condition
__________
* Not applicable, answer negative or not required.
<PAGE>
PARTS A AND B OF THIS PROSPECTUS DO NOT CONTAIN ALL OF THE INFORMATION WITH
RESPECT TO THE INVESTMENT COMPANY SET FORTH IN ITS REGISTRATION STATEMENT AND
EXHIBITS RELATING THERETO WHICH HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
[LOGO] MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT Portfolio Series 98
- -----------------------------------------------------------------------
(A Unit Investment Trust)
- -----------------------------------------------------------------------------
The objectives of the Trust are current income and capital appreciation through
an investment in a fixed portfolio of equity securities ("Securities") issued by
publicly traded real estate investment trusts ("REITs"), over a period of
approximately 2 years. The Trust is a fixed portfolio, consisting of the
Securities, and share weightings, as determined as of October 20, 1998. The
value of the Units of the Trust will fluctuate with the value of the portfolio
of underlying Securities. UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE UNITS ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. INVESTMENT IN UNITS OF THE TRUST IS SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
SPONSOR TRUSTEE
- ----------------------------------- -----------------------------------
Dean Witter Reynolds Inc. The Chase Manhattan Bank
2 World Trade Center 270 Park Avenue
New York, New York 10048 New York, New York 10017
PROSPECTUS DATED OCTOBER 22, 1998
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
AS OF OCTOBER 21, 1998(1)
<TABLE>
<S> <C>
Aggregate Value of Securities in Trust(2)............................. $241,188.80
Number of Units(3).................................................... 25,000
Fractional Undivided Interest in the Trust Represented by Each Unit... 1/25,000th
Public Offering Price Per 100 Units:
Value of Securities in the Trust.................................. $ 961.93
Plus Value of Securities for organization costs(4)................ 2.83
Total Value of Securities......................................... 964.76
Plus Sales Charge of 3.90% of Public Offering Price(5) (3.932% of
the amount invested in Securities)............................... 37.93
Less Deferred Sales Charge per 100 Units.......................... (30.00)
-----------
Public Offering Price per 100 Units(6)............................ $ 972.69
-----------
-----------
Sponsor's Repurchase Price per 100 Units and Redemption Price per 100
Units (based on the value of the underlying Securities, $37.93 less
than the Public Offering Price per 100 Units)(7).................... $ 934.76
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Evaluation Time................................... Close of the market: 4:00 P.M. New York time.
Record Dates...................................... Monthly on the first day of each month beginning December 1,
1998.
Distribution Dates................................ Monthly on the fifteenth day of each month beginning
December 15, 1998.
Minimum Principal Distribution.................... No distribution need be made from the Principal Account if
the balance therein is less than $1.00 per 100 Units
outstanding.
In-Kind Distribution Date......................... October 18, 2000
Liquidation Period................................ Not to exceed 30 business days after the In-kind
Distribution Date.(8)
Mandatory Termination Date........................ November 30, 2000
Discretionary Liquidation Amount.................. The Indenture may be terminated by the Sponsor if the value
of the Trust at any time is less than 40% of the market
value of the Securities deposited in the Trust.(3)
Trustee's Fee (including estimated expenses)(9)... $0.92 per 100 Units.
Organization Costs (estimated)(4)................. $2.83 per 100 Units.
Sponsor's Portfolio Supervision Fee(9)............ Maximum of $0.25 per 100 Units.
Deferred Sales Charge Payment Date................ The last business day of each month for 12 months com-
mencing on January 29, 1999
Minimum Purchase: $100
</TABLE>
i
<PAGE>
- ------------------------
(1) The Initial Date of Deposit. The Indenture was signed and the initial
deposit of Securities with the Trustee was made on the Initial Date of Deposit.
(2) Based on the evaluation of the Securities as of 4:00 P.M. on October 21,
1998.
(3) The number of Units will be increased as the Sponsor deposits additional
Securities into the Trust. See "Introduction", in Part B.
(4) $2.83 per 100 Units will be distributed to the Sponsor at the close of the
initial offering period to reimburse the Sponsor for the payment of the
organization costs. The organization costs including the cost of preparation and
printing of the Indenture, Registration Statement and other documents relating
to the Trust, Federal and State registration fees and costs, initial fees of the
Trustee, and legal and auditing expenses will be borne by Unit Holders.
Organizational expenses per Unit have been estimated based on a Trust with
projected total assets of $75 million. To the extent the assets of the Trust are
less than such amount, the organizational expense per Unit may be greater than
the estimate shown. The Securities are subject to the sales charge.
(5) The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($30.00 per 100 Units) from the aggregate sales charge (a maximum of
3.90% of the Public Offering Price); thus on the date of this Summary of
Essential Information, the Initial Sales Charge is $7.93 per 100 Units or 0.82%
of the Public Offering Price. The Initial Sales Charge paid by a Unit Holder may
be more or less than $7.93 per 100 Units because of the fluctuation of the value
of the Securities from that on the Initial Date of Deposit. The Initial Sales
Charge is reduced on a graduated basis on purchases of $50,000 or more (see
"Public Offering of Units-- Volume Discount"). The Deferred Sales Charge is paid
through reduction of Trust assets by $2.50 per 100 Units on each Deferred Sales
Charge Payment Date through the sale of Securities on each such date or
distribution of cash available in the Principal Account for such payment. On a
repurchase, redemption or exchange of Units before the last Deferred Sales
Charge Payment Date, any remaining Deferred Sales Charge payments will be
deducted from the proceeds. Units purchased pursuant to the Reinvestment Program
are subject to that portion of the Deferred Sales Charge remaining at the time
of reinvestment (see "Reinvestment Program").
(6) This price is computed as of the Initial Date of Deposit and may vary from
such price on the date of this Prospectus or any subsequent date.
(7) This price is computed as of the Initial Date of Deposit and may vary from
such price on the date of this Prospectus or any subsequent date. This price
reflects deductions for remaining Deferred Sales Charge payments ($30.00 per 100
Units initially). In addition, after the initial offering period, the repurchase
and cash redemption prices will be further reduced to reflect the Trust's
estimated brokerage costs of selling Securities to meet redemptions, currently
estimated at $1.25 per 100 Units. Estimated organization costs will be
reimbursed to the Sponsor at the close of the initial offering period.
(8) The final distribution will be made within 5 business days following the
receipt of proceeds from the sale of all Portfolio Securities. (See:
"Administration of the Trust--Termination".)
(9) See: "Expenses and Charges" herein. The fee accrues daily and is payable on
each Distribution Date. Estimated dividends from the Securities, based on the
last dividends actually paid, are expected by the Sponsor to be sufficient to
pay the estimated expenses of the Trust. In addition to the Trustee's fee,
brokerage costs borne by the Trust in connection with the purchase of Securities
by the Trustee with cash deposited in the Trust are currently estimated at $1.00
per 100 Units. The Trustee's fee is based on a Trust with assets of $75 million.
If Trust assets are less than $75 million, the Trustee's fee will be higher.
ii
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
FEE TABLE
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES THAT
YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC OFFERING OF UNITS AND EXPENSES
AND CHARGES. ALTHOUGH THE TRUST HAS A TERM OF APPROXIMATELY 2 YEARS, AND IS A
UNIT INVESTMENT TRUST RATHER THAN A MUTUAL FUND, THIS INFORMATION IS PRESENTED
TO PERMIT A COMPARISON OF FEES AND EXPENSES (PERCENTAGES ARE BASED ON A $1,000
INVESTMENT IN 100 UNITS).
<TABLE>
<CAPTION>
AMOUNT PER
$1,000
INVESTMENT
UNIT HOLDER TRANSACTION EXPENSES IN 100 UNITS
- ----------------------------------------------------------------- --------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase......................... 0.90%(a) $ 9.00
Deferred Sales Charge per Year................................... 3.00%(b) 30.00
------- ------
Maximum Sales Charge per Year.................................... 3.90% $ 39.00
------- ------
------- ------
Maximum Sales Charge per Year on Reinvested Dividends............ $ 30.00(c)
ORGANIZATION COSTS (d)........................................... 0.283% $ 2.83
</TABLE>
<TABLE>
<S> <C> <C>
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)(e)
Trustee's Fee.................................................. 0.092% $ 0.92
Portfolio Supervision, Bookkeeping and Administrative Fees..... 0.025% 0.25
Other Operating Expenses....................................... -- --
----- ------
Total...................................................... 0.117% $ 1.17
----- ------
----- ------
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES
PAID FOR PERIOD
-------------------
2
1 YEAR YEARS(f)
------- ---------
<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming an estimated operating expense ratio
and organization cost of 0.400% and a 5% annual return on
the investment
throughout the periods..................................... $ 43 $ 47
The Example assumes reinvestment of all dividends and distributions and utilizes
a 5% annual rate of return as mandated by Securities and Exchange Commission
regulations applicable to mutual funds. For purposes of the Example, the Deferred
Sales Charge imposed on reinvestment of dividends is not reflected until the year
following payment of the dividend; the cumulative expenses would be higher if
sales charges on reinvested dividends were reflected in the year of reinvestment.
Because the reductions to the repurchase and cash redemption prices described in
footnote 7 on page ii apply only to the secondary market, these reductions have
not been reflected in the figures above. The Example should not be considered a
representation of past or future expenses or annual rate of return; the actual
expenses and rate of return may be more or less than those assumed for purposes
of the Example.
</TABLE>
iii
<PAGE>
-------------------
(a) The Initial Sales Charge is actually the difference between 3.90% and the
Deferred Sales Charge ($30.00 per 100 Units) and would exceed 3.90% if the
Public Offering Price exceeds $1,000 per 100 Units.
(b) The actual fee is $2.50 per month per 100 Units, irrespective of purchase
or redemption price, paid on each Deferred Sales Charge Payment Date. If a
Holder sells Units before all of these payments have been made, the balance
of the Deferred Sales Charge will be paid from the sales proceeds. If the
Unit purchase price exceeds $10 per Unit, the Deferred Sales Charge will be
less than 3.0%; if the Unit purchase price is less than $10 per Unit, the
Deferred Sales Charge will exceed 3.0%.
(c) Reinvested dividends will be subject only to the Deferred Sales Charge
remaining at the time of reinvestment which may be more or less than 3.0%
of the Public Offering Price at the time of reinvestment (see "Reinvestment
Program").
(d) The cost of preparation and printing of the Indenture, Registration
Statement and other documents relating to the Trust, Federal and State
registration fees and costs, initial fees of the Trustee, and legal and
auditing expenses will be borne by Unit Holders. Organizational expenses
per Unit have been estimated based on a Trust with projected total assets
of $75 million. To the extent the assets of the Trust are less than such
amount, the organizational expense per Unit may be greater than the
estimate shown.
(e) The estimates do not include the costs borne by Unit Holders of purchasing
and selling Securities.
(f) Although the Trust has a term of approximately 2 years and is a unit
investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees and expenses, assuming the principal amount
and distributions are exchanged each 2 year period into a new trust subject
only to the Deferred Sales Charge.
iv
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
THE TRUST--The Morgan Stanley Dean Witter Select Equity Trust, REIT
Portfolio Series 98 (the "Trust") is a unit investment trust composed of a fixed
portfolio of publicly-traded common stocks and/or common shares of beneficial
interest issued by publicly traded REITs or contracts to purchase such stocks
(the "Securities"). The objectives of the Trust are current income and capital
appreciation by an investment in the Securities (selected as of October 20,
1998). There is no guarantee that the objectives of the Trust will be achieved.
In this prospectus a reference to common stock shall include both common stock
and common shares of beneficial interest issued by a REIT organized as a trust.
On the Initial Date of Deposit and thereafter, the Sponsor may, under the
Indenture and Agreement, deposit additional Securities, contracts to purchase
additional Securities together with a letter of credit and/or cash with
instructions to purchase additional Securities in order to create Additional
Units while maintaining to the extent practicable the proportionate relationship
between the number of shares of each Security in the Portfolio.
Unitholders may choose to hold their Units for any length of time up to
approximately 2 years, depending upon the date of purchase, unless the Trust is
terminated early.
SPECIAL CHARACTERISTICS OF THE TRUST--SECURITIES SELECTION--The Securities
of the Portfolio were selected by the Sponsor from the Morgan Stanley Dean
Witter Global Equity Research ("MSDW Research") REIT stock universe of Equity
REITs utilizing a rule-based formula developed by the Sponsor which primarily
reflects, among other things, the following criteria as of October 20, 1998: (a)
eliminate stocks that do not pay a dividend; (b) current stock rating must be
either Strong Buy, Outperform or Neutral; (c) the annual dividend payment is not
more than a predetermined percentage of the current estimate for Funds From
Operations ("FFO"); (d) stock has a positive trend for FFO; and (e) at least
five asset classes (i.e., office, apartments, hotels, etc.) of REIT stocks must
be represented in the Portfolio. The remaining stocks are then ranked from
highest to lowest dividend yield and the top 30 dividend yielding stocks
comprise the Portfolio. The Portfolio is generally equally-weighted, although
there may be certain variations based on market factors, including average daily
trading volume. See the "Schedule of Portfolio Securities" for specific share
weighting of each Security in the Portfolio as of the Initial Date of Deposit.
There is no guarantee that the above criteria will meet the objectives of the
Trust.
MSDW Research presently rates stocks in the order of highest rating category
to the lowest as follows: Strong Buy, Outperform, Neutral and Underperform. The
Securities selected for the Portfolio were rated either Strong Buy, Outperform
or Neutral on the Initial Date of Deposit. MSDW Research had no role in the
selection of the Portfolio. The MSDW Global Equity Research Department of Morgan
Stanley & Co. Incorporated is an affiliate of the Sponsor.
For additional characteristics of the Trust see Part B.
RISK FACTORS--SPECIAL CONSIDERATIONS--An investment in Units of the Trust should
be made with an understanding of the following risks:
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust Portfolio as of October 20, 1998. Assigning
research ratings to individual stocks is an ongoing process, which results in
changes to ratings as deemed appropriate in the opinion of the research
analysts. Thus, ratings can change at any time, and can be expected to change
during the life of the Trust. Also, research ratings are made without taking
into account any particular investor, portfolio or time horizon. Ratings do not
reflect any specified "allocations" of companies, by industry or sector.
The portfolio of the Trust is an unmanaged fixed portfolio. The Securities
listed in the Schedules of Portfolio Securities are expected to be held for the
life of the Trust, regardless of any changes in yields or ratings. Subsequent to
October 20, 1998; (i) any of the Securities may no longer meet the criteria for
initial inclusion in the Trust and may not be among the highest yielding REIT
v
<PAGE>
stocks rated Strong Buy, Outperform or Neutral by MSDW Global Equity Research;
and the ratings of any of the Securities may be downgraded or removed by MSDW
Research (and any ratings assigned to the Securities by any other firm may be
downgraded or removed by such firms), which may have an adverse effect on such
Securities. Nevertheless, none of these events will cause the removal of any
Securities from the Trust's fixed portfolio.
The Sponsor expects to, on and subsequent to the Initial Date of Deposit,
deposit additional Securities which reflect the Portfolio as of the Initial Date
of Deposit, subject to permitted adjustments, and/or contracts to purchase
additional Securities together with a letter of credit and/or cash with
instructions to purchase additional Securities and sell such additional Units
created. The creation, offer and sale of additional Units and the offer and sale
of Units in the secondary market may continue even though the Securities would
no longer be chosen for deposit into the Trust if the selection process were to
be made at such later time, even if a Security were rated "underperform" by MSDW
Global Equity Research at such time and even if the MSDW REIT Research analysts
no longer cover the REIT issuer.
The Securities may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities and securities issued by REITs in general and the Securities
in particular. The value of REITs may be particularly adversely affected in the
event of rising interest rates. The Securities' dividends may be lowered or
stopped at any time. Therefore, there can be no assurance that the Trust's
objectives will be achieved. The Securities, and hence the Units, may be
unsuitable for investors depending on their specific investment objectives and
financial position. The Trust is not appropriate for investors seeking capital
preservation. Past performance is not a guarantee of future results. The price
of, and income from, the Securities and, therefore, the Units may rise or fall.
A Unit Holder's Units, when redeemed or sold, may be worth more or less than
their original cost.
REIT RISK FACTORS--REITs generally have interests in income-producing real
estate. There are two principal types of REITs: those which hold primarily real
estate and benefit from the underlying net rental income generated from the
properties ("Equity REITs") and those which hold primarily mortgages which are
secured by real estate assets and benefit predominantly from the difference
between the interest income on the mortgage loans and the interest expense on
the capital used to finance the loans ("Mortgage REITs"). A third type combines
the investment strategies of the Equity REITs and the Mortgage REITs ("Hybrid
REITs"). Equity REITs emphasize direct property investment, holding their
invested assets primarily in the ownership of real estate or other equity
interests. The objective of an Equity REIT, which all of the Trust's Securities
consist of, is to purchase income-producing real estate properties in order to
generate cash flow from rental income and a gradual asset appreciation, and they
typically invest in properties such as office, retail, industrial, hotel,
parking facilities, apartment buildings and health care facilities. To qualify
for special tax treatment under the federal income tax law, a REIT must conform
to certain requirements of the Internal Revenue Code of 1986, as amended (the
"Code").
Many factors can have an adverse impact on the performance of a particular
REIT, its cash available for distribution, the credit quality of a particular
REIT or the real estate industry generally. Fundamentally, the success of REITs
depends on various factors, including the occupancy and rent levels,
appreciation of the underlying property and the ability to raise rents on those
properties. Economic recession, overbuilding, tax law changes, higher interest
rates or excessive speculation can all have a negative impact on REITs.
Currently, many REITs are finding it more difficult to acquire property, and
this may negatively affect future earnings, and, hence, share prices.
Risks associated with the direct ownership of real estate include, among
other factors, general and local economic conditions, decline in real estate
values, the financial health of tenants, overbuilding and increased competition
for tenants, oversupply of properties for sale, changing demographics, changes
in interest rates, changes in government regulations, faulty construction,
vi
<PAGE>
changes in neighborhood values, and the unavailability of construction financing
or mortgage loans at rates acceptable to developers. Variations in rental income
and space availability and vacancy rates in terms of supply and demand are
additional factors affecting real estate generally and REITs in particular.
Investors should also be aware that REITs may not be diversified and are
subject to the risks of financing projects. The real estate industry may be
cyclical and, to the extent the Trust acquires REIT Securities at or near the
top of the cycle, there is increased risk of a decline in value of the REIT
Securities during the life of the Trust. The recent increased demand for certain
types of real estate may have inflated the value of real estate thereby
increasing the risk of a substantial decline in the value of such real estate
and increasing the risk of a decline in the value of the Securities and
therefore the value of the Units. REITs are also subject to defaults by
borrowers and the market's perception of the REIT industry generally.
Because of their structure, and legal requirement that they distribute at
least 95% of their taxable income to shareholders annually, REITs are companies
that require frequent amounts of new funding, both through debt financings
(borrowings) and equity financings (stock issuances). Thus, REITs have had a
history of frequently issuing substantial amounts of new equity shares (or
equivalents) to purchase or build new properties. This may have had an adverse
effect on REIT equity share market prices, and both existing and new share
issuances may have such an effect on such prices in the future, especially when
REITs continue to issue stock when real estate prices are relatively high and
stock prices are relatively low.
Within the past year, several unit investment trusts (UIT's) acquired
significant amounts of REIT shares through underwriting arrangements between the
REIT issuers and the sponsors of the UITs. Such UITs are scheduled to terminate
within the next 2-4 years, which may result in the sale of substantial
quantities of shares of individual REIT shares in the open market. Such sales
may adversely affect the value of the Securities in the Trust and, when the
Trust sells Securities, may reduce the sales proceeds received by the Trust.
The Sponsor is unable to predict the extent to which REIT issuers, in
general, and the REIT issuers in the Trust, will issue new equity shares (or
equivalents) in the future. Any such new issuances and transactions could have a
negative effect on REIT equity share prices, including those shares held by the
Trust.
Certain REITs in the Trust may be structured as UPREITs. This form of REIT
owns an interest in a partnership that owns real estate, which can result in a
potential conflict of interest between shareholders of the REIT who may want to
sell an asset and other partnership interest holders who would be subject to tax
liability if the REIT sells the property. In some cases, REITs have entered into
"no sell" agreements, which are designed to avoid a taxable event to the holders
of partnership units by preventing the REIT from selling the property. This
arrangement may mean that the REIT would refuse a lucrative offer for an asset
or be forced to hold on to a poor asset. Since "no sell" agreements are often
undisclosed, the Sponsor is unable to state whether any of the REITs in the
Trust have entered into this kind of arrangement.
REIT Taxation. Each of the REITs in which the Trust invests will generally
state its intention to operate in such manner as to qualify for taxation as a
"real estate investment trust" under the Code, although, of course, no assurance
can be given that each REIT will at all times so qualify. So long as an issuer
qualifies as a REIT, it will, in general, be subject to Federal income tax only
on income that is not distributed to stockholders. In order to qualify as a REIT
for any taxable year, a REIT must, among other things, hold at least 75% of its
assets in real estate, cash items and government securities; derive at least 75%
of its gross income from rent from real property and interest on mortgages;
derive at least 95% of its gross income from sources that satisfy the 75% gross
income test described in the preceding clause, plus dividends, interest and gain
from the sale or disposition of certain stock or securities; and distribute to
its stockholders annually an amount at least equal to 95% of its REIT taxable
income (computed without regard to net capital gain or the dividends paid
deduction). Failure to qualify for taxation as a REIT in any taxable year will
subject an issuer to tax on its taxable income at regular corporate rates and
certain other taxes. Distributions to stockholders in any year in which an
issuer fails to qualify as a REIT will not be deductible by the issuer. Unless
entitled to relief under specific statutory provisions, the issuer would not
qualify for taxation as a REIT for the next four taxable years after failing to
qualify in any year. Each
vii
<PAGE>
REIT may also be subject to state, local or other taxation in various state,
local or other jurisdictions. A change in the tax laws or regulations relating
to REIT's may adversely affect the value of the Securities. The Administration
recently issued a budget proposal which contained provisions which, if enacted,
may adversely affect REITs. Such proposals include new limits on the ownership
by REITs of stock in other entities, new limits on ownership of a REIT and
limits on the ability of certain REITs to acquire additional properties.
LEGISLATIVE RISK--At any time there may exist proposals by lawmakers to pass
legislation that could adversely affect REIT's including proposals relating to
environmental, fire, safety and tax laws and regulations. The Sponsor cannot
predict whether new laws that affect REITS will be enacted.
For additional REIT related risks see "Part B--Risk Factors--Special
Considerations".
GENERAL RISKS OF EQUITY INVESTING--There are risks inherent in an investment
in common stocks, such as the Trust's Securities. The value of such stock will
fluctuate. Thus, the value of Units will fluctuate.
Common stock risks include risks associated with the limited rights of
holders of common stock to receive payments from issuers of such stock; such
rights are inferior to those of creditors and holders of debt obligations or
preferred stock. Also, holders of common stock have the right to receive
dividends only when, as and if such dividends are declared by the issuer's board
of directors. Investors should also be aware that the value of the underlying
Securities in the Portfolio may fluctuate in accordance with changes in the
value of common stocks in general. Equity markets have been at historically high
levels and no assurance can be given that these levels will continue. There are
certain risks of price volatility associated with investment in common stocks,
including REIT stocks. Your risk is increased because your capital is
concentrated in stocks from one industry. The value of the common stock in the
Trust may be expected to fluctuate over the life of the Trust to values higher
or lower than those prevailing on a date of deposit. The value of a Unit may be
subject to greater volatility than an investment in a more diversified portfolio
both in terms of the number of issuers and the concentration in issues from one
industry.
The value of the Units will fluctuate depending on all the factors that have
an impact on the economy and the equity markets. These factors similarly affect
the ability of an issuer to pay dividends. The Trust is not a "managed"
registered investment company and Securities will not be sold by the Trustee as
a result of ordinary market fluctuations.
In connection with the deposit by the Sponsor of cash (or a letter of credit
in lieu of cash) with instructions to purchase additional Securities to create
Additional Units, to the extent that the price of a Security fluctuates between
the time the cash is deposited and the time the cash is used to purchase the
Security, Units (including previously issued Units) may represent more or less
of that Security and more or less of other Securities in the Portfolio of the
Trust. In addition, the brokerage fees incurred in purchasing Securities with
such deposited cash will be borne by the Trust. Any Unit Holder who purchased
Units prior to the purchase of Securities with such deposited cash would
experience dilution as a result of any such brokerage fees.
DISTRIBUTION--The Trustee will distribute any dividends (net of Trust
expenses) and any proceeds from the disposition of Securities not used for
redemption of Units received by the Trust on the monthly Distribution Dates to
holders of record on the Record Date immediately preceeding each monthly
Distribution Date. Upon termination of the Trust, the Trustee will distribute to
each Unit Holder of record its pro rata share of the Trust's assets, less
expenses and less any Deferred Sales Charge then payable or Unit Holders can
elect to reinvest their distributions automatically in units of a New Series (as
defined below), if offered by the Sponsor, which units acquired through
reinvestment upon termination will be subject only to a deferred sales charge
(see "Administration of the Trust--Termination"). The sale of Securities in the
Trust during the period prior to termination and upon termination may result in
a lower amount than might otherwise be realized if such sale were not required
at such time due to impending or actual termination of the Trust. For this
reason, among others, the amount realized by a Unit Holder upon termination may
be less than the amount paid by such Unit Holder. (See: "Administration of the
Trust--Distribution".)
viii
<PAGE>
The Sponsor anticipates that, based upon the last dividends actually paid by
the companies listed in the "Schedule of Portfolio Securities", dividends from
the Securities will be sufficient to (i) pay expenses of the Trust and (ii)
after such payment, to make distributions to Unit Holders as described herein.
(See: "Expenses and Charges" and "Administration of the Trust-- Distribution".)
PUBLIC OFFERING PRICE--The Public Offering Price per 100 Units is computed
on the basis of the aggregate value of the underlying Securities next computed
after receipt of a purchase order plus cash on hand in the Trust, divided by the
number of Units outstanding times 100, plus a sales charge of 3.932% of such
evaluation per 100 Units (the amount invested in Securities); this results in a
sales charge of 3.90% of the Public Offering Price. A proportionate share of
amounts, if any, in the Income Account is also added to the Public Offering
Price. (See "Public Offering of Units--Public Offering Price".) The total sales
charge consists of an Initial Sales Charge and a Deferred Sales Charge, the
total of which equals 3.90% of the Public Offering Price or 3.932% of the amount
invested in Securities. The Initial Sales Charge is computed by deducting the
Deferred Sales Charge ($30.00 per 100 Units) from the aggregate sales charge;
thus, on the date of the Summary of Essential Information, the Initial Sales
Charge is $7.93 per 100 Units or 0.82% of the Public Offering Price. The Initial
Sales Charge paid by a Unit Holder may be more or less than $7.93 per 100 Units
because of the fluctuation of the value of the Securities from that on the
Initial Date of Deposit. The Initial Sales Charge will vary with changes in the
aggregate sales charge and is deducted from the purchase price of a Unit at the
time of purchase and paid to the Sponsor. The Initial sales charge will be
reduced on a graduated basis on purchases of $50,000 or more.
Unit Holders acquiring Units in future series, if any, through an exchange
or rollover of units of a previous series of the Trust will acquire such Units
subject only to the Deferred Sales Charge. The Deferred Sales Charge is paid
through reduction of Trust assets by $2.50 per 100 Units monthly on each
Deferred Sales Charge Payment Date commencing on the first Deferred Sales Charge
Payment Date shown on the Summary of Essential Information through the sale of
Securities on each such date or distribution of cash available for such payment.
Units purchased pursuant to the Reinvestment Program are subject only to
deductions remaining of the Deferred Sales Charge (see "Reinvestment Program").
If a Unit Holder exchanges, redeems or sells his Units to the Sponsor prior to
the last Deferred Sales Charge Payment Date, the Unit Holder is obligated to pay
any remaining Deferred Sales Charge.
MARKET FOR UNITS--The Sponsor, though not obligated to do so, intends to
maintain a market for the Units. If such market is not maintained, a Unit Holder
will be able to dispose of his Units through redemption at prices based on the
aggregate value of the underlying Securities. (See: "Redemption".) Market
conditions may cause such prices to be greater or less than the amount paid for
Units. The Sponsor's Repurchase Price, like the Redemption Price, will reflect
the deduction from the value of the underlying Securities of any unpaid amount
of the Deferred Sales Charge. Investors should note that the Deferred Sales
Charge of $2.50 per 100 Units will be deducted from Trust assets on the last
business day of each of the twelve months commencing on the first Deferred Sales
Charge Payment Date shown on the Summary of Essential Information, and to the
extent the entire Deferred Sales Charge has not been so deducted or paid at the
time of repurchase or redemption of the Units, the remainder will be deducted
from the proceeds of sale or redemption or in calculating an in-kind redemption.
TERMINATION--The Trust will terminate approximately 2 years after the
Initial Date of Deposit regardless of market conditions at that time. The Trust
will then liquidate. Unit Holders may elect to receive shares in-kind. Prior to
termination of the Trust, the Trustee will begin to sell the Securities held in
the Trust over a period not to exceed 30 consecutive business days (the
"Liquidation Period"). Monies held upon such sale of Securities will be held
uninvested in non-interest bearing accounts created by the Indenture until
distributed pro rata to Unit Holders on or about December 7, 2000 and will be of
benefit to the Trustee during such period. During the life of the Trust,
Securities will not be sold to take advantage of market fluctuations.
Because the Trust is not managed and the Securities can only be sold during
the Liquidation Period or under certain other limited circumstances described
herein, the proceeds received from the sale of Securities may be less than could
be obtained if the
ix
<PAGE>
sale had taken place at a different time. Depending on the volume of Securities
sold and the prices of and demand for Securities at the time of such sale, the
sales of Securities from the Trust may tend to depress the market prices of such
Securities and hence the value of the Units, thus reducing termination proceeds
available to Unit Holders. In order to mitigate potential adverse price
consequences of heavy volume trading in the Securities taking place over a short
period of time and to provide an average market price for the Securities, the
Trustee will follow procedures set forth in the Indenture to sell the Securities
in an orderly fashion over a period not to exceed the Liquidation Period. The
Sponsor can give no assurance, however, that such procedures will mitigate
negative price consequences or provide a better price for such Securities. The
Trust may terminate earlier than on the Mandatory Termination Date if the value
of the Trust is less than the Discretionary Liquidation Amount set forth under
"Administration of the Trust--Termination."
PORTFOLIO CHARACTERISTICS--A review of the Trust's Securities as of the
Initial Date of Deposit indicates that all are Equity REITs and can be
characterized as being within the following asset classes as set forth below:
<TABLE>
<CAPTION>
APPROXIMATE PERCENTAGE
OF AGGREGATE MARKET
ASSET CLASS PORTFOLIO NO. VALUE OF TRUST
- -------------------------------------------------- ----------------------- -----------------------
<S> <C> <C>
Office............................................ 2, 6, 8, 13, 17, 29 19.91%
Apartment/Multifamily............................. 1, 3, 7, 12, 21, 27 20.01%
Regional Mall..................................... 16, 20, 24, 28, 30 16.60%
Shopping Center................................... 5, 9, 10, 15 13.38%
Industrial........................................ 19, 25 6.72%
Hotel............................................. 4, 11, 14, 18, 22 16.66%
Self storage...................................... 23, 26 6.72%
</TABLE>
x
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
We have audited the accompanying statement of financial condition and
schedule of portfolio securities of the Morgan Stanley Dean Witter Select Equity
Trust REIT Portfolio Series 98 as of October 21, 1998. These financial
statements are the responsibility of the Trustee. (See note (f) to the Statement
of Financial Condition). Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit and contracts for the purchase
of securities, as shown in the statement of financial condition and schedule of
portfolio securities as of October 21, 1998, by correspondence with The Chase
Manhattan Bank, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of financial condition and schedule of
portfolio securities referred to above present fairly, in all material respects,
the financial position of the Morgan Stanley Dean Witter Select Equity Trust
REIT Portfolio Series 98 as of October 21, 1998 in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
October 21, 1998
New York, New York
xi
<PAGE>
STATEMENT OF FINANCIAL CONDITION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
INITIAL DATE OF DEPOSIT, OCTOBER 21, 1998
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's Contracts to purchase underlying Securities
backed by an irrevocable letter of credit (a)(b)....... $241,188.80
-----------
Total................................................. $241,188.80
-----------
-----------
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability--
Payment of deferred portion of sales charge (c)....... $ 7,500.00
Reimbursement to Sponsor for organization costs (b)... 707.50
-----------
Subtotal.............................................. 8,207.50
-----------
Interest of Unit Holders--
Units of fractional undivided interest outstanding:
Cost to investors (d)................................. $243,172.05
Less: Gross underwriting commissions (e).............. (9,483.25)
Less: Organization Costs (b) (707.50)
-----------
Net amount applicable to investors...................... $232,981.30
-----------
Total................................................. $241,188.80
-----------
-----------
</TABLE>
xii
<PAGE>
- ------------------------
(a) The aggregate value of the Securities represented by Contracts to Purchase
listed under "Schedule of Portfolio Securities" and their cost to the Trust
are the same. The value is determined by the Trustee on the basis set forth
under "Public Offering of Units--Public Offering Price" as of the Initial
Date of Deposit. An irrevocable letter of credit drawn on Compagnie
Financiere De CIC et de L'Union Europeenne, New York Branch, in the amount
of $300,000.00 has been deposited with the Trustee.
(b) A portion of the Public Offering Price consists of Securities in an amount
sufficient to pay for all or a portion of the costs incurred in establishing
the Trust. The Sponsor will be reimbursed for the organization costs at the
close of the initial offering period. Organizational costs per unit have
been estimated based on a Trust with projected total assets of $75 million.
To the extent the assets of the Trust are less than $75 million, the
organizational costs may be less although the per Unit amount may increase.
To the extent the assets of the Trust are more, the organizational costs may
be higher, although the per Unit amount may decrease.
(c) Represents the aggregate amount of mandatory distributions of $2.50 per 100
Units per month payable on the last business day of each month from January
29, 1999 through December 31, 1999. Distributions will be made to an account
maintained by the Trustee from which the Unit Holders' Deferred Sales Charge
obligation to the Sponsor will be satisfied. If Units are redeemed prior to
December 31, 1999, the remaining portion of the obligation applicable to
such Units will be transferred to such account on the redemption date.
(d) The aggregate Public Offering Price is computed on the basis set forth under
"Public Offering of Units--Public Offering Price".
(e) The aggregate sales charge of 3.90% of the Public Offering Price per 100
Units is computed on the basis set forth under "Public Offering of
Units--Public Offering Price".
(f) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the Trust
and is responsible for establishing and maintaining a system of internal
controls directly related to, and designed to provide reasonable assurance
as to the integrity and reliability of, financial reporting of the Trust.
The Trustee is also responsible for all estimates and accruals reflected in
the Trust's financial statements. The Trustee determines the price for each
underlying Security included in the Trust's Schedule of Portfolio Securities
on the basis set forth in "Public Offering of Units--Public Offering Price".
Under the Securities Act of 1933, as amended (the "Act"), the Sponsor is
deemed to be an issuer of the Trust's Units. As such, the Sponsor has the
responsibility of an issuer under the Act with respect to financial
statements of the Trust included in the Registration Statement under the Act
and amendments thereto.
xiii
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
ON INITIAL DATE OF DEPOSIT, OCTOBER 21, 1998
<TABLE>
<CAPTION>
CURRENT PROPORTIONATE PERCENTAGE
ANNUAL RELATIONSHIP OF AGGREGATE PRICE PER COST OF
DIVIDEND PER DIVIDEND NUMBER OF BETWEEN NO. OF MARKET VALUE SHARE TO SECURITIES
NO. NAME OF ISSUER SHARE (1) YIELD SHARES SHARES OF TRUST TRUST TO TRUST (2)(3)
- ----- ------------------------- ------------- ---------- ----------- -------------- ------------ --------- ---------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
1. Amli Residential $ 1.76 8.46% 391 3.16% 3.37% $20.8125 $ 8,137.69
Properties Trust
2. Arden Realty, Inc. 1.68 7.75 373 3.01 3.35 21.6875 8,089.44
3. Berkshire Realty Company, 0.97 10.70 896 7.24 3.37 9.0625 8,120.00
Inc.
4. Boykin Lodging Company 1.88 13.99 598 4.83 3.33 13.4375 8,035.63
5. Burnham Pacific 1.05 8.36 645 5.21 3.36 12.5625 8,102.81
Properties, Inc.
6. CarrAmerica Realty 1.85 8.81 378 3.06 3.29 21.0000 7,938.00
Corporation
7. Colonial Properties Trust 2.20 7.98 284 2.30 3.25 27.5625 7,827.75
8. Crescent Real Estate 2.20 9.34 334 2.70 3.26 23.5625 7,869.88
Equities, Inc.
9. Developers Diversified 1.31 7.33 445 3.60 3.30 17.8750 7,954.38
Realty Corporation
10. Federal Realty Investment 1.76 7.98 368 2.97 3.37 22.0625 8,119.00
Trust
11. FelCor Lodging Trust Inc. 2.20 9.94 363 2.93 3.33 22.1250 8,031.38
12. Gables Residential Trust 2.04 8.02 313 2.53 3.30 25.4375 7,961.94
13. Highwoods Properties, 2.16 7.91 293 2.37 3.32 27.3125 8,002.56
Inc.
14. Hospitality Properties 2.64 9.89 302 2.44 3.34 26.6875 8,059.63
Trust
15. JDN Realty Corporation 1.44 6.96 391 3.16 3.35 20.6875 8,088.81
16. JP Realty, Inc. 1.80 8.78 389 3.14 3.31 20.5000 7,974.50
17. Kilroy Realty Corporation 1.62 7.88 392 3.17 3.34 20.5625 8,060.50
18. LaSalle Hotel Properties 1.50 13.11 698 5.64 3.31 11.4375 7,983.38
19. Liberty Property Trust 1.80 8.00 362 2.93 3.38 22.5000 8,145.00
20. Macerich Company 1.84 6.83 295 2.38 3.29 26.9375 7,946.56
21. Mid-America Apartment 2.20 9.05 331 2.68 3.34 24.3125 8,047.44
Communities, Inc.
22. RFS Hotel Investors, Inc. 1.50 13.64 733 5.92 3.34 11.0000 8,063.00
23. Shurgard Storage Centers, 1.96 7.92 323 2.61 3.31 24.7500 7,994.25
Inc.
24. Simon Property Group, 2.02 6.89 272 2.20 3.31 29.3125 7,973.00
Inc.
25. Spieker Properties, Inc. 2.28 6.67 236 1.91 3.35 34.1875 8,068.25
26. Storage USA, Inc. 2.56 8.57 275 2.22 3.41 29.8750 8,215.63
27. Summit Properties, Inc. 1.63 8.64 433 3.50 3.39 18.8750 8,172.88
28. Taubman Centers, Inc. 0.94 7.06 606 4.90 3.34 13.3125 8,067.38
29. Tower Realty Trust, Inc. 1.69 8.45 403 3.26 3.34 20.0000 8,060.00
30. Urban Shopping Centers, 2.10 6.50 250 2.02 3.35 32.3125 8,078.13
Inc.
----------- ---------------
12,372 $241,188.80
----------- ---------------
----------- ---------------
</TABLE>
Footnotes
- ------------------------
(1) Based on the latest quarterly or semiannual declaration. There can be no
assurance that future dividend payments, if any, will be maintained in an
amount equal to the dividend listed above.
xiv
<PAGE>
(2) All Securities are represented entirely by contracts to purchase entered
into on October 21, 1998. Valuation of Securities by the Trustee was made on
the basis of the closing sale price on the exchange where the Security is
listed, or on the asked price if not listed on an exchange, on October 21,
1998. The aggregate purchase price to the Sponsor for the Securities
deposited in the Trust is $241,807.40.
(3) The Sponsor had a loss on the Initial Date of Deposit of $618.60.
The Sponsor or affiliates thereof may perform or seek to perform investment
banking services for, and may have acted as an underwriter, manager or
co-manager of a public offering of the securities of, the above issuers during
the last three years. The Sponsor or affiliates may serve as specialists in the
Securities in this Trust on one or more stock exchanges, or markets, may make
markets in or may have a long or short position in or effect transactions in any
of these stocks or in options on any of these stocks, and may be on the opposite
side of public orders executed on the floor of an exchange where the Securities
are listed. An officer, director or employee of the Sponsor or affiliates may be
an officer or director of one or more of the issuers of the Securities in the
Trust. The Sponsor or affiliates may trade for its own account as an odd-lot
dealer, market maker, block positioner and/or arbitrageur in any of the
Securities or options relating thereto. The Sponsor, its affiliates, directors,
elected officers, employees and employee benefits programs may have either a
long or short position in any Security or option relating thereto.
xv
<PAGE>
PROSPECTUS PART B
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
INTRODUCTION
This series of the Morgan Stanley Dean Witter Select Equity Trust (the
"Trust") was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement (the "Indenture") and a related Reference Trust
Agreement (the "Agreement") (collectively, the "Indenture and Agreement")*,
between Dean Witter Reynolds Inc. (the "Sponsor") and The Chase Manhattan Bank
(the "Trustee"). The Sponsor is a principal operating subsidiary of Morgan
Stanley Dean Witter & Co., a publicly-held corporation. (See: "Sponsor".) The
objectives of the Trust are current income and capital appreciation through
investment in a fixed portfolio of Securities (the "Portfolio") of
publicly-traded common stock. There is no assurance that the objectives will be
met because dividends may be lowered or curtailed and the Securities may
appreciate or depreciate in value depending on the full range of economic and
market influences affecting corporate profitability, the financial condition of
issuers and the prices of equity securities in general and the Securities in
particular.
On the date of creation of the Trust (the "Initial Date of Deposit"), the
Sponsor deposited with the Trustee certain securities and contracts and funds
(represented by irrevocable letter(s) of credit issued by major commercial
bank(s)) for the purchase of such securities (collectively, the "Securities") at
prices equal to the market value of such Securities as determined by the Trustee
as of the Initial Date of Deposit and/or cash with instructions to the Trustee
to purchase such Securities. (See: "Schedule of Portfolio Securities".) The
Trust was created simultaneously with the deposit of the Securities with the
Trustee and the execution of the Indenture and the Agreement. The Trustee then
immediately recorded the Sponsor as owner of the units (the "Units") comprising
the entire ownership of the Trust.
Through this prospectus (the "Prospectus"), the Sponsor is offering the
Units, including Additional Units, as defined below, for sale to the public. The
holders of Units (the "Unit Holders") will have the right to have their Units
redeemed at a price based on the market value of the Securities (the "Redemption
Value") if they cannot be sold in the secondary market which the Sponsor,
although not obligated to, proposes to maintain. In addition, the Sponsor may
offer for sale, through this Prospectus, Units which the Sponsor may have
repurchased in the secondary market or upon the tender of such Units for
redemption. The Trustee has not participated in the selection of Securities for
the Trust, and neither the Sponsor nor the Trustee will be liable in any way for
any default, failure or defect in any Securities.
With the deposit of the Securities in the Trust on the Initial Date of
Deposit, the Sponsor established a proportionate relationship between the number
of shares of each Security in the Portfolio. The original proportionate
relationships on the Initial Date of Deposit are set forth in "Schedule of
Portfolio Securities". The original proportionate relationships are subject to
adjustment under certain limited circumstances. (See: "Administration of the
Trust--Portfolio Supervision".) The Sponsor is permitted under the Indenture and
Agreement to deposit additional Securities, contracts to purchase additional
Securities together with a letter of credit and/or cash with instructions to the
Trustee to purchase additional Securities in order to create additional Units
("Additional Units"). Any such additional deposits made in the 90 day period
following the creation of the Trust will consist of securities identical to
those already in the Trust and will be in amounts which maintain, to the extent
practicable, the original proportionate relationship between the number of
shares of each Security and any cash in the Trust. Investors should be aware
that the Trust may not be able to buy each Security at the same time because of
availability of the Security, any restrictions applicable to the Trust
- ------------------------
* Reference is hereby made to said Indenture and Agreement and any statements
contained herein are qualified in their entirety by the provisions of said
Indenture and Agreement.
<PAGE>
relating to the purchase of the Security by reason of the federal securities
laws or otherwise. Any monies allocated to the purchase of a Security will
generally be held for the purchase of the Security. It may not be possible to
maintain the exact original proportionate relationship because of price changes
or other reasons.
Any cash deposited with instructions to purchase Securities may be held in
an interest bearing account by the Trustee. Any interest earned on such cash
will be the property of the Trust. Any cash deposited with instruction to
purchase Securities not used to purchase Securities and any interest not used to
pay Trust expenses will be distributed to Unit Holders on the earlier of the
first Distribution Date or 90 days after the Initial Date of Deposit. Additional
Units may be continuously offered for sale to the public by means of this
Prospectus. Subsequent to the 90 day period following the Initial Date of
Deposit any deposit of additional Securities and cash must exactly replicate the
portfolio immediately prior to such deposit.
The Sponsor may acquire large volumes of additional Securities for deposit
into the Trust over a short period of time. Such acquisitions may tend to raise
the market prices of these Securities. To minimize the risk of price
fluctuations when purchasing Securities, the Trust may purchase Securities at
the closing price as of the Evaluation Time by entering into trades with
unaffiliated broker/dealers for the purchase of large quantities of shares. Such
trades will be entered into at an increased commission cost which will be borne
by the Trust. (See "Summary of Essential Information"). The Sponsor cannot
currently predict the actual market impact of the Sponsor's purchases of
additional Securities, because the actual volume of Securities to be purchased
and the supply and price of such Securities is not known.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units, if Units are available
to fill orders on the day that that price is set. If Units are not available or
are insufficient to fill the order, the investor's order will be rejected by the
Sponsor. The number of Units available may be insufficient to meet demand
because of the Sponsor's inability to or decision not to purchase and deposit
underlying Securities in amounts sufficient to maintain the proportionate
numbers of shares of each Security as required to create additional Units. The
Sponsor may, if unable to accept orders on any given day, offer to execute the
order as soon as sufficient Units can be created. An investor who agrees to this
will be deemed to place a new order for that number of Units each day until that
order is accepted. The investor's order will then be executed, when Units are
available, at the Public Offering Price next calculated after such continuing
order is accepted. The investor will, of course, be able to revoke his purchase
offer at any time prior to acceptance by the Sponsor. The Sponsor will execute
orders to purchase in the order it determines that they are received, i.e.,
orders received first will be filled first, except that indications of interest
prior to the effectiveness of the registration of the offering of Trust Units
which become orders upon effectiveness will be accepted according to the order
in which the indications of interest were received.
On the Initial Date of Deposit, each Unit represented the fractional
undivided interest in the Securities and net income of the Trust set forth under
"Summary of Essential Information". Thereafter, if any Units are redeemed, the
amount of Securities in the Trust will be reduced, and the fractional undivided
interest represented by each remaining Unit in the balance of the Trust will be
increased. However, if Additional Units are issued by the Trust, the aggregate
value of the Securities in the Trust will be increased by amounts allocable to
such Additional Units and the fractional undivided interest in the balance will
be decreased. In connection with the deposit by the Sponsor of cash (or a letter
of credit in lieu of cash) with instructions to purchase additional Securities
in order to create Additional Units, to the extent that the price of a Security
fluctuates between the time the cash is deposited and the time the cash is used
to purchase the Security, Units (including previously issued Units) may
represent more or less of that Security and more or less of other Securities in
the Portfolio of the Trust. Units will remain outstanding until redeemed upon
tender to the Trustee by any Unit Holder (which may include the Sponsor) or
until the termination of the Trust pursuant to the Indenture and Agreement.
2
<PAGE>
THE TRUST
OBJECTIVE AND SECURITIES SELECTION
The objectives of the Trust are current income and capital appreciation
through an investment in a fixed diversified portfolio of Securities chosen in
the manner described in the "Summary of Essential Information" in Part A herein.
There is, of course, no guarantee that the Trust's objectives will be achieved.
The Trust has an expected life of approximately 2 years.
The Trust consists of such of the Securities listed under "Schedule of
Portfolio Securities" as may continue to be held from time to time in the Trust
and any additional Securities and/or contributed cash acquired and held by the
Trust pursuant to the provisions of the Indenture together with undistributed
income therefrom and undistributed cash realized from the disposition of
Securities (See: "Administration of the Trust"). Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any of
the Securities. However, should any contract deposited hereunder fail and no
substitute Security be acquired, the Sponsor shall cause to be refunded the
sales charge relating to such Security, plus the portion of the cost of the
failed contract listed under "Schedule of Portfolio Securities".
Because certain Securities from time to time may be sold or their percentage
reduced under certain circumstances described herein, and because additional
Securities are expected to be deposited into the Trust from time to time, the
Trust is not expected to retain for any length of time its present size and
exact composition. (See: "Administration of the Trust--Portfolio Supervision".)
The Trust is organized as a unit investment trust and not as a management
investment company. Therefore, neither the Trustee nor the Sponsor has the
authority to manage the Trust's assets in an attempt to take advantage of
various market conditions to improve the Trust's net asset value, and further,
the Trust's Securities may be disposed of only under limited circumstances.
(See: "Administration of the Trust--Portfolio Supervision".)
There is no assurance that any dividends will be declared or paid in the
future on the Securities initially deposited or to be deposited subsequently in
the Trust.
The Sponsor may deposit additional Securities and may continue to sell Units
of the Trust even though one or more of the Securities is no longer rated Strong
Buy, Outperform or Neutral by MSDW Global Equity Research on the date of deposit
of the additional Securities or sale of the Units.
SUMMARY DESCRIPTION OF THE PORTFOLIO
As used herein, the term "Common Stocks" refers to the common stocks and
common shares of beneficial interest (or contracts to purchase such common
stocks and common interests) (any such contracts to purchase common stocks to be
accompanied by an irrevocable letter of credit sufficient to perform such
contracts), initially deposited in the Trust and described under "Schedule of
Portfolio Securities". The term "Securities" includes any additional common
stock or contracts to purchase additional common stock together with the
corresponding irrevocable letter of credit, subsequently acquired by the Trust
pursuant to the Indenture and Agreement.
The Portfolio is comprised of REITs that the Sponsor believes offer an
opportunity for current income and capital appreciation during the life of the
Trust. Investors should carefully review the Portfolio and the objectives of the
Trust and consider their ability to assume the risks involved before investing
in the Trust.
REITs are structured as either corporations or business trusts. REITs will
not be subject to corporate income taxes provided the REIT satisfies the
applicable requirements of the Internal Revenue Code. The major tests for the
tax-qualified status are that the REIT (i) be managed by one or more trustees or
directors, (ii) issue shares of transferable interest to its owners, (iii) have
at least
3
<PAGE>
100 shareholders, (iv) during the last half of each taxable year have no more
than 50% of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate assets and derive substantially
all of its gross income from real estate related assets and (vi) distribute at
least 95% of its taxable income (without regard to any net capital gains) to its
shareholders each year.
The Securities deposited in the Trust on the Initial Date of Deposit consist
entirely of interests in REITs as set forth in Part A. There are two principal
types of REITs: Equity REITs which typically hold primarily real estate and
benefit from the underlying net rental income generated from the properties, and
Mortgage REITs, which typically hold primarily mortgages which are secured by
real estate assets and benefit predominantly from the difference between the
interest income on the mortgage loans and the interest expense on the capital
used to finance the loans. A third type, Hybrid REITs, combines the investment
strategies of the Equity REITs and the Mortgage REITs.
In addition to being classified according to investment type, REITS may be
categorized further in terms of their specialization by property type (e.g.,
retail, multifamily, industrial, office, etc.,) or geographic focus (nationwide,
regional or metropolitan area). Additional stratification is then possible
within certain product types (e.g., factory outlets, community centers, and
regional malls are all categories within the retail sector).
RISK FACTORS--SPECIAL CONSIDERATIONS
Investment in the Trust should be made with an understanding that the value
of the underlying Securities, and therefore the value of the Units, will
fluctuate, depending on the full range of economic and market influences which
may affect the market value of the Securities, including the profitability and
financial condition of issuers, conditions in the real estate industry, market
conditions and values of common stocks generally, and other factors. The Trust
is not appropriate for investors requiring conservation of capital.
The buying and selling of the Securities on behalf of the Trust to create
Units or to satisfy redemptions of Units may affect the value of the underlying
Securities and the Units. The publication of the list of the Securities selected
for the Trust may also cause increased buying activity in certain of the REITs
comprising the Portfolio. Such buying activity in the stock of these REITs prior
to the purchase of the Securities by the Trust may cause the Trust to purchase
the REITs at a higher price than those buyers who purchase REIT shares prior to
the purchases by the Trust.
A substantial amount of the shares of a REIT may be owned by the Trust
and/or other unit investment trusts. The sale proceeds of Securities during the
life of the Trust and particularly at the termination of the Trust may be
adversely affected as a result of the disposition of REIT shares by such other
unit investment trusts.
Since the Trust will consist entirely of shares issued by REITs, a domestic
corporation or business trust which invests primarily in income producing real
estate or real estate related loans or mortgages, an investment in the Trust
will be subject to risks similar to those associated with the direct ownership
of real estate (in addition to securities markets risks) because of its policy
of concentration in the securities of companies in the real estate industry.
These include declines in the value of real estate, illiquidity of real property
investments, risks related to general and local economic conditions, dependency
on management skill, heavy cash flow dependency, possible lack of availability
of mortgage funds, excessive levels of debt or overleveraged financial
structure, overbuilding, extended vacancies of properties, increase in
competition, increases in property taxes and operating expenses, changes in
zoning laws, losses due to costs resulting from the clean-up of environmental
problems, liability to third parties for damages resulting from environmental
problems, casualty or condemnation losses, economic or regulatory impediments to
raising rents, changes in neighborhood values and the appeal of properties to
tenants and changes in interest rates. In addition to these risks, Equity REITs
may be more likely to be affected by changes in the value of the underlying
property owned by the trusts. Further, REITs are dependent upon the management
skills of the issuers and generally may not be diversified. REITs are also
subject to heavy
4
<PAGE>
cash flow dependency, defaults by borrowers and self-liquidation. The above
factors may also adversely affect a borrower's or a lessee's ability to meet its
obligations to the REIT. In the event of a default by a borrower or lessee, the
REIT may experience delays in enforcing its rights as a mortgagee or lessor and
may incur substantial costs associated with protecting its investments.
Real estate investment trusts are financial vehicles that have as their
objective the pooling of capital from a number of investors in order to
participate directly in real estate ownership or financing. REITs may be
self-managed or managed by separate advisory companies for a fee which is
ordinarily based on a percentage of the assets of the REIT in addition to
reimbursement of operating expenses. Since the Trust will consist entirely of
shares issued by REITs, an investment in the Trust will be subject to varying
degrees of risk generally incident to the ownership of real property (in
addition to securities market risks) and will involve more risk than a portfolio
of common stocks that is not concentrated in a particular industry or group of
industries.* The underlying value of the Trust's Securities and the Trust's
ability to make distributions to its Unit Holders may be adversely affected by
adverse changes in national economic conditions, adverse changes in local market
conditions due to changes in general or local economic conditions and
neighborhood characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental legislation and
compliance with environmental laws, the ongoing need for capital improvements,
particularly in older properties, changes in real estate tax rates and other
operating expenses, regulatory and economic impediments to raising rents,
adverse changes in governmental rules and fiscal policies, dependency on
management skills, civil unrest, acts of God, including earthquakes and other
natural disasters (which may result in uninsured losses), acts of war, adverse
changes in zoning laws, and other factors which are beyond the control of the
issuers of the REITs in the Trust. The value of the REITs may at times be
particularly sensitive to devaluation in the event of rising interest rates.
A significant amount of the assets of a REIT may be invested in investments
in specific geographic areas or in specific property types, I.E., hotels,
shopping malls, residential complexes, and office buildings; the impact of
economic conditions on REITs can also be expected to vary with geographic
location and property type. Variations in rental income and space availability
and vacancy rates in terms of supply and demand are additional factors affecting
real estate generally and REITs in particular. In addition, investors should be
aware that REITs may not be diversified and are subject to the risks of
financing projects. REITs are also subject to defaults by borrowers, the
market's perception of the REIT industry generally, and the possibility of
failing to qualify for tax-free pass-through of income under the Internal
Revenue Code, and to maintain exemption from the Investment Company Act of 1940.
A default by a borrower or lessee may cause the REIT to experience delays in
enforcing its rights as mortgagee or lessor and to incur significant costs
related to protecting its investments.
UNINSURED LOSSES. The issuer of REITs generally maintains comprehensive
insurance on presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, there are certain
types of losses, generally of a catastrophic nature, such as earthquakes and
floods, that may be uninsurable or not economically insurable, as to which the
REITs properties are at risk in their particular locales. The management of REIT
issuers use their discretion in determining amounts, coverage limits and
deductibility provisions of insurance, with a view to requiring appropriate
insurance on their investments at a reasonable costs and on suitable terms. This
may result in insurance coverage that in the event of a substantial loss would
not be sufficient to pay the full current market value or current replacement
cost of the lost investment. Inflation, changes in building codes and
ordinances, environmental considerations, and other factors also might make it
unfeasible to use insurance proceeds to replace a facility after it has been
damaged or destroyed. Under such circumstances, the insurance proceeds received
by REITs might not be adequate to restore its economic position with respect to
such property.
- ------------------------
* A Trust is considered to be "concentrated" in a particular industry when the
Securities in that industry constitute 25% or more of the total asset value of
the portfolio.
5
<PAGE>
ENVIRONMENTAL LIABILITY. Under various federal, state, and local
environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be liable for the costs of removal or remediation
of hazardous or toxic substances on, under or in such property. Such laws often
impose liability whether or not the owner or operator caused or knew of the
presence of such hazardous or toxic substances and whether or not the storage of
such substances was in violation of a tenant's lease. In addition, the presence
of hazardous or toxic substances, or the failure to remediate such property
properly, may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of the REITs
in the Trust may not be presently liable or potentially liable for any such
costs in connection with real estate assets they presently own or subsequently
acquire while such REITs shares are held in the Trust.
AMERICANS WITH DISABILITIES ACT. Under the Americans with Disabilities Act
of 1990 (the "ADA"), all public accommodations are required to meet certain
federal requirements related to physical access and use by disabled persons. In
the event that any of the REITs in the Trust invest in or hold mortgages in real
estate properties subject to the ADA, a determinaton that any such properties
are not in compliance with the ADA could result in imposition of fines or an
award of damages to private litigants. If any of the REITs in the Trust were
required to make modifications to comply with the ADA, the REIT's ability to
make expected distributions to the Trust could be adversely affected, thus
adversely affecting the ability of the Trust to make distributions to Unit
Holders.
PROPERTY TAXES. Real estate generally is subject to real property taxes. The
real property taxes on the properties underlying the REITs in the Trust may
increase or decrease as property tax rates change and as the properties are
assessed or reassessed by taxing authorities. An increase in real estate taxes
may adversely affect the value of the Securities.
See "Part A--REIT Risk Factors" for additional risks relating to REITs.
An investment in Units of the Trust should be made with an understanding of
the risks which an investment in publicly-traded common stock may entail,
including the risk that the value of the Portfolio and hence of the Units will
decline with decreases in the market value of the Securities. The Trust will be
terminated and liquidated no later than the Mandatory Termination Date set forth
in the "Summary of Essential Information".
On each Deferred Sales Charge Payment Date Securities will be sold pro rata
in an amount equal to $2.50 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor. As Securities are sold to pay
the Deferred Sales Charge a Unit Holder's assets will be reduced and income per
Unit may be reduced.
The value of the underlying Securities, and therefore the value of Units,
will fluctuate, and can decline, depending upon the full range of economic and
market influences which may affect the market value of such Securities. Certain
risks are inherent in an investment in equity securities, including the risk
that the financial condition of one or more of the issuers of the Securities may
worsen or the general condition of the common stock market may weaken. In such
case, the value of the Portfolio Securities and hence the value of Units may
decline.
Common stocks are susceptible to general stock market movements and to
volatile and unpredictable increases and decreases in value as market confidence
in and perceptions of the issuers change from time to time. Such perceptions are
based upon varying reactions to such factors as expectations regarding domestic
and foreign economic, monetary and fiscal policies, inflation and interest
rates, currency exchange rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The Sponsor cannot predict the
direction or scope of any of these factors. Additionally, equity markets have
been at historically high levels and no assurance can be given that these levels
will continue. THE TRUST HOLDS STOCKS THAT MAY BE SUBJECT TO ABOVE-AVERAGE PRICE
VOLATILITY. THEREFORE THERE CAN BE NO ASSURANCE THAT THE TRUST WILL BE EFFECTIVE
IN ACHIEVING ITS OBJECTIVE OVER ITS LIFE OR THAT FUTURE PORTFOLIOS SELECTED
USING THE SAME METHODOLOGY AS THE TRUST, IF ANY, WILL MEET THEIR OBJECTIVES. THE
TRUST IS NOT DESIGNED TO BE A COMPLETE INVESTMENT PROGRAM.
6
<PAGE>
There are certain payment risks involved in owning common stocks, including
risks arising from the fact that holders of common and preferred stocks have
rights to receive payments from the issuers of those stocks that are generally
inferior to those of creditors of, or holders of debt obligations issued by,
such issuers. Furthermore, the rights of holders of common stocks are inferior
to the rights of holders of preferred stocks. Holders of common stocks of the
type held in the Portfolio have a right to receive dividends only when, as and
if, and in the amounts, declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks have the right to receive dividends at a fixed rate when and
as declared by the issuer's board of directors, normally on a cumulative basis,
but do not ordinarily participate in other amounts available for distribution by
the issuing corporation. Cumulative preferred stock dividends must be paid
before common stock dividends, and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of such cumulative
preferred stock. Preferred stocks are also entitled to rights on liquidation
which are senior to those of common stocks. For these reasons, preferred stocks
entail less risk than common stocks. However, neither preferred nor common
stocks represent an obligation or liability of the issuer and therefore do not
offer any assurance of income or provide the degree of protection of capital of
debt securities.
The issuance of debt securities (as compared with both preferred and common
stock) and preferred stock (as compared with common stock) will create prior
claims for payment of principal and interest (in the case of debt securities)
and dividends and liquidation preferences (in the case of preferred stock) which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Further, unlike
debt securities which typically have a stated principal amount payable at
maturity (which value will be subject to market fluctuations prior thereto), or
preferred stocks which typically have a liquidation preference and which may
have stated optional or mandatory redemption provisions, common stocks have
neither a fixed principal amount nor a maturity date and have values which are
subject to market fluctuations for as long as the common stocks remain
outstanding. Additionally, market timing and volume trading will also affect the
underlying value of Securities, including the Sponsor's buying of additional
Securities and the Trust's selling of Securities during the Liquidation Period.
The value of the Securities in the Portfolio thus may be expected to fluctuate
over the entire life of the Trust to values higher or lower than those
prevailing on the Initial Date of Deposit. The Sponsor may direct the Trustee to
dispose of Securities under certain specified circumstances (see "Administration
of the Trust--Portfolio Supervision"). However, Securities will not be disposed
of solely as a result of normal fluctuations in market value.
The Securities intended to be used to reimburse the Sponsor for the Trust's
organization costs may decrease in value during the initial offering period. To
the extent the proceeds from the sale of these Securities are insufficient to
repay the Sponsor for the organization costs, the Trustee will sell additional
Securities to allow the full reimbursement of the Sponsor. In that event, the
net asset value per Unit will be reduced by the amount of additional Securities
sold.
YEAR 2000 PROBLEM
Like other investment companies, financial and business organizations and
individuals around the world, the Trust depends on the smooth functioning of
computer systems. The Trust could be adversely affected if computer systems,
such as those used by the Sponsor or Trustee, do not properly process and
calculate date-related information and data concerning dates on or after January
1, 2000. Many computer systems in use today cannot recognize the year 2000, but
revert to 1900 or some other date, due to the manner in which dates were encoded
and calculated. That failure could have a negative impact on the handling of
securities trades, pricing, and Trust services, among other things. This is
commonly known as the "Year 2000 Problem." The Sponsor and Trustee are taking
steps that they believe are reasonably designed to address the Year 2000 Problem
with respect to computer systems that they use. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse impact
to the Trust, and interaction with other non-complying computer systems may have
an adverse effect on the Trust.
7
<PAGE>
The Year 2000 Problem is expected to affect business entities, which may
include issuers of the Trust's Securities, to varying extent and based upon a
number of factors, including, but not limited to, industry sector and level of
technological sophistication. The Sponsor is unable to predict what impact, if
any, the Year 2000 Problem will have on issuers of the Securities contained in
the Trust.
LIQUIDITY
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Trust may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold in connection with redemptions and the
value of the Trust will be adversely affected if trading markets for the
Securities are limited or absent.
DISTRIBUTION
The Record Dates and the Distribution Dates are set forth in Part A hereto.
(See: "Summary of Essential Information".) The distributions will be an amount
approximately equal to such Unit Holder's pro rata portion of one-twelfth of the
estimated annual dividend income and proceeds of the sale of Portfolio
Securities, including capital gains, not used for the redemption of Units, if
any (less the Trustee's fees, Sponsor's portfolio supervision fees and
expenses). Distributions for the account of beneficial owners of Units
registered in "street name" and held by the Sponsor will be made to the
investment account of such beneficial owners maintained with the Sponsor.
Whenever required for regulatory or tax purposes or if otherwise directed by the
Sponsor, the Trustee may make special distributions on special distribution
dates to Unit Holders of record on special record dates declared by the Trustee.
TAX STATUS OF THE TRUST
In the opinion of Cahill Gordon & Reindel, special counsel for the Sponsor,
under existing Federal income tax law:
The Trust is not an association taxable as a corporation for Federal
income tax purposes, and income received by the Trust will be treated as
income of the Unit Holders in the manner set forth below.
Each Unit Holder will be considered the owner of a pro rata portion of
each asset in the Trust under the grantor trust rules of Sections 671-678 of
the Internal Revenue Code of 1986, as amended (the "Code"). The total tax
cost of each Unit purchased solely for cash will equal the cost of Units
(including any Initial Sales Charge). A Unit Holder should determine the tax
cost for each asset represented by the Holder's Units purchased solely for
cash by allocating the total cost for such Units (including any Initial
Sales Charge) among the assets in the Trust represented by the Units in
proportion to the relative fair market values thereof on the date the Unit
Holder purchases such Units.
The proceeds actually received by a Unit Holder upon termination of the
Trust or redemption of Units will be net of the Deferred Sales Charge and
the charge for organizational expenses. The relevant tax reporting forms
sent to Unit Holders will also reflect the actual amounts paid to them, net
of the Deferred Sales Charge and the charge for organizational expenses.
Accordingly, Unit Holders should not increase the total cost for their Units
by the amount of the Deferred Sales Charge and the charge for organizational
expenses.
8
<PAGE>
A Unit Holder will be considered to have received all of the dividends
paid on the Holder's pro rata portion of each Security when such dividends
are received by the Trust including the portion of such dividend used to pay
ongoing expenses. An individual Unit Holder who itemizes deductions will be
entitled to an itemized deduction for the Holder's pro rata share of fees
and expenses paid by the Trust as though such fees and expenses were paid
directly by the Unit Holder, but only to the extent that this amount
together with the Unit Holder's other miscellaneous deductions exceeds 2% of
the Holder's adjusted gross income. A corporate Unit Holder will not be
subject to this 2% floor.
Under the position taken by the Internal Revenue Service in Revenue
Ruling 90-7, a distribution by the Trustee to a Unit Holder (or to the
Holder's agent) of such Holder's PRO RATA share of the Securities in kind
upon redemption or termination of the Trust will not be a taxable event to
the Unit Holder. Such Unit Holder's basis for Securities so distributed will
be equal to the Holder's basis for the same Securities (previously
represented by the Holder's Units) prior to such distribution and the
holding period for such Securities will include the period during which the
Unit Holder held the Units. A Unit Holder will have a taxable gain or loss,
which will be a capital gain or loss except in the case of a dealer, when
the Unit Holder disposes of such Securities in a taxable transfer.
Under the income tax laws of the State and City of New York, the Trust
is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unit Holders.
If the proceeds received by the Distribution Agent or by the Trustee
upon the sale of an underlying Security exceed a Unit Holder's adjusted tax
cost allocable to the Security disposed of, that Unit Holder will realize a
taxable gain to the extent of such excess. Conversely, if the proceeds
received by the Distribution Agent or by the Trustee upon the sale of an
underlying Security are less than a Unit Holder's adjusted tax cost
allocable to the Security disposed of, that Unit Holder will realize a loss
for tax purposes to the extent of such difference except that upon
reinvestment of proceeds in a New Series in connection with an exchange or
non In-Kind Rollover the Internal Revenue Service may seek to disallow such
loss to the extent that the underlying securities in each trust are
substantially identical and the purchase of units of the New Series take
place less than thirty-one days after the sale of the underlying Security.
Under the Code, capital gain of individuals, estates and trusts from
Securities held for more than 1 year is subject to a maximum nominal tax
rate of 20%. Such capital gain may, however, result in a disallowance of
itemized deductions and/or affect a personal exemption phase-out. The
maximum lower capital gain rate of 20% will be unavailable with respect to
those Securities which have been held for less than a year and a day at the
time of sale (including sales occasioned by mandatory or early termination
of the Trust or exchange or rollover of Units).
The Trust will own shares in REITs, entities that have elected and qualified
for the special tax treatment applicable to "real estate investment trusts"
under the Code. A number of complex requirements must be satisfied in order for
REIT status to be maintained. If the REIT distributes 95% or more of its real
estate investment trust taxable income, subject to certain adjustments, to its
shareholders, it will not be subject to Federal income tax on the amounts so
distributed. Moreover, if the REIT distributes at least 85% of its ordinary
income and 95% of its capital gain net income it will not be subject to the 4%
excise tax on certain undistributed income of REITs.
Distributions made to shareholders out of a REIT's current or accumulated
earnings and profits generally will be taxed to shareholders as ordinary
dividend income, except that, subject to the discussion below regarding tax
rates for unrecaptured section 1250 gain, distributions of net capital gain
designated by the REIT as capital gain dividends will be taxed to shareholders
as long-term capital gain (to the extent they do not exceed the REIT's actual
net capital gain for the taxable year) without regard to the period for which
the REIT shares have been held. To the extent that distributions exceed current
or accumulated earnings and profits, they will constitute a return of capital,
rather than dividend or capital gain income, and will reduce the tax basis of
the shareholder's shares with respect to which the distribution is made. To the
extent that distributions exceed such basis, they will be taxed in the
9
<PAGE>
same manner as gain from the sale of those shares. The Portfolio may receive
information from the REITs as to the tax status of distributions after it has
furnished information to its investors. In this case, the Sponsor will furnish
any amended information to investors as promptly as is practicable.
A REIT is permitted under the Code to elect to retain and pay income tax on
its net capital gain for any taxable year. Under the Taxpayer Relief Act of 1997
(the "1997 Act"), however, for taxable years beginning after December 31, 1997,
if the REIT so elects, a shareholder must include in income such shareholder's
proportionate share of the REIT's undistributed net capital gain for the taxable
year, and will be deemed to have paid such shareholder's proportionate share of
the income tax paid by the REIT with respect to such undistributed net capital
gain. Such tax would be credited against the shareholder's tax liability and
subject to normal refund procedures. In addition, each shareholder's basis in
such shareholder's shares would be increased by the amount of undistributed net
capital gain (less the tax paid by the REIT) included in the shareholder's
income.
The 1997 Act also provides a maximum rate of 25% for "unrecaptured section
1250 gain" recognized on the sale or exchange of certain real estate assets. The
1997 Act allows the Internal Revenue Service to prescribe regulations on how the
1997 Act's new capital gain rates will apply to sales of capital assets by
"pass-thru entities," which include REITs. To date regulations have not yet been
promulgated. However, in Notice 97-64, issued on November 10, 1997, the Internal
Revenue Service indicated that such regulations will provide that whether
capital gain dividends are taxed at the 25% or 20% rate will be determined by
reference to the REIT's holding period in the property that generates the gain
and the amount of unrecaptured straight-line depreciation attributable to such
property.
TAXATION OF FOREIGN UNIT HOLDERS
Foreign Unit Holders (including nonresident alien individuals, foreign
corporations, foreign partnerships and other foreign persons) not engaged in a
U.S. trade or business generally will be subject to a 30% withholding tax (or
lower applicable treaty rate) on the portion of any distribution that does not
constitute a capital gain distribution. In general, under the Foreign Investors
in Real Property Tax Act of 1980 ("FIRPTA"), foreign Unit Holders will be
subject to a 35% withholding tax on the portion of any distribution that is
designated as a capital gain dividend. A foreign Unit Holder also will be
required to file a U.S. tax return in respect of capital gain dividends and to
pay U.S. federal income tax on capital gain dividends (against which the 35%
FIRPTA withholding tax may be credited). Subject to treaty exemptions, capital
gain dividends distributed to foreign Unit Holders that are corporations may
also be subject to a 30% branch profits tax. The portion of any distribution
that constitutes a return of capital will not be subject to U.S. federal income
tax and, therefore, the Trustee may withhold more than the amount of tax
actually due. Foreign Unit Holders may seek a refund from the Internal Revenue
Service of any excess withholding tax. Foreign Unit Holders generally should not
be subject to FIRPTA withholding tax with respect to gain from the sale or
redemption of Units or from the Trust's sale of securities.
In view of the foregoing tax and return filing requirements, an investment
in the Trust may not be appropriate for certain foreign investors. Prospective
foreign investors should consult with their own tax advisors to determine the
impact of foreign, federal, state and local income tax laws on their investment
in the Trust, including any applicable reporting requirements.
Each Unit Holder should consult his, her or its tax advisor with respect to
the application of the above general information to his, her or its own personal
situation.
RETIREMENT PLANS
Units of the Trust may be suited for purchase by Individual Retirement
Accounts and pension plans or profit sharing and other qualified retirement
plans. Investors considering participation in any such plan should review
specific tax laws and pending legislation relating thereto and should consult
their attorneys or tax advisors with respect to the establishment and
maintenance of any such plan.
10
<PAGE>
A qualified retirement plan provides employee retirement benefits and is
funded in whole or in part by contributions from the employer (including
contributions by a self-employed individual, in which case the plan is sometimes
called a Keogh plan). The employer contributions are, within limits, deductible
in determining the taxable income of the contributing employer for Federal
income tax purposes. Income received by the plan is not taxed when received by
it (nor are plan losses deductible), but distributions from the plan are
generally included in ordinary income of the distributee upon receipt. A lump
sum payout of the entire amount held in such a plan can, however, be eligible
for 5 or 10 year averaging.
An individual retirement account (an "IRA") is similar to a qualified
retirement plan but contributions to an IRA up to $2,000 per year are generally
made by an individual from earned income, rather than by an employer.
(Additional contributions of up to $2,000 may also be made to an IRA of an
individual's spouse provided that the combined income of the individual and his
or her spouse is sufficient.) An individual is permitted to contribute to an IRA
even though he or she is also covered by a qualified retirement plan; but, in
the case of higher-income individuals who are active participants in a qualified
retirement plan, IRA contributions are neither currently deductible nor taxed
when paid out by the IRA (although income earned in the IRA is taxed as ordinary
income when distributed). The IRA beneficiary must not have attained age 70 1/2
by the close of the taxable year for which an IRA contribution is made; and 5
and 10 year averaging is not allowable for IRA distributions. Small employers
can establish so-called SIMPLE IRA plans allowing annual pre-tax contributions
by an employee to an IRA of up to $6,000 (subject to cost-of-living adjustments)
and requiring a minimum level of employer contributions. Two new types of IRAs
have been created by recent legislation effective beginning in 1998: Roth IRAs
and education IRAs. Contributions to Roth IRAs and education IRAs are not
deductible, but distributions of the income of the IRA can be received tax-free
if the applicable requirements are met (however, such income would be taxed upon
distribution if such requirements are not met). Distributions from a Roth IRA
are tax-free if made after satisfaction of a 5-year holding period and (i) on or
after attainment of age 59 1/2, (ii) upon death or disability, or (iii) to buy
or construct a first home as a principal residence for the individual, his
spouse or any child, grandchild or ancestor (up to $10,000). Distributions from
an education IRA are tax-free to the extent not in excess of the beneficiary's
qualified higher education expenses for the applicable year. (Distributions of
the non-deductible contributions themselves would in any event not be taxed.)
Contributions to Roth IRAs are limited to $2,000 per year (reduced by
contributions to other IRAs); contributions to education IRAs are limited to
$500 per year for each beneficiary under age 18. Higher-income individuals
cannot establish Roth IRAs or education IRAs.
Distributions from qualified retirement plans must begin in minimum amounts
no later than the April 1 following the calendar year in which the employee
attains age 70 1/2 (or in the case of a person other than a 5% owner, April 1
following the calendar year in which the employee retires, if later) or within 5
years after his or her prior death if death occurs before distributions begin
(with later distribution allowed for a surviving spouse and with lifetime
annuity-type payouts to any beneficiary permitted). Minimum required
distributions from IRAs (other than Roth IRAs and education IRAs) are governed
by similar rules (except that minimum distributions to the individual for whom
the IRA is maintained must in all cases begin no later than the April 1
following the calendar year in which the individual attains age 70 1/2). Roth
IRAs are not required to commence distributions upon the individual's attainment
of age 70 1/2 but are subject to the foregoing post-death minimum distribution
requirements upon the individual's death. Education IRAs are required to
distribute the account balance within 30 days of the death of the designated
beneficiary to the beneficiary's estate.
Forms and arrangements for establishing qualified retirement plans and IRAs
are available from the Sponsor, as well as from other brokerage firms, other
financial institutions and others. Fees and charges with respect to such plans
and IRAs are not uniform and may vary from time to time as well as from
institution to institution.
Distributions received from a qualified retirement plan or IRA (other than
an education IRA) before the employee attains age 59 1/2 are subject to a 10%
additional tax on the amount includible in income unless the distribution is (i)
made on or after the employee's death, (ii) attributable to his being disabled,
(iii) in the nature of a life annuity, (iv) made to the employee after
11
<PAGE>
separation from service after attainment of age 55, (v) made from an IRA after
1997 to pay certain qualified higher education expenses for the individual, his
spouse or any child or grandchild, (vi) made from an IRA after 1997 to buy or
construct a first home as a principal residence for the individual, his spouse
or any child, grandchild or ancestor (up to $10,000), or (vii) made for other
reasons specified in the law. Distributions from an education IRA in excess of
qualified higher education expenses are subject to a 10% additional tax on the
amount includible in income, unless the distribution is (i) made on or after the
death of the designated beneficiary, (ii) attributable to the designated
beneficiary's being disabled, or (iii) made on account of a scholarship or
certain other educational assistance allowances. Qualifying distributions from a
qualified retirement plan or from an IRA may, however, be rolled over or
transferred to another qualified retirement plan or IRA under specified
circumstances.
The foregoing information is of a general nature, does not purport to be
complete and relates only to the Federal income tax rules applicable to
qualified retirement plans and IRAs. State and local tax rules and foreign tax
regimes may treat qualified retirement plans and IRAs differently. Anyone
contemplating establishing a qualified retirement plan or IRA or investing funds
of such a plan or IRA in Trust units should consult his, her or its tax advisor
with respect to the tax consequences of any such action and the application of
the foregoing general tax information to his, her or its particular situation.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is calculated on each business day
and is computed by adding to the aggregate market value (as set forth below) of
the Portfolio Securities (as determined by the Trustee) and cash and other Trust
assets less trust liabilities next computed after receipt of a purchase order,
divided by the number of Units outstanding, the sales charge shown in "Summary
of Essential Information". The Units outstanding may be split (or split in
reverse). Commissions and any other transactional costs, if any, incurred by the
Sponsor in connection with the deposit of additional Securities or contracts to
purchase additional Securities for the creation of Additional Units will be
added to the Public Offering Price. After the Initial Date of Deposit, a
proportionate share of amounts in the Income Account and Principal Account and
amounts receivable in respect of stocks trading ex-dividend (other than money
required to be distributed to Unit Holders on a Distribution Date and money
required to redeem tendered Units) is added to the Public Offering Price. In the
event a stock is trading ex-dividend at the time of deposit of additional
Securities, an amount equal to the dividend that would be received if such stock
were to receive a dividend will be added to the Public Offering Price. The
Public Offering Price per Unit is calculated to five decimal places and rounded
up or down to three decimal places. The Public Offering Price on any particular
date will vary from the Public Offering Price on the Initial Date of Deposit
(set forth in the "Summary of Essential Information") in accordance with
fluctuations in the aggregate market value of the Securities, the amount of
available cash on hand in the Trust and the amount of certain accrued fees and
expenses.
A portion of the Public Offering Price also consists of cash or securities
in an amount sufficient to pay for all or a portion of the costs incurred in
establishing the Trust, including the cost of the intial preparation of
documents relating to the Trust, federal and state registration fees, the
initial fees and expenses of the Trustee, legal expenses and any other
out-of-pocket expenses. The estimated organization costs will be paid to the
Sponsor as of the close of the initial offering period.
As more fully described in the Indenture, the aggregate market value of the
Securities is determined by the Trustee based on closing prices on the day the
valuation is made as described under "Redemption--Computation of Redemption
Price" or, if there are no such reported prices, by taking into account the same
factors referred to under "Redemption--Computation of Redemption Price".
Determinations are effective for transactions effected subsequent to the last
preceding determination.
12
<PAGE>
The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($30.00 per 100 Units) from the aggregate sales charge. The Initial Sales
Charge paid by a Unit Holder may be more or less than the Initial Sales Charge
on the Date of Deposit because of the fluctuation of the value of the Securities
from that on the Date of Deposit. The Deferred Sales Charge will initially be
$30.00 per 100 Units but will be reduced each month by one twelfth; the Deferred
Sales Charge will be paid through monthly payments of $2.50 per 100 Units per
month commencing on the first Deferred Sales Charge Payment Date as shown on the
Summary of Essential Information through the sale of Securities on each such
date or distribution of cash available for such payment. To the extent the
entire Deferred Sales Charge has not been so paid at the time of repurchase,
redemption or exchange of the Units, any unpaid amount will be deducted from the
proceeds or in calculating an in kind distribution. For purchases of Units with
a value of $50,000 or more, the Initial Sales Charge is reduced on a graduated
basis as shown below under "Volume Discount". Units purchased pursuant to the
Reinvestment Program are subject only to any remaining Deferred Sales Charge
payments (see "Reinvestment Program"). Unit Holders investing the proceeds of
distribution from a previous terminating Series of Morgan Stanley Dean Witter
Select Equity Trust, upon purchase of Units of the Trust, will be subject only
to the Deferred Sales Charge on such Units. Unit Holders acquiring Units of the
Trust pursuant to an exchange of units of a different unit investment trust will
not be charged an initial sales charge at the time of the exchange but such
Units acquired will be subject to the Deferred Sales Charge.
PUBLIC DISTRIBUTION
Units issued on the Initial Date of Deposit and Additional Units issued in
respect of additional deposits of Securities will be distributed to the public
by the Sponsor and through dealers at the Public Offering Price determined as
provided above. Unsold Units or Units acquired by the Sponsor in the secondary
market referred to below may be offered to the public by this Prospectus at the
then current Public Offering Price determined as provided above.
The Sponsor intends to qualify Units in states selected by the Sponsor for
sale by the Sponsor and through dealers who are members of the National
Association of Securities Dealers, Inc. Sales to dealers during the initial
offering period will be made at prices which reflect a concession of 70% of the
applicable sales charge, subject to change from time to time. In addition, sales
of Units may be made pursuant to distribution arrangements with certain banks
and/or other entities subject to regulation by the Office of the Comptroller of
the Currency which are acting as agents for their customers. These banks and/or
entities are making Units of the Trust available to their customers on an agency
basis. A portion of the sales charge paid by these customers is retained by or
remitted to such banks or entities in an amount equal to the fee customarily
received by an agent for acting in such capacity in connection with the purchase
of Units. The Glass-Steagall Act prohibits banks from underwriting certain
securities, including Units of the Trust; however, this Act does permit certain
agency transactions, and banking regulators have not indicated that these
particular agency transactions are impermissible under this Act. In Texas, as
well as certain other states, any bank making Units available must be registered
as a broker-dealer in that State. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units.
SECONDARY MARKET
While not obligated to do so, it is the Sponsor's present intention to
maintain, at its expense, a secondary market for Units of this series of the
Dean Witter Select Equity Trust and to continuously offer to repurchase Units
from Unit Holders at the Sponsor's Repurchase Price. The Sponsor's Repurchase
Price is computed by adding to the aggregate value of the Securities in the
Trust, any cash on hand in the Trust including dividends receivable on stocks
trading ex-dividend (other than money required to redeem tendered Units and cash
deposited by the Sponsor to purchase Securities or cash held in the Reserve
Account) and deducting therefrom expenses of the Trust, Sponsor, counsel and
taxes, if any, and cash held for distribution to Unit Holders of record as of a
date on or prior to the evaluation; and then dividing the resulting sum by the
number of Units outstanding, as of the date of such computation. In addition,
the Sponsor's Repurchase Price will be reduced to reflect the estimated costs of
liquidating the Securities
13
<PAGE>
to meet redemption requests. There is no sales charge incurred when a Unit
Holder sells Units back to the Sponsor. Any Units repurchased by the Sponsor at
the Sponsor's Repurchase Price may be reoffered to the public by the Sponsor at
the then current Public Offering Price. Any profit or loss resulting from the
resale of such Units will belong to the Sponsor.
If the supply of Units exceeds demand (or for any other business reason),
the Sponsor may, at any time, occasionally, from time to time, or permanently,
discontinue the repurchase of Units of this series at the Sponsor's Repurchase
Price. In such event, although under no obligation to do so, the Sponsor may, as
a service to Unit Holders, offer to repurchase Units at the "Redemption Price".
Alternatively, Unit Holders may redeem their Units through the Trustee.
PROFIT OF SPONSOR
The Sponsor receives a sales charge on Units sold to the public and to
dealers. The Sponsor may have also realized a profit (or sustained a loss) on
the deposit of the Securities in the Trust representing the difference between
the cost of the Securities to the Sponsor and the cost of the Securities to the
Trust (for a description of such profit (or loss) and the amount of such
difference on the Initial Date of Deposit see: "Schedule of Portfolio
Securities"). The Sponsor may realize a similar profit (or loss) in connection
with each additional deposit of Securities. In addition, the Sponsor may have
acted as broker in transactions relating to the purchase of Securities for
deposit in the Trust. During the initial public offering period the Sponsor may
realize additional profit (or sustain a loss) due to daily fluctuations in the
prices of the Securities in the Trust and thus in the Public Offering Price of
Units received by the Sponsor. Cash, if any, received by the Sponsor from the
Unit Holders prior to the settlement date for purchase of Units or prior to the
payment for Securities upon their delivery may be used in the Sponsor's business
and may be of benefit to the Sponsor.
The Sponsor may also realize profits (or sustain losses) while maintaining a
secondary market in the Units, in the amount of any difference between the
prices at which the Sponsor buys Units and the prices at which the Sponsor
resells such Units (such prices include a sales charge) or the prices at which
the Sponsor redeems such Units, as the case may be.
VOLUME DISCOUNT
Although under no obligation to do so, the Sponsor intends to permit volume
purchasers of Units to purchase Units at a reduced sales charge. The Sponsor may
at any time change the amount by which the sales charge is reduced, or may
discontinue the discount altogether.
The sales charge of 3.90% of the Public Offering Price will be reduced
pursuant to the following graduated scale for sales to any person of at least
$50,000 during the Initial Offering Period. The sales charge in the secondary
market, which will be reduced pursuant to the following graduated scale,
consists of an Initial Sales Charge and the remaining portions of the Deferred
Sales Charge. The following scale assumes a public offering price of $1,000.00
per 100 units:
<TABLE>
<CAPTION>
SALES CHARGE
----------------------------------------------
PERCENT OF
PERCENT OF THE AMOUNT INVESTED
PUBLIC OFFERING PRICE IN SECURITIES
---------------------- ---------------------
<S> <C> <C>
Less than $50,000....................... 3.90% 3.935%
$50,000 to $99,999...................... 3.75 3.784
$100,000 to $249,999.................... 3.50 3.532
$250,000 to $499,999.................... 3.25 3.280
$500,000 to $999,999.................... * *
$1,000,000 or more...................... * *
</TABLE>
14
<PAGE>
The reduced sales charges as shown on the chart above will apply to all
purchases of Units of this Trust on any one day by the same person, partnership
or corporation (other than a dealer), in the amounts stated herein. *For
purchases of $500,000.00 or more, the sales charge consists solely of a deferred
charge of $30.00 per 100 units for a purchase of $500,000.00 to $999,999.99 and
adjusted to total $20.00 per 100 units for a purchase of $1,000,000.00 or more.
Units held in the name of the purchaser's spouse or in the name of a
purchaser's child under the age 21 are deemed for the purposes hereof to be
registered in the name of the purchaser. The reduced sales charges are also
applicable to a trustee or other fiduciary, including a partnership or
corporation purchasing Units for a single trust estate or single fiduciary
account.
The dealer concession will be 70% of the sales charge per Unit.
REDEMPTION
RIGHT OF REDEMPTION
One or more Units may be redeemed at the Redemption Price upon delivery of a
request for redemption to the Trustee at its unit investment trust office in the
City of New York, in form satisfactory to the Trustee. A Unit Holder may tender
its Units for redemption at any time after the settlement date for purchase. The
Redemption Price per Unit is calculated as set forth under "Computation of
Redemption Price". There is no sales charge incurred when a Unit Holder tenders
its Units to the Trustee for redemption other than the payment of any Deferred
Sales Charge then due.
On the third business day following the tender to the Trustee of Units to be
redeemed the Unit Holder will be entitled to receive monies per Unit equal to
the Redemption Price per Unit as determined by the Trustee as of the Evaluation
Time 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 as regards Units received after the Evaluation Time,
the date of tender is the next day on which the New York Stock Exchange is open
for trading, and such Units will be deemed to have been tendered to the Trustee
on such day for redemption at the Redemption Price computed on that day.
During the period in which the Sponsor maintains a secondary market for
Units, the Sponsor may repurchase any Unit presented for tender to the Trustee
for redemption no later than the close of business on the next Business Day
following such presentation.
In connection with each redemption the Sponsor will direct the Trustee to
redeem Units in accordance with the procedures set forth in either (a) or (b)
below.
(a) Units will be redeemed by the Trustee solely in cash for any one Unit
Holder tendering less than 25,000 Units. With respect to redemption requests
regarding at least 25,000 Units, the Sponsor may determine, in its discretion,
to direct the Trustee to redeem Units "in kind" by distributing Portfolio
Securities to the redeeming Unit Holder. The Sponsor may direct the Trustee to
redeem Units "in kind" even if it is then maintaining a secondary market in
Units of the Trust. Unit Holders redeeming "in kind" will receive an amount and
value of Trust Securities per Unit equal to the Redemption Price Per Unit as
determined as of the Evaluation Time next following the tender as set forth
herein under "Computation of Redemption Price" below. The distribution "in kind"
for redemption of Units will be held by the Trustee for the account of, and for
disposition in accordance with the instructions of, the tendering Unit Holder.
The tendering Unit Holder will be entitled to receive whole shares of each of
the underlying Portfolio Securities, plus cash equal to the Unit Holder's pro
rata share of the cash balance of the Income and Principal Accounts and cash
from the Principal Account equal to the fractional shares to which such
tendering Unit Holder is entitled. The Trustee, in connection with implementing
the redemption "in kind," procedures outlined above, may make any adjustments
necessary to reflect differences between the Redemption Price of Units and the
value of the Securities distributed "in kind" as of the date of tender. If
15
<PAGE>
the Principal Account does not contain amounts sufficient to cover the required
cash distribution to the tendering Unit Holder, the Trustee is empowered to sell
Securities in the Trust Portfolio in the manner discussed below. A Unit Holder
receiving redemption distributions of Securities "in kind" may incur brokerage
costs and odd-lot charges in converting Securities so received into cash. The
Trustee will assess transfer charges to Unit Holders taking Securities "in kind"
according to its usual practice.
The portion of the Redemption Price which represents the Unit Holder's
interest in the Income Account shall be withdrawn from the Income Account to the
extent available. The balance paid on any redemption, including dividends
receivable on stocks trading ex-dividend, if any, shall be drawn from the
Principal Account to the extent that funds are available for such purpose. The
Trustee is authorized by the Agreement to sell Securities in order to provide
funds for redemption. To the extent Securities are sold, the size of the Trust
will be reduced. Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. The Redemption Price received by a tendering Unit Holder may be more
or less than the purchase price originally paid by such Unit Holder, depending
on the value of the Securities in the Portfolio at the time of redemption.
Moreover, due to the minimum lot size in which Securities may be required to be
sold, the proceeds of such sales may exceed the amount necessary for payment of
Units redeemed. Such excess proceeds will be distributed pro rata to all
remaining Unit Holders of record on the next following Record Date.
Securities to be sold for purposes of redeeming Units will be selected from
a list supplied by the Sponsor. If not so instructed by the Sponsor, the Trustee
will select the Securities to be sold so as to maintain, as closely as
practicable, the proportionate relationship between the number of shares of each
Security in the Trust.
(b) The Trustee will redeem Units in kind by an in kind distribution to The
Chase Manhattan Bank as the Distribution Agent. A Unit Holder will be able to
receive in kind an amount per Unit equal to the Redemption Price per Unit as
determined as of the day of tender. In kind distributions (the "In Kind
Distribution") to Unit Holders will take the form of whole shares of Securities.
Cash will be distributed by the Distribution Agent in lieu of fractional shares.
The whole shares, fractional shares and cash distributed to the Distribution
Agent will aggregate an amount equal to the Redemption Price per Unit.
Distributions in kind on redemption of Units shall be held by the
Distribution Agent, whom each Unit Holder shall be deemed to have designated as
his agent upon purchase of a Unit, for the account, and for disposition in
accordance with the instructions of, the tendering Unit Holder as follows:
(i) The Distribution Agent shall sell the In Kind Distribution as of the
close of business on the date of tender or as soon thereafter as possible and
remit to the Unit Holder not later than seven calendar days thereafter the net
proceeds of sale, after deducting brokerage commissions and transfer taxes, if
any, on the sale unless the tendering Unit Holder requests a distribution of the
Securities as set forth in paragraph (ii) below. The Distribution Agent may sell
the Securities through the Sponsor, and the Sponsor may charge brokerage
commissions on those sales.
(ii) If the tendering Unit Holder requests distribution in kind and tenders
in excess of 25,000 Units, the Distribution Agent shall sell any portion of the
In Kind Distribution represented by fractional interests in shares in accordance
with the foregoing and distribute the net cash proceeds plus any other
distributable cash to the tendering Unit Holder together with certificates or
book-entry credit to the account of the Unit Holder at the Sponsor representing
whole shares of each of the Securities comprising the In Kind Distribution.
The 25,000 Unit threshold will not apply to redemptions in kind in
connection with a rollover or on an In-Kind Distribution Date in connection with
the termination of the Trust.
The portion of the Redemption Price which represents the Unit Holder's
interest in the Income Account shall be withdrawn from the Income Account to the
extent available. The balance paid on any redemption, including dividends
receivable on stocks trading ex-dividend, if any, shall be drawn from the
Principal Account to the extent that funds are available for such purpose. To
the
16
<PAGE>
extent Securities are distributed in kind to the Distribution Agent, the size of
the Trust will be reduced. Sales by the Distribution Agent may be required at a
time when Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized. The Redemption Price received by a
tendering Unit Holder may be more or less than the purchase price originally
paid by such Unit Holder, depending on the value of the Securities in the
Portfolio at the time of redemption.
Securities to be sold for purposes of redeeming Units will be selected from
a list supplied by the Sponsor. If not so instructed by the Sponsor, the Trustee
will select the Securities to be sold so as to maintain, as closely as
practicable, the proportionate relationship between the number of shares of each
Security in the Trust.
COMPUTATION OF REDEMPTION PRICE
The Trust Evaluation per Unit is determined as of the Evaluation Time stated
under "Summary of Essential Information" above (a) semiannually, on the last
Business Day of each of the months of June and December, (b) on the day on which
any Unit of the Trust is tendered for redemption (unless tender is made after
the Evaluation Time on such day, in which case Tender shall be deemed to have
been made on the next day subsequent thereto on which the New York Stock
Exchange is open for trading) and (c) on any other Business Day desired by the
Sponsor or the Trustee, (1) by adding:
a. The aggregate value of Securities in the Trust, as determined by the
Trustee;
b. Cash on hand in the Trust, including dividends receivable on stocks
trading ex-dividend, other than money deposited to purchase Securities or
money credited to the Reserve Account;
c. All other assets of the Trust;
(2) and then, by deducting from the resulting figure: amounts representing
any applicable taxes or governmental charges payable by the Trust for the
purpose of making an addition to the reserve account (as defined in the
Agreement, the "Reserve Account"), amounts representing estimated accrued fees
and expenses of the Trust (including legal and auditing expenses), amounts
representing unpaid fees of the Trustee, the Sponsor and counsel, any remaining
unpaid portion of the Deferred Sales Charge and monies held to redeem tendered
Units and for distribution to Unit Holders of record as of the Business Day
prior to the Evaluation being made on the days or dates set forth above and
then;
(3) by dividing the result of the above computation by the total number of
Units outstanding on the date of such Evaluation. The resulting figure equals
the Redemption Price for each Unit.
In addition, after the initial offering period, the Redemption Price will be
reduced to reflect estimated costs of liquidating the Securities to meet the
redemption.
The aggregate value of the Securities shall be determined by the Trustee in
good faith in the following manner: If the Securities are listed on one or more
national securities exchanges, such valuation shall be based on the closing
price on such exchange which is the principal market thereof and which shall be
deemed to be the New York Stock Exchange if the Securities are listed thereon
(unless the Trustee deems such price inappropriate as a basis for valuation). If
the Securities are not so listed, or, if so listed and the principal market is
other than such exchange or there is no closing price on such exchange, such
valuation shall be based on the closing price in the over-the-counter market
(unless the Trustee deems such price inappropriate as a basis for valuation) or
if there is no such closing price, by any of the following methods which the
Trustee deems appropriate: (i) on the basis of current bid prices of such
Securities as obtained from investment dealers or brokers (including the
Depositor) who customarily deal in securities comparable to those held by the
Trust, or (ii) if bid prices are not available for any of such Securities, on
the basis of bid prices for comparable securities, or (iii) by appraisal of the
value of the Securities on the bid side of the market or by such other appraisal
as is deemed appropriate, or (iv) by any combination of the above.
17
<PAGE>
POSTPONEMENT OF REDEMPTION
The right of redemption may be suspended and payment of the Redemption Price
per Unit postponed for more than seven calendar days following a tender of Units
for redemption (i) for any period during which the New York Stock Exchange, Inc.
is closed, other than for customary weekend and holiday closings, or (ii) for
any period during which, as determined by the Securities and Exchange
Commission, either trading on the New York Stock Exchange, Inc. is restricted or
an emergency exists as a result of which disposal or evaluation of the
Securities is not reasonably practicable, or (iii) for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee is not
liable to any person or in any way for any loss or damage that may result from
any such suspension or postponement.
EXCHANGE OPTION
Unit Holders of any Morgan Stanley Dean Witter Select Trust or any holders
of units of any other unit investment trust (collectively, "Holders") may elect
to exchange any or all of their units for units of one or more of any series of
the Morgan Stanley Dean Witter Select Equity Trust or for units of any other
Morgan Stanley Dean Witter Select Trusts, that may from time to time be made
available for such exchange by the Sponsor (the "Exchange Trusts"). Such an
exchange is implemented by a sale of Units and a purchase of the units of an
Exchange Trust. Such units may be acquired at prices based on reduced sales
charges per unit. The purpose of such reduced sales charge is to permit the
Sponsor to pass on to the Holder who wishes to exchange units the cost savings
resulting from such exchange. The cost savings result from reductions in time
and expense related to advice, financial planning and operational expense
required for the Exchange Option. The following Exchange Trusts are currently
available: the Dean Witter Select Municipal Trust, the Dean Witter Select
Government Trust, the Morgan Stanley Dean Witter Select Equity Trust, the Dean
Witter Select Investment Trust and the Dean Witter Select Corporate Trust.
Each Exchange Trust has different investment objectives: a Holder should
read the Prospectus for the applicable Exchange Trust carefully to determine the
investment objective prior to exercise of this option.
This option will be available provided the Sponsor maintains a secondary
market in units of the applicable Exchange Trust and provided that units of the
applicable Exchange Trust are available for sale and are lawfully qualified for
sale in the state in which the Holder is a resident. While it is the Sponsor's
present intention to maintain a secondary market for the units of Exchange
Trusts, there is no obligation on its part to do so. Therefore, there is no
assurance that a market for units will in fact exist on any given date in which
a Holder wishes to sell or exchange Units; thus, there is no assurance that the
Exchange Option will be available to any Unit Holder. The Sponsor reserves the
right to modify, suspend or terminate this option. Sixty days notice will be
given prior to the date of the termination of or a material amendment to the
Exchange Option except that no notice need be given in certain circumstances
approved by the Securities and Exchange Commission. In the event the Exchange
Option is not available to a Unit Holder at the time such Unit Holder wishes to
exercise such option, the Unit Holder will be immediately notified and no action
will be taken with respect to such tendered Units without further instruction
from the Unit Holder.
Exchanges will be affected in whole units only. Any excess proceeds from the
surrender of a Unit Holder's Units will be returned. Alternatively, Unit Holders
will be permitted to make up any difference between the amount representing the
Units being submitted for exchange and the amount representing the units being
acquired up to the next highest number of whole units.
An exchange of Units pursuant to the Exchange Option will constitute a
"taxable event" under the Code, i.e., a Holder will recognize a gain or loss at
the time of exchange, except that, upon an exchange of Units for units of any
series of the Exchange Trusts which are grantor trusts for U.S. federal income
tax purposes the Internal Revenue Service may seek to disallow any loss incurred
upon such exchange to the extent that the underlying securities in each Trust
are substantially identical and the purchase of the units of an Exchange Trust
takes place less than thirty-one days after the sale of the Units. In order to
avoid the potential disallowance of losses for tax purposes, a Unit Holder may
notify the Sponsor that the Unit Holder desires to purchase units of the
18
<PAGE>
Exchange Trust on the thirty-first day after the day of the sale of the Units
exchanged. The proceeds of the Units surrendered will be deposited in the Unit
Holder's brokerage account at the Sponsor and may be withdrawn at any time. Cash
from the account will be utilized to purchase units of the Exchange Trust on the
thirty-first day after the day of sale of the Units exchanged in accordance with
the procedures set forth above. A Unit Holder may revoke the order to purchase
at any time prior to the purchase on the thirty-first day by calling his
financial advisor. Units will be purchased at a price based upon the net asset
value per unit plus the applicable sales charge of 2.0%. However, there can be
no assurance that a market for units will exist on such date or that units will
be available for purchase on such date. If units are unavailable, the Sponsor
may acquire units in the secondary market or create units as soon as possible
thereafter, which units will be sold by the Sponsor based on the net asset value
on the date of purchase of the units plus the applicable sales charge of 2.0%.
The order does not create a contract or option to acquire units. If units are
not held in the Sponsor's inventory on the 31st day or if the Sponsor does not
create additional units or is unable to acquire units in the secondary market,
units of the Exchange Trust will not be purchased and the cash will remain in
the Unit Holder's account. A Unit Holder who exchanges Units of one Trust for
units of another Trust should consult his or her tax advisor regarding the
extent to which such exchange results in the recognition of a loss for Federal
and/or state or local income tax purposes.
To exercise the Exchange Option, a Unit Holder should notify the Sponsor of
the desire to acquire units of one or more of the Exchange Trusts. Upon the
exchange of Units of the Trust, any Deferred Sales Charge balance will be
deducted from the exchange proceeds. If units of the applicable outstanding
series of the Exchange Trust are at that time available for sale, the Unit
Holder may select the series or group of series for which the Units are to be
exchanged. The Unit Holder will be provided with a current prospectus or
prospectuses relating to each series in which interest is indicated.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, i.e., Units will be repurchased at a price
based upon the aggregate bid side evaluation per Unit of the Securities in the
Portfolio. Units of the Exchange Trust will be sold to the Unit Holder at a
price equal to the net asset value based on the offering or bid side evaluation
(as applicable) per unit of the securities in the Exchange Trust's Portfolio,
plus accrued interest, if any, and the applicable sales charge of 2.0% of the
Public Offering Price per Unit. If the Exchange Trust is a series of Morgan
Stanley Dean Witter Select Equity Trust the applicable sales charge on such
Trust will be the Deferred Sales Charge of such Trust which may be more or less
than 2.0% of the Public Offering Price.
REINVESTMENT PROGRAM
Unit Holders may elect to have the distributions with respect to their Units
automatically reinvested in additional Units of the Trust subject only to any
remaining portions of the Deferred Sales Charge. (Reinvestment Units are not
subject to the Initial Sales Charge.) The Unit Holder may participate in the
Trust's reinvestment program (the "Program") by filing with the Trustee a
written notice of election. The Unit Holder's completed notice of election to
participate in the Program must be received by the Trustee at least ten days
prior to the Record Date applicable to any distribution in order for the Program
to be in effect as to such distribution. Elections may be modified or revoked on
similar notice.
Such distributions, to the extent reinvested in the Trust, will be used by
the Trustee at the direction of the Sponsor in one or both of the following
manners. (i) The distributions may be used by the Trustee to purchase Units of
this Series of the Trust held in the Sponsor's inventory. The purchase price
payable by the Trustee for each of such Units will be equal to the applicable
Trust evaluation per Unit on (or as soon as possible after) the close of
business on the Distribution Date. The Units so purchased by the Trustee will be
issued or credited to the accounts of Unit Holders participating in the Program.
(ii) If there are no Units in the Sponsor's inventory, the Sponsor may purchase
additional Securities for deposit into the Trust (as described in "Prospectus
Part B--Introduction.") The additional Securities with any necessary cash will
be deposited by the Sponsor with the Trustee in exchange for new Units. The
distributions may then be used by the Trustee to purchase the new Units from the
Sponsor. The price for such new Units will be the applicable Trust evaluation
per Unit on (or as soon as possible after) the close of business on the
19
<PAGE>
Distribution Date. (See "Public Offering of Units--Public Offering Price.") The
Units so purchased by the Trustee will be issued or credited to the accounts of
Unit Holders participating in the Program. The Sponsor may terminate the Program
if it does not have sufficient Units in its inventory or it is no longer deemed
practical to create additional Units.
No fractional Units will be issued under any circumstances. If, after the
maximum number of full Units has been issued or credited at the applicable
price, there remains a portion of the distribution which is not sufficient to
purchase a full Unit at such price, the Trustee will distribute such cash to
Unit Holders. The cost of administering the reinvestment program will be borne
by the Trust and thus will be borne indirectly by all Unit Holders.
RIGHTS OF UNIT HOLDERS
UNIT HOLDERS
A Unit Holder is deemed to be a beneficiary of the Trust created by the
Indenture and Agreement and vested with all right, title and interest in the
Trust created therein. A Unit Holder may at any time tender its Units to the
Trustee for redemption.
Unit Holders are required to hold their Units in uncertificated form. The
Trustee will credit a Unit Holder's account with the number of Units held by the
Unit Holder. Units are transferable only on the records of the Trustee upon
presentation of evidence satisfactory to the Trustee for each transfer and any
sums payable for taxes or other governmental charges imposed upon these
transactions and compliance with the formalities necessary to redeem Units.
CERTAIN LIMITATIONS
The death or incapacity of any Unit Holder will not operate to terminate the
Trust nor entitle the legal representatives or heirs of such Unit Holder to
claim an accounting or to take any other action or proceeding in any court for a
partition or winding up of the Trust.
No Unit Holder shall have the right to vote except with respect to removal
of the Trustee or amendment and termination of the Trust. (See: "Administration
of the Trust--Amendment" and "Administration of the Trust--Termination".) Unit
Holders shall have no right to control the operation or administration of the
Trust in any manner, except upon the vote of 51% of the Units outstanding at any
time for purposes of amendment, or termination of the Trust or discharge of the
Trustee, all as provided in the Agreement; however, no Unit Holder shall ever be
under any liability to any third party for any action taken by the Trustee or
Sponsor. Unit Holders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. The Trustee, as
holder of the Securities, will have the right to vote all of the voting
Securities held in the Trust, and will vote such Securities in accordance with
the instructions of the Sponsor, if given, otherwise the Trustee shall vote as
it, in its sole discretion, shall determine.
EXPENSES AND CHARGES
ORGANIZATION COSTS
All or a portion of the organization costs and charges incurred in
connection with the establishment of the Trust including the cost of the
preparation, printing and execution of the Indenture, Registration Statement and
other documents relating to the Trust, Federal and State registration fees and
costs, the initial fees and expenses of the Trustee and legal and auditing
expenses will be borne by the Unit Holders. Advertising and selling expenses
will be paid by the Sponsor at no cost to the Trust.
20
<PAGE>
TRUST FEES AND EXPENSES
The Sponsor's fee, earned for portfolio supervisory services, is based upon
the largest number of Units outstanding during the computation period. The
Sponsor's fee as set forth in "Summary of Essential Information" may exceed the
actual costs of providing portfolio supervisory services for this Trust, but at
no time will the total amount the Sponsor receives for portfolio supervisory
services rendered to all series of the Dean Witter Select Equity Trust in any
calendar year exceed the aggregate cost to it of supplying such services in such
year.
Under the Indenture and Agreement for its services as Trustee and evaluator,
the Trustee receives the fee set forth in "Summary of Essential Information".
Certain regular expenses of the Trust, including certain mailing and printing
expenses, are borne by the Trust.
The estimated annual Trust expenses are listed in Part A--Summary of
Essential Information; if actual expenses exceed the estimated amounts such
excess will be borne by the Trust.
The Sponsor's fee, the Trustee's fees and the Trust expenses accrue daily
but are paid quarterly from the Income Account, to the extent funds are
available and thereafter from the Principal Account. Any of such fees may be
increased without approval of the Unit Holders in proportion to increases under
the classification "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if no longer published, a
similar index. The Trustee, pursuant to normal banking procedures, also receives
benefits to the extent that it holds funds on deposit in various non-interest
bearing accounts created under the Indenture and Agreement.
OTHER CHARGES
The following additional charges are or may be incurred by the Trust as more
fully described in the Indenture and Agreement: (a) fees of the Trustee for
extraordinary services, (b) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (c) various
governmental charges, (d) expenses and costs of any action taken by the Trustee
to protect the Trust and the rights and interests of the Unit Holders, (e)
indemnification of the Trustee for any loss, liability or expenses incurred by
it in the administration of the Trust without negligence, bad faith, wilful
malfeasance or wilful misconduct on its part or reckless disregard of its
obligations and duties, (f) indemnification of the Sponsor for any losses,
liabilities and expenses incurred in acting as Sponsor or Depositor under the
Agreement without gross negligence, bad faith, wilful malfeasance or wilful
misconduct or reckless disregard of its obligations and duties, (g) expenditures
incurred in contacting Unit Holders upon termination of the Trust, and (h)
brokerage commissions or charges incurred in connection with the purchase or
sale of Securities.
PAYMENT
The fees and expenses set forth herein are payable out of the Trust and when
so paid by or owing to the Trustee are secured by a lien on the Trust. Dividends
on the Securities are expected to be sufficient to pay the estimated expenses of
the Trust. If the balances in the Income and Principal Account are insufficient
to provide for amounts payable by the Trust, the Trustee has the power to sell
Securities to pay such amounts. To the extent Securities are sold, the size of
the Trust will be reduced and the proportions of the types of Securities may
change. Such sales might be required at a time when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. Moreover, due to the minimum lot size in which Securities may be
required to be sold, the proceeds of such sales may exceed the amount necessary
for the payment of such fees and expenses.
21
<PAGE>
ADMINISTRATION OF THE TRUST
RECORDS AND ACCOUNTS
The Trustee will keep records and accounts of all transactions of the Trust
at its unit investment trust office at 4 New York Plaza, New York, New York
10004. These records and accounts will be available for inspection by Unit
Holders at reasonable times during normal business hours. The Trustee will
additionally keep on file for inspection by Unit Holders an executed copy of the
Indenture and Agreement together with a current list of the Securities then held
in the Trust. In connection with the storage and handling of certain Securities
deposited in the Trust, the Trustee is authorized to use the services of
Depository Trust Company. These services would include safekeeping of the
Securities, coupon-clipping, computer book-entry transfer and institutional
delivery services. The Depository Trust Company is a limited purpose trust
company organized under the Banking Law of the State of New York, a member of
the Federal Reserve System and a clearing agency registered under the Securities
Exchange Act of 1934.
DISTRIBUTION
Dividends payable to the Trust as a holder of record of its Securities are
credited by the Trustee to an Income Account, as of the date on which the Trust
is entitled to receive such dividends. Other receipts, including return of
investment and gain and amounts received upon the sale, pursuant to the
Indenture and Agreement, of rights to purchase other Securities distributed in
respect of the Securities in the Portfolio, are credited to a Principal Account.
Any distribution for each Unit Holder as of a Record Date will be made on the
next following Distribution Date or shortly thereafter and shall consist of an
amount approximately equal to one-twelfth of the estimated annual dividend
income per Unit, after deducting estimated expenses, if any, plus such Holder's
pro rata share of the distributable cash balance of the Principal Account.
Proceeds received from the disposition of any of the Securities which are not
used for redemption of Units will be held in the Principal Account to be
distributed on the Distribution Date following receipt of such proceeds. No
distribution need be made from the Principal Account if the balance therein is
less than $1.00 per 100 Units outstanding. A Reserve Account may be created by
the Trustee by withdrawing from the Income or Principal Accounts, from time to
time, such amounts as it deems requisite to establish a reserve for any taxes or
other governmental charges that may be payable out of the Trust. Funds held by
the Trustee in the various accounts created under the Indenture are non-interest
bearing to Unit Holders.
On each Deferred Sales Charge Payment Date Securities will be sold pro rata
in an amount equal to $2.50 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor.
The Trustee will follow a policy that it will place securities acquisition
or disposition transactions with a broker or dealer only if it expects to obtain
the most favorable prices and executions of orders. Transactions in securities
held in the Trust are generally made in brokerage transactions (as distinguished
from principal transactions) and the Sponsor may act as broker therein and
receive commissions thereon if the Trustee expects thereby to obtain favorable
prices and execution. The furnishing of statistical and research information to
the Trustee by any of the securities dealers through which transactions are
executed will not be considered in placing securities transactions.
PORTFOLIO SUPERVISION
The original proportionate relationship between the number of shares of each
Security in the Trust will be adjusted to reflect the occurrence of a stock
dividend, a stock split, merger, reorganization or a similar event which affects
the capital structure of the issuer of a Security in the Trust but which does
not affect the Trust's percentage ownership of the common stock equity of such
issuer at the time of such event. If the Trust receives the securities of
another issuer as the result of a merger or reorganization of, or a spin-off,
split-off or split-up by the issuer of a Security included in the original
portfolio, the Trust may hold those securities as if they were one of the
Securities initially deposited and adjust the proportionate relationship
accordingly for all future subsequent deposits. The Portfolio of the Trust is
not "managed" by the Sponsor or the Trustee; their activities described below
are governed
22
<PAGE>
solely by the provisions of the Indenture and Agreement. The Sponsor may direct
the Trustee to dispose of Securities upon failure of the issuer of a Security in
the Trust to declare or pay anticipated cash dividends, institution of certain
materially adverse legal proceedings, default under certain documents materially
and adversely affecting future declaration or payment of dividends, or the
occurrence of other market or credit factors that in the opinion of the Sponsor
would make the retention of such Securities in the Trust detrimental to the
interests of the Unit Holders. The Sponsor will direct the Trustee to sell
Securities to pay portions of the Deferred Sales Charge. Except as otherwise
discussed herein, the acquisition of any Securities for the Trust other than
those initially deposited and deposited in order to create additional Units, is
prohibited. The Sponsor is authorized under the Indenture to direct the Trustee
to invest the proceeds of any sale of Securities not required for the redemption
of Units in eligible money market instruments selected by the Sponsor which will
include only negotiable certificates of deposit or time deposits of domestic
banks which are members of the Federal Deposit Insurance Corporation and which
have, together with their branches or subsidiaries, more than $2 billion in
total assets, except that certificates of deposit or time deposits of smaller
domestic banks may be held provided the deposit does not exceed the insurance
coverage on the instrument (which currently is $100,000), and provided further
that the Trust's aggregate holding of certificates of deposit or time deposits
issued by the Trustee may not exceed the insurance coverage of such obligations
and U.S. Treasury notes or bills (which shall be held until the maturity
thereof) each of which matures prior to the earlier of the next following
Distribution Date or 90 days after receipt, the principal thereof and interest
thereon (to the extent such interest is not used to pay Trust expenses) to be
distributed on the earlier of the 90th day after receipt or the next following
Distribution Date.
During the life of the Trust, the Sponsor, as part of its administrative
responsibilities, shall conduct reviews to determine whether or not to recommend
the disposition of Securities. In addition, the Sponsor shall undertake to
perform such other reviews and procedures as it may deem necessary in order for
it to give the consents and directions, including directions as to voting on the
underlying Securities, required by the Indenture and Agreement. For the
administrative services performed in making such recommendations and giving such
consents and directions, and in making the reviews called for in connection
therewith the Sponsor shall receive the portfolio supervisory fee referred to
under "Summary of Essential Information".
VOTING OF THE PORTFOLIO SECURITIES
Pursuant to the Indenture and Agreement, voting rights with respect to the
Portfolio Securities and Replacement Securities, if any, will be exercised by
the Trustee in accordance with the Indenture or the directions given by the
Sponsor.
REPORTS TO UNIT HOLDERS
With each distribution, the Trustee will furnish to Unit Holders a statement
of the amount of income and other receipts distributed, including the proceeds
of the sale of the Securities (including the sale of any Securities to pay
portions of the Deferred Sales Charge), expressed in each case as a dollar
amount per Unit.
Within a reasonable period of time after the last Business Day in each
calendar year, but not later than February 15, the Trustee will furnish to each
person who at any time during such calendar year was a Unit Holder of record a
statement setting forth:
1. As to the Income and Principal Account:
(a) the amount of income received on the Securities;
(b) the amount paid for redemption of Units;
(c) the deductions for applicable taxes or other governmental
charges, if any, and fees and expenses of the Sponsor, the Trustee and
counsel;
(d) the deductions of portions of the Deferred Sales Charge;
23
<PAGE>
(e) the amounts distributed from the Income Account;
(f) any other amount credited or deducted from the Income Account;
and
(g) the net amount remaining after such payments and deductions
expressed both as a total dollar amount and as a dollar amount per Unit
outstanding on the last business day of such calendar year.
2. The following information:
(a) a list of the Securities as of the last business day of such
calendar year;
(b) the number of Units outstanding as of the last business day of
such calendar year;
(c) the Unit Value (as defined in the Agreement) based on the last
Evaluation made during such calendar year; and
(d) the amounts actually distributed during such calendar year from
the Income and Principal Accounts, separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit outstanding on the
Record Dates for such distributions.
AMENDMENT
The Indenture and Agreement may be amended from time to time by the Trustee
and the Sponsor or their respective successors, without the consent of any of
the Unit Holders (a) to cure any ambiguity or to correct or supplement any
provision contained therein which may be defective or inconsistent with any
other provision contained therein; (b) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency exercising similar authority; or (c) to make such other provision in
regard to matters or questions arising thereunder as shall not adversely affect
the interest of the Unit Holders; provided, that the Indenture and Agreement may
also be amended from time to time by the parties thereto (or the performance of
any of the provisions of this Indenture and Agreement may be waived) with the
expressed written consent of Holders of Units evidencing 51% of the Units at the
time outstanding under the Indenture and Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture and Agreement or of modifying in any manner the rights of the Unit
Holders; provided, further however, that the Indenture and Agreement may not be
amended (nor may any provision thereof be waived) so as to (1) increase the
number of Units issuable in respect of the Trust above the aggregate number
specified in Part II of the Agreement or such lesser amount as may be
outstanding at any time during the term of the Indenture except as the result of
the deposit of Additional Securities, as therein provided, or reduce the
relative interest in the Trust of any Unit Holder without his consent, (2)
permit the deposit or acquisition thereunder of securities or other property
either in addition to or in substitution for any of the Securities except in the
manner permitted by the Trust Indenture as in effect on the date of the first
deposit of Securities or permit the Trustee to engage in business or investment
activities not specifically authorized in the Indenture and Agreement as
originally adopted or (3) adversely affect the characterization of the Trust as
a grantor trust for federal income tax purposes.
TERMINATION
The Indenture and Agreement provides that the Trust will be liquidated
during the Liquidation Period as set forth under "Summary of Essential
Information" and terminated at the end of such period. Additionally, if the
value of the Trust as shown by any Evaluation is less than forty percent (40%)
of the value of the Securities deposited in the Trust on the Initial Date of
Deposit and thereafter, the Trustee will, if directed by the Sponsor in writing,
terminate the Trust. The Trust may also be terminated at any time by the written
consent of Unit Holders owning 51% or more of the Units then outstanding. Unit
Holders will receive their final distributions (that is, their pro rata
distributions realized from the sale of Portfolio Securities plus any other
Trust assets, less Trust
24
<PAGE>
expenses) according to their Election Instructions. The Election Instructions
will provide for the following distribution options: (1) cash distributions; (2)
distributions "in kind"; or (3) investment of the distributions attributable to
the Unit Holder in units of a subsequent series of the Dean Witter Select Equity
Trust as designated by the Sponsor (the "New Series") if such New Series is
offered at such time (the "Rollover Option"). Unit Holders who do not tender
properly completed Election Instructions to the Trustee will be deemed to have
elected a cash distribution.
CASH OR "IN KIND" DISTRIBUTIONS. Unit Holders holding Units at termination
will receive distributions in respect of their Units in cash, unless they
indicate to the Trustee that they wish to receive termination distributions "in
kind", by returning to the Trustee properly completed Election Instructions
distributed by the Trustee to such Unit Holders of record 45 days prior to the
Termination Date. No minimum number of Units are needed to elect an in kind
distribution. The Trustee will duly honor such election instructions received on
or before the In Kind Distribution Date. Such Unit Holder will be entitled to
receive whole shares of each of the underlying Portfolio Securities and cash
from the Principal Account equal to the fractional shares to which such
tendering Unit Holder is entitled. A Unit Holder receiving distributions of
Securities "in kind" may incur brokerage and odd-lot costs in converting
Securities so received into cash. The Trustee will transfer the Securities to be
delivered in kind to the account of, and for disposition in accordance with the
instructions of, the Unit Holder.
ROLLOVER OPTION. A Unit Holder may elect to invest the distributions
attributable to the Unit Holder in units of a New Series. It is expected that
the terms of the New Series will be substantially the same as the terms of the
Trust described in this Prospectus, and that similar options to invest in a
subsequent series of the Trust will be exercisable as respects termination
distributions from each New Series of the Trust approximately 2 years after that
New Series' creation. The availability of this option does not constitute a
solicitation of an offer to purchase Units of a New Series or any other
security. A Unit Holder's election to exercise this option will be treated as an
indication of interest only. At any time prior to the purchase by a Unit Holder
of units of a New Series, such Unit Holder may change his investment strategy
and receive, in cash, the proceeds of the sale of the Securities.
METHOD OF SECURITIES DISPOSAL. The Trustee will begin to sell the remaining
Securities held in the Trust on the next business day following the In-Kind
Date. Since the Trust is not managed, Securities in the Portfolio must be sold
in accordance with the Indenture, which provides for sales over a period of days
or on any one day during the Liquidation Period set forth in the "Summary of
Essential Information". Daily proceeds of such sales will be deposited into the
Trust, will be held in a non-interest bearing account until distributed and will
be of benefit to the Trustee. The sales of Portfolio Securities may tend to
depress the market prices for such Securities and thus reduce the proceeds
available to Unit Holders. The Sponsor believes that gradual liquidation of
Securities during the Liquidation Period may mitigate negative market price
consequences stemming from the trading of large volumes of Securities over a
short period of time. There can be no assurance, however, that such procedures
will effectively mitigate any adverse price consequences of heavy volume trading
or that such procedures will produce a better price for Unit Holders than might
have been obtained had all the Securities been sold on one particular day during
the Liquidation Period.
The Trustee will, after deduction of brokerage charges and costs incurred in
connection with the sale of Securities, any fees and expenses of the Trust and
payment into the Reserve Account of any amount required for taxes or other
governmental charges that may be payable by the Trust, distribute to each Unit
Holder after due notice of such termination, such Unit Holder's pro rata share
in the Income and Principal Accounts. The sale of Securities in the Trust upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time. For this reason, among others, the
amount realized by a Unit Holder upon termination may be less than the amount
paid by such Unit Holder for Units.
The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an "exchange offer", for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsor has received an exemptive order under
Section 11(c) which it believes permits it to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsor's position and
additional regulatory approvals may be required.
25
<PAGE>
RESIGNATION, REMOVAL AND LIABILITY
REGARDING THE TRUSTEE
The Trustee shall be under no liability for any action taken in good faith
in reliance on prima facie properly executed documents or for the disposition of
monies or Securities in the Trust, nor shall the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the
disposition of any Securities by the Trustee. However, the Trustee shall be
liable for wilful misfeasance, bad faith or negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under the Indenture and Agreement. In the event of a failure of the Sponsor to
act, the Trustee may act under the Indenture and Agreement and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon the
Trust or in respect of the Securities or the interest thereon. The Agreement
also contains other customary provisions limiting the liability of the Trustee
and providing for the indemnification of the Trustee for any loss or claim
accruing to it without negligence, bad faith, wilful misconduct, wilful
misfeasance or reckless disregard of its duties and obligations under the
Agreement on its part.
The Trustee or any successor may resign by executing an instrument in
writing, filing the same with the Sponsor and mailing a copy of such notice of
resignation to all Unit Holders then of record. Upon receiving such notice the
Sponsor will use its best efforts to appoint a successor Trustee promptly. If
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities, or upon the determination of the Sponsor to
remove the Trustee for any reason, either with or without cause, the Sponsor may
remove the Trustee and appoint a successor as provided in the Agreement. If
within 30 days of the resignation of a Trustee no successor has been appointed
or, if appointed, has not accepted the appointment, the retiring Trustee may
apply to a court of competent jurisdiction for the appointment of a 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.
REGARDING THE SPONSOR
The Sponsor shall be under no liability to the Trust or to Unit Holders for
taking any action or for refraining from any action in good faith or for errors
in judgment. Nor shall the Sponsor be liable or responsible in any way for
depreciation or loss incurred by reason of the disposition of any Security. The
Sponsor will, however, be liable for its own wilful misfeasance, wilful
misconduct, bad faith, gross negligence or reckless disregard of its duties and
obligations under the Agreement.
If at any time the Sponsor shall resign under the Agreement or shall fail or
be incapable of performing its duties thereunder or shall become bankrupt or its
affairs are taken over by public authorities, the Agreement directs the Trustee
to either (1) appoint a successor Sponsor or Sponsors at rates of compensation
deemed reasonable by the Trustee not exceeding amounts prescribed by the
Securities and Exchange Commission, or (2) terminate the Trust Indenture and
Agreement and the Trust and liquidate the Trust. The Trustee will promptly
notify Unit Holders of any such action.
MISCELLANEOUS
SPONSOR
Dean Witter Reynolds Inc. ("Dean Witter") is a corporation organized under
the laws of the State of Delaware and is a principal operating subsidiary of
Morgan Stanley Dean Witter & Co. ("MSDW"), a publicly-held corporation. On May
31, 1997, Dean Witter, Discover & Co., Dean Witter's former parent company, and
Morgan Stanley Group Inc. merged to form MSDW. Dean Witter is a financial
services company that provides to its individual, corporate, and institutional
clients services as a broker in securities and
26
<PAGE>
commodities, a dealer in corporate, municipal, and government securities, an
investment banker, an investment adviser, and an agent in the sale of life
insurance and various other products and services. Dean Witter is a member firm
of the New York Stock Exchange, the American Stock Exchange, other major
securities exchanges and the National Association of Securities Dealers. Dean
Witter is currently servicing its clients through a network of more than 350
domestic and international offices with approximately 10,000 account executives
servicing individual and institutional client accounts.
TRUSTEE
The Trustee is The Chase Manhattan Bank, a New York Bank with its principal
executive office located at 270 Park Avenue, New York, New York 10017. The
Trustee is organized under the laws of the State of New York, is a member of the
New York Clearing House Association and is subject to supervision and
examination by the Superintendent of Banks of the State of New York, the Federal
Deposit Insurance Corporation and the Board of Governors of the Federal Reserve
System. Unit Holders should direct inquiries regarding distributions, address
changes and other matters relating to the administration of the Trust to the
Trustee at Unit Investment Trust Division, 4 New York Plaza, New York, New York
10004.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Cahill
Gordon & Reindel, a partnership including a professional corporation, 80 Pine
Street, New York, New York 10005, as special counsel for the Sponsor.
AUDITORS
The Statement of Financial Condition and Schedule of Portfolio Securities of
this series of the Morgan Stanley Dean Witter Select Equity Trust included in
this Prospectus have been audited by Deloitte & Touche LLP, certified public
accountants, as stated in their report as set forth in Part A of this
Prospectus, and are included in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
27
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THIS INVESTMENT COMPANY NOT CONTAINED IN
PARTS A AND B OF THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. PARTS A
AND B OF THIS PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO
WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PART A
Summary of Essential Information...................................... i
Independent Auditors' Report.......................................... xi
Statement of Financial Condition...................................... xii
Schedule of Portfolio Securities...................................... xiv
PART B
Introduction.......................................................... 1
The Trust............................................................. 3
Objectives and Securities Selection............................... 3
Summary Description of the Portfolio.............................. 3
Risk Factors--Special Considerations.............................. 4
Distribution...................................................... 8
Tax Status of the Trust............................................... 8
Retirement Plans...................................................... 10
Public Offering of Units.............................................. 12
Public Offering Price............................................. 12
Public Distribution............................................... 13
Secondary Market.................................................. 13
Profit of Sponsor................................................. 14
Volume Discount................................................... 14
Redemption............................................................ 15
Right of Redemption............................................... 15
Computation of Redemption Price................................... 17
Postponement of Redemption........................................ 18
Exchange Option....................................................... 18
Reinvestment Program.................................................. 19
Rights of Unit Holders................................................ 20
Unit Holders...................................................... 20
Certain Limitations............................................... 20
Expenses and Charges.................................................. 20
Organization Costs................................................ 20
Trust Fees and Expenses........................................... 21
Other Charges..................................................... 21
Payment........................................................... 21
Administration of the Trust........................................... 22
Records and Accounts.............................................. 22
Distribution...................................................... 22
Portfolio Supervision............................................. 22
Voting of the Portfolio Securities................................ 23
Reports to Unit Holders........................................... 23
Amendment......................................................... 24
Termination....................................................... 24
Resignation, Removal and Liability.................................... 26
Regarding the Trustee............................................. 26
Regarding the Sponsor............................................. 26
Miscellaneous......................................................... 26
Sponsor........................................................... 26
Trustee........................................................... 27
Legal Opinions.................................................... 27
Auditors.............................................................. 27
</TABLE>
37726
[LOGO] MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
- ------------------------
(A Unit Investment Trust)
- -------------------------------------------
[LOGO] MORGAN STANLEY DEAN WITTER
- -------------------------------------------
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
This prospectus may be used as a preliminary prospectus for a future series,
such as when Units of this Trust are no longer available, or for Investors who
will reinvest into subsequent series of the Trust. In such cases, Investors
should note that:
Information contained herein is subject to amendment. A registration
statement relating to securities of a future series has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
MORGAN STANLEY DEAN WITTER IS A SERVICE MARK OF MORGAN STANLEY DEAN WITTER &
CO.
<PAGE>
PART II. ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This registration statement on Form S-6 comprises the fol-
lowing documents:
The facing sheet.
The Cross Reference Sheet.
The Prospectus.
The signatures.
Written consents of the following persons:
. Cahill Gordon & Reindel (included in Exhibit 5)
. Deloitte & Touche LLP
The following Exhibits:
***EX-3(i) Certificate of Incorporation of Dean Witter Reynolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
*EX-4.1 Trust Indenture and Agreement, dated January 22, 1991.
*EX-4.15 Amendment to Exhibit 4.1 dated December 30, 1997.
****EX-4.2 Reference Trust Agreement dated October 21, 1998.
*****EX-4.3 Amendment dated July 18, 1995 to Trust Indenture and
Agreement dated January 22, 1991.
****EX-5 Opinion of counsel as to the legality of the securities
being registered.
****EX-23.1 Consent of Independent Auditors.
****EX-23.2 Consent of Cahill Gordon & Reindel
(included in Exhibit 5).
**EX-24 Powers of Attorney executed by a majority of the Board of
Directors of Dean Witter Reynolds Inc.
****EX-27 Financial Data Schedule.
EX-99 Information as to Officers and Directors of Dean Witter
Reynolds Inc. is incorporated by reference to Schedules A
and D of Form BD filed by Dean Witter Reynolds Inc. pur-
suant to Rules 15b1-1 and 15b3-1 under the Securities Ex-
change Act of 1934 (1934 Act File No. 8-14172).
___________________________
* The Trust Indenture and Agreement is incorporated by refer-
ence to exhibit of same designation filed with the Securi-
ties and Exchange Commission as an exhibit to the Registra-
<PAGE>
tion Statement of Sears Equity Investment Trust, Selected
Opportunities Series 4, Registration No. 33-35347 and as
amended and filed as an exhibit to Dean Witter Select Equity
Trust, Select 5 Industrial Portfolio 98, Registration No.
333-41783.
** Previously filed.
*** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an ex-
hibit to the Registration Statement of Sears Tax-Exempt In-
vestment Trust, Insured Long Term Series 33 and Long Term Mu-
nicipal Portfolio Series 106, Registration numbers 33-38086
and 33-37629, respectively.
**** Filed herewith.
***** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an ex-
hibit to the Registration Statement of Dean Witter Select Eq-
uity Trust, Select 5 Industrial Portfolio 95-3, Registration
No. 33-60121.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant, Morgan Stanley Dean Witter Select Equity
Trust, REIT Portfolio Series 98, has duly caused this Amendment
No. 3 to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City
of New York and State of New York on the 21st day of October,
1998.
MORGAN STANLEY DEAN WITTER SELECT
EQUITY TRUST,
REIT PORTFOLIO SERIES 98
(Registrant)
By: Dean Witter Reynolds Inc.
(Depositor)
/s/Thomas Hines
------------------------------
Thomas Hines
Authorized Signatory
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, this Amendment No. 3 to the Registration Statement has
been signed on behalf of Dean Witter Reynolds Inc., the Deposi-
tor, by the following person in the following capacities and by
the following persons who constitute a majority of the Deposi-
tor's Board of Directors in the City of New York, and State of
New York, on this 21st day of October, 1998.
DEAN WITTER REYNOLDS INC.
Name Office
Philip J. Purcell Chairman & Chief )
Executive Officer )
and Director )
Richard M. DeMartini Director
Robert J. Dwyer Director
Christine A. Edwards Director
James F. Higgins Director
Mitchell M. Merin Director
Stephen R. Miller Director
Richard F. Powers III Director
Thomas C. Schneider Director
William B. Smith Director
By: /s/Thomas Hines
---------------------
Thomas Hines
Attorney-in-fact*
__________________________
* Executed copies of the Powers of Attorney have been filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to the Registration Statement on Form
S-6 for Dean Witter Select Equity Trust, Select 10 Indus-
trial Portfolio 97-1, File No. 333-16839, Amendment No. 1
to the Registration Statement on Form S-6 for Dean Witter
Select Equity Trust, Select 10 Industrial Portfolio 96-4,
File No. 333-10499 and the Registration Statement on Form
S-6 for Dean Witter Select Equity Trust, Select 10 Inter-
national Series 95-1, File No. 33-56389.
<PAGE>
Exhibit Index
To
Form S-6
Registration Statement
Under the Securities Act of 1933
Exhibit No. Document
***EX-3(i) Certificate of Incorporation of Dean Witter
Reynolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
*EX-4.1 Trust Indenture and Agreement, dated Janu-
ary 22, 1991.
*EX-4.15 Amendment to Exhibit 4.1 dated December 30,
1997
****EX-4.2 Reference Trust Agreement dated October 21,
1998.
*****EX-4.3 Amendment dated July 18, 1995 to Trust In-
denture and Agreement dated January 22,
1991.
****EX-5 Opinion of counsel as to the legality of
the securities being registered.
****EX-23.1 Consent of Independent Auditors.
****EX-23.2 Consent of Cahill Gordon & Reindel
(included in Exhibit 5).
**EX-24 Powers of Attorney executed by a majority
of the Board of Directors of Dean Witter
Reynolds Inc.
****EX-27 Financial Data Schedule.
EX-99 Information as to Officers and Directors of
Dean Witter Reynolds Inc. is incorporated
by reference to Schedules A and D of Form
BD filed by Dean Witter Reynolds Inc. pur-
suant to Rules 15b1-1 and 15b3-1 under the
Securities Exchange Act of 1934 (1934 Act
File No. 8-14172).
<PAGE>
___________________________
* Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Sears Equity In-
vestment Trust, Selected Opportunities Series 4, Registra-
tion no. 33-35347 and as amended and filed as an exhibit
to Dean Witter Select Equity Trust, Select 5 Industrial
Portfolio 98-1, Registration No. 333-41783.
** Previously filed.
*** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Sears Tax-Exempt
Investment Trust, Insured Long Term Series 33 and Long
Term Municipal Portfolio Series 106, Registration numbers
33-38086 and 33-37629, respectively.
**** Filed herewith.
***** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Dean Witter Se-
lect Equity Trust, Select 5 Industrial Portfolio 95-3,
Registration No. 33-60121.
<PAGE>
Exhibit 4.2
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
REIT PORTFOLIO SERIES 98
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated October 21, 1998
between DEAN WITTER REYNOLDS INC., as Depositor, and The Chase
Manhattan Bank, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the
document entitled "Sears Equity Investment Trust, Trust Inden-
ture and Agreement" dated January 22, 1991, as amended on March
16, 1993, July 18, 1995 and December 30, 1997 (the "Basic
Agreement"). Such provisions as are incorporated by reference
constitute a single instrument (the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee
agree as follows:
I.
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the
provisions contained in the Basic Agreement are herein incorpo-
rated by reference in their entirety and shall be deemed to be
a part of this instrument as fully and to the same extent as
though said provisions had been set forth in full in this in-
strument except that the Basic Agreement is hereby amended in
the following manner:
A. Article I, Section 1.01, paragraph (29) defining
"Trustee" shall be amended as follows:
"'Trustee' shall mean The Chase Manhattan Bank,
or any successor trustee appointed as hereinaf-
ter provided."
B. Reference to United States Trust Company of New
York in its capacity as Trustee is replaced by The Chase
Manhattan Bank throughout the Basic Agreement.
<PAGE>
C. Reference to "Dean Witter Select Equity Trust"
is replaced by "Morgan Stanley Dean Witter Select Equity
Trust".
D. Section 3.01 is amended to substitute the fol-
lowing:
SECTION 3.01. INITIAL COST The costs of organizing
the Trust and sale of the Trust Units shall, to the extent
of the expenses reimbursable to the Depositor provided be-
low, be borne by the Unit Holders, PROVIDED, HOWEVER,
that, to the extent all of such costs are not borne by
Unit Holders, the amount of such costs not borne by Unit
Holders shall be borne by the Depositor and, PROVIDED FUR-
THER, however, that the liability on the part of the De-
positor under this Section shall not include any fees or
other expenses incurred in connection with the administra-
tion of the Trust subsequent to the deposit referred to in
Section 2.01. Upon notification from the Depositor that
the primary offering period is concluded, the Trustee
shall withdraw from the Account or Accounts specified in
the Prospectus or, if no Account is therein specified,
from the Principal Account, and pay to the Depositor the
Depositor's reimbursable expenses of organizing the Trust
and sale of the Trust Units in an amount certified to the
Trustee by the Depositor. If the balance of the Principal
Account is insufficient to make such withdrawal, the Trus-
tee shall, as directed by the Depositor, sell Securities
identified by the Depositor, or distribute to the Deposi-
tor Securities having a value, as determined under Section
4.01 as of the date of distribution, sufficient for such
reimbursement. The reimbursement provided for in this
Section shall be for the account of the Unitholders of re-
cord at the conclusion of the primary offering period and
shall not be reflected in the computation of the Unit
Value prior thereto. As used herein, the Depositor's re-
imbursable expenses of organizing the Trust and sale of
the Trust Units shall include the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the in-
denture, and other documents relating to the Trust, SEC
and state blue sky registration fees, the cost of the ini-
tial valuation of the portfolio and audit of the Trust,
the initial fees and expenses of the Trustee, and legal
and other out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of pre-
liminary prospectuses and prospectuses, expenses incurred
<PAGE>
in the preparation and printing of brochures and other ad-
vertising materials and any other selling expenses. Any
cash which the Depositor has identified as to be used for
reimbursement of expenses pursuant to this Section shall
be reserved by the Trustee for such purpose and shall not
be subject to distribution or, unless the Depositor other-
wise directs, used for payment of redemptions in excess of
the per-Unit amount allocable to Units tendered for re-
demption.
E. The third through fifth paragraphs of Sec-
tion 3.05 shall be amended to provide as follows:
On each Distribution Date or within a reasonable pe-
riod of time thereafter, the Trustee shall distribute by
mail to each Unit Holder of record at the close of busi-
ness on the preceding Record Date at his address appearing
on the registration books of the Trustee such Unit
Holder's income distribution, computed as hereinafter pro-
vided, plus such holder's pro rata share of the cash bal-
ance of the Principal Account, each computed as of the
preceding Record Date; provided, however, that funds cred-
ited to the Principal Account in the event of the failure
of consummation of a contract to purchase Securities pur-
suant to Section 2.01 hereof, funds representing the pro-
ceeds of the sale of Securities pursuant to Section 3.08
hereof, and funds representing the proceeds of the sale of
Securities under Sections 5.02 or 6.04 in excess of the
amounts needed for the purposes of said Sections shall not
be distributed until the next Distribution Date or at such
earlier date as shall be determined by the Trustee. The
Trustee shall not be required to make a distribution from
the Principal Amount unless the cash balance on deposit
therein available for distribution shall be sufficient to
distribute at least $1.00 per Unit in the case of Units
initially offered at approximately $1,000 or a proportion-
ately lower amount in the case of Units initially offered
at less that $1,000 (e.g. $.001 per Unit in the case of
Units initially offered at approximately $1.00).
The Trustee shall, as of each Record Date, compute
and report to the Depositor the per-Unit amount of the
monthly income distribution to be made on the next follow-
ing Distribution Date (the "Monthly Income Distribution")
by (i) estimating the annual income of the Trust for the
ensuing twelve months (by reference to the most recent
distributions made on Securities and any information re-
<PAGE>
ceived by the Trustee with respect to future dividends or
other income), (ii) deducting therefrom the estimated
costs and expenses to be incurred during the twelve-month
period for which such income has been estimated and
(iii) dividing the amount so obtained by the result of 12
multiplied by the number of Units outstanding on such Rec-
ord Date. However, unless the Trustee or the Sponsor de-
termines that the Monthly Income Distribution should be
adjusted as provided hereafter, the amount of the Monthly
Income Distribution shall be the amount computed by the
Trustee on the most recent prior, or concurrently occur-
ring, Quarterly Computation Date (such "Quarterly Computa-
tion Date" being the first Record Date and each Record
Date occurring at three-month intervals thereafter). The
Trustee will adjust the amount of the Monthly Income Dis-
tribution computed on each Quarterly Computation Date to
reconcile, over the ensuing three Monthly Income Distribu-
tions, any variance between net income and distributions
made during the preceding three months. Notwithstanding
the preceding, the Trustee may reduce the amount of any
Monthly Income Distribution in the event the Trustee or
the Sponsor determines that such adjustment is necessary
to avoid, or to respond to, a significant discrepancy be-
tween estimated and actual net income. Notwithstanding the
foregoing, the Trustee may adjust the amount of the
Monthly Income Distribution in order to maintain an aver-
age annual cash balance in the Income Account of $0.
In the event the amount on deposit in the Income Ac-
count of the Trust on a Distribution Date is not suffi-
cient for the payment of the amount of income to be dis-
tributed on the basis of the aforesaid computation, the
Trustee shall advance out of its own funds and cause to be
deposited in and credited to the Income Account such
amount as may be required to permit payment of the income
distribution to be made on such Distribution Date and
shall be entitled to be reimbursed, without interest, out
of the income subsequently received on the first Record
Date following the date of such advance on which such re-
imbursement may be made without reducing the cash balance
of the Income Account to an amount less than that required
for the next ensuing distribution. The Trustee shall be
deemed to be the beneficial owner of the dividends or
other income received by the Trust to the extent of all
amounts advanced by it pursuant to this paragraph, and
such advances shall be considered a lien on the Trust
prior to the interest of Unit Holders.
<PAGE>
The amounts to be distributed to each Unit Holder
shall be that per-Unit income distribution and pro rata
share of the cash balance of the Principal Account of the
Trust, computed as hereinabove provided, as shall be rep-
resented by the Units owned by such Unit Holder as evi-
denced by the record books of the Trustee as of the appli-
cable Record Date.
In computing the distribution to be made to any Unit
Holder, fractions of one cent shall be omitted. After any
such distribution, any cash balance remaining in the In-
come Account or the Principal Account shall be held in the
same manner as other amounts subsequently deposited in
each of such Accounts, respectively.
II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Trust is denominated Morgan Stanley Dean
Witter Select Equity Trust, REIT Portfolio Series 98 (the
"REIT" Trust").
B. The publicly traded stocks listed in Schedule A
hereto are those which, subject to the terms of this
Indenture, have been or are to be deposited in trust under
this Indenture.
C. The term, "Depositor" shall mean Dean Witter
Reynolds Inc.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is 25,000
for the REIT Trust.
E. A Unit is hereby declared initially equal to
1/25,000th for the REIT Trust.
F. The term "In-Kind Distribution Date" shall mean
October 18, 2000.
G. The term "Record Date" shall mean monthly on the
1st day of each month beginning December 1, 1998.
<PAGE>
H. The term "Distribution Dates" shall mean monthly
on the 15th day of each month beginning December 15, 1998.
I. The term "Termination Date" shall mean
November 30, 2000.
J. The Depositor's Annual Portfolio Supervision Fee
shall be a maximum of $0.25 per 100 Units.
K. The Trustee's annual fee as defined in
Section 6.04 of the Indenture shall be $.74 per 100 Units if
the greatest number of Units outstanding during the period
is 10,000,000 or more; $.80 per 100 Units if the greatest
number of Units outstanding during the period is between
5,000,000 and 9,999,999; and $.86 per 100 Units if the
greatest number of Units outstanding during the period is
4,999,999 or less.
L. For a Unit Holder to receive an "in-kind"
distribution during the life of the Trust, such Unit
Holder must tender at least 25,000 Units for redemption.
There is no minimum amount of Units that a Unit Holder
must tender in order to receive an "in-kind" distribution
on the In-Kind Date or in connection with a rollover.
M. The Indenture is amended to provide that the
period during which the Trustee shall liquidate the Trust
Securities shall not exceed 30 business days commencing on
the first business day following the In-Kind Date.
<PAGE>
(Signatures and acknowledgments on separate pages)
<PAGE>
The Schedule of Portfolio Securities in the
prospectus included in this Registration Statement is
hereby incorporated by reference herein as Schedule A
hereto.
<PAGE>
Exhibit 5
<PAGE>
(Letterhead of Cahill Gordon & Reindel)
October 21, 1998
Dean Witter Reynolds Inc.
Two World Trade Center
New York, New York 10048
Re: Morgan Stanley Dean Witter Select
Equity Trust, REIT Portfolio Series 98
Gentlemen:
We have acted as special counsel for you as Depositor
of the Morgan Stanley Dean Witter Select Equity Trust, REIT
Portfolio Series 98 (the "Trust"), in connection with the issu-
ance under the Trust Indenture and Agreement, dated January 22,
1991, as amended, and the related Reference Trust Agreement,
dated October 21, 1998 (such Trust Indenture and Agreement and
Reference Trust Agreement collectively referred to as the
"Indenture"), between you, as Depositor, and The Chase Manhat-
tan Bank, as Trustee, of units of fractional undivided interest
in said Trust (the "Units") comprising the Units of Morgan
Stanley Dean Witter Select Equity Trust, REIT Portfolio Series
98. In rendering our opinion expressed below, we have relied
in part upon the opinions and representations of your officers
and upon opinions of counsel to Dean Witter Reynolds Inc.
Based upon the foregoing, we advise you that, in our
opinion, when the Indenture has been duly executed and deliv-
ered on behalf of the Depositor and the Trustee and when the
Receipt for Units evidencing the Units has been duly executed
and delivered by the Trustee to the Depositor in accordance
with the Indenture, the Units will be legally issued, fully
paid and nonassessable by the Trust, and will constitute valid
and binding obligations of the Trust and the Depositor in ac-
cordance with their terms, except that enforceability of cer-
tain provisions thereof may be limited by applicable bank-
ruptcy, insolvency, reorganization, moratorium or other similar
<PAGE>
-2-
laws affecting creditors generally and by general equitable
principles.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-49917) re-
lating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and the related Prospectus. Our consent to such ref-
erence does not constitute a consent under Section 7 of the Se-
curities Act, as in consenting to such reference we have not
certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent
is required under said Section 7 or under the rules and regula-
tions of the Commission thereunder.
Very truly yours,
CAHILL GORDON & REINDEL
<PAGE>
Exhibit 23.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated October 21,
1998, accompanying the financial statements of the Morgan Stan-
ley Dean Witter Select Equity Trust, REIT Portfolio Series 98,
included herein and to the reference to our Firm as experts un-
der the heading "Auditors" in the prospectus which is a part of
this registration statement.
Deloitte & Touche LLP
Deloitte & Touche LLP
October 21, 1998
New York, New York
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS FOR MORGAN STANLEY DEAN WITTER
SELECT EQUITY TRUST REIT PORTFOLIO SERIES 98 OCTOBER 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> MSDW SELECT EQUITY TRUST REIT PORTFOLIO SERIES 98
OCTOBER 1998
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-21-1998
<PERIOD-START> OCT-21-1998
<PERIOD-END> OCT-21-1998
<INVESTMENTS-AT-COST> 241,189
<INVESTMENTS-AT-VALUE> 241,189
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 241,189
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,207
<TOTAL-LIABILITIES> 8,207
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 232,982
<SHARES-COMMON-STOCK> 25,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 232,982
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 25,000
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
