<PAGE>
Filer: MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO
Investment Company Act No. 811-5065
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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,
FINANCIAL SERVICES PORTFOLIO
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 agents 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
E. Total and amount of securities being registered:
An indefinite number of Units of Beneficial Interest
pursuant to Rule 24f-2 promulgated under the Investment
Company Act of 1940, as amended
<PAGE>
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.
The registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until
the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST,
FINANCIAL SERVICES PORTFOLIO
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 ) *
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
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
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
(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 )
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
(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
)
)
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
17. Withdrawal or redemption ) Redemption; Public Offer-
) ing of Units - Secondary
) Market
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 )
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
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
)
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 )
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
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 )
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 )
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
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
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 )
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
(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
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
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
Subject to Completion, dated February 22, 1999
[LOGO] MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
-----------------------------------------------------------------
(A Unit Investment Trust)
-----------------------------------------------------------------------------
Trust objective: to provide capital appreciation through an investment for
approximately two years in a fixed portfolio consisting of common stocks issued
by companies in the financial services industry.
The value of the Units of the Trust will fluctuate with the value of the
portfolio of underlying Securities and dividends may fluctuate or not be paid.
AN INVESTMENT IN THE TRUST IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN UNITS OF THE TRUST IS SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<TABLE>
<CAPTION>
SPONSOR TRUSTEE
- ------------------------------ ------------------------------
<S> <C>
Dean Witter Reynolds Inc.
2 World Trade Center
New York, New York 10048 New York, New York
</TABLE>
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or passed upon the
adequacy or accuracy of this prospectus, any representation to the contrary is a
criminal offense.
PROSPECTUS DATED MARCH , 1999
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
AS OF MARCH , 1999 THE INITIAL DATE OF DEPOSIT
<TABLE>
<S> <C>
Aggregate Value at the Evaluation Time of Securities in Trust......... $
Number of Units(1).................................................... 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.................................. $
Plus Value of Securities for Organization Costs(2)................
Total Value of Securities.........................................
Plus Sales Charge of [ ]% of Public Offering Price(3) ([ ]% of
the amount invested in Securities)...............................
Less Deferred Sales Charge per 100 Units.......................... (20.00)
-----------
Public Offering Price per 100 Units(4)............................ $
-----------
-----------
Sponsor's Repurchase Price per 100 Units and Redemption Price per 100
Units (based on the value of the underlying Securities, $[ ] less
than the Public Offering Price per 100 Units)(5).................... $
For Units redeemed or repurchased on or after the Second Year DSC
Commencement Date (reflects deduction of the additional DSC of
$10.00 per 100 Units for Units held on such date and
assumes , 1999 Securities values)......................... $
</TABLE>
Evaluation Time: Close of the market: 4:00 P.M. New York time.
Minimum Purchase: The minimum initial investment is $1,000 ($100 if the initial
purchase is through an IRA). The minimum subsequent investment is $100.
Distributions will be made on the Distribution Dates ( 15, 1999 and on or
about , 1999) to holders of record on the immediately preceeding Record
Date ( 1, 1999 and 1, 1999).
The Mandatory Termination Date of the Trust is , 1999, although the Trust
may terminate earlier if the value of the Trust at any time is less than 40% of
the market value of the Securities deposited into the Trust. If you wish to
receive Securities in-kind, you must elect prior to the in-kind Distribution
Date of , 1999. During the 14 business day period after that date, the
Liquidation Period, the remaining Securities will be sold and the final
distribution made within 5 business days after the proceeds of the last sale are
received.
- ------------------------
(1)The number of Units will increase as the Sponsor deposits additional
Securities into the Trust. See "Unit Creation--Deposit of Securities" in Part B.
(2)Unit Holders will bear Organization Costs, which include 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, the fees paid to the Portfolio Consultant and legal
and auditing expenses. At the close of the initial offering period, the Sponsor
will be reimbursed for organization costs. Organization Costs per Unit have been
estimated based on a Trust with $ million of assets. If the assets of the Trust
are less than such amount, the Organization Costs per Unit may be greater than
the estimate shown.
i
<PAGE>
(3)You will pay a maximum total sales charge of 2.9% of the Public Offering
Price in the first year. The sales charge has two components, an Initial Sales
Charge and a Deferred Sales Charge. The Initial Sales Charge is calculated by
subtracting the Deferred Sales Charge of $20 per 100 Units from the total sales
charge in the first year of the Trust. On the date of this Summary of Essential
Information, the Initial Sales Charge is $ per 100 Units (0. % of the Public
Offering Price).
Starting on the second year Deferred Sales Charge Commencement Date, you
will pay $10 more per 100 Units. This is payable at the rate of $2.50 per 100
Units on the last business day of each of the first four months. You will pay a
total of $30.00 per 100 Units in Deferred Sales Charges. The Initial Sales
Charge and the Deferred Sales Charge paid over two years will equal
approximately 3.9% of the Initial Public Offering price. The amount of the
Initial Sales Charge will change and may be more than $ per 100 Units as the
value of the Securities changes after the Initial Date of Deposit. The Initial
Sales Charge is reduced if you purchase Units with a value of $25,000 or more.
(See "Public Offering of Units--Volume Discount"). You will pay a sales charge
on all of the Securities, including the Securities held to pay organization
costs.
To pay the Deferred Sales Charge, the Trustee will sell Trust assets equal
to $2.50 per 100 Units on each Deferred Sales Charge Payment Date in the first
year (the last business day of each month, over an 8 month period beginning
, 1999). In the second year, the Trustee will sell Trust assets equal to
$ per 100 units. If you sell, redeem or exchange your Units before the last
Deferred Sales Charge Payment Date the proceeds payable to you will be reduced
by the amount of any unpaid Deferred Sales Charge. If you sell, redeem or
exchange units before the Second Year Commencement Date, the second year
Deferred Sales Charge of $10.00 will not apply. Units that you purchase through
the Reinvestment Program will be subject to the Deferred Sales Charge that
remains at the time of reinvestment (see "Reinvestment Program").
(4)This is the price as of the Initial Date of Deposit only and will change
on subsequent dates.
(5)This is the price as of the Initial Date of Deposit only and will change
on subsequent dates. This price reflects deductions for remaining Deferred Sales
Charge payments ($20.00 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 $ per 100 Units.
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 TWO YEARS, AND IS A
UNIT INVESTMENT TRUST RATHER THAN A MUTUAL FUND, THIS INFORMATION IS PRESENTED
TO PERMIT A COMPARISON OF FEES (PERCENTAGES ARE BASED ON A $1,000 INVESTMENT IN
100 UNITS) AND EXPENSES.
<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 (in the first year)........................ 2.00%(a) 20.00
----- ------
Maximum Sales Charge (in the first year)......................... 2.90% $29.00
----- ------
----- ------
Deferred Sales Charge per year for Unit Holders holding Units on
the Second Year DSC Commencement Date (as a percentage of
initial Public Offering Price).................................. 1.00% $10.00
Total Deferred Sales Charge (includes first and second year
Deferred Sales Charge).................................... 3.00% $30.00
Total Sales Charge............................................... 3.90% $39.00
Maximum Sales Charge Imposed on Reinvested Dividends............. $30.00(b)
</TABLE>
<TABLE>
<S> <C> <C>
ORGANIZATION COSTS
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)(C)
Trustee's Fee including Estimated Expenses(d).................. % $
Sponsor's Portfolio Supervision Fee............................ %
Bookkeeping and Administrative Fees............................ -- --
Other Operating Expenses....................................... -- --
----- ------
Total...................................................... % $
----- ------
----- ------
</TABLE>
iii
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR PERIOD
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $10,000 investment,
assuming an estimated operating expense ratio and organization cost
of % and a 5% annual return on the investment throughout
the periods................................................................... $ $ $ $
</TABLE>
The Example assumes all dividends and distributions will be reinvested and uses
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 5 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.
-------------------
(a) The Initial Sales Charge is actually the difference between 2.90% and the
Deferred Sales Charge of $20.00 per 100 Units; it will exceed 0.90% if the
Public Offering Price exceeds $1,000 per 100 Units.
The Deferred Sales Charge is paid at a rate of $2.50 per 100 Units per
month on each of the 8 Deferred Sales Charge Payment Dates, irrespective of
the purchase or redemption price per Unit. If a Holder sells Units before
all of these payments have been made, any unpaid Deferred Sales Charge will
be deducted from the sales proceeds. If the Unit purchase price exceeds
$1000 per 100 Units, the Deferred Sales Charge will be less than 2.00%; if
the Unit purchase price is less than $1000 per 100 Units, the Deferred
Sales Charge will exceed 2.00%.
(b) Reinvested dividends will be subject only to the Deferred Sales Charge
remaining at the time of reinvestment which, as described above, may be
more or less than 2.00% of the Public Offering Price at the time of
reinvestment (see "Reinvestment Program").
(c) The estimates do not include the costs borne by Unit Holders of purchasing
and selling Securities.
(d) The fees accrue daily and are payable on each Distribution Date. The
Sponsor estimates that dividends from the Securities (based on the last
dividends actually paid) will be sufficient to pay the estimated expenses
of the Trust. See: "Expenses and Charges". In addition to the Trustee's
fee, brokerage costs which the Trust will pay to purchase Securities are
currently estimated at $ per 100 Units.
iv
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION-- (continued)
INVESTMENT NAME AND STRUCTURE: The Morgan Stanley Dean Witter Select Equity
Trust Financial Services Portfolio 99-1 (the "Trust")--a unit investment trust
composed of publicly-traded common stocks or contracts to purchase such stocks
(the "Securities").
OBJECTIVES: to provide capital appreciation by an investment in Securities
issued by issuers in the financial services industry. An issuer will be
considered to be in the financial services industry if at least 50% of its
assets or revenues are derived from the creation, purchase and sale of financial
instruments. Examples of financial services companies include:
- commercial banks and savings institutions and loan associations and their
holding companies;
- consumer and industrial finance companies;
- diversified financial services companies;
- investment banks;
- insurance brokerages;
- securities brokerage and investment advisory companies;
- real estate-related companies;
- leasing companies; and
- a variety of firms in all segments of the insurance field such as
multi-line, property and casualty and life insurance and insurance holding
companies.
Unit Holders may choose to hold their Units for any length of time up to
approximately two years, depending upon the date of purchase, unless the Trust
is terminated early.
TRUST SECURITIES: The Portfolio Securities have been selected by the Sponsor
from a list of securities provided by Standard & Poor's, the Portfolio
Consultant. Standard & Poor's is a leading financial information and investment
research organization which provides financial research, benchmarks and market
data. Standard & Poor's has assembled the list of securities from which the
Portfolio Securities have been selected through the use of several of its
ratings and ranking methodologies. Standard & Poor's has constructed some
general guidelines, using its ratings and ranking methodologies, and applied
these guidelines to the universe of financial service companies followed by
Standard & Poor's research group. These general guidelines are described by
Standard & Poor's as follows:
- Companies ranked 4 or 5 in Standard & Poor's STARS ranking system. S&P's
Stock Appreciation Ranking System (STARS) evaluates the short-term (six to
12 months) appreciation potential for equity securities, using a scale of
1 to 5 (STARS). Companies assigned a 5 STAR rating are designated "Buy"
and are expected to be among the best performers over the next 12 months.
Companies assigned a 4 STAR rating are designated "Accumulate" and are
expected to be above-average performers.
- Market capitalization of at least $1 billion.
- Issuer credit rating of A- or higher. An obligation rated "A" is somewhat
more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. However,
the obligor's capacity to meet its financial commitment on the obligation
is still strong.
- Quality ranking of B or above. The S&P quality rankings are an appraisal
of the growth and stability of earnings and dividends over the past 10
years. The scale of quality rankings ranges from A+ (highest) to D (in
reorganization). The "B" ranking is designated "Below Average."
In addition to these general guidelines, Standard & Poor's applied
subjective analysis to arrive at the list of companies from which the Sponsor
has selected the Portfolio Securities. The Sponsor has selected the Portfolio
Securities from this list by considering factors such as trading volume, the
number of company shares outstanding and portfolio diversification.
Under applicable regulations, the Trust may not invest more than 5% of its
total assets in the securities of any company that derives more than 15% of its
revenues from
v
<PAGE>
securities-related activities, which means activities as a broker, dealer,
underwriter or investment adviser. Further, immediately after a purchase of
these equity securities, the Trust may not own more than 5% of the outstanding
securities of any class of equity securities of this issuer. The Securities were
selected for inclusion in the Trust Portfolio as of the Initial Date of Deposit.
The Trust will generally continue to hold each Security and purchase
additional shares of any Security even though the Sponsor's opinion of the
Security may have changed or a Security may no longer satisfy the Trust's
selection criteria and even though the Sponsor may recommend the sale of a
Security.
PORTFOLIO CHARACTERISTICS. A review of the Trust Portfolio's Securities as
of the Initial Date of Deposit indicates that all are common stocks, whose
issuers can be characterized as being within the categories set forth below:
<TABLE>
<CAPTION>
APPROXIMATE PERCENTAGE
OF
CATEGORIES PORTFOLIO AGGREGATE MARKET VALUE
OF ISSUER NUMBERS OF TRUST PORTFOLIO*
- ------------------------- --------- ------------------------
<S> <C> <C>
Money Center Bank
Regional Bank
Savings & Loan
Insurance
Asset Management
Financial Technology
</TABLE>
* As of Initial Date of Deposit; subject to future changes.
RISK FACTORS: An investment in Units of the Trust should be made with an
understanding of the following risks:
The Trust is an unmanaged, fixed portfolio of common stock of companies in
the financial services industry.
As stated above, the portfolio of the Trust is concentrated in investments
in the financial service industry. Its investments and performance, accordingly,
will be affected by general market and economic conditions as well as other risk
factors particular to the financial services industry.
- Financial services companies are subject to extensive government
regulation which may limit both the amount and types of loans and other
financial commitments they can make, and the interest rates and fees they
can charge.
- Profitability is largely dependent on the availability and cost of capital
funds, and can fluctuate significantly when interest rates change.
- Credit losses resulting from the financial difficulties of borrowers can
negatively impact the industry.
- Insurance companies may be subject to severe price competition, claims
activity, marketing competition and general economic conditions.
Particular insurance lines will also be influenced by specific matters.
Property and casualty insurer profits may be affected by certain weather
catastrophes and other disasters. Life and health insurer profits may be
affected by mortality risks and morbidity rates. Individual insurance
companies may be subject to material risks including reserve inadequacy
problems in investment portfolios (due to real estate or "junk" bond
holdings, for example), and the inability to collect from reinsurance
carriers. Insurance companies are subject to extensive governmental
regulation, including the imposition of maximum rate levels, which may not
be adequate for some lines of business. Proposed or potential antitrust or
tax law changes also may affect adversely insurance companies' policy
sales, tax obligations and profitability.
Companies in the financial services sector are subject to rapid business
changes, significant competition, value fluctuations due to the concentration of
loans in particular industries significantly affected by economic conditions
(such as real estate or energy) and volatile performance dependent upon the
availability and cost of capital and prevailing interest rates. In addition,
general economic conditions significantly affect these companies. Credit and
other losses resulting from the financial difficulty of borrowers or other third
parties potentially may have an adverse effect on companies in these industries.
Foreign banks, particularly those of Japan, have reported financial difficulties
attributed to increased competition, regulatory changes, and general economic
difficulties.
vi
<PAGE>
The financial services area in the United States currently is changing
relatively rapidly as existing distinctions between various financial service
segments become less clear. For instance, recent business combinations have
included insurance, finance, and securities brokerage under single ownership.
Some primarily retail corporations have expanded into securities and insurance
fields. Investment banking, securities brokerage and investment advisory
companies are subject to government regulation and risk due to securities
trading and underwriting activities.
Many of the investment considerations discussed in connection with banks,
savings institutions and loan associations, and finance companies also apply to
insurance companies. The performance of insurance company investments will be
subject to risk from several factors. The earnings of insurance companies will
be affected by interest rates, pricing (including severe pricing competition
from time to time), claims activity, marketing competition and general economic
conditions.
Investors must be able and willing to assume the risks associated with
investing in the Trust's fixed portfolio of common stocks. Risks inherent in an
investment in common stocks include price fluctuation and volatility inherent in
equity securities.
Securities may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences (both domestic and
international) affecting corporate profitability, the financial condition of
issuers and the prices of equity securities in general and the Securities in
particular. Dividends may fluctuate or not be paid at any time.
ADDITIONAL UNITS: On and after the Initial Date of Deposit, the Sponsor
expects to deposit additional Securities and sell the additional Units created.
These deposits generally will reflect the Portfolio, in terms of stocks and
their proportionate number of shares, as of the Initial Date of Deposit. The
sale of additional Units and the 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. The
Securities were selected irrespective of any buy or sell recommendation by the
Sponsor or any affiliate.
As the Sponsor creates Additional Units, all Units may represent more or
less of a particular Security, in terms of percentage of aggregate market value
of the portfolio. 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 have their holdings diluted as a result of any such brokerage fees.
FOREIGN ISSUERS: The Portfolio contains Securities of non-United States
issuers. Holding securities of non-United States companies may involve
investment risks that are different from those involved in holding securities of
domestic issues. These include:
- future political and economic developments,
- the possibility of nationalization of a foreign company by a foreign
government,
- the possible imposition of withholding taxes and exchange controls,
- other foreign governmental restrictions all of which might adversely
affect the payment of distributions on Securities in the Portfolio and
cause the value of the Securities to decline.
In addition, there may be less publicly available information about a
foreign issuer and foreign issuers may not generally be subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. Foreign
securities markets, while growing in volume, have, for the most part,
substantially less volume than U.S. markets, and securities of many foreign
companies are less liquid and their prices more volatile than securities of
comparable domestic companies. Brokerage commissions and other transaction costs
on foreign securities exchanges are generally higher than in the United States
and there is generally less government supervision and regulation of exchanges,
brokers and issuers in foreign countries than there is in the United States. You
should also consider global and regional perceptions of foreign markets and
currency exchange rate fluctuations, since they may adversely affect the value
of the foreign securities.
vii
<PAGE>
Additional Risk Factors. See also notes to "Schedule of Portfolio
Securities" and "The Trust--Risk Factors--Special Considerations" in Part B.
DISTRIBUTION: The Trustee will distribute net income on each Distribution
Date to holders of record on the immediately preceding Record Date as set forth
on page i above. If Securities are sold and the sales proceeds are not used to
redeem Units, the sales proceeds will be distributed to Unit Holders. Securities
may only be sold for limited reasons, such as a market deterioration in the
financial condition of an issuer. 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. Unit
Holders can elect to reinvest their distributions automatically in units of a
New Series, if offered by the Sponsor. Units acquired through reinvestment upon
termination will be subject only to a deferred sales charge (see "Administration
of the Trust--Termination").
The Sponsor anticipates that dividends from the Securities will be
sufficient to:
- pay expenses of the Trust and
- after paying expenses, to make the periodic net income distributions to
Unit Holders.
This expectation is based on the last dividend actually paid by the
companies included in the Schedule of Portfolio Securities. (See: "Expenses and
Charges" and "Administration of the Trust--Distribution".)
PUBLIC OFFERING PRICE: The Public Offering Price per 100 Units is computed
after receipt of a purchase order on the basis of:
- the total value of the underlying Securities and
- cash held by the Trust.
The assets are reduced by Trust expenses and liabilities and then divided by
the number of Units outstanding times 100. A sales charge is then added. (See
"Public Offering of Units--Public Offering Price".) Further details can be found
on pages i and ii above, particularly footnote 3.
The Income Account is an account maintained by the Trustee of the Trust to
hold the income from the Securities received by the Trust. The amount in the
Income Account divided by the number of Units is also added to the Public
Offering Price.
Unit Holders acquiring Units in any future series through an exchange or
rollover of units of this series will acquire such Units subject only to the
Deferred Sales Charge. Investors desiring to invest in successive trusts at a
reduced sales charge must elect to do so prior to the termination of their
existing trust.
MARKET FOR UNITS: The Sponsor, although 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. The sale or redemption price will
be based on the then current unit net asset value including deduction for any
remaining Deferred Sales Charge.
TERMINATION: The Trust will terminate approximately two years after the
Initial Date of Deposit regardless of market conditions at that time. The Trust
will then liquidate generally over a 14 business day period. Unit Holders may
elect to receive shares in-kind. Cash 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 , . The Trustee will
benefit from holding the cash because it can earn interest on it during the
period. During the life of the Trust, Securities will not be sold to take
advantage of market fluctuations.
The amount realized by a Unit Holder upon termination may be less than the
amount paid by the Unit Holder. Sales of Securities in the Trust during the
period prior to termination and upon termination may be at a lower price than
might otherwise be realized if the sale were not required at that time. (See:
"Administration of the Trust--Distribution".)
Because the Trust is not managed and the Securities can only be sold during
the Liquidation Period or under certain other limited circumstances described in
this prospectus, the proceeds received from the sale of Securities may be less
than could be obtained if the sale had taken
viii
<PAGE>
place at a different time. Depending on the volume of Securities sold and the
prices of and demand for Securities at the time of the sale, the sales of
Securities from the Trust may tend to depress the market prices of these
Securities and hence the value of the Units, thus reducing termination proceeds
available to Unit Holders. To lessen potential adverse price consequences of
heavy volume trading in the Securities 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 these procedures will
lessen negative price consequences or provide a better price for the Securities.
The Trust may terminate earlier than on the Mandatory Termination Date if the
value of the Trust is less than forty percent of the value of all of the
Securities at the time they are acquired by the Trust.
LITIGATION AND LEGISLATION: Congress is currently considering legislation
that would reduce the separation between commercial and investment banking
businesses. If enacted this legislation could significantly impact the industry
and the Securities in the Trust. While banks may be able to expand the services
which they offer if legislation broadening bank powers is enacted, expanded
powers could expose banks to well-established competitors, particularly as the
historical distinctions between banks and other financial institutions erode. In
addition, the financial services industry is an evolving and competitive
industry that is undergoing significant change with various consolidations and
the continual development of new products, structures and a regulatory
frame-work that may be subject to further change.
Many issuers within the financial services industry are smaller capitalized
companies and therefore may be subject to certain risks not associated with
larger companies.
Financial services industries may be subject to greater governmental
regulation than many other industries and changes in governmental policies and
the need for regulatory approvals may have a material effect on the services
offered by companies in the financial services industries. Governmental
regulation may limit both the financial commitments banks can make, including
the amounts and types of loans, and the interest rates and fees they can charge.
In addition, governmental regulation in certain foreign countries may impose
interest rate controls, currency controls, credit controls and price controls.
The Sponsor does not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Portfolio, although pending litigation may have a material adverse effect
on the value of Securities in the Portfolio. In addition, at any time after the
initial date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation, particularly with
respect to the financial services industry, may have a negative impact on
certain companies represented in the Portfolio. There can be no assurance that
future litigation, legislation, regulation or deregulation will not have a
material adverse effect on the Portfolio or will not impair the ability of the
issuers of the Securities to achieve their business goals.
ix
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
We have audited the accompanying statement of financial condition and
schedule of portfolio securities of the Morgan Stanley Dean Witter Select Equity
Trust Financial Services Portfolio 99-1 as of , 1999. These financial
statements are the responsibility of the Trustee. 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 , 1999, by correspondence with The Bank of
New York, 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
Financial Services Portfolio 99-1 as of , 1999 in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
, 1999
New York, New York
x
<PAGE>
STATEMENT OF FINANCIAL CONDITION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
INITIAL DATE OF DEPOSIT, , 1999
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's Contracts to purchase underlying Securities
backed by an irrevocable letter of credit (a)(b)....... $
-----------
Total................................................. $
-----------
-----------
LIABILITIES AND INTEREST OF UNIT HOLDERS
Liabilities
Deferred portion of sales charge (c).................. $
Organization Costs (b)................................
-----------
Subtotal.............................................. $
-----------
Interest of Unit Holders--
Units of fractional undivided interest outstanding:
Cost to investors (d)................................. $
Less: Gross underwriting commissions (e).............. ( )
Less: Organization Costs (b).......................... ( )
-----------
Net amount applicable to investors...................... $
-----------
Total................................................. $
-----------
-----------
</TABLE>
xi
<PAGE>
- ------------------------
(a) The aggregate value of the Securities represented by Contracts to Purchase
listed under "Schedule of Portfolio Securities" and their cost is 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". A $
irrevocable letter of credit drawn on Bank, New York Branch 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 $ million.
To the extent the assets of the Trust are less than $ million, the
organizational costs may be less, although the per Unit amount may increase.
If 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
30, 1999 through . 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 , the remaining portion of the
obligation applicable to such Units will be transferred to such account on
the redemption date except that if the Units are redeemed prior to the
Second Year DSC Commencement Date the last $10.00 of the Deferred Sales
Charge will not apply.
(d) The aggregate Public Offering Price is computed on the closing sale price of
the underlying Securities as of .
(e) The aggregate sales charge of 2.90% of the Public Offering Price per 100
Units is computed on the basis set forth under "Public Offering of
Units--Public Offering Price".
xii
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
ON INITIAL DATE OF DEPOSIT, MARCH , 1999
<TABLE>
<CAPTION>
PROPORTIONATE PERCENTAGE OF COST OF
NUMBER OF RELATIONSHIP AGGREGATE PRICE PER SECURITIES
PORTFOLIO SHARES BETWEEN NO. OF MARKET VALUE OF SHARE TO TO TRUST
NO. NAME OF ISSUER (1) SHARES TRUST TRUST (2)
- ---- --------------------------------------- --------- --------------- --------------- --------- ---------
<C> <S> <C> <C> <C> <C> <C>
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
----- ---------
----- ---------
----- ---------
</TABLE>
- ------------------------
(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.
(2) All Securities are represented entirely by contracts to purchase entered
into on , 1999. 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 , 1999. The
aggregate purchase price to the Sponsor for the Securities deposited in the
Trust is $ . The Sponsor had no profit or loss on the Initial Date
of Deposit.
The Sponsor and its affiliates 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. The Sponsor,
its affiliates, directors, elected others, employees and employee benefits
programs have either a long or short position in any security or related option.
xiii
<PAGE>
PROSPECTUS PART B
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
INTRODUCTION
Dean Witter Reynolds Inc. (the "Sponsor") and The Bank of New York (the
"Trustee") signed a Trust Indenture and Agreement and a related Reference Trust
Agreement that created this series of the Morgan Stanley Dean Witter Select
Equity Trust under the laws of the State of New York. Dean Witter Reynolds Inc.
is a principal operating subsidiary of Morgan Stanley Dean Witter & Co., a
publicly-held corporation.
THE TRUST
OBJECTIVE AND SECURITIES SELECTION
The objective of the Trust is capital appreciation through an investment for
approximately two years in a fixed portfolio of publicly-traded common stock
issued by companies in the financial services industry ("Securities").
The Trust's Securities* were chosen in the manner described in the "Summary
of Essential Information" in Part A. There is, of course, no guarantee that the
Trust will achieve its objective.
SUMMARY DESCRIPTION OF THE PORTFOLIO
The Trust consists of
(1) the Securities listed under "Schedule of Portfolio Securities" as
may continue to be held in the Trust;
(2) any additional Securities and contributed cash that the Trust
acquires and holds pursuant to the provisions of the Indenture;
(3) undistributed income; and
(4) undistributed cash realized from the disposition of Securities See:
"Administration of the Trust".
Because the Trust may sell certain Securities or reduce their percentage
under certain circumstances, and may acquire additional Securities from time to
time, the Trust is not expected to retain for any length of time its present
size and exact composition. See: "Unit Creation--Deposit of Securities" and
"Administration of the Trust--Portfolio Supervision".
- ------------------------
* The term "Securities" includes the initially deposited common stock, and any
additional common stock or contracts to purchase additional common stock,
subsequently acquired by the Trust pursuant to the Indenture and Agreement.
<PAGE>
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 increase the Trust's net asset value. Further, the
Trust may dispose of its Securities only under limited circumstances. See:
"Administration of the Trust--Portfolio Supervision".
There is no assurance that the Trust will declare or pay any distributions
in the future.
RISK FACTORS
If you invest in Units of the Trust, you should understand the risks
pertaining to an investment in publicly-traded common stock. These risks include
the risk that the value of the Portfolio and hence of the Units will decline
with decreases in the market value of the Securities. See the risks described in
the "Summary of Essential Information" in Part A of the Prospectus, as well as
those set forth below. The Trust will end and liquidate no later than the
Mandatory Termination Date set forth in the "Summary of Essential Information".
There is no assurance that the objective of the Trust will be met because
the Securities may rise or fall in value, and pay dividends, depending on the
full range of economic and market influences affecting:
- corporate profitability,
- the financial condition of issuers
- the prices of equity securities in general, and
- the stocks that this Trust buys in particular.
Fluctuating Security Value
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 (1) the risk
that the financial condition of one or more of the issuers of the Securities may
worsen; or (2) 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. Investors base these
perceptions upon 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 conditions.
The Sponsor cannot predict the direction or scope of any of these factors.
Additionally, stock markets have recently been at historically high levels and
we cannot give any assurance that these levels will continue.
Therefore, we can give no assurance that the Trust will effectively achieve
its objective over its two-year life. We can likewise give no assurance that
future portfolios selected using the same methodology as the Trust during
consecutive two-year periods will meet their objectives. The Trust is not
designed to be a complete equity investment program.
2
<PAGE>
Payment Risks
There are certain payment risks involved in owning common stocks. Risks
include those arising from the fact that holders of common and preferred stocks
have rights to receive payments from the issuers of those stocks. These rights
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.
Holders of common stocks such as those in the Portfolio also have a right 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. This
rate is normally on a cumulative basis. Holders of preferred stocks do not
ordinarily participate in other amounts available for distribution by the
issuing corporation. Issuing corporations must pay cumulative preferred stock
dividends before common stock dividends.
Any cumulative preferred stock dividend omitted is added to future dividends
payable to the holders of such cumulative preferred stock. Preferred stocks also
have 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.
Therefore, they 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, will create prior claims for payment of principal and interest in the
case of debt securities. The issuance of preferred stock, as compared with
common stock, will create prior claims for payment of dividends and liquidation
preferences in the case of preferred stock. These prior claims could adversely
affect (1) the ability and inclination of the issuer to declare or pay dividends
on its common stock or (2) the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. Further, common stocks lack
a fixed principal amount and a maturity date but have values which are subject
to market fluctuations for as long as the common stocks remain outstanding.
Common stocks are thus unlike debt securities which typically have a stated
principal amount payable at maturity; the amount payable will be subject to
market fluctuations prior thereto. Common stocks also differ from preferred
stocks which typically have a liquidation preference and which may have stated
optional or mandatory redemption provisions. 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 fluctuate over the
entire life of the Trust to values higher or lower than those 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, the Trustee will not dispose of
Securities solely as a result of normal fluctuations in market value.
Possible Lack of Market
We can give no assurance that a market will be made for any of the
Securities, that any market for the Securities will continue or that the
Securities in any markets made will be liquid. 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.
3
<PAGE>
Deferred Sales Charge
On each Deferred Sales Charge Payment Date, the Trust will sell Securities
pro rata in an amount equal to $2.00 per 100 Units to pay the Deferred Sales
Charge during the first year of the Trust. Unit Holders holding Units on the
Second Year DSC Commencement Date will pay an additional $2.50 per 100 Units on
the last business day of each of four months commencing on that date. Securities
equal to these amounts will be sold 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.
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 undergo difficulties 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.
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.
Reimbursement Costs
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.
UNIT CREATION--DEPOSIT OF SECURITIES
On the date that the Trust was created, 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 the
Securities. The Securities were deposited at prices equal to their market value
as determined by the Trustee. The Sponsor may also deposit cash or a letter of
credit and instruct the Trustee to purchase Securities. The Sponsor created the
Trust simultaneously with the deposit of the Securities with the Trustee and the
execution of the Indenture and the Reference Trust Agreement. The Trustee then
immediately recorded the Sponsor as owner of the units comprising the entire
ownership of the Trust.
Through this 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 if they cannot be sold in the
secondary market which the Sponsor, although not obligated to, proposes to
maintain. A secondary market for Units is a market where Units are bought and
sold after their original issue. 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 by Unit Holder of Units for redemption. The
Trustee has not participated in the selection of Securities for the Trust.
Neither the Sponsor nor the Trustee will be liable in way for any default,
failure or defect in any Securities.
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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. You may find the original
proportionate relationships on the Initial Date of Deposit in the "Schedule of
Portfolio Securities". The original proportionate relationships are subject to
adjustment under certain limited circumstances. See: "Administration of the
Trust--Portfolio Supervision". Under the Indenture and Agreement, the Sponsor
can deposit additional Securities and contracts to purchase additional
Securities together with a letter of credit or cash. The Sponsor may then give
instructions to the Trustee to purchase additional Securities in order to create
additional Units. Any such additional deposits made in the 90 day period
following the creation of the Trust will consist of securities of the same
issuers as those already in the Trust. These deposits 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 Portfolio. It
may not be possible to maintain the exact original proportionate relationship
because of price changes or other reasons. After the 90 day period following the
Initial Date of Deposit any deposit of additional Securities and cash must
replicate the portfolio exactly as it was immediately prior to such deposit.
Since the Sponsor deposits cash or a letter of credit in lieu of cash and
gives instructions to the Trustee to purchase additional Securities to create
Additional Units, 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. This is because the price of a Security fluctuates between the
time the cash is deposited and the time the cash is used to purchase the
Security.
The Trustee may hold any cash deposited with instructions to purchase
Securities in an interest bearing account. Any interest earned on such cash will
be the property of the Trust. Unit Holders will receive, as a distribution on
the earlier of (1) the first Distribution Date or (2) 90 days after the Initial
Date of Deposit:
- any cash deposited with instruction to purchase Securities that is not
used to purchase Securities, and
- any interest not used to pay Trust expenses.
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. To do so, the Trust may enter 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
the Trust will bear. See "Summary of Essential Information". The Sponsor cannot
currently predict the actual market impact of the Sponsor's purchases of
additional Securities because it does not know the actual volume of Securities
to be purchased and the supply and price of such Securities.
This prospectus may be used to continuously offer additional Units for sale
to the public. Units will be sold by the Sponsor 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 Sponsor
will reject the investor's order. The number of Units available may be
insufficient to meet demand. This may be 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. You will be deemed to have placed a new order for that number of Units
each day until that order is accepted. The Sponsor will execute your order, when
Units are available, at the Public Offering Price next calculated after the
Sponsor accepts your continuing order. You will, of course, be able to revoke
your 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. The Sponsor will first fill orders received first. However, the
Sponsor will accept indications of interest prior to the effectiveness of the
registration of the offering of Trust Units which become orders upon
effectiveness according to the order in which the Sponsor receives the
indications of interest.
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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 you redeem any Units, the
amount of Securities in the Trust will decline, and the fractional undivided
interest represented by each remaining Unit in the balance of the Trust will
increase. However, if the Trust issues Additional Units, the Securities in the
Trust will increase by amounts allocable to such Additional Units and the
fractional undivided interest in the Trust will fall. Units will remain
outstanding until you or any Unit Holder, including the Sponsor, redeem them
upon tender to the Trustee, or until the termination of the Trust on the terms
specified in the Indenture and Agreement. Only the Trustee can redeem Units. You
can redeem your Units, sell them to the Sponsor if the Sponsor is willing to buy
the Units or hold them until the Trust terminates.
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. Income received by the Trust will be treated as income
of the Unit Holders in the manner set forth below.
Under the grantor trust rules of Sections 671-678 of the Internal Revenue
Code of 1986, as amended, each Unit Holder will be considered to be the owner of
a pro rata portion of each asset in the Trust. The total tax cost of each Unit
purchased solely for cash will equal the cost of Units, including the Initial
Sales Charge. A Unit Holder should determine the tax cost for each asset
represented by the Unit Holder's Units purchased solely for cash by allocating
the total cost for such Units, including the 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 Holder will also reflect the actual amounts paid to them, after deduction
for the Deferred Sales Charge and the charge for organizational expenses.
Accordingly, you should not increase the total cost for your Units by the amount
of the Deferred Sales Charge and the charge for organizational expenses.
You as a Unit Holder will be considered to have received all of the
dividends paid on your pro rata portion of each Security when the Trust receives
such dividends including the portion of such dividend used to pay ongoing
expenses. The amount of the dividend will be its U.S. dollar value based on the
exchange rate in effect on the date the dividend payment is received by the
Trust. In the case of a corporate Unit Holder, dividends on U.S. Securities will
qualify for the 70% dividends received deduction for corporations to the same
extent as if the corporate Unit Holder held the dividend paying stock directly.
Dividends considered to have been received by a Unit Holder from Foreign
Securities will not qualify for the dividends-received deduction for corporate
Unit Holders because the dividends-received deduction is generally only
available for dividends received from domestic corporations.
An individual Unit Holder who itemizes deductions will be entitled to an
itemized deduction for his pro rata share of fees and expenses paid by the Trust
as if he paid such fees and expenses directly. You are entitled to this
deduction only to the extent that this amount together with your other
miscellaneous deductions exceed 2% of your 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 you or to your agent of your pro rata
share of the Securities in kind upon redemption or termination of the Trust will
not be a taxable event to you. Your basis for Securities so distributed will be
equal to your basis for the same Securities, previously represented by your
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<PAGE>
Units, prior to such distribution. The holding period for such Securities will
include the period during which you held the Units. You will have a taxable gain
or loss, which will be a capital gain or loss except in the case of a dealer,
when you dispose 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. These tax laws will treat the
income of the Trust as the income of the Unit Holders.
In connection with the In-kind Rollover Option set forth under
"Termination-In-Kind Rollover Option", you will not be taxed upon the receipt
in-kind from the Terminating Trust and the deposit in the New Trust of the
Duplicated Stocks. Your basis in such Duplicated Stocks will be your basis in
such Duplicated Stocks prior to the distribution from the Terminating Trust. The
holding period of such Duplicated Stocks will include the period during which
you held the Units. To the extent the Agent sells Securities received in-kind on
your behalf, you will have a taxable gain or loss, which will be a capital gain
or loss except in the case of a dealer. Your basis in non-Duplicated Stocks will
equal the purchase price paid by the Agent.
If the proceeds that the Distribution Agent or the Trustee receives upon the
sale of an underlying Security exceed your adjusted tax cost allocable to the
Security disposed of, you will realize a taxable gain to the extent of such
excess. Conversely, if the proceeds that the Distribution Agent or the Trustee
receives upon the sale of an underlying Security are less than your adjusted tax
cost allocable to the Security disposed of, you will realize a loss for tax
purposes to the extent of such difference. However, 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
(1) the underlying securities in each trust are substantially identical and (2)
the purchase of units of the New Series takes place less than thirty-one days
after the sale of the underlying Security.
Under the Federal Tax Code, capital gain of individuals, estates and trusts
from Securities held for more than one 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 to you with respect to those
Securities which you have held for less than a year and a day at the time of
sale. This includes sales occasioned by mandatory or early termination of the
Trust or exchange or rollover of Units.
From time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. This type of legislation, if enacted into law,
would reduce the after-tax return to investors who can take advantage of the
deduction.
Foreign Unit Holders (including nonresident alien individuals, foreign
corporations, and foreign partnerships) not engaged in a U.S. trade or business
generally will be subject to a 30% withholding tax (or lower applicable treaty
rate) on dividend distributions.
You should consult your tax advisor with respect to the application of the
above general information to your 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. If you are considering participation in any such plan you should review
specific tax laws and pending legislation relating to the plan and should
consult attorneys or tax advisors with respect to the establishment and
maintenance of any such plan.
A qualified retirement plan provides employee retirement benefits.
Contributions from the employer fund such a plan in whole or in part. If those
contributions include some by a self-employed individual, the plan is sometimes
called a Keogh plan. The
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employer contributions are, within limits, deductible in determining the taxable
income of the contributing employer for Federal income tax purposes. The plan
does not pay taxes on income upon receipt of it, and plan losses are not
deductible. However, distributees must generally include distributions from the
plan in their ordinary income 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 ("IRA") is similar to a qualified
retirement plan. However, an individual, rather than an employer, generally
makes contributions to an IRA up to $2,000 per year, from earned income. An
individual may also make additional contributions of up to $2,000 to an IRA of
an individual's spouse provided the combined income of the individual and his or
her spouse is sufficient. An individual may contribute to an IRA even though he
or she is also covered by a qualified retirement plan. However, higher-income
individuals who are active participants in a qualified retirement plan may not
currently deduct IRA contributions and the nondeductible IRA contributions from
the plan are not taxed when paid out by the IRA, but 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.
Recent legislation has created two new types of IRAs effective beginning in
1998: Roth IRAs and education IRAs. You may not deduct contributions to Roth
IRAs and education IRAs, but you may receive tax-free distributions of the
income of the IRA if you meet the applicable requirements. You would, however,
pay taxes on such income upon distribution if you do not meet such requirements.
Distributions from a Roth IRA are tax-free if made after satisfaction of a
5-year holding period and (1) on or after attainment of age 59 1/2, (2) upon
death or disability, or (3) to buy or construct a first home as a principal
residence for the indi-vidual, 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 regular 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 you attain
age 70 1/2, or in the case of a person other than a 5% owner, April 1
following the calendar year in which you retire, if later, or
- within 5 years after your 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. However, 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 you attain age 70 1/2. Roth
IRAs are not required to commence distributions upon the individual's attainment
of age 70 1/2. However, Roth IRAs 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 after the
designated beneficiary's attainment of age 30 or earlier death.
Forms and arrangements for establishing qualified retirement plans and IRAs
are available from:
- the Sponsor
- other brokerage firms
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<PAGE>
- other financial institutions
- 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:
- made on or after your death
- attributable to your being disabled
- in the nature of a life annuity
- made to you from a qualified retirement plan after separation from service
after attainment of age 55
- made from an IRA after 1997 to pay certain qualified higher education
expenses for you, your spouse or your child or grandchild
- made from an IRA after 1997 to buy or construct a first home as a
principal residence for you, your spouse or any child, grandchild or
ancestor up to $10,000, or
- 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:
- made on or after the death of the designated beneficiary
- attributable to the designated beneficiary's being disabled, or
- made on account of a scholarship or certain other educational assistance
allowances.
You may, however, roll over or transfer qualifying distributions from a
qualified retirement plan or from an IRA to another qualified retirement plan or
IRA under specified circumstances.
The foregoing information is of a general nature. It 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 by
the following formula: the aggregate market value of the Portfolio Securities
and other Trust assets, as determined by the Trustee, next computed after
receipt of a purchase order is reduced by Trust liabilities and then divided by
the number of Units outstanding. The sales charge shown in "Summary of Essential
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<PAGE>
Information" is added to the net asset value per Unit. The Sponsor will add to
the Public Offering Price commissions and any other transactional costs, if any,
in connection with the deposit of additional Securities or contracts to purchase
additional Securities for the creation of Additional Units.
After the Initial Date of Deposit, the Sponsor will add to the Public
Offering Price 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. In the event a
stock is trading ex-dividend at the time of deposit of additional Securities,
the Sponsor will add to the Public Offering Price an amount equal to the
dividend that would be received if such stock were to receive a dividend. 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
- the amount of Trust 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. These costs include:
- the cost of the initial preparation of documents relating to the Trust,
federal and state registration fees
- the initial fees and expenses of the Trustee
- legal expenses
- any other out-of-pocket expenses.
The Sponsor will receive the estimated organization costs as of the close of
the initial offering period.
As more fully described in the Indenture, the Trustee determines the
aggregate market value of the Securities based on closing prices on the day it
makes the valuation as described under "Redemption--Computation of Redemption
Price". If there are no such reported prices, the Trustee takes into account the
same factors referred to under "Redemption--Computation of Redemption Price".
Determinations are effective for transactions effected after the last preceding
determination.
SALES CHARGES
The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. To compute the Initial Sales Charge, deduct the Deferred Sales Charge of
$20.00 per 100 Units in the case of Unit Holders disposing of Units before the
Second Year DSC Commencement Date from the total sales charge in the first year.
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 $20.00 per 100 Units but will be reduced each month by
one tenth; the Deferred Sales Charge will be paid through monthly payments of
$2.00 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. Unit Holders holding Units on the Second Year DSC Commencement Date
will be charged an additional Deferred Sales Charge of $10.00 per 100 Units,
payable at the rate of $2.50 per 100 Units per month for four months on the last
business day of each month starting on the Second Year DSC Commencement Date
(the total Deferred Sales Charge for such Unit Holders will be $30.00 per 100
Units and the total of (i) the Initial Sales Charge and (ii) the Deferred Sales
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Charge payable over 10 months in the first year and four months in the second
year of $30.00 will equal approximately 3.9% of the initial Public Offering
Price.) 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
except that if the exchange, redemption or sale occurs prior to the Second Year
DSC Commencement Date, the second year Deferred Sales Charge of $10.00 will not
apply.
For purchases of Units with a value of $25,000 or more, we will reduce the
Initial Sales Charge 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.
If you acquire Units of the Trust pursuant to an exchange of units of a
different unit investment trust you will not have to pay an initial sales charge
at the time of the exchange. However, such Units acquired will be subject to the
Deferred Sales Charge.
PUBLIC DISTRIBUTION
The Sponsor directly and through dealers will distribute to the public, at
the Public Offering Price determined as provided above, Units issued on the
Initial Date of Deposit and Additional Units issued in respect of additional
deposits of Securities. They may offer to the public unsold Units or Units
acquired by the Sponsor in the secondary market referred to below, 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. The Sponsor will sell Units to dealers
during the initial offering period 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. These banks and entities are subject to
regulation by the Office of the Comptroller of the Currency and 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 that these customers pay is retained by or remitted to such banks or
entities in an amount equal to the amount 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. This Act, however, does permit certain agency
transactions. 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 register 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, the Sponsor presently intends to maintain, at
its expense, a secondary market for Units of this series of the Morgan Stanley
Dean Witter Select Equity Trust. The Sponsor also presently intends to
continuously offer to repurchase Units from Unit Holders at the Sponsor's
Repurchase Price. The Sponsor computes the Repurchase Price by adding:
- the aggregate value of the Securities in the Trust, and
- 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 the Sponsor deposited to purchase Securities or cash held in the
Reserve Account
- less expenses of the Trust, (includes Trustee fee, Sponsor fee, counsel's
expenses and taxes, if any), and
- less any remaining unpaid portion of the Deferred Sales Charge, and
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- less cash held for distribution to Unit Holders of record as of a date on
or prior to the evaluation
- and then dividing the result by the number of Units outstanding, as of the
date of such computation.
In addition, after the initial offering period, the Sponsor's Repurchase
Price will be reduced to reflect the estimated costs of liquidating the
Securities to meet redemption requests. The only sales charge incurred when a
Unit Holder sells Units back to the Sponsor is the payment of the unpaid portion
of the Deferred Sales Charge. The Sponsor may reoffer to the public any Units
repurchased by the Sponsor at the Sponsor's Repurchase Price. The reoffering
price will be the then current Public Offering Price. The Sponsor will bear any
profit or loss resulting from the resale of such Units.
The Sponsor may temporarily or permanently discontinue the repurchase of
Units of this series at the Sponsor's Repurchase Price if the supply of Units
exceeds demand or for any other business reason. 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. This profit or loss represents 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 the
Sponsor receives. If the Sponsor receives cash from the Unit Holders prior to
the settlement date for purchase of Units or prior to the payment for Securities
upon their delivery, the Sponsor may use the cash in the Sponsor's business and
may benefit from the use of the cash.
The Sponsor may also realize profits or sustain losses while maintaining a
secondary market in the Units. These profits or losses are the amount of any
difference between the prices at which the Sponsor buys Units and the prices,
including a sales charge, at which the Sponsor resells such Units 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. The Sponsor
may also discontinue the discount altogether.
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The sales charge of 2.90% of the Public Offering Price will decline as shown
on the following graduated scale for sales to any person of at least $25,000
during the Initial Offering Period. The sales charge in the secondary market,
which will decline as shown on 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 $25,000....................... 2.90% 2.926%
$25,000 to $49,999...................... 2.75 2.775
$50,000 to $99,999...................... 2.50 2.523
$100,000 to $249,999.................... 2.25 2.270
$250,000 to $999,999.................... 2.00 2.00
$1,000,000 or more...................... 1.00 1.00
</TABLE>
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 $250,000.00 or more, the sales charge consists solely of a deferred sales
charge of $20.00 per 100 units for a purchase of $250,000.00 to $999,999.99 and
adjusted to total $10.00 per 100 units for a purchase of $1,000,000.00 or more.
Units held in the name of your spouse or in the name of your child under the
age 21 are deemed for the purposes of the volume discount to be registered in
your name. 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
You may redeem one or more of your Units 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. You may
tender 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 you tender your 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, you will be entitled to receive cash per Unit equal to the Redemption
Price per Unit. The Trustee will determine the Redemption Price as of the
Evaluation Time on the date of tender. The Evaluation Time is the close of the
market, generally, 4:00 PM New York time.
The "date of tender" is the date on which the Trustee receives Units.
However, 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. 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.
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REDEMPTION PROCEDURES
In connection with each redemption the Sponsor will direct the Trustee to
redeem Units in accordance with the procedures set forth in either (1) or (2)
below.
(1) The Trustee will redeem Units solely in cash for any one Unit Holder
tendering less than 25,000 Units. If you request redemption of 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 you. 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. If you redeem Units "in kind" you 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 Trustee
will hold the distribution "in kind" for redemption of Units for your account,
and for disposition in accordance with your instructions. You will be entitled
to receive (1) whole shares of each of the underlying Portfolio Securities, plus
(2) cash equal to the your pro rata share of the cash balance of the Income and
Principal Accounts and (3) cash from the Principal Account equal to the
fractional shares to which you are entitled. The Trustee, in connection with
implementing the redemption "in kind," procedures outlined above, may make any
adjustments necessary to reflect differences between (1) the Redemption Price of
Units and (2) the value of the Securities distributed "in kind" as of the date
of tender. If the Principal Account does not contain amounts sufficient to cover
the required cash distribution to you, the Trustee may sell Securities in the
Trust Portfolio in the manner discussed below. If you receive redemption
distributions of Securities "in kind" you 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 your interest in the
Income Account will 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, will be drawn from the Principal Account to
the extent that funds are available for such purpose. The Agreement authorizes
the Trustee to sell Securities in order to provide funds for redemption. To the
extent Securities are sold, the size of the Trust will decline. 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 realize. The Redemption Price you
receive may be more or less than the purchase price you originally paid. The
price difference will depend 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.
The Sponsor will supply to the Trustee a list of Securities to sell for
purposes of redeeming Units. If the Sponsor does not so instruct the Trustee,
the Trustee will select the Securities to sell so as to maintain, as closely as
practicable, the proportionate relationship between the number of shares of each
Security in the Trust.
(2) The Trustee will redeem Units in kind by an in kind distribution to The
Bank of New York as the Distribution Agent. You 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 to Unit Holders will take the form of
whole shares of Securities. The Distribution Agent will distribute cash in lieu
of fractional shares. The whole shares, fractional shares and cash distributed
to the Distribution Agent will total an amount equal to the Redemption Price per
Unit.
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The Distribution Agent shall hold distributions in kind upon the redemption
of Units. You shall be deemed to have designated the Distribution Agent as your
agent upon purchase of a Unit, for your account, and for disposition in
accordance with your instructions 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. The
Distribution Agent shall then remit to you not later than seven calendar days
thereafter the net proceeds of sale, after deducting brokerage commissions and
transfer taxes, if any, on the sale. However, you may request 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 you request distribution in kind and tender more than 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.
The Distribution Agent shall then distribute (1) the net cash proceeds plus (2)
any other distributable cash to you together with (3) certificates or book-entry
credit to your account at the Sponsor of each of the whole shares of 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 your 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, will be withdrawn from the Principal Account
to the extent that funds are available for such purpose. To the 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 you receive may be more
or less than the purchase price you originally paid, depending on the value of
the Securities in the Portfolio at the time of redemption.
COMPUTATION OF REDEMPTION PRICE
The Trust Evaluation per Unit is determined as of the Evaluation Time stated
under "Summary of Essential Information" above:
- semiannually, on the last Business Day of each of the months of June and
December,
- on the day on which you tender any Unit of the Trust for redemption,
unless you tender after the Evaluation Time on such day. In this case
Tender shall be considered made on the next day after on which the New
York Stock Exchange is open for trading.
- on any other Business Day desired by the Sponsor or the Trustee.
I. To determine the Trust Evaluation per Unit, add:
(1) The aggregate value of Securities in the Trust, as the Trustee
determines;
(2) 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;
(3) All other assets of the Trust;
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II. Then deduct from the resulting figure:
(1) amounts representing any applicable taxes or governmental charges
payable by the Trust for the purpose of making an addition to the reserve
account,
(2) amounts representing estimated accrued fees and expenses of the Trust,
including legal and auditing expenses,
(3) amounts representing unpaid fees of the Trustee, the Sponsor and
counsel,
(4) any remaining unpaid portion of the Deferred Sales Charge, and
(5) cash 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;
III. Divide 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 the estimated costs of liquidating the Securities to meet the
redemption.
The Trustee shall determine the aggregate value of the Securities in good
faith in the following manner:
- If the Securities are listed on one or more national securities exchanges,
the Trustee shall base such valuation on the closing price on such
exchange which is the principal market thereof. The exchange shall be the
New York Stock Exchange if the Securities are listed there, unless the
Trustee deems such price inappropriate as a basis for valuation.
- If the Securities are not so listed, or, if so listed and their principal
market is other than such exchange or there is no closing price on such
exchange, the Trustee shall base such valuation on the closing price in
the over-the-counter market, unless the Trustee deems such price
inappropriate as a basis for valuation.
If there is no such closing price, the Trustee shall use any of the
following methods which the Trustee deems appropriate:
- on the basis of current bid prices of such Securities as obtained from
investment dealers or brokers, including the Sponsor, who customarily deal
in securities comparable to those held by the Trust, or
- if bid prices are not available for any of such Securities, on the basis
of bid prices for comparable securities, or
- 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
- by any combination of the above.
POSTPONEMENT OF REDEMPTION
Your right of redemption may be suspended and the payment of the Redemption
Price per Unit to you may be postponed for more than seven calendar days
following a tender of Units for redemption
- for any period during which the New York Stock Exchange, Inc. is closed,
other than for customary weekend and holiday closings, or
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- 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
- 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 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,
called the "Exchange Trusts".
Such an exchange is implemented by a sale of Units and a purchase of the
units of an Exchange Trust. You may acquire such units 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 Dean Witter Select Equity Trust
- the Dean Witter Select Investment Trust
- the Dean Witter Select Corporate Trust.
Each Exchange Trust has different investment objectives. You 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 that (1) the Sponsor maintains a
secondary market in units of the applicable Exchange Trust and (2) units of the
applicable Exchange Trust are available for sale and are lawfully qualified for
sale in the state in which you are a resident. While the Sponsor presently
intends to maintain a secondary market for the units of Exchange Trusts, there
is no obligation on its part to do so. Therefore, we do not promise that a
market for units will in fact exist on any given date in which you wish to sell
or exchange Units. Thus, we do not promise that the Exchange Option will be
available to any Unit Holder. The Sponsor reserves the right to modify, suspend
or terminate this option. The Sponsor will give sixty days notice before the
date of the termination of or a material amendment to the Exchange Option.
However, the Sponsor will not have to give notice in certain circumstances
approved by the Securities and Exchange Commission. In the event the Exchange
Option is not available to you at the time you wish to exercise such option, we
will immediately notify you and we will not take any action with respect to your
tendered Units without further instruction from you.
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You may make exchanges in whole units only. We will return any excess
proceeds from the surrender of your Units. Alternatively, you may make up any
difference between (1) the amount representing the Units being submitted for
exchange (2) and the amount representing the units being acquired up to the next
highest number of whole units. The full value of the Units, including any make
up amount, will be subject to a sales charge.
An exchange of Units pursuant to the Exchange Option will constitute a
"taxable event" under the Code. You will recognize a gain or loss at the time of
exchange. However, if you exchange 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. The IRS may seek to disallow the loss to the extent that (1) the
underlying securities in each Trust are substantially identical and (2) 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, you may notify the Sponsor that you desire to purchase
units of the Exchange Trust on the thirty-first day after the day of the sale of
the Units exchanged. The Sponsor will deposit the proceeds of the Units
surrendered in your brokerage account at the Sponsor. You may withdraw the
proceeds at any time. You may use cash from the account 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. You may revoke the
order to purchase at any time prior to the purchase on the thirty-first day by
calling your financial advisor.
The Sponsor will purchase units at a price based upon the value of the Trust
per unit plus the applicable sales charge of 2.0%. However, we do not promise
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.
The Sponsor will sell these units based on the value of the Trust per unit 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 the Sponsor does
not hold units in its inventory on the 31st day or if the Sponsor does not
create additional units or is unable to acquire units in the secondary market,
the Sponsor will not purchase units of the Exchange Trust and the cash will
remain in your account. If you exchange Units of one Trust for units of another
Trust, you should consult your 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, you 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, we will deduct any Deferred Sales Charge balance from the
exchange proceeds. If units of the applicable outstanding series of the Exchange
Trust are at that time available for sale, you may select the series or group of
series for which the Units are to be exchanged. You 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. Units will be repurchased at a price based
upon the aggregate bid side evaluation per Unit of the Securities in the
Portfolio. We will sell units of the Exchange Trust to you 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. The Deferred Sales Charge may be more or less than
2.0% of the Public Offering Price.
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REINVESTMENT PROGRAM
You may elect to automatically reinvest the distributions with respect to
your Units 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. You may participate in the Trust's reinvestment program by
filing a written notice of election with the Trustee. The Trustee must receive
your completed notice of election to participate in the Program at least ten
days prior to the Record Date applicable to any distribution in order for the
Program to be in effect as to that distribution. You may modify or revoke
elections on similar notice.
The Trustee will use such distributions, to the extent reinvested in the
Trust, at the direction of the Sponsor in one or both of the following manners:
(1) The Trustee may use the distributions to purchase Units of this Series
of the Trust 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 Trustee will issue or credit the Units purchased to the
accounts of Unit Holders participating in the Program.
(2) If there are no Units in the Sponsor's inventory, the Sponsor may
purchase additional Securities for deposit into the Trust as described above in
Part B. The Sponsor will deposit the additional Securities with any necessary
cash with the Trustee in exchange for new Units. The Trustee may then use the
distributions 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 Distribution Date. See "Public Offering of
Units--Public Offering Price". The Units purchased by the Trustee will be issued
or credited to the accounts of Unit Holders who participate in the Program. The
Sponsor may terminate the Program if it does not have sufficient Units in its
inventory or if it is no longer 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 created 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 Trust will bear the cost of administering the reinvestment program.
Thus all Unit Holders will indirectly bear that cost.
RIGHTS OF UNIT HOLDERS
UNIT HOLDERS
A Unit Holder is deemed to be a beneficiary of the Trust created by the
Indenture and Agreement. A Unit Holder is vested with all right, title and
interest in the Trust created therein. As a Unit Holder, you may at any time
tender your Units to the Trustee for redemption.
You are required to hold your Units in uncertificated form. The Trustee will
credit your account with the number of Units you hold. Units are transferable
only on the records of the Trustee upon presentation of evidence satisfactory to
the Trustee for each transfer. Any sums payable for taxes or other governmental
charges imposed upon these transactions must be paid by you and you must comply
with the formalities necessary to redeem Units.
CERTAIN LIMITATIONS
The death or incapacity of any Unit Holder will not operate to terminate the
Trust. Death or incapacity will not entitle your legal representatives or heirs
to claim an accounting or to take any other action or proceeding in any court
for a partition or winding up of the Trust.
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Neither you nor any other 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. The only time you will have such a
right is 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 that the Trustee or Sponsor takes.
You 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. The Trustee 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
Part A--Summary of Essential Information lists the estimated annual Trust
expenses. If actual expenses exceed the estimated amounts, the Trust will bear
the excess.
ORGANIZATION COSTS
You and the other Unit Holders will bear all or a portion of the
organization costs and charges incurred in connection with the establishment of
the Trust. These costs and charges will include:
- 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
- legal and auditing expenses.
The Sponsor will pay advertising and selling expenses at no cost to the
Trust.
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. At no
time will the total amount the Sponsor receives for portfolio supervisory
services rendered to all series of the Morgan Stanley 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".
The Trust bears certain regular expenses of the Trust, including certain mailing
and printing expenses.
The Sponsor's fee, the Trustee's fees and the Trust expenses accrue daily
but are payable only on or before each Distribution Date from the Income
Account, to the extent funds are available and thereafter from the Principal
Account. Any of such fees may increase without approval of you or the other 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. If the actual expenses exceed the estimated amounts,
the excess expenses will be borne by the Trust.
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OTHER CHARGES
The Trust does or may incur the following additional charges as more fully
described in the Indenture and Agreement:
- fees of the Trustee for extraordinary services
- expenses of the Trustee, including legal and auditing expenses, and of
counsel that the Sponsor designated
- various governmental charges
- expenses and costs of any action the Trustee takes to protect the Trust
and the rights and interests of you and the other Unit Holders
- indemnification of the Trustee for any loss, liability or expenses it
incurred in the administration of the Trust without gross negligence, bad
faith, wilful malfeasance or wilful misconduct on its part or reckless
disregard of its obligations and duties
- 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
- expenditures incurred in contacting Unit Holders upon termination of the
Trust, and
- 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. When
the Trustee pays them or when they are owed to the Trustee, they 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
that the Trustee sells Securities, the size of the Trust will decline and the
proportions of the types of Securities may change. These sales might be required
at a time when Securities would not otherwise be sold. These sales 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 these
sales may exceed the amount necessary for the payment of these fees and
expenses.
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 101 Barclay Street, New York, New York
10286. Unit Holders may inspect these records and accounts 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.
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DISTRIBUTION
The Record Dates and the Distribution Dates are set forth in Part A of this
prospectus. See "Summary of Essential Information". The distributions will be an
amount equal to:
- the Unit Holder's pro rata portion of the amount of dividend income
received by the Trust plus
- proceeds of the sale of Portfolio Securities, including capital gains, not
used for the redemption of Units, if any, less
- the Trustee's fees and expenses and less the Sponsor's portfolio
supervision fees.
Distributions for the account of beneficial owners of Units registered in
"street name" that the Sponsor holds will be made to the investment account of
such beneficial owners maintained with the Sponsor. Whenever regulatory or tax
purposes require or whenever the Sponsor directs, the Trustee may make special
distributions on special distribution dates to Unit Holders of record on special
record dates that the Trustee declares.
The Trustee credits dividends payable to the Trust as a holder of record of
its Securities to an Income Account, as of the date on which the Trust is
entitled to receive such dividends. The Trustee credits to a Principal Account
other receipts, including (1) return of investment and gain and (2) 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. The Trust will distribute the following to each Unit Holder as of a
Record Date on the next following Distribution Date or shortly thereafter. The
distribution shall consist of:
- an amount approximately equal to the dividend income per Unit, after
deducting estimated expenses, if any, plus
- your pro rata share of the distributable cash balance of the Principal
Account.
The Trustee will hold proceeds it receives from the disposition of any of
the Securities which are not used for redemption of Units in the Principal
Account until it distributes those proceeds on the Distribution Date following
receipt of them. The Trustee does not need to make a distribution from the
Principal Account if the balance therein is less than $1.00 per 100 Units
outstanding. The Trustee may create a Reserve Account by withdrawing from the
Income or Principal Accounts, from time to time, such amounts as it deems
necessary to establish a reserve for any taxes or other governmental charges
that may be payable out of the Trust. Funds the Trustee holds in the various
accounts created under the Indenture are non-interest bearing to Unit Holders.
The Trustee receives the benefit of holding such funds which are interest
bearing to it.
On each Deferred Sales Charge Payment Date prior to the Second Year DSC
Commencement Date Securities will be sold pro rata in an amount equal to $2.00
per 100 Units (on and for each of the three months following such date an amount
equal to $2.50 per 100 Units will be sold) 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
favorable prices and executions of orders. The Trustee generally makes
transactions in Securities held in the Trust in brokerage transactions, as
distinguished from principal transactions. In connection with the brokerage
transactions, the Sponsor may act as broker and receive commissions if the
Trustee expects to obtain the most favorable prices and execution. In placing
Securities transactions, the Trustee will not consider the furnishing of
statistical and research information to the Trustee by any of the securities
dealers through which the Trustee executes transactions.
PORTFOLIO SUPERVISION
The Trustee will adjust the original proportionate relationship between the
number of shares of each Security in the Trust to reflect:
- the occurrence of a stock dividend
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- 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 (1)
a merger or reorganization of, (2) a spin-off, (3) a split-off or (4) a 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 Sponsor or the Trustee does not "manage" the Portfolio of the Trust.
Only the provisions of the Indenture and Agreement govern their activities
described below. 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 those
deposited in order to create additional Units, is prohibited. The Indenture
authorizes the Sponsor 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. The Sponsor will select these instruments, which will include only
(1) negotiable certificates of deposit or (2) 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. However, the Trust may hold certificates of deposit or time deposits of
smaller domestic banks provided the deposit does not exceed the insurance
coverage on the instrument, which currently is $100,000. Also, the Trust's
aggregate holding of certificates of deposit or time deposits that the Trustee
issued may not exceed the insurance coverage of such obligations. U.S. Treasury
notes or bills, which the Trust shall hold until their maturity, must mature
prior to the earlier of the next following Distribution Date or 90 days after
receipt. The Trust shall distribute the principal and interest of each Treasury
note or bill, to the extent such interest is not used to pay Trust expenses, 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, that the Indenture and Agreement require. The Sponsor
shall receive the portfolio supervisory fee referred to under "Summary of
Essential Information" for (1) performing the administrative services in making
such recommendations and (2) giving such consents and directions, and (3) making
the reviews called for in connection therewith.
23
<PAGE>
VOTING OF THE PORTFOLIO SECURITIES
The Indenture and Agreement states that the Trustee will exercise voting
rights with respect to the Portfolio Securities and Replacement Securities, if
any, in accordance with the Indenture or the directions that the Sponsor gives.
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. The statement shall express proceeds 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:
- the amount of income received on the Securities;
- the amount paid for redemption of Units;
- the deductions for applicable taxes or other governmental charges, if any,
and fees and expenses of the Sponsor, the Trustee and counsel;
- the deductions of portions of the Deferred Sales Charge;
- the amounts distributed from the Income Account;
- any other amount credited or deducted from the Income Account; and
- 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 list of the Securities as of the last business day of such calendar
year;
- the number of Units outstanding as of the last business day of such
calendar year;
- the Unit Value (as defined in the Agreement) based on the last Evaluation
made during such calendar year; and
- 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 Trustee and the Sponsor or their respective successors may amend the
Indenture and Agreement from time to time without the consent of any of the Unit
Holders
- 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;
- to change any provision thereof as the Securities and Exchange Commission
or any successor governmental agency exercising similar authority may
require; or
24
<PAGE>
- to make such other provision in regard to matters or questions arising
thereunder as shall not adversely affect the interest of the Unit Holders.
The parties to the Indenture and Agreement may also amend that document from
time to time or they may waive the performance of any of the provisions of 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, if the
express written consent of Holders of Units evidencing 51% of the Units at the
time outstanding under the Indenture and Agreement is obtained. No party,
however, may amend the Indenture and Agreement, or waive may any provision
thereof, so as to (1) increase the number of Units issuable in respect of the
Trust above the aggregate number specified in Part 2 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 acquired afterwards, the Trustee will, if the Sponsor directs 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 final distributions according to their
Election Instructions. Final distributions are the Unit Holders pro rata
distributions realized from the sale of Portfolio Securities plus any other
Trust assets, less Trust expenses. 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 your Units in
units of a subsequent new series of the Morgan Stanley Dean Witter Select Equity
Trust (the "New Series") as the Sponsor designates if the 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 considered to have
elected a cash distribution.
CASH OR "IN KIND" DISTRIBUTIONS. Unit Holders who hold Units at termination
will receive distributions in respect of their Units in cash. Unitholders may,
however, indicate to the Trustee that they wish to receive termination
distributions "in kind". To do so, return to the Trustee properly completed
Election Instructions that the Trustee distributed to such Unit Holders of
record 45 days prior to the Termination Date. You do not need any minimum number
of Units to elect an in kind distribution. The Trustee will duly honor such
election instructions that it receives on or before the In Kind Distribution
Date. You 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 you are entitled. If you receive distributions of Securities "in
kind", you 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 your account and for disposition in accordance with your instructions.
NON IN-KIND ROLLOVER OPTION. You may elect to invest the distributions
attributable to your Units in units of a New Series subject only to the deferred
sales charge on the units of the 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. It is also expected 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 one year after
that New Series' creation. The availability of this option does not constitute a
solicitation of an offer to
25
<PAGE>
purchase Units of a New Series or any other security. We will treat your
election to exercise this option as an indication of interest only. At any time
prior to your purchase of units of a New Series, you may change your investment
strategy and receive, in cash, the proceeds of the sale of the Securities.
IN-KIND ROLLOVER OPTION. The Sponsor may offer Unit Holders the ability to
"roll over" their Units of the Trust for Units of a subsequent series as set
forth below. If this feature is offered, the following structure will be
implemented for such rollovers. Although the Sponsor may offer Unit Holders this
additional termination alternative, the Sponsor reserves the right in its sole
discretion to decline to offer such alternative for any reason. If the Sponsor
determines to offer such alternative, it will notify Unit Holders, who will then
notify the Sponsor whether they wish to participate. Such rollover will occur at
least 30 days prior to but not more than 65 days prior to the scheduled
termination of the Terminating Trust.
If you desire to reinvest your interests in units of the Trust in Units of a
newly created series of Morgan Stanley Dean Witter Select Equity Trust,
Financial Services Portfolio, you may do so by so advising your account
executive. Such exchange will be effected by an in-kind redemption from the
Terminating Trust and subsequent in kind deposit with the Trustee of the New
Trust, as follows:
will act as agent on your behalf in connection with the creation of
a Unit of the New Trust. The Agent will deposit the number and types of
securities constituting a Unit of the New Trust in kind in the New Trust.
Certain stocks contained in the Terminating Trust are likely to be included in
the portfolio of the New Trust. A Unit Holder in the Terminating Trust electing
to receive his interest in such Terminating Trust in kind and desiring to
purchase Units in the New Trust by an in kind contribution to the New Trust
would direct the Agent to carry out the transactions necessary to consummate the
in kind deposit. The Agent would have the authorization to receive your in kind
distribution from the Terminating Trust and to assemble and deposit, on your
behalf, the package of stocks needed to make up a Unit in the New Trust. Such
assembly and deposit would include an in kind contribution to the New Trust of
an appropriate amount of your interest in Duplicated Stocks. The Agent would
sell securities distributed in kind from the Terminating Trust not required to
make up a Unit in the New Trust. The Agent would utilize the cash proceeds of
each sale to purchase the stocks, other than the Duplicated Stocks, necessary to
constitute a Unit of the New Trust. The proceeds of these sales will be reduced
and the cost of these purchases will increase by any applicable brokerage
commissions. If additional cash is necessary to purchase stocks, you would pay
such cash to the Agent. You would receive any cash not used to make up a Unit in
the New Trust. The Agent will sell fractional interests received from the
Terminating Trust. The Agent will use the cash proceeds of such sale to purchase
securities for deposit in the New Trust. If the Agent does not use the proceeds
for those purposes, the Agent will distribute them to you. Upon receipt of the
in kind deposit, the Trustee will issue the appropriate number of Units in the
New Trust to the Unit Holder on whose behalf the Agent acted. If you acquire
units pursuant to an in-kind deposit into a New Trust from a Terminating Trust,
you will not be subject to an Initial Sales Charge on those units. You will be
subject only to a Deferred Sales Charge.
We will also offer the ability to purchase Units of the New Trust by the
deposit of securities in kind to persons who were not Unit Holders in a
Terminating Trust. Any such person may contribute whole shares in kind to a New
Trust. Such person will be required to pay the Initial Sales Charge to the
Sponsor in connection with the in kind purchase of Units. These Units will be
subject to a Deferred Sales Charge.
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. The Indenture 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". The Trustee will deposit proceeds of such
sales into the Trust. The Trustee will hold those proceeds in a non-interest
bearing account to Unit Holders until distributed, and the Trustee will receive
benefit from such proceeds. 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
26
<PAGE>
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.
After (1) deducting brokerage charges and costs incurred in connection with
the sale of Securities, any fees and expenses of the Trust and (2) paying into
the Reserve Account any amount required for taxes or other governmental charges
that may be payable by the Trust, the Trustee will distribute to each Unit
Holder after due notice of such termination, the Unit Holders pro rata share of
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 it
such sale were not required at such time. For this reason, among others, the
amount you may realize upon termination may be less than the amount you paid for
Units.
The Division of Investment Management of the SEC believes 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 obtained an exemptive order under Section 11(c)
which it believes permits it to offer the rollover. There can be no assurance
that the SEC will concur with the Sponsor's position. Additional regulatory
approvals may be required.
RESIGNATION, REMOVAL AND LIABILITY
REGARDING THE TRUSTEE
The Trustee shall be under no liability for:
- any action taken in good faith in reliance on apparently properly executed
documents or
- for the disposition of cash or Securities in the Trust.
The Trustee shall not be liable or responsible in any way for depreciation or
loss incurred by reason of the Trustee's disposition of any Securities. However,
the Trustee shall be liable for wilful misfeasance, bad faith or gross
negligence in the performance of its duties. The Trustee shall also be liable 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. In that case, the Trustee
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 dividends. 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 (1) gross or extreme negligence, (2) bad faith, (3)
wilful misconduct, (4) wilful misfeasance or (5) 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 instrument 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 if
public authorities take over its affairs, or if the Sponsor determines 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 the Sponsor has not appointed a successor
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.
27
<PAGE>
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. Likewise, the Sponsor shall not 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 (1) its own wilful misfeasance, (2)
wilful misconduct, (3) bad faith, (4) gross negligence or (5) reckless disregard
of its duties and obligations under the Agreement.
If at any time the Sponsor (1) shall resign under the Agreement or (2) shall
fail or be incapable of performing its duties thereunder or (3) shall become
bankrupt or (4) public authorities take over its affairs, the Agreement directs
the Trustee to act. The Trustee shall either (1) appoint a successor Sponsor or
Sponsors at rates of compensation that the Trustee finds reasonable and which
does not exceed 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. is a principal operating subsidiary of Morgan
Stanley Dean Witter & Co., 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 Morgan Stanley Dean Witter & Co. Dean Witter is a
financial services company that provides to its individual, corporate, and
institutional clients services as
- a broker in securities and 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 currently services its
clients through a network of more than 350 domestic and international
offices with approximately 11,000 financial advisors servicing individual
and institutional client accounts.
TRUSTEE
The Trustee is
.
LEGAL OPINIONS
Cahill Gordon & Reindel, a partnership including a professional corporation,
80 Pine Street, New York, New York 10005, as special counsel for the Sponsor has
passed upon the legality of the Units offered hereby.
28
<PAGE>
AUDITORS
Deloitte & Touche LLP, certified public accountants has audited 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. Deloitte & Touche LLP has provided a report as set forth in Part A
of this Prospectus. The Statement and Schedule are included in reliance upon
such report given upon the authority of that firm as experts in accounting and
auditing.
29
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT
WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS NOT CONTAINED IN THIS DOCUMENT. THE REGISTRATION
STATEMENT FOR THE TRUST AND ITS EXHIBITS, WHICH HAVE BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, CONTAIN INFORMATION THAT IS NOT CONTAINED IN
THIS PROSPECTUS. THIS PROSPECTUS DOES 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.......................................... x
Statement of Financial Condition...................................... xi
Schedule of Portfolio Securities...................................... xiii
PART B
Introduction.......................................................... 1
The Trust............................................................. 1
Objective and Securities Selection................................ 1
Summary Description of the Portfolio.............................. 1
Risk Factors--Special Considerations.............................. 2
Distribution......................................................
Tax Status of the Trust............................................... 6
Retirement Plans...................................................... 8
Public Offering of Units.............................................. 10
Public Offering Price............................................. 10
Sales Charges..................................................... 10
Public Distribution............................................... 11
Secondary Market.................................................. 11
Profit of Sponsor................................................. 12
Volume Discount................................................... 12
Redemption............................................................ 13
Right of Redemption............................................... 13
Computation of Redemption Price................................... 15
Postponement of Redemption........................................ 16
Exchange Option....................................................... 17
Reinvestment Program.................................................. 19
Rights of Unit Holders................................................ 19
Unit Holders...................................................... 19
Certain Limitations............................................... 19
Expenses and Charges.................................................. 20
Organization Costs................................................ 20
Trust Fees and Expenses........................................... 20
Other Charges..................................................... 21
Payment........................................................... 21
Administration of the Trust........................................... 21
Records and Accounts.............................................. 21
Distribution...................................................... 22
Portfolio Supervision............................................. 22
Voting of the Portfolio Securities................................ 24
Reports to Unit Holders........................................... 24
Amendment......................................................... 24
Termination....................................................... 25
Resignation, Removal and Liability.................................... 27
Regarding the Trustee............................................. 27
Regarding the Sponsor............................................. 28
Miscellaneous......................................................... 28
Sponsor........................................................... 28
Trustee........................................................... 28
Legal Opinions.................................................... 28
Auditors.............................................................. 29
</TABLE>
37701
[LOGO] MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO 99-1
- ------------------------------
(A Unit Investment Trust)
- ----------------------------------------
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:
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
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 Sep-
tember 30, 1993.
*EX-4.15 Amendment to Exhibit 4.1, dated December
30, 1997.
**EX-4.2 Draft of Reference Trust Agreement.
****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 Rule 15b1-1 and 15b3-1 under the
Securities Exchange Act of 1934 (1934 Act
File No. 8-14172).
<PAGE>
___________________________
* The Trust Indenture and Agreement is incorporated by refer-
ence to exhibit of same designation filed with the Securities
and Exchange Commission as an exhibit to the Registration
Statement of Dean Witter Select Equity Trust, Selected Oppor-
tunities Series 18, Registration number 33-50105 and as
amended and filed as an exhibit to Dean Witter Select Equity
Trust, Select 10 Industrial Portfolio 98-1, Registration num-
ber 333-41785.
** 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 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.
**** To be filed by amendment.
***** Previously Filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant, Morgan Stanley Dean Witter Select Equity
Trust, Financial Services Portfolio, has duly caused this Reg-
istration Statement to be signed on its behalf by the under-
signed, thereunto duly authorized, all in the City of New York
and State of New York on the 22nd day of February, 1999.
MORGAN STANLEY DEAN WITTER
SELECT EQUITY TRUST,
FINANCIAL SERVICES PORTFOLIO
(Registrant)
By: Dean Witter Reynolds Inc.
(Depositor)
Thomas Hines
-----------------------
Thomas Hines
Authorized Signatory
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed on behalf of
Dean Witter Reynolds Inc., the Depositor, by the following per-
son in the following capacities and by the following persons
who constitute a majority of the Depositor's Board of Directors
in the City of New York, and State of New York, on this 22nd
day of February, 1999.
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: 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.
** Executed copies of 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 Industrial
Portfolio 96-4, File No. 333-10499.
*** Executed copies of Powers of Attorney have been filed with
the Securities and Exchange Commission in connection with
the Registration Statement on Form S-6 for Dean Witter Se-
lect Equity Trust, Select 10 International 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 Sep-
tember 30, 1993.
*EX-4.15 Amendment to Exhibit 4.1, dated December
30, 1997.
**EX-4.2 Draft of Reference Trust Agreement.
****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 Rule 15b1-1 and 15b3-1 under the
Securities Exchange Act of 1934 (1934 Act
File No. 8-14172).
___________________________
* The Trust Indenture and Agreement is 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 Select Equity
<PAGE>
Trust, Selected Opportunities Series 18, Registration
number 33-50105 and as amended and filed as an exhibit
to Dean Witter Select Equity Trust, Select 10 Industrial
Portfolio 98-1, Registration number 333-41785.
** 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 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.
**** To be filed by amendment.
*****Previously Filed.
<PAGE>
Exhibit 4.2
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
FINANCIAL SERVICES PORTFOLIO
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated , 1999
between DEAN WITTER REYNOLDS INC., as Depositor, and The Bank
of New York, as Trustee, sets forth certain provisions in full
and incorporates other provisions by reference to the document
entitled "Dean Witter Select Equity Trust, Trust Indenture and
Agreement" (the "Basic Agreement") dated September 30, 1993.
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 as
follows:
A. The first sentence of Section 2.01 is amended to
add the following language at the end of such sentence:
"and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase one or more of
such Securities which cash (or cash in an amount equal to
the face amount of the letter of credit), to the extent
not used by the Trustee to purchase such Securities within
the 90-day period following the first deposit of Securi-
ties in the Trust, shall be distributed to Unit Holders on
the Distribution Date next following such 90-day period or
such earlier date as the Depositor and the Trustee deter-
mine".
B. The first sentence of Section 2.06 is amended to
add the following language after "Securities"))": "and/or
cash (or a letter of credit in lieu of cash) with
<PAGE>
instructions to the Trustee to purchase one or more Addi-
tional Securities which cash (or cash in an amount equal
to the face amount of the letter of credit), to the extent
not used by the Trustee to purchase such Additional Secu-
rities within the 90-day period following the first de-
posit of Securities in the Trust, shall be distributed to
Unit Holders on the Distribution Date next following such
90-day period or such earlier date as the Depositor and
the Trustee determine".
C. Article III, entitled "Administration of Trust",
Section 3.01 Initial Cost shall be amended as follows:
Section 3.01 Initial Cost shall be amended to
substitute the following language:
SECTION 3.01. INITIAL COST The costs of
organizing the Trust and sale of the Trust Units
shall, to the extent of the expenses reimburs-
able to the Depositor provided below, 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 FURTHER, HOWEVER, that the liabil-
ity on the part of the Depositor under this sec-
tion shall not include any fees or other ex-
penses incurred in connection with the admini-
stration of the Trust subsequent to the deposit
referred to in Section 2.01. Upon notification
from the Depositor that the primary offering pe-
riod is concluded, the Trustee shall withdraw
from the Account or Accounts specified in the
Prospectus or, if no Account is therein speci-
fied, 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 Trustee shall, as directed by the Depositor,
sell Securities identified by the Depositor, or
distribute to the Depositor 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 record at the conclusion of the
<PAGE>
primary offering period and shall not be re-
flected in the computation of the Unit Value
prior thereto. As used herein, the Depositor's
reimbursable 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 inden-
ture, and other documents relating to the Trust,
SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio
and audit of the Trust, the initial fees and ex-
penses of the Trustee, and legal and other out-
of-pocket expenses related thereto, but not in-
cluding the expenses incurred in the printing of
preliminary prospectuses and prospectuses, ex-
penses incurred in the preparation and printing
of brochures and other advertising materials and
any other selling expenses. Any cash which the
Depositor has identified as to be used for reim-
bursement of expenses pursuant to this Section
shall be reserved by the Trustee for such pur-
pose and shall not be subject to distribution
or, unless the Depositor otherwise directs, used
for payment of redemptions in excess of the per-
Unit amount allocable to Units tendered for re-
demption.
D. The third paragraph of Section 3.05 is hereby
amended to add the following sentence after the first sen-
tence thereof: "Depositor may direct the Trustee to in-
vest the proceeds of any sale of Securities not required
for the redemption of Units in eligible money market in-
struments selected by the Depositor 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 depos-
its of smaller domestic banks may be held provided the de-
posit does not exceed the insurance coverage on the in-
strument (which currently is $100,000), and provided fur-
ther that the Trust's aggregate holding of certificates of
deposit or time deposits issued by the Trustee may not ex-
ceed the insurance coverage of such obligations and U.S.
Treasury notes or bills (which shall be held until the ma-
turity thereof) each of which matures prior to the earlier
of the next following Distribution Date or 90 days after
<PAGE>
receipt, the principal thereof and interest thereon (to
the extent such interest is not used to pay Trust ex-
penses) to be distributed on the earlier of the 90th day
after receipt or the next following Distribution Date."
E. The first sentence of each of Sections 3.10,
3.11 and 3.12 is amended to insert the following language
at the beginning of such sentence, "Except as otherwise
provided in Section 3.13,".
F. The following new Section 3.13 is added:
Section 3.13. EXTRAORDINARY EVENT - SECURITY RETEN-
TION AND VOTING. In the event the Trustee is notified of
any action to be taken or proposed to be taken by holders
of the securities held by the Trust in connection with any
proposed merger, reorganization, spin-off, split-off or
split-up by the issuer of stock or securities held in the
Trust, the Trustee shall take such action or refrain from
taking any action, as appropriate, so as to insure that
the securities are voted as closely as possible in the
same manner and in the same general proportion as are the
securities held by owners other than the Trust. If stock
or securities are received by the Trustee, with or without
cash, as a result of any merger, reorganization, spin-off,
split-off or split-up by the issuer of stock or securities
held in the Trust, the Trustee at the direction of the De-
positor may retain such stock or securities in the Trust.
Neither the Depositor nor the Trustee shall be liable to
any person for any action or failure to take action with
respect to this section.
G. Section 1.01 is amended to add the following
definition: (9) "Deferred Sales Charge" shall mean any
deferred sales charge payable in accordance with the pro-
visions of Section 3.12 hereof, as set forth in the pro-
spectus for a Trust. Definitions following this defini-
tion (9) shall be renumbered.
H. Section 3.05 is hereby amended to add the fol-
lowing paragraph after the end thereof: On each Deferred
Sales Charge payment date set forth in the prospectus for
a Trust, the Trustee shall pay the account created pursu-
ant to Section 3.12 the amount of the Deferred Sales
Charge payable on each such date as stated in the prospec-
tus for a Trust. Such amount shall be withdrawn from the
Principal Account from the amounts therein designated for
such purpose.
<PAGE>
I. Section 3.06B(3) shall be amended by adding the
following: "and any Deferred Sales Charge paid".
J. Section 3.08 shall be amended by adding the fol-
lowing at the end thereof: "In order to pay the Deferred
Sales Charge, the Trustee shall sell or liquidate an
amount of Securities at such time and from time to time
and in such manner as the Depositor shall direct such that
the proceeds of such sale or liquidation shall equal the
amount required to be paid to the Depositor pursuant to
the Deferred Sales Charge program as set forth in the pro-
spectus for a Trust.
K. Section 3.12 shall be added as follows:
Section 3.12. DEFERRED SALES CHARGE. If the pro-
spectus for a Trust specifies a Deferred Sales Charge, the
Trustee shall, on the dates specified in and as permitted
by the prospectus, withdraw from the Income Account if
such account is designated in the prospectus as the source
of the payments of the Deferred Sales Charge, or to the
extent funds are not available in that account or if such
account is not so designated, from the Principal Account,
an amount per Unit specified in the prospectus and credit
such amount to a special, non-Trust account maintained at
the Trustee out of which the Deferred Sales Charge will be
distributed to the Depositor. If the Income Account is
not designated as the source of the Deferred Sales Charge
payment or if the balances in the Income and Principal Ac-
counts are insufficient to make any such withdrawal, the
Trustee shall, as directed by the Depositor, either ad-
vance funds, if so agreed to by the Trustee, in an amount
equal to the proposed withdrawal and be entitled to reim-
bursement of such advance upon the deposit of additional
monies in the Income Account or the Principal Account,
sell Securities and credit the proceeds thereof to such
special Depositor's account or credit Securities in kind
to such special Depositor's Account. Such directions
shall identify the Securities, if any, to be sold or dis-
tributed in kind and shall contain, if the Trustee is di-
rected by the Depositor to sell a Security, instructions
as to execution of such sales. If a Unit Holder redeems
Units prior to full payment of the Deferred Sales Charge,
the Trustee shall, if so provided in the prospectus, on
the Redemption Date, withhold from the Redemption Price
payment to such Unit Holder an amount equal to the unpaid
portion of the Deferred Sales Charge and distribute such
amount to such special Depositor's account or, if the
<PAGE>
Depositor shall purchase such Unit pursuant to the terms
of Section 5.02 hereof, the Depositor shall pay the Re-
demption Price for such Unit less the unpaid portion of
the Deferred Sales Charge. The Depositor may at any time
instruct the Trustee to distribute to the Depositor cash
or Securities previously credited to the special Deposi-
tor's account.
L. Reference to "Dean Witter Select Equity Trust"
is replaced by "Morgan Stanley Dean Witter Select Equity
Trust".
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, Financial Services Industrial Port-
folio (the "Financial Services 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 for the
Financial Services Trust.
E. A Unit is hereby declared initially equal to
1/ th for the Financial Services Trust.
F. The term "In-Kind Distribution Date" shall mean.
G. The term "Record Dates" shall mean
and
and such other date as the Depositor may direct.
H. The term "Distribution Dates shall mean
and
and such other date as the Depositor may direct.
<PAGE>
I. The term "Termination Date" shall mean .
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 $ per 100 Units.
L. For a Unit Holder to receive "in-kind" distribu-
tion during the life of the Trust other than in connection with
a rollover, such Unit Holder must tender at least 25,000 Units
for redemption. On the In-Kind Date there is no minimum amount
of Units that a Unit Holder must tender in order to receive an
"in-kind" distribution.
M. The Indenture is amended to provide that the pe-
riod during which the Trustee shall liquidate the Trust Securi-
ties shall not exceed 14 business days commencing on the first
business day following the In-Kind Date.
(Signatures and acknowledgments on separate pages)
