MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 248
The Prospectus filed with Amendment No. 2 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 248 on December 12, 2000. An effort has been
made to set forth below each of the major changes and also to reflect the same
by blacklining the marked counterparts of the Prospectus submitted with the
Amendment.
Cover Page. The date of the Prospectus has been completed.
Pages 2-3. "The Summary of Essential Financial Information" section and
"Fee Table" have been completed.
Pages 4-6. Revisions have been made and the portfolio has been completed.
Pages 7-9. The descriptions of the Securities issuers have been completed.
Pages 10-11. The Report of Independent Certified Public Accountants and
Statement of Condition have been completed.
FILE NO. 333-43726
CIK #1104604
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: VAN KAMPEN FOCUS PORTFOLIOS, SERIES 248
B. Name of Depositor: VAN KAMPEN FUNDS INC.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
CHAPMAN AND CUTLER VAN KAMPEN FUNDS INC.
Attention: Mark J. Kneedy Attention: A. Thomas Smith III, General Counsel
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of proportionate
interest
F. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT
/ X / Check box if it is proposed that this filing will become
effective at 8:00 a.m. on December 12, 2000 pursuant to Rule 487.
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
THE ROARING 2000sSM PORTFOLIO, TRADITIONAL SERIES 8
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Van Kampen Focus Portfolios, Series 248 includes the unit investment trust
described above (the "Portfolio"). The Portfolio invests in a portfolio of
stocks selected by Van Kampen based on concepts outlined in The Roaring 2000s
written by Harry S. Dent, Jr. The Portfolio seeks to increase the value of your
Units. Of course, we cannot guarantee that the Portfolio will achieve its
objective.
DECEMBER 12, 2000
YOU SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
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The Securities and Exchange Commission has not approved or disapproved of the
Units or passed upon the adequacy or accuracy of this prospectus.
Any contrary representation is a criminal offense.
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
DECEMBER 12, 2000
PUBLIC OFFERING PRICE
Aggregate value of Securities per Unit (1) $ 9.675
Sales charge 0.325
Public offering price per Unit (2) $ 10.000
PORTFOLIO INFORMATION
Initial number of Units (3) 14,862
Aggregate value of Securities (1) $ 143,785
Estimated initial distribution per Unit (June 2001) (4) $ .02
Estimated annual dividends per Unit (4) $ .05374
Redemption price per Unit (5) $ 9.675
GENERAL INFORMATION
Initial Date of Deposit December 12, 2000
Mandatory Termination Date December 12, 2002
Record Dates June 10 and December 10
Distribution Dates June 25 and December 25
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(1)Each Security is valued at the most recent closing sale price as of the
close of the New York Stock Exchange on the business day before the Initial
Date of Deposit.
(2)You will bear all or a portion of the expenses incurred in organizing and
offering your Portfolio. The public offering price includes the estimated
amount of these costs. These costs include the cost of preparation and
printing of the trust agreement, registration statement and other documents
relating to the Portfolio, federal and state registration fees and costs,
initial fees and expenses of the Trustee, and legal and auditing expenses.
The Trustee will deduct these expenses from your Portfolio at the end of the
initial offering period (approximately three months). The estimated amount is
described on the next page. The public offering price will also include any
accumulated dividends or cash in the Income or Capital Accounts.
(3)The number of Units may be adjusted so that the public offering price per
Unit equals $10 as of the close of the New York Stock Exchange on the Initial
Date of Deposit. The number of Units and fractional interest of each Unit
will increase or decrease to the extent of any adjustment.
(4)This estimate is based on the most recently declared quarterly dividends or
Interim and final dividends accounting for any foreign withholding taxes.
Actual dividends may vary due to a variety of factors. See "Risk Factors".
(5)The redemption price includes the estimated organizational and offering
costs. The redemption price will not include these costs after the initial
offering period. See "Rights of Unitholders--Redemption of Units".
FEE TABLE
TRANSACTION FEES (AS % OF OFFERING PRICE)
Maximum sales charge (1) 3.25%
==========
Maximum sales charge on reinvested dividends 0.00%
==========
ESTIMATED ORGANIZATIONAL COSTS PER UNIT (2) $ 0.02472
==========
ESTIMATED ANNUAL EXPENSES PER UNIT
Trustee's fee and operating expenses $ 0.02028
Supervisory and evaluation fees $ 0.00500
----------
Estimated annual expenses per Unit $ 0.02528
==========
ESTIMATED COSTS OVER TIME
One year $ 38
Three years $ 44
Five years N/A
Ten years N/A
This fee table is intended to assist you in understanding the costs that you
will bear and to present a comparison of fees. The "Estimated Costs Over Time"
example illustrates the expenses you would pay on a $1,000 investment assuming a
5% annual return and redemption at the end of each period. This example assumes
that you reinvest your distributions at the end of each year. Of course, you
should not consider this example a representation of actual past or future
expenses or annual rate of return which may differ from those assumed for this
example. The sales charge and expenses are described under "Public Offering" and
"Portfolio Operating Expenses".
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(1)The sales charge is equivalent to 3.359% of the aggregate value of the
Securities. A reduced sales charge applies to transactions involving $100,000
or more.
(2)You will bear all or a portion of the expenses incurred in organizing and
offering your Portfolio. The Trustee will deduct the actual amount of these
expenses from your Portfolio at the end of the initial offering period.
THE ROARING 2000sSM PORTFOLIO
The Portfolio invests in a portfolio of stocks selected using concepts
outlined in The Roaring 2000s written by Harry S. Dent, Jr. The Portfolio seeks
to increase the value of your investment over its two-year life.
[CHART APPEARS HERE]
The Roaring 2000s is the third book written by Harry S. Dent, Jr. analyzing
economic, technological and demographic trends in society. We designed the
Portfolio to take advantage of the insights, philosophies and strategies
discussed in this book. Based on Mr. Dent's current analysis, the portfolio
focuses on stocks from four sectors: Technology, Financials, Health Care and
U.S.-based Multi-Nationals. The Portfolio seeks to leverage demographic,
economic and lifestyle trends that may develop over the next 10-15 years.
According to Mr. Dent, some significant changes that may potentially impact the
future economy include:
o Aging Baby Boomers reaching their peak spending years
o Internet usage and new technologies becoming more mainstream
o A shift in the business and organizational structure brought on by the
Information Age
o Rising importance of small- to medium-sized, high growth companies
o Growth opportunities from continued global economic development
Mr. Dent believes that the coming years may bring an era of economic
prosperity and lifestyle changes. For instance, Mr. Dent believes that the
Internet may be as important a catalyst for change in business as the
assembly-line once was for production. Mr. Dent applies the principle of the
"S-curve" in analyzing technologies and social trends in the economy. This
concept shows how products move into mainstream acceptance. The S-curve shows
how products develop in three stages over time: Innovation, Growth and Maturity.
Mr. Dent also focuses on the "spending wave". This analysis illustrates how our
economy has correlated closely with birth rates. Over time, the level of births
lagged for peak in family spending has almost paralleled the Dow Jones
Industrial Average adjusted for inflation.
Of course, we cannot guarantee that the Portfolio will achieve its objective.
The value of your Units may fall below the price you paid for the Units. You
should read the "Risk Factors" section before you invest.
ABOUT MR. DENT. Using extensive research developed from years of hands-on
business experience, Mr. Dent seeks to offer a positive and understandable view
of trends in society. He proposes practical applications at all levels: from
personal investments, to business strategies, to jobs and changes in the
workplace, to growth areas for real estate. Mr. Dent received his MBA from
Harvard Business School where he was a Baker Scholar. He graduated number one in
his class at the University of South Carolina with a degree in accounting and
finance. Mr. Dent has worked as a consultant with several Fortune 100 companies
to develop and innovate competitive business strategies. He has been CEO of
several growth companies and has acted as consultant to several leading edge
companies.
Mr. Dent is the author of the 1993 book, The Great Boom Ahead (revised in
1995). His second book, Job Shock: Four New Principles Transforming Our Work and
Business, was published in 1995 and then re-released in 1996 as The Great Jobs
Ahead. The Roaring 2000s updates key principles of these books, and focuses on
the Internet's rapid move into the mainstream and how our work, organizations,
and living circumstances may change. Mr. Dent also publishes the H.S. Dent
Forecast newsletter. Since 1988 he has been speaking to executives around the
world. He has appeared on "Good Morning America", PBS, CNBC, "The Business
Channel", and has been featured in Fortune, Success, The Wall Street Journal,
and Omni.
The Sponsor selected the portfolio based on concepts presented in The Roaring
2000s and research compiled by Mr. Dent. Mr. Dent did not select the stocks for
the Portfolio, does not endorse the Portfolio and will not supervise the
Portfolio. The opinions and forecasts of Mr. Dent expressed in his books and
elsewhere are not necessarily those of Van Kampen Funds Inc. and may not
actually come to pass. Mr. Dent is being compensated by the Sponsor for his
research. The Roaring 2000sSM is the exclusive property of The H.S. Dent
Foundation. The Roaring 2000sSM is a service mark of the H.S. Dent Foundation.
The Portfolio has licensed the use of this service mark from the H.S. Dent
Foundation.
<TABLE>
<CAPTION>
PORTFOLIO
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CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
------------ ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
FINANCIAL SERVICES
84 AFLAC, Inc. $ 68.375 0.50% $ 5,743.50
103 American Express Company 56.500 0.57 5,819.50
56 American International Group, Inc. 100.063 0.15 5,603.50
110 Citigroup, Inc. 52.875 1.06 5,816.25
160 MBNA Corporation 36.688 0.87 5,870.00
54 SEI Investments Company 111.000 0.14 5,994.00
117 Washington Mutual, Inc. 49.000 2.45 5,733.00
HEALTH CARE
68 Allergan, Inc. 86.188 0.37 5,860.75
145 HCA-The Healthcare Company 39.880 0.20 5,782.60
48 UnitedHealth Group, Inc. 120.438 0.02 5,781.00
TECHNOLOGY
81 Applied Micro Circuits Corporation 74.563 0.00 6,039.56
25 Brocade Communications Systems, Inc. 225.063 0.00 5,626.56
^ 35 Check Point Software Technologies Ltd. 154.500 0.00 5,407.50
107 Cisco Systems, Inc. 54.875 0.00 5,871.63
74 Corning, Inc. 79.750 0.30 5,901.50
64 EMC Corporation 90.000 0.00 5,760.00
77 JDS Uniphase Corporation 71.813 0.00 5,529.56
35 Juniper Networks, Inc. 163.875 0.00 5,735.63
^ 132 Nortel Networks Corporation 43.000 0.15 5,676.00
190 Oracle Corporation 31.938 0.00 6,068.13
108 Palm, Inc. 56.688 0.00 6,122.25
21 SDL, Inc. 257.875 0.00 5,415.38
156 Sun Microsystems, Inc. 34.000 0.00 5,304.00
U.S. MULTINATIONAL
238 ConAgra Foods, Inc. 23.438 3.84 5,578.13
137 Du Pont (E.I.) de Nemours and Company 41.938 3.34 5,745.44
------------ ------------
2,425 $ 143,785.37
============ ============
See "Notes to Portfolio".
</TABLE>
NOTES TO PORTFOLIO
(1) The Securities are initially represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been deposited with
the Trustee. Contracts to acquire Securities were entered into on December 11,
2000 and have a settlement date of December 14, 2000 (see "The Portfolio").
(2) The market value of each Security is based on the most recent closing
sale price as of the close of the New York Stock Exchange on the business day
prior to the Initial Date of Deposit. Other information regarding the
Securities, as of the Initial Date of Deposit, is as follows:
PROFIT
COST TO (LOSS) TO
SPONSOR SPONSOR
-------------- -------------
$ 143,790 $ (5)
"+" indicates that the stock is held in the form of American Depositary
Receipts or similar receipts.
"^" indicates that the stock is a foreign common stock traded on a U.S.
securities exchange.
(3) Current Dividend Yield for each Security is based on the estimated annual
dividends per share and the Security's market value as of the close of the New
York Stock Exchange on the business day prior to the Initial Date of Deposit.
Estimated annual dividends per share are calculated by annualizing the most
recently declared dividends or by adding the most recent interim and final
dividends declared and reflect any foreign withholding taxes.
THE SECURITIES. A brief description of each of the issuers of the Securities
is listed below.
AFLAC, Inc. AFLAC, Inc. provides supplemental insurance to individuals in the
United States and Japan. The company's products help fill gaps in consumers'
primary insurance coverage. AFLAC's products include cancer expense insurance,
care plans, supplemental general medical expense plans, and living benefit
plans.
Allergan, Inc. Allergan, Inc. provides eye care and specialty pharmaceutical
products throughout the world. The company's products are marketed to the eye
care pharmaceutical, ophthalmic surgical device, over-the-counter contact lens
care, movement disorder, and dermatological markets. Allergan markets its
products under brand names such as Alphagan, Botox, and Complete.
American Express Company. American Express Company, through its subsidiaries,
provides travel-related, financial advisory, and international banking services
around the world. The company's products include the American Express Card, the
Optima Card, and American Express Travelers Cheque.
American International Group, Inc. American International Group, Inc.,
through its subsidiaries, provides a variety of insurance and insurance-related
services in the United States and overseas. The company writes property and
casualty and life insurance, as well as provides financial services.
Applied Micro Circuits Corporation. Applied Micro Circuits Corporation
designs, develops, manufactures, and markets high-performance, high-bandwidth
silicon solutions for the world's communications infrastructure. The company
provides products for the automated test equipment, high-speed computing, and
military markets.
Brocade Communications Systems, Inc. Brocade Communications Systems, Inc.
provides switching solutions for storage area networks (SAN). The company's
switching solutions utilize the fiber channel interconnect protocol. Brocade's
family of SilkWorm switches enables a company to manage growth of its data
storage requirements, improve the data transfer performance, and increase the
size of its SAN.
Check Point Software Technologies, Ltd. Check Point Software Technologies,
Ltd. provides Internet security. The company's secure virtual network (SVN)
architecture provides the infrastructure that enables secure and reliable
Internet communications. SVN secures business-to-business communications between
networks, systems, applications, and users across the Internet, intranets, and
extranets.
Cisco Systems, Inc. Cisco Systems, Inc. supplies data networking products to
the corporate enterprise and public wide area service provider markets. The
company's products offer a variety of end-to-end networking hardware, software,
and services. Cisco's clients include utilities, corporations, universities,
governments, and small to medium-size businesses worldwide.
Citigroup, Inc. Citigroup, Inc. is a diversified financial services holding
company that provides a broad range of financial services to consumer and
corporate customers around the world. The company's services include investment
banking, retail brokerage, corporate banking, and cash management products and
services.
ConAgra Foods, Inc. ConAgra Foods, Inc. is a food company that manufactures
and markets products for retail consumers, restaurants, and institutions. The
company's products include brands such as Hunt's, Healthy Choice, Banquet,
Bumble Bee, Butterball, Peter Pan, and Swiss Miss. ConAgra conducts operations
in countries around the world.
Corning, Inc. Corning, Inc. conducts operations in the telecommunications,
advanced materials, and information display industries. The company produces
optical fiber, cable, and photonic components for the telecommunications
industry, as well as produces glass panels, funnels, liquid crystal display
glass and projection video lens assemblies for the information display industry.
Du Pont (I.E.) de Nemours and Company. Du Pont (I.E.) de Nemours and Company
is a global chemical and life sciences company, with businesses in
high-performance materials, specialty chemicals, pharmaceuticals, and
biotechnology. The company sells its products to the transportation, textile,
construction, automotive, agricultural, hybrid seeds, nutrition and health,
pharmaceuticals, packaging, and electronics markets.
EMC Corporation. EMC Corporation provides enterprise storage systems,
software, networks, and services. The company's products store, retrieve,
manage, protect, and share information from all major computing environments,
including UNIX, Windows NT, and mainframe platforms. EMC operates offices around
the world.
HCA-The Healthcare Company. HCA-The Healthcare Company operates hospitals and
related health care entities. The company currently operates general, acute care
hospitals, and psychiatric hospitals that offer a full range of services. HCA's
facilities are located in the United States, England, and Switzerland.
JDS Uniphase Corporation. JDS Uniphase Corporation provides advanced
fiberoptic components and modules. The company's products are sold to
telecommunications and cable television system providers worldwide. Products
include semiconductor lasers, high-speed external modulators, transmitters,
amplifiers, couplers, multiplexers, and optical switches. JDS also designs,
manufactures, and markets laser subsystems.
Juniper Networks, Inc. Juniper Networks, Inc. provides Internet
infrastructure solutions for Internet service providers and other
telecommunications service providers. The company delivers next generation
Internet backbone routers that are designed for service provider networks.
MBNA Corporation. MBNA Corporation is the holding company for MBNA America
Bank, N.A. The bank issues bank credit cards, marketed primarily to members of
associations and customers of financial institutions. MBNA also makes other
consumer loans and offers insurance and deposit products.
Nortel Networks Corporation. Nortel Networks Corporation is an Internet and
communications provider with capabilities spanning optical, wireless, local
Internet, and electronic business. The company serves carrier, service provider,
and enterprise customers around the world. Nortel provides access products,
business applications and services, data and Internet products, and other
products and services.
Oracle Corporation. Oracle Corporation supplies software for enterprise
information management. The company offers databases and relational servers,
application development and decision support tools, and enterprise business
applications. Oracle's software runs on network computers, personal digital
assistants, set-top devices, workstations, PCs, minicomputers, mainframes, and
massively parallel computers.
Palm, Inc. Palm, Inc. provides handheld computing devices. The company
develops, designs, and markets its Palm-branded handheld devices. The Palm
product family offers HotSync synchronization technology, pen-based input
technology, and personal information management applications such as datebook
and address book.
SDL, Inc. SDL, Inc. designs, manufactures, and markets semiconductor lasers,
fiber optic related products, and optoelectronic systems. The company's products
are used in the telecommunications, cable television, dense wavelength division
multiplexing, and satellite communications markets.
SEI Investments Company. SEI Investments Company provides global investment
solutions and business solutions. The company integrates technology, research,
information services, financial products, and asset management advice to serve
banks, mutual fund and pension plan sponsors, insurance companies, money
managers, and individual investors.
Sun Microsystems, Inc. Sun Microsystems, Inc. provides products, services,
and support solutions for building and maintaining network computing
environments. The company sells scalable computer systems, high-speed
microprocessors, and a complete line of high-performance software for operating
network computing equipment and storage products. Sun also provides support,
education, and professional services.
UnitedHealth Group, Inc. UnitedHealth Group, Inc. owns and manages organized
health systems in the United States and internationally. The company provides
employers products and resources to plan and administer employee benefit
programs. UnitedHealth also serves the health needs of older Americans, provides
specialized care services, and provides health care information and research to
providers and payers.
Washington Mutual, Inc. Washington Mutual, Inc. is a financial services
company that provides a diversified line of products and services to consumers
and small to mid-sized businesses. The company offers consumer banking, mortgage
lending, commercial banking, and consumer finance throughout the United States.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen Focus Portfolios, Series 248
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 248 as of December 12, 2000.
The statement of condition and portfolio are the responsibility of the Sponsor.
Our responsibility is to express an opinion on such financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of an irrevocable letter of
credit deposited to purchase securities by correspondence with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall financial
statement presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen Focus Portfolios,
Series 248 as of December 12, 2000, in conformity with accounting principles
generally accepted in the United States of America.
GRANT THORNTON LLP
Chicago, Illinois
December 12, 2000
STATEMENT OF CONDITION
AS OF DECEMBER 12, 2000
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 143,785
-------------
Total $ 143,785
=============
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Organizational costs (2) $ 367
Interest of Unitholders--
Cost to investors (3) 148,620
Less: Gross underwriting commission
and organizational costs (2)(3)(4) 5,202
-------------
Net interest to Unitholders (3) 143,418
-------------
Total $ 143,785
=============
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(1)The value of the Securities is determined by Interactive Data Corporation on
the bases set forth under "Public Offering--Offering Price". The contracts to
purchase Securities are collateralized by an irrevocable letter of credit
which has been deposited with the Trustee.
(2)A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the Portfolio.
The amount of these costs are set forth in the "Fee Table". A distribution
will be made as of the close of the initial offering period to an account
maintained by the Trustee from which this obligation of the investors will be
satisfied.
(3)The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering--Offering Price".
(4)Assumes the maximum sales charge.
THE PORTFOLIO
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The Portfolio was created under the laws of the State of New York pursuant to
a Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the date of
this Prospectus (the "Initial Date of Deposit"), among Van Kampen Funds Inc., as
Sponsor, Van Kampen Investment Advisory Corp., as Supervisor, The Bank of New
York, as Trustee, and American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator.
The Portfolio offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities. The
Portfolio may be an appropriate medium for investors who desire to participate
in a portfolio of stocks with greater diversification than they might be able to
acquire individually.
On the Initial Date of Deposit, the Sponsor deposited delivery statements
relating to contracts for the purchase of the Securities and an irrevocable
letter of credit in the amount required for these purchases with the Trustee. In
exchange for these contracts the Trustee delivered to the Sponsor documentation
evidencing the ownership of Units of the Portfolio. Unless otherwise terminated
as provided in the Trust Agreement, the Portfolio will terminate on the
Mandatory Termination Date and any remaining Securities will be liquidated or
distributed by the Trustee within a reasonable time. As used in this Prospectus
the term "Securities" means the securities (including contracts to purchase
these securities) listed in "Portfolio" and any additional securities deposited
into the Portfolio.
Additional Units of the Portfolio may be issued at any time by depositing in
the Portfolio (i) additional Securities, (ii) contracts to purchase Securities
together with cash or irrevocable letters of credit or (iii) cash (or a letter
of credit) with instructions to purchase additional Securities. As additional
Units are issued by the Portfolio, the aggregate value of the Securities will be
increased and the fractional undivided interest represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits into the
Portfolio following the Initial Date of Deposit provided that the additional
deposits will be in amounts which will maintain, as nearly as practicable, the
same percentage relationship among the number of shares of each Security in the
portfolio that existed immediately prior to the subsequent deposit. Investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the deposit and the purchase of the Securities and because
the Portfolio will pay the associated brokerage or acquisition fees.
Each Unit of the Portfolio initially offered represents an undivided interest
in the Portfolio. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being deposited
by the Sponsor, the fractional undivided interest in the Portfolio represented
by each unredeemed Unit will increase or decrease accordingly, although the
actual interest in the Portfolio will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which may
include the Sponsor, or until the termination of the Trust Agreement.
The Portfolio consists of (a) the Securities (including contracts for the
purchase thereof) listed under the "Portfolio" as may continue to be held from
time to time in the Portfolio, (b) any additional Securities acquired and held
by the Portfolio pursuant to the provisions of the Trust Agreement and (c) any
cash held in the related Income and Capital Accounts. Neither the Sponsor nor
the Trustee shall be liable in any way for any failure in any of the Securities.
OBJECTIVES AND SECURITIES SELECTION
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The objective of the Portfolio is to provide capital appreciation by
investing in a portfolio of actively traded equity securities selected by the
Sponsor based on concepts outlined in The Roaring 2000s written by Harry S.
Dent, Jr. There is no assurance that the Portfolio will achieve its objective.
The Portfolio selection criteria is described in "The Roaring 2000sSM
Portfolio".
Harry S. Dent, Jr. has not participated in any way in the creation of the
Portfolio or in the selection of stocks included in the Portfolio and has not
approved any information herein relating thereto.
A balanced investment portfolio incorporates various style and capitalization
characteristics. The Sponsor offers unit trusts with a variety of styles and
capitalizations to meet your needs. The Sponsor determines style characteristics
(growth and value) based on the criteria used in selecting the Portfolio.
Generally, a growth portfolio includes companies in a growth phase of their
business with increasing earnings. A value portfolio generally includes
companies with low relative price-earnings ratios that the Sponsor believes are
undervalued. The Sponsor determines market capitalizations as follows based on
the weighted median market capitalization of a portfolio: Small-Cap -- less than
$1.7 billion; Mid-Cap -- $1.7 billion to $10.5 billion; and Large-Cap -- over
$10.5 billion. The Sponsor determines all style and capitalization
characteristics as of the Initial Date of Deposit and the characteristics may
vary thereafter. The Sponsor will not remove a Security from the Portfolio as a
result of any change in characteristics.
Investors should note that the above criteria were applied to the Securities
for inclusion in the Portfolio prior to the Initial Date of Deposit. Subsequent
to the initial selection, the Securities may no longer meet the above criteria.
Should a Security no longer meet the selection criteria, the Security will not
as a result thereof be removed from the Portfolio.
RISK FACTORS
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PRICE VOLATILITY. The Portfolio invests in stocks. The value of Units will
fluctuate with the value of these stocks and may be more or less than the price
you originally paid for your Units. The market value of stocks sometimes moves
up or down rapidly and unpredictably. Because the Portfolio is unmanaged, the
Trustee will not sell stocks in response to market fluctuations as is common in
managed investments. As with any investment, we cannot guarantee that the
performance of the Portfolio will be positive over any period of time.
DIVIDENDS. Stocks represent ownership interests in the issuers and are not
obligations of the issuers. Common stockholders have a right to receive
dividends only after the company has provided for payment of its creditors,
bondholders and preferred stockholders. Common stocks do not assure dividend
payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
TECHNOLOGY ISSUERS. The Portfolio invests significantly in technology
companies. These companies face risks related to rapidly changing technology,
rapid product obsolescence, cyclical market patterns, evolving industry
standards and frequent new product introductions. An unexpected change in
technology can have a significant negative impact on a company. The failure of a
company to introduce new products or technologies or keep pace with rapidly
changing technology, can have a negative impact on the company's results.
Technology stocks tend to experience substantial price volatility and
speculative trading. Announcements about new products, technologies, operating
results or marketing alliances can cause stock prices to fluctuate dramatically.
At times, however, extreme price and volume fluctuations are unrelated to the
operating performance of a company. This can impact your ability to redeem your
Units at a price equal to or greater than what you paid.
The market for certain products may have only recently begun to develop, is
rapidly evolving or is characterized by increasing suppliers. Key components of
some technology products are available only from limited sources. This can
impact the cost of and ability to acquire these components. Some technology
companies serve highly concentrated customer bases with a limited number of
large customers. Any failure to meet the standard of these customers can result
in a significant loss or reduction in sales. Many products and technologies are
incorporated into other products. As a result, some companies are highly
dependent on the performance of other technology companies. We cannot guarantee
that these customers will continue to place additional orders or will place
orders in similar quantities as in the past.
FINANCIAL SERVICES INDUSTRY. The Portfolio invests significantly in banks and
thrifts, insurance companies and investment firms. Banks, thrifts and their
holding companies are especially subject to the adverse effects of economic
recession; volatile interest rates; portfolio concentrations in geographic
markets and in commercial and residential real estate loans; and competition
from new entrants in their fields of business. In addition, banks, thrifts and
their holding companies are extensively regulated at both the federal and state
level and may be adversely affected by increased regulations.
Banks and thrifts will face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial services
overhaul legislation, permit new entrants to offer various financial products.
Technological advances such as the Internet allow these nontraditional lending
sources to cut overhead and permit the more efficient use of customer data.
Banks are already facing tremendous pressure from mutual funds, brokerage firms
and other financial service providers in the competition to furnish services
that were traditionally offered by banks.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services, such as
brokerage and investment advice. In addition, all financial service companies
face shrinking profit margins due to new competitors, the cost of new technology
and the pressure to compete globally.
Companies involved in the insurance industry underwrite, sell or distribute
property and casualty, life or health insurance. Many factors affect insurance
company profits, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and casualty
insurance profits may also be affected by weather catastrophes and other
disasters. Life and health insurance profits may be affected by mortality rates.
Already extensively regulated, insurance companies' profits may also be
adversely affected by increased government regulations or tax law changes.
Health care facility operators face risks related to demand for services, the
ability of the facility to provide required services, confidence in the
facility, management capabilities, competition, efforts by insurers and
government agencies to limit rates, expenses, the cost and possible
unavailability of malpractice insurance, and termination or restriction of
government financial assistance (such as Medicare, Medicaid or similar
programs).
NO FDIC GUARANTEE. An investment in your Portfolio is not a deposit of any
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
PUBLIC OFFERING
--------------------------------------------------------------------------------
GENERAL. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the sales charge and cash, if any, in the
Income and Capital Accounts. The "Fee Table" describes the sales charge in
detail. A portion of the Public Offering Price includes an amount of Securities
to pay for all or a portion of the costs incurred in establishing your
Portfolio. These costs include the cost of preparing documents relating to the
Portfolio (such as the prospectus, trust agreement and closing documents),
federal and state registration fees, the initial fees and expenses of the
Trustee and legal and audit expenses. Beginning on December 12, 2001, the
secondary market sales charge will be 2.75%.
The initial offering period sales charge will be reduced as follows:
AGGREGATE AMOUNT
OF UNITS PURCHASED* SALES CHARGE
--------------------- ----------------
$100,000 - $249,999 3.00%
$250,000 - $499,999 2.75
$500,000 - $999,999 2.50
$1,000,000 or more 2.00
---------------
*The breakpoint sales charges are also applied on a Unit basis using a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. The reduced sales charge structure will also apply on all
purchases by the same person from any one dealer of units of Van
Kampen-sponsored unit investment trusts which are being offered in the initial
offering period (a) on any one day (the "Initial Purchase Date") or (b) on any
day subsequent to the Initial Purchase Date if the units purchased are of a unit
investment trust purchased on the Initial Purchase Date. In the event units of
more than one trust are purchased on the Initial Purchase Date, the aggregate
dollar amount of such purchases will be used to determine whether purchasers are
eligible for a reduced sales charge. Such aggregate dollar amount will be
divided by the public offering price per unit of each respective trust purchased
to determine the total number of units which such amount could have purchased of
each individual trust. Purchasers must then consult the applicable trust's
prospectus to determine whether the total number of units which could have been
purchased of a specific trust would have qualified for a reduced sales charge
and the amount of such reduction. To determine the applicable sales charge
reduction it is necessary to accumulate all purchases made on the Initial
Purchase Date and all purchases made in accordance with (b) above. Units
purchased in the name of the spouse of a purchaser or in the name of a child of
such purchaser ("immediate family members") will be deemed to be additional
purchases by the purchaser for the purposes of calculating the applicable sales
charge. The reduced sales charges will also be applicable to a trustee or other
fiduciary purchasing securities for one or more trust estate or fiduciary
accounts. If you purchase Units on more than one day to achieve the discounts
described in this paragraph, the discount allowed on any single day will apply
only to Units purchased on that day (a retroactive discount is not given on all
prior purchases).
A portion of the sales charge is waived for certain accounts described in
this paragraph. Purchases by these accounts are subject only to the portion of
the sales charge that is retained by the Sponsor. Please refer to the section
called "Wrap Fee and Advisory Accounts" for additional information on these
purchases. Units may be purchased in the primary or secondary market at the
Public Offering Price less the concession the Sponsor typically allows to
brokers and dealers for purchases by (1) investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for brokerage
services, financial planning, investment advisory or asset management service,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive sales charge reductions for quantity
purchases.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of the Van Kampen Funds Inc. and its affiliates,
dealers and their affiliates and vendors providing services to the Sponsor may
purchase Units at the Public Offering Price less the applicable dealer
concession.
During the initial offering period of the Portfolio offered in this
prospectus, unitholders of any other Van Kampen-sponsored unit investment trusts
may utilize their redemption or termination proceeds to purchase Units of the
Portfolio offered in this prospectus at the Public Offering Price per Unit less
1%.
The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
OFFERING PRICE. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in accordance with
fluctuations in the prices of the underlying Securities in the Portfolio. The
initial price of the Securities was determined by Interactive Data Corporation,
a firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities. The Evaluator will generally determine the value of the
Securities as of the Evaluation Time on each business day and will adjust the
Public Offering Price of Units accordingly. This Public Offering Price will be
effective for all orders received prior to the Evaluation Time on each business
day. The Evaluation Time is the close of the New York Stock Exchange on each
Portfolio business day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day which is not a business day,
will be held until the next determination of price. The term "business day", as
used herein and under "Rights of Unitholders--Redemption of Units", excludes
Saturdays, Sundays and holidays observed by the New York Stock Exchange. The
term "business day" also excludes any day on which more than 33% of the
Securities are not traded on their principal trading exchange due to a customary
business holiday on that exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange or the Nasdaq Stock Market, Inc., this evaluation is generally based on
the closing sale prices on that exchange or market (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange or market, at the closing asked prices. If
the Securities are not listed on a national or foreign securities exchange or
the Nasdaq Stock Market, Inc. or, if so listed and the principal market therefor
is other than on the exchange or market, the evaluation shall generally be based
on the current asked price on the over-the-counter market (unless it is
determined that these prices are inappropriate as a basis for evaluation). If
current asked prices are unavailable, the evaluation is generally determined (a)
on the basis of current asked prices for comparable securities, (b) by
appraising the value of the Securities on the asked side of the market or (c) by
any combination of the above. The value of any foreign securities is based on
the applicable currency exchange rate as of the Evaluation Time. The value of
the Securities for purposes of secondary market transactions and redemptions is
described under "Rights of Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities in the Portfolio, taken as a whole, which are
represented by the Units.
UNIT DISTRIBUTION. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. Units repurchased in the
secondary market, if any, may be offered by this Prospectus at the secondary
market Public Offering Price in the manner described above.
The Sponsor intends to qualify Units for sale in a number of states. Brokers,
dealers and others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period as
described below.
AGGREGATE DOLLAR AMOUNT CONCESSION OR
OF UNITS PURCHASED* AGENCY COMMISSION
------------------------ -----------------------
Up to $99,999 2.25%
$100,000 - $249,999 2.00
$250,000 - $499,999 1.90
$500,000 - $999,999 1.75
$1,000,000 or more 1.40
---------------
*The breakpoint concessions or agency commissions are also applied on a Unit
basis using a breakpoint equivalent of $10 per Unit and are applied on whichever
basis is more favorable to the distributor.
In addition to the amounts above, during the initial offering period any firm
that distributes 500,000 - 999,999 Units will receive additional compensation of
$.005 per Unit; any firm that distributes 1,000,000 - 1,999,999 Units will
receive additional compensation of $.01 per Unit; any firm that distributes
2,000,000 - 2,999,999 Units will receive additional compensation of $.015 per
Unit; any firm that distributes 3,000,000 Units or more will receive additional
compensation of $.02 per Unit. This additional compensation will be paid by the
Sponsor out of its own assets at the end of the initial offering period.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For transactions involving unitholders
of other unit investment trusts who use their redemption or termination proceeds
to purchase Units of the Portfolio offered in this prospectus, the total
concession or agency commission will equal 1.50% per Unit. For all secondary
market transactions the total concession or agency commission will amount to 70%
of the sales charge. Notwithstanding anything to the contrary herein, in no case
shall the total of any concessions, agency commissions and any additional
compensation allowed or paid to any broker, dealer or other distributor of Units
with respect to any individual transaction exceed the total sales charge
applicable to such transaction. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others up to the entire
amount of the sales charge. The breakpoint concessions or agency commissions are
also applied on a Unit basis utilizing a breakpoint equivalent of $10 per Unit
and will be applied on whichever basis is more favorable to the broker, dealer
or agent.
Broker-dealers, banks and/or others may be eligible to participate in a
program in which such firms receive from the Sponsor a nominal award for each of
their representatives who have sold a minimum number of units of unit investment
trusts created by the Sponsor during a specified time period. In addition, at
various times the Sponsor may implement other programs under which the sales
forces of brokers, dealers, banks and/or others may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor will
reallow to such brokers, dealers, banks and/or others that sponsor sales
contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Portfolio. Such payments are made by the Sponsor out of its own assets, and not
out of the assets of the Portfolio. These programs will not change the price
Unitholders pay for their Units or the amount that the Portfolio will receive
from the Units sold.
SPONSOR AND OTHER COMPENSATION. The Sponsor will receive a gross sales
commission equal to the total sales charge applicable to each transaction. Any
sales charge discount provided to investors will be borne by the selling dealer
or agent. In addition, the Sponsor will realize a profit or loss as a result of
the difference between the price paid for the Securities by the Sponsor and the
cost of the Securities to the Portfolio on the Initial Date of Deposit as well
as on subsequent deposits. See "Notes to Portfolio". The Sponsor has not
participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities. The Sponsor may realize profit or loss as a result of the possible
fluctuations in the market value of the Securities, since all proceeds received
from purchasers of Units are retained by the Sponsor. Cash, if any, made
available to the Sponsor prior to the date of settlement for the purchase of
Units may be used in the Sponsor's business and may be deemed to be a benefit to
the Sponsor, subject to the limitations of the Securities Exchange Act of 1934.
The Sponsor or an affiliate may have participated in a public offering of one
or more of the Securities. The Sponsor, an affiliate or their employees may have
a long or short position in these Securities or related securities. An affiliate
may act as a specialist or market maker for these Securities. An officer,
director or employee of the Sponsor or an affiliate may be an officer or
director for issuers of the Securities.
Purchases and sales of Securities by your Portfolio may impact the value of
the Securities. This may especially be the case during the initial offering of
Units, upon Portfolio termination and in the course of satisfying large Unit
redemptions. Any publication of a list of Securities, or a list of anticipated
Securities, to be included in a Portfolio may also cause increased buying
activity in certain Securities. Once this information becomes public, investors
may purchase individual Securities appearing in such a publication and may do so
during or prior to the initial offering of Units. It is possible that these
investors could include investment advisory and brokerage firms of the Sponsor
or its affiliates or firms that are distributing Units. This activity may cause
your Portfolio to purchase stocks at a higher price than those buyers who effect
purchases prior to purchases by your Portfolio.
MARKET FOR UNITS. The Sponsor does not currently intend to maintain a market
for Units or to purchase Units at any secondary market repurchase price. A
Unitholder may, however, dispose of Units by tendering them to the Trustee for
redemption at the Redemption Price. See "Rights of Unitholders--Redemption of
Units". Unitholders should contact their broker to determine the best price for
Units in the secondary market. The Trustee will notify the Sponsor of any
tendered of Units for redemption. The Sponsor may purchase the Units not later
than the day on which Units would have been redeemed by the Trustee. If the
Sponsor decides to maintain a secondary market, the Sponsor may sell repurchased
Units at the secondary market Public Offering Price per Unit.
RETIREMENT ACCOUNTS
--------------------------------------------------------------------------------
Units are available for purchase in connection with certain types of
tax-sheltered retirement plans, including Individual Retirement Accounts for
individuals, Simplified Employee Pension Plans for employees, qualified plans
for self-employed individuals, and qualified corporate pension and profit
sharing plans for employees. The minimum purchase for these accounts is reduced
to 25 Units but may vary by selling firm. The purchase of Units may be limited
by the plans' provisions and does not itself establish such plans.
WRAP FEE AND ADVISORY ACCOUNTS
--------------------------------------------------------------------------------
Units may be available for purchase by investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for brokerage
services, financial planning, investment advisory or asset management service,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed. You should
consult your financial professional to determine whether you can benefit from
these accounts. For these purchases you generally only pay the portion of the
sales charge that is retained by your Portfolio's Sponsor, Van Kampen Funds Inc.
For example, this table illustrates the transaction fees you will pay as a
percentage of the public offering price per Unit.
Fee paid to broker on purchase 0.00%
Sponsor retention 1.00
---------
Total 1.00
=========
You should consult the "Public Offering--General" section for specific
information on this and other sales charge discounts. That section governs the
calculation of all sales charge discounts.
RIGHTS OF UNITHOLDERS
--------------------------------------------------------------------------------
DISTRIBUTIONS. Dividends and any net proceeds from the sale of Securities
received by the Portfolio will generally be distributed to Unitholders on each
Distribution Date to Unitholders of record on the preceding Record Date. These
dates appear under "Summary of Essential Financial Information". A person
becomes a Unitholder of record on the date of settlement (generally three
business days after Units are ordered). Unitholders may elect to receive
distributions in cash or to have distributions reinvested into additional Units.
Distributions may also be reinvested into Van Kampen mutual funds. See "Rights
of Unitholders--Reinvestment Option".
Dividends received by the Portfolio are credited to the Income Account of the
Portfolio. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds received on the
sale of any Securities, to the extent not used to meet redemptions of Units or
pay fees or expenses, will be distributed to Unitholders. Proceeds received from
the disposition of any Securities after a record date and prior to the following
distribution date will be held in the Capital Account and not distributed until
the next distribution date. Any distribution to Unitholders consists of each
Unitholder's pro rata share of the available cash in the Income and Capital
Accounts as of the related Record Date.
REINVESTMENT OPTION. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option (to the
extent Units may be lawfully offered for sale in the state in which the
Unitholder resides). Brokers and dealers can use the Dividend Reinvestment
Service through Depository Trust Company. To participate in this reinvestment
option, a Unitholder must file with the Trustee a written notice of election,
together with any certificate representing Units and other documentation that
the Trustee may then require, at least five days prior to the related Record
Date. A Unitholder's election will apply to all Units owned by the Unitholder
and will remain in effect until changed by the Unitholder. If Units are
unavailable for reinvestment, distributions will be paid in cash. Purchases of
additional Units made pursuant to the reinvestment plan will be made at the net
asset value for Units as of the Evaluation Time on the Distribution Date.
In addition, under the Guaranteed Reinvestment Option Unitholders may elect
to have distributions automatically reinvested in certain Van Kampen mutual
funds (the "Reinvestment Funds"). Each Reinvestment Fund has investment
objectives which differ from those of the Portfolio. The prospectus relating to
each Reinvestment Fund describes its investment policies and how to begin
reinvestment. A Unitholder may obtain a prospectus for the Reinvestment Funds
from the Sponsor. Purchases of shares of a Reinvestment Fund will be made at a
net asset value computed on the Distribution Date. Unitholders with an existing
Guaranteed Reinvestment Option account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new
account which allows purchases of Reinvestment Fund shares at net asset value.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor, each Reinvestment Fund, and
its investment adviser shall have the right to suspend or terminate these
reinvestment plans at any time.
REDEMPTION OF UNITS. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Portfolio business day, the date of tender is
deemed to be the next business day.
Unitholders tendering 1,000 or more Units of the Portfolio for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. Unitholders may not request an in kind distribution
during the five business days prior to the Portfolio's termination. The
Portfolio generally does not offer in kind distributions of portfolio securities
that are held in foreign markets. An in kind distribution will be made by the
Trustee through the distribution of each of the Securities in book-entry form to
the account of the Unitholder's broker-dealer at Depository Trust Company.
Amounts representing fractional shares will be distributed in cash. The Trustee
may adjust the number of shares of any Security included in a Unitholder's in
kind distribution to facilitate the distribution of whole shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of the Portfolio will be,
and the diversity of the Portfolio may be, reduced. Sales may be required at a
time when Securities would not otherwise be sold and may result in lower prices
than might otherwise be realized. The price received upon redemption may be more
or less than the amount paid by the Unitholder depending on the value of the
Securities at the time of redemption. Special federal income tax consequences
will result if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in the Portfolio determined on
the basis of (i) the cash on hand in the Portfolio, (ii) the value of the
Securities in the Portfolio and (iii) dividends receivable on the Securities in
the Portfolio trading ex-dividend as of the date of computation, less (a)
amounts representing taxes or other governmental charges payable out of the
Portfolio and (b) the accrued expenses of the Portfolio. During the initial
offering period, the redemption price and the secondary market repurchase price
will include estimated organizational and offering costs. For these purposes,
the Evaluator may determine the value of the Securities in the following manner:
If the Securities are listed on a national or foreign securities exchange or the
Nasdaq Stock Market, Inc., this evaluation is generally based on the closing
sale prices on that exchange or market (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange or market, at the closing bid prices. If the
Securities are not so listed or, if so listed and the principal market therefor
is other than on the exchange or market, the evaluation may be based on the
current bid price on the over-the-counter market. If current bid prices are
unavailable or inappropriate, the evaluation may be determined (a) on the basis
of current bid prices for comparable securities, (b) by appraising the
Securities on the bid side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the SEC determines that
trading on that Exchange is restricted or an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
for other periods as the SEC may permit.
CERTIFICATES. Ownership of Units is evidenced in book-entry form unless a
Unitholder makes a written request to the Trustee that ownership be in
certificate form. Units are transferable by making a written request to the
Trustee and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not limited
to, trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Fractional certificates
will not be issued. The Trustee may require a Unitholder to pay a reasonable fee
for each certificate reissued or transferred and to pay any governmental charge
that may be imposed in connection with each transfer or interchange. Destroyed,
stolen, mutilated or lost certificates will be replaced upon delivery to the
Trustee of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
REPORTS PROVIDED. Unitholders will receive a statement of dividends and other
amounts received by the Portfolio for each distribution. Within a reasonable
time after the end of each year, each person who was a Unitholder during that
year will receive a statement describing dividends and capital received, actual
Portfolio distributions, Portfolio expenses, a list of the Securities and other
Portfolio information. Unitholders may obtain the Evaluator's evaluations of the
Securities upon request.
PORTFOLIO ADMINISTRATION
--------------------------------------------------------------------------------
PORTFOLIO ADMINISTRATION. The Portfolio is not a managed fund and, except as
provided in the Trust Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Portfolio based on advice from the
Supervisor. These situations may include events such as the issuer having
defaulted on payment of any of its outstanding obligations or the price of a
Security has declined to such an extent or other credit factors exist so that in
the opinion of the Sponsor retention of the Security would be detrimental to the
Portfolio. If a public tender offer has been made for a Security or a merger or
acquisition has been announced affecting a Security, the Trustee may either sell
the Security or accept a tender offer for cash if the Supervisor determines that
the sale or tender is in the best interest of Unitholders. The Trustee will
distribute any cash proceeds to Unitholders. In addition, the Trustee may sell
Securities to redeem Units or pay Portfolio expenses. The Trustee must reject
any offer for securities or property other than cash in exchange for the
Securities. If securities or property are nonetheless acquired by the Portfolio,
the Sponsor may direct the Trustee to sell the securities or property and
distribute the proceeds to Unitholders or to accept the securities or property
for deposit in the Portfolio. Should any contract for the purchase of any of the
Securities fail, the Sponsor will (unless substantially all of the moneys held
in the Portfolio to cover the purchase are reinvested in substitute Securities
in accordance with the Trust Agreement) refund the cash and sales charge
attributable to the failed contract to all Unitholders on or before the next
distribution date.
When your Portfolio sells Securities, the composition and diversity of the
Securities in the Portfolio may be altered. In order to obtain the best price
for the Portfolio, it may be necessary for the Supervisor to specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of the portfolio securities, the Sponsor may
direct that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the Portfolio, the Sponsor or
dealers participating in the offering of Units. In addition, in selecting among
firms to handle a particular transaction, the Sponsor may take into account
whether the firm has sold or is selling units of unit investment trusts which it
sponsors.
AMENDMENT OF THE TRUST AGREEMENT. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
TERMINATION. The Portfolio will terminate on the Mandatory Termination Date
or upon the sale or other disposition of the last Security held in the
Portfolio. The Portfolio may be terminated at any time with consent of
Unitholders representing two-thirds of the outstanding Units or by the Trustee
when the value of the Portfolio is less than $500,000 ($3,000,000 if the value
of the Portfolio has exceeded $15,000,000) (the "Minimum Termination Value").
Unitholders will be notified of any termination. The Trustee may begin to sell
Securities in connection with a Portfolio termination nine business days before,
and no later than, the Mandatory Termination Date. Approximately thirty days
before this date, the Trustee will notify Unitholders of the termination and
provide a form enabling qualified Unitholders to elect an in kind distribution
of Securities. See "Rights of Unitholders--Redemption of Units". This form must
be returned at least five business days prior to the Mandatory Termination Date.
Unitholders will receive a final cash distribution within a reasonable time
after the Mandatory Termination Date. All distributions will be net of Portfolio
expenses and costs. Unitholders will receive a final distribution statement
following termination. The Information Supplement contains further information
regarding termination of the Portfolio. See "Additional Information".
LIMITATIONS ON LIABILITIES. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability for taking any action or for refraining from taking any
action in good faith pursuant to the Trust Agreement, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad faith or gross
negligence (negligence in the case of the Trustee) in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder. The Trustee is not liable for depreciation or loss incurred by reason
of the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act thereunder
and is not liable for any action taken by it in good faith under the Trust
Agreement. The Trustee is not liable for any taxes or other governmental charges
imposed on the Securities, on it as Trustee under the Trust Agreement or on a
Portfolio which the Trustee may be required to pay under any present or future
law of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee. The Trustee, Sponsor and
Supervisor may rely on any evaluation furnished by the Evaluator and have no
responsibility for the accuracy thereof. Determinations by the Evaluator shall
be made in good faith upon the basis of the best information available to it.
SPONSOR. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Portfolio. The Sponsor is an indirect subsidiary of Morgan Stanley Dean Witter &
Co. Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has its principal office at 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999,
the total stockholders' equity of Van Kampen Funds Inc. was $141,554,861
(audited). Van Kampen Funds Inc. and your Portfolio have adopted a code of
ethics requiring Van Kampen's employees who have access to information on
Portfolio transactions to report personal securities transactions. The purpose
of the code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to your Portfolio. The Information
Supplement contains additional information about the Sponsor.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Portfolio as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. Additional information
regarding the Trustee is set forth in the Information Supplement, including the
Trustee's qualifications and duties, its ability to resign, the effect of a
merger involving the Trustee and the Sponsor's ability to remove and replace the
Trustee. See "Additional Information".
PERFORMANCE INFORMATION. The Sponsor may from time to time in its advertising
and sales materials compare the then current estimated returns on the Portfolio
and returns over specified time periods on other similar Van Kampen trusts or
investment strategies utilized by the Portfolio (which may show performance net
of expenses and charges which the Portfolio would have charged) with returns on
other taxable investments such as the common stocks comprising the Dow Jones
Industrial Average, the S&P 500, other investment indices, corporate or U.S.
government bonds, bank CDs, money market accounts or money market funds, or with
performance data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc. or various publications, each of which has characteristics
that may differ from those of the Portfolio. Information on percentage changes
in the dollar value of Units may be included from time to time in
advertisements, sales literature, reports and other information furnished to
current or prospective Unitholders. Total return figures may not be averaged and
may not reflect deduction of the sales charge, which would decrease return. No
provision is made for any income taxes payable. Past performance may not be
indicative of future results. The Portfolio is not managed and Unit price and
return fluctuate with the value of common stocks in the portfolio, so there may
be a gain or loss when Units are sold. As with other performance data,
performance comparisons should not be considered representative of the
Portfolio's relative performance for any future period.
TAXATION
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The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units of your
Portfolio. The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code")). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Portfolio. For purposes of the following discussion and opinion, it is
assumed that each Security in the Portfolio is equity for federal income tax
purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Portfolio is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Portfolio under the Code; and the income of
the Portfolio will be treated as income of the Unitholders thereof under the
Code. Each Unitholder will be considered to have received his pro rata share of
income derived from each Security asset when such income is considered to be
received by the Portfolio.
2. Each Unitholder will have a taxable event when the Portfolio disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder as described
below). The price a Unitholder pays for his Units, generally including sales
charges, is allocated among his pro rata portion of each Security held by the
Portfolio (in proportion to the fair market values thereof on the valuation date
nearest the date the Unitholder purchase his Units) in order to determine his
initial tax basis for his pro rata portion of each Security held by the
Portfolio. Unitholders should consult their own tax advisers with regard to
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of dividends as defined by Section 316 of the Code paid by a corporation
with respect to a Security held by the Portfolio are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits". A Unitholder's pro rata portion of dividends paid on such Security
which exceeds such current and accumulated earnings and profits will first
reduce a Unitholder's tax basis in such Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Equity Security shall
generally be treated as capital gain. In general, the holding period for such
capital gain will be determined by the period of time a Unitholder has held his
Units.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Portfolio will generally be
considered a capital gain, except in the case of a dealer or a financial
institution. A Unitholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Portfolio will generally
be considered a capital loss (except in the case of a dealer or a financial
institution). Unitholders should consult their tax advisers regarding the
recognition of such capital gains and losses for federal income tax purposes.
DIVIDENDS RECEIVED DEDUCTION. A Unitholder will be considered to have
received all of the dividends paid on his pro rata portion of each Security when
such dividends are received by the Portfolio. Unitholders will be taxed in this
manner regardless of whether distributions from the Portfolio are actually
received by the Unitholder or are automatically reinvested. A corporation that
owns Units will generally be entitled to a 70% dividends received deduction with
respect to such Unitholder's pro rata portion of dividends received by the
Portfolio (to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the same
manner as if such corporation directly owned the Securities paying such
dividends (other than corporate Unitholders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics and
other than for purposes of special taxes such as the accumulated earnings tax
and the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. These limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding
requirement is met. Moreover, the allowable percentage of the deduction will be
reduced from 70% if a corporate Unitholder owns certain stock (or Units) the
financing of which is directly attributable to indebtedness incurred by such
corporation. To the extent dividends received by the Portfolio are attributable
to foreign corporations, a corporation that owns Units will not be entitled to
the dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. Unitholders should
consult with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
LIMITATIONS ON DEDUCTIBILITY OF PORTFOLIO EXPENSES BY UNITHOLDERS. Each
Unitholder's pro rata share of each expense paid by the Portfolio is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Portfolio as miscellaneous itemized deductions subject to this
limitation. Unitholders should consult with their own tax advisers regarding the
deductibility of Portfolio expenses.
RECOGNITION OF TAXABLE GAIN OR LOSS UPON DISPOSITION OF SECURITIES BY THE
PORTFOLIO OR DISPOSITION OF UNITS. As discussed above, a Unitholder may
recognize taxable gain (or loss) when a Security is disposed of by the Portfolio
or if the Unitholder disposes of a Unit. The Internal Revenue Service
Restructing and Reform Act of 1998 (the "1998 Tax Act") provides that for
taxpayers other than corporations, net capital gain (which is defined as net
long-term capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is subject to a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in the
lowest tax bracket). Capital gain or loss is long-term if the holding period for
the asset is more than one year, and is short-term if the holding period for the
asset is one year or less. The date on which a Unit is acquired (i.e., the
"trade date") is excluded for purposes of determining the holding period of the
Unit. Capital gains realized from assets held for one year or less are taxed at
the same rates as ordinary income.
For tax years beginning after December 31, 2000, the 20% rate is reduced to
18% and the 10% rate is reduced to 8% for long-term gains from most property
held for more than five years. Due to the length of the Portfolio's life, the
reduction in the capital gains rate for property held for more than five years
could only possibly apply to your interest in the Securities if you are eligible
for and elect to receive an in kind distribution at redemption or termination.
However, the reduction of the 20% to 18% applies only if the holding period for
the property begins after December 31, 2000. Therefore, you will not be eligible
for the 18% capital gain rate on assets for which your holding period began
before January 1, 2001. However, if you are an individual, you may elect to
treat certain assets you hold on January 1, 2001 as having been sold for their
fair market value on the next business day after January 1, 2001 for purposes of
this holding period requirement. If you make this election for an asset, the
asset would be eligible for the 18% rate if it is held by you for more than five
years after this deemed sale. If you make this election, you must recognize any
gain from this deemed sale, but any loss is not recognized.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Portfolio including his pro
rata portion of all Securities represented by a Unit.
The Taxpayer Relief Act of 1997 (the "1997 Tax Act") includes provisions that
treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures or forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not of loss) and for purposes of
determining the holding period. Unitholders should consult their own tax
advisers with regard to any such constructive sales rules.
SPECIAL TAX CONSEQUENCES OF IN KIND DISTRIBUTIONS UPON REDEMPTION OF UNITS OR
TERMINATION OF THE PORTFOLIO. As discussed in "Rights of Unitholders--Redemption
of Units", under certain circumstances a Unitholder tendering Units for
redemption may request an in kind distribution. A Unitholder may also under
certain circumstances request an in kind distribution upon the termination of
the Portfolio. See "Rights of Unitholders--Redemption of Units. As previously
discussed, prior to the redemption of Units or the termination of the Portfolio,
a Unitholder is considered as owning a pro rata portion of each of the
Portfolio's assets for federal income tax purposes. The receipt of an in kind
distribution will result in a Unitholder receiving whole shares of stock plus,
possibly, cash.
The potential tax consequences that may occur under an in kind distribution
with respect to each Security held by the Portfolio will depend on whether or
not a Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
the Portfolio. However, if a Unitholder also receives cash in exchange for a
fractional share of such Security held by the Portfolio, such Unitholder will
generally recognize gain or loss based upon the difference between the amount of
cash received by the Unitholder and his tax basis in such fractional share of a
Security held by the Portfolio.
Because the Portfolio will own many Securities, a Unitholder who requests an
in kind distribution will have to analyze the tax consequences with respect to
each Security owned by the Portfolio. The amount of taxable gain (or loss)
recognized upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Security owned by the Portfolio. Unitholders who request an in kind
distribution are advised to consult their tax advisers in this regard.
COMPUTATION OF THE UNITHOLDER'S TAX BASIS. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder of his
Units. The cost of the Units is allocated among the Securities held in the
Portfolio in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Portfolio will be reduced to the extent dividends paid with respect
to such Security are received by the Portfolio which are not taxable as ordinary
income as described above.
GENERAL. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Portfolio to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Portfolio (other than
those that are not treated as United States source income, if any) will
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporations for a three-year period ending with the close
of its taxable year preceding payment was effectively connected to the conduct
of a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the United
States and a foreign country. Non-U.S. Unitholders should consult their own tax
advisers regarding the imposition of U.S. withholding on distributions from the
Portfolio.
It should be noted that payments to the Portfolio of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes and Unitholders should consult their tax advisers regarding
the potential tax consequences relating to the payment of any such withholding
taxes by the Portfolio. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because, under the grantor
trust rules, an investor is deemed to have paid directly his share of foreign
taxes that have been paid or accrued, if any, an investor may be entitled to a
foreign tax credit or deduction for United States tax purposes with respect to
such taxes. The 1997 Tax Act imposes a required holding period for such credits.
Investors should consult their tax advisers with respect to foreign withholding
taxes and foreign tax credits.
At the termination of the Portfolio, the Trustee will furnish to each
Unitholder of the Portfolio a statement containing information relating to the
dividends received by the Portfolio on the Securities, the gross proceeds
received by the Portfolio from the disposition of any Security (resulting from
redemption or the sale of any Security), and the fees and expenses paid by the
Portfolio. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
In the opinion of special counsel to the Portfolio for New York tax matters,
the Portfolio is not an association taxable as a corporation and the income of
the Portfolio will be treated as the income of the Unitholders under the
existing income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
of the Portfolio that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unitholder in paragraph (a) but whose
income from a Unit is effectively connected with such Unitholder's conduct of a
United States trade or business. The term also includes certain former citizens
of the United States whose income and gain on the Units will be taxable.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.
PORTFOLIO OPERATING EXPENSES
--------------------------------------------------------------------------------
GENERAL. The fees and expenses of your Portfolio will generally accrue on a
daily basis. The deferred sales charge, fees and expenses are generally paid out
of the Capital Account of your Portfolio. When these amounts are paid by or
owing to the Trustee, they are secured by a lien on your Portfolio. It is
expected that Securities will be sold to pay these amounts which will result in
capital gains or losses to Unitholders. See "Taxation". The Supervisor's,
Evaluator's and Trustee's fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index or, if this
category is not published, in a comparable category.
ORGANIZATION COSTS. You and the other Unitholders will bear all or a portion
of the organization costs and charges incurred in connection with the
establishment of your Portfolio. These costs and charges will include the cost
of the preparation, printing and execution of the trust agreement, registration
statement and other documents relating to your Portfolio, federal and state
registration fees and costs, the initial fees and expenses of the Trustee, and
legal and auditing expenses. The public offering price of Units includes the
estimated amount of these costs. The Trustee will deduct these expenses from
your Portfolio's assets at the end of the initial offering period.
TRUSTEE'S FEE. For its services the Trustee will receive the fee from your
Portfolio set forth in the "Fee Table" (which includes the estimated amount of
miscellaneous Portfolio expenses). The Trustee benefits to the extent there are
funds in the Capital and Income Accounts since these Accounts are non-interest
bearing to Unitholders and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to your Portfolio
is expected to result from the use of these funds.
COMPENSATION OF SPONSOR, SUPERVISOR AND EVALUATOR. The Supervisor and
Evaluator, which are affiliates of the Sponsor, will receive the annual fee for
portfolio supervisory and evaluation services set forth in the "Fee Table".
These fees may exceed the actual costs of providing these services to your
Portfolio but at no time will the total amount received for supervisory and
evaluation services rendered to all Van Kampen unit investment trusts in any
calendar year exceed the aggregate cost of providing these services in that
year.
MISCELLANEOUS EXPENSES. The following additional charges are or may be
incurred by your Portfolio: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the
Portfolio, (b) fees of the Trustee for extraordinary services, (c) expenses of
the Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect the Portfolio and the rights and
interests of Unitholders, (f) indemnification of the Trustee for any loss,
liability or expenses incurred in the administration of the Portfolio without
negligence, bad faith or wilful misconduct on its part, (g) foreign custodial
and transaction fees, (h) costs associated with liquidating the securities held
in the Portfolio, (i) any offering costs incurred after the end of the initial
offering period and (j) expenditures incurred in contacting Unitholders upon
termination of the Portfolio. The Portfolio will also pay a license fee to the
H.S. Dent Foundation Inc. for use of certain service marks. The Portfolio may
pay the expenses of updating its registration statement each year.
OTHER MATTERS
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LEGAL OPINIONS. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. The statement of condition and the
related portfolio included in this Prospectus have been audited by Grant
Thornton LLP, independent certified public accountants, as set forth in their
report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Portfolio with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Portfolio. Information about your Portfolio (including the Information
Supplement) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. You may obtain information about the Public Reference Room by
calling 1-202-942-8090. Reports and other information about your Portfolio are
available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained, after paying a
duplication fee, by electronic request at the following e-mail address:
[email protected] or by writing the SEC's Public Reference Section, Washington,
D.C. 20549-0102.
TABLE OF CONTENTS
TITLE PAGE
----- ----
Summary of Essential Financial Information.. 2
Fee Table................................... 3
The Roaring 2000sSM Portfolio............... 4
Notes to Portfolio.......................... 6
The Securities.............................. 7
Report of Independent Certified
Public Accountants....................... 10
Statement of Condition ..................... 11
The Portfolio............................... A-1
Objectives and Securities Selection......... A-1
Risk Factors................................ A-2
Public Offering............................. A-3
Retirement Accounts......................... A-7
Wrap Fee and Advisory Accounts.............. A-7
Rights of Unitholders....................... A-7
Portfolio Administration.................... A-10
Taxation.................................... A-12
Portfolio Operating Expenses................ A-16
Other Matters............................... A-17
Additional Information...................... A-17
--------------
When Units of the Portfolio are no longer available this prospectus may be used
as a preliminary prospectus for a future Portfolio. If this prospectus is used
for future Portfolios you should note the following:
The information in this prospectus is not complete with respect to future
Portfolio series and may be changed. No person may sell Units of future
Portfolios until a registration statement is filed with the Securities and
Exchange Commission and is effective. This prospectus is not an offer to sell
Units and is not soliciting an offer to buy Units in any state where the offer
or sale is not permitted.
EMSPRO248
Item #3572
PROSPECTUS
--------------------------------------------------------------------------------
DECENBER 12, 2000
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
THE ROARING 2000s(SM) PORTFOLIO,
TRADITIONAL SERIES 8
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
Please retain this prospectus for future reference.
VAN KAMPEN
INFORMATION SUPPLEMENT
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 248
--------------------------------------------------------------------------------
This Information Supplement provides additional information concerning the
risks and operations of the Portfolio which is not described in the Prospectus.
You should read this Information Supplement in conjunction with the Prospectus.
This Information Supplement is not a prospectus. It does not include all of the
information that you should consider before investing in the Portfolio. This
Information Supplement may not be used to offer or sell Units without the
Prospectus. You can obtain copies of the Prospectus by contacting the Sponsor at
1 Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, Illinois 60181-5555 or by
contacting your broker. This Information Supplement is dated as of the date of
the Prospectus. All capitalized terms have been defined in the Prospectus.
TABLE OF CONTENTS
PAGE
Risk Factors 2
The Portfolio 8
Sponsor Information 10
Trustee Information 10
Portfolio Termination 11
RISK FACTORS
PRICE VOLATILITY. Because the Portfolio invests in stocks, you should
understand the risks of investing in stocks before purchasing Units. These risks
include the risk that the financial condition of the company or the general
condition of the stock market may worsen and the value of the stocks (and
therefore Units) will fall. Stocks are especially susceptible to general stock
market movements. The value of common stocks often rises or falls rapidly and
unpredictably as market confidence and perceptions of companies change. These
perceptions are based on factors including expectations regarding government
economic policies, inflation, interest rates, economic expansion or contraction,
political climates and economic or banking crises. The value of Units will
fluctuate with the value of the stocks in the Portfolio and may be more or less
than the price you originally paid for your Units. As with any investment, we
cannot guarantee that the performance of a Portfolio will be positive over any
period of time. Because the Portfolio is unmanaged, the Trustee will not sell
stocks in response to market fluctuations as is common in managed investments.
DIVIDENDS. Stocks represent ownership interests in a company and are not
obligations of the company. Common stockholders have a right to receive payments
from the company that is subordinate to the rights of creditors, bondholders or
preferred stockholders of the company. This means that common stockholders have
a right to receive dividends only if a company's board of directors declares a
dividend and the company has provided for payment of all of its creditors,
bondholders and preferred stockholders. If a company issues additional debt
securities or preferred stock, the owners of these securities will have a claim
against the company's assets before common stockholders if the company declares
bankruptcy or liquidates its assets even though the common stock was issued
first. As a result, the company may be less willing or able to declare or pay
dividends on its common stock.
FOREIGN STOCKS. Because the Portfolio may invest in foreign stocks, it may
involve additional risks that differ from an investment in domestic stocks.
Investments in foreign securities may involve a greater degree of risk than
those in domestic securities. There is generally less publicly available
information about foreign companies in the form of reports and ratings similar
to those that are published about issuers in the United States. Also, foreign
issuers are generally not subject to uniform accounting, auditing and financial
reporting requirements comparable to those applicable to United States issuers.
With respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation,
nationalization or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect United States investments in those countries.
Moreover, industrial foreign economies may differ favorably or unfavorably from
the United States' economy in terms of growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Foreign securities markets are generally not as developed or
efficient as those in the United States. While growing in volume, they usually
have substantially less volume than the New York Stock Exchange, and securities
of some foreign issuers are less liquid and more volatile than securities of
comparable United States issuers. Fixed commissions on foreign exchanges are
generally higher than negotiated commissions on United States exchanges. There
is generally less government supervision and regulation of securities exchanges,
brokers and listed issuers than in the United States.
FOREIGN CURRENCIES. The Portfolio may involve the risk that fluctuations in
exchange rates between the U.S. dollar and foreign currencies may negatively
affect the value of the stocks. For example, if a foreign stock rose 10% in
price but the U.S. dollar gained 5% against the related foreign currency, a U.S.
investor's return would be reduced to about 5%. This is because the foreign
currency would "buy" fewer dollars or, conversely, a dollar would buy more of
the foreign currency. Many foreign currencies have fluctuated widely against the
U.S. dollar for a variety of reasons such as supply and demand of the currency,
investor perceptions of world or country economies, political instability,
currency speculation by institutional investors, changes in government policies,
buying and selling of currencies by central banks of countries, trade balances
and changes in interest rates. The Portfolio's foreign currency transactions
will be conducted with foreign exchange dealers acting as principals on a spot
(i.e., cash) buying basis. These dealers realize a profit based on the
difference between the price at which they buy the currency (bid price) and the
price at which they sell the currency (offer price). The Evaluator will estimate
the currency exchange rates based on current activity in the related currency
exchange markets, however, due to the volatility of the markets and other
factors, the estimated rates may not be indicative of the rate the Portfolio
might obtain had the Trustee sold the currency in the market at that time.
FINANCIAL SERVICES ISSUERS. An investment in Units of the Portfolio should be
made with an understanding of the problems and risks inherent in the bank and
financial services sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates, portfolio
concentrations in geographic markets and in commercial and residential real
estate loans, and competition from new entrants in their fields of business.
Banks and thrifts are highly dependent on net interest margin. Recently, bank
profits have come under pressure as net interest margins have contracted, but
volume gains have been strong in both commercial and consumer products. There is
no certainty that such conditions will continue. Bank and thrift institutions
had received significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and refinancing
activity subsided, this income diminished. Economic conditions in the real
estate markets, which have been weak in the past, can have a substantial effect
upon banks and thrifts because they generally have a portion of their assets
invested in loans secured by real estate. Banks, thrifts and their holding
companies are subject to extensive federal regulation and, when such
institutions are state- chartered, to state regulation as well. Such regulations
impose strict capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their supervisory
and enforcement authority and may substantially restrict the permissible
activities of a particular institution if deemed to pose significant risks to
the soundness of such institution or the safety of the federal deposit insurance
fund. Regulatory actions, such as increases in the minimum capital requirements
applicable to banks and thrifts and increases in deposit insurance premiums
required to be paid by banks and thrifts to the Federal Deposit Insurance
Corporation ("FDIC"), can negatively impact earnings and the ability of a
company to pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or their
holding companies, or insures against any risk of investment in the securities
issued by such institutions.
The statutory requirements applicable to and regulatory supervision of banks,
thrifts and their holding companies have increased significantly and have
undergone substantial change in recent years. To a great extent, these changes
are embodied in the Financial Institutions Reform, Recovery and Enforcement Act;
enacted in August 1989, the Federal Deposit Insurance Corporation Improvement
Act of 1991, the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991 and the regulations promulgated under these laws. Many
of the regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and prospects of
the Securities in the Portfolio cannot be predicted with certainty. The recently
enacted financial-services overhaul legislation will allow banks, securities
firms and insurance companies to form one-stop financial conglomerates marketing
a wide range of financial service products to investors. This legislation will
likely result in increased merger activity and heightened competition among
existing and new participants in the field. Efforts to expand the ability of
federal thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize interstate
banking has recently been signed into law. Under the legislation, banks will be
able to purchase or establish subsidiary banks in any state, one year after the
legislation's enactment. Since mid-1997, banks have been allowed to turn
existing banks into branches. Consolidation is likely to continue. The
Securities and Exchange Commission and the Financial Accounting Standards Board
require the expanded use of market value accounting by banks and have imposed
rules requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may result in
increased volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. Additional legislative and
regulatory changes may be forthcoming. For example, the bank regulatory
authorities have proposed substantial changes to the Community Reinvestment Act
and fair lending laws, rules and regulations, and there can be no certainty as
to the effect, if any, that such changes would have on the Securities in the
Portfolio. In addition, from time to time the deposit insurance system is
reviewed by Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited moneys
can be used by banks or reduce the dollar amount or number of deposits insured
for any depositor. Such reforms could reduce profitability as investment
opportunities available to bank institutions become more limited and as
consumers look for savings vehicles other than bank deposits. Banks and thrifts
face significant competition from other financial institutions such as mutual
funds, credit unions, mortgage banking companies and insurance companies, and
increased competition may result from legislative broadening of regional and
national interstate banking powers as has been recently enacted. Among other
benefits, the legislation allows banks and bank holding companies to acquire
across previously prohibited state lines and to consolidate their various bank
subsidiaries into one unit. The Sponsor makes no prediction as to what, if any,
manner of bank and thrift regulatory actions might ultimately be adopted or what
ultimate effect such actions might have on the Portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5% of the
outstanding shares of any class of voting securities of a bank or bank holding
company, (2) acquiring control of a bank or another bank holding company, (3)
acquiring all or substantially all the assets of a bank, or (4) merging or
consolidating with another bank holding company, without first obtaining Federal
Reserve Board ("FRB") approval. In considering an application with respect to
any such transaction, the FRB is required to consider a variety of factors,
including the potential anti-competitive effects of the transaction, the
financial condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would serve,
the record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the prospective
availability to the FRB of information appropriate to determine ongoing
regulatory compliance with applicable banking laws. In addition, the federal
Change In Bank Control Act and various state laws impose limitations on the
ability of one or more individuals or other entities to acquire control of banks
or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies. In the policy statement, the FRB expressed its view that
a bank holding company experiencing earnings weaknesses should not pay cash
dividends which exceed its net income or which could only be funded in ways that
would weaken its financial health, such as by borrowing. The FRB also may impose
limitations on the payment of dividends as a condition to its approval of
certain applications, including applications for approval of mergers and
acquisitions. The Sponsor makes no prediction as to the effect, if any, such
laws will have on the Securities or whether such approvals, if necessary, will
be obtained.
Companies involved in the insurance industry are engaged in underwriting,
reinsuring, selling, distributing or placing of property and casualty, life or
health insurance. Other growth areas within the insurance industry include
brokerage, reciprocals, claims processors and multiline insurance companies.
Insurance company profits are affected by interest rate levels, general economic
conditions, and price and marketing competition. Property and casualty insurance
profits may also be affected by weather catastrophes and other disasters. Life
and health insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy 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 tax law changes may also adversely affect
insurance companies' policy sales, tax obligations, and profitability. In
addition to the foregoing, profit margins of these companies continue to shrink
due to the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including those
applicable to regulated insurance companies, such as: (i) the inherent
uncertainty in the process of establishing property-liability loss reserves,
particularly reserves for the cost of environmental, asbestos and mass tort
claims, and the fact that ultimate losses could materially exceed established
loss reserves which could have a material adverse effect on results of
operations and financial condition; (ii) the fact that insurance companies have
experienced, and can be expected in the future to experience, catastrophe losses
which could have a material adverse impact on their financial condition, results
of operations and cash flow; (iii) the inherent uncertainty in the process of
establishing property-liability loss reserves due to changes in loss payment
patterns caused by new claims settlement practices; (iv) the need for insurance
companies and their subsidiaries to maintain appropriate levels of statutory
capital and surplus, particularly in light of continuing scrutiny by rating
organizations and state insurance regulatory authorities, and in order to
maintain acceptable financial strength or claims-paying ability rating; (v) the
extensive regulation and supervision to which insurance companies' subsidiaries
are subject, various regulatory initiatives that may affect insurance companies,
and regulatory and other legal actions; (vi) the adverse impact that increases
in interest rates could have on the value of an insurance company's investment
portfolio and on the attractiveness of certain of its products; (vii) the need
to adjust the effective duration of the assets and liabilities of life insurance
operations in order to meet the anticipated cash flow requirements of its
policyholder obligations; and (vii) the uncertainty involved in estimating the
availability of reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come under
increased federal scrutiny, and certain state legislatures have considered or
enacted laws that alter and, in many cases, increase state authority to regulate
insurance companies and insurance holding company systems. Further, the National
Association of Insurance Commissioners ("NAIC") and state insurance regulators
are re-examining existing laws and regulations, specifically focusing on
insurance companies, interpretations of existing laws and the development of new
laws. In addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine whether to
promulgate additional federal regulation. The Sponsor is unable to predict
whether any state or federal legislation will be enacted to change the nature or
scope of regulation of the insurance industry, or what effect, if any, such
legislation would have on the industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the amount of
investments in certain investment categories. Failure to comply with these laws
and regulations would cause non-conforming investments to be treated as
non-admitted assets for purposes of measuring statutory surplus and, in some
instances, would require divestiture.
Environmental pollution clean-up is the subject of both federal and state
regulation. By some estimates, there are thousands of potential waste sites
subject to clean up. The insurance industry is involved in extensive litigation
regarding coverage issues. The Comprehensive Environmental Response Compensation
and Liability Act of 1980 ("Superfund") and comparable state statutes
("mini-Superfund") govern the clean-up and restoration by "Potentially
Responsible Parties" ("PRP's"). Superfund and the mini-Superfunds
("Environmental Clean-up Laws or "ECLs") establish a mechanism to pay for
clean-up of waste sites if PRP's fail to do so, and to assign liability to
PRP's. The extent of liability to be allocated to a PRP is dependent on a
variety of factors. The extent of clean-up necessary and the assignment of
liability has not been fully established. The insurance industry is disputing
many such claims. Key coverage issues include whether Superfund response costs
are considered damages under the policies, when and how coverage is triggered,
applicability of pollution exclusions, the potential for joint and several
liability and definition of an occurrence. Similar coverage issues exist for
clean up and waste sites not covered under Superfund. To date, courts have been
inconsistent in their rulings on these issues. An insurer's exposure to
liability with regard to its insureds which have been, or may be, named as PRPs
is uncertain. Superfund reform proposals have been introduced in Congress, but
none have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide for a
fair, effective and cost-efficient system for settlement of Superfund related
claims.
While current federal income tax law permits the tax-deferred accumulation of
earnings on the premiums paid by an annuity owner and holders of certain
savings-oriented life insurance products, no assurance can be given that future
tax law will continue to allow such tax deferrals. If such deferrals were not
allowed, consumer demand for the affected products would be substantially
reduced. In addition, proposals to lower the federal income tax rates through a
form of flat tax or otherwise could have, if enacted, a negative impact on the
demand for such products.
Companies engaged in investment banking/brokerage and investment management
include brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies. Earnings and share prices of companies in this industry
are quite volatile, and often exceed the volatility levels of the market as a
whole. Recently, ongoing consolidation in the industry and the strong stock
market has benefited stocks which investors believe will benefit from greater
investor and issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence, equity
transaction volume, the level and direction of long-term and short-term interest
rates, and the outlook for emerging markets. Negative trends in any of these
earnings determinants could have a serious adverse effect on the financial
stability, as well as the stock prices, of these companies. Furthermore, there
can be no assurance that the issuers of the Securities will be able to respond
in a timely manner to compete in the rapidly developing marketplace. In addition
to the foregoing, profit margins of these companies continue to shrink due to
the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.
TECHNOLOGY ISSUERS. The Portfolio invests significantly in issuers within the
technology industry. A portfolio concentrated in a single industry may present
more risk than a portfolio broadly diversified over several industries. The
Portfolio, and therefore Unitholders, may be particularly susceptible to a
negative impact resulting from adverse market conditions or other factors
affecting technology issuers because any negative impact on the technology
industry will not be diversified among issuers within other unrelated
industries. Accordingly, an investment in Units should be made with an
understanding of the characteristics of the technology industry and the risks
which such an investment may entail.
Technology companies generally include companies involved in the development,
design, manufacture and sale of computers, computer related equipment, computer
networks, communications systems, telecommunications products, electronic
products, and other related products, systems and services. The market for
technology products and services, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and frequent
new product introductions. The success of the issuers of the Securities depends
in substantial part on the timely and successful introduction of new products.
An unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond timely to compete in the rapidly developing marketplace.
The market for certain technology products and services may have only
recently begun to develop, is rapidly evolving and is characterized by an
increasing number of market entrants. Additionally, certain technology companies
may have only recently commenced operations or offered equity securities to the
public. Such companies are in the early stage of development and have a limited
operating history on which to analyze future operating results. It is important
to note that following its initial public offering a security is likely to
experience substantial stock price volatility and speculative trading.
Accordingly, there can be no assurance that upon redemption of Units or
termination of a Portfolio a Unitholder will receive an amount greater than or
equal to the Unitholder's initial investment.
Based on trading history, factors such as announcements of new products or
development of new technologies and general conditions of the industry have
caused and are likely to cause the market price of technology common stocks to
fluctuate substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to the
operating performance of such companies. This market volatility may adversely
affect the market price of the Securities and therefore the ability of a
Unitholder to redeem units, or roll over Units into a new trust, at a price
equal to or greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the future
suppliers will be able to meet the demand for components in a timely and cost
effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for, or
and interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous and constantly developing industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies are incorporated into
other related products, certain companies are often highly dependent on the
performance of other computer, electronics and communications companies. There
can be no assurance that these customers will place additional orders, or that
an issuer of Securities will obtain orders of similar magnitude as past orders
form other customers. Similarly, the success of certain companies is tied to a
relatively small concentration of products or technologies with intense
competition between companies. Accordingly, a decline in demand of such
products, technologies or from such customers could have a material adverse
impact on issuers of the Securities.
HEALTH CARE ISSUERS. An investment in Units of the Portfolio should be made
with an understanding of the problems and risks inherent in the healthcare
industry in general. Healthcare companies involved in advanced medical devices
and instruments, drugs and biotech, managed care, hospital management/health
services and medical supplies have potential risks unique to their sector of the
healthcare field. These companies are subject to governmental regulation of
their products and services, a factor which could have a significant and
possibly unfavorable effect on the price and availability of such products or
services. Furthermore, such companies face the risk of increasing competition
from new products or services, generic drug sales, termination of patent
protection for drug or medical supply products and the risk that technological
advances will render their products obsolete. The research and development costs
of bringing a drug to market are substantial, and include lengthy governmental
review processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and not offer certain products for
several years. Such companies may also have persistent losses during a new
product's transition from development to production, and revenue patterns may be
erratic. In addition, healthcare facility operators may be affected by events
and conditions including, among other things, demand for services, the ability
of the facility to provide the services required, physicians' confidence in the
facility, management capabilities, competition with other hospitals, efforts by
insurers and governmental agencies to limit rates, legislation establishing
state rate-setting agencies, expenses, government regulation, the cost and
possible unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that associated with
Medicare, Medicaid and other similar third-party payor programs.
Legislative proposals concerning healthcare are proposed in Congress from
time to time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of prescription
drugs), national health insurance, incentives for competition in the provision
of healthcare services, tax incentives and penalties related to healthcare
insurance premiums and promotion of pre-paid healthcare plans. The Sponsor is
unable to predict the effect of any of these proposals, if enacted, on the
issuers of Securities in the Portfolio.
LIQUIDITY. Whether or not the stocks in the Portfolio are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
ADDITIONAL UNITS. The Sponsor may create additional Units of the Portfolio
by depositing into the Portfolio additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Portfolio will pay brokerage fees.
VOTING. Only the Trustee may sell or vote the stocks in the Portfolio.
While you may sell or redeem your Units, you may not sell or vote the stocks in
your Portfolio. The Sponsor will instruct the Trustee how to vote the stocks.
The Trustee will vote the stocks in the same general proportion as shares held
by other shareholders if the Sponsor fails to provide instructions.
THE PORTFOLIO
Harry S. Dent, Jr. believes that the economy may be on the edge of economic
change that may change how people communicate and fundamentally alter how and
where people live and work. At the same time, Mr. Dent believes the Baby Boom
generation will reach its peak earning, spending and productivity years. Mr.
Dent believes that the convergence of these two events could spark the trends of
the years ahead.
The Portfolio was designed to benefit from the insights, philosophies and
strategies found in the book, "The Roaring 2000s," by Harry S. Dent, Jr.
Family spending cycles of each new generation of consumers and workers drive
the economy. Birth rates, because they show how many people are in a generation,
may be a leading indicator of the economy. As a generation develops and moves
into its peak family spending cycle, the economy may rise. To account for the
number of people at their peak spending age at a given time, Mr. Dent lags the
birth index forward 46.5 years (the average person historically hits their peak
spending at approximately 46.5 years of age). After consideration of this lag,
the birth index and the Dow Jones Industrial Average, adjusted for inflation,
have exhibited a close correlation in the past. Mr. Dent believes that this
"Spending Wave" may enable a connection to be made, helping to forecast the
economy in the future. Of course, past performance is no guarantee of future
results.
Based on the cycles discussed previously, Mr. Dent has identified various
sectors of our economy that may be primed for growth potential. The Portfolio
seeks to capitalize on trends impacting four main sectors, including:
o TECHNOLOGY - New technologies may be shaping new standards in the way
people work and live. Businesses may be beginning to prepare for
downshifts in the labor force by investing in labor saving technology that
could improve productivity and lower costs.
o FINANCIAL SERVICES - The Baby Boomers may be forced to become investors
and, therefore, may need to seek financial advice. Additionally, choices
for investing are numerous and complicated. As our economy grows, so may
additional opportunities for investment vehicles.
o HEALTH CARE - As the Baby Boomers age, health care may become increasingly
important as needs statistically begin to rise. As people age they tend to
spend more of their income on health care costs. As technologies increase,
Americans may find more options and choices in this sector than ever
before.
o U.S. MULTINATIONAL COMPANIES - A global marketplace is emerging and many
U.S.-based companies appear to be experiencing new sales growth through
the elimination of geographical barriers that once inhibited sales. Now,
through technology increases, multinational companies may be emerging as
market leaders internationally as well as domestically.
The Sponsor selected the portfolio based on concepts presented in The Roaring
2000s and research compiled by Mr. Dent. Mr. Dent did not select the stocks for
the Portfolio, does not endorse the Portfolio and will not supervise the
Portfolio. The opinions and forecasts of Mr. Dent expressed in his books and
elsewhere are not necessarily those of Van Kampen Funds Inc. and may not
actually come to pass. Mr. Dent is being compensated by the Sponsor for his
research.
The Roaring 2000sSM is the exclusive property of The H.S. Dent Foundation.
The Roaring 2000sSM is a service mark of the H.S. Dent Foundation and has been
licensed for use by Van Kampen Funds Inc.
This fund is not sponsored, endorsed, sold or promoted by the H.S. Dent
Foundation. The H.S. Dent Foundation makes no representation or warranty,
express or implied, to the owners of this fund or any member of the public
regarding the advisability of investing in funds generally or in this fund
particularly. The H.S. Dent Foundation is the licensor of certain trademarks,
service marks and trade names of the H.S. Dent Foundation. The H.S. Dent
Foundation is not responsible for and has not participated in the determination
of the timing of, prices at, or quantities of this fund to be issued. The H.S.
Dent Foundation has no obligation or liability to owners of this fund in
connection with the administration, marketing or trading of this fund.
NEITHER The H.S. DENT Foundation NOR ANY OTHER RELATED PARTY GUARANTEES THE
ACCURACY AND/OR THE COMPLETENESS OF ANY DATA INCLUDED THEREIN. NEITHER The H.S.
DENT Foundation NOR ANY OTHER RELATED PARTY MAKES ANY WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND
COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF ANY DATA INCLUDED HEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR
FOR ANY OTHER USE. NEITHER The H.S. DENT Foundation NOR ANY OTHER RELATED PARTY
MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND The H.S. DENT Foundation HEREBY
EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO ITS SERVICE MARKS. WITHOUT LIMITING ANY OF
THE FORE-GOING, IN NO EVENT SHALL The H.S. DENT Foundation OR ANY OTHER RELATED
PARTY HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of your
Portfolio. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc.
Van Kampen Investments Inc. is a wholly owned subsidiary of MSAM Holdings II,
Inc., which in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter &
Co.
Morgan Stanley Dean Witter & Co., together with various of its directly and
indirectly owned subsidiaries, is engaged in a wide range of financial services
through three primary businesses: securities, asset management and credit
services. These principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring and other corporate
finance advisory activities; merchant banking; stock brokerage and research
services; credit services; asset management; trading of futures, options,
foreign exchange commodities and swaps (involving foreign exchange, commodities,
indices and interest rates); and real estate advice, financing and investing.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has its principal offices at 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999,
the total stockholders' equity of Van Kampen Funds Inc. was $141,554,861
(audited). (This paragraph relates only to the Sponsor and not to the Portfolio
or to any other Series thereof. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
As of September 30, 2000, the Sponsor and its Van Kampen affiliates managed
or supervised more than $100 billion of investment products. The Sponsor and its
Van Kampen affiliates offer more than 50 open-end mutual funds, 37 closed-end
funds, and have sponsored over 2,700 series of fixed income and equity unit
investment trusts.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Portfolio as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE INFORMATION
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust division
offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Portfolio. In accordance with
the Trust Agreement, the Trustee shall keep proper books of record and account
of all transactions at its office for the Portfolio. Such records shall include
the name and address of, and the number of Units of the Portfolio held by, every
Unitholder. Such books and records shall be open to inspection by any Unitholder
at all reasonable times during the usual business hours. The Trustee shall make
such annual or other reports as may from time to time be required under any
applicable state or federal statute, rule or regulation. The Trustee is required
to keep a certified copy or duplicate original of the Trust Agreement on file in
its office available for inspection at all reasonable times during the usual
business hours by any Unitholder, together with a current list of the Securities
held in the Portfolio.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
PORTFOLIO TERMINATION
The Portfolio may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units of the Portfolio then outstanding or by the
Trustee when the value of the Securities owned by the Portfolio, as shown by any
evaluation, is less than $500,000 ($3,000,000 if the value of the Portfolio has
exceeded $15,000,000). The Portfolio will be liquidated by the Trustee in the
event that a sufficient number of Units of the Portfolio not yet sold are
tendered for redemption by the Sponsor, so that the net worth of the Portfolio
would be reduced to less than 40% of the value of the Securities at the time
they were deposited in the Portfolio. If the Portfolio is liquidated because of
the redemption of unsold Units by the Sponsor, the Sponsor will refund to each
purchaser of Units the entire sales charge paid by such purchaser. The Trust
Agreement will terminate upon the sale or other disposition of the last Security
held thereunder, but in no event will it continue beyond the Mandatory
Termination Date.
Commencing during the period beginning nine business days prior to, and no
later than, the Mandatory Termination Date, Securities will begin to be sold in
connection with the termination of the Portfolio. The Sponsor will determine the
manner, timing and execution of the sales of the Securities. The Sponsor shall
direct the liquidation of the Securities in such manner as to effectuate orderly
sales and a minimal market impact. In the event the Sponsor does not so direct,
the Securities shall be sold within a reasonable period and in such manner as
the Trustee, in its sole discretion, shall determine. At least 30 days before
the Mandatory Termination Date the Trustee will provide written notice of any
termination to all Unitholders of the Portfolio and in the case of the Portfolio
will include with such notice a form to enable Unitholders owning 1,000 or more
Units to request an in kind distribution of the U.S.-traded Securities. To be
effective, this request must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date. On the Mandatory Termination Date
(or on the previous business day if a holiday) the Trustee will deliver each
requesting Unitholder's pro rata number of whole shares of the U.S.-traded
Securities in the Portfolio to the account of the broker-dealer or bank
designated by the Unitholder at Depository Trust Company. A Unitholder electing
an in kind distribution will not receive a distribution of shares of the foreign
exchange-traded Securities but will instead receive cash representing his pro
rata portion of such Securities. The value of the Unitholder's fractional shares
of the Securities will be paid in cash. Unitholders with less than 1,000 Units
and Unitholders in the Portfolio with 1,000 or more Units not requesting an in
kind distribution will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Portfolio any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation of
the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Securities in a Portfolio upon termination may result in a lower amount
than might otherwise be realized if such sale were not required at such time.
The Trustee will then distribute to the Unitholder of the Portfolio his pro rata
share of the balance of the Income and Capital Accounts of the Portfolio.
The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent series of the Portfolio. There is, however, no assurance
that units of any new series of the Portfolio will be offered for sale at that
time, or if offered, that there will be sufficient units available for sale to
meet the requests of any or all Unitholders.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in the
same manner.
CONTENTS OF REGISTRATION STATEMENTS
This Amendment No. 2 to the Registration Statement comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
2.1 Form of Code of Ethics. Reference is made to Exhibit 2.1 to the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 223 (File No. 333-34242) dated July 25, 2000.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of securities
being registered.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Accountants.
SIGNATURES
The Registrant, Van Kampen Focus Portfolios, Series 248, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7 and Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 248 has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and State of
Illinois on the 12th day of December, 2000.
Van Kampen Focus Portfolios, Series 248
By Van Kampen Funds Inc.
By Christine K. Putong
------------------------
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed below on December
12, 2000 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President and Chief )
Operations and Technology Officer )
Christine K. Putong
---------------------------
(Attorney-in-fact*)
--------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney is filed
herewith or was filed with the Securities and Exchange Commission in connection
with the Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 136 (File No. 333-70897) and the same are hereby incorporated herein by
this reference.
