MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 271
The Prospectus filed with Amendment No. 1 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 271 on January 16, 2001. 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. 333-53138
CIK #1123037
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: VAN KAMPEN FOCUS PORTFOLIOS, SERIES 271
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 undivided
fractional beneficial 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 January 16, 2001 pursuant to Rule 487.
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
UTILITY PORTFOLIO, SERIES 10
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Van Kampen Focus Portfolios, Series 271 includes the unit investment trust
described above
(the "Portfolio"). The Portfolio seeks to increase the value of your investment
and provide dividend income by investing in a portfolio of companies diversified
within the utility industry. Of course, we cannot guarantee that the Portfolio
will achieve its objective.
JANUARY 16, 2001
YOU SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
--------------------------------------------------------------------------------
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
JANUARY 16, 2001
PUBLIC OFFERING PRICE
Aggregate value of Securities per Unit (1) ............... $ 9.900
Sales charge ............................................. 0.295
Less deferred sales charge ............................. 0.195
Public offering price per Unit (2) ....................... $ 10.000
PORTFOLIO INFORMATION
Initial number of Units (3) .............................. 15,154
Aggregate value of Securities (1) ........................ $ 150,017
Estimated initial distribution per Unit (4) .............. $ 0.17
Estimated annual dividends per Unit (4) .................. $ .21747
Redemption price per Unit (5) ............................ $ 9.705
GENERAL INFORMATION
Initial Date of Deposit ............................ January 16, 2001
Mandatory Termination Date ......................... April 16, 2002
Record Date ........................................ November 10, 2001
Distribution Date .................................. November 25, 2001
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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 for the Portfolio is described on the next page. The public offering
price will also include any accumulated dividends or cash in the Income or
Capital Accounts of the Portfolio.
(3) At the close of the New York Stock Exchange on the Initial Date of Deposit,
the number of Units may be adjusted so that the public offering price per
Unit equals $10. The number of Units and fractional interest of each Unit
in the Portfolio will increase or decrease to the extent of any adjustment.
(4) This estimate is based on the most recently declared quarterly dividends or
interim and final dividends accounting for any foreign withholding taxes.
Actual dividends may vary due to a variety of factors. See "Risk Factors".
(5) The redemption price is reduced by any remaining deferred sales charge. See
"Rights of Unitholders--Redemption of Units". The redemption price includes
the estimated organizational and offering costs. The redemption price will
not include these costs after the initial offering period.
FEE TABLE
TRANSACTION FEES (AS % OF OFFERING PRICE)
Initial sales charge (1)...................................... 1.00%
Deferred sales charge (2)..................................... 1.95%
-----------
Maximum sales charge.......................................... 2.95%
===========
Maximum sales charge on reinvested dividends.................. 0.00%
===========
ESTIMATED ORGANIZATIONAL COSTS PER UNIT (3)................... $ 0.03130
===========
ESTIMATED ANNUAL EXPENSES PER UNIT
Trustee's fee and operating expenses.......................... $ 0.01095
Supervisory and evaluation fees............................... $ 0.00500
-----------
Estimated annual expenses per Unit............................ $ 0.01595
===========
ESTIMATED COSTS OVER TIME
One year...................................................... $ 34
Three years................................................... $ 84
Five years.................................................... $ 136
Ten years..................................................... $ 278
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 all distributions at the end of each year. This example also
assumes that you reinvest your investment into a new trust when the current
Portfolio terminates at the end of each 15 month period. 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 initial sales charge is the difference between the maximum sales charge
and the deferred sales charge.
(2) The deferred sales charge is actually equal to $0.35 per Unit. This amount
will exceed the percentages above if the public offering price per Unit
falls below $10 and will be less than the percentage above if the public
offering price per Unit exceeds $10. The deferred sales charge accrues
daily from May 10, 2001 through October 9, 2001. Your Portfolio pays a
proportionate amount of this charge on the 10th day of each month beginning
in the accrual period until paid in full.
(3) 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.
UTILITY PORTFOLIO
The Portfolio seeks to increase the value of your Units over time and provide
dividend income by investing in a portfolio of common stocks of companies
diversified within the utility industry. Electricity is a necessity of the
technological age of e-mail, e-business, e-commerce, e-marketing, e-tail and
other electronic technologies. Most technological tools will not work without
electricity. In the past, electricity consumption generally grew as a result of
population increases. Today, however, new technologies have created tools that
depend on the use of electricity. The average household twenty years ago had one
or two televisions, one or two telephones, radios/stereos and kitchen
appliances. Today, the average household has several televisions, VCRs and/or
DVD players, stereos, computers with modems and printers, video games, cellular
phones, answering machines, fax machines, microwave ovens and kitchen appliances
which all use electricity. Further, every site visited on the Internet is
constantly available because its server is using electricity. Global positioning
systems depend on information from satellites and substations that run on
electricity.
As technology advances, the demand for electricity may continue to increase,
not only in quantity, but also in reliability. The world is requiring cleaner
energy and increased reliability. The current standard for reliability is 99.9%.
With advances in technology, this level appears not to be high enough. The
current reliability level generally results in 8.8 hours of power disruptions
per year, which is generally acceptable for homes. A reliability level of 99.99%
generally results in 53 minutes of power disruptions per year, which is
generally acceptable for hospitals and airports. However, a reliability level
acceptable for online markets is generally thought to be 99.9999999% which would
result in 0.03 seconds of disruptions per year. Without this level of
reliability, significant loss could occur.
Adaptation will be a key to success in the utility industry. Legislative
changes have led to an increase in deregulation in the traditional utility
industry. Consolidation, technological advances and increased competition have
forced utility companies to diversify into other businesses. Some utilities have
become fiber optic cable providers, while others have expanded to provide
telephone, Internet and cable services. Developments in technology are opening
new opportunities for utilities that may continue as consolidations and
deregulation persist. Consider these points:
o Standard & Poor's projects that from 2000 through 2004, higher demand,
combined with earnings from unregulated businesses could allow utility
profits to increase at a rate of 6% to 10% annually. (S&P Industry Surveys
Natural Gas Distribution, May 11, 2000)
o Information technology and telecommunications have already fueled a rise in
energy consumption and the demand could increase. (CBSMarketWatch.com,
September 15, 2000)
o Utilities have been the best performing industry sector in the past year.
(TheStreet.com, September 15, 2000)
No one can guarantee that these trends will continue or be realized. No one
can guarantee that continuation of these trends or realization of these
estimates will have a positive impact on the performance of your investment.
Utility stocks have recently exhibited above-average price appreciation. This
has not always been the case and no one can assure you that this will continue
or that the performance of these stocks will replicate the performance exhibited
in the past. Of course, we cannot guarantee that your 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.
<TABLE>
<CAPTION>
PORTFOLIO
-------------------------------------------------------------------------------------------------------------
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>
AEROSPACE & DEFENSE
89 FuelCell Energy, Inc. $ 60.813 0.00% $ 5,412.31
ALTERNATIVE POWER GENERATION
186 Calpine Corporation 33.250 0.00 6,184.50
242 NRG Energy, Inc. 24.000 0.00 5,808.00
ELECTRIC UTILITIES
95 Dominion Resources, Inc. 58.250 4.43 5,533.75
83 Duke Energy Corporation 70.125 1.57 5,820.38
157 Entergy Corporation 35.125 3.59 5,514.63
96 Exelon Corporation 56.960 1.11 5,468.16
201 NiSource, Inc. 27.438 4.23 5,514.94
135 Pinnacle West Capital Corporation 40.563 3.70 5,475.94
235 Public Service Company of New Mexico 24.000 3.33 5,640.00
164 Reliant Energy, Inc. 34.000 4.41 5,576.00
247 Southern Energy, Inc. 22.375 0.00 5,526.63
203 TECO Energy, Inc. 27.563 4.86 5,595.19
208 Utilicorp United, Inc. 26.500 4.53 5,512.00
220 Xcel Energy, Inc. 24.938 6.02 5,486.25
ELECTRICAL PRODUCTS
174 Capstone Turbine Corporation 34.188 0.00 5,948.63
GAS DISTRIBUTORS
95 Equitable Resources, Inc. 57.938 2.04 5,504.06
144 KeySpan Corporation 37.313 4.77 5,373.00
119 Kinder Morgan, Inc. 46.438 0.43 5,526.06
99 National Fuel Gas Company 55.563 3.46 5,500.69
198 Questar Corporation 27.938 2.51 5,531.63
629 TNPC, Inc. 8.063 0.00 5,071.31
MAJOR TELECOMMUNICATIONS
105 SBC Communications, Inc. 50.938 1.99 5,348.44
OIL & GAS PIPELINES
137 Dynegy, Inc. 43.000 0.70 5,891.00
87 El Paso Energy Corporation 62.813 1.31 5,464.69
78 Enron Corporation 70.438 0.71 5,494.13
WIRELESS TELECOMMUNICATIONS
187 Sprint Corporation (PCS Group) 28.313 0.00 5,294.44
---------- -------------
4,613 $ 150,016.76
========== =============
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
January 12, 2001 and have a settlement date of January 18, 2001 (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
------------ ---------
$ 150,017 $ --
(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 most recent
close of trading on 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.
Calpine Corporation. Calpine Corporation acquires, develops, owns, and
operates power generation facilities, as well as sells electricity in the United
States. The company also provides thermal energy for industrial customers.
Capstone Turbine Corporation. Capstone Turbine Corporation designs,
assembles, and sells Capstone MicroTurbines for worldwide applications in the
distributed power generation and hybrid electric vehicle markets. The Capstone
MicroTurbine is a low-emissions power generation system that combines a gas
turbine-driven high-speed generator with power electronics.
Dominion Resources, Inc. Dominion Resources, Inc., a diversified utility
holding company, generates, transmits, distributes, and sells electric energy in
Virginia and northeastern North Carolina. The company produces, transports,
distributes, and markets natural gas to customers in the Northeast and
Mid-Atlantic regions of the United States.
Duke Energy Corporation. Duke Energy Corporation, is an integrated energy
company delivering both electricity and natural gas to customers throughout the
U.S. and abroad. The company is a domestic gatherer and processor of natural gas
and develops, constructs and operates energy facilities worldwide. Duke Energy
also actively trades and markets energy-related commodities around the globe.
Dynegy, Inc. Dynegy, Inc. provides energy products and services in North
America and the United Kingdom. The company markets natural gas, electricity,
coal, natural gas liquids, crude oil, liquid petroleum gas, and related
services.
El Paso Energy Corporation. El Paso Energy Corporation owns an integrated
coast-to-coast natural gas pipeline system in the United States. The company has
operations in interstate natural gas transmission, gas gathering and processing,
international infrastructure development, and energy marketing. El Paso Energy's
international assets include pipeline and power generation.
Enron Corporation. Enron Corporation conducts electricity, natural gas, and
communications businesses. The company produces electricity and natural gas,
develops, constructs, and operates energy facilities worldwide, and delivers
both physical commodities and financial and risk management services to
customers. The company is also developing an intelligent network platform to
facilitate online business.
Entergy Corporation. Entergy Corporation is an energy company that is
primarily focused on electric power production, marketing and trading services,
and distribution operations. The company is headquartered in the United States
and has energy and investment operations in Latin America, North America,
Europe, and Australia.
Equitable Resouces, Inc. Equitable Resources, Inc. is an integrated energy
company providing natural gas in the Appalachian area, natural gas transmission
and distribution, and energy management solutions. The company also has
exploration and production interests in the Gulf of Mexico, as well as energy
service management projects internationally.
Exelon Corporation. Exelon Corporation distributes electricity and gas to
customers in Illinois and Pennsylvania. The company also has holdings in
infrastructure services, energy services, and telecommunications businesses.
FuelCell Energy, Inc. FuelCell Energy, Inc. develops and commercializes
fuel cell power plants for electric power generation. The company also has
contracts to develop its fuel cells for use of alternative fuels and for marine
transportation applications. FuelCell has research and development contracts
with government and industry.
KeySpan Corporation. KeySpan Corporation, through its subsidiaries,
distributes natural gas to customers in New York City and on Long Island, New
York. The company also provides gas-marketing and energy services, generates
electricity, and provides electric transmission-and-distribution operating
services and customer-billing services.
Kinder Morgan, Inc. Kinder Morgan, Inc. is a midstream energy company,
operating natural gas and product pipelines, retail distribution, electric
generation and terminal assets. Kinder Morgan, Inc., through its general partner
interest, also operates Kinder Morgan Energy Partners, L.P., a pipeline master
limited partnership.
National Fuel Gas Company. National Fuel Gas Company is an integrated
natural gas company with operations in all segments of the natural gas industry,
including utility, pipeline and storage, exploration and production, and
marketing operations. The company operates across the United States.
NiSource, Inc. NiSource, Inc. is an utility/energy-based holding company
providing electric energy, natural gas, and water to the public. The company,
through its subsidiaries, markets and trades energy, generates power, transmits,
supplies, and stores gas, develops and manages energy projects, installs,
repairs, and maintains underground pipelines, and locates utility lines.
NRG Energy, Inc. NRG Energy, Inc., a global energy company, acquires,
develops, constructs, owns, and operates power generation facilities. The
company's operations utilize such diverse fuel sources as natural gas, oil,
coal, and refuse derived fuel.
Pinnacle West Capital Corporation. Pinnacle West Capital Corporation is a
utility holding company. The company's Arizona Public Service Company subsidiary
provides electricity service in the state of Arizona. The company also owns
SunCor Development Company, which holds, develops, and sells real estate.
Public Service Company of New Mexico. Public Service Company of New Mexico
generates, transmits, distributes, and sells electricity. The company provides
retail electric service to customers in New Mexico. Public Service Company also
transmits, distributes, and sells natural gas within New Mexico. The company's
activities also include energy management services and management services for
water and wastewater systems.
Questar Corporation. Questar Corporation is an integrated energy services
holding company which operates through its market resources and regulated
services divisions. The company develops and produces energy, gathers and
processes gas, and trades wholesale gas, electricity, and hydrocarbon liquids.
Questar also conducts interstate gas transmission and storage activities and
retail gas distribution services.
Reliant Energy, Inc. Reliant Energy, Inc. is an international energy
services company. The company's retail group consists of three natural gas
utilities and one electric utility, as well as a retail marketing group which
provides unregulated retail energy products and services. Reliant's wholesale
group invests in power generation projects and provides wholesale trading and
marketing services.
SBC Communications, Inc. SBC Communications, Inc. provides communications
services in the United States and in other countries. The company provides local
and long-distance phone service, wireless and data communications, paging,
Internet access and messaging, cable and satellite television, security
services, and telecommunications equipment. SBC also provides directory
advertising and publishing.
Southern Energy, Inc. Southern Energy, Inc. provides electricity and
energy-related products and services. The company operates in the Americas,
Europe, and the Asia-Pacific region.
Sprint Corporation (PCS Group). Sprint Corporation (PCS Group) operates a
100% digital, 100% personal cellular communication system (PCS) nationwide
wireless network in the United States. The company currently serves the United
States, Puerto Rico and the US Virgin Islands.
TECO Energy, Inc. TECO Energy, Inc. is a diversified, energy-related
utility holding company. The company, through various subsidiaries, provides
retail electric service to customers in west central Florida, as well as
purchases, distributes, and markets natural gas for residential, commercial,
industrial, and electric power generation customers.
TNPC, Inc. TNPC, Inc. provides electricity and natural gas to residential
and small commercial customers in the United States.
UtiliCorp United, Inc. UtiliCorp United, Inc. is a multinational energy
solutions provider. The company's network segment includes network generation,
distribution and transmission businesses, as well as appliance repair. The
energy merchant segment includes energy marketing and trading businesses,
natural gas gathering, processing and transportation, and independent power
projects.
Xcel Energy, Inc. Xcel Energy, Inc. provides electric and natural gas
services. The company offers a variety of energy-related services, including
generation, transmission, and distribution of electricity and natural gas
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 271:
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 271 as of January 16, 2001.
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 271 as of January 16, 2001, in conformity with accounting
principles generally accepted in the United States of America.
GRANT THORNTON LLP
Chicago, Illinois
January 16, 2001
STATEMENT OF CONDITION
AS OF JANUARY 16, 2001
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) .............................. $150,017
--------
Total ........................................................ $150,017
========
LIABILITY AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) ..................................... $ 474
Deferred sales charge liability (3) .......................... 2,955
Interest of Unitholders--
Cost to investors (4) ........................................ 151,540
Less: Gross underwriting commission and organizational
costs (2)(4)(5) .............................................. 4,952
--------
Net interest to Unitholders (4) .......................... 146,588
--------
Total .................................................... $150,017
========
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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 separate irrevocable
letters of credit which have 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) Represents the amount of mandatory distributions from the Portfolio on the
bases set forth under "Public Offering".
(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering-- Offering Price".
(5) Assumes the maximum sales charge.
THE 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 the "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) 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 Portfolio seeks to increase the value of your investment by investing in
a portfolio of common stocks. We cannot guarantee that a Portfolio will achieve
its objective. We describe the objective and selection criteria for the
Portfolio on page 4.
You should note that we applied the selection criteria to the Securities for
inclusion in the Portfolios prior to the Initial Date of Deposit. After the
initial selection, the Securities may no longer meet the selection criteria.
Should a Security no longer meet the selection criteria, we will generally not
remove the Security from its Portfolio.
A balanced investment portfolio incorporates various style and capitalization
characteristics. We offer unit trusts with a variety of styles and
capitalizations to meet your needs. We determine style characteristics (growth
or value) based on the criteria used in selecting the Portfolio. Generally, a
growth portfolio includes companies in a growth phase of their business with
increasing earnings. A value portfolio generally includes companies with low
relative price-earnings ratios that we believe are undervalued. We determine
market capitalizations as follows based on the weighted median market
capitalization of a portfolio: Small-Cap -- less than $1.7 billion; Mid-Cap --
$1.7 billion to $10.5 billion; and Large-Cap -- over $10.5 billion. We determine
all style and capitalization characteristics as of the Initial Date of Deposit
and the characteristics may vary thereafter. We will not remove a Security from
the Portfolio as a result of any change in characteristics.
RISK FACTORS
--------------------------------------------------------------------------------
PRICE VOLATILITY. The Portfolio invests in stocks of U.S. companies. The
value of Units will fluctuate with the value of these stocks and may be more or
less than the price you originally paid for your Units. The market value of
stocks sometimes moves up or down rapidly and unpredictably. Because the
Portfolio is unmanaged, the Trustee will not sell stocks in response to market
fluctuations as is common in managed investments. In addition, because the
Portfolio holds a relatively small number of stocks, you may encounter greater
market risk than in a more diversified investment. As with any investment, we
cannot guarantee that the performance of the Portfolio will be positive over any
period of time.
DIVIDENDS. Common stocks represent ownership interests in the issuers and are
not obligations of the issuers. Accordingly, 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.
UTILITY ISSUERS. The Portfolio invests in utility companies. Many utility
companies, especially electric and gas and other energy related utility
companies, are subject to various uncertainties, including:
o risks of increases in fuel and other operating costs;
o restrictions on operations and increased costs and delays as a result
of environmental, nuclear safety and other regulations;
o coping with the general effects of energy conservation;
o technological innovations which may render existing plants, equipment
or products obsolete;
o the effects of local weather, maturing markets and difficulty in
expanding to new markets due to regulatory and other factors;
o the potential impact of natural or man-made disasters;
o difficulty obtaining adequate returns on invested capital, even if
frequent rate increases are approved by public service commissions;
o the high cost of obtaining financing during periods of inflation;
o difficulties of the capital markets in absorbing utility debt and
equity securities; and
o increased competition.
Any of these factors, or a combination of these factors, could affect the
supply of or demand for electricity, natural gas, water or other energy, which
could adversely affect the profitability of the issuers of the Securities and
the performance of the Portfolio.
Utility companies are subject to extensive regulation at the federal and
state levels in the United States. At the federal level, the Federal Energy
Regulatory Commission (the "FERC"), the Federal Trade Commission (the "FTC"),
the Securities and Exchange Commission (the "SEC"), and the Nuclear Regulatory
Commission (the "NRC") have authority to oversee electric and combination
electric and gas utilities. The value of utility company stocks may decline
because governmental regulation controlling the utilities industry can change.
This regulation may prevent or delay the utility company from passing along cost
increases to its customers. Furthermore, regulatory authorities, which may be
subject to political and other pressures, may not grant future rate increases,
or may impose accounting or operational policies, any of which could adversely
affect a company's profitability and its stock price. Mergers in the utility
industry may require approval from several federal and state regulatory
agencies, including FERC, the FTC, and the SEC. These regulatory authorities
could, as a matter of policy, reverse the trend toward deregulation and make
consolidation more difficult, or cause delay in the merger process, any of which
could cause the prices of these stocks to fall.
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 initial sales charge, and cash, if any,
in the Income and Capital Accounts. The "Fee Table" describes the sales charges
in detail. If any deferred sales charge payment date is not a business day, we
will charge the payment on the next business day. If you purchase Units after
the initial deferred sales charge payment, you will only pay that portion of the
payments not yet collected. A portion of the Public Offering Price includes an
amount of Securities to pay for all or a portion of the costs incurred in
establishing your Portfolio, including 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). The initial offering period sales charge
is reduced as follows:
TRANSACTION
AMOUNT* SALES CHARGE
-------------- --------------
Less than $50,000 2.95%
$50,000 - $99,999 2.70
$100,000 - $249,999 2.50
$250,000 - $499,999 2.25
$500,000 - $999,999 2.00
$1,000,000 or more 1.50
---------------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. An investor may aggregate purchases of Units of the Portfolio
for purposes of qualifying for volume purchase discounts listed above. The
reduced sales charge structure will also apply on all purchases by the same
person from any one dealer of units of Van Kampen-sponsored unit investment
trusts which are being offered in the initial offering period (a) on any one day
(the "Initial Purchase Date") or (b) on any day subsequent to the Initial
Purchase Date if the units purchased are of a unit investment trust purchased on
the Initial Purchase Date. In the event units of more than one trust are
purchased on the Initial Purchase Date, the aggregate dollar amount of such
purchases will be used to determine whether purchasers are eligible for a
reduced sales charge. Such aggregate dollar amount will be divided by the public
offering price per unit of each respective trust purchased to determine the
total number of units which such amount could have purchased of each individual
trust. Purchasers must then consult the applicable trust's prospectus to
determine whether the total number of units which could have been purchased of a
specific trust would have qualified for a reduced sales charge and the amount of
such reduction. To determine the applicable sales charge reduction it is
necessary to accumulate all purchases made on the Initial Purchase Date and all
purchases made in accordance with (b) above. Units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser ("immediate
family members") will be deemed to be additional purchases by the purchaser for
the purposes of calculating the applicable sales charge. The reduced sales
charges will also be applicable to a trustee or other fiduciary purchasing
securities for one or more trust estate or fiduciary accounts. 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 deferred 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.
During the initial offering period of the Portfolio offered in this
prospectus, unitholders of any Van Kampen-sponsored unit investment trust 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%.
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.
Your Portfolio will charge the deferred sales charge per Unit regardless of
any discounts. However, if you are eligible to receive a discount such that the
sales charge you must pay is less than the applicable deferred sales charge, you
will be credited the difference between your sales charge and the deferred sales
charge at the time you buy your Units. If you elect to have distributions
reinvested into additional Units of your Portfolio, in addition to the
reinvestment Units you receive you will also be credited additional Units with a
dollar value sufficient to cover the amount of any remaining deferred sales
charge to be collected on such Units at the time of reinvestment. The dollar
value of these Units will fluctuate over time.
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.
TRANSACTION
AMOUNT* CONCESSION
-------------- --------------
Less than $50,000 2.25%
$50,000 - $99,999 2.00
$100,000 - $249,999 1.75
$250,000 - $499,999 1.50
$500,000 - $999,999 1.25
$1,000,000 or more 0.75
---------------
*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 regular concession or agency commission earned by selling
firms, 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 $.01 per Unit; any
firm that distributes 2,000,000 - 2,999,999 Units will receive $.015 per Unit;
and any firm that distributes 3,000,000 Units or more will receive $.02 per
Unit.
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 Van Kampen unit investment trusts who use their redemption or
termination proceeds to purchase Units of the Portfolio, the total concession or
agency commission will amount to 1.30% per Unit. For all secondary market
transactions the total concession or agency commission will amount to 70% of the
sales charge. Notwithstanding anything to the contrary herein, in no case shall
the total of any concessions, agency commissions and any additional compensation
allowed or paid to any broker, dealer or other distributor of Units with respect
to any individual transaction exceed the total sales charge applicable to such
transaction. The Sponsor reserves the right to reject, in whole or in part, any
order for the purchase of Units and to change the amount of the concession or
agency commission to dealers and others from time to time.
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 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. In maintaining a secondary market, the Sponsor will
realize profits or losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge) or from a redemption of repurchased Units
at a price above or below the purchase price. Cash, if any, made available to
the Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the Sponsor,
subject to the limitations of the Securities Exchange Act of 1934.
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 the 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. Although it is not obligated to do so, the Sponsor
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Sponsor may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market.
Units sold prior to the time the entire deferred sales charge has been collected
will be assessed the amount of any remaining deferred sales charge at the time
of sale. The Trustee will notify the Sponsor of any tendered Units for
redemption. If the Sponsor's bid in the secondary market equals or exceeds the
Redemption Price per Unit, it may purchase the Units not later than the day on
which Units would have been redeemed by the Trustee. The Sponsor may sell
repurchased Units at the secondary market Public Offering Price per Unit.
RETIREMENT ACCOUNTS
--------------------------------------------------------------------------------
Units are available for purchase in connection with certain types of
tax-sheltered retirement plans, including Individual Retirement Accounts for the
individuals, Simplified Employee Pension Plans for employees, qualified plans
for self-employed individuals, and qualified corporate pension and profit
sharing plans for employees. The minimum purchase for these accounts is reduced
to 25 Units but may vary by selling firm. The purchase of Units may be limited
by the plans' provisions and does not itself establish such plans.
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 on purchase 0.00%
Deferred sponsor retention 0.70
-----
Total 0.70%
=====
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 are listed 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 deferred sales charges, fees or expenses, will be distributed to
Unitholders. Proceeds received from the disposition of any Securities after a
record date and prior to the following distribution date will be held in the
Capital Account and not distributed until the next distribution date. Any
distribution to Unitholders consists of each Unitholder's pro rata share of the
available cash in the Income and Capital Accounts as of the related Record Date.
REINVESTMENT OPTION. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option without a
sales charge (to the extent Units may be lawfully offered for sale in the state
in which the Unitholder resides) through two options, if available. Brokers and
dealers can use the Dividend Reinvestment Service through Depository Trust
Company or purchase the Automatic Reinvestment Option CUSIP, if available. 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 will 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, (b) the accrued expenses of the Portfolio and (c) any unpaid deferred
sales charge payments. During the initial offering period, the redemption price
and the secondary market repurchase price will also include estimated
organizational costs. For these purposes, the Evaluator may determine the value
of 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 or deferred sales charges.
If securities or property are 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 a Security, 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's 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 the 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 the
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 offices at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, Illinois 60181-5555, (630)
684-6000. As of November 30, 2000, the total stockholders' equity of Van Kampen
Funds Inc. was $161,761,917 (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
(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
--------------------------------------------------------------------------------
The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units of the
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. Your 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 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 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.
DEFERRED SALES CHARGE. Generally, the tax basis of a Unitholder includes
sales charges, and such charges are not deductible. A portion of the sales
charge for the Portfolio is deferred. The income (or proceeds from redemption) a
Unitholder must take into account for federal income tax purposes is not reduced
by amounts deducted to pay the deferred sales charge. Unitholders should consult
their own tax advisers as to the income tax consequences of the deferred sales
charge.
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 regardless of whether such
dividends are used to pay a portion of a deferred sales charge. 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. 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 the
holding period of which is 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.
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.
OTHER MATTERS. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the 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 may pay the expenses of updating its
registration statement each year.
OTHER MATTERS
--------------------------------------------------------------------------------
LEGAL OPINIONS. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. The statement of condition and the
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 your 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
Utility Portfolio........................... 4
Notes to the 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-15
Other Matters............................... A-16
Additional Information...................... A-16
--------------
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.
EMSPRO271
#37745
PROSPECTUS
--------------------------------------------------------------------------------
JANUARY 16, 2001
VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.
UTILITY PORTFOLIO, SERIES 10
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 271
--------------------------------------------------------------------------------
This Information Supplement provides additional information concerning the
risks and operations of the Portfolio which is not described in the Prospectus.
This Information Supplement should be read in conjunction with the Prospectus.
This Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in the Portfolio
and may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at 1 Parkview Plaza, P.O.
Box 5555, Oakbrook Terrace, Illinois 60181-5555 or by contacting your broker.
This Information Supplement is dated as of the date of the Prospectus and all
capitalized terms have been defined in the Prospectus.
TABLE OF CONTENTS
PAGE
Risk Factors ................................................ 2
The Portfolio ............................................... 4
Sponsor Information ......................................... 4
Trustee Information ......................................... 5
Portfolio Termination ....................................... 5
RISK FACTORS
PRICE VOLATILITY. Because the Portfolio invests in common stocks of U.S.
and foreign companies, you should understand the risks of investing in common
stocks before purchasing Units. These risks include the risk that the financial
condition of the company or the general condition of the stock market may worsen
and the value of the stocks (and therefore Units) will fall. Common 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 the 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. In addition, because
the Portfolio holds a relatively small number of stocks, you may encounter
greater market risk than in a more diversified investment.
DIVIDENDS. Common stocks represent ownership interests in a company and are
not obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means that
common stockholders have a right to receive dividends only if a company's board
of directors declares a dividend and the company has provided for payment of all
of its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.
LIQUIDITY. Whether or not the stocks in 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.
UTILITY ISSUERS. An investment in Units of certain Portfolios should be made
with an understanding of the characteristics of the public utility industry and
the risks which such an investment may entail. General problems of the public
utility industry include the difficulty in obtaining an adequate return on
invested capital despite frequent increases in rates which have been granted by
the public service commissions having jurisdiction, the difficulty in financing
large construction programs during an inflationary period, the restrictions on
operations and increased cost and delays attributable to environmental, nuclear
safety and other regulatory considerations, the difficulty of the capital
markets absorbing utility debt and equity securities, the difficulty in
obtaining fuel for electric generation at reasonable prices, and the effects of
energy conservation. There is no assurance that public service commissions will
grant rate increases in the future or that any such increases will be timely or
adequate to cover operating and other expenses and debt service requirements.
All of the public utilities which are issuers of the Securities have been
experiencing many of these problems in varying degrees. Furthermore, utility
stocks are particularly susceptible to interest rate risk, generally exhibiting
an inverse relationship to interest rates. As a result, electric utility stock
prices may be adversely affected as interest rates rise. Similarly, the success
of certain companies is tied to a relatively small concentration of products or
technologies with intense competition between 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 from other
customers. Accordingly, a decline in demand of such products, technologies or
from such customers could have a material adverse impact on issuers of the
Securities.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and the
appropriate rate of return on an approved asset base, which must be approved by
the state commissions. Certain utilities have had difficulty from time to time
in persuading regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment. Any unexpected
limitations could negatively affect the profitability of utilities whose budgets
are planned far in advance. In addition, gas pipeline and distribution companies
have had difficulties in adjusting to short and surplus energy supplies,
enforcing or being required to comply with long-term contracts and avoiding
litigation with their customers, on the one hand, or suppliers, on the other.
Certain of the issuers of the Securities may own or operate nuclear
generating facilities. Governmental authorities may from time to time review
existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating projects
in the electric utility industry have experienced substantial cost increases,
construction delays and licensing difficulties. These have been caused by
various factors, including inflation, high financing costs, required design
changes and rework, allegedly faulty construction, objections by groups and
governmental officials, limits on the ability to finance, reduced forecasts of
energy requirements and economic conditions. This experience indicates that the
risk of significant cost increases, delays and licensing difficulties remain
present until completion and achievement of commercial operation of any nuclear
project. Also, nuclear generating units in service have experienced unplanned
outages or extensions of scheduled outages due to equipment problems or new
regulatory requirements sometimes followed by a significant delay in obtaining
regulatory approval to return to service. A major accident at a nuclear plant
anywhere could cause the imposition of limits or prohibitions on the operation,
construction or licensing of nuclear units.
In view of the uncertainties discussed above, there can be no assurance
that any utility company's share of the full cost of nuclear units under
construction ultimately will be recovered in rates or the extent to which a
company could earn an adequate return on its investment in such units. The
likelihood of a significantly adverse event occurring in any of the areas of
concern described above varies, as does the potential severity of any adverse
impact. It should be recognized, however, that one or more of such adverse
events could occur and individually or collectively could have a material
adverse impact on a company's financial condition, the results of its
operations, its ability to make interest and principal payments on its
outstanding debt or to pay dividends.
Other general problems of the electric, gas and water utility industries
(including state and local joint action power agencies) include rising costs of
rail transportation to transport fossil fuels, the uncertainty of transmission
service costs for both interstate and intrastate transactions, changes in tax
laws which adversely affect a utility's ability to operate profitably, increased
competition in service costs, recent reductions in estimates of future demand
for electricity and gas in certain areas of the country, restrictions on
operations and increased cost and delays attributable to environmental
considerations, uncertain availability and increased cost of capital,
unavailability of fuel for electric generation at reasonable prices, including
the steady rise in fuel costs and the costs associated with conversion to
alternate fuel sources such as coal, availability and cost of natural gas for
resale, technical and cost factors and other problems associated with
construction, licensing, regulation and operation of nuclear facilities for
electric generation, including, among other considerations, the problems
associated with the use of radioactive materials and the disposal of radioactive
wastes, and the effects of energy and environmental conservation efforts. Each
of the problems referred to could adversely affect the ability of the issuers of
any Securities to make dividend payments and the value of such Securities on
redemption of your Units.
THE PORTFOLIO
In seeking the Portfolio's objectives, the Sponsor considered the ability
of the Securities to outpace inflation. While inflation is currently relatively
low, the United States has historically experienced periods of double-digit
inflation. While the prices of securities will fluctuate, over time securities
have outperformed the rate of inflation, and other less risky investments, such
as government bonds and U.S. Treasury bills. Past performance is, however, no
guarantee of future results.
Investors should note that the above criteria were applied to the
Securities for inclusion in the Portfolio prior to the Initial Date of Deposit.
Should a Security no longer meet the criteria used for selection for the
Portfolio, such Security will not as a result thereof be removed from the
portfolio except as provided in the Trust Agreement.
SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
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. ("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; 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, 2000,
the total stockholders' equity of Van Kampen Funds Inc. was $161,761,917
(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 Portfolios.
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 will also 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 prior
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. The value of the Unitholder's fractional shares of the
Securities will be paid in cash. Unitholders with less than 1,000 Units,
Unitholders in the 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 appropriate 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 the 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 each Unitholder of the Portfolio his
pro rata share of the balance of the Income and Capital Accounts of the
Portfolio.
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 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 271, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7; Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89; Van Kampen Focus Portfolios,
Series 235 and Series 265 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 271 has duly caused this
Amendment 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 16th day of January, 2001.
Van Kampen Focus Portfolios, Series 271
By Van Kampen Funds Inc.
By Christine K. Putong
------------------------------
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on January 16,
2001 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmermann III President )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President and Chief )
Operations and Technology Officer )
Christine K. Putong
---------------------
(Attorney-in-fact*)
--------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney is filed
herewith or was filed with the Securities and Exchange Commission in connection
with the Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 136 (File No. 333-70897) and the same are hereby incorporated herein by
this reference.
