Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen Merritt Equity Opportunity Trust, Series 1
(Exact Name of Trust)
Van Kampen Merritt Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen Merritt Inc. Chapman and Cutler
Attention: John C. Merritt Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on April 25, 1994 pursuant to paragraph (b) of Rule 485.
Van Kampen Merritt Equity Opportunity Trust, Series 1
Van Kampen Merritt Select Equity Trust, Series 1
Van Kampen Merritt Select Equity and Treasury Trust, Series 1
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
Please retain both parts of this Prospectus for future reference.
THE TRUST
The above-named series of Van Kampen Merritt Equity Opportunity Trust
(the "Trust") is comprised of two separate and distinct unit investment
trusts, Van Kampen Merritt Select Equity Trust (the "Select Equity Trust") and
Van Kampen Merritt Select Equity and Treasury Trust (the "Select Equity and
Treasury Trust"). The Select Equity Trust offers investors the opportunity to
purchase Units representing proportionate interests in a fixed, diversified
portfolio of the 30 actively traded "blue chip" equity securities which
currently are components of the Dow Jones Industrial Average.* The Select
Equity and Treasury Trust offers investors the opportunity to purchase Units
representing proportionate interests in the same equity securities as are in
the Select Equity Trust plus "zero coupon" U.S. Treasury obligations. Dow
Jones & Company, Inc. has not participated in any way in the creation of the
Trust or in the selection of stocks included in either Trust and has not
approved any information herein relating thereto. Unless terminated earlier,
each Trust will terminate on May 15, 2002 and any securities then held will,
within a reasonable time thereafter, be liquidated or distributed by the
Trustee. Any Securities liquidated at termination will be sold at the then
current market value for such Securities; therefore, the amount distributable
in cash to a Unitholder upon termination may be more or less than the amount
such Unitholder paid for his Units.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit of each Trust is equal to the
aggregate underlying value of the Equity Securities in such Trust (plus, in
the case of the Select Equity and Treasury Trust, the aggregate bid price of
the Treasury Obligations) plus or minus cash, if any, in the Capital and
Income Accounts, divided by the number of Units outstanding, plus a sales
charge of 4.5% of the Public Offering Price (excluding any transaction fees)
which is equivalent to 4.712% of the aggregate underlying value of the
Securities. See "Summary of Essential Financial Information" in Part
Two.
ESTIMATED CURRENT AND LONG-TERM RETURNS
Estimated Current and Long-Term Returns to Unitholders are indicated
under "Summary of Essential information" in this Part One. The methods of
calculating Estimated Current Returns and Estimated Long-Term Return are set
forth in Part Two of this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
* The Dow Jones Industrial Average is the property of Dow Jones &
Company, Inc. Dow Jones & Company, Inc. has not granted to the Trust or the
Sponsor a license to use the Dow Jones Industrial Average.
The Date of this Prospectus is April 20, 1994
Van Kampen Merritt
Page 1
<PAGE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 1
(Select Equity Trust)
<TABLE>
Summary of Essential Financial Information
As of March 4, 1994
Sponsor: Van Kampen Merritt Inc.
Supervisor: Van Kampen Merritt Investment
Advisory Corp. (a subsidiary of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Select Equity Trust
<S> <C>
-------------------
General Information
Number of Units ......................................................................................... 436,264
Fractional Undivided Interest in the Trust per Unit ..................................................... 1/ 436,264
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>...................................................... $ 5,664,535.43
Aggregate Value of Securities per Unit (including accumulated dividends) ............................ 13.04
Sales charge 3.9% (4.0583% of Aggregate Value of Securities excluding principal cash)
per Unit <F3>...................................................................................... $ .53
Principal Cash per Unit ............................................................................. $ --
Public Offering Price per Unit <F1><F2><F3>.......................................................... $ 13.57
Redemption Price per Unit ............................................................................... $ 13.04
Secondary Market Repurchase Price per Unit .............................................................. $ 12.98
Excess of Public Offering Price per Unit over Redemption Price per Unit ................................. $ .53
Supervisor's Annual Supervisory Fee Maximum of $0.0025 per Unit
Evaluator's Annual Evaluation Fee Maximum of $0.0025 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are
made as of the close of trading on the New York Stock Exchange
(currently 4:00 P.M. New York time) next following receipt of an order
for a sale or purchase of Units or receipt by the Trustee of Units
tendered for redemption.
Date of Deposit ..................November 21, 1991
Mandatory Termination Date .......May 15, 2002
Minimum Termination Value ........The Select Equity Trust may be terminated if
the net asset value of such Trust is less
than $500,000 unless the net asset value of
such Trust deposits has exceeded
$15,000,000, then the Trust Agreement may be
terminated if the net asset value of such
Trust is less than $3,000,000.
Trustee's Annual Fee .............$.008 per Unit
Income Distribution Record Date ..Fifteenth day of March, June, September and
December.
Income Distribution Date .........Last day of March, June, September and
December.
Capital Account Record Date ......Fifteenth day of December.
Capital Account Distribution Date Last day of December.
<FN>
<F1>Equity Securities listed on a national securities exchange are valued
at the last available sale price on or immediately prior to the Evaluation
Time, or if no such price exists, at the mean between the last available bid
and offer prices.
<F2>Plus accumulated dividends.
<F3>Effective on each December 1, commencing December 1, 1992, the
secondary sales charge will decrease by .3 of 1% to a minimum sales charge of
1.5%. See "Public Offering--Offering Price".
</TABLE>
Page 2
<PAGE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 1
(Select Equity and Treasury Trust)
<TABLE>
Summary of Essential Financial Information
As of March 4, 1994
Sponsor: Van Kampen Merritt Inc.
Supervisor: Van Kampen Merritt Investment
Advisory Corp. (a subsidiary of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Select Equity and
Treasury Trust
<S> <C>
-------------------
General Information
Aggregate Maturity Value of Treasury Obligations ........................................................ $ 27,000,000
Number of Units ......................................................................................... 2,376,197
Fractional Undivided Interest in the Trust per Unit ..................................................... 1/ 2,376,197
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>...................................................... $ 29,109,009.17
Aggregate Value of Securities per Unit (including accumulated dividends) ............................ $ 12.27
Sales charge 3.9% (4.0583% of Aggregate Value of Securities excluding principal cash)
per Unit <F3>...................................................................................... $ .50
Principal Cash per Unit ............................................................................. $ --
Public Offering Price per Unit <F1><F2><F3>.......................................................... $ 12.77
Redemption Price per Unit ............................................................................... $ 12.28
Secondary Market Repurchase Price per Unit .............................................................. $ 12.25
Excess of Public Offering Price per Unit over Redemption Price per Unit ................................. $ .49
Supervisor's Annual Supervisory Fee Maximum of $0.0025 per Unit
Evaluator's Annual Evaluation Fee Maximum of $0.0025 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are
made as of the close of trading on the New York Stock Exchange
(currently 4:00 P.M. New York time) next following receipt of an order
for a sale or purchase of Units or receipt by the Trustee of Units
tendered for redemption.
Mandatory Termination Date .......May 15, 2002
Trustee's Annual Fee .............$.008 per Unit
Income Distribution Record Date ..Fifteenth day of March, June, September and
December.
Income Distribution Date .........Last day of March, June, September and
December.
Capital Account Record Date ......Fifteenth day of December.
Capital Account Distribution Date Last day of December.
<FN>
<F1>Equity Securities listed on a national securities exchange are valued
at the last available sale price on or immediately prior to the Evaluation
Time, or if no such price exists, at the mean between the last available bid
and offer prices.
<F2>Plus accumulated dividends.
<F3>Effective on each December 1, commencing December 1, 1992, the
secondary sales charge will decrease by .3 of 1% to a minimum sales charge of
1.5%. See "Public Offering--Offering Price".
</TABLE>
Page 3
<PAGE>
PORTFOLIO
The Select Equity Trust consists of 31 different issues of Equity
Securities, all of which are actively traded, blue-chip securities issued by
large, well established corporations and all of which, taken together,
currently are components of the Dow Jones Industrial Average. Each issue, as
of the Initial Date of Deposit, represented approximately the same dollar
value of a portfolio since the Sponsor utilized a dollar weighted average
approach in acquiring such Equity Securities. Dow Jones & Company, Inc., owner
of the Dow Jones Industrial Average, has not granted to the Fund or the
Sponsor a license to use the Dow Jones Industrial Average. Units are not
designed so that their prices will parallel or correlate with movements in the
Dow Jones Industrial Average, and it is expected that their prices will not
parallel or correlate with such movements. Dow Jones & Company, Inc. has not
participated in any way in the creation of the Fund or in the selection of
stocks included in either Trust and has not approved any information herein
relating thereto.
<TABLE>
PER UNIT INFORMATION
<CAPTION>
1991<F1> 1992 1993
<S> <C> <C> <C>
-------------- -------------- ---------------
Net asset value per Unit at beginning of period ............................... $ 9.42 $ 10.19 $ 11.05
============== ============== ===============
Net asset value per Unit at end of period ..................................... $ 10.19 $ 11.05 $ 12.74
============== ============== ===============
Distributions to Unitholders of investment income including accumulated dividends
paid on Units redeemed (average Units outstanding for entire period) ........
$ -- $ .33 $ .35
============== ============== ===============
Distributions to Unitholders from Security redemption proceeds (average Units
outstanding for entire period) .............................................. $ -- $ -- $ --
============== ============== ===============
Unrealized appreciation (depreciation) of Securities (per Unit outstanding at end
of period) .................................................................. $ .75 $ .32 $ 1.12
============== ============== ===============
Units outstanding at end of period ............................................ 150,000 675,000 462,635
<FN>
<F1>For the period from November 21, 1991 (initial date of deposit) through
December 31, 1991.
</TABLE>
Page 4
<PAGE>
PORTFOLIO
The Select Equity and Treasury Trust consists of 31 different issues of
Equity Securities, all of which are actively traded, blue-chip securities
issued by large, well established corporations and all of which, taken
together, currently are components of the Dow Jones Industrial Average plus
zero coupon U.S. Treasury obligations. Each issue of Equity Securities, as of
the Initial Date of Deposit, represented approximately the same dollar value
of a portfolio since the Sponsor utilized a dollar weighted average approach
in acquiring such Equity Securities. Dow Jones & Company, Inc., owner of the
Dow Jones Industrial Average, has not granted to the Fund or the Sponsor a
license to use the Dow Jones Industrial Average. Units are not designed so
that their prices will parallel or correlate with movements in the Dow Jones
Industrial Average, and it is expected that their prices will not parallel or
correlate with such movements. Dow Jones & Company, Inc. has not participated
in any way in the creation of the Fund or in the selection of stocks included
in either Trust and has not approved any information herein relating
thereto.
<TABLE>
PER UNIT INFORMATION
<CAPTION>
1991<F1> 1992 1993
<S> <C> <C> <C>
-------------- -------------- ---------------
Net asset value per Unit at beginning of period ............................... $ 9.05 $ 9.75 $ 10.62
============== ============== ===============
Net asset value per Unit at end of period ..................................... $ 9.75 $ 10.62 $ 12.41
============== ============== ===============
Distributions to Unitholders of investment income including accumulated dividends
paid on Units redeemed (average Units outstanding for entire period) ........
$ -- $ .16 $ .14
============== ============== ===============
Distributions to Unitholders from Security redemption proceeds (average Units
outstanding for entire period) .............................................. $ -- $ -- $ --
============== ============== ===============
Unrealized appreciation (depreciation) of Securities (per Unit outstanding at end
of period) .................................................................. $ .70 $ .59 $ .95
============== ============== ===============
Units outstanding at end of period ............................................ 300,000 2,700,000 2,464,843
<FN>
<F1>For the period from November 21, 1991 (initial date of deposit) through
December 31, 1991.
</TABLE>
Page 5
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Merritt Inc. and the Unitholders of
Van Kampen Merritt Equity Opportunity Trust, Series 1 (Select Equity and
Select Equity and Treasury Trusts):
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of Van Kampen Merritt Equity
Opportunity Trust, Series 1 (Select Equity and Select Equity and Treasury
Trusts) as of December 31, 1993, and the related statements of operations and
changes in net assets for the period from November 21, 1991 (date of deposit)
through December 31, 1991 and the years ended December 31, 1992 and 1993.
These statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Merritt Equity
Opportunity Trust, Series 1 (Select Equity and Select Equity and Treasury
Trusts) as of December 31, 1993, and the results of operations and changes in
net assets for the period from November 21, 1991 (date of deposit) through
December 31, 1991 and the years ended December 31, 1992 and 1993, in
conformity with generally accepted accounting principles.
GRANT THORNTON
Chicago, Illinois
March 11, 1994
Page 6
<PAGE>
<TABLE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 1
Statements of Condition
December 31, 1993
<CAPTION>
Select Select Equity
Equity and Treasury
Trust Trust
<S> <C> <C>
----------------- ------------------
Trust property
Securities at market value, (cost $5,055,068 and $27,536,786, respectively) (note 1)
$ 5,901,312 $ 30,562,733
Accumulated dividends .............................................................. 9,688 22,546
----------------- ------------------
$ 5,911,000 $ 30,585,279
================= ==================
Liabilities and interest of Unitholders
Cash overdraft ..................................................................... $ 16,235 $ 6,786
Interest to Unitholders ............................................................ 5,894,765 30,578,493
----------------- ------------------
$ 5,911,000 $ 30,585,279
================= ==================
</TABLE>
<TABLE>
Analyses of Net Assets
<CAPTION>
<S> <C> <C>
Interest of Unitholders (462,635 and 2,464,843 Units, respectively of fractional undivided
interest outstanding)
Cost to original investors of 675,000 and 2,700,000 Units, respectively
(note 1) ......................................................................... $ 7,448,262 $ 28,114,935
Less initial underwriting commission (note 3) ................................ 339,996 1,275,163
----------------- ------------------
7,108,266 26,839,772
Less redemption of Units (212,365 and 235,157 Units, respectively) (note 4) .
2,486,722 2,798,091
----------------- ------------------
4,621,544 24,041,681
Undistributed net investment income
Net investment income ........................................................ 324,281 3,504,892
Less distributions to Unitholders ............................................ 330,192 612,454
----------------- ------------------
(5,911) 2,892,438
Realized gain (loss) on Security sale or redemption ................................ 432,888 618,427
Unrealized appreciation (depreciation) of Securities (note 2) ...................... 846,244 3,025,947
Distributions to Unitholders of Security sale or redemption proceeds ............... -- --
----------------- ------------------
Net asset value to Unitholders ............................................ $ 5,894,765 $ 30,578,493
================= ==================
Net asset value per Unit (Units outstanding of 462,635 and 2,464,843, respectively) ....
$ 12.74 $ 12.41
================= ==================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 7
<PAGE>
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY TRUST, SERIES 1
Statement of Operations--Period from November 21, 1991 (date of deposit)
through December 31, 1991 and the years ended December 31, 1992 and 1993
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
------------------ ----------------- ------------------
Investment income
Dividend income .................................................. $ 3,075 $ 164,169 $ 173,362
Expenses
Trustee fees and expenses ..................................... 21 5,736 6,082
Evaluator fees ................................................ -- -- 2,413
Supervisory fees .............................................. -- 707 1,366
------------------ ----------------- ------------------
Total expenses .......................................... 21 6,443 9,861
------------------ ----------------- ------------------
Net Investment Income ......................................... 3,054 157,726 163,501
Realized gain (loss) from Security sale or redemption
Proceeds ......................................................... -- 100 2,485,986
Cost ............................................................. -- -- 2,053,198
------------------ ----------------- ------------------
Realized gain (loss) .......................................... -- 100 432,788
Net change in unrealized appreciation (depreciation)
of Securities ...................................................... 112,275 217,622 516,347
------------------ ----------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................ $ 115,329 $ 375,448 $ 1,112,636
================== ================= ==================
</TABLE>
<TABLE>
Statement of Changes in Net Assets--Period from November 21, 1991 (date of
deposit)
through December 31, 1991 and the years ended December 31, 1992 and 1993
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
------------------ ----------------- ------------------
Increase (decrease) in net assets
Operations:
Net investment income ......................................... $ 3,054 $ 157,726 $ 163,501
Realized gain (loss) on Security sale or redemption ........... -- 100 432,788
Net change in unrealized appreciation (depreciation)
of Securities ............................................... 112,275 217,622 516,347
------------------ ----------------- ------------------
Net increase (decrease) in net assets resulting
from operations .......................................... 115,329 375,448 1,112,636
Distributions to Unitholders from:
Net investment income ......................................... -- (140,393) (189,799)
Security sale or redemption proceeds .......................... -- -- --
Redemption of Units (note 4) ......................................... -- -- (2,486,722)
------------------ ----------------- ------------------
Total increase (decrease) .................................. 115,329 235,055 (1,563,885)
Net asset value to Unitholders
Beginning of period ........................................... 1,413,450 1,528,779 7,458,650
Additional Securities purchased from proceeds of
Unit sales .................................................. -- 5,694,816 --
------------------ ----------------- ------------------
End of period (including undistributed (overdistributed) net
investment income of $3,054, $20,387 and $(5,911),
respectively) ............................................... $ 1,528,779 $ 7,458,650 $ 5,894,765
================== ================= ==================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 8
<PAGE>
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY AND TREASURY TRUST, SERIES 1
Statement of Operations--Period from November 21, 1991 (date of deposit)
through December 31, 1991 and the years ended December 31, 1992 and 1993
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
------------------ ----------------- ------------------
Investment income
Interest Income .................................................. $ -- $ 1,110,000 $ 2,142,170
Dividend income .................................................. 3,021 301,318 --
Expenses
Trustee fees and expenses ..................................... 22 14,476 23,733
Evaluator fees ................................................ -- -- 5,117
Supervisory fees .............................................. 2,581 5,688
------------------ ----------------- ------------------
Total expenses .......................................... 22 17,057 34,538
------------------ ----------------- ------------------
Net Investment Income ......................................... 2,999 1,384,261 2,107,632
Realized gain (loss) from Security sale or redemption
Proceeds ......................................................... -- 90 2,797,891
Cost ............................................................. -- -- 2,179,554
------------------ ----------------- ------------------
Realized gain (loss) .......................................... -- 90 618,337
Net change in unrealized appreciation (depreciation)
of Securities ...................................................... 210,163 484,005 2,331,779
------------------ ----------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................ $ 213,162 $ 1,878,356 $ 5,057,748
================== ================= ==================
</TABLE>
<TABLE>
Statement of Changes in Net Assets--Period from November 21, 1991 (date of
deposit)
through December 31, 1991 and the years ended December 31, 1992 and 1993
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
------------------ ----------------- ------------------
Increase (decrease) in net assets
Operations:
Net investment income ......................................... $ 2,999 $ 1,384,261 $ 2,107,632
Realized gain (loss) on Security sale or redemption ........... -- 90 618,337
Net change in unrealized appreciation (depreciation)
of Securities ............................................... 210,163 484,005 2,331,779
------------------ ----------------- ------------------
Net increase (decrease) in net assets resulting
from operations .......................................... 213,162 1,878,356 5,057,748
Distributions to Unitholders from:
Net investment income ......................................... -- (251,175) (361,279)
Security sale or redemption proceeds .......................... -- -- --
Redemption of Units (note 4) ......................................... -- -- (2,798,091)
------------------ ----------------- ------------------
Total increase (decrease) .................................. 213,162 1,627,181 1,898,378
Net asset value to Unitholders
Beginning of period ........................................... 2,712,655 2,925,817 28,680,115
Additional Securities purchased from proceeds of
Unit sales .................................................. -- 24,127,117 --
------------------ ----------------- ------------------
End of period (including undistributed net investment income of
$2,999, $36,085 and $2,892,438, respectively) ...............
$ 2,925,817 $ 28,680,115 $ 30,578,493
================== ================= ==================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 9
<PAGE>
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY TRUST, SERIES 1 PORTFOLIO
<CAPTION>
Valuation of
Number Securities at
of Market Value December 31, 1993
Shares Name of Issuer per Share (note 1)
<S> <C> <C> <C>
- --------------- --------------------------------------------------------------------------- ---------------- --------------------
2,915 Allied Signal, Inc. ..................................................... $ 79.000 $ 230,285
2,884 Aluminum Company of America (ALCOA) ..................................... 69.375 200,077
6,303 American Express Company ................................................ 30.875 194,605
3,376 American Telephone and Telegraph (AT&T).................................. 52.500 177,240
9,993 Bethlehem Steel Corporation.............................................. 20.375 203,607
3,840 The Boeing Company ...................................................... 43.250 166,080
2,445 Caterpillar Inc. ........................................................ 89.000 217,605
2,292 Chevron Corp. ........................................................... 87.125 199,690
4,783 Coca-Cola Enterprises, Inc. ............................................. 44.625 213,441
410 Dean Witter ............................................................. 34.625 14,196
4,900 Walt Disney Company...................................................... 42.625 208,862
4,390 Du Pont (E.I) de Nemours & Company ...................................... 48.250 211,817
3,450 Eastman Kodak Company ................................................... 56.000 193,200
3,130 Exxon Corporation ....................................................... 63.000 197,190
2,078 General Electric Company ................................................ 104.875 217,930
4,007 General Motors .......................................................... 54.875 219,884
4,425 Goodyear Tire & Rubber Company .......................................... 45.750 202,444
1,985 International Business Machines (IBM) ................................... 56.500 112,153
2,810 International Paper Company ............................................. 67.750 190,378
3,685 McDonalds Corporation ................................................... 57.000 210,045
3,770 Merck & Co., Inc. ....................................................... 34.375 129,594
1,930 Minnesota Mining and Manufacturing Company (3M) ......................... 108.750 209,888
2,780 J.P. Morgan & Company, Inc. ............................................. 69.375 192,863
2,935 Philip Morris Companies Inc. ............................................ 55.750 163,626
3,881 The Procter & Gamble Company ............................................ 57.000 221,217
3,644 Sears, Roebuck & Company ................................................ 52.750 192,221
3,265 Texaco, Inc. ............................................................ 64.625 211,001
10,450 Union Carbide Corporation ............................................... 2.375 233,819
3,445 United Technologies Corporation ......................................... 62.000 213,590
12,295 Westinghouse Electric Corporation ....................................... 14.125 173,667
7,058 Woolworth Corp. ......................................................... 25.375 179,097
- --------------- --------------------
129,554 $ 5,901,312
=============== ====================
_________________________________________________________________________________________________________________________________
</TABLE>
The accompanying notes are an integral part of this statement.
Page 10
<PAGE>
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY AND TREASURY TRUST, SERIES 1 PORTFOLIO
<CAPTION>
Valuation of
Number Securities at
of Market Value December 31, 1993
Shares Name of Issuer per Share (note 1)
<S> <C> <C> <C>
- --------------- --------------------------------------------------------------------------- ---------------- --------------------
7,038 Allied Signal, Inc. ..................................................... $ 79.000 $ 556,002
6,585 Aluminum Company of America (ALCOA) ..................................... 69.375 456,834
15,130 American Express Company ................................................ 30.875 467,139
8,798 American Telephone and Telegraph (AT&T) ................................. 52.500 461,895
26,800 Bethlehem Steel Corporation ............................................. 20.375 546,050
8,765 The Boeing Company ...................................................... 43.250 379,086
5,939 Caterpillar Inc. ........................................................ 89.000 528,571
5,490 Chevron Corp. ........................................................... 87.125 478,316
11,560 Coca-Cola Enterprises, Inc. ............................................. 44.625 515,865
12,420 Walt Disney Company ..................................................... 42.625 529,403
1,643 Dean Witter Discover .................................................... 34.625 56,889
8,770 Du Pont (E.I) de Nemours & Company ...................................... 48.250 423,153
7,995 Eastman Kodak Company ................................................... 56.000 447,720
6,825 Exxon Corporation ....................................................... 63.000 429,975
5,178 General Electric Company ................................................ 104.875 543,043
10,925 General Motors .......................................................... 54.875 599,509
12,080 Goodyear Tire & Rubber Company .......................................... 45.750 552,660
4,255 International Business Machines (IBM) ................................... 56.500 240,408
6,110 International Paper Company ............................................. 67.750 413,953
9,328 McDonalds Corporation ................................................... 57.000 531,696
8,100 Merck & Co., Inc. ....................................................... 34.375 278,438
4,405 Minnesota Mining and Manufacturing Company (3M) ......................... 108.750 479,043
6,300 J.P. Morgan & Company, Inc. ............................................. 69.375 437,062
6,300 Philip Morris Companies Inc. ............................................ 55.750 351,225
-- Praxair Inc. ............................................................ 16.625 --
9,430 The Procter & Gamble Company ............................................ 57.000 537,510
9,330 Sears, Roebuck & Company ................................................ 52.750 492,157
6,300 Texaco, Inc. ............................................................ 64.625 407,138
22,500 Union Carbide Corporation ............................................... 22.375 503,438
7,920 United Technologies Corporation ......................................... 62.000 491,039
22,725 Westinghouse Electric Corporation ....................................... 14.125 320,991
16,200 Woolworth Corp. ......................................................... 25.375 411,075
- --------------- --------------------
301,144 13,867,282
===============
</TABLE>
<TABLE>
<CAPTION>
Maturity
Value Name of Issuer and Title of Security
<S> <C> <C>
- ------------------- -----------------------------------------------------------------------
$ 27,000,000 "Zero Coupon" U.S. Treasury bonds maturing May 15, 2002 16,695,450
===================
$ 30,562,733
====================
_________________________________________________________________________________________________________________________________
</TABLE>
The accompanying notes are an integral part of this statement.
Page 11
<PAGE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 1
Notes to Financial Statements
December 31, 1991, 1992 and 1993
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation--Securities listed on a national securities exchange
are valued at the last closing sales price. Treasury obligations are valued at
the closing bid price.
Security Cost--The original cost to the Trust of the Securities was
based, for Securities listed on a national securities exchange, on the closing
sale prices on the exchange. The original cost of the Treasury obligations was
based on the closing bid price. In each case, the costs were determined on the
day of the various Dates of Deposit and included brokerage commissions.
Unit Valuation--The redemption price per Unit is the pro rata share of
each Unit based upon (1) the cash on hand in the Trust or monies in the
process of being collected, (2) the Securities in the Trust based on the value
as described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes--The Trust is not taxable for Federal income tax
purposes. Each Unitholder is considered to be the owner of a pro rata portion
of the Trust and, accordingly, no provision has been made for Federal income
taxes.
Other--The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2--PORTFOLIO
Unrealized Appreciation and Depreciation--An analysis of net unrealized
appreciation (depreciation) at December 31, 1993 is as follows:
<TABLE>
<CAPTION>
Select Select Equity
Equity and Treasury
Trust Trust
<S> <C> <C>
----------------- ------------------
Unrealized Appreciation $ 1,088,671 $ 3,568,921
Unrealized Depreciation (242,427) (542,974)
----------------- ------------------
$ 846,244 $ 3,025,947
================= ==================
</TABLE>
NOTE 3--OTHER
Marketability--Although it is not obligated to do so, the Sponsor intends
to maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities
in the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such Units to the Trustee for redemption at the redemption
price.
Cost to Investors--The cost to original investors was based on the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus a sales charge of 4.5% of the public offering price which is
equivalent to 4.712% of the aggregate offering price of the Securities. The
secondary market cost to investors is based on the determination of the
underlying value of the Securities per Unit on the date of an investor's
purchase plus a sales charge of 4.2% of the public offering price which is
4.3841% of the underlying value of the Securities. Effective on each December
1, commencing December 1, 1992, the secondary sales charge will decrease by .3
of 1% to a minimum sales charge of 1.5%.
Compensation of Evaluator and Supervisor--The Supervisor receives a fee
for providing portfolio supervisory services for the Trust ($.0025 per Unit,
not to exceed the aggregate cost of the Supervisor for providing such services
to all applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer Price
Index.
Page 12
<PAGE>
NOTE 4--REDEMPTION OF UNITS
Units were presented for redemption as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
<S> <C>
1993
-----------------
Select Equity Trust 212,365
Select Equity and Treasury Trust 235,157
</TABLE>
Page 13
VAN KAMPEN MERRITT PROSPECTUS
EQUITY OPPORTUNITY TRUST PART TWO
The Fund. Van Kampen Merritt Equity Opportunity Trust (the "Fund") is
comprised of separate and distinct unit investment trusts, entitled Van Kampen
Merritt Select Equity Trust (the "Select Equity Trust"), Van Kampen Merritt
Select Equity and Treasury Trust (the "Select Equity and Treasury Trust"), Van
Kampen Merritt Blue Chip Opportunity Trust (the "Blue Chip Opportunity Trust")
and Van Kampen Merritt Blue Chip Opportunity and Treasury Trust (the "Blue
Chip Opportunity and Treasury Trust"). The Select Equity Trust and the Blue
Chip Opportunity Trust each offer investors the opportunity to purchase Units
representing proportionate interests in a fixed, diversified portfolio of the
30 actively traded "blue chip" equity securities which were components of the
Dow Jones Industrial Average on the original date of creation of the Trust.
The Select Equity and Treasury Trust and the Blue Chip Opportunity and
Treasury Trust each offer investors the opportunity to purchase Units
representing proportionate interests in a fixed, diversified portfolio of the
30 actively traded "blue chip" equity securities which were components of the
Dow Jones Industrial Average on the original date of creation of the Trust
plus "zero coupon" U.S. Treasury obligations. Dow Jones & Company, Inc. has
not participated in any way in the creation of the Fund or in the selection of
stocks included in the Trusts and has not approved any information herein
relating thereto. Unless terminated earlier, each Trust will terminate on the
Mandatory Termination Date stated under "Summary of Essential Financial
Information" in Part One of this Prospectus and any securities then held will,
within a reasonable time thereafter, be liquidated or distributed by the
Trustee. Any Securities liquidated at termination will be sold at the then
current market value for such Securities; therefore, the amount distributable
in cash to a Unitholder upon termination may be more or less than the amount
such Unitholder paid for his Units.
Objectives of the Trusts. The objectives of the Select Equity Trust and the
Blue Chip Opportunity Trust are to provide the potential for capital
appreciation and income by investing in a portfolio of actively traded, New
York Stock Exchange listed equity securities which were components of the Dow
Jones Industrial Average on the original date of creation of the Trust
("Equity Securities"). The objectives of the Select Equity and Treasury Trust
and the Blue Chip Opportunity and Treasury Trust are to protect Unitholders'
capital and provide the potential for capital appreciation and income by
investing a portion of its portfolio in "zero coupon" U.S. Treasury
obligations ("Treasury Obligations") and the remainder of the Trust's
portfolio in the identical Equity Securities that comprise both the Select
Equity Trust and the Blue Chip Opportunity Trust. Collectively, the Treasury
Obligations and the Equity Securities are referred to herein as the
"Securities." See "Portfolios" in Part One of this Prospectus. Units are not
designed so that their prices will parallel or correlate with movements in the
Dow Jones Industrial Average, and it is expected that their prices will not
parallel or correlate with such movements. The Treasury Obligations in the
Select Equity and Treasury Trust and the Blue Chip Opportunity and Treasury
Trust evidence the right to receive a fixed payment at a future date from the
U.S. Government and are backed by the full faith and credit of the U.S.
Government. The guarantee of the U.S. Government does not apply to the market
value of the Treasury Obligations of the Units of the Select Equity and
Treasury Trust or the Blue Chip Opportunity and Treasury Trust, whose net
asset value will fluctuate and, prior to maturity, may be worth more or less
than a purchaser's acquisition cost. There is, of course, no guarantee that
the objectives of the Trusts will be achieved.
Public Offering Price. The Public Offering Price per Unit is equal to the
aggregate underlying value of the Securities in a Trust divided by the number
of Units outstanding, plus a sales charge as set forth in "Summary of
Essential Financial Information" appearing in Part One of this Prospectus. In
addition, a pro rata share of accumulated dividends, if any, in the Income
Account will be added to the Public Offering Price. The minimum purchase for
an individual Trust is 500 Units (100 Units for a tax-sheltered retirement
plan). See "Public Offering".
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of a Trust, with changes
in dividends received and with the sale or liquidation of Securities;
therefore, there is no assurance that the annual dividend distribution will be
realized in the future.
Principal Protection. The Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust were both organized so that purchasers of Units
should receive, at the termination of such Trust, an amount per Unit at least
equal to $10.00 (which is equal to the per Unit value upon maturity of the
Treasury Obligations), even if the respective Trust never paid a dividend and
the value of the Equity Securities were to decrease to zero, which the Sponsor
considers highly unlikely. This feature of the Select Equity and Treasury
Trust and the Blue Chip Opportunity and Treasury Trust provides Unitholders
who purchase Units at the price of $10.00 or less per Unit with total
principal protection, including any sales charges paid, although they might
forego any earnings on the amount invested. To the extent that Units are
purchased at a price less than $10.00 per Unit, this feature may also provide
a potential for capital appreciation. It should be remembered, however, that
the value of the Treasury Obligations may fluctuate before maturity due to
fluctuations in interest rates.
Distributions. Distributions of dividends received, and realized capital
gains, if any, received by each Trust will be paid in cash on the applicable
Distribution Date to Unitholders of record on the record date as set forth in
the "Summary of Essential Financial Information" in Part One of this
Prospectus. Income with respect to the amortization of original issue discount
on the Treasury Obligations in the Select Equity and Treasury Trust will not
be distributed currently, although Unitholders will be subject to income tax
at ordinary income rates as if a distribution had occurred. Any distribution
of income and/or capital gains will be net of the expenses of the applicable
Trust. See "Federal Taxation." Additionally, upon termination of each Trust,
the Trustee will distribute, upon surrender of Units for redemption, to each
Unitholder his pro rata share of each Trust's assets, less expenses, in the
manner set forth under "Rights of UnitholdersDistributions of Income and
Capital".
Termination. Commencing on the Mandatory Termination Date as specified in Part
One for each Trust, Equity Securities will begin to be sold in connection with
the termination of a Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice of any
termination of a Trust specifying the time or times at which Unitholders may
surrender their certificates for cancellation shall be given by the Trustee to
each Unitholder at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date for the respective Trusts, with the exception of Van Kampen
Merritt Blue Chip Opportunity Trust, Series 2 the Trustee will provide written
notice thereof to all Unitholders and will include with such notice a form to
enable Unitholders to elect a distribution of shares of Equity Securities if
such Unitholder owns at least 5,000 Units of a Trust, rather than to receive
payment in cash for such Unitholder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. All Unitholders will
receive cash in lieu of any fractional shares and cash representing their pro
rata portion of the Treasury Obligations, if any. To be effective, the
election form, together with surrendered certificates, if issued, and other
documentation required by the Trustee, must be returned to the Trustee at
least five business days prior to the Mandatory Termination Date. Unitholders
not electing a distribution of shares of Equity Securities and Unitholders of
Van Kampen Merritt Blue Chip Opportunity Trust, Series 2 will receive a cash
distribution from the sale of the remaining Securities within a reasonable
time after the Trust in terminated. See "Trust AdministrationAmendment or
Termination."
Reinvestment Option. Unitholders have the opportunity to have their
distributions reinvested into an open-end, management investment company as
described herein. Unitholders of Van Kampen Merritt Blue Chip Opportunity
Trust, Series 2 also have the option of having distributions reinvested into
additional Units of the Trust as described herein. See "Rights of
UnitholdersReinvestment Option."
Risk Factors. The Equity Securities in the Trusts involve certain risks. See
"Trust Portfolio."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSIONOR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Note: this prospectus may be used only when accompanied
by part one.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part I accompanying
this Prospectus Part II.
Van Kampen Merritt
THE TRUSTS
Van Kampen Merritt Equity Opportunity Trust (the "Fund") is comprised of
separate and distinct unit investment trusts, entitled Van Kampen Merritt
Select Equity Trust,Van Kampen Merritt Select Equity and Treasury Trust, Van
Kampen Merritt Blue Chip Opportunity Trust and Van Kampen Merritt Blue Chip
Opportunity Treasury Trust. The Fund was created under the laws of the State
of New York pursuant to a Trust Indenture and Agreement (the "Trust
Agreement"), among Van Kampen Merritt Inc., as Sponsor, American Portfolio
Evaluation Services, a division of Van Kampen Merritt Investment Advisory
Corp., as Evaluator, Van Kampen Merritt Investment Advisory Corp., as
Supervisor, and The Bank of New York, as Trustee.
The Select Equity Trust and the Blue Chip Opportunity Trust may be appropriate
mediums for investors who desire to participate in a portfolio of equity
securities with greater diversification than they might be able to acquire
individually. The Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust may be appropriate mediums for investors who
desire to participate in a portfolio of equity securities and zero-coupon U.S.
Treasury obligations with greater diversification with regard to the equity
securities than they might be able to acquire individually. Diversification of
assets in the Trusts will not eliminate the risk of loss always inherent in
the ownership of securities. For a breakdown of the portfolio see "Portfolios"
in Part One of this Prospectus.
Each Unit represents a fractional undivided interest in the Trust involved. To
the extent that any Units are redeemed by the Trustee, the fractional
undivided interest in a Trust represented by each unredeemed Unit will
increase accordingly, although the actual interest in the Trust represented by
such fraction 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.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Select Equity Trust and the Blue Chip Opportunity Trust
are to provide investors with the potential for capital appreciation and
income. The objectives of the Select Equity and Treasury Trust and the Blue
Chip Opportunity and Treasury Trust are to protect Unitholders' capital and
provide investors with the potential for capital appreciation and income. The
portfolio of each Trust is described under "Trust Portfolios" herein and under
"Portfolios" in Part One of this Prospectus. An investor will be subjected to
taxation on the dividend income received from the Fund and on gains from the
sale or liquidation of Securities (see "Federal Taxation"). Investors should
be aware that there is not any guarantee that the objectives of any of the
Trusts will be achieved because they are subject to the continuing ability of
the respective Security issuers to continue to declare and pay dividends and
because the market value of the Securities can be affected by a variety of
factors. Common stocks may be especially susceptible to general stock market
movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. Investors should be aware
that there can be no assurance that the value of the underlying Securities
will increase or that the issuers of the Equity Securities will pay dividends
on outstanding common shares. The Select Equity and Treasury Trust and the
Blue Chip Opportunity and Treasury Trust, however, were both organized so that
investors should receive, at termination of such Trusts, an amount per Unit at
least equal to $10.00 (which is equal to the per Unit value upon maturity of
the Treasury Obligations), even if such Trusts never paid a distribution and
the value of the Equity Securities were to decrease to zero, which the Sponsor
considers highly unlikely. Any distributions of income will generally depend
upon the declaration of dividends by the issuers of the Securities and the
declaration of any dividends depends upon several factors including the
financial condition of the issuers and general economic conditions.
In determining Equity Securities for deposit in the Select Equity Trust and
the Blue Chip Opportunity Trust and the percentage of the portfolio
represented by each such Equity Security, the Sponsor selected those Equity
Securities that were at the date of creation of the Fund components of the Dow
Jones Industrial Average and the dollar value of the shares of such securities
with the intent to have approximately equal dollar amounts invested in each
such security.
In selecting Securities for the Select Equity and Treasury Trust and the Blue
Chip Opportunity and Treasury Trust, the following factors, among others, were
considered by the Sponsor: (a) for the portion of the Securities that are
Equity Securities, the same factors as the Select Equity Trust and the Blue
Chip Opportunity Trust, and (b) for the portion of the Securities that are
Treasury Obligations, the evidence of the right to receive a fixed payment at
a future date from the U.S. Government, backed by the full faith credit of the
U.S. Government.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trusts as of the date the Trusts were
created. Subsequent thereto, the Securities may no longer be included in the
Dow Jones Industrial Average. Should an Equity Security no longer be included
in the Dow Jones Industrial Average, such Equity Security will not as a result
thereof be removed from the portfolio of a Trust.
Investors should be aware that the Fund is not a "managed" trust and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration-Portfolio Administration"). In addition, Securities will
not be sold by a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that
the securities were selected by the Sponsor as of the date the Securities were
purchased by the Trust involved. Each Trust may continue to purchase or hold
Securities originally selected through this process even though the evaluation
of the attractiveness of the Securities may have changed and, if the
evaluation were performed again at that time, the Securities would not be
selected for such Trust.
TRUST PORTFOLIOS
The Select Equity Trust and the Blue Chip Opportunity Trust consist of a
number of different issues of Equity Securities, all of which are actively
traded, blue-chip securities issued by large, well established corporations
and all of which, taken together, were components of the Dow Jones Industrial
Average on the date of creation of the Fund. Each issue, as of such date,
represented approximately the same dollar value of a portfolio since the
Sponsor utilized a dollar weighted average approach in acquiring such Equity
Securities. The Select Equity and Treasury Trust and the Blue Chip Opportunity
and Treasury Trust initially consisted of the same equity security components
as the Select Equity Trust and the Blue Chip Opportunity Trust plus
zero-coupon U.S. Treasury Obligations. Dow Jones & Company, Inc., owner of the
Dow Jones Industrial Average, has not granted to the Fund or the Sponsor a
license to use the Dow Jones Industrial Average. Units are not designed so
that their prices will parallel or correlate with movements in the Dow Jones
Industrial Average, and it is expected that their prices will not parallel or
correlate with such movements. Dow Jones & Company, Inc. has not participated
in any way in the creation of the Fund or in the selection of stocks included
in any of the Trusts and has not approved any information herein relating
thereto.
The Dow Jones Industrial Average is composed of 30 common stocks chosen by the
editors of The Wall Street Journal, a publication of Dow Jones & Company, Inc.
The companies are major factors in their industries and their stocks are
widely held by individuals and institutional investors. Changes in the
components are made entirely by the editors of The Wall Street Journal without
consultation with the companies, the stock exchange or any official agency.
Dow Jones & Company, Inc. expressly reserves the right to change the
components of the Dow Jones Industrial Average at any time for any reason. Any
changes in the components of the Dow Jones Industrial Average after the date
the Fund was created will not cause a change in the identity of the common
stocks included in any of the Trusts.
The Trusts consist of such of the Securities listed under "Portfolio" in Part
One of this Prospectus as may continue to be held from time to time in the
Trusts together with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of
the Securities.
Because certain of the Securities from time to time may be sold under certain
circumstances described herein, and because the proceeds from such events will
be distributed to Unitholders and will not be reinvested, no assurance can be
given that the Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor may instruct
the Trustee to sell Securities under certain limited circumstances.
Securities, however, will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation or depreciation.
Equity Securities. The Trusts consist of different issues of Equity
Securities, all of which are listed on the New York Stock Exchange. An
investment in Units should be made with an understanding of the risks which an
investment in common stocks entails, including the risk that the financial
condition of the issuers of the Equity Securities or the general condition of
the common stock market may worsen and the value of the Equity Securities and
therefore the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases of value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Fund have a right to receive dividends only
when and if, and in the amounts declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding, and
thus the value of the Equity Securities may be expected to fluctuate over the
life of the Fund to values higher or lower than those prevailing on the date
of purchase by a Unitholder.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Treasury Obligations. The Treasury Obligations deposited in the Select Equity
and Treasury Trust and the Blue Chip Opportunity and Treasury Trust consist of
U.S. Treasury bonds which have been stripped of their unmatured interest
coupons. The Treasury Obligations evidence the right to receive a fixed
payment at a future date from the U.S. Government and are backed by the full
faith and credit of the U.S. Government. Treasury Obligations are purchased at
a deep discount because the buyer obtains only the right to a fixed payment at
a fixed date in the future and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the Treasury Obligations) is that a fixed yield is
earned not only on the original investment, but also, in effect, on all
earnings during the life of the discount obligation. This implicit
reinvestment of earnings at the same rate eliminates the risk of being unable
to reinvest the income on such obligations at a rate as high as the implicit
yield on the discount obligation, but at the same time eliminates the
holder's ability to reinvest at higher rates in the future. For this reason,
the Treasury Obligations are subject to substantially greater price
fluctuations during periods of changing interest rates than are securities of
comparable quality which make regular interest payments. The effect of being
able to acquire the Treasury Obligations at a lower price is to permit more of
such Trusts' portfolio to be invested in Equity Securities.
General. Each Trust consists of such of the Securities listed under
"Portfolios" as may continue to be held from time to time in such Trust in
Part One of this Prospectus together with cash held in the Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for
any failure in any of the Securities.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested, no
assurance can be given that a Trust will retain for any length of time its
present size and composition. Although the portfolios are not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain
limited circumstances. See "Trust Administration." Equity Securities, however,
will not be sold by a Trust to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation.
Unitholders will be unable to dispose of any of the Equity Securities as such,
and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in a Trust and will vote such stocks in accordance with the
instructions of the Sponsor. Actions required to be taken with respect to the
Treasury Obligations will be in accordance with the instruction of the
Sponsor. Unitholders of the Select Equity Trust and the Blue Chip Opportunity
Trust may, however, be able upon request to receive an "in kind" distribution
of these Securities evidenced by the Units (see "Rights of
UnitholdersRedemption of Units").
FEDERAL TAXATION
Federal Taxation of the Select Equity, Select Equity and Treasury, and Blue
Chip Opportunity and Treasury Trusts. The following discussion of federal
income taxation applies only to the Select Equity Trust, Select Equity and
Treasury Trust and Blue Chip Opportunity and Treasury Trust.
United States Federal Income Taxes. The following is a general discussion of
certain of the federal income tax consequences of the purchase, ownership and
disposition of the Units. The summary is limited to investors who hold the
Units as "capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the "Code").
Unitholders should consult their tax advisers in determining the federal,
state, local and any other tax consequences of the purchase, ownership and
disposition of Units in a Trust.
At the time of creation of each Trust, Chapman and Cutler, special counsel for
the Sponsor, rendered an opinion under then existing law substantially to the
effect that:
1. Each Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro
rata portion of the assets of such Trust under the Code; and the income of
such Trust will be treated as income of the Unitholders thereof under the
Code. Each Unitholder will be considered to have received his pro rata share
of income derived from each Trust asset when such income is received by a
Trust.
2. Each Unitholder will have a taxable event when a Trust disposes of a
Security (whether by sale, exchange, redemption, or payment at maturity) or
upon the sale or redemption of Units by such Unitholder. The price a
Unitholder pays for his Units, including sales charges, is allocated among his
pro rata portion of each Security held by such Trust (in proportion to
the fair market values thereof on the date the Unitholder purchases his Units)
in order to determine his initial cost for his pro rata portion of each
Security held by such Trust. The Treasury Obligations held by the Selected
Equity and Treasury Trust and the Blue Chip Opportunity and Treasury Trust are
treated as stripped bonds and may be treated as bonds issued at an original
issue discount as of the date a Unitholder purchases his Units. Because the
Treasury Obligations represent interests in "stripped" U.S. Treasury bonds, a
Unitholder's initial cost for his pro rata portion of each Treasury
Obligation held by such Trust shall be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as interest for
federal income tax purposes and the amount of original issue discount in this
case is generally the difference between the bond's purchase price and its
stated redemption price at maturity. A Unitholder will be required to include
in gross income for each taxable year the sum of his daily portions of
original issue discount attributable to the Treasury Obligations held by such
Trust as such original issue discount accrues and will in general be subject
to federal income tax with respect to the total amount of such original issue
discount that accrues for such year even though the income is not distributed
to the Unitholders during such year to the extent it is not less than a "de
minimis" amount as determined under a Treasury Regulation issued on December
28, 1992 relating to stripped bonds. To the extent the amount of such discount
is less than the respective "de minimis" amount, such discount shall be
treated as zero. In general, original issue discount accrues daily under a
constant interest method which takes into account the semi-annual compounding
of accrued interest. In the case of the Treasury Obligations, this method will
generally result in an increasing amount of income to the Unitholders each
year. Unitholders should consult their tax advisers regarding the federal
income tax consequences and accretion of original issue discount under the
stripped bond rules. For federal income tax purposes, a Unitholder's pro rata
portion of dividends as defined by Section 316 of the Code paid with respect
to an Equity Security held by a Trust are taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by a Trust will generally be
considered a capital gain except in the case of a dealer or a financial
institution and, in general, will be long-term if the Unitholder has held his
Units for more than one year. A Unitholder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of Securities held by
a Trust will generally be considered a capital loss except in the case of a
dealer or a financial institution and will be long-term if the Unitholder has
held his Units for more than one year. Unitholders should consult their tax
advisers regarding the recognition of such capital gains and losses for
federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions" are allowable
only to the extent that they exceed two percent of an individual taxpayer's
adjusted gross income. Miscellaneous itemized deductions subject to this
limitation under present law include a Unitholder's pro rata share of
expenses paid by a Trust, including fees of the Trustee, Supervisor and the
Evaluator.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by such Trust (to the
extent such dividends are taxable as ordinary income, as discussed above) in
the same manner as if such corporation directly owned the Equity Securities
paying such dividends. 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). Proposed 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.
It should be noted that various legislative proposals that would affect the
dividends received deduction have been introduced. Accordingly, Unitholders
should consult their tax advisers with respect to the limitations on and
possible modifications to the dividends received deductions.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust
or Disposition of Units. As discussed above, the Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by a Trust or if the
Unitholder disposes of a Unit. For taxpayers other than corporations, net
capital gains are subject to a maximum marginal stated tax rate of 28%.
However, it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate. Because some or all capital gains are taxed at a comparatively lower
rate under the Act, the Act includes a provision that would recharacterize
capital gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision on
their investment in Units.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of a Trust. As discussed in "Rights of Unitholders," 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 related Trust. See "Rights
of Unitholders." Treasury Obligations held by the Select Equity and Treasury
Trust and the Blue Chip Opportunity and Treasury Trust will not be distributed
to a Unitholder as part of an In Kind Distribution. The tax consequences
relating to the sale of Treasury Obligations are discussed above. As
previously discussed, prior to the redemption of Units or the termination of a
Trust, a Unitholder is considered as owning a pro rata portion of each of such
Trust assets for federal income tax purposes. The receipt of an In Kind
Distribution would be deemed an exchange of such Unitholder's pro rata
portion of each of the shares of stock and other assets held by such Trust in
exchange for an undivided interest in whole shares of stock plus, possibly,
cash.
There are generally three different potential tax consequences which may occur
under an In Kind Distribution with respect to each Security owned by a Trust.
A "Security" for this purpose is a particular class of stock issued by a
particular corporation (and does not include the Treasury Obligations). If the
Unitholder receives only whole shares of a Security in exchange for his or her
pro rata portion in each share of such Security held by such Trust, there is
no taxable gain or loss recognized upon such deemed exchange pursuant to
Section 1036 of the Code. If the Unitholder receives whole shares of a
particular Security plus cash in lieu of a fractional share of such Security,
and if the fair market value of the Unitholder's pro rata portion of the
shares of such Security exceeds his tax basis in his pro rata portion of such
Security, taxable gain would be recognized in an amount not to exceed the
amount of such cash received, pursuant to Section 1031(b) of the Code. No
taxable loss would be recognized upon such an exchange pursuant to Section
1031(c) of the Code, whether or not cash is received in lieu of a fractional
share. Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unitholder's tax basis in
the shares of such particular Security which he receives as part of the In
Kind Distribution. Finally, if a Unitholder's pro rata interest in a Security
does not equal a whole share, he may receive entirely cash in exchange for his
pro rata portion of a particular Security. In such case, taxable gain or loss
is measured by comparing the amount of cash received by the Unitholder with
his tax basis in such Security.
Because a Trust 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 such Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Security owned by such Trust. Unitholders who request an In Kind
Distribution are advised to consult their tax advisers in this regard.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by a
Trust to such Unitholder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by a Trust will
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non- United States persons (accrual of original issue discount on the
Treasury Obligations may not be subject to taxation or withholding provided
certain requirements are met). Such persons should consult their tax advisers.
Unitholders will be notified annually of the amounts of original discount and
income dividends includable in the Unitholder's gross income and amounts of
Fund expenses which may be claimed as itemized deductions.
Dividend income, long-term capital gains and accrual of original issue
discount may also be subject to state and local taxes. Investors should
consult their tax advisers for specific information on the tax consequences of
particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
At the time of creation of each Trust, special counsel to the Trust for New
York tax matters rendered an opinion substantially to the effect that such
Trust is not an association taxable as a corporation and the income of such
Trust will be treated as the income of the Unitholders under the existing
income tax laws of the State and City of New York.
Federal Taxation of the Van Kampen Merritt Blue Chip Opportunity Trust,
Series 2. The following, discussion of federal income taxation applies only to
the Van Kampen Merritt Blue Chip Opportunity Trust, Series 2.
The Blue Chip Opportunity Trust has elected and intends to qualify on a
continuing basis for special federal income tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Trust so qualifies and timely distributes to Unitholders 90%
or more of its taxable income (without regard to its net capital gain, i.e.,
the excess of its net long-term capital gain over its net short-term capital
loss), it will not be subject to federal income tax on the portion of its
taxable income (including any net capital gain) that it distributes to
Unitholders. In addition, to the extent the Trust timely distributes to
Unitholders at least 98% of its taxable income (including any net capital
gain), it will not be subject to the 4% excise tax on certain undistributed
income of "regulated investment companies." Because the Trust intends to
timely distribute its taxable income (including any net capital gain), it is
anticipated that the Trust will not be subject to federal income tax or the
excise tax. Although all or a portion of the Trust's taxable income
(including any net capital gain) for the taxable year may be distributed to
Unitholders shortly after the end of the calendar year, such a distribution
will be treated for federal income tax purposes as having been received by
Unitholders during the calendar year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its
net capital gain) will be taxable as ordinary income to Unitholders. To the
extent that distributions to a Unitholder in any year exceed the Trust's
current and accumulated earnings and profits, they will be treated as a return
of capital and will reduce the Unitholder's basis in his Units and, to the
extent that they exceed his basis, will be treated as a gain from the sale of
his Units as discussed below.
Distributions of the Trust's net capital gain which are properly designated
as capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will be a capital
gain or loss, except in the case of a dealer or a financial institution. For
taxpayers other than corporations, net capital gains are presently subject to
a maximum stated marginal tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that affect tax rates
and could affect relative differences at which ordinary income and capital
gains are taxed. A capital loss is long-term if the asset is held for more
than one year and short-term if held for one year or less. If a Unitholder
holds Units for six months or less and subsequently sells such Units at a
loss, the loss will be treated as a long-term capital loss to the extent that
any long-term capital gain distribution is made with respect to such Units
during the six-month period or less that the Unitholder owns the Units.
The Revenue Reconciliation Act of 1993 (the "Act") raises tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate. Because some or all capital gains are taxed at a comparatively lower
rate under the Act, the Act includes a provision that would recharacterize
capital gains as ordinary income in the case of certain financial transactions
that are "conversion transactions'' effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision on
their investment in Units.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. To the extent dividends
received by the Trust are attributable to foreign corporations, a corporation
that owns Units will not be entitled to the dividends received deduction with
respect to its pro rata portion of such dividends, since the dividends
received deduction is generally available only with respect to dividends paid
by domestic corporations.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trust and to the tax
treatment of distributions by the Trust to U.S. Unitholders. Unitholders that
are not United States citizens or residents should be aware that distributions
from the Trust will generally be subject to a withholding tax of 30%, or a
lower treaty rate, and should consult their own tax advisors to determine
whether investment in the Trust is appropriate. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisors in this regard.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year.
In the event the Units are held by fewer than 500 persons, additional taxable
income will be realized by the individual (and other noncorporate) Unitholders
in excess of the distributions received by the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income,
long-term capital gain or as a return of capital).
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
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.
Unitholders will be notified annually of the amounts of income dividends
includable in the Unitholder's gross income and amounts of Trust expenses
which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject to state and
local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
TRUST OPERATING EXPENSES
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trusts. However, Van Kampen
Merritt Investment Advisory Corp., which is a wholly owned subsidiary of the
Sponsor, will receive an annual supervisory fee, payable in monthly
installments, which is not to exceed the amount set forth under "Summary of
Essential Financial Information" in Part One of this Prospectus, for providing
portfolio supervisory services for each Trust. Such fee (which is based on the
number of Units outstanding on January 1 of each year) may exceed the actual
costs of providing such supervisory services for this Fund, but at no time
will the total amount received for portfolio supervisory services rendered to
Series 1 and subsequent series of Van Kampen Merritt Equity Opportunity Trust
in any calendar year exceed the aggregate cost to the Supervisor of supplying
such services in such year. In addition, the Evaluator, which is a division of
Van Kampen Merritt Investment Advisory Corp., shall receive as an annual per
Unit evaluation fee, payable in monthly installments, for regularly evaluating
each Trust's portfolio that amount set forth under "Summary of Essential
Financial Information" in Part One of this Prospectus (which is based on the
outstanding number of Units on January 1 of each year). Both of the foregoing
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 published by the United States
Department of Labor or, if such category is no longer published, in a
comparable category. The Sponsor and dealers will receive sales commissions
and may realize other profits (or losses) in connection with the sale of Units
as described under "Public OfferingSponsor and Dealer Compensation".
Trustee's Fee. For its services the Trustee will receive as an annual per
Unit fee from the Trusts that amount set forth under "Summary of Essential
Information" in Part One of this Prospectus (which is based on the outstanding
number of units on January 1 of each year). The Trustee's fees are payable
monthly on or before the fifteenth day of each month from the Income Account
to the extent funds are available and then from the Capital Account. The
Trustee benefits to the extent there are funds for future distributions,
payment of expenses and redemptions in the Capital and Income Accounts since
these Accounts are non-interest bearing and the amounts earned by the Trustee
are retained by the Trustee. Part of the Trustee's compensation for its
services to a Trust is expected to result from the use of these funds. Such
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 published by the United States
Department of Labor or, if such category is no longer published, in a
comparable category. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
UnitholdersReports Provided" and "Trust Administration".
Miscellaneous Expenses. The following additional charges are or may be
incurred by a Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of a Trust,
(b) fees of the Trustee for extraordinary services, (c) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect a Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of a Trust without negligence, bad
faith or wilful misconduct on its part and (g) expenditures incurred in
contacting Unitholders upon termination of the Trusts.
The fees and expenses set forth herein are payable out of each Trust. When
such fees and expenses are paid by or owning to the Trustee, they are secured
by a lien on the portfolio of each Trust. Since the Securities are all common
stocks, and the income stream produced by dividend payments is unpredictable,
the Sponsor cannot provide any assurance that dividends will be sufficient to
meet any or all expenses of a Trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by a Trust, the
Trustee has the power to sell Securities to pay such amounts. These sales may
result in capital gains or losses to Unitholders. See "Federal Taxation".
PUBLIC OFFERING
General. Units are offered at the Public Offering Price (which is based on the
aggregate underlying value of the Securities and on the bid side evaluation of
the Treasury Obligations in a Trust and includes a sales charge of 4.5% of the
Public Offering Price for the Select Equity Trust and Select Equity and
Treasury Trust, and 4.9% for the Blue Chip Opportunity Trust and Blue Chip
Opportunity and Treasury Trustwhich charge is equivalent to 4.712% of the
aggregate underlying value of the Securities in the Select Equity Trust and
Select Equity and Treasury Trust and 5.152% of the aggregate underlying value
of the Securities in the Blue Chip Opportunity Trust and Blue Chip Opportunity
and Treasury Trust). Such underlying value shall include the proportionate
share of any undistributed cash held in the Capital and Income Accounts.
Employees of Van Kampen Merritt Inc. and its subsidiaries may purchase Units
of each Trust at the current Public Offering Price less the dealer's
concession described below. Registered representatives of selling
underwriters, brokers, dealers, or agents may purchase Units of the Fund at
the current Public Offering Price less the dealer's concession described
below.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in Part One
of this Prospectus in accordance with fluctuations in the prices of the
underlying Securities in a Trust.
The price of the Units as of the opening of business on the date stated in the
"Summary of Essential Financial Information" in Part One of this Prospectus
was established by adding to the determination of the aggregate underlying
value of the Securities an amount equal to 4.712% of such value for the Select
Equity Trust and Select Equity and Treasury Trust, and 5.152% of such value
for the Blue Chip Opportunity Trust and Blue Chip Opportunity and Treasury
Trust and dividing the sum so obtained by the number of Units outstanding.
Such underlying value shall include the proportionate share of any cash held
in the Capital Account. This computation produced a gross sales commission
equal to 4.5% of the Public Offering Price for the Select Equity Trust and
Select Equity and Treasury Trust and 4.9% of the Public Offering Price for the
Blue Chip Opportunity Trust and Blue Chip Opportunity and Treasury Trust. The
Evaluator will appraise or cause to be appraised daily the value of the
underlying Securities as of the close of trading on the New York Stock
Exchange (which is presently 4:00 P.M. New York time) on days the New York
Stock Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day. Orders received by the Trustee, Sponsor or
any dealer for purchases, sales or redemptions after that time, or on a day
when the New York Stock Exchange is closed, will be held until the next
determination of price. Such sales charge may be reduced over time, as set
forth in "Summary of Essential Financial Information" in Part One of this
Prospectus, by .3 of 1% to a minimum sales charge of 1.5%.
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made
for Securities listed on a national stock exchange or, if no such price
exists, at the mean between bid and offering prices on the day the valuation
is made. The Treasury Obligations will be valued on the bid prices thereof.
In offering the Units to the public, neither the Sponsor, the Underwriters,
nor any broker-dealers are recommending any of the individual Securities in
the Trust but rather the entire pool of Securities, taken as a whole, which
are represented by the Units.
Unit Distribution. 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.
Broker-dealers or others will be allowed a concession or agency commission of
70% of the sale charge in connection with the distribution of Units.
Certain commercial banks are making Units of each Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Units;
however, the Glass-Steagall Act does permit certain agency transactions and
the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 500 Units (100 Units for a
tax-sheltered retirement plan). 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.
Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public OfferingGeneral" above.
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.
As stated under "Public Market" below, the Sponsor intends to, and certain
dealers maintain a secondary market for Units of each Trust. In so maintaining
a market, the Sponsor and any such dealers will also realize profits or
sustain losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold. In addition, the
Sponsor and any such dealers will also realize profits or sustain losses
resulting from a redemption of such repurchased Units at a price above or
below the purchase price for such Units, respectively.
Public Market. Although they are not obligated to do so, the Sponsor intends
to, and certain of the other Underwriters may, maintain a market for the Units
offered hereby and offer continuously to purchase Units at prices subject to
change at any time, based upon the aggregate underlying value of the Equity
Securities in each Trust plus, in the case of the Select Equity and Treasury
Trust and the Blue Chip Opportunity and Treasury Trust, the aggregate bid
price of the Treasury Obligations. If the supply of Units exceeds demand or if
some other business reason warrants it, the Sponsor and/or Underwriters may
either discontinue all purchases of Units or discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units and
the Unitholder cannot find another purchaser, a Unitholder desiring to dispose
of his Units may be able to dispose of such Units only by tendering them to
the Trustee for redemption at the Redemption Price. See "Rights of
UnitholdersRedemption of Units". A Unitholder who wishes to dispose of his
Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trusts are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of a Trust may be limited by the plans' provisions and does
not itself establish such plans. The minimum purchase in connection with a
tax-sheltered retirement plan is 100 Units of an individual Trust.
RIGHTS OF UNITHOLDERS
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of each Trust is evidenced by separate registered
certificates executed by the Trustee and the Sponsor. Certificates are
transferable by presentation and surrender to the Trustee properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unitholder
must sign exactly as his name appears on the face of the certificate with the
signature guaranteed by an officer of a commercial bank or trust company, a
member firm of either the New York, American, Midwest or Pacific Stock
Exchange, or in such other manner as may be acceptable to 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. Certificates
will be issued in denominations of one Unit or any multiple thereof.
Although no such charge is now made or contemplated, 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 such 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.
Distributions of Income and Capital. Any dividends received by each Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, return of principal, etc.) are credited to the Capital Account.
The Trustee will distribute any net income other than accreted interest
received with respect to any of the Securities in the Trust on or about the
Income Distribution Dates to Unitholders of record on the preceding Income
Record Dates. See "Summary of Essential Financial Information" in Part One of
the Prospectus. Proceeds received on the sale of any Securities in the Trust,
to the extent not used to meet redemptions of Units or pay expenses, will be
distributed annually on the Capital Account Distribution Date to Unitholders
of record on the preceding Capital Account Record Date. Income with respect to
the original issue discount on the Treasury Obligations will not be
distributed currently, although Unitholders in the Trust will be subject to
federal income tax as if a distribution had occurred. See "Federal Taxation."
Proceeds received from the disposition of any of the 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 applicable to
such Capital Account. The Trustee is not required to pay interest on funds
held in the Capital or Income Accounts (but may itself earn interest thereon
and therefore benefits from the use of such funds).
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share
of the cash in the Income Account after deducting estimated expenses. Because
dividends are not received by the Trusts at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
As of the fifteenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account amounts necessary to pay the expenses of each Trust (as determined on
the basis set forth under "Trust Operating Expenses"). The Trustee also may
withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a Trust.
Amounts so withdrawn shall not be considered a part of a Trust's assets until
such time as the Trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the Trustee may withdraw from the Income
and Capital Accounts such amounts as may be necessary to cover redemptions of
Units.
Reinvestment Option. Unitholders of each Trust may elect to have each
distribution of income, capital gains and/or capital on their Units
automatically reinvested in shares of any of the open-end mutual funds listed
under "Trust AdministrationSponsor" which are registered in the Unitholder's
state of residence (other than B shares). Such mutual funds are hereinafter
collectively referred to as the "Reinvestment Funds."
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets
forth the procedures to follow to commence reinvestment. A Unitholder may
obtain a prospectus for the respective Reinvestment Funds from Van Kampen
Merritt Inc. at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. Texas
residents who desire to reinvest may request that a broker-dealer registered
in Texas send the prospectus relating to the respective fund.
After becoming a participant in a reinvestment plan, each distribution of
income, capital gains and/or capital on the participant's Units will, on the
applicable distribution date, automatically be applied, as directed by such
person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange (which is
currently 4:00 P.M. New York time) on such date, plus a sales charge of $1.00
per $100 of reinvestment, except if the participant selects the Van Kampen
Merritt Money Market Fund or the Van Kampen Merritt Tax Free Money Fund in
which case no sales charge applies. A minimum of one-half of such sales charge
would be paid to Van Kampen Merritt Inc.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund.
Unitholders of the Van Kampen Merritt Blue Chip Opportunity Trust Series 2 may
elect to have each distribution of income, capital gains and/or capital on
their Units automatically reinvested in additional Units of such Trust without
a sales charge (to the extent Units may be lawfully offered for sale in the
state in which the Unitholder resides).To participate in the reinvestment
plan, a Unitholder may either contact his or her broker or agent or file with
the Trustee a written notice of election at least ten days prior to the Record
Date for which the first distribution is to apply. A Unitholder's election to
participate in the reinvestment plan will apply to all Units of the Van Kampen
Merritt Blue Chip Opportunity Trust owned by such Unitholder and such election
will remain in effect until changed by the Unitholder.
Reinvestment plan distributions may be reinvested in Units of the Van Kampen
Merritt Blue Chip Opportunity Trust already held in inventory by the Sponsor
(see "Public Offering-Public Market'') or, until such time as additional
Units cease to be issued by the Trust (see "The Trust"), distributions may be
reinvested in such additional Units. If Units are unavailable in the secondary
market, distributions which would otherwise have been reinvested shall be paid
in cash to the Unitholder on the applicable Distribution Date.
Purchases made pursuant to the reinvestment plan will be made without a sales
charge at the net asset value for Units of the Van Kampen Merritt Blue Chip
Opportunity Trust as of the Evaluation Time on the related Income or Capital
Distribution Dates. Under the reinvestment plan, the Trust will pay the
Unitholder's distributions to the Trustee which in turn will purchase for
such Unitholder full and fractional Units of the Van Kampen Merritt Blue Chip
Opportunity Trust and will send such Unitholder a statement reflecting the
reinvestment.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and its investment adviser shall have the
right to terminate at any time the reinvestment plan relating to such
Reinvestment Fund and the Sponsor shall have the right to suspend or terminate
the reinvestment plan for reinvestment in additional Units of the Van Kampen
Merritt Blue Chip Opportunity Trust at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of a Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received (including amortization of original
issue discount with respect to the Treasury Obligations in Select Equity and
Treasury Trust and Blue Chip Opportunity and Treasury Trust), deductions for
applicable taxes and for fees and expenses of a Trust, for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (ii) as to the Capital Account: the
dates of disposition of any Securities (other than pursuant to In Kind
Distributions) and the net proceeds received therefrom, the results of In Kind
Distributions in connection with redemptions of Units, if any, deductions for
payment of applicable taxes and fees and expenses of the related Trust held
for distribution to Unitholders of record as of a date prior to the
determination and the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each Unit outstanding on the last business
day of such calendar year; (iii) a list of the Securities held and the number
of Units outstanding on the last business day of such calendar year; (iv) the
Redemption Price per Unit based upon the last computation thereof made during
such calendar year; and (v) amounts actually distributed during such calendar
year from the Income and Capital Accounts, separately stated, expressed as
total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in a Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its corporate trust office at its Unit Investment
Trust Division, 101 Barclay Street, 20th Floor, New York, New York 10286 of
the certificates representing the Units to be redeemed, duly endorsed or
accompanied by proper instruments of transfer with signature guaranteed (or by
providing satisfactory indemnity, as in connection with lost, stolen or
destroyed certificates) and by payment of applicable governmental charges, if
any. No redemption fee will be charged. On the seventh calendar day following
such tender, or if the seventh calendar day is not a business day, on the
first business day prior thereto, the Unitholder will be entitled to receive
in cash (unless the redeeming Unitholder elects an In Kind Distribution as
indicated below) an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units. The
"date of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the close of trading on
the New York Stock Exchange (which is currently 4:00 P.M. New York time) the
date of tender is the next day on which such Exchange is open for trading and
such Units will be deemed to have been tendered to the Trustee on such day for
redemption at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
Unitholders of the Select Equity, Select Equity and Treasury or Blue Chip
Opportunity and Treasury Trusts tendering 5000 Units or more for redemption
may request from the Trustee in lieu of a cash redemption a distribution in
kind ("In Kind Distribution") of an amount and value of Securities per Unit
equal to the Redemption Price per Unit as determined as of the evaluation next
following the tender. In Kind Distributions are not available to Unitholders
of the Van Kampen Merritt Blue Chip Opportunity Trust, Series 2. An In Kind
Distribution on redemption of Units 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 bank or broker-dealer at Depository Trust Company. The
tendering Unitholder will receive his pro rata number of whole shares of each
of the Securities comprising the portfolio and cash from the Capital Account
equal to the fractional shares (and in the case of the Select Equity and
Treasury Trust and the Blue Chip Opportunity and Treasury Trust the pro rata
portion of the Treasury Obligations) to which the tendering Unitholder is
entitled. In implementing these redemption procedures, the Trustee shall make
any adjustments necessary to reflect differences between the Redemption Price
of the Securities distributed in kind as of the date of tender. If funds in
the Capital Account are insufficient to cover the required cash distribution
to the tendering Unitholder, the Trustee may sell Securities according to the
criteria discussed above.
To the extent that Securities are redeemed in kind or sold, the size of a
Trust will be, and the diversity of such Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the portfolio at the time of
redemption. Special federal income tax consequences will result if a
Unitholder requests an In Kind Distribution. See "Federal Taxation".
The Redemption Price per Unit will be determined on the basis of the aggregate
underlying value of the Equity Securities in each Trust plus, in the case of
the Select Equity and Treasury Trust and the Blue Chip Opportunity and
Treasury Trust, the bid price of the Treasury Obligations, plus or minus cash,
if any, in the Income and Capital Accounts. While the Trustee has the power to
determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in a Trust determined on the basis of (i)
the cash on hand in such Trust or monies in the process of being collected and
(ii) the value of the Securities in such Trust, less (a) amounts representing
taxes or other governmental charges payable out of such Trust, (b) any amount
owing to the Trustee for its advances and (c) the accrued expenses of such
Trust. The Evaluator may determine the value of a Securities in a Trust in the
following manner: if the Securities are listed on a national securities
exchange, the evaluation will generally be based on the last available sale
price on the exchange (unless the Evaluator deems the price inappropriate as a
basis for evaluation) or, if there is no last available sale price on the
exchange, at the mean between the last available bid and offer prices. See
"Public Offering" for a description of the method of evaluating the Treasury
Obligations in the Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and the diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not otherwise be
sold and might result in lower prices than might otherwise be realized.
The 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 Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in a Trust is not reasonably practicable, or for such other periods
as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.
Portfolio Administration. The portfolios of the Fund are not "managed" by the
Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. The Trust Agreement
provides that the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the payment of a
dividend that has been declared, that any action or proceeding has been
instituted restraining the payment of dividends or there exists any legal
question or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments of
dividends, the credit standing of the issuer or otherwise impair the sound
investment character of the Equity Security, that the issuer has defaulted on
the payment on any other of its outstanding obligations, that the price of the
Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Equity
Securities would be detrimental to a Trust. In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that the Van Kampen
Merritt Blue Chip Opportunity Trust, Series 2 continues to satisfy the
qualifications of a regulated investment company, including the requirements
with respect to diversification under Section 851 of the Internal Revenue
Code. Treasury Obligations may be sold by the Trustee only pursuant to the
liquidation of a Trust or to meet redemption requests. Except as stated under
"Trust Portfolios General" for failed securities, the acquisition by the Fund
of any securities other than the Securities is prohibited. Pursuant to the
Trust Agreement and with limited exceptions, the Trustee must sell any
securities or other properties acquired in exchange for Equity Securities such
as those acquired in connection with a merger or other transaction. Proceeds
from the sale of Securities (or any securities or other property received by
the Fund in exchange for Equity Securities) are credited to the applicable
Capital Account for distribution to Unitholders or to meet redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also sell
Securities designated by the Supervisor, or if not so directed, in its own
discretion, for the purpose of redeeming Units of a Trust tendered for
redemption and the payment of expenses; provided, however, that in the case of
Securities sold to meet redemption requests, Treasury Obligations may only be
sold if the Select Equity and Treasury Trust and the Blue Chip Opportunity and
Treasury Trust is assured of retaining a sufficient principal amount of
Treasury Obligations to provide funds upon maturity of such Trust at least
equal to $10.00 per Unit. Treasury Obligations may not be sold by the Trustee
to meet expenses of the Select Equity and Treasury Trust and the Blue Chip
Opportunity and Treasury Trust.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities. To the extent this is not practicable,
the composition and diversity of the Equity Securities may be altered. In
order to obtain the best price for a Trust, it may be necessary for the
Supervisor to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, (as determined in good faith by the Sponsor
and the Trustee) provided, however, that the Trust Agreement may not be
amended to increase the number of Units. The Trust Agreement may also be
amended in any respect by the Trustee and Sponsor, or any of the provisions
thereof may be waived, with the consent of the holders of 51% of the Units
then outstanding, provided that no such amendment or waiver will reduce the
interest in a Trust of any Unitholder without the consent of such Unitholder
or reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.
Each Trust may be liquidated (1) at any time by consent of Unitholders
representing 51% of the Units of the Select Equity Trust or the Blue Chip
Opportunity Trust then outstanding (or in the case of the Select Equity and
Treasury Trust or the Blue Chip Opportunity and Treasury Trust, 100% of the
Units then outstanding) or (2) in the case of the Select Equity Trust or the
Blue Chip Opportunity Trust, by the Trustee when the value of such Trust, as
shown by any evaluation, is less than that indicated under "Summary of
Essential Financial Information" in Part One of the Prospectus. The Trust will
be liquidated by the Trustee in the event that a sufficient number of Units
not yet sold are tendered for redemption by the Underwriters, including the
Sponsor, so that the net worth of the Trust would be reduced to less than 40%
of the value of the Securities at the time they were deposited in the Trust.
If the Trust is liquidated because of the redemption of unsold Units by the
Underwriters, 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 stated under
"Summary of Essential Financial Information" in Part One of this Prospectus.
Commencing on the Mandatory Termination Date, Equity Securities will begin
to be sold in connection with the termination of the Trusts. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. Written notice of any termination specifying the time or times at
which Unitholders may surrender their certificates for cancellation, if any
are then issued and outstanding, shall be given by the Trustee to each
Unitholder so holding a certificate at his address appearing on the
registration books of the Fund maintained by the Trustee. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice
thereof to all Unitholders and will include with such notice a form to enable
Unitholders of the Select Equity, Select Equity and Treasury, and Blue Chip
Opportunity and Treasury Trusts owning 5,000 or more Units of such Trusts to
request an In Kind Distribution rather than payment in cash upon the
termination of the related Trust. In Kind Distributions are not available for
the Van Kampen Merritt Blue Chip Opportunity Trust, Series 2. 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 next business day thereafter if a holiday) the Trustee will deliver each
requesting Unitholder's pro rata number of whole shares of each of the Equity
Securities in the related 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 Equity Securities (and in the case
of the Select Equity and Treasury Trust and the Blue Chip Opportunity and
Treasury Trust the pro rata portion of the Treasury Obligations) will be paid
in cash. Unitholders with less than 5,000 Units, those not requesting an In
Kind Distribution and Unitholders of the Van Kampen Merritt Blue Chip
Opportunity Trust, Series 2 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 each Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation
of the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in a Trust upon termination may result in a lower
amount than might otherwise be realized if such sale were not required at such
time. The Trustee will then distribute to each Unitholder his pro rata share
of the balance of the Income and Capital Accounts.
The Sponsor currently intends to, but is not obligated to, offer for
sale units of a subsequent series of Van Kampen Merritt Equity Opportunity
Trust on the Mandatory Termination Date for the Trust. If the Sponsor is in
fact offering such units for sale, Unitholders of the Trust will be given an
opportunity to purchase such units at a public offering price which includes a
special reduced sales charge. There is, however, no assurance that units of
any new series of Van Kampen Merritt Equity Opportunity Trust will be offered
for sale at that time, or if offered, that there will be sufficient units
available for sale to meet the requests of any or all Unitholders.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
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.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders 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 negligence (gross negligence in the case of
the Sponsor) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee
of any of the Securities. In the event of the failure of the Sponsor to act
under the Trust Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of a Trust
which the Trustee may be required to pay under any present or future law of
the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Sponsor. Van Kampen Merritt Inc., a Delaware corporation, is the Sponsor of
the Trust. Van Kampen Merritt Inc. is primarily owned by Clayton, Dubilier &
Rice, Inc., a New York-based private investment firm. Van Kampen Merritt Inc.
management owns a significant minority equity position. Van Kampen Merritt
Inc. specializes in the underwriting and distribution of unit investment
trusts and mutual funds. The Sponsor is a member of the National Association
of Securities Dealers, Inc. and has its principal office at One Parkview
Plaza, Oakbrook Terrace, lllinois 60181 (708-684-6000). It maintains a branch
office in Philadelphia and has regional representatives in Atlanta, Dallas,
Los Angeles, New York, San Francisco, Seattle and Tampa. As of September 30,
1993, the total stockholders' equity of Van Kampen Merritt Inc. was
$200,885,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trusts. 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 November 30, 1993, the Sponsor and its affiliates managed or supervised
approximately $38.5 billion of investment products, of which over $25 billion
is invested in municipal securities. The Sponsor and its affiliates managed
$23 billion of assets, consisting of $8.2 billion for 19 mutual funds, $8.3
billion for 33 closed-end funds and $6.5 billion for 51 institutional
accounts. The Sponsor has also deposited over $23.5 billion of unit investment
trusts. Based on cumulative assets deposited, the Sponsor believes that it is
the largest sponsor of insured municipal unit investment trusts, primarily
through the success of its Insured Municipal Income Trust or the IM-IT trust.
The Sponsor also provides surveillance and evaluation services at cost for
approximately $15.5 billion of unit investment trust assets outstanding. Since
1976, the Sponsor has opened over one million retail investor accounts through
retail distribution firms. Van Kampen Merritt Inc. is the sponsor of the
various series of the trusts listed below and the distributor of the mutual
funds and closed-end funds listed below. Unitholders may only invest in the
trusts, mutual funds and closed-end funds which are registered for sale in the
state of residence of such Unitholder.
Van Kampen Merritt Inc. is the sponsor of the various series of the following
unit investment trusts: Investors' Quality Tax-Exempt Trust; Investors'
Quality Tax-Exempt Trust, Multi-Series; Insured Municipals Income Trust;
Insured Municipals Income Trust, Insured Multi-Series; California Insured
Municipals Income Trust; New York Insured Municipals Income Trust;
Pennsylvania Insured Municipals Income Trust; Insured Tax Free Bond Trust;
Insured Tax Free Bond Trust, Insured Multi-Series; Investors' Quality
Municipals Trust, AMT Series; Van Kampen Merritt Blue Chip Opportunity Trust;
Van Kampen Merritt Blue Chip Opportunity and Treasury Trust; Investors'
Corporate Income Trust; Investors' Governmental Securities-Income Trust; Van
Kampen Merritt International Bond Income Trust; Van Kampen Merritt Utility
Income Trust; Van Kampen Merritt Insured Income Trust; Van Kampen Merritt
Emerging Markets Income Trust; Van Kampen Merritt Global Telecommunications
Trust; and Van Kampen Merritt Global Energy Trust.
Van Kampen Merritt Inc. is the distributor of the following mutual funds: Van
Kampen Merritt U.S.Government Fund; Van Kampen Merritt California Insured Tax
Free Fund; Van Kampen Merritt Tax-Free High Income Fund; Van Kampen Merritt
Insured Tax-Free Income Fund; Van Kampen Merritt High Yield Fund; Van Kampen
Merritt Growth and Income Fund; Van Kampen Merritt Pennsylvania Tax-Free
Income Fund; Van Kampen Merritt Money Market Fund; Van Kampen Merritt Tax Free
Money Fund; Van Kampen Merritt Municipal Income Fund; Van Kampen Merritt
Adjustable Rate U.S. Government Fund; Van Kampen Merritt Short-Term Global
Income Fund; and Van Kampen Merritt Limited Term Municipal Income Fund.
Van Kampen Merritt is the distributor of the following closed-end funds: Van
Kampen Merritt Municipal Income Trust; Van Kampen Merritt California Municipal
Trust; Van Kampen Merritt Intermediate Term High Income Trust; Van Kampen
Merritt Limited Term High Income Trust; Van Kampen Merritt Prime Rate Income
Trust; Van Kampen Merritt Investment Grade Municipal Trust; Van Kampen Merritt
Municipal Trust; Van Kampen Merritt California Quality Municipal Trust; Van
Kampen Merritt Florida Quality Municipal Trust; Van Kampen Merritt New York
Quality Municipal Trust; Van Kampen Merritt Ohio Quality Municipal Trust; Van
Kampen Merritt Pennsylvania Quality Municipal Trust; Van Kampen Merritt Trust
for Investment Grade Municipals; Van Kampen Merritt Trust for Investment Grade
CA Municipals; Van Kampen Merritt Trust for Insured Municipals; Van Kampen
Merritt Trust for Investment Grade FL Municipals; Van Kampen Merritt Trust for
Investment Grade PA Municipals; Van Kampen Merritt Advantage Pennsylvania
Municipal Income Trust; Van Kampen Merritt Advantage Municipal Income Trust;
Van Kampen Merritt Municipal Opportunity Trust; Van Kampen Merritt Trust for
Investment Grade NY Municipals; Van Kampen Merritt Trust for Investment Grade
NJ Municipals; Van Kampen Merritt Strategic Sector Municipal Trust; Van Kampen
Merritt Value Municipal Income Trust; Van Kampen Merritt California Value
Municipal Income Trust; Van Kampen Merritt Massachusetts Value Municipal
Income Trust; Van Kampen Merritt New Jersey Value Municipal Income Trust; Van
Kampen Merritt New York Value Municipal Income Trust; Van Kampen Merritt Ohio
Value Municipal Income Trust; Van Kampen Merritt Pennsylvania Value Municipal
Income Trust; Van Kampen Merritt Municipal Opportunity Trust II; Van Kampen
Merritt Florida Municipal Opportunity Trust; Van Kampen Merritt Advantage
Municipal Income Trust II; and Van Kampen Merritt Select Municipal Trust.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or 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 Fund as provided therein
or (iii) continue to act as Trustee without terminating the Trust Agreement.
All costs and expenses incurred in creating and establishing the Fund,
including the cost of the initial preparation, printing and execution of the
Trust Agreement and the certificates, legal and accounting expenses,
advertising and selling expenses, expenses of the Trustee, initial evaluation
fees and other out-of-pocket expenses have been borne by the Sponsor at no
cost to the Fund.
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 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 the Banks of
the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the trust portfolios.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of such Trust. 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 (see "Rights of Unitholders-Reports Provided"). The Trustee
is required to keep a certified copy or duplicate original of the Trust
Agreement on file in its office available for inspection at all reasonable
times during the usual business hours by any Unitholder, together with a
current list of the Securities held in each Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus, and undivided
profits of not less than $5,000,000.
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.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in Part One of this Prospectus have been
audited by Grant Thornton, independent certified public accountants, as set
forth in their report in Part One of this Prospectus, and are included herein
in reliance upon the authority of said firm as experts in accounting and
auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trusts, the Sponsor or dealers. This Prospectus does not constitute an offer
to sell, or a solicitation of any offer to buy, securities in any state to any
persons to whom it is not lawful to make such offer in such state.
TABLE OF CONTENTS
Title Page
The Trusts 3
Objectives and Securities Selection 3
Trust Portfolios 4
Federal Taxation 6
Trust Operating Expenses 10
Public Offering 10
Rights of Unitholders 12
Trust Administration 15
Other Matters 20
This Prospectus does not contain all the information set forth in the
registration statements and exhibits relating thereto, which the Fund has
filed with Securities and Exchange Commission, Washington, D.C. under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
VAN KAMPEN MERRITT
EQUITY OPPORTUNITY TRUST
__________________
PROSPECTUS
PART TWO
__________________
Note: This Prospectus May Be Used Only When Accompanied by Part One. Both
parts of this Prospectus should be retained for future reference.
Dated as of the Date of the Prospectus Part I accompanying this Prospectus
Part II
Sponsor:
VAN KAMPEN MERRITT
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Mellon Bank Center
1735 Market Street
Philadelphia, Pennsylvania 19103
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Merritt Equity Opportunity Trust, Series 1,
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 25th
day of April, 1994.
Van Kampen Merritt Equity
Opportunity Trust, Series 1
(Registrant)
By Van Kampen Merritt Inc.
(Depositor)
By Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Post Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities on April 25, 1994:
Signature Title
John C. Merritt Chairman, Chief Executive )
Officer and Director )
)
William R. Rybak Senior Vice President and )
Chief Financial Officer )
)
Ronald A. Nyberg Director )
)
William R. Molinari Director )
)
Sandra A. Waterworth
(Attorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income
Trust, 113th Insured Multi-Series (File No. 33-46036) and the same
are hereby incorporated herein by this reference.
Consent of Independent Certified Public Accountants
We have issued our report dated March 4, 1994 accompanying the
financial statements of Van Kampen Merritt Equity Opportunity Trust,
Series 1 as of December 31, 1993, and for the period then ended,
contained in this Post-Effective Amendment No. 2 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton
Chicago, Illinois
April 25, 1994
