Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 3
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen Merritt Equity Opportunity Trust, Series 1
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell 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 24, 1995 pursuant to paragraph (b) of Rule 485.
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.
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
THE TRUST
The above-named series of Van Kampen Merritt Equity Opportunity Trust, Series
1 (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 19, 1995
Van Kampen American Capital
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 1
Select Equity Trust and Select Equity and Treasury Trust
Summary of Essential Financial Information
As of March 9, 1995
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Van Kampen American Capital 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
<TABLE>
<CAPTION>
Select
Equity
Select and
Equity Treasury
Trust Trust
<S> <C> <C>
General Information
Aggregate Maturity Value of Treasury Obligations Initially Deposited............................ -- 27,000,000
Number of Units................................................................................. 380,902 2,120,659
Fractional Undivided Interest in Trust per Unit................................................. 1/380,902 1/2,120,659
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>................................................ $ 5,095,919.15 $ 26,487,419.53
Aggregate Value Securities per Unit (including accumulated dividends).......................... $ 13.36 $ 12.49
Sales charge 3.6% (3.73% of Aggregate Value of Securities excluding principal cash per Unit)<F3> $ .50 $ .46
Transaction Fees per Unit <F2>................................................................. $ -- $ --
Public Offering Price per Unit <F2><F3>........................................................ $ 13.86 $ 12.95
Redemption Price per Unit....................................................................... $ 13.36 $ 12.49
Secondary Market Repurchase Price per Unit...................................................... $ 13.36 $ 12.49
Excess of Public Offering Price per Unit over Redemption Price per Unit......................... $ .50 $ .46
Supervisor's Annual Supervisory Fee...Maximum of $.0025 per Unit
Evaluator's Annual Fee ...............Maximum of $.0025 per Unit
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made
as of the close of trading on the New York Stock Exchange(currently 4:00
P.M. New York time) next followingreceipt of an order for a sale or purchase
of Units or receipt by the Trustee of Units tendered for redemption.
<TABLE>
<CAPTION>
<S> <C>
Date of Deposit.......................November 21, 1991
Mandatory Termination Date............May 15, 2002
Trustee's Annual Fee..................$.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>Anyone ordering units will have added to the Public Offering Price a pro rata
share of any cash in the income account.
<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>
PORTFOLIO
The Select Equity Trust consists of 30 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.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1991 <F1> 1992 1993 1994
<S> <C> <C> <C> <C>
Net asset value per Unit at beginning of period................ $ 9.42 $ 10.19 $ 11.05 $ 12.74
Net asset value per Unit at end of period...................... $ 10.19 $ 11.05 $ 12.74 $ 12.82
Distributions to Unitholders of investment income including
accrued interest to carry paid on Units redeemed (average
Units outstanding for entire period) ........................... $ -- $ .33 $ .35 $ .33
Distributions to Unitholders from Bond redemption proceeds
(average Units outstanding for entire period)................... $ -- $ -- $ -- $ --
Unrealized appreciation (depreciation) of Bonds (per Unit
outstanding at end of period) .................................. $ .75 $ .32 $ 1.12 $ (.53)
Distributions of investment income by frequency of payment .....
Units outstanding at end of period............................. 150,000 675,000 462,635 390,527
</TABLE>
For the period from November 21, 1991 (date of deposit) through December 31,
1991.
PORTFOLIO
The Select Equity and Treasury Trust consists of 30 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.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1991 <F1> 1992 1993 1994
<S> <C> <C> <C> <C>
Net asset value per Unit at beginning of period................ $ 9.05 $ 9.75 $ 10.62 $ 12.41
Net asset value per Unit at end of period...................... $ 9.75 $ 10.62 $ 12.41 $ 11.82
Distributions to Unitholders of investment income including
accrued interest to carry paid on Units redeemed (average
Units outstanding for entire period) ........................... $ -- $ .16 $ .14 $ .12
Distributions to Unitholders from Bond redemption proceeds
(average Units outstanding for entire period)................... $ -- $ -- $ -- $ --
Unrealized appreciation (depreciation) of Bonds (per Unit
outstanding at end of period) .................................. $ .70 $ .59 $ .95 $ (1.73)
Units outstanding at end of period............................. 300,000 2,700,000 2,464,843 2,152,345
</TABLE>
For the period from November 21, 1991 (date of deposit) through December 31,
1991.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, 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, 1994, and the related statements of operations and
changes in net assets for the three years ended December 31, 1994. 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, 1994 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, 1994, and the results of operations and changes in
net assets for the three years ended December 31, 1994, in conformity with
generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 10, 1995
<TABLE>
VAN KAMPEN MERRITT
EQUITY OPPORTUNITY TRUST
SERIES 1
Statement of Condition
December 31, 1994
<CAPTION>
Select
Equity
Select and
Equity Treasury
Trust Trust
<S> <C> <C>
Trust property
Cash................................................................................................. $ -- $ --
Securities at market value, (cost $4,397,101 and $26,098,559, respectively) (note 1)................. 5,035,361 25,402,703
Accumulated dividends................................................................................ 12,435 26,260
Receivable for securities sold....................................................................... 14,021 73,263
$ 5,061,817 $ 25,502,226
Liabilities and interest to Unitholders
Cash overdraft....................................................................................... $ 34,330 $ 10,641
Redemptions payable.................................................................................. 19,822 59,401
Interest to Unitholders.............................................................................. 5,007,665 25,432,184
$ 5,061,817 $ 25,502,226
Analyses of Net Assets
Interest of Unitholders (390,527 and 2,152,345 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 (284,473 and 547,655 Units, respectively)................................... 3,414,413 6,574,976
3,693,853 20,264,796
Undistributed net investment income
Net investment income................................................................................ 458,872 5,149,993
Less distributions to Unitholders.................................................................... 466,585 889,377
(7,713) 4,260,616
Realized gain (loss) on Security sale or redemption.................................................. 683,265 1,602,628
Unrealized appreciation (depreciation) of Securities (note 2)........................................ 638,260 (695,856)
Distributions to Unitholders of Security sale or redemption proceeds................................. -- --
Net asset value to Unitholders....................................................................... $ 5,007,665 $ 25,432,184
Net asset value per Unit (Units outstanding of 390,527 and 2,152,345, respectively)................... $ 12.82 $ 11.82
</TABLE>
The accompanying notes are an integral part of this statement.
<TABLE>
VAN KAMPEN MERRITT
SELECT EQUITY TRUST, SERIES 1
Statements of Operations
Years ended
December 31,
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Investment income
Dividend income..................................................... $ 164,169 $ 173,362 $ 145,562
Expenses
Trustee fees and expenses........................................... 5,736 6,082 5,707
Evaluator fees...................................................... -- 2,413 4,754
Supervisory fees.................................................... 707 1,366 510
Total expenses...................................................... 6,443 9,861 10,971
Net investment income............................................... 157,726 163,501 134,591
Realized gain (loss) from Security sale or redemption
Proceeds............................................................ 100 2,485,986 908,344
Cost................................................................ -- 2,053,198 657,967
Realized gain (loss)................................................ 100 432,788 250,377
Net change in unrealized appreciation (depreciation) of Securities... 217,622 516,347 (207,984)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......$ 375,448 $ 1,112,636 $ 176,984
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Years ended
December 31,
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income........................................................... $ 157,726 $ 163,501 $ 134,591
Realized gain (loss) on Security sale or redemption............................. 100 432,788 250,377
Net change in unrealized appreciation (depreciation) of Securities.............. 217,622 516,347 (207,984)
Net increase (decrease) in net assets resulting from operations................. 375,448 1,112,636 176,984
Distributions to Unitholders from:
Net investment income........................................................... (140,393) (189,799) (136,393)
Securities sale or redemption proceeds.......................................... -- -- --
Redemption of Units -- (2,486,722) (927,691)
Total increase (decrease)....................................................... 235,055 (1,563,885) (887,100)
Net asset value to Unitholders
Beginning of period............................................................. 1,528,779 7,458,650 5,894,765
Additional Securities purchased from proceeds of Unit sales..................... 5,694,816 -- --
End of period (including undistributed (overdistributed) net investment income
of $20,387, $ (5,911) and $ (7,713), respectively)............................... $ 7,458,650 $ 5,894,765 $ 5,007,665
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY AND TREASURY TRUST, SERIES 1
Statements of Operations
Years ended
December 31,
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Investment income
Dividend income...................................................... $ 301,318 $ 375,602 $ 319,185
Interest income...................................................... 1,110,000 1,766,568 1,354,106
Expenses
Trustee fees and expenses............................................ 14,476 23,733 21,918
Evaluator fees....................................................... -- 5,117 2,102
Insurance fees....................................................... -- -- --
Supervisory fees..................................................... 2,581 5,688 4,170
Total expenses....................................................... 17,057 34,538 28,190
Net investment income................................................ 1,394,261 2,107,632 1,645,101
Realized gain (loss) from Security sale or redemption
Proceeds............................................................. 90 2,797,891 3,776,534
Cost................................................................. -- 2,179,554 2,792,333
Realized gain (loss)................................................. 90 618,337 984,201
Net change in unrealized appreciation (depreciation) of Securities... 484,005 2,331,779 (3,721,803)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.......$ 1,878,356 $ 5,057,748 $ (1,092,501)
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Years ended
December 31,
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income........................................................ $ 1,394,261 $ 2,107,632 $ 1,645,101
Realized gain (loss) on Security sale or redemption.......................... 90 618,337 984,201
Net change in unrealized appreciation (depreciation) of Securities........... 484,005 2,331,779 (3,721,803)
Net increase (decrease) in net assets resulting from operations.............. 1,878,356 5,057,748 (1,092,501)
Distributions to Unitholders from:
Net investment income........................................................ (251,175) (361,279) (276,923)
Security sale or redemption proceeds......................................... -- -- --
Redemption of Units.......................................................... -- (2,798,091) (3,776,885)
Total increase (decrease).................................................... 1,627,181 1,898,378 (5,146,309)
Net asset value to Unitholders
Beginning of period.......................................................... 2,925,817 28,680,115 30,578,493
Additional Securities purchased from proceeds of Unit sales.................. 24,127,117 -- --
End of period (including undistributed net investment income of $923,275,
$2,669,628 and $4,260,616, respectively)...................................... $ 28,680,115 $ 30,578,493 $ 25,432,184
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY TRUST, SERIES 1
PORTFOLIO as of December 31, 1994
<CAPTION>
Valuation of
Securities at
Number December 31,
of Market Value Per 1994
Shares Name of Issuer Share (Note 1)
<S> <C> <C> <C>
5,084 Allied Signal, Inc. 34.000 $ 172,856.00
2,212 Aluminum Company of America (ALCOA) 86.625 191,614.50
6,015 American Express Company 29.500 177,442.50
3,376 American Telephone and Telegraph (AT&T) 50.250 169,644.00
7,791 Bethlehem Steel Corporation 18.000 140,238.00
3,840 The Boeing Company 46.750 179,520.00
3,412 Caterpillar Inc. 55.125 188,086.50
3,950 Chevron Corp. 44.625 176,268.75
3,734 Coca-Cola Enterprises, Inc. 51.500 192,301.00
4,037 Walt Disney Company 46.125 186,206.63
3,083 Du Pont (E.I) de Nemours & Company 56.250 173,418.75
3,450 Eastman Kodak Company 47.750 164,737.50
2,993 Exxon Corporation 60.750 181,824.75
3,642 General Electric Company 51.000 185,742.00
3,180 General Motors 42.250 134,355.00
4,425 Goodyear Tire & Rubber Company 33.625 148,790.63
1,985 International Business Machines (IBM) 73.500 145,897.50
2,518 International Paper Company 75.375 189,794.25
6,229 McDonalds Corporation 29.250 182,198.25
3,770 Merck & Co., Inc. 38.125 143,731.25
3,202 Minnesota Mining and Manufacturing Company (3M) 53.375 170,906.75
2,780 J.P. Morgan & Company, Inc. 56.000 155,680.00
2,935 Philip Morris Companies Inc. 57.500 168,762.50
2,969 The Procter & Gamble Company 62.000 184,078.00
3,644 Sears, Roebuck & Company 46.000 167,624.00
3,020 Texaco, Inc. 59.875 180,822.50
5,791 Union Carbide Corporation 29.375 170,110.63
2,752 United Technologies Corporation 62.875 173,032.00
10,923 Westinghouse Electric Corporation 12.250 133,806.75
7,058 Woolworth Corp. 15.000 105,870.00
123,800 $ 5,035,360.89
</TABLE>
The accompanying notes are an integral part of this statement.
<TABLE>
VAN KAMPEN MERRITT SELECT EQUITY AND TREASURY TRUST, SERIES 1
PORTFOLIO as of December 31, 1994
<CAPTION>
Valuation of
Securities at
Number December 31,
of Market Value Per 1994
Shares Name of Issuer Share (Note 1)
<S> <C> <C> <C>
10,052 Allied Signal, Inc. 34.000 $ 341,768.00
4,292 Aluminum Company of America (ALCOA) 86.625 371,794.50
11,822 American Express Company 29.500 348,749.00
7,008 American Telephone and Telegraph (AT&T) 50.250 352,152.00
14,045 Bethlehem Steel Corporation 18.000 252,810.00
7,828 The Boeing Company 46.750 365,959.00
6,723 Caterpillar Inc. 55.125 370,605.38
8,135 Chevron Corp. 44.625 363,024.38
7,090 Coca-Cola Enterprises, Inc. 51.500 365,135.00
7,859 Walt Disney Company 46.125 362,496.38
6,411 Du Pont (E.I) de Nemours & Company 56.250 360,618.75
7,281 Eastman Kodak Company 47.750 347,667.75
5,891 Exxon Corporation 60.750 357,878.25
7,303 General Electric Company 51.000 372,453.00
7,430 General Motors 42.250 313,917.50
10,105 Goodyear Tire & Rubber Company 33.625 339,780.63
4,255 International Business Machines (IBM) 73.500 312,742.50
4,847 International Paper Company 75.375 365,342.63
12,010 McDonalds Corporation 29.250 351,292.50
8,100 Merck & Co., Inc. 38.125 308,812.50
6,891 Minnesota Mining and Manufacturing Company (3M) 53.375 367,807.13
6,031 J.P. Morgan & Company, Inc. 56.000 337,736.00
6,179 Philip Morris Companies Inc. 57.500 355,292.50
5,861 The Procter & Gamble Company 62.000 363,382.00
7,700 Sears, Roebuck & Company 46.000 354,200.00
6,025 Texaco, Inc. 59.875 360,746.88
10,592 Union Carbide Corporation 29.375 311,140.00
5,841 United Technologies Corporation 62.875 367,252.88
19,818 Westinghouse Electric Corporation 12.250 242,770.50
14,965 Woolworth Corp. 15.000 224,475.00
248,390 10,209,802.54
Maturity
Value Name of Issuer and Title of Security
$ 27,000,000 Zero Coupon U.S. Treasury bonds maturing May 15, 2002 15,192,900.00
$ 25,402,702.54
</TABLE>
The accompanying notes are an integral part of this statement.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST SERIES 1
Notes to Financial Statements
December 31, 1992, 1993 and 1994
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 - 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. Since the date of deposit undistributed
net investment income includes $4,230,674 of accreted interest.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1994 is as follows:
<TABLE>
<CAPTION>
Select
Select Equity and
Equity Treasury
Trust Trust
<S> <C> <C>
Unrealized Appreciation $ 914,429 $ 1,732,680
Unrealized Depreciation (276,169) (2,428,536)
$ 638,260 $ (695,856)
</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.
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994
<S> <C> <C>
Select Equity Trust 212,365 72,108
Select Equity and Treasury Trust 235,157 312,498
</TABLE>
VAN KAMPEN MERRITT
EQUITY OPPORTUNITY TRUST
PROSPECTUS 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 and Treasury Trust.
Series 2 (the "Blue Chip Opportunity and Treasury Trust"), Van Kampen
Merritt Global Telecommunications Trust (the "Global Telecommunications
Trust"), Van Kampen Merritt Global Energy Trust (The "Global Energy
Trust") and Van Kampen Merritt Brand Name Equity Trust (the "Brand
Name 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 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. The Global
Telecommunications Trust offers investors the opportunity to purchase Units
representing proportionate interests in a fixed, diversified portfolio of
equity securities issued by companies which provide equipment for or services
to the telecommunications field including common stocks of foreign issuers,
all of which are in American Depositary Receipt form ("ADRs"). The
Global Energy Trust offers investors the opportunity to purchase Units
representing proportionate interests in a fixed, diversified portfolio of
equity securities issued by companies diversified within the energy industry
including common stocks of foreign issuers, all of which are in American
Depositary receipt form ("ADRs"). The Brand Name Trust offers
investors the opportunity to purchase Units representing proportionate
interests in a fixed portfolio of equity securities issued by companies
diversified within the non-durable consumer goods industry including common
stocks of foreign issuers, all of which are in American Depositary Receipt
form ("ADRs"). 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 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 in the case of the Select Equity and Treasury Trust, the remainder of
the Trust's portfolio in the identical Equity Securities that comprise the
Select Equity Trust, and, in the case of the Blue Chip Opportunity and
Treasury Trust, the remainder of the Trust's portfolio in New York Stock
Exchange listed equity securities which are components of the Dow Jones
Industrial Average. The objectives of the Global Telecommunications, Global
Energy and Brand Name Trusts are to provide the potential for capital
appreciation and income, consistent with the preservation of capital, by
investing in a portfolio of equity securities diversified within the
telecommunications, energy, and non-durable consumer goods industries,
respectively ("Equity Securities"). 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.
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.
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.
Van Kampen American Capital
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 (250 Units in the case of the Global
Telecommunications Trust) and 100 Units for a tax-sheltered retirement plan,
(50 Units in the case of the Telecommunications Trust). See "Public
Offering".
Additional Deposits. The Sponsor may, from time to time during a period of up
to 12 months after the Initial Date of Deposit, deposit additional Securities
in the Trust provided it maintains, as nearly as is practicable, the original
proportionate relationship of the Securities in Trust's portfolio. See "
The Trusts."
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 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 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 and the
Blue Chip Opportunity 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 the Global
Telecommunications and Global Energy Trusts 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 (2,500 Units in the case
of the Brand Name 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 of the Brand Name Trust
electing a distribution of shares of Equity Securities should be aware that
the transaction is subject to taxation and Unitholders will recognize gain
based on any appreciation in value of the Equity Securities. Unitholders not
electing a distribution of shares of Equity Securities and Unitholders of the
Global Telecommunications and Global Energy Trusts will receive a cash
distribution from the sale of the remaining Securities within a reasonable
time after the Trust in terminated. See "Trust AdministrationReinvestment
Option."
Reinvestment Option. Unitholders of Trusts other than the Global
Telecommunications Trust have the opportunity to have their distributions
reinvested into an open-end, management investment company as described
herein. Unitholders of Trusts other than the Select Equity, Select Equity and
Treasury and Blue Chip Opportunity and Treasury Trusts also have the option of
having distributions reinvested into additional Units of the Trust if Units
are available at the time of reinvestment as described herein. See "Rights
of UnitholdersReinvestment Option."
Risk Factors. An investment in a Trust should be made with an understanding of
the risks associated therewith, including the possible deterioration of either
the financial condition of the issuers or the general condition of the stock
market and currency fluctuations, the lack of adequate financial information
concerning an issuer and exchange control restrictions impacting foreign
issuers. See "Risk Factors". Units of the Fund are not deposits or
obligations of, and are not guaranteed or endorsed by, any bank, and are not
federally insured or otherwise protected by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency, and involve
investment risk, including the possible loss of principal.
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 Treasury Trust, Series 2, Van Kampen
Merritt Global Telecommunications Trust, Van Kampen Merritt Global Energy
Trust and Van Kampen Merritt Brand Name Equity 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 American Capital
Distributors, Inc., as Sponsor, American Portfolio Evaluation Services, a
division of Van Kampen American Capital Investment Advisory Corp., as
Evaluator, Van Kampen American Capital Investment Advisory Corp., as
Supervisor, and The Bank of New York, as Trustee.
The Trusts 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 "Portfolio"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, Global Telecommunications, Global Energy
and Brand Name Trusts 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 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 (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.
In selecting Securities for the Global Telecommunications Trust, the Global
Energy Trust and the Brand Name Trust, the following factors, among others,
were considered: (a) the issuer's position within the industry, (b) breadth
and stability of the issuer's business base and (c) growth potential.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trusts as of the date the Trusts were created.
Subsequent thereto, the Equity Securities may no longer meet such criteria.
Should an Equity Security no longer meet such criteria, 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 AdministrationPortfolio 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 consists 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 such
Trust. 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, respectively, 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 Global Telecommunications Trust initially consisted of several different
issues of Equity Securities, all of which are issued by companies which
provide equipment for or services to the telecommunications field including
common stocks of foreign issuers, all of which are ADRs. The Global Energy
Trust initially consisted of several different issues of Equity Securities,
all of which are issued by companies diversified within the energy industry
including common stocks of foreign issuers, all of which are ADRs. The Brand
Name Trust initially consisted of 30 different issues of Equity Securities,
most of which are issued by companies diversified within the non-durable
consumer goods industry including common stocks of foreign issuers, all of
which are ADRs. The Equity Securities in these portfolios are listed on a
national securities exchange, the NASDAQ National Market System or are traded
in the over-the-counter market.
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.
RISK FACTORS
Equity Securities. 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.
Telecommunications Industry. The Global Telecommunications Trust concentrates
its assets in the telecommunications industry and, as a result, the value of
the Units of such Trust may be susceptible to factors affecting the
telecommunications industry. The telecommunications industry is subject to
governmental regulations and the products and services of telecommunications
companies may be subject to rapid obsolescence. These factors could affect the
value of the Global Telecommunications Trust's Units. Telephone companies in
the United States, for example, are subject to both state and federal
regulations affecting permitted rates of returns and the kinds of services
that may be offered. Certain types of companies represented in the Global
Telecommunications Trust portfolio are engaged in fierce competition for a
share of the market of their products. As a result, competitive pressures are
intense and the stocks are subject to rapid price volatility. While the Global
Telecommunications Trust portfolio concentrates on the securities of
established suppliers of traditional telecommunications products and services,
the Trust also invests in smaller telecommunications companies which may
benefit from the development of new products and services. These smaller
companies may present greater opportunities for capital appreciation, and may
also involve greater risk than large, established issuers. Such smaller
companies may have limited product lines, market or financial resources, and
their securities may trade less frequently and in more limited volume than the
securities of larger, more established companies. As a result, the prices of
the securities of such smaller companies may fluctuate to a greater degree
than the prices of securities of other issuers.
The telecommunications industry has been one of the fastest growing, most
rapidly changing market sectors. Demand for networking technologies and
interactive communication services has prompted worldwide activity,
positioning the industry for rapid growth and future expansion. Its growing
customer base, increasing cost efficiency and technological breakthroughs add
greater stability to its current position in the marketplace. There can be no
assurance, however, that future growth or technological developments will be
realized.
Telecommunications is the facilitator of ideas, messages and information that
can be found in a variety of formats, including speech, images, writing and
signals. Companies within this field may provide customers with
telecommunication equipment and services, ongoing research and technological
development. Specific services of these companies (provided on a daily basis)
may include: worldwide telephone systems, wireless services and equipment
(cellular telephones, pagers), data and voice transmission, computers,
electronic equipment, video systems, and television and radio transmission.
Research in areas such as fiber optics and digital compression may lead to
further investment opportunities in the likely creation and deployment of
interactive services. Further, the industry is diversified into many different
sectors, with companies focused on established technologies, and those engaged
in development or emerging technologies.
Energy Industry. The Global Energy Trust may include securities which are
issued by companies engaged in refining and marketing oil and related
products. According to the U.S. Department of Commerce, the factors which will
most likely shape the industry in the future include the price and
availability of oil from the Middle East, changes in United States
environmental policies and the continued decline in U.S. production of crude
oil. Possible effects of these factors may be increased U.S. and world
dependence on oil from the Organization of Petroleum Exporting Countries ("
OPEC") and highly uncertain and potentially more volatile oil prices.
Factors which the Sponsor believes may increase the profitability of oil and
petroleum operations include increasing demand for oil and petroleum products
as a result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the
two principal requirements for stable crude oil markets. Without excess
capacity, supply disruptions in some countries cannot be compensated for by
others. Surplus capacity in Saudi Arabia and a few other countries and the
utilization of that capacity prevented during the Persian Gulf crisis, and
continue to prevent, severe market disruption. Although unused capacity
contributed to market stability in 1990 and 1991, it ordinarily creates
pressure to overproduce and contributes to market uncertainty. The likely
restoration of a large portion of Kuwait's and Iraq's production and export
capacity could lead to such a development in the absence of substantial growth
in world oil demand. Formerly, OPEC members attempted to exercise control over
production levels in each country through a system of mandatory production
quotas. Because of the crisis in the Middle East, the mandatory system has
since been replaced with a voluntary system. Production under the new system
has had to be curtailed on at least one occasion as a result of weak prices,
even in the absence of supplies from Kuwait and Iraq. The pressure to deviate
from mandatory quotas, if they are reimposed, is likely to be substantial and
could lead to a weakening of prices. In the longer term, additional capacity
and production will be required to accommodate the expected large increases in
world oil demand and to compensate for expected sharp drops in U.S. crude oil
production and exports from the former Soviet Union. Only a few OPEC
countries, particularly Saudi Arabia, have the petroleum reserves that will
allow the required increase in production capacity to be attained. Given the
large-scale financing that is required, the prospect that such expansion will
occur soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased dependence
on OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments in order to comply with increasingly stringent environmental
legislation, such as the 1990 amendments to the Clean Air Act. If the cost of
these changes is substantial enough to cut deeply into profits, smaller
refiners may be forced out of the industry entirely. Moreover, lower consumer
demand due to increases in energy efficiency and conservation, due to gasoline
reformulations that call for less crude oil, due to warmer winters or due to a
general slowdown in economic growth in this country and abroad, could
negatively affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will increase or
that any increases will not be marked by great volatility. Some oil companies
may incur large cleanup and litigation costs relating to oil spills and other
environmental damage. Oil production and refining operations are subject to
extensive federal, state and local environmental laws and regulations
governing air emissions and the disposal of hazardous materials. Increasingly
stringent environmental laws and regulations are expected to require companies
with oil production and refining operations to devote significant financial
and managerial resources to pollution control. General problems of the oil and
petroleum products industry include the ability of a few influential producers
significantly to affect production, the concomitant volatility of crude oil
prices and increasing public and governmental concern over air emissions,
waste product disposal, fuel quality and the environmental effects of
fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of energy
and fuels or legislative changes relating to the energy industry or the
environment could have a negative impact on the petroleum products industry.
While legislation has been enacted to deregulate certain aspects of the oil
industry, no assurances can be given that new or additional regulations will
not be adopted. Each of the problems referred to could adversely affect the
financial stability of the issuers of any petroleum industry stocks in the
Global Energy Trust. The Global Energy Trust may also include securities which
are issued by companies engaged in the exploration for and mining of various
minerals, including coal, and/or the manufacture, transportation, or marketing
of chemical products and plastics. The problems faced by such companies are
similar to those discussed with regard to petroleum companies.
The Global Energy Trust may include securities which are issued by companies
that own or operate nuclear generating facilities. Governmental authorities
may from time to time review existing, and impose additional, requirements
governing the licensing, construction and operation of nuclear power plants.
Nuclear generating projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing difficulties.
These have been caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic conditions.
This experience indicates that the risk of significant cost increases, delays
and licensing difficulties remains present through the completion and
achievement of commercial operation of any nuclear project. Also, nuclear
generating units in service have experienced unplanned outages or extensions
of scheduled outages due to equipment problems or new regulatory requirements
sometimes followed by a significant delay in obtaining regulatory approval to
return to service. A major accident at a nuclear plant anywhere, such as the
accident at the plant in Chernobyl, could cause the imposition of limits or
prohibitions on the operation, construction or licensing of nuclear units in
the United Sates.
In view of the uncertainties discussed above, there can be no assurance that
any company's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a company
could earn an adequate return on its investment in such Units. The likelihood
of a significantly adverse event occurring in any of the areas of concern
described above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse events
could occur and individually or collectively could have a material adverse
impact on the financial condition or the results of operations of a company.
The Global Energy Trust may include securities which are issued by companies
whose revenues are primarily derived from the sale of electric energy. The
problems faced by such issuers include the difficulty in obtaining approval
for timely and adequate rate increases from the applicable public utility
commissions, the difficulty of financing large construction programs,
increased competition, reductions in estimates of future demand for
electricity in certain areas of the country, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
difficulty of the capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy conservation. All
of such issuers have been experiencing certain of these problems in varying
degrees. In addition, federal, state and municipal governmental authorities
may from time to time review existing, and impose additional, regulations
governing the licensing, construction and operation of nuclear power plants,
which may adversely affect the financial condition or the results of
operations of such issuers.
The Global Energy Trust may include securities which are issued by companies
engaged in the exploration, drilling, production, refining, transmission,
marketing or distribution of natural gas. The problems faced by such issuers
include many of those faced by electric utilities discussed above, and, in
addition, rising costs of rail transportation to transport fossil fuels,
availability and costs of natural gas for resale and difficulties of gas
pipeline and distribution companies in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers and suppliers. All of such issuers
have been experiencing certain of these problems in varying degrees.
Consumer Products, Food and Beverage, and Pharmaceutical Industries. The Brand
Name Trust includes securities issued by companies in the non-durable consumer
products industry. Investment in securities issued by non-durable consumer
products companies should be made with an understanding of the many factors
which may have an adverse impact on the credit quality of the particular
company or industry. These include cyclically of revenues and earnings,
changing consumer demands, regulatory restrictions, products liability
litigation and other litigation resulting from accidents, extensive
competition (including that of low-cost foreign companies), unfunded pension
fund liabilities and employee and retiree benefit costs and financial
deterioration resulting from leveraged buy-outs, takeovers or acquisitions. In
general, expenditures on consumer products will be affected by the economic
health of consumers. Various factors such as the recent recession and the
related tightening of consumer credit and spending may have a continuing
adverse effect on the industry. Other factors of particular relevance to the
profitability of the industry are the effects of increasing environmental
regulation on packaging and on waste disposal, the continuing need to conform
with foreign regulations governing packaging and the environment, the outcome
of trade negotiations and their effect on foreign subsidies and tariffs,
foreign exchange rates, the price of oil and its effect on energy costs,
inventory cutbacks by retailers, transportation and distribution costs, health
concerns relating to the consumption of certain products, the effect of
demographics on consumer demand, the availability and cost of raw materials
and the ongoing need to develop new products and to improve productivity.
Within today's highly competitive non-durable consumer goods marketplace,
there are less expensive alternatives to almost every product made. These are
sold as private and generic label products. The Sponsor believes that the
success of such less expensive alternative products has created the fear that
brand name products may be unable to compete in a cost-conscious environment
and, consequently, such perceptions may have depressed brand name stock prices
well below their market highs. The Sponsor believes many brand name companies
have been able to reduce costs while continuing to produce high quality
products and, therefore, were undervalued by the market at the Initial Date of
Deposit.
Many of the companies behind brand name products are industry leaders in both
domestic and international markets. They are established, well-managed,
financially strong and proven performers. Recently, many have undertaken
restructuring and expansion projects which have increased their profit
potential. As large companies, they are able to provide their brands with a
great deal of support, including large advertising budgets able to produce
sales beyond the life of a campaign, research and development prowess
producing high quality and new products, effective distribution and
promotional efforts creating widespread exposure throughout the retail
industry, and exposure to international markets and expansion of operations to
capitalize on growth opportunities in developing countries worldwide. The
Sponsor believes that as cost differences between brand name and generic
products shrink, consumers will be willing to pay a premium for brand name
products they recognize and believe to be of better quality. However, there
can be no assurance that these expectations will be realized in the future.
The Brand Name Trust also includes securities issued by companies in the food
and beverage industry. The Department of Commerce ranks the food and beverage
industry as the second largest U.S. manufacturing sector. In recent years,
this industry has had consistently positive earnings and has tended to be
recession-resistant. Performance has reflected consumer demand more than
general economic conditions.
Food processing companies include manufacturers of packaged foods such as
canned and frozen foods, baked goods, desserts, jelly, coffee and hot
chocolate, and processors of agricultural products such as fruits, vegetables,
cereals, flour, meat and poultry, including pet food. Distributors include
food wholesalers (companies that distribute food products to retailers,
restaurants and institutions) and retailers, supermarket chains and
restaurants. The beverage companies represented manufacture alcoholic and
non-alcoholic drinks. The issuers in the Brand Name Trust include companies
that have successfully adapted to new consumer demands such as developing low
calorie, low fat and low sodium products for a public increasingly concerned
with health and fitness. The Sponsor anticipates, but cannot guarantee, that
continued adaptation will result in consumer support and lead to continued
growth.
The Brand Name Trust also includes securities issued by companies diversified
within the pharmaceutical industry. The medical sector has historically
provided investors with significant growth opportunities. One of the
industries included in the sector is pharmaceutical companies. Pharmaceutical
companies develop, manufacture and sell prescription and over-the-counter
drugs. In addition, they are well known for the significant amounts of money
they spend on research and development. Pharmaceutical companies have
potential risks unique to their sector of the health care field. Such
companies are subject to governmental regulation of their products and
services, a factor which could have a significant and possibly unfavorable
effect on the price and availability of such products or services.
Furthermore, pharmaceutical companies face the risk of increasing competition
from generic drug sales, the termination of their patent protection for drug
products and the risk that technological advances will render their products
or services obsolete. The research and development costs of bringing a drug to
market are substantial and include lengthy governmental review processes, with
no guarantee that the product will ever come to market. Many of these
pharmaceutical companies may have losses and not offer certain products until
the late 1990s. Pharmaceutical companies may also have persistent losses
during a new product's transition from development to production, and revenue
patterns may be erratic.
As the population of the United States ages, the companies involved in the
pharmaceutical field will continue to search for and develop new drugs through
advanced technologies and diagnostics. On a world-wide basis, pharmaceutical
companies are involved in the development and distribution of drugs and
vaccines. These activities may make the pharmaceutical sector very attractive
for investors seeking the potential for growth in their investment portfolio.
There can be no assurance, however, that research and development projects
will result in new products or technologies that will be approved and brought
to market.
Legislative proposals concerning health care are under consideration by the
Clinton Administration. These proposals span a wide range of topics, including
cost and price controls (which might include a freeze on the prices of
prescription drugs), national health insurance, incentives for competition in
the provision of health care services, tax incentives and penalties related to
health care insurance premiums and promotions of pre-paid health care plans.
The Sponsor is unable to predict the effect of any of these proposals, if
enacted, on the issuers of Equity Securities in the Brand Name Trust.
Foreign Issuers. Since certain of the Equity Securities in certain of the
Trusts are securities of foreign issuers, an investment in these Trusts
involves some investment risks that are different in some respects from an
investment in a trust that invests entirely in securities of domestic issuers.
Those investment risks include future political and governmental restrictions
which might adversely affect the payment or receipt of dividends on the
relevant Equity Securities. In addition, for the foreign issuers that are not
subject to the reporting requirements of the Securities Exchange Act of 1934,
there may be less publicly available information than is available from a
domestic issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. However, due
to the nature of the issuers of Equity Securities included in the Trusts, the
Sponsor believes that adequate information will be available to allow the
Supervisor to provide portfolio surveillance.
The securities of the foreign issuers in the Trusts are in ADR form. ADRs
evidence American Depository Receipts which represent common stock deposited
with a custodian in a depositary. American Depositary Shares, and receipts
therefore (ADRs), are issued by an American bank or trust company to evidence
ownership of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares. ADRs may
be sponsored or unsponsored. In an unsponsored facility, the depositary
initiates and arranges the facility at the request of market makers and acts
as agent for the ADR holder, while the company itself is not involved in the
transaction. In a sponsored facility, the issuing company initiates the
facility and agrees to pay certain administrative and shareholder-related
expenses. Sponsored facilities use a single depositary and entail a
contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In
addition, the depositary bank incurs expenses in connection with the
conversion of dividends or other cash distributions paid in local currency
into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices
in the ADR market may also exist with respect to certain ADRs. In varying
degrees, any or all of these factors may affect the value of the ADR compared
with the value of the underlying shares in the local market. In addition, the
rights of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than that for
the underlying shares. ADRs are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements of the
Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs
and consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including supply and
demand of the respective currency, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries. Therefore, for any securities of issuers (whether
or not they are in ADR form) whose earnings are stated in foreign currencies,
or which pay dividends in foreign currencies or which are traded in foreign
currencies, there is a risk that their United States dollar value will vary
with fluctuations in the United States dollar foreign exchange rates for the
relevant currencies.
On the basis of the best information available to the Sponsor at the Initial
Date of Deposit, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trusts of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trusts. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trusts and on the ability of
the Trusts to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
General. Each Trust consists of such of the Securities listed under "
Portfolio"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 Trusts (other than the Global Telecommunications
and Global Energy Trusts) 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 Global Telecommunications, Global Energy and Brand
Name Trusts. The following discussion of federal income taxation applies only
to the Global Telecommunications, Global Energy and Brand Name Trusts.
Each 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 a 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 a 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 each Trust intends
to timely distribute its taxable income (including any net capital gain), it
is anticipated that the Trusts will not be subject to federal income tax or
the excise tax. Although all or a portion of a 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 a 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 a 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 a 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") 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.
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 above-named Trusts and to
the tax treatment of distributions by such Trusts to U.S. Unitholders.
Unitholders that are not United States citizens or residents should be aware
that distributions from a 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 a Trust is appropriate. Units in a Trust and
Trust distributions may also be subject to state and local taxation and
Unitholders should consult their own tax advisors in this regard.
A Trust may elect to pass through to the Unitholders the foreign income and
similar taxes paid by the Trust in order to enable such Unitholders to take a
credit (or deduction) for foreign income taxes paid by the Trust. If such an
election is made, Unitholders of that Trust, because they are deemed to own a
pro rata portion of the ADRs held by the Trust, must include in their gross
income, for federal income tax purposes, both their portion of dividends
received by the Trust and also their portion of the amount which the Trust
deems to be the Unitholders' portion of foreign income taxes paid with respect
to, or withheld from, dividends, interest or other income of the Trust from
its foreign investments. Unitholders may then subtract from their federal
income tax the amount of such taxes withheld, or else treat such foreign taxes
as deductions from gross income; however, as in the case of investors
receiving income directly from foreign sources, the above described tax credit
or deduction is subject to certain limitations. Unitholders should consult
their tax advisers regarding this election and its consequences to them.
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 a Trust.
Distributions reinvested into additional Units of a 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).
As discussed in "Rights of UnitholdersRedemption of Units", under
certain circumstances a Unitholder in the Brand Name Trust who owns at least
2,500 Units may request an In-Kind Distribution upon the redemption of Units
or the termination of such Trust. Unitholders in the Brand Name Trust electing
an In-Kind Distribution of shares of Equity Securities should be aware that
the transaction is subject to taxation and Unitholders will recognize gain
based on the appreciation in value of the Equity Securities received.
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. 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
American Capital 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 American Capital Distributors
Inc., 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 which included, on the Initial Date of
Deposit, 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 and Treasury Trust, the Brand Name Trust, the Global
Telecommunications Trust and the Global Energy 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 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 American Capital Distributors, 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 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 (as of the opening of
business on the date stated in the "Summary of Essential Financial
Information"in Part One of this Prospectus) 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 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 will be reduced annually, 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% in the case
of the Select Equity, Select Equity and Treasury and Blue Chip Opportunity and
Treasury Trusts and by .5 of 1% to a minimum sales charge of 1.5% in the case
of the Global Telecommunication, Global Energy and Brand Name Trusts.
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 (250 Units in the
case of the Global Telecommunications Trust) and 100 Units for a tax-sheltered
retirement plan (50 Units in the case of the Global Telecommunications Trust).
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 (50 Units in
the case of the Global Telecommunications 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. A
person will become the owner of Units, and thereby a Unitholder of record, on
the date of settlement provided payment has been received. 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 (other than the Global
Telecommunications 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
American Capital Distributors, 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 American Capital Distributors, 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 Global Telecommunications Trust, the Global Energy Trust
and the Brand Name Trust 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 applicable 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 Global
Telecommunications Trust, the Global Energy Trust and the Brand Name Trust
already held in inventory by the Sponsor (see "Public OfferingPublic
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 Global Telecommunications
Trust, the Global Energy Trust and the Brand Name Trust as of the Evaluation
Time on the related Income or Capital Distribution Dates. Under the
reinvestment plan, a Trust will pay the Unitholder's distributions to the
Trustee which in turn will purchase for such Unitholder full and fractional
Units of the appropriate 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 Global
Telecommunications Trust, the Global Energy Trust and the Brand Name 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, Blue Chip
Opportunity and Treasury or Brand Name Trusts tendering 5,000 Units or more
(2,500 Units or more in the case of the Brand Name Trust) 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 Global Telecommunications Trust and the Global Energy Trust. 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 Brand Name Trust,
Global Telecommunications Trust and Global Energy Trust continue 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.
A Trust may be liquidated (1) at any time by consent of Unitholders
representing 51% of the Units of the Select Equity 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 in the
case of other Trusts 66 2/3% of the Units then outstanding, or (2) 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 and
Unitholders of the Brand Name Trust owning 2,500 or more Units of such Trust
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 Global Telecommunications Trust and the Global Energy Trust. 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
(less than 2,500 Units in the case of the Brand Name Trust), those not
requesting an In Kind Distribution and Unitholders of the Global
Telecommunications Trust and the Global Energy Trust 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.
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 American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. Van Kampen American Capital Distributors,
Inc. management owns a significant minority equity position. Effective
December 20, 1994, the parent of Van Kampen Merritt Inc. acquired American
Capital Management & Research, Inc. As a result, Van Kampen Merritt Inc., has
changed its name to Van Kampen American Capital Distributors, Inc. Van Kampen
American Capital Distributors, 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 offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas, 77056, (713) 993-0500. 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
December 31, 1993 the total stockholders' equity of Van Kampen Merritt Inc.
was $122,167,000 (audited). (This paragraph relates only to the Sponsor and
not to the Insured Municipals Income Trust thereof or to any other
Underwriter. The information is included herein only for the purpose of
informing investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. More detailed financial
information will be made available by the Sponsor upon request.)
As of September 30, 1994, and without giving effect to the merger, the Sponsor
and its affiliates managed or supervised approximately $35.4 billion of
investment products, of which over $23 billion is invested in municipal
securities. The Sponsor and its affiliates managed $22 billion of assets,
consisting of $7.7 billion for 20 open end mutual funds, $8.0 billion for 34
closed-end funds and $6.1 billion for 65 institutional accounts. The Sponsor
has also deposited approximately $24.5 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 Municipals Income Trust(R)or the IM-IT(R)
trust. The Sponsor also provides surveillance and evaluation services at cost
for approximately $13 billion of unit investment trust assets outstanding.
Since 1976, the Sponsor has serviced over one million retail investor
accounts, opened through retail distribution firms. Van Kampen American
Capital Distributors, 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. In order for a Unitholder to invest in the trusts, mutual
funds and closed-end funds listed below, such Unitholder must obtain a
prospectus relating to the trust or fund involved. A prospectus is the only
means by which an offer can be delivered to investors.
<TABLE>
Name of Trust Trust Investment Objective
<CAPTION>
<S> <C>
Insured Municipals Income Trust..................................... Tax-exempt income by investing in insured municipal securities
Double tax-exemption for California residents by investing in
California Insured Municipals Income Trust.......................... insured California municipal securities
Double and in certain cases triple tax-exemption for New York
residents by investing in insured New York municipal
New York Insured Municipals Income Trust............................ securities
Double and in certain cases triple tax-exemption for
Pennsylvania residents by investing in insured Pennsylvania
Pennsylvania Insured Municipals Income Trust........................ municipal securities
Insured Municipals Income Trust, Insured Multi-Series
(Premium Bond Series, National, Limited Maturity, Intermediate,
Short Intermediate, Discount, Alabama, Arizona, Arkansas,
California, California Intermediate, California Intermediate
Laddered Maturity, California Premium, Colorado, Connecticut,
Florida, Florida Intermediate, Florida Intermediate Laddered
Maturity, Georgia, Louisiana, Massachusetts, Massachusetts
Premium, Michigan, Michigan Intermediate, Michigan
Intermediate Laddered Maturity, Michigan Premium, Minnesota,
Missouri, Missouri Intermediate Laddered Maturity, Missouri
Premium, New Jersey, New Jersey Intermediate Laddered
Maturity, New Mexico, New York, New York Intermediate, New Tax-exempt income by investing in insured municipal
York Intermediate Laddered Maturity, New York Limited securities; all issuers of bonds in a state trust are located
Maturity, Ohio, Ohio Intermediate, Ohio Intermediate Laddered in such state or in territories or possessions of the United
Maturity, Ohio Premium, Oklahoma, Pennsylvania, Pennsylvania States-- providing exemptions from all state income tax for
Intermediate, Pennsylvania Intermediate Laddered Maturity, residents of such state (except for the Oklahoma IM-IT Trust
Pennsylvania Premium, Tennessee, Texas, Texas Intermediate where a portion of the income of the Trust may be subject to
Laddered Maturity, Washington, West Virginia)...................... the Oklahoma state income tax)
Insured Tax Free Bond Trust......................................... Tax-exempt income by investing in insured municipal securities
Tax-exempt income by investing in insured municipal
securities; all issuers of bonds in a state trust are located
Insured Tax Free Bond Trust, Insured Multi-Series in such state--providing exemptions from state income tax for
(National Limited Maturity, New York).............................. residents of such state
Investors' Quality Tax-Exempt Trust................................. Tax-exempt income by investing in municipal securities
Investors' Quality Tax-Exempt Trust, Multi-Series
(National, National AMT, Intermediate, Alabama, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware, Tax-exempt income by investing in municipal securities; all
Florida, Georgia, Hawaii, Kansas, Kentucky, Maine, Maryland, issuers of bonds in a state trust are located in such state
Massachusetts, Michigan, Minnesota, Missouri, Nebraska, or in territories or possessions of the United
New Jersey, New York, North Carolina, Ohio, Oregon, States--providing exemptions from state income tax for
Pennsylvania, South Carolina, Virginia)............................ residents of such state
Tax-exempt income for investors not subject to the
alternative minimum tax by investing in municipal securities,
some or all of which are subject to the Federal alternative
Investors' Quality Municipals Trust, AMT Series......................minimum tax
Investors' Corporate Income Trust....................................Taxable income by investing in corporate bonds
Taxable income by investing in government-backed GNMA
Investors' Governmental Securities--Income Trust.................... securities
High current income through an investment in a diversified
portfolio of foreign currency denominated corporate debt
Van Kampen Merritt International Bond Income Trust...................obligations
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio of
insured, long-term or intermediate-term corporate debt
Van Kampen Merritt Insured Income Trust..............................securities
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio of
insured, long-term or intermediate-term corporate debt
Van Kampen American Capital Insured Income Trust.....................securities
High dividend income and capital appreciation by investing in
Van Kampen Merritt Utility Income Trust..............................common stock of electric utilities
Provide the potential for capital appreciation and income by
investing in a portfolio of actively traded, New York Stock
Exchange listed equity securities which are components of the
Van Kampen Merritt Select Equity Trust...............................Dow Jones Industrial Average*
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
and the remainder of the trust's portfolio in the identical
Van Kampen Merritt Select Equity and Treasury Trust..................equity securities which comprise the Select Equity Trust
Provide the potential for capital appreciation and income by
investing in a portfolio of actively traded, New York Stock
Exchange listed equity securities which are components of the
Van Kampen Merritt Blue Chip Opportunity Trust.......................Dow Jones Industrial Average*
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
and the remainder of the trust's portfolio in actively
traded, New York Stock Exchange listed equity securities
Van Kampen Merritt Blue Chip Opportunity and which at the time of the creation of the trust were
Treasury Trust......................................................components of the Dow Jones Industrial Average*
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio
primarily consisting of Brady Bonds of emerging market
countries that have restructured sovereign debt pursuant to
Van Kampen Merritt Emerging Markets Income Trust.....................the framework of the Brady Plan
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities which provide
Van Kampen Merritt Global Telecommunications Trust...................equipment for or services to the telecommunications industry
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities diversified
Van Kampen Merritt Global Energy Trust...............................within the energy industry
Provide an above average total return through a combination
of potential capital appreciation and dividend income,
consistent with preservation of invested capital, by
investing in a portfolio of common stocks of the ten
Strategic Ten Trust companies in a recognized stock exchange index having the
(United States, United Kingdom, and Hong Kong Portfolios)...........highest dividend yields
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities diversified
Van Kampen Merritt Brand Name Equity Trust...........................within the non-durable consumer products industry
</TABLE>
*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.
<TABLE>
Name of Mutual Fund Fund Investment Objective
<CAPTION>
<S> <C>
Van Kampen Merritt U.S. Government Fund....................High current income by investing in U.S. Government securities
High current income exempt from Federal income taxes by investing in
Van Kampen Merritt Insured Tax Free Income Fund............insured municipal securities
High level of current income exempt from Federal income tax, consistent
Van Kampen Merritt Municipal Income Fund...................with preservation of capital
High current income exempt from Federal income taxes by investing in
Van Kampen Merritt Tax Free High Income Fund...............medium and lower grade municipal securities
High current income exempt from Federal and California income taxes by
Van Kampen Merritt California Insured Tax Free Fund........investing in insured California municipal securities
Provide a high level of current income by investing in medium and lower
grade domestic and foreign government and corporate debt securities.
Van Kampen Merritt High Yield Fund.........................The Fund will seek capital appreciation as a secondary objective
Long-term growth of both capital and dividend income by investing in
Van Kampen Merritt Growth and Income Fund..................dividend paying common stocks
High current income exempt from Federal and Pennsylvania state and
local income taxes by investing in medium and lower grade Pennsylvania
Van Kampen Merritt Pennsylvania Tax Free Income Fund.......municipal securities
High current income by investing in a broad range of money market
Van Kampen Merritt Money Market Fund.......................instruments that will mature within twelve months
High current income exempt from Federal income taxes by investing in a
broad range of municipal securities that will mature within twelve
Van Kampen Merritt Tax Free Money Fund.....................months
High current income by investing in a global portfolio of high quality
debt securities denominated in various currencies having remaining
Van Kampen Merritt Short-Term Global Income Fund...........maturities of not more than three years
High level of current income with a relatively stable net asset value
Van Kampen Merritt Adjustable Rate U.S. Government Fund....investing in U.S. Government securities
High level of current income exempt from Federal income tax, consistent
Van Kampen Merritt Limited Term Municipal Income Fund......with preservation of capital
Provide capital appreciation and current income by investing in a
diversified portfolio of common stocks and income securities issued by
Van Kampen Merritt Utility Fund............................companies engaged in the utilities industry
Provide shareholders with high current income. The Fund will seek
Van Kampen Merritt Strategic Income Fund...................capital appreciation as a secondary objective
High level of current income exempt from Federal income tax and Florida
intangible personal property taxes consistent with preservation of
Van Kampen Merritt Florida Insured Tax Free Income Fund....capital
High level of current income exempt from Federal income tax and New
Van Kampen Merritt New Jersey Tax Free Income Fund.........Jersey gross income tax consistent with preservation of capital
High level of current income exempt from Federal as well as New York
State and New York City income taxes, consistent with preservation of
Van Kampen Merritt New York Tax Free Income Fund...........capital
To provide shareholders current income while also seeking to provide
Van Kampen Merritt Balanced Fund...........................capital growth
</TABLE>
<TABLE>
Name of Closed-end Fund Fund Investment Objective
<CAPTION>
<S> <C>
High current income exempt from Federal income taxes with safety of
principal by investing in a diversified portfolio of investment grade
Van Kampen Merritt Municipal Income Trust...................municipal securities
High current income exempt from Federal and California income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt California Municipal Trust...............investment grade California municipal securities
High current income while seeking to preserve shareholders' capital by
investing in a diversified portfolio of high yield fixed income
Van Kampen Merritt Intermediate Term High Income Trust......securities
High current income while seeking to preserve shareholders' capital by
investing in a diversified portfolio of high yield fixed income
Van Kampen Merritt Limited Term High Income Trust...........securities
High current income, consistent with preservation of capital by
Van Kampen Merritt Prime Rate Income Trust..................investing in interests in floating or variable rate senior loans
High current income exempt from Federal income tax, consistent with
Van Kampen Merritt Investment Grade Municipal Trust.........preservation of capital
High level of current income exempt from Federal income tax,
Van Kampen Merritt Municipal Trust..........................consistent with preservation of capital
High current income exempt from Federal and California income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt California Quality Municipal Trust.......investment grade California municipal securities
High current income exempt from Federal income taxes and Florida
intangible personal property taxes with safety of principal by
investing in a diversified portfolio of investment grade Florida
Van Kampen Merritt Florida Quality Municipal Trust..........municipal securities
High current income exempt from Federal as well as New York State and
New York City income taxes with safety of principal by investing in a
Van Kampen Merritt New York Quality Municipal Trust.........diversified portfolio of investment grade New York municipal securities
High current income exempt from Federal and Ohio income taxes with
safety of principal by investing in a diversified portfolio of
Van Kampen Merritt Ohio Quality Municipal Trust.............investment grade Ohio municipal securities
High current income exempt from Federal and Pennsylvania income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt Pennsylvania Quality Municipal Trust.....investment grade Pennsylvania municipal securities
High level of current income exempt from Federal income tax,
Van Kampen Merritt Trust for Investment Grade Municipals....consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
portfolio of municipal securities which are covered by insurance with
Van Kampen Merritt Trust for Insured Municipals.............respect to timely payment of principal and interest
High level of current income exempt from Federal and California income
Van Kampen Merritt Trust for Investment Grade CA taxes, consistent with preservation of capital by investing in a
Municipals.................................................diversified portfolio of California municipal securities
High level of current income exempt from Federal income taxes,
consistent with preservation of capital. The Fund also seeks to offer
Van Kampen Merritt Trust for Investment Grade FL its Shareholders the opportunity to own securities exempt from Florida
Municipals.................................................intangible personal property taxes
Van Kampen Merritt Trust for Investment Grade NJ
Municipals High level of current income exempt from Federal income taxes and New
..........................................................Jersey gross income taxes, consistent with preservation of capital
High level of current income exempt from Federal as well as from New
Van Kampen Merritt Trust for Investment Grade NY York State and New York City income taxes, consistent with
Municipals.................................................preservation of capital
High level of current income exempt from Federal and Pennsylvania
Van Kampen Merritt Trust for Investment Grade PA income taxes and, where possible under local law, local income and
Municipals.................................................property taxes, consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
Van Kampen Merritt Municipal Opportunity Trust..............portfolio of municipal securities
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
Van Kampen Merritt Advantage Municipal Income Trust.........portfolio of municipal securities
High level of current income exempt from Federal and Pennsylvania
Van Kampen Merritt Advantage Pennsylvania Municipal income taxes and, where possible under local law, local income and
Income Trust...............................................property taxes, consistent with preservation of capital
Provide common shareholders with a high level of current income exempt
Van Kampen Merritt Strategic Sector Municipal Trust.........from Federal income taxes, consistent with preservation of capital
High level of current income exempt from Federal income taxes,
Van Kampen Merritt Value Municipal Income Trust.............consistent with preservation of capital
Van Kampen Merritt California Value Municipal High level of current income exempt from Federal and California income
Income Trust...............................................taxes, consistent with preservation of capital
High level of current income exempt from Federal income taxes and
Van Kampen Merritt Massachusetts Value Municipal Massachusetts personal income taxes, consistent with preservation of
Income Trust..............................................capital
Van Kampen Merritt New Jersey Value Municipal High level of current income exempt from Federal income taxes and New
Income Trust...............................................Jersey gross income tax, consistent with preservation of capital
High level of current income exempt from Federal as well as New York
Van Kampen Merritt New York Value Municipal State and New York City income taxes, consistent with preservation of
Income Trust...............................................capital
Van Kampen Merritt Ohio Value Municipal Income High level of current income exempt from Federal and Ohio income
Trust......................................................taxes, consistent with preservation of capital
Van Kampen Merritt Pennsylvania Value Municipal High level of current income exempt from Federal and Pennsylvania
Income Trust..............................................income taxes, consistent with preservation of capital
High level of current income exempt from Federal income tax,
Van Kampen Merritt Municipal Opportunity Trust II...........consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital. The Fund seeks to offer its
common shareholders the opportunity to own securities exempt from
Van Kampen Merritt Florida Municipal Opportunity Trust .....Florida intangible personal property taxes
Provide common shareholders with a high level of current income exempt
Van Kampen Merritt Advantage Municipal Income Trust II......from Federal income tax, consistent with preservation of capital
To provide common shareholders with a high level of current income
Van Kampen Merritt Select Sector Municipal Trust............exempt from Federal income tax, consistent with preservation of capital
</TABLE>
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 UnitholdersReports 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 LLP, 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>
TABLE OF CONTENTS
<CAPTION>
Title Page
<S> <C>
The Trusts................................ 4
Objectives and Securities Selection....... 4
Trust Portfolios.......................... 5
Risk Factors.............................. 6
Federal Taxation.......................... 12
Trust Operating Expenses.................. 18
Public Offering........................... 19
Rights of Unitholders..................... 20
Trust Administration...................... 24
Other Matters............................. 32
</TABLE>
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 AMERICAN CAPITAL
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 AMERICAN CAPITAL DISTRIBUTORS, INC.
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
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
24th day of April, 1995.
Van Kampen Merritt Equity Opportunity Trust,
Series 1
(Registrant)
By Van Kampen American Capital Distributors,
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 24, 1995:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
)
William R. Molinari President and Chief )
Operating Officer )
)
Ronald A. Nyberg Executive Vice President )
and General Counsel )
)
William R. Rybak Executive Vice President and )
Chief Financial Officer )
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 10, 1995 accompanying the
financial statements of Van Kampen Merritt Equity Opportunity Trust,
Series 1 as of December 31, 1994, and for the period then ended,
contained in this Post-Effective Amendment No. 3 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 LLP
Chicago, Illinois
April 24, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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