File No. 33-55786
CIK #895331
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 4
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 2
(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, 1997 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 2
Van Kampen Merritt Blue Chip Opportunity Trust, Series 2
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two. Please retain both parts of this Prospectus for future reference.
THE TRUST
The Van Kampen Merritt Equity Opportunity Trust, Series 2 (the "Fund")
is comprised of one unit investment trust, Van Kampen Merritt Blue Chip
Opportunity Trust, Series 2 (the "Trust" or "Blue Chip Opportunity
Trust"). The Blue Chip Opportunity 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. Dow Jones
& Company, Inc. has not participated in any way in the creation of the Trust
or in the selection of stocks included in the Trust and has not approved any
information herein relating thereto. Unless terminated earlier, the Trust will
terminate on August 15, 2013 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 or minus cash, if
any, in the Capital and Income Accounts, divided by the number of Units
outstanding, plus a sales charge of 4.9% of the Public Offering Price which is
equivalent to 5.152% of the aggregate underlying value of the Securities. See
"Summary of Essential Financial Information".
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 16, 1997
Van Kampen American Capital
<TABLE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 2
Blue Chip Opportunity Trust
Summary of Essential Financial Information
As of March 5, 1997
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor: Van Kampen American Capital Investment Advisory Corp.
(An affiliate of the Sponsor)
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Blue Chip
Opportunity
Trust
-----------------
<S> <C>
General Information
Number of Units.................................................................................. 595,840.537
Fractional Undivided Interest in the Trust per Unit ............................................. 1/595,840.537
Public Offering Price: ..........................................................................
Aggregate Value of Securities in Portfolio <F1>................................................. $ 10,840,018
Aggregate Value of Securities per Unit (including accumulated dividends)........................ $ 18.26
Sales Charge 4.9% (5.152% of Aggregate Value of Securities excluding principal cash) per Unit... $ .95
Public Offering Price per Unit <F2>............................................................. $ 19.21
Redemption Price per Unit........................................................................ $ 18.26
Secondary Market Repurchase Price per Unit....................................................... $ 18.26
Excess of Public Offering Price per Unit Over Redemption Price per Unit.......................... $ .95
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.0025 per Unit
Evaluator's Annual Fee ...............Maximum of $.0025 per Unit
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4:00 P.M. Eastern time on days of trading on the
New York Stock Exchange next following receipt of an order for a sale or purchase of Units or receipt by The Bank of New York of
Units tendered for redemption.
Date of Deposit.......................February 23, 1993
Mandatory Termination Date............August 15, 2013
The Trust may be terminated if the net asset value of such Trust is less than $500,000
unless the net asset value of such Trust deposits has exceeded $15,000,000, then the Trust
Minimum Termination Value.............Agreement may be terminated if the net asset value of such Trust is less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Special Information......................................
Calculation of Estimated Net Annual Dividends per Unit...
Estimated Gross Annual Dividends per Unit............... $ .33690
Less: Estimated Expenses per Unit....................... $ .01714
Estimated Net Annual Dividends per Unit................. $ .31976
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee................$.008 per Unit
Income Distribution Record Date.....TENTH day of March, June, September, and December.
Income Distribution Date............TWENTY-FIFTH day of March, June, September and December.
Capital Account Record Date.........TENTH day of December.
Capital Account Distribution Date...TWENTY-FIFTH day of December.
- ----------
<FN>
<F1>Securities listed on a national securities exchange are valued at the closing
sale price.
<F2>Anyone ordering Units will have added to the Public Offering Price a pro rata
share of any cash in the Income and Capital Accounts.
</TABLE>
PORTFOLIO
The Blue Chip Opportunity 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>
1993<F1> 1994 1995 1996
------------- ----------- -----------------------
<S> <C> <C> <C> <C>
Net asset value per Unit at beginning of period.................................. $ 9.47 $ 10.72 $ 10.74 $ 14.17
============= =========== =======================
Net asset value per Unit at end of period........................................ $ 10.72 $ 10.74 $ 14.17 $ 16.85
============= =========== =======================
Distributions to Unitholders of investment income on Units redeemed.............. $ .23 $ .27 $ .30 $ .30
============= =========== =======================
Distributions to Unitholders from Security redemption proceeds (average Units
outstanding for entire period)................................................... $ .09 $ .10 $ .06 $ .77
============= =========== =======================
Unrealized appreciation (depreciation) of Security (per Unit outstanding at end
of period)....................................................................... $ .85 $ .11 $ 3.33 $ 2.86
============= =========== =======================
Units outstanding at end of period............................................... 399,999 599,996 699,995 608,916
</TABLE>
(1) For the period from February 23, 1993 (initial date of deposit) through
December 31, 1993.
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 2:
(Blue Chip Opportunity Trust):
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of Van Kampen Merritt Equity
Opportunity Trust, Series 2 (Blue Chip Opportunity Trust) as of December 31,
1996, and the related statements of operations and changes in net assets for
the three years ended December 31, 1996. 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, 1996 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 financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen Merritt Equity
Opportunity Trust, Series 2 (Blue Chip Opportunity Trust) as of December 31,
1996, and the results of operations and changes in net assets for the three
years ended December 31, 1996, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 14, 1997
<TABLE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 2
Statements of Condition
December 31, 1996
<CAPTION>
Blue Chip
Opportunity
Trust
<S> <C>
Trust property
Securities at market value, (cost $6,286,373) (note 1)................................ $ 10,769,517
Accumulated dividends................................................................. 18,919
$ 10,788,436
===============
Liabilities and interest to Unitholders
Cash overdraft........................................................................ $ 530,964
Interest to Unitholders............................................................... 10,257,472
$ 10,788,436
===============
Analyses of Net Assets
Interest of Unitholders (608,916 Units of fractional undivided interest outstanding)
Cost to original investors of 700,000 Units (note 1).................................. $ 7,448,540
Less initial underwriting commission (note 3)......................................... 183,598
---------------
7,264,942
Less redemption of 91,084 Units....................................................... 1,474,073
---------------
5,790,869
Undistributed net investment income
Net investment income................................................................. 606,870
Less distributions to Unitholders..................................................... 605,666
---------------
1,204
Realized gain (loss) on Security sale or redemption................................... 612,664
Unrealized appreciation (depreciation) of Securities (note 2)......................... 4,483,144
Distributions to Unitholders of Security sale or redemption proceeds.................. (630,409)
Net asset value to Unitholders........................................................ $ 10,257,472
===============
Net asset value per Unit (608,916 Units outstanding)................................... $ 16.85
===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
VAN KAMPEN MERRITT BLUE CHIP OPPORTUNITY TRUST, SERIES 2
Statements of Operations
Years ended December 31,
<CAPTION>
1994 1995 1996
----------- ------------- -------------
<S> <C> <C> <C>
Investment income....................................................
Dividend income..................................................... $ 153,742 $ 202,263 $ 222,648
Expenses.............................................................
Trustee fees and expenses........................................... 8,058 8,709 12,435
Evaluator fees...................................................... 1,208 1,791 (2,032)
Supervisory fees.................................................... 1,001 192 1,776
----------- ------------- -------------
Total expenses...................................................... 10,267 10,692 12,179
----------- ------------- -------------
Net investment income............................................... 143,475 191,571 210,469
Realized gain (loss) from Securities sale or redemption
Proceeds............................................................ 50,750 185,875 1,538,885
Cost................................................................ 42,328 151,329 970,460
----------- ------------- -------------
Realized gain (loss)................................................ 8,422 34,546 568,425
Net change in unrealized appreciation (depreciation) of Securities... 67,145 2,330,806 1,744,067
----------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS...................................................... $ 219,042 $ 2,556,923 $ 2,522,961
=========== ============= =============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Years ended December 31,
<CAPTION>
1994 1995 1996
------------- ------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income................................................................. $ 143,475 $ 191,571 $ 210,469
Realized gain (loss) on Securities sale or redemption................................. 8,422 34,546 568,425
Net change in unrealized appreciation (depreciation) of Securities.................... 67,145 2,330,806 1,744,067
------------- ------------- ---------------
Net increase (decrease) in net assets resulting from operations....................... 219,042 2,556,923 2,522,961
Distributions to Unitholders from:
Net investment income................................................................. (140,594) (203,489) (197,668)
Securities sale or redemption proceeds................................................ (50,445) (43,995) (509,995)
Redemption of Units (25) (16) (1,474,020)
------------- ------------- ---------------
Total increase (decrease)............................................................. 27,978 2,309,423 341,278
Net asset value to Unitholders
Beginning of period................................................................... 4,286,261 6,444,261 9,916,194
Additional Securities purchased from proceeds of Unit Sales........................... 2,130,022 1,162,510 --
------------- ------------- ---------------
End of period (including (Overdistributed) undistributed net investment income of
$321 and $(11,597) and $1,204 respectively)............................................ $ 6,444,261 $ 9,916,194 $ 10,257,472
============= ============= ===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
VAN KAMPEN MERRITT BLUE CHIP OPPORTUNITY TRUST, SERIES 2
PORTFOLIO as of December 31, 1996
<CAPTION>
Valuation of Securities
Number at December 31,
of Market Value Per 1996
Shares Name of Issuer Share (Note 1)
- ---------- --------------------------------------------------- --------------------- ----------------------------
<S> <C> <C> <C>
5,920 Allied Signal, Inc. $67.000 $396,640
- -----------------------------------------------------------------------------------------------------------------
5,717 Aluminum Company of America (ALCOA) 63.750 364,459
- -----------------------------------------------------------------------------------------------------------------
7,396 American Express Company 56.500 417,874
- -----------------------------------------------------------------------------------------------------------------
5,193 American Telephone and Telegraph (AT&T) 43.500 225,896
- -----------------------------------------------------------------------------------------------------------------
11,121 Bethlehem Steel Corporation 9.000 100,089
- -----------------------------------------------------------------------------------------------------------------
5,087 The Boeing Company 106.375 541,130
- -----------------------------------------------------------------------------------------------------------------
5,310 Caterpillar Inc. 75.250 399,578
- -----------------------------------------------------------------------------------------------------------------
4,874 Chevron Corp. 65.000 316,810
- -----------------------------------------------------------------------------------------------------------------
9,571 Coca-Cola Enterprises, Inc. 52.625 503,674
- -----------------------------------------------------------------------------------------------------------------
4,596 Walt Disney Company 69.625 319,996
- -----------------------------------------------------------------------------------------------------------------
3,956 Du Pont (E.I) de Nemours & Company 94.375 373,348
- -----------------------------------------------------------------------------------------------------------------
4,183 Eastman Kodak Company 80.250 335,686
- -----------------------------------------------------------------------------------------------------------------
3,338 Exxon Corporation 98.000 327,124
- -----------------------------------------------------------------------------------------------------------------
4,373 General Electric Company 98.875 432,380
- -----------------------------------------------------------------------------------------------------------------
4,554 General Motors 55.750 253,886
- -----------------------------------------------------------------------------------------------------------------
5,499 Goodyear Tire & Rubber Company 51.375 282,511
- -----------------------------------------------------------------------------------------------------------------
3,683 International Business Machines (IBM) 151.000 556,133
- -----------------------------------------------------------------------------------------------------------------
6,135 International Paper Company 40.375 247,701
- -----------------------------------------------------------------------------------------------------------------
7,384 McDonald's Corporation 45.250 334,126
- -----------------------------------------------------------------------------------------------------------------
5,873 Merck & Co., Inc. 79.250 465,435
- -----------------------------------------------------------------------------------------------------------------
4,034 Minnesota Mining and Manufacturing Company (3M) 82.875 334,318
- -----------------------------------------------------------------------------------------------------------------
3,342 J.P. Morgan & Company, Inc. 97.625 326,263
- -----------------------------------------------------------------------------------------------------------------
3,668 Philip Morris Companies Inc. 112.625 413,108
- -----------------------------------------------------------------------------------------------------------------
3,860 The Procter & Gamble Company 107.500 414,950
- -----------------------------------------------------------------------------------------------------------------
7,700 Sears, Roebuck & Company 46.125 355,162
- -----------------------------------------------------------------------------------------------------------------
3,354 Texaco, Inc. 98.125 329,111
- -----------------------------------------------------------------------------------------------------------------
9,590 Union Carbide Corporation 40.875 391,991
- -----------------------------------------------------------------------------------------------------------------
7,595 United Technologies Corporation 66.000 501,270
- -----------------------------------------------------------------------------------------------------------------
15,208 Westinghouse Electric Corporation 19.875 302,259
- -----------------------------------------------------------------------------------------------------------------
9,445 Woolworth Corp. 21.875 206,609
- ---------- ----------------------------
181,559 $10,769,517
========== ============================
</TABLE>
The accompanying notes are an integral part of these statements.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 2
Notes to Financial Statements
December 31, 1994, 1995 and 1996
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales 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 cost was determined on the day of the various
Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes - The Trust 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 (the "Code").
If the Trust so qualifies and timely distributes to Unitholders 90% or more of
its taxable income (without regard to its net capital gain, i.e., the excess
of its net long-term capital gain over its net short-term capital loss), it
will not be subject to federal income tax on the portion of its taxable income
(including any net capital gain) that it distributes to Unitholders.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
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 basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Blue Chip
Opportunity Trust
---------------------
<S> <C>
Unrealized Appreciation $ 4,583,612
Unrealized Depreciation (100,468)
---------------------
$ 4,483,144
=====================
</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 4.9% of the public offering price which is equivalent to
5.152% 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 4.9% of the public offering price which is 5.152% of the underlying value
of the Securities.
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.
NOTE 4 - REDEMPTION OF UNITS
During the three years ended December 31, 1994, 1995 and 1996, 3 Units, 1
Unit, and 91,079 Units, respectively, were presented for redemption.
- --------------------------------------------------------------------------
Van Kampen American Capital
Van Kampen Merritt Equity Opportunity Trust, Series 2
Van Kampen Merritt Blue Chip Opportunity Trust, Series 2
Prospectus Part Two
The Fund. The Van Kampen Merritt Equity Opportunity Trust, Series 2 (the "
Fund") is comprised of one unit investment trust, Van Kampen Merritt Blue
Chip Opportunity Trust (the "Blue Chip Opportunity Trust" or the "
Trust"). The Blue Chip Opportunity 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.* Dow Jones
& Company, Inc. has not participated in any way in the creation of the Trust
or in the selection of stocks included in the Trust and has not approved any
information herein relating thereto. Unless terminated earlier, the Trust will
terminate on August 15, 2013 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.
Objective of the Trust. The objective of the Blue Chip Opportunity Trust is to
provide the potential for capital appreciation and income by investing in a
portfolio of actively traded equity securities which are current components of
the Dow Jones Industrial Average* ("Equity Securities"). 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. There is, of course, no guarantee
that the objective of the Trust will be achieved.
Public Offering Price. The secondary market Public Offering Price of the Trust
will include the aggregate underlying value of the Securities in the Trust,
the applicable sales charge as described herein, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The minimum purchase
is 500 Units (100 Units for a tax-sheltered retirement plan). See "Public
Offering" .
Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of the 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.
Distributions. Distributions of dividends received, and capital, if any,
received by the 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. Any distribution of
income and/or capital will be net of the expenses of the Trust. See "
Federal Taxation." Additionally, upon termination of the Trust, the
Trustee will distribute, upon surrender of Units for redemption, to each
Unitholder his pro rata share of the Trust's assets, less expenses, in the
manner set forth under "Rights of UnitholdersDistributions of Income and
Capital" .
Secondary Market for Units. Although not obligated to do so, the Sponsor
intends to maintain a market for Units of the Trust and offer to repurchase
such Units at prices which are based on the aggregate underlying value of
Equity Securities in the Trust (generally determined by the last available
sale prices of listed Equity Securities on or immediately prior to the
Evaluation Time), plus or minus cash, if any, in the Capital and Income
Accounts of the Trust. If a secondary market is not maintained, a Unitholder
may redeem Units through redemption at prices based upon the aggregate
underlying value of the Equity Securities in the Trust, plus or minus a pro
rata share of cash, if any, in the Capital and Income Accounts of the Trust.
See "Rights of UnitholdersRedemption of Units" .
Units of the Trust 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 loss of principal.
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.
* 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.
Termination. Commencing on the Mandatory Termination Date as specified in "
Summary of Essential Financial Information" in Part One, Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. Written notice of any termination of the 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 Trust, the
Trustee will provide written notice thereof to all Unitholders. Unitholders
will receive a cash distribution from the sale of the remaining Securities
within a reasonable time after the Trust is terminated. See "Trust
AdministrationAmendment or Termination."
Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases). Unitholders have the opportunity to have their
distributions reinvested into an open-end, management investment company as
described herein or into additional Units of the Trust. See "Rights of
UnitholdersReinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including, among other factors, the
possible deterioration of either the financial condition of the issuers or the
general condition of the stock market, volatile interest rates or an economic
recession. See "Trust PortfolioRisk Factors" .
THE TRUST
Van Kampen Merritt Equity Opportunity Trust, Series 2 (the "Trust") is
comprised of one unit investment trust entitled Van Kampen Merritt Blue Chip
Opportunity Trust, Series 2. The Trust 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 or their predecessors.
The Blue Chip Opportunity Trust may be an appropriate medium for investors who
desire to participate in a portfolio of equity securities with greater
diversification than they might be able to acquire individually.
Diversification of assets in the Trust 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.
Each Unit represents a fractional undivided interest in the Trust. To the
extent that any Units are redeemed by the Trustee the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase
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 objective of the Blue Chip Opportunity Trust is to provide investors with
the potential for capital appreciation and income. The portfolio of the Trust
is described under "Trust Portfolio" herein and under "
Portfolio" in Part One. An investor will be subjected to taxation on the
dividend income received from the Trust 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 the Trust 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. 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 Blue Chip Opportunity
Trust and the percentage of the portfolio represented by each such Equity
Security, the Sponsor selected those Equity Securities that are current
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.
Investors should note that the above criteria were initially applied to the
Equity Securities selected for inclusion in the Trust as of the Initial Date
of Deposit. Subsequent to the Initial Date of Deposit, the Securities may no
longer be included in the Dow Jones Industrial Average. Should an Equity
Security no longer be included in the Dow Jones Industrial Average, such
Equity Security will as a result thereof be removed from the portfolio of the
Trust and the proceeds received from the sale of such Security will be used to
acquire as many round lots as possible of the security which has replaced such
removed Security in the Dow Jones Industrial Average.
Investors should be aware that the Trust 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 the 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. The 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 the Trust.
TRUST PORTFOLIO
The Blue Chip Opportunity 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, are currently 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. On March 12, 1997, Dow
Jones and Co. Inc. announced that Hewlett-Packard Co., Travelers Group Inc.,
Johnson & Johnson Inc. and Wal-Mart Stores Inc. would replace Westinghouse
Electric Corp., Texaco Inc., Woolworth Corp. and Bethelehem Steel Corp. in the
Dow Jones Industrial Average as of March 17, 1997. Consistent with the Trust's
investment objective, the composition of the Trust portfolio was modified to
reflect the current components of the Dow Jones Industrial Average. Dow Jones
& Company, Inc., owner of the Dow Jones Industrial Average, has not granted to
the Trust 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 Trust or
in the selection of stocks included in the Trust 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.
Risk Factors. The Trust consists of different issues of Equity Securities, all
of which are listed on the New York Stock Exchange. An investment in Units
should be made with an understanding of the risks which an investment in
common stocks entails, including the risk that the financial condition of the
issuers of the Equity Securities or the general condition of the common stock
market may worsen and the value of the Equity Securities and therefore the
value of the Units may decline. Common stocks are especially susceptible to
general stock market movements and to volatile increases and decreases of
value as market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations
regarding government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or regional
political, economic or banking crises. Shareholders of common stocks have
rights to receive payments from the issuers of those common stocks that are
generally subordinate to those of creditors of or holders of debt obligations
or preferred stocks of, such issuers. Shareholders of common stocks of the
type held by the Trust 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 Trust 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.
General. The Trust consists of such of the Securities listed under "
Portfolio" in Part One as may continue to be held from time to time in the
Trust 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 might be distributed to Unitholders and might 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 Equity Securities under certain
limited circumstances. See "Trust Administration." Equity Securities,
however, will not be sold by the 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 the Trust and will vote such stocks in accordance with the
instructions of the Sponsor. Unitholders, however, may 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
The Trust has elected and intends to qualify on a continuing basis for special
federal income tax treatment as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). If the
Trust so qualifies and timely distributes to Unitholders 90% or more of its
taxable income (without regard to its net capital gain, i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to federal income tax on the portion of its taxable income
(including any net capital gain) that it distributes to Unitholders. In
addition, to the extent the Trust timely distributes to Unitholders at least
98% of its taxable income (including any net capital gain), it will not be
subject to the 4% excise tax on certain undistributed income of "regulated
investment companies." Because the Trust intends to timely distribute its
taxable income (including any net capital gain), it is anticipated that the
Trust will not be subject to federal income tax or the excise tax. Although
all or a portion of the Trust's taxable income (including any net capital
gain) for the taxable year may be distributed to Unitholders shortly after the
end of the calendar year, such a distribution will be treated for federal
income tax purposes as having been received by Unitholders during the calendar
year just ended.
Distributions to Unitholders of the Trust's taxable income (other than its net
capital gain) will be taxable as ordinary income to Unitholders. To the extent
that distributions to a Unitholder in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of capital
and will reduce the Unitholder's basis in his Units and, to the extent that
they exceed his basis, will be treated as a gain from the sale of his Units as
discussed below.
Distributions of the Trust's net capital gain which are properly designated as
capital gain dividends by the Trust will be taxable to Unitholders as
long-term capital gain, regardless of the length of time the Units have been
held by a Unitholder. A Unitholder may recognize a taxable gain or loss if the
Unitholder sells or redeems his Units. Any gain or loss arising from (or
treated as arising from) the sale or redemption of Units will generally 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 for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes 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. When Units are held by
corporate Unitholders, Trust distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable
to dividends received by the Trust from United States corporations (other than
Real Estate Investment Trusts) and is designated by the Trust as being
eligible for such deduction. 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
Trust will provide each Unitholder with information annually concerning what
part of the Trust distributions are eligible for the dividends received
deduction.
The 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 the 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 or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions received from
the Trust.
Distributions reinvested into additional Units of the Trust will be taxed to a
Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an In Kind
Distribution upon the redemption of Units or the termination of the Trust. See
"Rights of Unitholders--Redemption of Units." Unitholders electing an
In Kind Distribution of shares of Equity Securities should be aware that the
exchange is subject to taxation and Unitholders will recognize gain or loss
based on the value of the Equity Securities received.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. The foregoing discussion
relates only to the federal income tax status of the Trust and to the tax
treatment of distributions by the Trust to United States Unitholders.
Distributions by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons. Such
persons should consult their tax advisers. Units in the Trust and Trust
distributions may also be subject to state and local taxation and Unitholders
should consult their own tax advisers in this regard. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e. an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gains
dividends) will be subject to United States income taxes, including
withholding taxes. However, distributions received by a foreign investor from
the Trust that are designated by the Trust as capital gain dividends should
not be subject to United States income taxes, including withholding taxes, if
all of the following conditions are met: (i) the capital gain dividend is not
effectively connected with the conduct by the foreign investor of a trade or
business within the United States, (ii) the foreign investor (if an
individual) is not present in the United States for 183 days or more during
his or her taxable year, and (iii) the foreign investor provides all
certification which may be required of his or her status. Foreign investors
should consult their tax advisers with respect to United States tax
consequences of ownership of Units.
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 Trust. However, Van Kampen
American Capital Investment Advisory Corp., an affiliate 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, for providing portfolio supervisory services for
the 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 and its
successors and to any other unit investment trusts sponsored by the Sponsor
for which the Supervisor provides portfolio supervisory services 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 Investment Advisory Corp., shall receive as an annual
per Unit evaluation fee, payable in monthly installments, for regularly
evaluating the Trust's portfolio, that amount set forth under "Summary of
Essential Financial Information" in Part One (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 Trust that amount set forth under "Summary of Essential
Information" in Part One (which is based on the number of Units
outstanding on January 1 of each year). The Trustee's fees are payable monthly
on or before the tenth 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 the 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 the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the
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 the Trust and the rights and interests
of Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part and (g) expenditures incurred in
contacting Unitholders upon termination of the Trust.
The fees and expenses set forth herein are payable out of the Trust. When such
fees and expenses are paid by or owning to the Trustee, they are secured by a
lien on the portfolio of the 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 the Trust. If the balances in the Income and
Capital Accounts are insufficient to provide for amounts payable by the 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. The secondary market
Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge and cash, if any, in the
Income and Capital Accounts held or owned by the Trust.
Any sales charge reduction will primarily be the responsibility of the selling
broker, dealer or agent.
Employees of Van Kampen American Capital Distributors, Inc. and its
subsidiaries and registered representatives of selling brokers, dealers, or
agents may purchase Units of the Trust at the current Public Offering Price
less the dealer's concession described below.
Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Public Offering--Unit Distribution") by
(1) investors who purchase Units through registered investment advisers,
certified financial planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or
asset management service, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap
fee" charge is imposed, (2) bank trust departments investing funds over
which they exercise exclusive discretionary investment authority and that are
held in a fiduciary, agency, custodial or similar capacity, (3) any person who
for at least 90 days, has been an officer, director or bona fida employee of
any firm offering Units for sale to investors or their spouses or children and
(4) officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One in accordance with fluctuations in the prices of the underlying
Securities in the 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 was
established by adding to the determination of the aggregate underlying value
of the Securities an amount equal to 5.152% of such value for the Trust and
dividing the sum so obtained by the number of Units outstanding. The Public
Offering Price shall include the proportionate share of any cash held in the
Income and Capital Accounts. This computation produced a gross sales
commission equal to 4.9% of the Public Offering Price for the 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.
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 bid prices on the day the valuation is made.
In offering the Units to the public, neither the Sponsor 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 above.
The Sponsor intends to qualify the Units for sale in a number of states.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For secondary market
transactions, the broker-dealer concession or agency commission will amount to
70% of the sales charge applicable to the transaction.
Certain commercial banks are making Units of the 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 Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally
be limited to transactions involving a minimum of 500 Units (100 Units for a
tax-sheltered retirement plan). The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor will receive a gross sales
commission initially equal to 4.9% of the Public Offering Price (excluding any
transaction fees) of the Units (equivalent to 5.152% of the net amount
invested), less any reduced sales charges. The Sponsor will receive from the
dealers the excess of such gross sales commission over the concession or
agency concession described above.
In addition, the Sponsor has realized a profit or sustained a loss, as the
case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. The Sponsor has not
participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities in the Trust portfolio. The Sponsor may have further realized
additional profit or loss during the initial offering period as a result of
the possible fluctuations in the market value of the Securities in the Trust
after a date of deposit, since all proceeds received from purchasers of Units
(excluding dealer concessions and agency commissions allowed, if any) will be
retained by the Sponsor.
Cash, if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to maintain
a secondary market for Units of the Trust. In so maintaining a market, the
Sponsor 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 (which price includes the applicable sales charge). In
addition, the Sponsor 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,
Public Market. Although they are not obligated to do so, the Sponsor intends
to 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 the Trust. If the
supply of Units exceeds demand or if some other business reason warrants it,
the Sponsor and/or dealers 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 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 Trust 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 the 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 the 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 the 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 a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by the
Trustee. In certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of corporate
authority. 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 the 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.
After making provisions for the distribution of amounts in respect of income
and capital gain so the Trust shall not be subject to Federal income tax, the
Trustee will then distribute any net income 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. Proceeds received on the
sale of any Securities in a Trust, to the extent (1) not used to purchase new
Securities, meet redemptions of Units or pay expenses or (2) not retained in
reserve to pay any applicable taxes, will be distributed annually on the
Capital Account Distribution Date to Unitholders of record on the preceding
Capital Account Record Date. 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 Trust at a constant rate throughout the
year, such distributions to Unitholders are expected to fluctuate from
distribution to distribution. Persons who purchase Units will commence
receiving distributions only after such person becomes a record owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker-dealer.
As of the tenth 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 the 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
the 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 all unit investment trusts sponsored by
Van Kampen American Capital Distributors, Inc., may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any Van Kampen American Capital mutual
funds (except for B shares) which are registered in the Unitholder's state of
residence. Such mutual funds are hereinafter collectively refereed 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
interest income, capital gains and/or principal 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 on such date. Unitholders with an existing Guaranteed Reinvestment
Option (GRO) Program account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new GRO
account which allows purchases of Reinvestment Fund shares at net asset value
as described above.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. 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 received future distributions of his or her Units in
cash.
Unitholders may elect to have each distribution of income, capital gains
and/or capital on their Units automatically reinvested in additional Units of
the Trust without a sales charge (to the extent Units may be lawfully offered
for sale in the state in which the Unitholder resides).To participate in the
reinvestment plan, a Unitholder may either contact his or her broker or agent
or file with the Trustee a written notice of election at least ten days prior
to the Record Date for which the first distribution is to apply. A
Unitholder's election to participate in the reinvestment plan will apply to
all Units of the Van Kampen Merritt Blue Chip Opportunity Trust owned by such
Unitholder and such election will remain in effect until changed by the
Unitholder.
Reinvestment plan distributions may be reinvested in Units of the Van Kampen
Merritt Blue Chip Opportunity Trust already held in inventory by the Sponsor
(see "Public OfferingPublic Market") or, until such time as additional
Units cease to be issued by the Trust, distributions may be reinvested in such
additional Units. If Units are unavailable in the secondary market,
distributions which would otherwise have been reinvested shall be paid in cash
to the Unitholder on the applicable Distribution Date.
Purchases made pursuant to the reinvestment plan will be made without a sales
charge at the net asset value for Units of the Van Kampen Merritt Blue Chip
Opportunity Trust as of the Evaluation Time on the related Income or Capital
Distribution Dates. Under the reinvestment plan, the Trust will pay the
Unitholder's distributions to the Trustee which in turn will purchase for such
Unitholder full and fractional Units of the Van Kampen Merritt Blue Chip
Opportunity Trust and will send such Unitholder a statement reflecting the
reinvestment.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and its investment adviser shall have the
right to terminate at any time the reinvestment plan relating to such
Reinvestment Fund and the Sponsor shall have the right to suspend or terminate
the reinvestment plan for reinvestment in additional Units of the Van Kampen
Merritt Blue Chip Opportunity Trust at any time.
Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Sponsor deems it to be
in the best interest of the Unitholders, the accounts of the 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, deductions for applicable taxes and
for fees and expenses of the 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 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 the 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 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 third business day following such tender 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.
To the extent that Securities are sold, the size of the 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 the Trust, 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 the Trust determined on the basis of (i)
the cash on hand in the Trust or monies in the process of being collected and
(ii) the value of the Securities in the Trust, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) any amount
owing to the Trustee for its advances and (c) the accrued expenses of the
Trust. The Evaluator may determine the value of a Securities in the 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 last available bid prices.
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 the 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 portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. The Trust, however, will not be managed. Instead, as a
general rule the only purchases and sales that will be made with respect to
the Trust's portfolio will be those necessary to maintain, to the extent
feasible, a portfolio which reflects the current components of the Dow Jones
Industrial Average, taking into consideration redemptions, sales of additional
Units and the other adjustments referred to elsewhere in this prospectus (see
"The Trust"). The Trust Agreement, however, does provide that the
Sponsor may (but need not) direct the Trustee to dispose of a Security in
certain events such as the issuer having defaulted on the payment on any of
its outstanding obligations or the price of the 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 Securities would be detrimental to the 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 Trust continues to satisfy the qualifications of a
regulated investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue Code. The Trust
requires the Sponsor, as part of its administrative function, to instruct the
Trustee to reinvest the net proceeds of the sale of Securities in additional
Securities to the extent that such proceeds are not required for the
redemption of Units. As a policy matter, the Sponsor currently intends to
direct the Trustee to acquire round lots of shares of the Securities rather
than odd lot amounts. Any funds not used to acquire round lots will be held
for future purchases of shares, for redemptions of Units or for distributions
to Unitholders. Except as provided in this paragraph, the acquisition by the
Trust of any securities other than the Securities is prohibited. In the event
the Trustee receives any securities or other properties relating to the
Securities (other than normal dividends) acquired in exchange for Securities
such as those acquired in connection with a merger, a spin-off of a subsidiary
or other transaction, the Trustee is directed to sell such securities or other
property and reinvest the proceeds in shares of the Security for which such
securities or other property relates, or if such Security is thereafter
removed from the Dow Jones Industrial Average, in any new security which is
added as a component of the Dow Jones Industrial Average. Proceeds from the
sale of Securities (or any securities or other property received by the Trust
in exchange for Securities) are credited to the Capital Account for
reinvestment into new securities which are added as components of the Dow
Industrial Average or into additional shares of the Security as indicated in
the preceding sentence, 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 the Trust tendered for
redemption and the payment of expenses; provided, however, that in the case of
Securities sold to meet redemption requests.
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 the 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 the 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.
The Trust may be liquidated (1) at any time by consent of Unitholders
representing 51% of the Units then outstanding or (2) by the Trustee when the
value of the Trust, as shown by any evaluation, is less than that indicated
under "Summary of Essential Financial Information" in Part One. 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.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. 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 Trust maintained by the Trustee. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice
thereof to all Unitholders. Unitholders will receive a cash distribution from
the sale of the remaining Securities within a reasonable time following the
Mandatory Termination Date. The Trustee will deduct from the funds of the
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 the Trust upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time. The
Trustee will then distribute to each Unitholder his pro rata share of the
balance of the Income and Capital Accounts.
The Sponsor currently intends to, but is not obligated to, offer for
sale units of a subsequent series of Van Kampen Merritt Equity Opportunity
Trust or its successors on the Mandatory Termination Date for the Trust. If
the Sponsor is in fact offering such units for sale, Unitholders of the Trust
will be given an opportunity to purchase such units at a public offering price
which includes a special reduced sales charge. There is, however, no assurance
that units of any new series of Van Kampen Merritt Equity Opportunity Trust or
a successor trust will be offered for sale at that time, or if offered, that
there will be sufficient units available for sale to meet the requests of any
or all Unitholders.
Within 60 days of the final distribution Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or negligence (gross negligence in the case of
the Sponsor) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee
of any of the Securities. In the event of the failure of the Sponsor to act
under the Trust Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
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, Supervisor 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. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition").
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser (MSAM"), Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment adviser, and Morgan
Stanley International, are engaged in a wide range of financial services.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending. As of September 30,
1996, MSAM, together with its affiliated investment advisory companies, had
approximately $103.5 billion of assets under management and fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 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 November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of December 31, 1996, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $59 billion of investment
products, of which over $11.88 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $48 billion
of assets, consisting of $29.9 billion for 59 open end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.), $13.1
billion for 38 closed-end funds and $4.99 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-end funds and unit investment trusts are professionally distributed by
leading financial firms nationwide. 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 two million investor accounts, opened through retail distribution firms.
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 Unit Investment Trust
Division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of 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 portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the 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 the 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 this Prospectus have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
their report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
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
Trust, 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>
<CAPTION>
Table of Contents Page
<S> <C>
Introduction..........................1
The Trust.............................2
Objectives and Securities Selection...2
Trust Portfolio.......................3
Risk Factors..........................3
Federal Taxation......................3
Trust Operating Expenses..............4
Public Offering.......................5
Rights of Unitholders.................6
Trust Administration..................8
Other Matters.........................10
</TABLE>
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C. under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY
TRUST, SERIES 2
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 One accompanying this Prospectus
Part Two.
Sponsor: VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL
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 2,
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, 1997.
Van Kampen Merritt Equity Opportunity Trust,
Series 2
(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
Amendment to the Registration Statement has been signed below on
April 24, 1997 by the following persons who constitute a majority of the
Board of Directors of Van Kampen American Capital Distributors, Inc.:
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 Senior 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 and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated March 21, 1997 accompanying the
financial statements of Van Kampen Merritt Equity Opportunity Trust,
Series 2 as of December 31, 1996, and for the period then ended,
contained in this Post-Effective Amendment No. 4 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, 1997
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<NAME> BCOT
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<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (197668)
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<PER-SHARE-NAV-BEGIN> 14.17
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</TABLE>
