File No. 33-55786 CIK #895331
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549-1004
POST-EFFECTIVE AMENDMENT NO. 5 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, 1998 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 See "Summary of Essential Financial
Information".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 24, 1998
Van Kampen American Capital
<TABLE>
BLUE CHIP OPPORTUNITY TRUST
Van Kampen Merritt Equity Opportunity Trust, Series 2
Summary of Essential Financial Information
As of March 5, 1998
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.................................................................................. 501,167.345
Fractional Undivided Interest in the Trust per Unit ............................................. 1/501,167.345
Public Offering Price: ..........................................................................
Aggregate Value of Securities in Portfolio <F1>................................................. $ 9,809,650
Aggregate Value of Securities per Unit (including accumulated dividends)........................ $ 19.57
Sales Charge 4.9% (5.152% of Aggregate Value of Securities excluding principal cash) per Unit... $ 1.00
Public Offering Price per Unit <F2>............................................................. $ 20.57
Redemption Price per Unit........................................................................ $ 19.57
Secondary Market Repurchase Price per Unit....................................................... $ 19.57
Excess of Public Offering Price per Unit Over Redemption Price per Unit.......................... $ 1.00
</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............... $.31728
Less: Estimated Expenses per Unit....................... $.02040
Estimated Net Annual Dividends per Unit................. $.29688
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee................$.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.
- ----------
<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 Equity Securities, which are
actively traded blue-chip securities issued by large, well established
corporations. The Trust seeks to hold common stocks of 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 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(1) 1994 1995 1996 1997
------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value per Unit at beginning of period.............. $ 9.47 $ 10.72 $ 10.74 $ 14.17 $ 16.85
============= =========== =========== ============ ============
Net asset value per Unit at end of period.................... $ 10.72 $ 10.74 $ 14.17 $ 16.85 $ 18.38
============= =========== =========== ============ ============
Distributions to Unitholders of investment income on
Units redeemed.............. .................................$ .23 $ .27 $ .30 $ .30 $ .37
============= =========== =========== ============ ============
Distributions to Unitholders from Security redemption
proceeds (average Units outstanding for entire period)....... $ .09 $ .10 $ .06 $ .77 $ 1.96
============= =========== =========== ============ ============
Unrealized appreciation (depreciation) of Security
(per Unit outstanding at end of period)...................... $ .85 $ .11 $ 3.33 $ 2.86 $ 1.76
============= =========== =========== ============ ============
Units outstanding at end of period........................... 399,999 599,996 699,995 608,916 521,072
</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,
1997, and the related statements of operations and changes in net assets for
the three years ended December 31, 1997. 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, 1997 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,
1997, and the results of operations and changes in net assets for the three
years ended December 31, 1997, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 13, 1998
<TABLE>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST
SERIES 2
Statements of Condition
December 31, 1997
<CAPTION>
Blue Chip
Opportunity
Trust
---------------
<S> <C>
Trust property
Securities at market value, (5,316,931) (note 1)...................................... $ 10,715,275
Accumulated dividends................................................................. 17,244
Receivable for securities sold........................................................ 25,713
---------------
$ 10,758,232
===============
Liabilities and interest to Unitholders
Cash overdraft........................................................................ $ 1,181,616
Interest to Unitholders............................................................... 9,576,616
---------------
$ 10,758,232
===============
Analyses of Net Assets
Interest of Unitholders (521,072 Units of fractional undivided interest outstanding)
Cost to original investors of 708,600 Units (note 1).................................. $ 7,619,761
Less initial underwriting commission (note 3)......................................... 179,274
---------------
7,440,487
Less redemption of 187,528 Units....................................................... 3,324,466
---------------
4,116,021
Undistributed net investment income
Net investment income................................................................. 785,125
Less distributions to Unitholders..................................................... 816,417
---------------
(31,292)
Realized gain (loss) on Security sale or redemption................................... 1,829,546
Unrealized appreciation (depreciation) of Securities (note 2)......................... 5,398,344
Distributions to Unitholders of Security sale or redemption proceeds.................. (1,736,003)
---------------
Net asset value to Unitholders........................................................ $ 9,576,616
===============
Net asset value per Unit (521,072 Units outstanding)................................... $ 18.38
===============
</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>
1995 1996 1997
----------- ------------- -------------
<S> <C> <C> <C>
Investment income....................................................
Dividend income..................................................... $ 202,263 $ 222,648 $ 191,918
Expenses
Trustee fees and expenses........................................... 8,709 12,435 10,269
Evaluator fees...................................................... 1,791 (2,032) 1,782
Supervisory fees.................................................... 192 1,776 1,612
----------- ------------- -------------
Total expenses...................................................... 10,692 12,179 13,663
----------- ------------- -------------
Net investment income............................................... 191,571 210,469 178,255
Realized gain (loss) from Securities sale or redemption
Proceeds............................................................ 185,875 1,538,885 3,243,988
Cost................................................................ 151,329 970,460 2,027,106
----------- ------------- -------------
Realized gain (loss)................................................ 34,546 568,425 1,216,882
Net change in unrealized appreciation (depreciation) of Securities... 2,330,806 1,744,067 915,200
----------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS...................................................... $ 2,556,923 $ 2,522,961 $ 2,310,337
=========== ============= =============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Years ended December 31,
<CAPTION>
1995 1996 1997
------------- ------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income................................................................. $ 191,571 $ 210,469 $ 178,255
Realized gain (loss) on Securities sale or redemption................................. 34,546 568,425 1,216,882
Net change in unrealized appreciation (depreciation) of Securities.................... 2,330,806 1,744,067 915,200
------------- ------------- ---------------
Net increase (decrease) in net assets resulting from operations....................... 2,556,923 2,522,961 2,310,337
Distributions to Unitholders from:
Net investment income................................................................. (203,489) (197,668) (210,751)
Securities sale or redemption proceeds................................................ (43,995) (509,995) (1,150,594)
Redemption of Units (16) (1,474,020) (1,850,393)
------------- ------------- ---------------
Total increase (decrease)............................................................. 2,309,423 341,278 (856,401)
Net asset value to Unitholders
Beginning of period................................................................... 6,444,261 9,916,194 10,257,472
Additional Securities purchased from proceeds of Unit Sales........................... 1,162,510 -- 175,545
------------- ------------- ---------------
End of period (including undistributed (overdistributed) net investment income of
$(11,597), $1,204, and $(31,292) respectively)........................................ $ 9,916,194 $ 10,257,472 $ 9,576,616
============ ============= ===============
</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, 1997
<CAPTION>
Valuation of Securities
Number at December 31,
of Market Value Per 1997
Shares Name of Issuer Share (Note 1)
- ---------- --------------------------------------------------- --------------------- -----------------------------
<S> <C> <C> <C>
9,612 Allied Signal, Inc. $38.9375 $374,267
- -----------------------------------------------------------------------------------------------------------------
4,655 Aluminum Company of America (ALCOA) 70.3750 327,596
- -----------------------------------------------------------------------------------------------------------------
6,095 American Express Company 89.2500 543,979
- -----------------------------------------------------------------------------------------------------------------
4,314 American Telephone and Telegraph (AT&T) 61.2500 264,233
- -----------------------------------------------------------------------------------------------------------------
8,331 The Boeing Company 48.9375 407,698
- -----------------------------------------------------------------------------------------------------------------
8,732 Caterpillar Inc. 48.5625 424,048
- -----------------------------------------------------------------------------------------------------------------
3,959 Chevron Corp. 77.0000 304,843
- -----------------------------------------------------------------------------------------------------------------
7,880 Coca-Cola Enterprises, Inc. 66.6250 525,005
- -----------------------------------------------------------------------------------------------------------------
3,733 Walt Disney Company 99.0625 369,800
- -----------------------------------------------------------------------------------------------------------------
6,474 Du Pont (E.I) de Nemours & Company 60.0625 388,845
- -----------------------------------------------------------------------------------------------------------------
3,334 Eastman Kodak Company 60.8125 202,749
- -----------------------------------------------------------------------------------------------------------------
5,436 Exxon Corporation 61.1875 332,615
- -----------------------------------------------------------------------------------------------------------------
7,216 General Electric Company 73.3750 529,474
- -----------------------------------------------------------------------------------------------------------------
3,646 General Motors 60.6250 221,039
- -----------------------------------------------------------------------------------------------------------------
4,441 Goodyear Tire & Rubber Company 63.6250 282,559
- -----------------------------------------------------------------------------------------------------------------
4,967 Hewlett Packard Company 62.5000 310,437
- -----------------------------------------------------------------------------------------------------------------
6,117 International Business Machines (IBM) 104.5625 639,609
- -----------------------------------------------------------------------------------------------------------------
4,915 International Paper Company 43.1250 211,959
- -----------------------------------------------------------------------------------------------------------------
1,179 Johnson & Johnson 65.8750 77,667
- -----------------------------------------------------------------------------------------------------------------
5,956 McDonald's Corporation 47.7500 284,399
- -----------------------------------------------------------------------------------------------------------------
4,830 Merck & Co., Inc. 106.2500 513,188
- -----------------------------------------------------------------------------------------------------------------
3,281 Minnesota Mining and Manufacturing Company (3M) 82.0625 269,247
- -----------------------------------------------------------------------------------------------------------------
2,723 J.P. Morgan & Company, Inc. 112.8750 307,359
- -----------------------------------------------------------------------------------------------------------------
8,964 Philip Morris Companies Inc. 45.3125 406,181
- -----------------------------------------------------------------------------------------------------------------
6,360 The Procter & Gamble Company 79.8125 507,607
- -----------------------------------------------------------------------------------------------------------------
328 Ratheon Company 49.3125 16,174
- -----------------------------------------------------------------------------------------------------------------
6,225 Sears, Roebuck & Company 45.2500 281,681
- -----------------------------------------------------------------------------------------------------------------
6,719 Travelers Group Incorporated 53.8750 361,986
- -----------------------------------------------------------------------------------------------------------------
7,829 Union Carbide Corporation 42.9375 336,158
- -----------------------------------------------------------------------------------------------------------------
6,239 United Technologies Corporation 72.8125 454,277
- -----------------------------------------------------------------------------------------------------------------
6,050 Wal Mart Stores Incorporated 39.4375 238,596
- -----------------------------------------------------------------------------------------------------------------
- ---------- -----------------------------
170,540 $10,715,275
========== =============================
</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, 1995, 1996 and 1997
- --------------------------------------------------------------------------
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, 1997 is as follows:
<TABLE>
<CAPTION>
Blue Chip
Opportunity Trust
---------------------
<S> <C>
Unrealized Appreciation $ 5,398,344
Unrealized Depreciation --
---------------------
$ 5,398,344
=====================
</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, 1995, 1996 and 1997, 1 Unit, 91,079
Units and 96,444 Units, respectively, were presented for redemption.
VAN KAMPEN AMERICAN CAPITAL
BLUE CHIP OPPORTUNITY TRUST PROSPECTUS PART TWO
- --------------------------------------------------------------------------------
THE FUND. Van Kampen Merritt Equity Opportunity Trust and Van Kampen
American Capital Equity Opportunity Trust (the "Fund") are comprised of separate
and distinct unit investment trusts including series of the 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 the
Mandatory Termination Date 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. 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
Unitholders--Distributions 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 Unitholders--Redemption
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 NOR HAS THE 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 Administration--Amendment 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
Unitholders--Reinvestment 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 Portfolio--Risk Factors".
THE TRUST
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 Administration--Portfolio 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. 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 Unitholders--Redemption 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.
Distributions to Unitholders of the Trust's taxable income, other than
distributions which are designated as capital gain dividends, will be taxable as
ordinary income to Unitholders, except that, 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.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Trust (and
received by the Unitholder) on December 31 of the year such distributions are
declared.
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. The
Taxpayer Relief Act of 1997 (the "1997 Act") provides that for taxpayers other
than corporations, net capital gain (which is defined as net long-term capital
gain over net short-term capital loss for the taxable year) is subject to a
maximum marginal stated tax rate of either 28% or 20%, depending upon the
holding periods of the capital assets. Capital gain or loss is long-term if the
holding period for the asset is more than one year, and is short-term if the
holding period for the asset is one year or less. The date on which a Unit is
acquired (i.e., the "trade date") is excluded for purposes for determining the
holding period of the Unit. Generally, capital gains realized from assets held
for more than one year but not more than 18 months are taxed at a maximum
marginal stated tax rate of 28% and capital gains realized from assets (with
certain exclusions) held for more than 18 months are taxed at a maximum marginal
stated tax rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Further, capital gains realized from assets held for one year or less
are taxed at the same rates as ordinary income. Legislation is currently pending
that provides the appropriate methodology that should be applied in netting the
realized capital gains and losses. Such legislation is proposed to be effective
retroactively for tax years ending after May 6, 1997. Note, however, that the
1997 Act provides that the application of the rules described above in the case
of pass-through entities such as the Trust will be prescribed in future Treasury
Regulations. The Internal Revenue Service has released preliminary guidance
which provides that, in general, pass-through entities such as the Trust may
designate their capital gains dividends as either a 20% rate gain distribution
or a 28% rate gain distribution, depending on the nature of the gain received by
the pass-through entity. Unitholders should consult their own tax advisers as to
the tax rate applicable to capital gain dividends. Note that 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 1997 Act includes other provisions that treat certain other
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g., short sales, offsetting notional principal contracts, futures or
forward contracts or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. Unitholders should consult their own tax advisers with regard to any
such constructive sales rules.
In addition, it should be noted that capital gains may be recharacterized
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. The 1997 Act imposes a required holding period
for such credits. 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 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 this 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.
Units in the Trust and Trust distributions may also be subject to state and
local taxation and Unitholders should consult their tax advisers in this regard.
Unitholders desiring to purchase Unites 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 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 Offering--Sponsor
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
Unitholders--Reports Provided" and "Trust Administration".
MISCELLANEOUS EXPENSES. Expenses incurred in establishing a Trust,
including the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses ("organizational costs"), may be paid by the Trust and amortized over a
five year period or over the life of the Trust if less than five years. 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. The current sales charge
applicable to Units is described in Part One of this Prospectus under "Summary
of Essential Financial Information".
Any sales charge reduction will primarily be the responsibility of the
selling broker, dealer or agent.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law and trustees, custodians or difuciaries for the
benefit of such persons) of Van Kampen American Capital Distributors, Inc. and
its affiliates, dealers and their affiliates, and vendors providing services to
the Sponsor may purchase Units at the Public Offering Price less the applicable
dealer concession.
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 the original sales charge 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. 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 100 Units (25 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 the total sales charge applicable to a transaction
of the Units 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 Unitholders--Redemption 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 25 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 certain Van Kampen American Capital or
Morgan Stanley mutual funds 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 already held in
inventory by the Sponsor (see "Public Offering--Public Market") or, until such
time as additional Units cease to be issued by the Trust, 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 the 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. VK/AC Holding, Inc. is a wholly owned subsidiary of MSAM
Holdings II, Inc., which in turn is a wholly owned subsidiary of Morgan Stanley,
Dean Witter, Discover & Co. ("MSDWD").
MSDWD is a global financial services firm with a market capitalization of
more than $21 billion which was created by the merger of Morgan Stanley Group
Inc. with and into Dean Witter, Discover & Co. on May 31, 1997. MSDWD, together
with various of its directly and indirectly owned subsidiaries, is engaged in a
wide range of financial services through three primary businesses: securities,
asset management and credit services. These principal businesses include
securities underwriting, distribution and trading; merger, acquisition,
restructuring and other corporate finance advisory activities; merchant banking;
stock brokerage and research services; asset management; trading of futures,
options, foreign exchange commodities and swaps (involving foreign exchange,
commodities, indices and interest rating and investing; global custody,
securities clearance services and securities lending; and credit card services.
As of June 2, 1997, MSDWD, together with its affiliated investment advisory
companies, had approximately $270 billion of assets under management,
supervision or fiduciary advice.
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 and Seattle. 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 Trusts or to any other Series thereof. The information is included herein
only for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor upon
request.)
As of September 30, 1997, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $65.3 billion of investment
products, of which over $10.85 billion is invested in municipal securities. The
Sponsor and its Van Kampen American Capital affiliates managed $54 billion of
assets, consisting of $34.3 billion for 55 open-end mutual funds (of which 45
are distributed by Van Kampen American Capital Distributors, Inc.) $14.2 billion
for 37 closed-end funds and $5.5 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-ended 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 shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
All costs and expenses incurred in creating and establishing Series 1,
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 Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Securities held 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 of Contents Page
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Introduction 1
The Trust 2
Objectives and Securities Selection 2
Trust Portfolio 2
Federal Taxation 3
Trust Operating Expenses 4
Public Offering 5
Rights of Unitholders 6
Trust Administration 8
Other Matters 10
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.
BLUE CHIP OPPORTUNITY TRUST
PROSPECTUS
PART TWO
NOTE: THIS PROSPECTUS MAY BE USED ONLY
WHEN ACCOMPANIED BY PART ONE. BOTH
PARTS OF THIS PROSPECTUS SHOULD BE
RETAINED FOR FUTURE REFERENCE.
DATED AS OF THE DATE
OF THE PROSPECTUS
PART 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 o Knowledge of Wealth(sm) ------
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, 1998.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 2
(Registrant)
By VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
(Depositor)
By: Gina Costello
Assistant Secretary
(SEAL)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on April 24, 1998 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 )
John H. Zimmerman President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Gina Costello_______
(Atttorney 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 Van Kampen American Capital Equity Opportunity Trust,
Series 64 (File No. 333-33087) and Van Kampen American Capital Equity
Opportunity Trust, Series 87 (File No. 333-44581) and the same are hereby
incorporated herein by this reference.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 13, 1998 accompanying the financial
statements of Van Kampen Merritt Equity Opportunity Trust, Series 2 as of
December 31, 1997, and for the period then ended, contained in this
Post-Effective Amendment No. 5 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, 1998
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