File No. 33-50993 CIK #896961
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549-1004
POST-EFFECTIVE AMENDMENT NO. 6 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 4
(Exact Name of Trust)
VAN KAMPEN FUNDS INC.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel 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, 2000 pursuant to paragraph (b) of Rule 485.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 4
VAN KAMPEN MERRITT GLOBAL TELECOMMUNICATIONS TRUST, SERIES 1
- --------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part I of this Prospectus may not be distributed unless accompanied by
Part II. Please retain both parts of this Prospectus for future reference.
- --------------------------------------------------------------------------------
THE TRUST
The above-named series of Van Kampen Merritt Equity Opportunity Trust,
Series 4 (the "Fund") is comprised of one unit investment trust, Van Kampen
Merritt Global Telecommunications Trust, Series 1 (the "Trust" or "Global
Telecommunications Trust"). The Global Telecommunications Trust offers investors
the opportunity to purchase Units representing proportionate interests in a
fixed, diversified portfolio of equity securities issued by companies which
provide equipment for or services to the telecommunications field including
common stocks of foreign issuers, all of which are in American Depository
Receipt form ("ADRs"). Unless terminated earlier, the Trust will terminate on
July 15, 2001 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 the Trust is equal to the
aggregate underlying value of the Equity Securities plus or minus cash, if any,
in the Capital and Income Accounts, divided by the number of Units outstanding,
plus the applicable sales charge. See "Summary of Essential Financial
Information" in this Part One.
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 Date of this Prospectus is April 24, 2000
Van Kampen
VAN KAMPEN MERRITT GLOBAL TELECOMMUNICATIONS TRUST, SERIES 1
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 4
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF MARCH 2, 2000
SPONSOR: VAN KAMPEN FUNDS INC.
SUPERVISOR: VAN KAMPEN 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
<TABLE>
<CAPTION>
Global
Telecommunications
Trust
----------------
GENERAL INFORMATION
<S> <C>
Number of Units 1,435,656.105
Fractional Undivided Interest in Trust per Unit 1/1,435,656.105
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 81,412,592
Aggregate Value of Securities per Unit (including accumulated dividends) $ 56.7076
Sales charge 1.9% (1.937% of Aggregate Value of Securities excluding
principal cash) per Unit (3) $ 1.1008
Public Offering Price per Unit (2)(3) $ 57.8084
Redemption Price per Unit $ 56.7076
Secondary Market Repurchase Price per Unit $ 56.7076
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ 1.1008
</TABLE>
Supervisor's Annual Supervisory Fee Maximum of $.005 per Unit
Evaluator's Annual Fee Maximum of $.005 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....................January 4, 1994
Mandatory Termination Date.........July 15, 2001
Minimum Termination Value..........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 Agreement may
be terminated if the net asset value of such Trust is less than $3,000,000.
Special Information
Calculation of Estimated Net Annual Dividends per Unit
Estimated Gross Annual Dividends per Unit $.70279
Less: Estimated Expenses per Unit $.03346
Estimated Net Annual Dividends per Unit $.66933
Trustee's Annual fee $.0016 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.
- --------------------------------------------------------------------------------
(1) Equity Securities listed on a national securities exchange are valued at
the closing sale price, or if no such price exists or if the Equity
Security is not listed, at the closing bid price thereof.
(2) Anyone ordering Units will have included in the Public Offering Price a pro
rata share of any cash in Income and Capital Accounts.
(3) Effective on each January 4, commencing January 4, 1995, the secondary
sales charge will decrease by .5 of 1% to a minimum sales charge of 1.5%.
See "Public Offering-Offering Price" in Part Two.
PORTFOLIO
The Van Kampen Merritt Global Telecommunications Trust, Series 1 consists of
several different issues of Equity Securities, which are primarily issued by
companies which provide equipment for or services to the telecommunications
field including common stocks of foreign issuers, all of which are ADRs. All the
Equity Securities are listed on a national securities exchange, the NASDAQ
National Market System or are traded in the over-the-counter market.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
1994 (1) 1995 1996 1997 1998
------------ ------------ ------------ ------------ ------------
Net asset value per Unit at
<S> <C> <C> <C> <C> <C>
beginning of period..................... $ 18.82 $ 16.47 $ 19.73 $ 19.91 $ 26.30
============ ============ ============ ============ ============
Net asset value per Unit at
end of period........................... $ 16.47 $ 19.73 $ 19.91 $ 26.30 $ 39.11
============ ============ ============ ============ ============
Distributions to Unitholders of investment
income including accumulated dividends
paid on Units redeemed (average Units
outstanding for entire period).......... $ 0.46 $ 0.45 $ 0.50 $ 0.74 $ 0.49
============ ============ ============ ============ ============
Distributions to Unitholders from Security
sales redemption proceeds (average
Units outstanding for entire period).... $ -- $ -- $ 0.16 $ 0.46 $ 1.07
============ ============ ============ ============ ============
Unrealized appreciation (depreciation) of
Equity Securities (per Unit outstanding
at end of period)....................... $ (2.03) $ 3.51 $ 0.19 $ 6.76 $ 13.05
============ ============ ============ ============ ============
Units outstanding at end of period......... 2,849,994 2,523,843 1,954,230 1,638,654 1,512,204
</TABLE>
- --------------------------------------------------------------------------------
(1) For the period from January 4, 1994 (date of deposit) through December 31,
1994.
<TABLE>
<CAPTION>
PER UNIT INFORMATION (continued)
1999
-------------
Net asset value per Unit at
<S> <C>
beginning of period................................................................................. $ 39.11
=============
Net asset value per Unit at
end of period....................................................................................... $ 55.20
=============
Distributions to Unitholders of investment income including accumulated
dividends paid on Units redeemed (average Units
outstanding for entire period)...................................................................... $ 0.45
=============
Distributions to Unitholders from Equity Security
redemption proceeds (average Units
outstanding for entire period)...................................................................... $ 3.01
=============
Unrealized appreciation (depreciation) of
Equity Securities (per Unit outstanding
at end of period)................................................................................... $ 14.48
=============
Units outstanding at end of period..................................................................... 1,458,875
</TABLE>
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(1) For the period from January 4, 1994 (date of deposit) through December 31,
1994.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen Merritt Equity Opportunity Trust, Series 4 (Van Kampen Merritt Global
Telecommunications Trust, Series 1):
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 4 (Van Kampen Merritt Global Telecommunications Trust,
Series 1) as of December 31, 1999, and the related statements of operations and
changes in net assets for the three years ended December 31, 1999. 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 auditing standards generally
accepted in the United States. 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, 1999 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 4 (Van Kampen Merritt Global Telecommunications Trust,
Series 1) as of December 31, 1999, and the related statements of operations and
changes in net assets for the three years ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
GRANT THORNTON LLP
Chicago, Illinois
March 10, 2000
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 4
STATEMENTS OF CONDITION
DECEMBER 31, 1999
Global
Telecommunications
Trust
----------------
Trust property
<S> <C>
Cash......................................................................................... $ --
Securities at market value, (cost $25,829,910) (note 1) ..................................... 81,229,311
Accumulated dividends........................................................................ 86,240
Receivable for Securities sold............................................................... 3,576,353
----------------
$ 84,891,904
================
Liabilities and interest to Unitholders
Cash overdraft............................................................................... $ 2,601,602
Payables for Securities Purchased............................................................ 1,729,102
Redemptions payable.......................................................................... 35,950
Interest to Unitholders...................................................................... 80,525,250
----------------
$ 84,891,904
================
ANALYSES OF NET ASSETS
Interest of Unitholders (1,458,875 Units of fractional undivided interest outstanding)
Cost to original investors of 2,922,729 Units (note 1) ...................................... $ 58,831,437
Less initial underwriting commission (note 3)............................................. 2,846,480
----------------
55,984,957
Less redemption of 1,463,854 Units........................................................ 33,706,339
----------------
22,278,618
Undistributed net investment income
Net investment income..................................................................... 5,955,712
Less distributions to Unitholders......................................................... 6,163,744
----------------
(208,032)
Realized gain (loss) on Security sale or redemption.......................................... 10,367,758
Unrealized appreciation (depreciation) of Securities (note 2) ............................... 55,399,401
Distributions to Unitholders of Security sale or redemption proceeds......................... (7,312,495)
----------------
Net asset value to Unitholders......................................................... $ 80,525,250
================
Net asset value per Unit (Units outstanding of 1,458,875) ...................................... $ 55.20
================
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT GLOBAL TELECOMMUNICATIONS TRUST, SERIES 1
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
1997 1998 1999
------------ ------------ -----------
Investment income
<S> <C> <C> <C>
Dividend income......................................................... $ 1,103,603 $ 988,163 $ 678,311
Expenses
Trustee fees and expenses................................................ 27,495 76,515 20,733
Evaluator fees........................................................... 11,141 9,382 8,836
Supervisory fees......................................................... 9,961 9,201 8,836
------------ ------------ -----------
Total expenses........................................................ 48,597 95,098 38,405
------------ ------------ -----------
Net investment income.................................................... 1,055,006 893,066 639,906
Realized gain (loss) from Security sale or redemption
Proceeds................................................................. 7,611,460 4,798,850 11,196,443
Cost..................................................................... 6,624,912 2,910,442 3,934,300
------------ ------------ -----------
Realized gain (loss) ................................................. 986,548 1,888,408 7,262,143
Net change in unrealized appreciation (depreciation) of Securities.......... 11,077,533 19,738,775 21,121,784
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......... $13,119,087 $22,520,248 $29,023,833
============ ============ ===========
Statements of Changes in Net Assets
Years ended December 31,
1997 1998 1999
------------ ------------ -----------
Increase (decrease) in net assets Operations:
Net investment income.................................................... $ 1,055,006 $ 893,065 $ 639,906
Realized gain (loss) on Security sale or redemption...................... 986,548 1,888,408 7,262,143
Net change in unrealized appreciation (depreciation) of Securities....... 11,077,533 19,738,775 21,121,784
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations....... 13,119,087 22,520,248 29,023,833
Distributions to Unitholders from:
Net investment income.................................................... (1,303,866) (774,856) (668,480)
Securities sale or redemption proceeds................................... (808,161) (1,685,691) (4,453,643)
Redemption of Units...................................................... (7,248,922) (4,009,083) (5,296,167)
------------ ------------ -----------
Total increase (decrease) ............................................ 3,758,138 16,050,618 18,605,543
Net asset value to Unitholders
Beginning of period...................................................... 38,914,953 43,091,203 59,141,821
Additional Securities purchased from proceeds of Unit Sales.............. 418,112 -- 2,777,886
------------ ------------ -----------
End of period (including undistributed (overdistributed) net investment
income of $(297,667), $(179,45) and $(208,032), respectively) ........ $43,091,203 $59,141,821 $80,525,250
============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
VAN KAMPEN MERRITT GLOBAL TELECOMMUNICATIONS TRUST, SERIES 1 PORTFOLIO AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------------------------------
Valuation of
Number Market Value Securities
of Shares Name of Issuer Per Share (Note 1)
- --------------- ------------------------------------------------------------------------------------ ----------------
<S> <C> <C> <C>
38,628 ALLTELL Corporation $ 82.6875 $ 3,194,053
- -------------------------------------------------------------------------------------------------------------------------
27,856 American Telephone and Telegraph Company (AT&T) 50.7500 1,413,692
- -------------------------------------------------------------------------------------------------------------------------
73,994 Bell Atlantic Corporation 61.5625 4,555,256
- -------------------------------------------------------------------------------------------------------------------------
15,605 British Telecommunications Plc 238.0000 3,713,990
- -------------------------------------------------------------------------------------------------------------------------
42,010 Cable and Wireless Plc 52.9375 2,223,904
- -------------------------------------------------------------------------------------------------------------------------
43,332 Cable and Wireless HKT Ltd 29.1250 1,262,045
- -------------------------------------------------------------------------------------------------------------------------
75,211 Comcast Corporation 50.5000 3,798,156
- -------------------------------------------------------------------------------------------------------------------------
44,659 Compania de Telef de Chile 18.2500 815,027
- -------------------------------------------------------------------------------------------------------------------------
116,575 Global Crossings Ltd. 49.9375 5,821,464
- -------------------------------------------------------------------------------------------------------------------------
28,504 GTE Corporation 70.5625 2,011,314
- -------------------------------------------------------------------------------------------------------------------------
26,054 Lucent Technologies 74.8125 1,949,165
- -------------------------------------------------------------------------------------------------------------------------
63,543 MCI Worldcom Incorporated 53.0000 3,367,779
- -------------------------------------------------------------------------------------------------------------------------
19,542 Mediaone Group Incorporated 76.8125 1,501,070
- -------------------------------------------------------------------------------------------------------------------------
1,385 NCR Corporation 37.8750 52,457
- -------------------------------------------------------------------------------------------------------------------------
14,342 NEXTEL Communications, Incorporated 103.0625 1,478,122
- -------------------------------------------------------------------------------------------------------------------------
27,398 Philippine Long Distance Telephone Company 25.8750 708,923
- -------------------------------------------------------------------------------------------------------------------------
34,173 Rogers Cantel Mobile Communications 36.3750 1,243,043
- -------------------------------------------------------------------------------------------------------------------------
143,764 SBC Communications 48.7500 7,008,495
- -------------------------------------------------------------------------------------------------------------------------
57,737 Sprint Corporation (Phone Group) 67.3125 3,886,422
- -------------------------------------------------------------------------------------------------------------------------
14,460 Sprint Corporation (PCS Group) 102.5000 1,482,150
- -------------------------------------------------------------------------------------------------------------------------
88,622 Telefonica de Espana 78.8125 6,984,521
- -------------------------------------------------------------------------------------------------------------------------
14,850 Telefonos de Mexico 112.5000 1,670,625
- -------------------------------------------------------------------------------------------------------------------------
19,244 Telephone and Date Systems, Incorporated 126.0000 2,424,744
- -------------------------------------------------------------------------------------------------------------------------
44,766 Time Warner, Incorporated 72.4375 3,242,737
- -------------------------------------------------------------------------------------------------------------------------
21,607 U.S. West 72.0000 1,555,704
- -------------------------------------------------------------------------------------------------------------------------
280,090 Vodafone Group Plc 49.5000 13,864,453
- --------------- ---------------
1,377,951 $ 81,229,311
=============== ===============
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 4
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1998 AND 1999
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales price or, if not so listed, on the closing bid
price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange, on the closing sale
prices on the exchange. In each case, the costs were 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.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1999 is as follows:
Global
Telecommunications
Trust
--------------
Unrealized Appreciation $ 55,888,589
Unrealized Depreciation (489,188)
--------------
$ 55,399,401
==============
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. Effective on each January 4,
commencing January 4, 1995, the secondary sales charge will decrease by .5 of 1%
to a minimum sales charge of 1.5%.
Compensation of Evaluator and Supervisor - the Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.005 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, 1997, 1998 and 1999, 315,576 Units,
126,450 Units and 114,004 Units, respectively, were presented for redemption.
GLOBAL TELECOMMUNICATIONS TRUST
Prospectus Part Two
- --------------------------------------------------------------------------------
The Fund. Van Kampen Merritt Equity Opportunity Trust (the "Fund") is
comprised of separate and distinct unit investment trusts, including the Global
Telecommunications Trust (the "Global Telecommunications Trust" or the "Trust").
The Global Telecommunications Trust offers investors the opportunity to purchase
Units representing proportionate interests in a fixed, diversified portfolio of
equity securities issued by companies which provide equipment for or services to
the telecommunications field including common stocks of foreign issuers, all of
which are in American Depositary Receipt form ("ADRs"). Unless terminated
earlier, the Trust will terminate on the Mandatory Termination Date stated under
"Summary of Essential Financial Information" in Part One of this Prospectus and
any securities then held will, within a reasonable time thereafter, be
liquidated or distributed by the Trustee. Any Securities liquidated at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder upon termination may
be more or less than the amount such Unitholder paid for his Units.
Objectives of the Trust. The objectives of the Global Telecommunications
Trust is to provide the potential for capital appreciation and income,
consistent with the preservation of capital, by investing in a portfolio of
equity securities diversified within the telecommunications industry ("Equity
Securities"). See "Portfolio" in Part One of this Prospectus. 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 a Trust, with changes in
dividends received and with the sale or liquidation of Securities; therefore,
there is no assurance that the annual dividend distribution will be realized in
the future.
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 of this Prospectus. Any
distribution of income and/or capital will be net of the expenses of the
applicable Trust. See "Federal Taxation." Additionally, upon termination of each
Trust, the Trustee will distribute, upon surrender of Units for redemption, to
each Unitholder his pro rata share of each Trust's assets, less expenses, in the
manner set forth under "Rights of Unitholders--Distributions of Income and
Capital".
Termination. Commencing on the Mandatory Termination Date as specified 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 not electing a distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
after the Trust is terminated. See "Trust Administration--Reinvestment Option."
Units of the Fund are not deposits or obligations of, and are not guaranteed
or endorsed by, any bank, and are not federally insured or otherwise protected
by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency, and involve investment risk, including the possible loss of
principal.
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.
Reinvestment Option. Unitholders of any Van Kampen-sponsored unit investment
trust may utilized their redemption or termination proceeds to purchase units of
any other Van Kampen 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 option of having distributions reinvested into additional Units of the Trust
if Units are available at the time of reinvestment as described herein. See
"Rights of Unitholders-- Reinvestment Option".
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. See "Risk Factors".
THE TRUST
Van Kampen Merritt Equity Opportunity Trust (the "Fund") is comprised of
separate and distinct unit investment trusts, including Van Kampen Merritt
Global Telecommunications Trust. The Fund was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the "Trust
Agreement"), among Van Kampen Funds, Inc., as Sponsor, American Portfolio
Evaluation Services, a division of Van Kampen Investment Advisory Corp., as
Evaluator, Van Kampen Investment Advisory Corp., as Supervisor, and The Bank of
New York, as Trustee, or their predecessors.
The Trusts may be appropriate mediums for investors who desire to participate
in a portfolio of equity securities with greater diversification than they might
be able to acquire individually. 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 of this Prospectus.
Each Unit represents a fractional undivided interest in the Trust involved.
To the extent that any Units are redeemed by the Trustee, the fractional
undivided interest in a Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Global Telecommunications 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 of this Prospectus. An investor will be subjected to taxation on the
dividend income received from the Fund and on gains from the sale or liquidation
of Securities (see "Federal Taxation"). Investors should be aware that there is
not any guarantee that the objectives of 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 selecting Securities for the Global Telecommunications Trust the following
factors, among others, were considered: (a) the issuer's position within the
industry, (b) breadth and stability of the issuer's business base and (c) growth
potential.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust as of the date the Trust was created.
Subsequent thereto, the Equity Securities may no longer meet such criteria.
Should an Equity Security no longer meet such criteria, such Equity Security
will not as a result thereof be removed from the portfolio of the Trust.
Investors should be aware that the Fund is not a "managed" trust and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that the
securities were selected by the Sponsor as of the date the Securities were
purchased by the Trust. 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 such
Trust.
TRUST PORTFOLIO
The Global Telecommunications Trust initially consisted of several different
issues of Equity Securities, all of which are issued by companies which provide
equipment for or services to the telecommunications field including common
stocks of foreign issuers, all of which are ADRs. The Equity Securities in the
portfolio are listed on a national securities exchange, the NASDAQ National
Market System or are traded in the over-the-counter market.
The Trust consists of such of the Securities listed under "Portfolio" in Part
One of this Prospectus as may continue to be held from time to time in the
Trusts together with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of the
Securities.
Because certain of the Securities from time to time may be sold under certain
circumstances described herein, and because the proceeds from such events will
be distributed to Unitholders and will not be reinvested, no assurance can be
given that the Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor may instruct the
Trustee to sell Securities under certain limited circumstances. Securities,
however, will not be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
RISK FACTORS
Equity Securities. An investment in Units should be made with an
understanding of the risks which an investment in common stocks entails,
including the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market may worsen and
the value of the Equity Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market confidence
in and perceptions of the issuers change. These perceptions are based on
unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments from the issuers
of those common stocks that are generally subordinate to those of creditors of
or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Fund have a right to
receive dividends only when and if, and in the amounts declared by the issuer's
board of directors and have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. Common stocks do not represent an obligation of the issuer
and, therefore, do not offer any assurance of income or provide the same degree
of protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of principal,
interest and dividends which could adversely affect the ability and inclination
of the issuer to declare or pay dividends on its common stock or the rights of
holders of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for as
long as the common stocks remain outstanding, and thus the value of the Equity
Securities may be expected to fluctuate over the life of the Fund to values
higher or lower than those prevailing on the date of purchase by a Unitholder.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
Telecommunications Industry. The Global Telecommunications Trust concentrates
its assets in the telecommunications industry and, as a result, the value of the
Units of such Trust may be susceptible to factors affecting the
telecommunications industry. The telecommunications industry is subject to
governmental regulations and the products and services of telecommunications
companies may be subject to rapid obsolescence. These factors could affect the
value of the Global Telecommunications Trust's Units. Telephone companies in the
United States, for example, are subject to both state and federal regulations
affecting permitted rates of returns and the kinds of services that may be
offered. Certain types of companies represented in the Global Telecommunications
Trust portfolio are engaged in fierce competition for a share of the market of
their products. As a result, competitive pressures are intense and the stocks
are subject to rapid price volatility. While the Global Telecommunications Trust
portfolio concentrates on the securities of established suppliers of traditional
telecommunications products and services, the Trust also invests in smaller
telecommunications companies which may benefit from the development of new
products and services. These smaller companies may present greater opportunities
for capital appreciation, and may also involve greater risk than large,
established issuers. Such smaller companies may have limited product lines,
market or financial resources, and their securities may trade less frequently
and in more limited volume than the securities of larger, more established
companies. As a result, the prices of the securities of such smaller companies
may fluctuate to a greater degree than the prices of securities of other
issuers.
The telecommunications industry has been one of the fastest growing, most
rapidly changing market sectors. Demand for networking technologies and
interactive communication services has prompted worldwide activity, positioning
the industry for rapid growth and future expansion. Its growing customer base,
increasing cost efficiency and technological breakthroughs add greater stability
to its current position in the marketplace. There can be no assurance, however,
that future growth or technological developments will be realized.
Telecommunications is the facilitator of ideas, messages and information that
can be found in a variety of formats, including speech, images, writing and
signals. Companies within this field may provide customers with
telecommunication equipment and services, ongoing research and technological
development. Specific services of these companies (provided on a daily basis)
may include: worldwide telephone systems, wireless services and equipment
(cellular telephones, pagers), data and voice transmission, computers,
electronic equipment, video systems, and television and radio transmission.
In addition, the Telecommunications Act of 1996 is designed to open local
telephone services to competition. The Telecommunications Act is expected to
have a significant impact on the telecommunications industry. In particular,
companies within the local exchange and long distance markets will be subject to
substantially increased competition from other long distance carriers,
competitive access providers and cable companies, among others.
Telecommunications companies will need to be able to adapt to an increasingly
innovative and competitive marketplace with many companies offering combined
video, internet and telephonic services. This increased competition and the
changing regulatory environment within the telecommunications industry could
have a material adverse impact on certain issuers of the Securities.
Research in areas such as fiber optics and digital compression may lead to
further investment opportunities in the likely creation and deployment of
interactive services. Further, the industry is diversified into many different
sectors, with companies focused on established technologies, and those engaged
in development or emerging technologies.
Foreign Issuers. Since certain of the Equity Securities in certain of the
Trusts are securities of foreign issuers, an investment in these Trusts involves
some investment risks that are different in some respects from an investment in
a trust that invests entirely in securities of domestic issuers. Those
investment risks include future political and governmental restrictions which
might adversely affect the payment or receipt of dividends on the relevant
Equity Securities. In addition, for the foreign issuers that are not subject to
the reporting requirements of the Securities Exchange Act of 1934, there may be
less publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. However, due to the nature
of the issuers of Equity Securities included in the Trusts, the Sponsor believes
that adequate information will be available to allow the Supervisor to provide
portfolio surveillance.
The securities of the foreign issuers in the Trusts are in ADR form. ADRs
evidence American Depository Receipts which represent common stock deposited
with a custodian in a depositary. American Depositary Shares, and receipts
therefore (ADRs), are issued by an American bank or trust company to evidence
ownership of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares. ADRs may be
sponsored or unsponsored. In an unsponsored facility, the depositary initiates
and arranges the facility at the request of market makers and acts as agent for
the ADR holder, while the company itself is not involved in the transaction. In
a sponsored facility, the issuing company initiates the facility and agrees to
pay certain administrative and shareholder-related expenses. Sponsored
facilities use a single depositary and entail a contractual relationship between
the issuer, the shareholder and the depositary; unsponsored facilities involve
several depositaries with no contractual relationship to the company. The
depositary bank that issues an ADR generally charges a fee, based on the price
of the ADR, upon issuance and cancellation of the ADR. This fee would be in
addition to the brokerage commissions paid upon the acquisition or surrender of
the security. In addition, the depositary bank incurs expenses in connection
with the conversion of dividends or other cash distributions paid in local
currency into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices in
the ADR market may also exist with respect to certain ADRs. In varying degrees,
any or all of these factors may affect the value of the ADR compared with the
value of the underlying shares in the local market. In addition, the rights of
holders of ADRs may be different than those of holders of the underlying shares,
and the market for ADRs may be less liquid than that for the underlying shares.
ADRs are registered securities pursuant to the Securities Act of 1933 and may be
subject to the reporting requirements of the Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations will affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs and
consequently the value of the Equity Securities. The foreign issuers of
securities that are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated widely in value
against the United States dollar for many reasons, including supply and demand
of the respective currency, the soundness of the world economy and the strength
of the respective economy as compared to the economies of the United States and
other countries. Therefore, for any securities of issuers (whether or not they
are in ADR form) whose earnings are stated in foreign currencies, or which pay
dividends in foreign currencies or which are traded in foreign currencies, there
is a risk that their United States dollar value will vary with fluctuations in
the United States dollar foreign exchange rates for the relevant currencies.
On the basis of the best information available to the Sponsor at the Initial
Date of Deposit, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment to
the Trusts of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control regulations
might not be adopted in the future which might adversely affect payment to the
Trusts. In addition, the adoption of exchange control regulations and other
legal restrictions could have an adverse impact on the marketability of
international securities in the Trusts and on the ability of the Trusts to
satisfy its obligation to redeem Units tendered to the Trustee for redemption.
General. The Trust consists of such of the Securities listed under
"Portfolio" as may continue to be held from time to time in such Trust in Part
One of this Prospectus together with cash held in the Income and Capital
Accounts. Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Securities.
Because certain of the Equity Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested, no
assurance can be given that a Trust will retain for any length of time its
present size and composition. Although the portfolios are not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under certain limited
circumstances. See "Trust Administration." Equity Securities, however, will not
be sold by a Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation or depreciation.
Unitholders will be unable to dispose of any of the Equity Securities as
such, and will not be able to vote the Equity Securities. As the holder of the
Equity Securities, the Trustee will have the right to vote all of the voting
stocks in a Trust and will vote such stocks in accordance with the instructions
of the Sponsor.
FEDERAL TAXATION
The Trust intends to elect and 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 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
Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Tax
Act") provides that for taxpayers other than corporations, net capital gain
(which is defined as net long-term capital gain over net short-term capital loss
for the taxable year) realized from property (with certain exceptions) is
generally subject to a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). Capital gain or loss is long-
term if the holding period for the asset is more than one year, and is short-
term if the holding period for the asset is one year or less. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes for
determining the holding period of the Unit. Capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary income. 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. In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
The Taxpayer Relief Act of 1997 includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportUnities for
gain (e.g. short sales, offsetting notional principal contracts, futures or
forward contracts or similar transactions) as constructive sales for purposes of
recognition of gain (but not loss) and for purposes of determining the holding
period. Unitholders should consult their tax advisers with regard to any such
constructive sales rules.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Trust may be
deferred. The income (or proceeds from redemption) a Unitholder must take into
account for federal income tax purposes is not reduced by amounts deducted to
pay any deferred sales charge.
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 foreign Securities 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. A required holding period for such credits is
imposed. Unitholders should consult their tax advisers regarding this election
and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the taxable year or
another exception is met. In the event the Units are held by fewer than 500
persons, additional taxable income may be realized by the individual (and other
noncorporate) Unitholders in excess of the distributions received from the
Trust.
Distributions reinvested into additional Units of the Trust will be taxed to
a Unitholder in the manner described above (i.e., as ordinary income, long-term
capital gain or as a return of capital).
Under certain circumstances a Unitholder may be able to request an in kind
distribution upon termination of the Trust. Unitholders electing an in kind
distribution of stock should be aware that the exchange is subject to taxation
and Unitholders will recognize gain or loss based on the value of the Securities
received. Investors electing an in kind distribution should consult their own
tax advisers with regard to such transactions.
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. 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 to such Unitholder (including amounts received upon the
redemption of Units) will be subject to back-up withholding.
The foregoing discussion relates only to the federal income tax status of
your Trust and to the tax treatment of distributions by the Trust to United
States Unitholders.
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 a Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as capital gain
dividends) will be subject to United States income taxes, including withholding
taxes. However, distributions received by a foreign investor from a Trust that
are designated by the Trust as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes, if all of the
following conditions are met (i) the capital gain dividend is not effectively
connected with the conduct by the foreign investor of a trade or business within
the United States, (ii) the foreign investor (if an individual) is not present
in the United States for 183 days or more during his or her taxable year, and
(iii) the foreign investor provides all certification which may be required of
his status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). 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.
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
Investment Advisory Corp., which is 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 of this Prospectus, for providing portfolio supervisory services for the
Trust. Such fee (which is based on the number of Units outstanding on January 1
of each year) may exceed the actual costs of providing such supervisory services
for this Fund, but at no time will the total amount received for portfolio
supervisory services rendered to Series 1 and subsequent series of Van Kampen
Merritt Equity Opportunity Trust 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 Investment Advisory Corp., shall
receive as an annual per Unit evaluation fee, payable in monthly installments,
for regularly evaluating each Trust's portfolio that amount set forth under
"Summary of Essential Financial Information" in Part One of this Prospectus
(which is based on the outstanding number of Units on January 1 of each year).
Both of the foregoing fees may be increased without approval of the Unitholders
by amounts not exceeding proportionate increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index published by the
United States Department of Labor or, if such category is no longer published,
in a comparable category. The Sponsor and dealers will receive sales commissions
and may realize other profits (or losses) in connection with the sale of Units
as described under "Public 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 of this Prospectus (which is based on the outstanding
number of units on January 1 of each year). The Trustee's fees are payable
monthly on or before the twenty-fifth 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. 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 Trust may pay the cost
of updating its registration statement each year. Unit investment trust sponsors
have historically paid these costs.
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 (which will be reduced
annually by .5 of 1% to a minimum sales charge of 1.5%), and cash, if any, in
the Income and Capital Accounts held or owned by the Trust.
Employees of Van Kampen Funds Inc. and its affiliates may purchase Units of
each Trust at the current Public Offering Price less the dealer's concession
described below. Registered representatives of selling underwriters, brokers,
dealers, or agents may purchase Units of the Fund at the current Public Offering
Price less the dealer's concession described below.
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 "Unit Distribution" below) 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 services,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in the 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 of
this Prospectus in accordance with fluctuations in the prices of the underlying
Securities in a Trust.
The price of the Units as of the opening of business on the date stated in
the "Summary of Essential Financial Information" in Part One of this Prospectus
was established by adding to the determination of the aggregate underlying value
of the Securities an amount initially equal to 5.152% of such value and dividing
the sum so obtained by the number of Units outstanding. The Public Offering
Price value shall include the proportionate share of any cash held in the
Capital Account. This computation produced a gross sales commission initially
equal to 4.9% of the Public Offering Price for the Trust. The Evaluator will
appraise or cause to be appraised daily the value of the underlying Securities
as of the close of trading on the New York Stock Exchange (which is presently
4:00 P.M. New York time) on days the New York Stock Exchange is open and will
adjust the Public Offering Price of the Units commensurate with such valuation.
Such Public Offering Price will be effective for all orders received at or prior
to the close of trading on the New York Stock Exchange on each such day. Orders
received by the Trustee, Sponsor or any dealer for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price. Such sales charge
will be reduced annually, as set forth in "Summary of Essential Financial
Information" in Part One of this Prospectus, by .5 of 1% to a minimum sales
charge of 1.5%.
The value of the Equity Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made or,
if no such price exists, at the bid price on the day the valuation is made.
In offering the Units to the public, neither the Sponsor, the Underwriters,
nor any broker-dealers are recommending any of the individual Securities in the
Trust but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in the
manner described.
Broker-dealers or others will be allowed a concession or agency commission of
70% of the sale charge in connection with the distribution of Units.
Certain commercial banks are making Units of 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 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 250 Units and 50 Units for a
tax-sheltered retirement plan. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public Offering--General" above.
Cash, if any, made available to the Sponsor prior to the date of settlement for
the purchase of Units may be used in the Sponsor's business and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor intends to, and certain
dealers maintain a secondary market for Units of each Trust. In so maintaining a
market, the Sponsor and any such dealers will also realize profits or sustain
losses in the amount of any difference between the price at which Units are
purchased and the price at which Units are resold. In addition, the Sponsor and
any such dealers will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
Public Market. Although they are not obligated to do so, the Sponsor intends
to, and certain of the other Underwriters may, maintain a market for the Units
offered hereby and offer continuously to purchase Units at prices subject to
change at any time, based upon the aggregate underlying value of the Equity
Securities in the Trust. If the supply of Units exceeds demand or if some other
business reason warrants it, the Sponsor and/or Underwriters may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. In the event that a market is not maintained for the Units and the
Unitholder cannot find another purchaser, a Unitholder desiring to dispose of
his Units may be able to dispose of such Units only by tendering them to the
Trustee for redemption at the Redemption Price. See "Rights of
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 50 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. The
Trustee will distribute any net income other than accredit interest received
with respect to any of the Securities in the Trust on or about the Income
Distribution Dates to Unitholders of record on the preceding Income Record
Dates. See "Summary of Essential Financial Information" in Part One of the
Prospectus. Proceeds received on the sale of any Securities in the Trust, to the
extent not used to meet redemptions of Units or pay expenses, will be
distributed annually on the Capital Account Distribution Date to Unitholders of
record on the preceding Capital Account Record Date. Proceeds received from the
disposition of any of the Securities after a record date and prior to the
following distribution date will be held in the Capital Account and not
distributed until the next distribution date applicable to such Capital Account.
The Trustee is not required to pay interest on funds held in the Capital or
Income Accounts (but may itself earn interest thereon and therefore benefits
from the use of such funds).
The distribution to the Unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share of
the cash in the Income Account after deducting estimated expenses. Because
dividends are not received by the Trusts at a constant rate throughout the year,
such distributions to Unitholders are expected to fluctuate from distribution to
distribution. Persons who purchase Units will commence receiving distributions
only after such person becomes a record owner. A person will become the owner of
Units, and thereby a Unitholder of record, on the date of settlement provided
payment has been received. Notification to the Trustee of the transfer of Units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
On or before 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 the 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 may elect to have each distribution of
income, capital gains and/or capital on their Units automatically reinvested in
additional Units without a sales charge (to the extent Units may be lawfully
offered for sale in the state in which the Unitholder resides). To participate
in the reinvestment plan, a Unitholder may either contact his or her broker or
agent or file with the Trustee a written notice of election at least ten days
prior to the Record Date for which the first distribution is to apply. A
Unitholder's election to participate in the reinvestment plan will apply to all
Units of the applicable Trust owned by such Unitholder and such election will
remain in effect until changed by the Unitholder.
Reinvestment plan distributions may be reinvested in Units of the Trust
already held in inventory by the Sponsor (see "Public Offering--Public Market")
or, until such time as additional Units cease to be issued by the Trust (see
"The Trust"), distributions may be reinvested in such additional Units. If Units
are unavailable in the secondary market, distributions which would otherwise
have been reinvested shall be paid in cash to the Unitholder on the applicable
Distribution Date.
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 appropriate Trust and will send such Unitholder
a statement reflecting the reinvestment.
A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its sponsor and its investment adviser
shall have the right to terminate at any time the reinvestment plan relating to
such Reinvestment Fund and the Sponsor shall have the right to suspend or
terminate the reinvestment plan for reinvestment in additional Units of the
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 a Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its 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 the Unitholder will be entitled to
receive in cash (unless the redeeming Unitholder elects an In Kind Distribution
as indicated below) an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units. The
"date of tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after the close of trading on the
New York Stock Exchange (which is currently 4:00 P.M. New York time) the date of
tender is the next day on which such Exchange is open for trading and such Units
will be deemed to have been tendered to the Trustee on such day for redemption
at the redemption price computed on that day.
The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by the
Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.
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.
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) any unpaid deferred sales charge payments. During
the initial offering period, the redemption price and the secondary market
repurchase price will include estimated organizational and offering costs. For
these purposes, the Evaluator may determine the value of the Securities in the
following manner: If the Securities are listed on a national or foreign
securities exchange or the Nasdaq Stock Market, Inc., this evaluation is
generally based on the closing sale prices on that exchange or market (unless it
is determined that these prices are inappropriate as a basis for valuation) or,
if there is no closing sale price on that exchange or market, at the closing bid
prices. If the Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange or market, the evaluation may be
based on the current bid price on the over-the-counter market. If current bid
prices are unavailable or inappropriate, the evaluation may be determined (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
Securities on the bid side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate as of the Evaluation Time.
As stated above, the Trustee may sell Securities to cover redemptions. When
Securities are sold, the size and the diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Securities
in 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 portfolios of the Fund are not "managed" by the
Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. The Trust Agreement
provides that the Sponsor may (but need not) direct the Trustee to dispose of an
Equity Security in the event that an issuer defaults in the payment of a
dividend that has been declared, that any action or proceeding has been
instituted restraining the payment of dividends or there exists any legal
question or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments of
dividends, the credit standing of the issuer or otherwise impair the sound
investment character of the Equity Security, that the issuer has defaulted on
the payment on any other of its outstanding obligations, that the price of the
Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such Equity
Securities would be detrimental to a Trust. In addition, the Sponsor will
instruct the Trustee to dispose of certain Securities and to take such further
action as may be needed from time to time to ensure that the 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. Except as stated under "Trust Portfolios -- General" for failed
securities, the acquisition by the Fund of any securities other than the
Securities is prohibited. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired in
exchange for Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
property, the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by a Trust, they may be accepted
for deposit in such Trust and either sold by the Trustee or held in such Trust
pursuant to the direction of the Sponsor (who may rely on the advice of the
Supervisor). Proceeds from the sale of Securities (or any securities or other
property received by the Fund in exchange for Equity Securities) are credited to
the applicable Capital Account for distribution to Unitholders or to meet
redemptions.
As indicated under "Rights of Unitholders" above, the Trustee may also sell
Securities designated by the Supervisor, or if not so directed, in its own
discretion, for the purpose of redeeming Units of a Trust tendered for
redemption and the payment of expenses.
When the Trust sells Securities, 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.
A Trust may be liquidated (1) at any time by consent of Unitholders
representing 66 2/3% 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 of the
Prospectus. The Trust Agreement will terminate upon the sale or other
disposition of the last Security held thereunder, but in no event will it
continue beyond the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the 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
Fund maintained by the Trustee. At least 30 days before the Mandatory
Termination Date the Trustee will provide written notice thereof to all
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.
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 (negligence in the case of the
Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee 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
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 Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van
Kampen Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.,
which in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; asset
management; trading of futures, options, foreign exchange commodities and swaps
(involving foreign exchange, commodities, indices and interest rates); real
estate advice, financing and investing; global custody, securities clearance
services and securities lending; and credit card services.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has offices at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1999, the total stockholders' equity of Van Kampen
Funds Inc. was $141,554,861 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen'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 or evaluation services at cost for approximately $13.4
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 the Trust,
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 such Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Securities held in 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 Part One of this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as set
forth in their report in Part One of this Prospectus, and are included herein in
reliance upon the authority of said firm as experts in accounting and audit.
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 4, 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 Chic ago and State of Illinois on the
24th day of April, 2000.
VAN KAMPEN MERRITT EQUITY OPPORTUNITY TRUST, SERIES 4
(Registrant)
By VAN KAMPEN FUNDS 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, 2000 by the
following persons who constitute a majority of the Board of Directors of Van
Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Gina M. Costello______________
(Attorney in Fact)*
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* An executed copy of each of the related powers of attorney is filed herewith
or was filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 10, 2000 accompanying the financial
statements of Van Kampen Merritt Equity Opportunity Trust, Series 4 as of
December 31, 1999, and for the period then ended, contained in this
Post-Effective Amendment No. 6 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, 2000
