<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FILER: DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
INVESTMENT COMPANY ACT NO. 811-5065
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
DEAN WITTER SELECT EQUITY TRUST,
SELECT 10 INTERNATIONAL SERIES 95-2
B. Name of Depositor:
DEAN WITTER REYNOLDS INC.
C. Complete address of Depositor's principal executive office:
DEAN WITTER REYNOLDS INC.
Two World Trade Center
New York, New York 10048
D. Name and complete address of agents for service:
MR. MICHAEL D. BROWNE
DEAN WITTER REYNOLDS INC.
Unit Trust Department
Two World Trade Center - 59th Floor
New York, New York 10048
COPY TO:
KENNETH W. ORCE, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
E. Total and amount of securities being registered:
An indefinite number of Units of Beneficial Interest pursuant to Rule
24f-2 promulgated under the Investment Company Act of 1940, as amended
F. Proposed maximum offering price to the public of the securities being
registered:
Indefinite
G. Amount of filing fee:
$500.00 (as required by Rule 24f-2)
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEAN WITTER SELECT EQUITY TRUST,
SELECT 10 INTERNATIONAL SERIES 95-2
CROSS REFERENCE SHEET
PURSUANT TO RULE 404(C) OF REGULATION C
UNDER THE SECURITIES ACT OF 1933
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTION 1
AS TO PROSPECTUS ON FORM S-6)
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
- ---------------------------------------------------------------- -----------------------------------------------------
<C> <S> <C>
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Table of Contents
3. Name and address of Trustee ) Table of Contents
4. Name and address of principal ) Table of Contents
Underwriter )
5. Organization of Trust ) Introduction
6. Execution and termination of ) Introduction;
Indenture ) Amendment and
) Termination of
) the Indenture
7. Changes of name ) Included in Form N-8B-2
8. Fiscal Year ) Included in Form N-8B-2
9. Litigation ) *
II. GENERAL DESCRIPTION OF THE TRUST
AND SECURITIES OF THE TRUST
10. General Information regarding )
Trust's Securities and Rights )
of Holders )
(a) Type of Securities ) Rights of Unit Holders
(Registered or Bearer)
(b) Type of Securities ) Administration of the
(Cumulative or Distributive) ) Trust-Distribution
(c) Rights of Holders as to withdrawal or redemption ) Redemption; Public
) Offering of Units--
) Secondary Market
(d) Rights of Holders as to ) Public Offering of
conversion, transfer, ) Units-Secondary
partial redemption and ) Market; Exchange
similar matters ) Option; Redemption;
) Rights of Unit Holders--
) Certificates
(e) Lapses or defaults with ) *
respect to periodic payment )
plan certificates )
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
(f) Voting rights as to Secu- ) Rights of Unit Holder
rities under the Indenture ) --Certain Limitations;
) Amendment and Termination
) of the Indenture
(g) Notice to Holders as to )
change in )
(1) Composition of assets ) Administration of the
of Trust ) Trust--Reports to Unit
) Holders; The Trust--
) Summary Description
) of the Portfolios
(2) Terms and Conditions ) Amendment and Termination
of Trust's Securities ) of the Indenture
(3) Provisions of ) Amendment and Termination
Indenture ) of the Indenture
(4) Identity of Depositor ) Sponsor; Trustee
and Trustee )
(h) Security Holders Consent )
required to change )
(1) Composition of assets ) Amendment and Termination
of Trust ) of the Indenture
(2) Terms and conditions ) Amendment and Termination
of Trust's Securities ) of the Indenture
(3) Provisions of ) Amendment and Termination
Indenture ) of the Indenture
(4) Identity of Depositor ) *
and Trustee )
(i) Other principal features ) Cover of Prospectus;
of the Trust's Securities ) Tax Status
11. Type of securities comprising ) The Trust-Summary
units ) Description of
) the Portfolios;
) Objectives and
) Securities Selection;
) The Trust-Special
) Considerations
12. Type of securities comprising periodic payment ) *
certificates )
13. (a) Load, fees, expenses, etc. ) Summary of Essential
) Information; Public
) Offering of Units--Public
) Offering Price;--Profit
) of Sponsor;--Volume
) Discount; Expenses and
) Charges
(b) Certain information ) *
regarding periodic payment )
certificates )
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
(c) Certain percentages ) Summary of Essential
) Information;
) Public Offering of
) Units-Public
) Offering Price;
) --Profit of Sponsor;
) --Volume Discount
(d) Price differentials ) Public Offering of
) Units--Public
) Offering Price
(e) Certain other loads, fees, ) Rights of Unit Holders--
expenses, etc. ) Certificates
payable by holders )
(f) Certain profits receivable ) Redemption--Purchase by
by depositor, principal ) the Sponsors of Units
underwriters, trustee or ) Tendered for Redemption
affiliated persons )
(g) Ratio of annual charges to income ) *
14. Issuance of trust's securities ) Introduction; Rights of
) Unit Holders--Certifi-
) cates
15. Receipt and handling of ) Public Offering of Units--
payments from purchasers ) Profit of Sponsor
16. Acquisition and disposition of ) Introduction;
underlying securities ) Amendment and
) Termination of the
) Indenture; Objectives
) and Securities Selection;
) The Trust--Summary
) Description of
) the Portfolio;
) Sponsor--Responsibility
17. Withdrawal or redemption ) Redemption;
) Public Offering of Units--
) Secondary Market;
18. (a) Receipt and disposition of ) Administration of the
income ) Trust; Reinvestment
) Programs
(b) Reinvestment of distribu- ) Reinvestment
tions ) Programs
(c) Reserves or special fund ) Administration of the
) Trust--Distribution
(d) Schedule of distribution ) *
19. Records, accounts and report ) Administration of the
) Trust--Records and
) Accounts;--Reports to
) Unit Holders
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
20. Certain miscellaneous provisions of trust agreement ) Amendment and Termination
) of the Indenture; Sponsor
) --Limitation on Liability
) --Resignation; Trustee--
) --Limitation on Liability
) --Resignation
21. Loans to security holders ) *
22. Limitations on liability of ) Sponsor, Trustee;
depositor, trustee, custodian, ) Evaluator--Limitation on
etc. ) Liability
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material provisions of ) *
trust agreement )
III. ORGANIZATION PERSONNEL AND AFFILIATED
PERSONS OF DEPOSITOR
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Expenses and Charges--
) fees; Public Offering of
) Units--Profit of Sponsor
27. Business of Depositor ) Sponsor and
) Included in Form N-8B-2
28. Certain information as to ) Included in Form N-8B-2
officials and affiliated persons of Depositor )
29. Voting securities of Depositor ) Included in Form N-8B-2
30. Persons controlling Depositor ) *
31. Compensation of Officers and ) *
Director of Depositor )
32. Compensation of Directors of Depositor ) *
33. Compensation of employees of Depositor ) *
34. Remuneration of other persons ) *
for certain services rendered )
to trust )
</TABLE>
<TABLE>
<C> <S> <C>
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's ) Public Offering of Units--
securities by states ) Public Distribution
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution ) Public Offering of Units
(b) Underwriting agreements )
(c) Selling agreements )
39. (a) Organization of principal ) Sponsor
underwriter )
(b) N.A.S.D. membership of )
principal underwriter )
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
40. Certain fees received by ) Public Offering of Units--
principal underwriter ) Profit of Sponsor
41. (a) Business of principal ) Sponsor
underwriter )
(b) Branch offices of ) *
principal underwriter )
(c) Salesman of principal underwriter ) *
42. Ownership of trust's securities by certain ) *
persons
43. Certain brokerage commissions ) *
received by principal )
underwriter )
44. (a) Method of valuation ) Public Offering of Units
(b) Schedule as to offering price ) *
(c) Variation in offering ) Public Offering of Units--
price to certain persons ) --Volume Discount; Exchange
) option
45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Public Offering of Units--
) Secondary Market; Redemption
(b) Schedule as to redemption price ) *
47. Maintenance of position in ) See items 10(d), 44
underlying securities ) and 46
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation of Trustee ) Trustee
49. Fees and expenses of Trustee ) Expenses
) and Charges
50. Trustee's lien ) Expenses and Charges
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. (a) Name and address of Insurance Company ) *
(b) Type of policies ) *
(c) Type of risks insured and excluded ) *
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of cancellation ) *
(g) Method of determining premiums ) *
(h) Amount of aggregate premiums paid ) *
(i) Persons receiving any part ) *
of premiums )
(j) Other material provisions ) *
of the Trust relating to )
insurance )
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
VII. POLICY OF REGISTRANT
52. (a) Method of selecting and ) Introduction
eliminating securities from ) Objectives and Securities
the Trust ) Selection; The Trust
) --Summary Description of the Portfolio
) Sponsor--Responsibility
(b) Elimination of securities ) *
from the Trust )
(c) Substitution and elimina- ) Introducton
tion of securities from ) Objectives and
the Trust ) Securities Selection;
) Sponsor--Responsibility;
(d) Description of any funda- ) *
mental policy of the Trust )
53. Taxable status of the Trust ) Cover of Prospectus;
) Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Information regarding the ) *
Trust's past ten fiscal years )
55. Certain information regarding )
periodic payment plan certifi- )
cates ) *
56. Certain information regarding ) *
periodic payment plan certificates )
57. Certain information regarding ) *
periodic payment plan certificates )
58. Certain information regarding ) *
periodic payment plan certificates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to Form S-6) ) Condition
<FN>
- ------------------------
* Not applicable, answer negative or not required.
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO UNITS OF THIS SERIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. SUCH UNITS
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THE UNITS IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION DATED MARCH 15, 1995
[LOGO]
SELECT 10 INTERNATIONAL SERIES 95-2
- ------------------------------------------
Select 10 United Kingdom Portfolio 95-2
20,000 Units
(A Unit Investment Trust)
Select 10 Hong Kong Portfolio 95-2
20,000 Units
(A Unit Investment Trust)
-------------------------------------------------------------------------
Select 10 International Series 95-2 consists of two separate unit investment
trusts formed for the purposes of providing income and above-average growth
potential through an investment for approximately one year in a fixed
portfolio of common stocks. Select 10 United Kingdom Portfolio 95-2 (the
"United Kingdom Portfolio") and Select 10 Hong Kong Portfolio 95-2 (the
"Hong Kong Portfolio") consist of the ten common stocks in the Financial
Times Ordinary Share Index (the "Financial Times Index") and the Hang Seng
Index, respectively, having the highest dividend yields on March 31, 1995.
The publishers of these indexes have not participated in any way in the
creation of a Trust or in the selection of stocks included in a Trust and
have not reviewed or approved any information included herein relating
thereto. The value of the Units of a Trust will fluctuate with the value of
the Portfolio of underlying Securities and changes in exchange rates. Unless
otherwise indicated, all amounts herein are stated in U.S. dollars computed
on the basis of the exchange rate for British pounds sterling or Hong Kong
dollars, as applicable, on the Date of Deposit. UNITS OF A TRUST ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE
UNITS ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
----------------------------------------------------------------------------
Sponsor: [LOGO]
----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------------------------------
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
PROSPECTUS DATED APRIL , 1995
<PAGE>
Parts A and B of this Prospectus do not contain all of the information with
respect to the investment company set forth in its registration statement and
exhibits relating thereto which have been filed with the Securities and Exchange
Commission, Washington, D.C. under the Securities Act of 1933 and the Investment
Company Act of 1940, and to which reference is hereby made.
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
SELECT 10 HONG KONG PORTFOLIO 95-2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PART A
Cover
Table of Contents..................................... i
Summary of Essential Information...................... ii
Independent Auditors' Report.......................... xvii
Statement of Financial Condition...................... xviii
Schedule of Portfolio Securities...................... xx
PART B
Introduction.......................................... 1
The Trust............................................. 2
Risk Factors--Special Considerations.............. 2
Summary Description of the Portfolio.............. 2
Objectives and Securities Selection............... 7
Distribution...................................... 8
Tax Status of the Trust............................... 8
Retirement Plans...................................... 10
Public Offering of Units.............................. 11
Public Offering Price............................. 11
Public Distribution............................... 11
Secondary Market.................................. 12
Profit of Sponsor................................. 12
Volume Discount................................... 12
Redemption............................................ 13
Right of Redemption............................... 13
Computation of Redemption Price................... 14
Postponement of Redemption........................ 15
<CAPTION>
PAGE
-----
<S> <C>
Exchange Option....................................... 15
Reinvestment Program.................................. 16
Rights of Unit Holders................................ 16
Unit Holders...................................... 16
Certain Limitations............................... 16
Expenses and Charges.................................. 17
Initial Expenses.................................. 17
Fees.............................................. 17
Other Charges..................................... 17
Administration of the Trust........................... 17
Records and Accounts.............................. 17
Distribution...................................... 18
Portfolio Supervision............................. 18
Voting of the Portfolio Securities................ 19
Reports to Unit Holders........................... 19
Amendment......................................... 19
Termination....................................... 19
Resignation, Removal and Liability.................... 20
Regarding the Trustee............................. 20
Regarding the Sponsor............................. 21
Miscellaneous......................................... 21
Sponsor........................................... 21
Trustee........................................... 21
Legal Opinions.................................... 21
Auditors.............................................. 21
</TABLE>
<TABLE>
<CAPTION>
SPONSOR TRUSTEE
- -------------------------- --------------------------
<S> <C>
Dean Witter Reynolds Inc. The Bank of New York
2 World Trade Center 101 Barclay Street
New York, New York 10048 New York, New York 10286
</TABLE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THIS INVESTMENT COMPANY NOT CONTAINED IN PARTS A
AND B OF THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT CONTAINED
HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. PARTS A AND B OF THIS
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH
OFFER IN SUCH STATE.
i
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
AS OF APRIL , 1995*
<TABLE>
<S> <C>
Aggregate U.S. Dollar Value of
Securities in Trust**................. $
Number of Units......................... +
Fractional Undivided Interest in the
Trust Represented by Each Unit........ th
Public Offering Price Per 100 Units:
Aggregate U.S. Dollar Value of
Securities in the Trust Divided by
20,000 Units (Times 100 Units).....
Plus Sales Charge of 2.90% of Public
Offering Price*** (2.987% of net
amount invested in Securities)..... 0.3681
-------------
Less Deferred Sales Charge per 100
Units.............................. (20.00)
-------------
Public Offering Price per 100
Units.............................. $
-------------
-------------
Public Offering Price Per 100
Units****............................. $
-------------
-------------
Minimum Purchase: $1,000
Sponsor's Repurchase Price per 100 Units
and Redemption Price per 100 Units
(based on the value of the underlying
Securities, $ less than the Public
Offering' Price per 100 Units)*****... $
-------------
-------------
</TABLE>
<TABLE>
<S> <C>
Evaluation Time......................... Close of London Stock Exchange
(currently 11:30 a.m., New York time)
Record Dates............................ July 1, 1995, October 1, 1995, January
1, 1996.
Distribution Dates...................... July 15, 1995, October 15, 1995, January
15, 1996 and on or about May 29, 1996.++
Minimum Principal Distribution.......... No distribution need be made from the
Principal Account if the balance therein
is less than $1.00 per 100 Units
outstanding.
In-Kind Distribution Date............... May 1, 1996.
Liquidation Period...................... Not to exceed 10 business days after the
In-Kind Distribution Date.++
Mandatory Termination Date.............. May 15, 1996.
Discretionary Liquidation Amount........ The Indenture may be terminated by the
Sponsor if the value of the Trust at any
time is less than 40% of the market
value of the Securities deposited in the
Trust.+
Trustee's Fee (including estimated
expenses)******......................... $ per 100 Units.
Sponsor's Portfolio Supervision
Fee******............................... Maximum of $0.25 per 100 Units.
Deferred Sales Charge Payment Date...... The 1st day of each month commencing
1, 1995
<FN>
- ------------------------
*The Date of Deposit. The Indenture was signed and the initial deposit of
Securities with the Trustee was made on the Date of Deposit.
**Based on the evaluation of the Securities in U.S. dollars at the mid close
of the exchange rate for the British pound sterling as of 11:30 A.M., New York
Time, on the Date of Deposit.
***The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge (a maximum of
2.90% of the Public Offering Price); thus on the date of this Summary of
Essential Information, the Initial Sales Charge is $9 per 100 Units or 0.90% of
the Public Offering Price. The Initial Sales Charge paid by a Unit Holder may be
more or less than $9 per 100 Units based on the fluctuation of the value of the
Securities on the date of purchase. The Initial Sales Charge is deducted from
the purchase price at the time of purchase and is reduced on a graduated basis
on purchases of $50,000 or more (see "Public Offering of Units--Volume
Discount"). The Deferred Sales Charge is paid through reduction of Trust assets
by $2.00 per 100 Units on each Deferred Sales Charge Payment Date through the
sale of Securities on each such date or distribution of cash available for such
payment. On a repurchase, redemption or exchange of Units before the last
Deferred Sales Charge Payment Date, any remaining Deferred Sales Charge payments
will be deducted from the proceeds. Units purchased pursuant to the Reinvestment
Program are subject to that portion of the Deferred Sales Charge remaining at
the time of reinvestment (see "Reinvestment Program").
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
****This price is computed as of the Date of Deposit and may vary from such price on the date of
this Prospectus or any subsequent date.
*****The Sponsor's Repurchase Price and Redemption Price are based on the aggregate value of the
Securities in U.S. dollars at the mid close of the exchange rate for the British pound sterling. This
price is computed as of the Date of Deposit and may vary from such price on the date of this
Prospectus or any subsequent date. Reflects deductions for remaining Deferred Sales Charge payments
($20.00 per 100 Units initially). In addition, after the initial offering period, the repurchase and
cash redemption prices will be further reduced to reflect the Trust's estimated costs of liquidating
Securities to meet the redemption, currently estimated at $ per 100 Units.
******See: "Expenses and Charges" herein. The fee accrues daily and is payable on each Distribution
Date. Estimated dividends from the Securities, based on the last dividends actually paid, are
expected by the Sponsor to be sufficient to pay the estimated expenses of the Trust. In addition to
the Trustee's fee, brokerage costs and other transaction costs borne by the Trust in connection with
the purchase of Securities by the Trustee with cash deposited in the Trust are currently estimated at
$ per 100 Units.
+The number of Units will be increased as the Sponsor deposits additional Securities into the
Trust. See "Introduction", in Part B.
++The final distribution will be made within 5 business days following the receipt of proceeds
from the sale of all Portfolio Securities. (See: "Administration of the Trust--Termination".)
</TABLE>
iii
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
FEE TABLE
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES THAT
YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC OFFERING OF UNITS AND EXPENSES
AND CHARGES. ALTHOUGH THE TRUST HAS A TERM OF APPROXIMATELY ONE YEAR, AND IS A
UNIT INVESTMENT TRUST RATHER THAN A MUTUAL FUND, THIS INFORMATION IS PRESENTED
TO PERMIT A COMPARISON OF FEES, ASSUMING THE PRINCIPAL AMOUNT AND DISTRIBUTIONS
ARE EXCHANGED EACH YEAR INTO A NEW TRUST SUBJECT ONLY TO THE DEFERRED SALES
CHARGE.
<TABLE>
<CAPTION>
AMOUNT PER
UNIT HOLDER TRANSACTION EXPENSES 100 UNITS
- --------------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase (as a percentage of offering price)............................ 0.90%(a) $ 9.00
Deferred Sales Charge per Year (as a percentage of original purchase price)............................ 2.00(b) 20.00
----- ------
2.90% $ 29.00
----- ------
----- ------
Maximum Sales Charge Imposed Per Year on Reinvested Dividends.......................................... $ 20.00(c)
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Trustee's Fees......................................................................................... % $
Portfolio Supervision, Bookkeeping and Administrative Fees.............................................
Other Operating Expenses...............................................................................
----- ------
Total.............................................................................................. % $
----- ------
----- ------
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR PERIOD
------------------------------------------
3 5 10
1 YEAR YEARS(D) YEARS(D) YEARS(D)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming an estimated operating expense ratio of % and a
5% annual return on the investment throughout the periods.............................. $ $ $ $
The Example assumes reinvestment of all dividends and distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations applicable to mutual funds. For purposes of the Example, the Deferred Sales Charge
imposed on reinvestment of dividends is not reflected until the year following payment of the dividend; the cumulative expenses
would be higher if sales charges on reinvested dividends were reflected in the year of reinvestment. Because the reductions to the
repurchase and cash redemption prices described in footnote (*****) on page (iii) apply only to the secondary market, these
reductions have not been reflected in the figures above. The Example should not be considered a represention of past or future
expenses or annual rate of return; the actual expenses and annual rate of return may be more or less than those assumed for purposes
of the Example.
<FN>
- ------------------------
(a) The Initial Sales Charge is actually the difference between 2.90% and the
Deferred Sales Charge ($20.00 per 100 Units) and would exceed 0.90% if the
Public Offering Price exceeds $1,000 per 100 Units.
(b) The actual fee is $2.00 per month per 100 Units, irrespective of purchase
or redemption price, paid in each of the last 10 months of each
approximately one-year Trust. If a Holder sells Units before all of these
payments have been made, the balance of the Deferred Sales Charge will be
paid from the sales proceeds. If the Unit price exceeds $10 per Unit, the
Deferred Sales Charge will be less than 2.00%; if Unit price is less than
$10 per Unit, the Deferred Sales Charge will exceed 2.00%.
(c) Reinvested dividends will be subject only to the Deferred Sales Charge
remaining at the time of reinvestment which may be more or less than 2.00%
of the Public Offering Price at the time of reinvestment (see
"Reinvestment Program").
(d) Although each Trust has a term on approximately one year and is a unit
investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees, assuming the principal amount and
distributions are exchanged each year into a new Trust subject only to the
Deferred Sales Charge.
</TABLE>
iv
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(CONTINUED)
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 HONG KONG PORTFOLIO 95-2
AS OF APRIL 3, 1995*
<TABLE>
<S> <C>
Aggregate U.S. Dollar Value of
Securities in Trust**................. $
Number of Units......................... +
Fractional Undivided Interest in the
Trust Represented by Each Unit........ th
Public Offering Price Per Unit:
Aggregate U.S. Dollar Value of
Securities in the Trust Divided by
20,000 Units (times 100 Units)..... $
Plus Sales Charge of 2.90% of Public
Offering Price*** (2.987% of net
amount invested in Securities).....
-------------
Less Deferred Sales Charge per 100
Units.............................. (20.00)
-------------
Public Offering Price per Unit...... $
-------------
-------------
Public Offering Price Per 100
Units****............................. $
-------------
-------------
Minimum Purchase: $1,000
Sponsor's Repurchase Price per 100 Units
and Redemption Price per 100 Units
(based on the value of the underlying
Securities, $ less than the Public
Offering Price per 100 Units)*****.... $
-------------
-------------
</TABLE>
<TABLE>
<S> <C>
Evaluation Time......................... Close of Hong Kong Exchange (currently
3:30 a.m., New York time)
Record Dates............................ July 1, 1995, October 1, 1995, January
1, 1996.
Distribution Dates...................... July 15, 1995, October 15, 1995, January
15, 1996 and on or about May 29, 1996.++
Minimum Principal Distribution.......... No distribution need be made from the
Principal Account if the balance therein
is less than $1.00 per 100 Units
outstanding.
In-Kind Distribution Date............... May 1, 1996.
Liquidation Period...................... Not to exceed 10 business days after the
In-Kind Distribution Date.++
Mandatory Termination Date.............. May 15, 1996.
Discretionary Liquidation Amount........ The Indenture may be terminated by the
Sponsor if the value of the Trust at any
time is less than 40% of the market
value of the Securities deposited in the
Trust.+
Trustee's Fee (including estimated
expenses)******......................... $ per 100 Units.
Sponsor's Portfolio Supervision
Fee******............................... Maximum of $0.25 per 100 Units.
Deferred Sales Charge Payment Date...... The 1st day of each month commencing
1, 1995
<FN>
- ------------------------
*The Date of Deposit. The Indenture was signed and the initial deposit of
Securities with the Trustee was made on the Date of Deposit.
**Based on the evaluation of the Securities in U.S. dollars at the mid close
of the exchange rate for the Hong Kong dollar as of 3:30 A.M., New York Time, on
the Date of Deposit.
***The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge (a maximum of
2.90% of the Public Offering Price); thus on the date of this Summary of
Essential Information, the Initial Sales Charge is $9 per 100 Units or 0.90% of
the Public Offering Price. The Initial Sales Charge paid by a Unit Holder may be
more or less than $9 per 100 Units based on the fluctuation of the value of the
Securities on the date of purchase. The Initial Sales Charge is deducted from
the purchase price at the time of purchase and is reduced on a graduated basis
on purchases of $50,000 or more (see "Public Offering of Units--Volume
Discount"). The Deferred Sales Charge is paid through reduction of Trust assets
by $2.00 per 100 Units on each Deferred Sales Charge Payment Date through the
sale of Securities on each such date or distribution of cash available for such
payment. On a repurchase, redemption or exchange of Units before the last
Deferred Sales Charge Payment Date, any remaining Deferred Sales Charge payments
will be deducted from the proceeds. Units purchased pursuant to the Reinvestment
Program are subject to that portion of the Deferred Sales Charge remaining at
the time of reinvestment (see "Reinvestment Program").
****This price is computed as of the Date of Deposit and may vary from such
price on the date of this Prospectus or any subsequent date.
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
*****The Sponsor's Repurchase Price and Redemption Price are based on the aggregated value of the
Securities in U.S. dollars at the mid close of the exchange rate for the Hong Kong dollar this price is
computed as of the Date of Deposit and may vary from such price on the date of this Prospectus or any
subsequent date. Reflects deductions for remaining Deferred Sales Charge payments ($20.00 per 100 Units
initially). In addition, after the initial offering period, the repurchase and cash redemption prices will
be further reduced to reflect the Trust's estimated costs of liquidating Securities to meet the
redemption, currently estimated at $ per 100 Units.
******See: "Expenses and Charges" herein. The fee accrues daily and is payable on each Distribution Date.
Estimated dividends from the Securities, based on the last dividends actually paid, are expected by the
Sponsor to be sufficient to pay the estimated expenses of the Trust. In addition to the Trustee's fee,
brokerage costs and other transaction costs borne by the Trust in connection with the purchase of
Securities by the Trustee with cash deposited in the Trust are currently estimated at $ per 100 Units.
+The number of Units will be increased as the Sponsor deposits additional Securities into the Trust.
See "Introduction", in Part B.
++The final distribution will be made within 5 business days following the receipt of proceeds from the
sale of all Portfolio Securities. (See: "Administration of the Trust--Termination".)
</TABLE>
vi
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 HONG KONG PORTFOLIO 95-2
FEE TABLE
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES THAT
YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC OFFERING OF UNITS AND EXPENSES
AND CHARGES. ALTHOUGH THE TRUST HAS A TERM OF APPROXIMATELY ONE YEAR, AND IS A
UNIT INVESTMENT TRUST RATHER THAN A MUTUAL FUND, THIS INFORMATION IS PRESENTED
TO PERMIT A COMPARISON OF FEES, ASSUMING THE PRINCIPAL AMOUNT AND DISTRIBUTIONS
ARE EXCHANGED EACH YEAR INTO A NEW TRUST SUBJECT ONLY TO THE DEFERRED SALES
CHARGE.
<TABLE>
<CAPTION>
AMOUNT PER
UNIT HOLDER TRANSACTION EXPENSES 100 UNITS
- ------------------------------------------------------------------------------------ -------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase (as a percentage of offering price)...... 0.90%(a) $ 9.00
Deferred Sales Charge per Year (as a percentage of original purchase price)....... 2.00(b) 20.00
----- ------
2.90% $ 29.00
----- ------
----- ------
Maximum Sales Charge Imposed Per Year on Reinvested Dividends..................... $ 20.00(c)
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Trustee's Fees.................................................................... % $
Portfolio Supervision, Bookkeeping and Administrative Fees........................
Other Operating Expenses..........................................................
----- ------
Total......................................................................... % $
----- ------
----- ------
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR PERIOD
------------------------------------------
3 5 10
1 YEAR YEARS(D) YEARS(D) YEARS(D)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming an estimated operating expense ratio of % and a
5% annual return on the investment throughout the periods.............................. $ $ $ $
The Example assumes reinvestment of all dividends and distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations applicable to mutual funds. For purposes of the Example, the Deferred Sales Charge
imposed on reinvestment of dividends is not reflected until the year following payment of the dividend; the cumulative expenses
would be higher if sales charges on reinvested dividends were reflected in the year of reinvestment. Because the reductions to the
repurchase and cash redemption prices described in footnote (*****) on page (vi) apply only to the secondary market, these
reductions have not been reflected in the figures above. The Example should not be considered a represention of past or future
expenses or annual rate of return; the actual expenses and annual rate of return may be more or less than those assumed for purposes
of the Example.
<FN>
- ------------------------
(a) The Initial Sales Charge is actually the difference between 2.90% and the
Deferred Sales Charge ($20.00 per 100 Units) and would exceed 0.90% if the
Public Offering Price exceeds $1,000 per 100 Units.
(b) The actual fee is $2.00 per month per 100 Units, irrespective of purchase
or redemption price, paid in each of the last 10 months of each
approximately one-year Trust. If a Holder sells Units before all of these
payments have been made, the balance of the Deferred Sales Charge will be
paid from the sales proceeds. If the Unit price exceeds $10 per Unit, the
Deferred Sales Charge will be less than 2.00%; if Unit price is less than
$10 per Unit, the Deferred Sales Charge will exceed 2.00%.
(c) Reinvested dividends will be subject only to the Deferred Sales Charge
remaining at the time of reinvestment which may be more or less than 2.00%
of the Public Offering Price at the time of reinvestment (see
"Reinvestment Program").
(d) Although each Trust has a term on approximately one year and is a unit
investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees, assuming the principal amount and
distributions are exchanged each year into a new Trust subject only to the
Deferred Sales Charge.
</TABLE>
vii
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
THE TRUST--The Dean Witter Select Equity Trust Select 10 International
Series 95-2 consists of two unit investment trusts, Select 10 United Kingdom
Portfolio 95-2 (the "United Kingdom Portfolio") and Select 10 Hong Kong
Portfolio 95-2 (the "Hong Kong Portfolio") (each a "Trust"), each composed of
publicly-traded common stocks or contracts to purchase such stocks (the
"Securities"). The objectives of the United Kingdom Portfolio are to provide
income and above-average growth potential through investment in the ten common
stocks in the Financial Times Ordinary Share Index (the "Financial Times Index")
having the highest dividend yields on March 31, 1995. The Financial Times Index
is composed of 30 companies which are representative of British industry and
commerce and is an unweighted average. The objectives of the Hong Kong Portfolio
are to provide income and above-average growth potential through investment in
the ten common stocks in the Hang Seng Index having the highest dividend yields
on March 31, 1995. The Hang Seng Index is composed of 33 companies listed on the
Hong Kong Exchange which are representative of the companies listed on the Hong
Kong Exchange and is weighted by market capitalization. An investment in
approximately equal values of the ten highest yielding stocks in the Financial
Times Index and the Hang Seng Index (the "Select 10") for a period of one year
would have, in 10 of the last 10 years in the case of the United Kingdom and 5
of the last 10 years in the case of Hong Kong, yielded a higher total return
than an investment in all of the stocks comprising the Financial Times Index and
the Hang Seng Index, respectively. The United Kingdom Portfolio and Hong Kong
Portfolio seek to achieve better performance than the Financial Times Index and
the Hang Seng Index, respectively. Investment in a number of companies having
high dividends relative to their stock prices (usually because their stock
prices are depressed) is designed to increase the Trust's potential for higher
returns. The Securities may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular. In addition, a
decrease in the value of the British pound sterling or the Hong Kong dollar
relative to the U.S. dollar will adversely affect the U.S. dollar value of the
respective Portfolio's income and assets and the value of Units of that
Portfolio. Therefore, there is no guarantee that the objectives of the Trust
will be achieved. On the initial Date of Deposit and thereafter, the Sponsor
may, under the Indenture and Agreement, deposit additional Securities, contracts
to purchase additional Securities together with a letter of credit and/or cash
(or a letter of credit in lieu of cash) with instructions to purchase additional
Securities in order to create Additional Units while maintaining to the extent
practicable the proportionate relationship between the number of shares of each
Security in the Portfolio.
TERMINATION--The Trust will terminate approximately one year after the
initial Date of Deposit regardless of market conditions at that time. After this
period, the Trust will liquidate. Unit Holders of 2,500 units or more may elect
to receive shares in-kind. Prior to termination of the Trust, the Trustee will
begin to sell the Securities held in the Trust over a period not to exceed 10
consecutive business days (the "Liquidation Period"). Monies held upon such sale
of Securities will be held uninvested in non-interest bearing accounts created
by the Indenture until distributed pro rata to Unit Holders on or about May 29,
1996 and will be of benefit to the Trustee during such period. During the life
of the Trust, Securities will not be sold to take advantage of market
fluctuations. Because the Trust is not managed and the Securities can only be
sold during the Liquidation Period or under certain other limited circumstances
described herein, the proceeds received from the sale of Securities may be less
than could be obtained if the sale had taken place at a different time.
Depending on the volume of Securities sold and the prices of and demand for
Securities at the time of such sale, the sales of Securities from the Trust may
tend to depress the market prices of such Securities and hence the value of the
Units, thus reducing termination proceeds available to Unit Holders. In order to
mitigate potential adverse price consequences of heavy volume trading in the
Securities taking place over a short period of time and to provide an average
market price for the Securities, the Trustee will follow procedures set forth in
the Indenture to sell the Securities in an orderly fashion over a period not to
exceed the Liquidation Period. The Sponsor can give no assurance, however, that
such procedures will mitigate negative price consequences or provide a better
price for such Securities. The Trust may terminate earlier than on the Mandatory
Termination Date if the value of the Trust is less than the Discretionary
Liquidation Amount set forth under "Administration of the Trust--Termination."
DISTRIBUTION--The Trustee will distribute any dividends and any proceeds
from the disposition of Securities not used for redemption of Units received by
each Trust on July 15, 1995, October 15, 1995, January 15, 1996 and on or about
May 29, 1996 to holders of record on July 1, 1995, October 1, 1995, January 1,
1996 and the Termination Date, respectively. Upon termination of the Trust, the
Trustee will distribute to each Unit Holder of record its pro rata share of the
Trust's assets, less expenses and less any Deferred Sales Charge then payable or
Unit Holders can elect to reinvest their distributions automatically in Units of
a New Series (as defined below) if offered by the Sponsor, which units will be
subject only to a deferred sales charge (see "Administration of the
Trust--Termination"). The sale of Securities in the Trust during the period
prior to termination and upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time due to
impending or actual termination of the Trust. For this reason, among others, the
amount realized by a Unit Holder upon termination may be less than the amount
paid by such Unit Holder. (See: "Administration of the Trust--Distribution".)
The Sponsor anticipates that, based upon the last dividends actually paid by
the companies listed in the "Schedule of Portfolio Securities", dividends from
the Securities will be sufficient to (i) pay expenses of the Trust and (ii)
after such payment, to make distributions to Unit Holders as described herein.
(See: "Expenses and Charges" and "Administration of the Trust--Distribution".)
PUBLIC OFFERING PRICE--The Public Offering Price per 100 Units is computed
on the basis of the aggregate U.S. dollar value of the underlying Securities
next computed after receipt of a purchase order plus cash on hand in the Trust
at the mid close value of the currency exchange rate, divided by the number of
Units outstanding times 100, plus a sales charge of 2.987% of such evaluation
per 100 Units (the net amount invested); this results in a sales charge of 2.90%
of the Public Offering Price. A proportionate share of amounts, if any, in the
Income
viii
<PAGE>
Account is also added to the Public Offering Price. (See "Public Offering of
Units--Public Offering Price".) The total sales charge consists of an Initial
Sales Charge and a Deferred Sales Charge, the maximum total of which equals
2.90% of the Public Offering Price or 2.987% of the net asset value of the
Trust. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge; thus, on the date
of the Summary of Essential Information, the Initial Sales Charge is $9 per 100
Units or 0.90% of the Public Offering Price. The Initial Sales Charge paid by a
Unit Holder may be more or less than $9 per 100 Units based on the fluctuation
of the value of the Securities on the date of purchase. The Initial Sales Charge
is deducted from the purchase price at the time of purchase. The Initial Sales
Charge will be reduced on a graduated basis on purchases of $50,000 or more. The
Deferred Sales Charge is paid through reduction of Trust assets by $2.00 per 100
Units monthly on each Deferred Sales Charge Payment Date commencing on the first
Deferred Sales Charge Payment Date shown on page (ii) through the sale of
Securities on each such date or distribution of cash available for such payment.
Units purchased pursuant to the Reinvestment Program are subject only to
remaining deductions of the Deferred Sales Charge (see "Reinvestment Program").
If a Unit Holder exchanges, redeems or sells his Units to the Sponsor prior to
the last Deferred Sales Charge Payment Date, the Unit Holder is obligated to pay
any remaining Deferred Sales Charge.
MARKET FOR UNITS--The Sponsor, though not obligated to do so, intends to
maintain a market for the Units. If such market is not maintained, a Unit Holder
will be able to dispose of his Units through redemption at prices based on the
aggregate value of the underlying Securities. (See: "Redemption".) Market
conditions may cause such prices to be greater or less than the amount paid for
Units. The Sponsor's Repurchase Price, like the Redemption Price, will reflect
the deduction from the value of the underlying Securities of any unpaid amount
of the Deferred Sales Charge. Investors should note that the Deferred Sales
Charge of $2.00 per 100 Units will be deducted from Trust assets on the first of
each month commencing on the first Deferred Sales Charge Payment Date shown on
page (ii), and to the extent the entire Deferred Sales Charge has not been so
deducted or paid at the time of repurchase or redemption of the Units, the
remainder will be deducted from the proceeds of sale or redemption or in
calculating an in-kind redemption.
RISK FACTORS--SPECIAL CONSIDERATIONS--An investment in Units of the Trust
should be made with an understanding of the risks inherent in an investment in
common stocks, including risks associated with the limited rights of holders of
common stock to receive payments from issuers of such stock; such rights are
inferior to those of creditors and holders of debt obligations or preferred
stock. Also, holders of common stock have the right to receive dividends only
when, as and if such dividends are declared by the issuer's board of directors.
Investors should also be aware that the value of the underlying Securities in
the Portfolio may fluctuate in accordance with changes in the value of common
stocks in general. Global and regional perceptions of the United Kingdom and
Hong Kong markets' currency exchange rate fluctuations and the impact of the
Sponsors' purchase and sale of Securities should also be considered. Although
there are certain risks of price volatility associated with investment in common
stocks, your risk is reduced because your capital is divided among 10 stocks
from several different industry groups.
FOREIGN ISSUERS. Each Portfolio is considered to be concentrated in
securities of non-United States issuers. Holding securities of non-United States
companies may involve investment risks that are different from those involved in
holding securities of domestic issues, including future political and economic
developments, the possible imposition of withholding taxes and exchange controls
or other foreign governmental restrictions which might adversely affect the
payment of distributions on Securities in the Portfolio. In addition, there may
be less publicly available information about a foreign issuer and foreign
issuers may not generally be subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. Foreign securities markets, while growing in
volume, have, for the most part, substantially less volume than U.S. markets,
and securities of many foreign companies are less liquid and their prices more
volatile than securities of comparable domestic companies. Brokerage commissions
and other transaction costs on foreign securities exchanges are generally higher
than in the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there is
in the United States. (See "Risk Factors--Jurisdiction over Foreign Issuers".)
CURRENCY EXCHANGE. All of the Securities in the United Kingdom Portfolio are
denominated in British pounds sterling and all of the Securities in the Hong
Kong Portfolio are denominated in Hong Kong dollars. In the past both of these
currencies have fluctuated in value against the United States dollar for many
reasons, including supply and demand of each currency, the impact of interest
rate differentials between different currencies on the movement of foreign
currency rates, the soundness of the world economy, the rate of inflation in the
United Kingdom and Hong Kong compared to that of the United States and the
strength of the economies of the United Kingdom and Hong Kong as compared to the
economy of the United States. However, the Hong Kong Dollar has been "pegged" to
the U.S. dollar since 1983 and this has reduced currency exchange risk to some
degree. (See "Risk Factors--Foreign Exchange Rates".) There can be no assurance
that fluctuations in exchange rates will not adversely affect the value of the
Units of a Trust.
The Securities in the United Kingdom Portfolio and Hong Kong Portfolio are
listed on a securities exchange. Whether or not those Securities are, or
continue to be, listed, their principal trading market may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Securities may depend on whether dealers will make a market in the
Securities. There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet the
redemptions and the value of Units will be adversely affected if trading markets
for the Securities are limited or absent. (See "Risk Factors--Liquidity".)
ix
<PAGE>
In connection with the deposit by the Sponsor of cash (or a letter of credit
in lieu of cash) with instructions to purchase additional Securities in order to
create Additional Units, to the extent that the price of a Security and/or
exchange rates fluctuate between the time the cash is deposited and the time the
cash is used to purchase the Security, Units (including previously issued Units)
may represent more or less of that Security and more or less of other Securities
in the Portfolio of the Trust. In addition, the brokerage fees and other
transaction costs, if any, incurred in purchasing Securities with such deposited
cash will be borne by the Trust. Any Unit Holder who purchased Units prior to
the purchase of Securities with such deposited cash would experience dilution as
a result of any such brokerage fees.
SPECIAL CHARACTERISTICS OF THE TRUST
SECURITIES SELECTION. The United Kingdom Portfolio and the Hong Kong
Portfolio consist of the ten common stocks in the Financial Times Index and the
Hang Seng Index, respectively, having the highest dividend yields on March 31,
1995. The publishers of these indexes have not participated in any way in the
creation of a Trust or in the selection of the stocks included in a Trust and
have not reviewed or approved any of the information herein relating thereto.
The yield for each stock was calculated by adding together the most recent
interim and final dividend declared (generally, United Kingdom and Hong Kong
companies pay one interim and one final dividend per fiscal year) and dividing
the result by the market value of the stock. Such formula (an objective
determination) served as the basis for the Sponsor's selection of the ten stocks
in each index having the highest dividend yield. The philosophy is simple. The
Trusts do not require sophisticated analysis or an explanation of complex
investment strategies, just the pure and simple concept of buying a quality
portfolio of stocks with the highest dividend yields of the stocks in the
Financial Times Index or the Hang Seng Index in one convenient purchase. The
Securities were selected irrespective of any buy or sell recommendation by the
Sponsor. Investing in Financial Times Index and Hang Seng Index stocks with the
highest dividend yields may be effective as well as conservative because regular
dividends are common for established companies and dividends have accounted for
a substantial portion of the total return on Financial Times Index and Hang Seng
Index stocks as a group.
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust Portfolio on March 31, 1995. Subsequent to
such date, the Securities may no longer rank among the ten stocks in the
Financial Times Index and the Hang Seng Index having the highest dividend yield,
the yields on the Securities in a portfolio may change or the Securities may no
longer be included in the Financial Times Index and the Hang Seng Index.
However, the Sponsor may, on and subsequent to the Date of Deposit, deposit
additional Securities which reflect the Portfolio as of the Date of Deposit,
subject to permitted adjustments, and sell such additional Units created. The
creation and sale of additional Units and the sale of Units in the secondary
market may continue even though the Securities would no longer be chosen for
deposit into the Trust if the selection process were to be made at such later
time. In addition, certain Securities to be deposited in the United Kingdom
Portfolio and the Hong Kong Portfolio may be purchased on securities exchanges
other than the London Stock Exchange and the Hong Kong Stock Exchange,
respectively.
Simple strategies can sometimes be the most effective. To outperform the
market is more difficult than just outperforming other asset classes. The Trusts
seek a higher total return than the Financial Times Index and the Hang Seng
Index by acquiring the ten common stocks in the Financial Times Index and the
Hang Seng Index, respectively, having the highest dividend yields on March 31,
1995, and holding them for about one year. Purchasing a portfolio of these
stocks through an investment in the Trust as opposed to one or two individual
stocks may achieve better overall performance and will achieve diversification.
There is only one investment decision instead of ten, and two distributions to
the investor during the one-year life of the Trust instead of 40. An investment
in the Trust can be cost-efficient, avoiding the odd-lot costs of buying small
quantities of securities directly. Investment in a number of companies with high
dividends relative to their stock prices is designed to increase the Trust's
potential for higher returns. The Trust's return may consist of a combination of
capital appreciation and current dividend income.
UNITED KINGDOM PORTFOLIO--THE FINANCIAL TIMES INDEX. The Financial Times
Index was designed to detect changes in the United Kingdom equity market as
reflected in prices of the leading and most actively traded shares and comprises
30 common stocks chosen by the editors of THE FINANCIAL TIMES (London) as
representative of British industry and commerce. Such companies are major
factors in their industries and their stocks are widely held by individuals and
institutional investors. The Financial Times Index is a geometric, unweighted
average of the share prices of these companies and is calculated on a
minute-by-minute basis. Its base is 100 as at July 1, 1935. Changes in the
components of the Financial Times Index are made entirely by the editors of THE
FINANCIAL TIMES without consultation with the companies, any stock exchange or
any official agency. Since the introduction of the Financial Times Index in
1935, there has been a steady shift of emphasis in its makeup from heavy
industry towards companies engaged in service trades. Most substitutions of
companies have been the result of mergers or because of bankruptcy. The
components of the Financial Times Index may be changed at any time for any
reason. Any changes in the components in the Financial Times Index announced
after the Date of Deposit will not cause a change in the identity of the common
stocks included in the United Kingdom Portfolio, including any Securities
deposited thereafter. (See "Risk Factors--United Kingdom Portfolio".)
x
<PAGE>
THE FINANCIAL TIMES ORDINARY SHARE INDEX (THE "FINANCIAL TIMES INDEX")
The Financial Times Index began as the Financial News Industrial Ordinary
Share Index in London in 1935, became the Financial Times Industrial Ordinary
Share Index in 1947 and is now known as the Financial Times Ordinary Share
Index. The following are the companies whose stocks are currently represented in
the Financial Times Index:
<TABLE>
<S> <C>
Allied-Domecq PLC Glaxo Holdings PLC
ASDA Group PLC Grand Metropolitan PLC
BICC PLC GKN PLC
The BOC Group PLC Guinness PLC
BTR PLC Hanson PLC
Blue Circle Industries PLC Imperial Chemical Industries PLC
The Boots Company PLC Lucas Industries PLC
The British Petroleum Company PLC Marks & Spencer PLC
British Telecommunications PLC National Westminster Bank PLC
British Gas PLC Peninsular & Oriental Steam Navigation
British Airways PLC Company
Cadbury Schweppes PLC Reuters Holdings PLC
Courtaulds PLC Royal Insurance Holdings PLC
Forte PLC SmithKline Beecham PLC (A shares)
The General Electric Company PLC Tate & Lyle PLC
Thorn EMI PLC
</TABLE>
HONG KONG PORTFOLIO--THE HANG SENG INDEX. The Hang Seng Index, which was
first published in 1969, comprises 33 of the stocks listed on the Stock Exchange
of Hong Kong Ltd. (the "Hong Kong Exchange"), and includes companies intended to
represent four major market sectors: commerce and industry, finance, properties
and utilities. The Hang Seng Index is a recognized indicator of stock market
performance in Hong Kong. It is computed by dividing the aggregate current
market value of the constituent stocks (I.E. the sum of the products of the
current market price of each stock and the number of issued shares of such
stock) by the aggregate base market value of those stocks. Accordingly, the Hang
Seng Index is strongly influenced by stocks with large market capitalizations.
The Index represents approximately 70% of the total market capitalization of the
stocks listed on the Hong Kong Exchange. Any changes in the components in the
Hang Seng Index announced after the Date of Deposit will not cause a change in
the identity of the common stocks included in the Hong Kong Portfolio, including
any Securities deposited thereafter. (See "Risk Factors--Hong Kong Portfolio".)
THE HANG SENG INDEX
Following are the stocks comprising the Hang Seng Index:
<TABLE>
<S> <C>
Amoy Properties Ltd. HSBC Holdings PLC
Bank of East Asia Ltd. Hutchison Whampoa
Cathay Pacific Hysan Development Company
Cheung Kong Johnson Electric Holdings Ltd.
China Light & Power Co. Miramar Hotel & Investment
Citic Pacific New World Development Co. Ltd.
Great Eagle Holdings Oriental Press Group Ltd.
Guangdong Investment Ltd. Shangri-La Asia Ltd.
Hang Lung Development Company Shun Tak Holdings Limited
Hang Seng Bank Sino Land Co. Ltd.
Henderson Land Development South China Morning Post (Holdings) Ltd.
Hong Kong Aircraft Engineering Sun Hung Kai Properties
Hong Kong Electric Swire Pacific (A)
Hong Kong and China Gas TV Broadcasts
Hong Kong and Shanghai Hotels Wharf Holdings
Hong Kong Telecommunications Wheelock & Co.
Hopewell Holdings
</TABLE>
xi
<PAGE>
UNITED KINGDOM PORTFOLIO
The following tables show the actual performance of the Financial Times
Ordinary Share Index (Financial Times Index) and the ten stocks in the index
having the highest dividend yields in each of the past ten years (the "Select 10
United Kingdom"), as of December 31 in each of those years. The Financial Times
Index performance numbers are based on a geometric, unweighted average of the 30
companies comprising the Financial Times Index, while the performance numbers
for Select 10 United Kingdom are based on an approximately equal weighting by
market value of each of the ten stocks. The performance numbers are presented in
local currency (British Pound Sterling) with the Total Return presented in both
local currency and in U.S. Dollars to illustrate the effects of currency
exchange rate fluctuations on the Total Return performance. No adjustments have
been made to reflect taxes payable or withholding taxes.
FINANCIAL TIMES ORDINARY SHARE INDEX(1)
<TABLE>
<CAPTION>
TOTAL RETURN
YEAR ENDED % CHANGE IN INDEX DIVIDEND TOTAL IN U.S.
12/31 FOR YEAR*(2) RETURN*(3) RETURN*(4)(5)(6) DOLLARS(4)(5)(6)
- --------------- -------------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
1985 18.81% 5.20% 24.01% 54.59%
1986 16.13 5.09 21.22 25.31
1987 4.52 4.73 9.25 37.93
1988 5.97 5.34 11.31 6.71
1989 31.70 5.86 37.56 22.68
1990 (12.67) 5.00 (7.67) 10.55
1991 13.02 5.47 18.49 14.62
1992 15.52 4.93 20.45 (2.42)
1993 17.13 4.26 21.39 18.58
1994 (7.76) 4.09 (3.67) 2.13
1995 **
</TABLE>
<TABLE>
<S> <C>
The returns shown above are not guarantees of future performance and should
not be used as a predictor of returns to be expected in connection with a
Portfolio. Such returns do not reflect sales charges, commissions, expenses or
taxes.
<FN>
- ------------------------
* Source: Datastream International, Inc.
** Period beginning January 1, 1995 and ending March 31, 1995.
(1) An index of 30 stocks compiled by THE FINANCIAL TIMES.
(2) The percentage change in value represents the difference between the
beginning and ending value of the Financial Times Index divided by the value
of the Financial Times Index at the beginning of the year.
(3) The total dividends earned during the year divided by the value of the
Financial Times Index at the beginning of the year.
(4) The change in value of the Financial Times Index plus the dividend return
for the year.
(5) Does not reflect sales charges, commissions, expenses or taxes.
(6) The difference between Total Return performance in local currency and U.S.
Dollars relates solely to changes in exchange rates. Conversion into U.S.
Dollars was made based on the mid close of the exchange rate as of the last
day of each year as supplied by a major international bank. Past exchange
rate fluctuations are not indicative of future exchange rate movements.
</TABLE>
xii
<PAGE>
SELECT 10 UNITED KINGDOM
<TABLE>
<CAPTION>
TOTAL RETURN
YEAR ENDED % CHANGE IN VALUE DIVIDEND TOTAL IN U.S.
12/31 FOR YEAR(1) RETURN(2) RETURN(3)(4)(5) DOLLARS(3)(4)(5)
- ------------- ------------------- ------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
1985 29.12% 6.03% 35.15% 68.74%
1986 22.59 5.87 28.46 32.79
1987 10.25 5.14 15.39 45.68
1988 9.54 5.78 15.32 10.55
1989 40.30 7.17 47.47 31.52
1990 (11.05) 5.33 (5.72) 12.88
1991 15.95 6.51 22.46 18.46
1992 21.38 5.82 27.20 3.05
1993 38.25 5.44 43.69 40.36
1994 (5.40) 3.81 (1.59) 4.34
1995*
</TABLE>
<TABLE>
<S> <C>
The returns shown above are not guarantees of future performance and should
not be used as a predictor of returns to be expected in connection with a
Portfolio. Such returns do not reflect sales charges, commissions, expenses or
taxes. Reasonable assumptions were relied upon where data was either unavailable
or only partially available and these assumptions could have a material impact
on the historical performance calculations.
<FN>
- ------------------------
* Period beginning January 1, 1995 and ending March 31, 1995.
(1) The percentage change in value, over a one year period, of the Select 10
United Kingdom stocks as of the close of the last day of the previous year.
The percentage change in value represents the difference between the
beginning and ending value of the Select 10 United Kingdom stocks divided by
the value of such stocks at the beginning of the year.
(2) The total dividends earned on the Select 10 United Kingdom stocks during the
calendar year, including stock dividends, spinoffs, warrants, rights or
other special distributions, divided by the market value of the Select 10
United Kingdom stocks at the beginning of the year. No adjustments have been
made to reflect taxes payable or withholding taxes.
(3) The change in value of the Select 10 United Kingdom stocks plus the dividend
return for the calendar year on such stocks.
(4) Does not reflect sales charges, commissions, expenses or taxes.
(5) The difference between Total Return performance in local currency and U.S.
Dollars relates solely to changes in exchange rates. Conversion into U.S.
Dollars was made based on the mid close of the exchange rate as of the last
day of each year as supplied by a major international bank. Past exchange
rate fluctuations are not indicative of future exchange rate movements.
</TABLE>
COMPARISON OF THE TOTAL RETURN
LISTED ON THE ABOVE CHARTS
<TABLE>
<CAPTION>
BRITISH POUND STERLING U.S. DOLLARS
------------------------------------ ------------------------------------
FINANCIAL TIMES SELECT 10 FINANCIAL TIMES SELECT 10
YEAR ENDED INDEX UNITED KINGDOM INDEX UNITED KINGDOM
12/31 TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1985 24.01% 35.15% 54.59% 68.74%
1986 21.22 28.46 25.31 32.79
1987 9.25 15.39 37.93 45.68
1988 11.31 15.32 6.71 10.55
1989 37.56 47.47 22.68 31.52
1990 (7.67) (5.72) 10.55 12.88
1991 18.49 22.46 14.62 18.46
1992 20.45 27.20 (2.42) 3.05
1993 21.39 43.69 18.58 40.36
1994 (3.67) (1.59) 2.13 4.34
1995
</TABLE>
xiii
<PAGE>
HONG KONG PORTFOLIO
The following tables show the actual performance of the Hang Seng Index and
the ten stocks in the index having the highest dividend yield in each of the
past ten years (the "Select 10 Hong Kong"), as of December 31 in each of those
years. The Hang Seng Index performance numbers are based on an average of the 33
companies comprising the Hang Seng Index weighted by market capitalization while
the performance numbers for the Select 10 Hong Kong are based on an
approximately equal weighting by market value of each of the ten stocks. The
performance numbers are presented in local currency (Hong Kong Dollars) with the
Total Return presented in both local currency and in U.S. Dollars to illustrate
the effects of currency exchange rate fluctuations on the Total Return
performance. No adjustments have been made to reflect taxes payable or
withholding taxes.
HANG SENG INDEX(1)
<TABLE>
<CAPTION>
TOTAL RETURN
YEAR ENDED % CHANGE IN HANG SENG DIVIDEND TOTAL IN U.S.
12/31 FOR YEAR*(2) RETURN*(3) RETURN*(4)(5)(6) DOLLARS(4)(5)(6)
- ------------- --------------------- ----------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
1985 45.99% 4.76% 50.75% 50.94%
1986 46.55 4.25 50.80 51.38
1987 (10.34) 3.32 (7.02) (6.66)
1988 16.71 4.55 21.26 20.33
1989 5.55 4.64 10.19 10.19
1990 6.63 5.28 11.91 12.05
1991 42.08 5.83 47.91 48.29
1992 28.27 4.73 33.00 33.69
1993 115.67 4.25 119.92 120.20
1994 (31.10) 2.33 (28.77) (28.86)
1995**
</TABLE>
<TABLE>
<S> <C>
The returns shown above are not guarantees of future performance and should
not be used as a predictor of returns to be expected in connection with a
Portfolio. Such returns do not reflect sales charges, commissions, expenses or
taxes.
<FN>
- ------------------------
* Source: Datastream International, Inc.
** Period beginning January 1, 1995 and ending March 31, 1995.
(1) An index of 33 stocks listed on the Hong Kong Exchange.
(2) The percentage change in value represents the difference between the
beginning and ending value of the Hang Seng Index divided by the value of
the Hang Seng Index at the beginning of the year.
(3) The total dividends earned during the year divided by the value of the Hang
Seng Index at the beginning of the year.
(4) The change in value of the Hang Seng Index plus the dividend return for the
year.
(5) Does not reflect sales charges, commissions, expenses or taxes.
(6) The difference between Total Return performance in local currency and U.S.
Dollars relates solely to changes in exchange rates. Conversion into U.S.
Dollars was made based on the mid close of the exchange rate as of the last
day of each year as supplied by a major international bank. Past exchange
rate fluctuations are not indicative of future exchange rate movements.
</TABLE>
xiv
<PAGE>
SELECT 10 HONG KONG
<TABLE>
<CAPTION>
TOTAL RETURN
YEAR ENDED % CHANGE IN VALUE DIVIDEND TOTAL IN U.S.
12/31 FOR YEAR(1) RETURN(2) RETURN(3)(4)(5) DOLLARS(3)(4)(5)
- ------------- ------------------- --------------- --------------- -----------------------
<S> <C> <C> <C> <C>
1985 43.46% 7.22% 50.68% 50.87%
1986 56.32 5.78 62.10 62.73
1987 (6.27) 5.61 (0.66) (0.28)
1988 26.36 6.94 33.30 32.28
1989 0.82 6.37 7.19 7.19
1990 (2.16) 8.08 5.92 6.06
1991 40.04 8.47 48.51 48.89
1992 35.82 6.88 42.70 43.44
1993 100.42 5.54 105.96 106.23
1994 (35.17) 3.52 (31.65) (31.74)
1995*
</TABLE>
<TABLE>
<S> <C>
The returns shown above are not guarantees of future performance and should not
be used as a predictor of returns to be expected in connection with a Portfolio.
Such returns do not reflect sales charges, commissions, expenses or taxes.
Reasonable assumptions were relied upon where data was either unavailable or
only partially available and these assumptions could have a material impact on
the historical performance calculations.
<FN>
- ------------------------
* Period beginning January 1, 1995 and ending March 31, 1995.
(1) The percentage change in value, over a one year period, of the Select 10
Hong Kong stocks as of the close of the last day of the previous year. The
percentage change in value represents the difference between the beginning
and ending value of the Select 10 Hong Kong stocks divided by the value of
such stocks at the beginning of the year.
(2) The total dividends earned on the Select 10 Hong Kong stocks during the
calendar year, including stock dividends, spinoffs, warrants, rights or
other special distributions, divided by the market value of the Select 10
Hong Kong stocks at the beginning of the year. No adjustments have been made
to reflect taxes payable or withholding taxes.
(3) The change in value of the Select 10 Hong Kong stocks plus the dividend
return for the calendar year on such stocks.
(4) Does not reflect sales charges, commissions, expenses or taxes.
(5) The difference between Total Return performance in local currency and U.S.
Dollars relates solely to changes in exchange rates. Conversion into U.S.
Dollars was made based on the mid close of the exchange rate as of the last
day of each year as supplied by a major international bank. Past exchange
rate fluctuations are not indicative of future exchange rate movements.
</TABLE>
COMPARISON OF THE TOTAL RETURN
LISTED ON THE ABOVE CHARTS
<TABLE>
<CAPTION>
HONG KONG DOLLARS U.S. DOLLARS
---------------------------- ----------------------------
SELECT 10 SELECT 10
YEAR ENDED HANG SENG HONG KONG HANG SENG HONG KONG
12/31 TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
1985 50.75% 50.68% 50.94% 50.87%
1986 50.80 62.10 51.38 62.73
1987 (7.02) (0.66) (6.66) (0.28)
1988 21.26 33.30 20.33 32.28
1989 10.19 7.19 10.19 7.19
1990 11.91 5.92 12.05 6.06
1991 47.91 48.51 48.29 48.89
1992 33.00 42.70 33.69 43.44
1993 119.92 105.96 120.20 106.23
1994 (28.77) (31.65) (28.86) (31.74)
1995
</TABLE>
The Select 10 United Kingdom Portfolio 95-2 and Select 10 Hong Kong
Portfolio 95-2 seek to achieve a better performance than the Financial Times
Index and the Hang Seng Index through investment for about one year in the ten
common stocks in the Financial Times Index and the Hang Seng Index,
respectively, having the highest dividend yields on March 31, 1995. A strategy
of investing in approximately equal
xv
<PAGE>
values of the Select 10 stocks in each index each year would have yielded a
higher total return than an investment in all the stocks which make up the
Financial Times Index and the Hang Seng Index for 10 of the last 10 years in the
case of the United Kingdom and 5 of the last 10 years in the case of Hong Kong.
The returns shown above are not guarantees of future performance and should
not be used as a predictor of returns to be expected in connection with a
Portfolio. Such returns do not reflect sales charges, commissions, expenses or
taxes. As indicated in the above tables, the Select 10 stocks underperformed
each index in certain years and there can be no assurance that the Portfolio of
a Trust will outperform its respective index over the life of the Trust.
PORTFOLIO CHARACTERISTICS. The Portfolio of each Trust consists of ten
issues of Securities, all of which are common stocks, issued by companies in the
categories set forth below:
<TABLE>
<CAPTION>
UNITED KINGDOM PORTFOLIO
---------------------------------------
PERCENTAGE OF
PORTFOLIO AGGREGATE MARKET VALUE
CATEGORIES OF ISSUER NUMBERS OF TRUST PORTFOLIO
- -------------------------------------------------- --------------- ----------------------
<S> <C> <C>
%
<CAPTION>
HONG KONG PORTFOLIO
---------------------------------------
PERCENTAGE OF
PORTFOLIO AGGREGATE MARKET VALUE
CATEGORIES OF ISSUER NUMBERS OF TRUST PORTFOLIO
- -------------------------------------------------- --------------- ----------------------
<S> <C> <C>
%
</TABLE>
All of the Stocks in the United Kingdom Portfolio represent United Kingdom
issuers, and that Portfolio is not considered to be concentrated in stocks of
any particular industry (see Risk Factors--United Kingdom Portfolio). All of the
Stocks in the Hong Kong Portfolio represent Hong Kong and other non-United
States issuers, and that Portfolio is considered to be concentrated in stocks of
real estate companies.
On the Date of Deposit, the aggregate market value of the Securities in the
United Kingdom Portfolio and Hong Kong Portfolio was $ and $ ,
respectively.
MINIMUM PURCHASE--$1,000.
PERFORMANCE INFORMATION--Information on the performance of the Trust, on the
basis of changes in Unit price (total return) may be included from time to time
in advertisements, sales literature and reports to current or prospective Unit
Holders.
xvi
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
Select 10 United Kingdom Portfolio 95-2
Select 10 Hong Kong Portfolio 95-2
We have audited the accompanying statements of financial condition and
schedules of portfolio securities of the Dean Witter Select Equity Trust Select
10 International Series 95-2 consisting of the Select 10 United Kingdom
Portfolio 95-2 and Select 10 Hong Kong Portfolio 95-2 as of April , 1995. These
financial statements are the responsibility of the Trustee. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit and contracts for the purchase
of securities, as shown in the statements of financial condition and schedules
of portfolio securities as of April , 1995, by correspondence with The Bank of
New York, the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the statements of financial condition and schedules of
portfolio securities referred to above present fairly, in all material respects,
the financial position of the Dean Witter Select Equity Trust Select 10
International Series 95-2 consisting of the Select 10 United Kingdom Portfolio
95-2 and Select 10 Hong Kong Portfolio 95-2 as of April , 1995 in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
April , 1995
New York, New York
xvii
<PAGE>
STATEMENT OF FINANCIAL CONDITION
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
DATE OF DEPOSIT, APRIL , 1995
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's Contracts to purchase
underlying Securities backed by an
irrevocable letter of credit (a)... $
-----------
-----------
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability--
Payment of deferred portion of
sales charge (b)..................
$
-----------
INTEREST OF UNIT HOLDERS
Units of fractional undivided
interest outstanding:
Cost to investors (c)............. $
Gross underwriting commissions
(d)...............................
-----------
Net amount applicable to
investors..........................
-----------
Total............................. $
-----------
-----------
<FN>
(a) The aggregate U.S. dollar value of the Securities represented by Contracts
to Purchase listed under "Schedule of Portfolio Securities" at the mid close
value of the British pound sterling and their cost to the Trust are the
same. The value is determined by the Trustee on the basis set forth under
"Public Offering of Units--Public Offering Price" as of the Date of Deposit.
An irrevocable letter of credit drawn on Morgan Guaranty Trust Company of
New York in the amount of $ has been deposited with the Trustee.
(b) Represents the aggregate amount of mandatory distributions of $2.00 per 100
Units per month payable on the 1st day of each month from ,
1995 through , 1996. Distributions will be made to an account
maintained by the Trustee from which the Unit Holders' Deferred Sales Charge
obligation to the Sponsor will be satisfied. If Units are redeemed prior to
, 1996, the remaining portion of the distribution applicable
to such Units will be transferred to such account on the redemption date.
(c) The aggregate Public Offering Price is computed on the basis set forth under
"Public Offering of Units--Public Offering Price" as of the evaluation time
on the Date of Deposit.
(d) The aggregate sales charge of 2.90% of the Public Offering Price per 100
Units is computed on the basis set forth under "Public Offering of
Units--Public Offering Price".
(e) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the Trust
and is responsible for establishing and maintaining a system of internal
controls directly related to, and designed to provide reasonable assurance
as to the integrity and reliability of, financial reporting of the Trust.
The Trustee is also responsible for all estimates and accruals reflected in
the Trust's financial statements. The Trustee determines the price for each
underlying Security included in the Trust's Schedule of Portfolio Securities
on the basis set forth in "Public Offering of Units--Public Offering Price".
Under the Securities Act of 1933, as amended (the "Act"), the Sponsor is
deemed to be an issuer of the Trust's Units. As such, the Sponsor has the
responsibility of an issuer under the Act with respect to financial
statements of the Trust included in the Registration Statement under the Act
and amendments thereto.
</TABLE>
xviii
<PAGE>
STATEMENT OF FINANCIAL CONDITION
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 HONG KONG PORTFOLIO 95-2
DATE OF DEPOSIT, APRIL , 1995
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's Contracts to purchase
underlying Securities backed by an
irrevocable letter of credit (a)... $
-----------
-----------
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability--
Payment of deferred portion of
sales charge (b)..................
-----------
INTEREST OF UNIT HOLDERS
Units of fractional undivided
interest outstanding:
Cost to investors (c)............. $
Gross underwriting commissions
(d)...............................
-----------
Net amount applicable to
investors..........................
-----------
Total............................. $
-----------
-----------
<FN>
(a) The aggregate U.S. dollar value of the Securities represented by Contracts
to Purchase listed under "Schedule of Portfolio Securities" at the mid close
value of the Hong Kong dollar and their cost to the Trust are the same. The
value is determined by the Trustee on the basis set forth under "Public
Offering of Units--Public Offering Price" as of the Date of Deposit. An
irrevocable letter of credit drawn on Morgan Guaranty Trust Company of New
York in the amount of $ has been deposited with the Trustee.
(b) Represents the aggregate amount of mandatory distributions of $2.00 per 100
Units per month payable on the 1st day of each month from ,
1995 through , 1996. Distributions will be made to an account
maintained by the Trustee from which the Unit Holders' Deferred Sales Charge
obligation to the Sponsor will be satisfied. If Units are redeemed prior to
, 1996, the remaining portion of the distribution applicable
to such Units will be transferred to such account on the redemption date.
(c) The aggregate Public Offering Price is computed on the basis set forth under
"Public Offering of Units--Public Offering Price" as of the evaluation time
on the Date of Deposit.
(d) The aggregate sales charge of 2.90% of the Public Offering Price per 100
Units is computed on the basis set forth under "Public Offering of
Units--Public Offering Price".
(e) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the Trust
and is responsible for establishing and maintaining a system of internal
controls directly related to, and designed to provide reasonable assurance
as to the integrity and reliability of, financial reporting of the Trust.
The Trustee is also responsible for all estimates and accruals reflected in
the Trust's financial statements. The Trustee determines the price for each
underlying Security included in the Trust's Schedule of Portfolio Securities
on the basis set forth in "Public Offering of Units--Public Offering Price".
Under the Securities Act of 1933, as amended (the "Act"), the Sponsor is
deemed to be an issuer of the Trust's Units. As such, the Sponsor has the
responsibility of an issuer under the Act with respect to financial
statements of the Trust included in the Registration Statement under the Act
and amendments thereto.
</TABLE>
xix
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
ON DATE OF DEPOSIT APRIL , 1995
<TABLE>
<CAPTION>
CURRENT PROPORTIONATE
ANNUAL RELATIONSHIP PERCENTAGE OF PRICE PER COST OF
PORTFOLIO DIVIDEND PER NUMBER OF BETWEEN NO. OF AGGREGATE MARKET SHARE TO SECURITIES
NO. NAME OF ISSUER SHARE (1) SHARES SHARES VALUE OF TRUST TRUST TO TRUST(2)(3)
---------- ------------------------- ------------- ---------- --------------- ---------------- ------------- --------------
<C> <S> <C> <C> <C> <C> <C> <C>
1. $ % % $ $
2.
3.
4.
5.
6.
7.
8.
9.
10.
--------------
$
--------------
--------------
<FN>
- ------------------------
(1) Based on the most recent interim and final dividends declared, converted
into U.S. dollars at the mid close value of the British pound sterling as of
the Evaluation Time on the Date of Deposit. There can be no assurance that
future dividend payments, if any, will be maintained in an amount equal to
the dividend listed above.
(2) The Securities were acquired by the Sponsor on , 1995. All
Securities are represented entirely by contracts to purchase. Valuation of
Securities by the Trustee was made on the basis of the closing sale price on
the London Stock Exchange on the Date of Deposit converted into U.S. dollars
at the mid close value of the British pound sterling as of the Evaluation
Time. The aggregate purchase price to the Sponsor for the Securities
deposited in the Trust is $ .
(3) The Sponsor had a profit on the Date of Deposit of $ .
</TABLE>
xx
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 HONG KONG PORTFOLIO 95-2
ON DATE OF DEPOSIT APRIL , 1995
<TABLE>
<CAPTION>
CURRENT PROPORTIONATE
ANNUAL RELATIONSHIP PERCENTAGE OF PRICE PER COST OF
PORTFOLIO DIVIDEND PER NUMBER OF BETWEEN NO. OF AGGREGATE MARKET SHARE TO SECURITIES
NO. NAME OF ISSUER SHARE (1) SHARES SHARES VALUE OF TRUST TRUST TO TRUST(2)(3)
---------- ------------------------- ------------- ---------- --------------- ---------------- ------------- --------------
<C> <S> <C> <C> <C> <C> <C> <C>
1. $ % % $ $
2.
3. ]
4.
5.
6.
7. ]
8.
9.
10.
--------------
$
--------------
--------------
<FN>
- ------------------------
(1) Based on the most recent interim and final dividends declared, converted
into U.S. dollars at the mid close value of the Hong Kong dollar as of the
Evaluation Time on the Date of Deposit. There can be no assurance that
future dividend payments, if any, will be maintained in an amount equal to
the dividend listed above.
(2) The Securities were acquired by the Sponsor on , 1995. All
Securities are represented entirely by contracts to purchase. Valuation of
Securities by the Trustee was made on the basis of the closing sale price on
the Hong Kong Stock Exchange on the Date of Deposit converted into U.S.
dollars at the mid close value of the Hong Kong dollar as of the Evaluation
Time. The aggregate purchase price to the Sponsor for the Securities
deposited in the Trust is $ .
(3) The Sponsor had a loss on the Date of Deposit of $ .
</TABLE>
xxi
<PAGE>
OFFERING FEATURES
Dean Witter Select Equity Trust
Select 10 International Series 95-2
Select 10 United Kingdom Portfolio 95-2
Select 10 Hong Kong Portfolio 95-2
- ----------------------------------------------
AN OPPORTUNITY TO INVEST FOR INCOME AND ABOVE-AVERAGE GROWTH POTENTIAL
- -------------------------------------------------------------
- PORTFOLIO SELECTION -- Investment in the 10 common stocks in the Financial
Times Index and/or Hang Seng Index having the highest dividend yields on
March 31, 1995 offers an opportunity to earn income with above-average
growth potential over the following 12 months.*
- DIVERSIFICATION -- Risk is reduced because your investment is spread among
10 common stocks from various industry groups. Individual investors would
require a substantial capital commitment to achieve the level of
diversification offered by a Trust without incurring odd-lot charges.
- REINVESTMENT OPTION -- Investors may elect to have distributions
automatically reinvested in additional units of a Trust subject to the
then remaining deferred sales charge.
- LOW MINIMUM INVESTMENT -- Each Trust is priced at approximately $10 per
unit and the minimum investment is $1,000 although investors may purchase
any number of additional units they wish.
- EASY LIQUIDITY WITHOUT A FEE -- The Sponsor intends to maintain a
secondary market where you can sell units at a price based on the
then-current market value without a fee or penalty other than the payment
of any deferred sales charge then due.
* The publishers of these indexes have not participated in any way in the
creation of a Trust or in the selection of the stocks included in a Trust and
have not reviewed or approved any information included in the Prospectus
relating thereto.
The Offering Features are part of this Prospectus and should be read in
conjunction
with the entire Prospectus.
<PAGE>
INVEST IN THE 10 HIGHEST YIELDING STOCKS
IN THE FINANCIAL TIMES INDEX AND/OR THE
HANG SENG INDEX FOR AS LITTLE AS $1,000.
- ---------------------------------------------------------
THE SELECT EQUITY TRUSTS
Achieving financial success in today's dynamic markets depends on
selecting the right investment strategy. As new opportunities emerge,
sparked by changing business trends, market strategies must be geared to
capitalize on them. Because such opportunities may not be easily
identified by individual investors, Dean Witter has developed the Select
Equity Trusts that offer investors a simple and convenient way to
participate in the equity market.
- --------------------------------------------------------------------------------
PORTFOLIO SELECTION
The Select 10 United Kingdom Portfolio 95-2 and the Select 10 Hong Kong
Portfolio 95-2 consist of the 10 common stocks in the Financial Times
Index and Hang Seng Index, respectively, having the highest dividend
yields on March 31, 1995. Each Trust is specifically designed for
investors seeking income and above-average growth potential. Because a
Trust is a fixed portfolio of preselected securities, purchasers know in
advance what they are investing in.
- --------------------------------------------------------------------------------
RISK FACTORS--SPECIAL CONSIDERATIONS
The risks of an investment in Units of a Trust include price volatility
resulting from factors affecting the common stock of the issuer of a
portfolio security in particular and the equity markets in general. The
political and economic risks associated with an investment in common
stocks of United Kingdom and Hong Kong issuers and the risk of
unfavorable exchange rate fluctuations in the British pound sterling and
the Hong Kong dollar are present for the respective Trusts.
- --------------------------------------------------------------------------------
DIVERSIFICATION
Risk is reduced through a Trust because it allows you to participate in a
diversified portfolio of stocks. Although there are certain risks
associated with investment in common stocks, your risk is reduced because
your capital is divided among 10 stocks from various industry groups. It
would be difficult for the average investor to achieve a comparable level
of diversification, without making a substantial capital commitment or
incurring odd-lot charges.
- --------------------------------------------------------------------------------
REINVESTMENT OPTION
Investors may elect to have distributions automatically reinvested in
additional units of a Trust subject to the then remaining deferred sales
charge.
- --------------------------------------------------------------------------------
COST EFFECTIVE
CONVENIENT PURCHASE PRICE/NO ODD-LOT PENALTIES
Typically stocks purchased in amounts less than 100 shares are subject to
odd-lot penalties. If you were to purchase 100 shares of each of the
stocks in this portfolio, it would require a large commitment of capital.
If you were to purchase smaller amounts of each stock, you would incur
odd-lot penalties on many of your purchases. Our convenient purchase
price of approximately $10 per unit with a minimum purchase of $1,000,
allows you to invest in all the stocks in an affordable manner. Volume
discounts are available beginning on orders over $50,000.
The Offering Features are part of this Prospectus and should be read in
conjunction
with the entire Prospectus.
<PAGE>
- ---------------------------------------------------------
FLEXIBILITY THROUGH EXCHANGE PRIVILEGES
Investors may elect, at any time, to exchange or rollover these units for
units of another Dean Witter Select Trust at a reduced sales charge.
- --------------------------------------------------------------------------------
SHORT-TERM LIFE
The Trust will terminate in approximately one year. After this period,
the Portfolio will liquidate. Unit Holders owning at least 2,500 units
may elect to receive distributions in respect of their Units in kind.
Unit Holders not so electing will receive cash. You may, of course, sell
or redeem your Units prior to a Trust's termination.
- --------------------------------------------------------------------------------
EASY LIQUIDITY WITHOUT A FEE
Although not obligated to do so, Dean Witter intends to maintain a
secondary market for the resale of Units. All or a portion of your Units
may be liquidated at any time, without charge other than any deferred
sales charge then payable. The price you receive will reflect market
conditions and could be more or less than the price originally paid.
- --------------------------------------------------------------------------------
RETIREMENT ACCOUNTS
Each Trust may be an attractive investment vehicle for a self-directed
IRA or self-directed self-employed retirement plan ("Keogh plan"). As an
income- and growth-oriented investment, it may be a suitable complement
to achieve overall portfolio diversification.
- --------------------------------------------------------------------------------
EASE OF OWNERSHIP
The usual chores associated with individual ownership of stocks-keeping
records and safekeeping of certificates are eliminated through a single
investment in a Trust. You will receive year-end information from the
Trustee, including Federal income tax information.
The Offering Features are part of this Prospectus and should be read in
conjunction
with the entire Prospectus.
<PAGE>
PROSPECTUS PART B
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
SELECT 10 UNITED KINGDOM PORTFOLIO 95-2
SELECT 10 HONG KONG PORTFOLIO 95-2
INTRODUCTION
Each series of the Dean Witter Select Equity Trust (each a "Trust") was
created under the laws of the State of New York pursuant to a Trust Indenture
and Agreement (the "Indenture") and a related Reference Trust Agreement (the
"Agreement") (collectively, the "Indenture and Agreement")*, between Dean Witter
Reynolds Inc. (the "Sponsor") and The Bank of New York (the "Trustee"). The
Sponsor is a principal operating subsidiary of Dean Witter, Discover & Co.
("DWDC"), a publicly-held corporation. (See "Sponsor".) The objectives of each
Trust are income and above average growth potential through investment in a
fixed portfolio of Securities (the "Portfolio") of publicly-traded common stock.
There is no assurance that this objective will be met because the Securities may
appreciate or depreciate in value (or pay dividends) depending on the full range
of economic and market influences affecting corporate profitability, the
financial condition of issuers, the prices of equity securities in general and
the Securities in particular, fluctuations in exchange rates, global and
regional perceptions of the United Kingdom (the "United Kingdom") and Hong Kong,
and other factors.
On the date of creation of the Trust (the "Date of Deposit"), the Sponsor
deposited with the Trustee certain securities and contracts and funds
(represented by irrevocable letter(s) of credit issued by major commercial
bank(s)) for the purchase of such securities (collectively, the "Securities") at
prices equal to the market value of such Securities converted into U.S. dollars
at the mid close of the applicable exchange rate as determined by the Trustee as
of the Date of Deposit and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase such Securities. (See "Schedule of
Portfolio Securities".) The Trust was created simultaneously with the deposit of
the Securities with the Trustee and the execution of the Indenture and the
Agreement. The Trustee then immediately delivered to the Sponsor certificates of
beneficial interest (the "Certificates") representing the units (the "Units")
comprising the entire ownership of the Trust. Through this prospectus (the
"Prospectus"), the Sponsor is offering the Units, including Additional Units, as
defined below, for sale to the public. The holders of Certificates (the "Unit
Holders") will have the right to have their Units redeemed at a U.S. dollar
price based on the market value of the Securities (the "Redemption Value") if
they cannot be sold in the secondary market which the Sponsor, although not
obligated to, proposes to maintain. In addition, the Sponsor may offer for sale,
through this Prospectus, Units which the Sponsor may have repurchased in the
secondary market or upon the tender of such Units for redemption. The Trustee
has not participated in the selection of Securities for the Trust, and neither
the Sponsor nor the Trustee will be liable in any way for any default, failure
or defect in any Securities.
With the deposit of the Securities in the Trust on the Date of Deposit, the
Sponsor established a proportionate relationship between the number of shares of
each Security in the Portfolio. (The original proportionate relationships on the
Date of Deposit are set forth in "Schedule of Portfolio Securities".) The
original proportionate relationships are subject to adjustment under certain
limited circumstances. (See "Administration of the Trust--Portfolio
Supervision".) The Sponsor is permitted under the Indenture and Agreement to
deposit additional Securities, contracts to purchase additional Securities
together with a letter of credit and/or cash (or a letter of credit in lieu of
cash) with instructions to the Trustee to purchase additional Securities in
order to create additional Units ("Additional Units"). Any such additional
deposits will be in amounts which maintain, to the extent practicable, the
original proportionate relationship between the number of shares of each
Security in the Portfolio. It may not be possible to maintain the exact original
proportionate relationship because of, among other reasons, purchase
requirements, price changes or unavailability of Securities. Any cash deposited
with instructions to purchase Securities may be held in an interest bearing
account by the Trustee. Any interest earned on such cash will be the property of
the Trust. Any cash deposited with instruction to purchase Securities not used
to purchase Securities and any interest not used to pay Trust expenses will be
distributed to Unit Holders on the earlier of the first Distribution Date or 90
days after the Date of Deposit. Additional Units may be continuously offered for
sale to the public by means of this Prospectus. Subsequent to the 90 day period
following the Date of Deposit any deposit of additional Securities and cash must
exactly replicate the portfolio immediately prior to such deposit. The Sponsor
may acquire large volumes of additional Securities for deposit into the Trust
over a short period of time. Such acquisitions may tend to raise the market
prices of these Securities. The Sponsor cannot currently predict the actual
market impact of the Sponsor's purchases of additional Securities, because the
actual volume of Securities to be purchased and the supply and price of such
Securities is not known.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units, if Units are available
to fill orders on the day that that price is set. If Units are not available or
are insufficient to fill the order, the investor's order will be rejected by the
Sponsor. The number of Units available may be insufficient to meet demand
because of the Sponsor's inability to or decision not to purchase and deposit
underlying Securities in amounts sufficient to maintain the proportionate
numbers of shares of each Security as required to create additional Units. The
Sponsor may, if unable to accept orders on any given day, offer to execute the
order as soon as sufficient Units can be created. An investor who agrees to this
will be deemed to place a new order for that number of Units each day until that
order is accepted. The investor's order will then be executed, when Units are
available, at the Public Offering Price next calculated after such continuing
- ------------------------
* Reference is hereby made to said Indenture and Agreement and any statements
contained herein are qualified in their entirety by the provisions of said
Indenture and Agreement.
<PAGE>
order is accepted. The investor will, of course, be able to revoke his purchase
offer at any time prior to acceptance by the Sponsor. The Sponsor will execute
orders to purchase in the order it determines that they are received, i.e.,
orders received first will be filled first, except that indications of interest
prior to the effectiveness of the registration of the offering of Trust Units
which become orders upon effectiveness will be accepted according to the order
in which the indications of interest were received.
On the Date of Deposit, each Unit represented the fractional undivided
interest in the Securities and net income of the Trust set forth under "Summary
of Essential Information". Thereafter, if any Units are redeemed, the amount of
Securities in the Trust will be reduced, and the fractional undivided interest
represented by each remaining Unit in the balance of the Trust will be
increased. However, if Additional Units are issued by the Trust, the aggregate
value of the Securities in the Trust will be increased by amounts allocable to
such Additional Units and the fractional undivided interest in the balance will
be decreased. Units will remain outstanding until redeemed upon tender to the
Trustee by any Unit Holder (which may include the Sponsor) or until the
termination of the Trust pursuant to the Indenture and Agreement.
In connection with the deposit by the Sponsor of cash (or a letter of credit
in lieu of cash) with instructions to purchase additional Securities in order to
create Additional Units, to the extent that the price of a Security and/or
exchange rates fluctuate between the time the cash is deposited and the time the
cash is used to purchase the Security, Units (including previously issued Units)
may represent more or less of that Security and more or less of other Securities
in the Portfolio of the Trust. In addition, the brokerage fees incurred in
purchasing Securities with such deposited cash will be borne by the Trust. Any
Unit Holder who purchased Units prior to the purchase of Securities with such
deposited cash would experience dilution as a result of any such brokerage fees.
THE TRUST
RISK FACTORS--SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of
the risks which an investment in publicly-traded common stock may entail,
including the risk that the value of the Portfolio and hence of the Units will
decline with decreases in the market value of the Securities. The Trust will be
terminated and liquidated no later than the Mandatory Termination Date set forth
in the "Summary of Essential Information".
On each Deferred Sales Charge Payment Date Securities will be sold pro rata
in an amount equal to $2.00 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor. As Securities are sold to pay
the Deferred Sales Charge a Unit Holder's assets will be reduced and income per
Unit may be reduced.
SUMMARY DESCRIPTION OF THE PORTFOLIO
As used herein, the term "Common Stocks" refers to the common stocks (or
contracts to purchase such common stocks) (any such contracts to purchase common
stocks to be accompanied by an irrevocable letter of credit sufficient to
perform such contracts), initially deposited in the Trust and described under
"Schedule of Portfolio Securities". The term "Securities" includes any
additional common stock or contracts to purchase additional common stock
together with the corresponding irrevocable letter of credit, subsequently
acquired by the Trust pursuant to the Indenture and Agreement. An investment in
Units of the Trust should be made with an understanding that the value of the
underlying Securities, and therefore the value of Units, will fluctuate,
depending upon the full range of economic and market influences which may affect
the market value of such Securities. Certain risks are inherent in an investment
in equity securities, including the risk that the financial condition of one or
more of the issuers of the Securities may worsen or the general condition of the
common stock market may weaken. In such case, the value of the Portfolio
Securities and hence the value of Units may decline. Common stocks are
susceptible to general stock market movements and to volatile and unpredictable
increases and decreases in value as market confidence in and perceptions of the
issuers change from time to time. Such perceptions are based upon varying
reactions to such factors as expectations regarding domestic and foreign
economic, monetary and fiscal policies, inflation and interest rates, currency
exchange rates, economic expansion or contraction, and global or regional
political, economic or banking crises. In addition, investors should understand
that there are certain payment risks involved in owning common stocks, including
risks arising from the fact that holders of common and preferred stocks have
rights to receive payments from the issuers of those stocks that are generally
inferior to those of creditors of, or holders of debt obligations issued by,
such issuers. Furthermore, the rights of holders of common stocks are inferior
to the rights of holders of preferred stocks. Holders of common stocks of the
type held in the Portfolio have a right to receive dividends only when, as and
if, and in the amounts, declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks have the right to receive dividends at a fixed rate when and
as declared by the issuer's board of directors, normally on a cumulative basis,
but do not ordinarily participate in other amounts available for distribution by
the issuing corporation. 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 such cumulative
preferred stock. Preferred stocks are also entitled to rights on liquidation
which are senior to those of common stocks. For these reasons, preferred stocks
entail less risk than common stocks. However, neither preferred nor common
stocks represent an obligation or liability of the issuer and therefore do not
offer any assurance of income or provide the degree of protection of capital of
debt securities. The issuance of debt securities (as compared with both
preferred and common stock) and preferred stock (as compared with common stock)
will create prior claims for payment of principal and interest (in the case of
debt securities)
2
<PAGE>
and dividends (in the case of preferred securities) 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. Further, unlike debt securities which
typically have a stated principal amount payable at maturity (which value will
be subject to market fluctuations prior thereto), or preferred stocks which
typically have liquidation preference and which may have stated optional or
mandatory redemption provisions, common stocks have neither a fixed principal
amount nor a maturity date and have values which are subject to market
fluctuations for as long as the common stocks remain outstanding. Additionally,
market timing and volume trading will also affect the underlying value of
Securities, including the Sponsor's buying of additional Securities and the
Trust's selling of Securities during the Liquidation Period. The value of the
Securities in the Portfolio thus may be expected to fluctuate over the entire
life of the Trust to values higher or lower than those prevailing on the Date of
Deposit. The Sponsor may direct the Trustee to dispose of Securities under
certain specified circumstances (see "Administration of the Trust--Portfolio
Supervision"). However, Securities will not be disposed of solely as a result of
normal fluctuations in market value.
There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet redemptions
and the value of the Trust will be adversely affected if trading markets for the
Securities are limited or absent.
FOREIGN ISSUERS. Investments in trusts consisting partially or entirely of
securities of foreign issuers involve investments risks that are different in
some respects from an investment in a trust that invests partially or entirely
in securities of domestic issuers. Those investment risks include future
political and economic developments and the possible establishment of exchange
controls or other governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant 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 such as those
applicable to domestic issuers.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies, and are principally traded in foreign currencies. Therefore, there
is a risk that the United States dollar value of these Securities will vary with
fluctuations in the United States dollar foreign exchange rates for the relevant
currencies.
FOREIGN EXCHANGE RATES. A Portfolio of securities that are principally
traded in foreign currencies involves investment risks that are substantially
different from an investment in a trust which invests in securities that are
principally traded in United States dollars. This is because the United States
dollar value of a Portfolio (and hence of the Units) and of the distributions
from the Portfolio will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies. 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.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty, which established a system of fixed
exchange rates and the convertibility of the United States dollar into gold
through foreign central banks. Starting in 1971, growing volatility in the
foreign exchange markets caused the United States to abandon gold convertibility
and to effect a small devaluation of the United States dollar. In 1973, the
system of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most Western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating international
market. Many smaller or developing countries have continued to "peg" their
currencies to the United States dollar although there has been some interest in
recent years in "pegging" currencies to "baskets" of other currencies or to a
Special Drawing Right administered by the International Monetary Fund. Since
1983, the Hong Kong dollar has been pegged to the U.S. dollar. In Europe a
European Currency Unit ("ECU") has been developed. Currencies are generally
traded by leading international commercial banks and institutional investors
(including corporate treasurers, money managers, pension funds and insurance
companies). From time to time, central banks in a number of countries also are
major buyers and sellers of foreign currencies, mostly for the purpose of
preventing or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual and
proposed government policies on the value of the currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling large
amounts of the same currency or currencies. However, over the long term, the
currency of a country with a low rate of inflation and a favorable balance of
trade should increase in value relative to the currency of a country with a high
rate of inflation and deficits in the balance of trade.
3
<PAGE>
The following table sets forth recent end-of-month United States dollar
exchange rates for the British pound sterling and the Hong Kong dollar.
Fluctuations of the rates that have occurred in the past are not necessarily
indicative of fluctuations that may occur over the life of the Trust:
FOREIGN EXCHANGE RATES
END-OF-MONTH
U.S. DOLLAR
EXCHANGE RATES
<TABLE>
<CAPTION>
1993: U.S.$/L HK$/U.S.$ 1994: U.S.$/L HK$/U.S.$ 1995: U.S.$/L HK$/U.S.$
- -------------- --------- ----------- -------------- --------- ----------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 1.48600 7.7325 January 1.50750 7.7230 January
February 1.43050 7.7337 February 1.48600 7.7262 February
March 1.51300 7.7310 March 1.48500 7.7275 March
April 1.57250 7.7295 April 1.51950 7.7250
May 1.56250 7.7235 May 1.51050 7.7260
June 1.49150 7.7425 June 1.54350 7.7295
July 1.48600 7.7562 July 1.54250 7.7247
August 1.49000 7.7480 August 1.53550 7.7277
September 1.49640 7.7336 September 1.57650 7.7273
October 1.48150 7.7280 October 1.63550 7.7270
November 1.48500 7.7248 November 1.56450 7.7345
December 1.47950 7.7233 December 1.56500 7.7370
Source: Datastream International, Inc.
</TABLE>
The following table shows fluctuations in the value of the British pound and
Hong Kong dollar relative to the United States dollar in the past nine years.
FOREIGN EXCHANGE RATES
RANGE OF FLUCTUATIONS IN FOREIGN CURRENCY
<TABLE>
<CAPTION>
U.S. HONG KONG
DOLLAR/BRITISH DOLLAR/ U.S.
PERIOD POUND STERLING DOLLAR
- --------- ----------------- ---------------
<S> <C> <C>
1986 1.55850-1.37350 7.8150-7.7650
1987 1.88700-1.47200 7.8130-7.7485
1988 1.89900-1.66050 7.8225-7.7500
1989 1.82300-1.51350 7.8155-7.7730
1990 1.97910-1.59500 7.8155-7.7543
1991 2.00400-1.60200 7.8010-7.7160
1992 2.00670-1.49400 7.7770-7.7200
1993 1.58600-1.41800 7.7650-7.7223
1994 1.63700-1.46050 7.7525-7.7225
Source: Datastream International, Inc.
</TABLE>
The Trustee will estimate current exchange rates for the relevant currencies
based on activity in the various currency exchange markets. However, since these
markets are volatile and are constantly changing, depending on the activity at
any particular time of the large international commercial banks, various central
banks, large multinational corporations, speculators and other buyers and
sellers of foreign currencies, and since actual foreign currency transactions
may not be instantly reported, the exchange rates estimated by the Trustee may
not be indicative of the amount in United States dollars the Trust would receive
had the Trustee sold any particular currency in the market.
The foreign exchange transactions of a Portfolio may be concluded by the
Trustee with foreign exchange dealers acting as principals either on a spot
(I.E., cash) buying basis or on a forward foreign exchange basis on the date a
Portfolio is entitled to receive the applicable foreign currency. These forward
foreign exchange transactions will generally be of as short a duration as
practicable and will generally settle on the date of receipt of the applicable
foreign currency involving specific receivables or payables of the Portfolio
accruing in connection with the purchase and sale of its Securities and income
received on the Securities or the sale and redemption of Units. These
transactions are accomplished by contracting to purchase or sell a specific
currency at a future date and price set at the time of the contract. The cost to
the Portfolio of engaging in these foreign currency transactions varies with
such factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency
exchange are usually conducted on a principal basis, fees or commissions are not
normally involved. Although foreign exchange dealers trade on a net basis, they
do realize a profit based upon the difference between the
4
<PAGE>
price at which they are willing to buy a particular currency (bid price) and the
price at which they are willing to sell the currency (offering price). The
relevant exchange rate used for evaluations of the Securities may include the
cost of buying or selling, as the case may be, of any forward foreign exchange
contract in the relevant currency.
EXCHANGE CONTROLS. On the basis of the best information available to the
Sponsor at the present time none of the Securities is subject to exchange
control restrictions under existing law which would materially interfere with
payment to the Portfolio of amounts due on the Securities either because the
particular jurisdictions have not adopted any currency regulations of this type
or because the issues qualify for an exemption or the Portfolio, as an
extraterritorial investor, has qualified its purchase of the Securities as
exempt by following applicable "validation" or similar regulatory or exemptive
procedures. However, there can be no assurance that exchange control regulations
might not be adopted in the future which might adversely affect payments to a
Portfolio.
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 Portfolio and on the ability of the Portfolio to satisfy its
obligation to redeem Units tendered to the Trustee for redemption (see
"Redemption").
LIQUIDITY. Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration requirements
of the Act. Sales of non-exempt Securities by a Portfolio in United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Securities by a Portfolio will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that a Portfolio will encounter obstacles in disposing of the
Securities, investors should realize that the Securities may be traded in
foreign countries where the securities markets are not as developed or efficient
and may not be as liquid as those in the United States. To the extent the
liquidity of these markets becomes impaired, however, the value of a Portfolio
when responding to a substantial volume of requests for redemption of Units
(should redemptions be necessary despite the market making activities of the
Sponsor) received at or about the same time could be adversely affected. This
might occur, for example, as a result of economic or political turmoil in a
country in whose currency a Portfolio had a substantial portion of its assets
invested, or should relations between the United States and such foreign country
deteriorate markedly. Even though the Securities are listed, the principal
trading market for the Securities may be in the over-the-counter market. As a
result, the existence of a liquid trading market for the Securities may depend
on whether dealers will make a market in the Securities. There can be no
assurance that a market will be made for any of the Securities, that any market
for the Securities will be maintained or of the liquidity of the Securities in
any markets made. In addition, the Portfolio may be restricted under the
Investment Company Act of 1940 from selling Securities to the Sponsor. The price
at which the Securities may be sold to meet redemptions and the value of a
Portfolio will be adversely affected if trading markets for the Securities are
limited or absent.
The information set forth below has been extracted from various governmental
and private publications, but no representation can be made as to its accuracy;
furthermore, no representation is made that any correlation exists between the
state of the economy of the United Kingdom and the value of any Securities held
by the United Kingdom Portfolio or between the economy of Hong Kong and the
value of any Securities held by the Hong Kong Portfolio.
UNITED KINGDOM PORTFOLIO
The Portfolio contains common stocks of United Kingdom companies engaged in
such industries as the building materials industry, the food and beverage
industry, the automotive/aviation industry, the transportation industry,
engineering, finance and utilities.
The economy of the United Kingdom is focused upon the private services
sector, which includes the wholesale and retail sector, banking, finance,
insurance and tourism. Services as a whole account for a majority of the United
Kingdom's gross national product and make a significant contribution to the
country's balance of payments. London is one of the world's major financial
centers, with a substantial part of the business international in nature. The
continuance of London as an international financial center is dependent on,
among other things, a favorable regulatory regime and its success against
foreign competition. Current risks affecting the United Kingdom's economy
include over-expansion of the economy, increased taxation and a change of
government.
In addition, the United Kingdom is a member of the European Union (the
"EU"). The EU was established by the Treaty on Economic Union signed at
Maastricht which came into force on November 1, 1994. The aim of the Maastricht
Treaty, as it is sometimes known, is to build on the economic and monetary
integration put in place by the Treaties establishing the European Communities
and to extend the ambit of the EU to matters such as social policy,
international relations and defence. One of the central aims of the Maastricht
Treaty is to accomplish an internal market in the EU. The basic legal framework
to assure the free circulation of goods, services and capital is well advanced
and systematic controls at internal borders on goods, capital and services have
been abolished. The EU now consists of 15 nations, having expanded with the
accession of Sweden, Finland and Austria on January 1, 1995. The EU is a
powerful trade bloc with a combined population of approximately 350 million
people and an annual gross national product of more than $5.5 trillion. The
recent rapid political and social change throughout Europe make the extent and
nature of future economic development in the United Kingdom and Europe and the
impact of such development upon the value of the Securities in the Portfolio
impossible to predict at present. Volatility in oil prices could slow economic
development throughout Western Europe; moreover, it is not possible accurately
to predict the effect of the current political and economic situation upon the
long-term inflation and balance of trade cycles and how these changes would
affect the currency exchange rate between the U.S. dollar and the British pound
sterling.
5
<PAGE>
HONG KONG PORTFOLIO
The Hong Kong Portfolio contains common stocks of companies trading on the
Hong Kong Exchange and engaged in such businesses as hotels, property and real
estate, textiles, telecommunications and utilities.
HONG KONG
The British colony of Hong Kong, established in the 1840's, is situated
adjacent to the southern coast of the People's Republic of China ("China"). It
is currently a colony of the United Kingdom and administered by the Hong Kong
Government, which is headed by a Governor appointed by the Queen on the advice
of the British government. The Hong Kong government generally follows a
laissez-faire policy towards industry. There are limited import and export
restrictions and no foreign exchange restrictions. Regulation of business is
generally less than in other developed countries. A fixed exchange rate regime
exists by which the Hong Kong dollar has been pegged to the U.S. dollar. Over
the ten year period between 1983 and 1993, Real Gross Domestic Product increased
at an average annual rate of approximately 6%.
HONG KONG EXCHANGE
Formal trading of securities was established in Hong Kong in 1891, when the
Association of Stockbrokers in Hong Kong was formed. It was renamed the Hong
Kong Stock Exchange in 1914. In 1969, the Far East Exchange was formed, followed
by the Kam Ngan Stock Exchange in 1971 and the Kowloon Stock Exchange in 1972.
These four exchanges were merged to form the Stock Exchange of Hong Kong Ltd.
(the "Hong Kong Exchange"), which commenced trading on April 2, 1986. The Hong
Kong Exchange is the second largest stock market in Asia, measured by market
capitalization, behind that of Japan. The Securities and Futures Commission,
which was established by the Hong Kong government in May 1989 in response to the
difficulties encountered in Hong Kong's financial markets at the time of the
October 1987 world stock market crash, exercises supervision of the securities,
financial investment and the commodities futures industry.
Jardine Matheson Holdings, the British trading house, and Jardine Strategic
Holdings, Mandarin Oriental International, Hong Kong Land Holdings and Dairy
Farm International Holdings, all Jardine companies, recently delisted their
shares from the Hong Kong Stock Exchange. These five companies represented
almost 10% of the total capitalization of the Hang Seng Index. Additional
changes, mainly necessitated by the delisting of the Jardine companies, were
made with the aim of strengthening the representation of the Hang Seng Index.
The market value coverage of the Index after the changes will remain equal to
approximately 70%. The total number of constituent stocks remains, at 33. Any
future delisting could have an adverse impact on the performance of the
Portfolio. Such delisting would not necessarily result in the disposal of the
stock of these companies, nor would it prevent the Portfolio from purchasing
such Securities in connection with the issuance of Additional Units or the
purchase of additional Securities (see "Administration of the Fund--Portfolio
Supervision").
VOLATILITY OF THE HANG SENG INDEX
Securities prices on the Hang Seng Index can be highly volatile and are
sensitive to developments in Hong Kong and China, as well as other world
markets. For example, in 1989, the Hang Seng Index rose to 3,310 in May from its
previous year-end level of 2,687 but fell to 2,094 in early June following the
events at Tiananmen Square. The Hang Seng Index gradually climbed in subsequent
months but fell by 181 points on October 13, 1989 (approximately 6.5%) following
a substantial fall in the U.S. stock markets, and at the year end closed at a
level of 2,837. There can be no assurance that similar volatility will not be
experienced in the future. Factors which may cause added volatility of the Hang
Seng Index include, but are not limited to, those discussed below. (See
"Additional Hong Kong Risk Factors" below.)
The following table demonstrates the volatility of the Hang Seng Index in
comparison to that of the Financial Times Index and the Dow Jones Industrial
Average by showing for each index the number of trading days during the period
from January 1, 1994 through December 31, 1994 on which the value of the index
in local currency gained or lost 1%, 2% and 3% of its value as of the previous
trading day.
<TABLE>
<CAPTION>
NUMBER OF TRADING DAYS WITH GAINS OR
LOSSES SHOWN
PERCENTAGE -------------------------------------
GAINS OR LOSSES DOW JONES
IN VALUE OF HANG SENG FT INDUSTRIAL
INDEX INDEX INDEX AVERAGE
- -------------------------- --------- --------- ---------------
<S> <C> <C> <C>
1.00 - 1.99%.............. 53 61 29
2.00 - 2.99%.............. 38 3 3
3.00% or more............. 30 -- --
</TABLE>
Previous performance is no guarantee of future results; any index may
display more or less volatility in the future.
HONG KONG REAL ESTATE COMPANIES
The Hong Kong Portfolio is considered to be concentrated in common stocks of
companies engaged in real estate asset management, development, leasing,
property sales and other related activities. Investment in securities issued by
these real estate companies should be made with an understanding of the many
factors which may have an adverse impact on the credit quality of the particular
company or industry. Generally, these include economic recession, the cyclical
nature of real estate markets, competitive overbuilding, the supply of land for
construction made available by the Hong Kong Government, changing demographics,
changes in governmental regulations (including tax laws
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<PAGE>
and environmental, building, zoning and sales regulations), increases in real
estate taxes or costs of material and labor, the inability to secure performance
guarantees or insurance as required, the unavailability of investment capital
and the inability to obtain construction financing or mortgage loans at rates
acceptable to builders and purchasers of real estate. Additional risks include
an inability to reduce expenditures associated with a property (such as mortgage
payments and property taxes) when rental revenue declines, and possible loss
upon foreclosure of mortgaged properties if mortgage payments are not paid when
due.
Recently, in the wake of Chinese economic development and reform, certain
Hong Kong real estate companies and other investors began purchasing and
developing real estate in China, including Beijing, the Chinese capital. By
1992, however, some of the major development areas in China began to experience
a rise in real estate prices and construction costs, a growing supply of real
estate and a tightening of credit markets. The same trend continued in 1993. Any
worsening of these conditions could affect the profitability and financial
condition of Hong Kong real estate companies and could have a materially adverse
effect on the value of the Hong Kong Portfolio. Hong Kong real estate companies
also could be materially adversely affected by other factors, including those
discussed below (see "Additional Hong Kong Risk Factors" below).
ADDITIONAL HONG KONG RISK FACTORS
HONG KONG'S REVERSION TO CHINESE SOVEREIGNTY. In December 1984, Great
Britain and China signed an agreement (the "Sino-British Accord") under which
Hong Kong will revert to Chinese sovereignty effective July 1, 1997. Although
China has committed by treaty to preserve for 50 years the economic and social
freedoms currently enjoyed in Hong Kong, the continuation of the economic system
in Hong Kong after the reversion will be dependent on the Chinese government.
For example, Christopher Patten, who assumed office as British Governor of Hong
Kong in June 1992, has introduced increased democratization of Hong Kong's
legislature. In response, China declared that certain categories of contracts
negotiated by the current Hong Kong government with the private sector would be
void upon the reversion to Chinese sovereignty, unless specifically approved by
China. Any increase in uncertainty as to the future economic status of Hong Kong
could have a materially adverse effect on the value of the Hong Kong Portfolio.
MOST FAVORED NATION STATUS. China (like most other nations) currently enjoys
a most favored nation status ("MFN Status") from the United States, which is
subject to annual review by the President of the United States. On June 2, 1994,
President Clinton signed an executive order which renewed China's MFN Status for
another year. Revocation of the MFN Status would have a severe effect on China's
trade and thus could have a materially adverse effect on the value of the Hong
Kong Portfolio.
OTHER ECONOMIC FACTORS. Hong Kong is subject to a relatively high inflation
rate of approximately 9% per year. Any downturn in economic growth or increase
in the rate of inflation in Hong Kong could have a materially adverse effect on
the value of the Hong Kong Portfolio. In addition, risks resulting from the
$US/$HK pegging could have an adverse effect on the value of the Hong Kong
Portfolio. The performance of certain companies listed on the Hong Kong Exchange
is linked to the economic climate of China. For example, between 1985 and 1990,
Hong Kong businesses invested US$20 billion in the nearby Chinese province of
Guangdong to take advantage of the lower property and labor costs than were
available in Hong Kong. Recently, however, high economic growth in this area
(industrial production grew at an annual rate of about 20% in 1991, 24% in 1992
and 36.5% in 1993) has been associated with rising inflation and concerns about
the devaluation of the Chinese currency. In addition, in 1991 China and Hong
Kong announced the construction of a new airport on Lantau Island, together with
an expansion of the port facilities, to be worth an estimated HK$127 billion and
scheduled for completion around 1997. Any downturn in economic growth or
increase in the rate of inflation in China could have a materially adverse
effect on the value of the Hong Kong Portfolio.
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Trust are (i) to provide income and (ii) to offer
above-average growth potential through an investment for approximately one year
in a fixed diversified portfolio of Securities chosen in the manner described in
the "Summary of Essential Information" in Part A herein. There is, of course, no
guarantee that the Trust's objectives will be achieved. The Trust consists of
such of the Securities listed under "Schedule of Portfolio Securities" as may
continue to be held from time to time in the Trust and any additional Securities
and/or contributed cash acquired and held by the Trust pursuant to the
provisions of the Indenture together with undistributed income therefrom and
undistributed cash realized from the disposition of Securities. (See
"Administration of the Trust".) Neither the Sponsor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Securities.
However, should any contract deposited hereunder fail and no substitute Security
be acquired, the Sponsor shall cause to be refunded the sales charge relating to
such security, plus the pro rata portion of the cost of the failed contract
listed under "Schedule of Portfolio Securities".
Because certain Securities from time to time may be sold or their percentage
reduced under certain circumstances described herein, and because additional
Securities may be deposited into the Trust from time to time, the Trust is not
expected to retain for any length of time its present size and composition. (See
"Administration of the Trust--Portfolio Supervision".)
The Trust is organized as a unit investment trust and not as a management
investment company. Therefore, neither the Trustee nor the Sponsor has the
authority to manage the Trust's assets in an attempt to take advantage of
various market conditions to improve the Trust's net asset value, and further,
the Trust's Securities may be disposed of only under limited circumstances. (See
"Administration of the Trust-- Portfolio Supervision".)
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<PAGE>
There is no assurance that any dividends will be declared or paid in the
future on the Securities initially deposited or to be deposited subsequently in
the Trust.
DISTRIBUTION
The Record Date and the Distribution Dates are set forth in Part A hereto.
(See "Summary of Essential Information".) The distributions will be a U.S.
dollar amount equal to such Unit Holder's pro rata portion of the amount of
dividend income received by the Trust and proceeds of the sale of Portfolio
Securities, including capital gains, not used for the redemption of Units, if
any (less the Trustee's fees, Sponsor's portfolio supervision fees and
expenses). Distributions for the account of beneficial owners of Units
registered in "street name" and held by the Sponsor will be made to the
investment account of such beneficial owners maintained with the Sponsor.
Whenever required for regulatory or tax purposes or if otherwise directed by the
Sponsor, the Trustee may make special distributions on special distribution
dates to Unit Holders of record on special record dates declared by the Trustee.
TAX STATUS OF THE TRUST
As used herein, the term "U.S. Holder" means an owner of a Unit in the
United Kingdom Portfolio or the Hong Kong Portfolio (each, a "Trust") that is
(i) for United States federal income tax purposes a citizen or resident of the
United States, (ii) a corporation organized in or under the laws of the United
States or of any political subdivision thereof, or (iii) an estate, trust or
partnership the income of which is subject to United States federal income
taxation in the hands of the estate, trust or partnership, or the beneficiaries
or partners thereof regardless of its source.
UNITED STATES TAXATION
In the opinion of Cahill Gordon & Reindel, special counsel for the Sponsor,
under existing Federal income tax law:
The Trust is not an association taxable as a corporation for Federal
income tax purposes, and income received by the Trust will be treated as
income of the Unit Holders in the manner set forth below.
Each Unit Holder will be considered the owner of a pro rata portion of
each asset in the Trust under the grantor trust rules of Sections 671-678 of
the Internal Revenue Code of 1986, as amended (the "Code"). A Unit Holder
should determine the tax cost (in U.S. dollars) for each asset represented
by the Holder's Units by allocating the total cost (in U.S. dollars) for
such Units among the assets in the Trust represented by the Units in
proportion to the relative fair market values thereof on the date the Unit
Holder purchases such Units.
A Unit Holder will be considered to have received all of the dividends
paid on the Holder's pro rata portion of each Security when such dividends
are received by the Trust. The amount of the dividend payment will be its
U.S. dollar value based on the exchange rate in effect on the date the
dividend payment is received by the Trust. Dividends considered to have been
received by a Holder will not qualify for the dividends-received deduction
for corporate Holders because the dividends-received deduction is generally
only available for dividends received from domestic corporations.
As stated below under "United Kingdom Taxation," it is unclear whether
in practice U.S. Holders will be able to obtain directly Treaty Payments
(also described below) to which they are entitled under the U.S./U.K. income
tax treaty (the "Treaty"). However, the Inland Revenue has approved a
special procedure whereby the Trustee can claim Treaty Payments on behalf of
U.S. Holders of the U.K. Trust and distribute those payments to Unit
Holders. To the extent the Trustee obtains Treaty Payments, U.S. Holders
will report as gross income earned their pro rata share of dividends
received by the Trust as well as the amount of the associated tax credit
(described below). Such Holders will be entitled to either a foreign tax
credit or deduction for the U.K. tax withheld on such refund, assuming other
limitations on such credit or deduction under the Code do not apply.
Under the position taken by the Internal Revenue Service in Revenue
Ruling 90-7, a distribution by the Trustee to a Unit Holder (or to the
Holder's agent) of such Holder's pro rata share of the Securities in kind
upon redemption or termination of the Trust will not be a taxable event to
the Unit Holder. Such Unit Holder's basis for Securities so distributed will
be equal to the Holder's basis for the same Securities (previously
represented by the Holder's Units) prior to such distribution and the
holding period for such Securities will be the shorter of the period during
which the Unit Holder held the Units and the period for which the Securities
were held in the Trust. A Unit Holder will have a taxable gain or loss,
which will be a capital gain or loss except in the case of a dealer, when
the Unit Holder disposes of such Securities in a taxable transfer.
The amount of the proceeds received by the Trust from a sale or
redemption of an underlying Security will be the U.S. dollar value of the
proceeds based on the exchange rate in effect on the date of disposition. If
the proceeds received by the Trust upon the sale or redemption of an
underlying Security exceed a Unit Holder's adjusted tax cost allocable to
the Security disposed of, that Unit Holder will realize a taxable gain to
the extent of such excess. Conversely, if the proceeds received by the Trust
upon the sale or redemption of an underlying Security are less than a Unit
Holder's adjusted tax cost allocable to the Security disposed of, that Unit
Holder will realize a loss for tax purposes to the extent of such
difference. A capital gain or loss is long term if the asset is held for
more than one year. Under the Code, net capital gain (i.e., the excess of
net long-term capital gain over net short-term capital loss) of individuals,
estates and trusts is
8
<PAGE>
subject to a maximum nominal tax rate of 28%. Such rate, however, will be
unavailable for those individuals who as of the termination of the Trust
have held their Units for less than a year and a day. Such net capital gain
may, however, result in a disallowance of itemized deductions and/or affect
a personal exemption phase-out.
An individual Unit Holder who itemizes deductions will be entitled to an
itemized deduction for the Holder's pro rata share of fees and expenses paid
by the Trust as though such fees and expenses were paid directly by the Unit
Holder, but only to the extent that this amount together with the Unit
Holder's other miscellaneous deductions exceeds 2% of the Holder's adjusted
gross income. A corporate Unit Holder will not be subject to this 2% floor.
Under the income tax laws of the State and City of New York, the Trust
is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unit Holders.
UNITED KINGDOM TAXATION
In the opinion of Slaughter and May, special U.K. counsel to the Sponsors,
based on the terms of the Trust as described in the Prospectus, the following
summary accurately describes certain of the U.K. tax consequences to U.S.
Holders of Units of the United Kingdom Portfolio (the "U.K. Trust"). This
summary is based upon current U.K. law and Inland Revenue practice, the Treaty
and the U.S./U.K. convention relating to estate and gift taxes (the "Estate Tax
Treaty"). The summary is a general guide only and is subject to any changes in
U.K. law, or the practice relating thereto and in the Treaty or Estate Tax
Treaty occurring after the date of this Prospectus which may affect (including
possibly on a retroactive basis) the tax consequences described herein.
TAXATION OF DIVIDENDS--Subject to the comments in the following paragraph,
where a U.K. resident receives a dividend from a U.K. corporation, such resident
is generally entitled to a tax credit (currently equal to one quarter of the
cash dividend received), which may be offset against such resident's U.K. taxes,
or, in certain circumstances, repaid. Under the Treaty, a U.S. Holder who holds
shares in a U.K. corporation directly may, in appropriate circumstances, be
entitled to a repayment of that tax credit, but such repayment is subject to
withholding tax at the rate of 15% of the sum of the dividend and the credit
(the net amount paid being a "Treaty Payment"). It is unclear, however, whether
a U.S. Holder who holds shares in a U.K. corporation indirectly through a trust,
such as the U.K. Trust, would also be entitled to a Treaty Payment where the
dividend payments are made directly to the U.K. Trust. Any claim for such a
Treaty Payment would have to be supported by evidence of each U.S. Holder's
entitlement to the relevant dividend. It is therefore uncertain whether U.S.
Holders would in practice be able to secure the benefit of the Treaty and obtain
Treaty Payments directly from the U.K. Inland Revenue. While no formal procedure
exists generally for trusts to claim Treaty Payments on behalf of unitholders,
the Inland Revenue have confirmed a special procedure whereby they will allow
the Trustee to claim Treaty Payments on behalf of the U.S. Holders of the U.K.
Trust (treating the Trust, instead of the U.S. Holders, as the beneficiary of
the dividend). This concessionary treatment will enable U.S. Holders to benefit
from Treaty Payments without having to file individual claims with the Inland
Revenue and will avoid the uncertainty of whether in practice a U.S. Holder
could obtain a Treaty Payment.
Under the provisions of the Finance Act 1994, after 1st July 1994 a U.K.
company can elect to pay a "foreign income dividend" rather than an ordinary
dividend. If a company whose shares were held in the Portfolio of the Trust pays
a foreign income dividend, no tax credit would be attributable to it and,
therefore, no Treaty Payment could be claimed.
TAXATION OF CAPITAL GAINS--U.S. Holders who are not resident or ordinarily
resident for tax purposes in the U.K. will not be liable for U.K. tax on capital
gains realized on the disposal of their Units unless such units are used, held
or acquired for the purposes of a trade, profession or vocation carried on in
the U.K. through a branch or agency or for the purposes of such branch or
agency.
U.K. INHERITANCE TAX--An individual Holder who is domiciled in the U.S. for
the purposes of the Estate Tax Treaty and who is not a national of the U.K. for
the purposes of the Estate Tax Treaty will not generally be subject to U.K.
inheritance tax in respect of Units in the U.K. Trust on the individual's death
or on a gift of such Units during the individual's lifetime provided that any
applicable U.S. federal gift or estate tax liability is paid, unless the Units
are part of the business property of a permanent establishment of the individual
in the U.K. or pertain to a fixed base in the U.K. used by an individual for the
performance of independent personal services. In the exceptional case where the
Units are subject both to U.K. inheritance tax and to U.S. federal gift or
estate tax, the Estate Tax Treaty generally provides for the tax paid in the
U.K. to be credited against tax paid in the U.S. or for tax paid in the U.S. to
be credited against tax payable in the U.K. based on priority rules set out in
that Treaty.
For the U.S. tax consequences to U.S. Holders, see "United States Taxation."
The taxation of non-U.S. Holders in the U.K. and in their own countries of
residence as a result of their ownership, sale, exchange or other disposition of
Units of the U.K. Trust will be governed by the relevant treaties, if any,
between the countries of residence of such non-U.S. Holders and the U.K. and by
the internal tax laws of such countries.
HONG KONG TAXATION
In the opinion of Slaughter and May, special Hong Kong counsel to the
Sponsor, the following summary accurately describes the Hong Kong tax
consequences under existing law to all U.S. Holders of Units of the Hong Kong
Portfolio ("Hong Kong Trust"). This discussion is for general purposes only and
assumes that such U.S. Holder is not carrying on a trade, profession or business
in Hong Kong and has no profits arising in or derived from Hong Kong in respect
of the carrying on of such trade, profession or business. Holders should consult
their tax advisors as to the Hong Kong tax consequences of ownership of the
Units of the Hong Kong Trust applicable to their particular circumstances.
9
<PAGE>
TAXATION OF DIVIDENDS--Amounts in respect of dividends paid to U.S. Holders
of Units of the Hong Kong Trust are not taxable under current legislation and
practice and therefore will not be subject to the deduction of any withholding
tax.
PROFITS TAX--A U.S. Holder of Units of the Hong Kong Trust (other than a
person carrying on a trade, profession or business in Hong Kong) will not be
subject to profits tax on any gain or profits made on the realization or other
disposal of such Units.
ESTATE DUTY--Ownership of Units of the Hong Kong Trust will not give rise to
a liability to Hong Kong estate duty.
HONG KONG STAMP DUTY--No Hong Kong stamp duty will be payable in respect of
transactions in Units of the Hong Kong Trust.
The foregoing discussion addresses only the Hong Kong tax consequences to
Holders of Units in the Hong Kong Trust. For the U.S. tax consequences to U.S.
Holders, see "United States Taxation." The taxation of non-U.S. Holders in their
own countries of residence as a result of their ownership, sale, exchange or
other disposition of Units in the Hong Kong Trust will be governed by the
internal tax laws of the countries of residence of such non-U.S. Holders.
UNIT HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE ABOVE GENERAL INFORMATION TO THEIR OWN PERSONAL SITUATION.
RETIREMENT PLANS
Units of the Trust may be suited for purchase by Individual Retirement
Accounts and pension plans or profit sharing and other qualified retirement
plans. Investors considering participation in any such plan should review
specific tax laws and pending legislation relating thereto and should consult
their attorneys or tax advisors with respect to the establishment and
maintenance of any such plan.
A qualified retirement plan provides employee retirement benefits and is
funded by contributions from the employer (including contributions by a
self-employed individual, in which case the plan is sometimes called a Keogh
plan). The contributions are, within limits, deductible in determining the
taxable income of the contributing employer for Federal income tax purposes.
Income received by the plan is not taxed when received by it (nor are plan
losses deductible), but distributions from the plan are generally included in
ordinary income of the distributee upon receipt. A lump sum payout of the entire
amount held in such a plan can, however, be eligible for 5 or 10 year averaging.
An individual retirement account (an "IRA") is similar to a qualified
retirement plan but contributions to an IRA up to $2,000 per year ($2,250 if at
least $250 is contributed for the benefit of the worker's non-earning spouse)
are generally made by an individual from earned income, rather than by an
employer. An individual is permitted to contribute to an IRA even though he or
she is also covered by a qualified retirement plan; but, in the case of
higher-income individuals who are active participants in a qualified retirement
plan, IRA contributions are neither currently deductible nor taxed when paid out
by the IRA (although income earned in the IRA is taxed as ordinary income when
distributed). The IRA beneficiary must not have attained age 70 1/2 by the close
of the taxable year for which an IRA contribution is made; and 5 and 10 year
averaging is not allowable for IRA distributions.
Distributions from qualified retirement plans must begin in minimum amounts
no later than the April 1 following the calendar year in which the employee
attains age 70 1/2 or within 5 years after his or her prior death if death
occurs before distributions begin (with later distribution allowed for a
surviving spouse and with lifetime annuity-type payouts to any beneficiary
permitted). Minimum required distributions from IRAs are governed by similar
rules.
Forms and arrangements for establishing qualified retirement plans and IRAs
are available from the Sponsor, as well as from other brokerage firms, other
financial institutions and others. Fees and charges with respect to such plans
and IRAs are not uniform and may vary from time to time as well as from
institution to institution.
Distributions received from a qualified retirement plan or IRA before the
employee attains age 59 1/2 are subject to a 10% additional tax, unless the
distribution is (i) made on or after the employee's death, (ii) attributable to
his disablement, (iii) in the nature of a life annuity, (iv) made to the
employee after separation from service after attainment of age 55, or (v) made
for other reasons specified in the law. Qualifying distributions from a
qualified retirement plan or from an IRA may, however, be rolled over or
transferred to another qualified retirement plan or IRA under specified
circumstances.
The foregoing information is of a general nature, does not purport to be
complete and relates only to the Federal income tax rules applicable to
qualified retirement plans and IRAs. State and local tax rules and foreign tax
regimes may treat qualified retirement plans and IRAs differently. Anyone
contemplating establishing a qualified retirement plan or IRA or investing funds
of such a plan or IRA in Trust units should consult his, her or its tax advisor
with respect to the tax consequences of any such action and the application of
the foregoing general tax information to his, her or its particular situation.
10
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PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is calculated daily and is computed
by adding to the aggregate U.S. dollar market value of the Portfolio Securities
(as determined by the Trustee based on the mid close of the applicable exchange
rate) next computed after receipt of a purchase order, divided by the number of
Units outstanding, the sales charge shown in "Summary of Essential Information".
In order to enable purchasers of Units on the date of this Prospectus to
purchase Units at a Public Offering Price of $10.00 per Unit, the Units
outstanding as of the Evaluation Time on the date of this Prospectus (all of
which are held by the Sponsor) may be split (or split in reverse). Commissions
and any other transactional costs, if any, incurred by the Sponsor in connection
with the deposit of additional Securities or contracts to purchase additional
Securities for the creation of Additional Units will be added to the Public
Offering Price. After the initial Date of Deposit, a proportionate share of
amounts in the Income Account and Principal Account and amounts receivable in
respect of stocks trading ex-dividend (other than money required to be
distributed to Unit Holders on a Distribution Date and money required to redeem
tendered Units) is added to the Public Offering Price. In the event a stock is
trading ex-dividend at the time of deposit of additional Securities, an amount
equal to the dividend that would be received if such stock were to receive a
dividend will be added to the Public Offering Price. The sales charge will
decline over the life of the Trust in the manner described in "Summary of
Essential Information--Public Offering Price". The Public Offering Price per
Unit is calculated to five decimal places and rounded up or down to three
decimal places. The Public Offering Price on any particular date will vary from
the Public Offering Price on the Date of Deposit (set forth in the "Summary of
Essential Information") in accordance with fluctuations in the aggregate market
value of the Securities, the amount of available cash on hand in the Trust, the
amount of certain accrued fees and expenses, changes in the relevant foreign
currency exchange rates and changes in applicable commissions and other costs
associated with foreign trading.
As more fully described in the Indenture, the aggregate U.S. dollar market
value of the Securities is determined on each business day by the Trustee based
on closing prices and relevant currency exchange rates on the day the valuation
is made or, if there are no such reported prices, by taking into account the
same factors referred to under "Redemption--Computation of Redemption Price",
except that the relevant exchange rate used for determining the value of
Securities in foreign currency may include the cost of any forward contract to
purchase the relevant currency. Determinations are effective for transactions
effected subsequent to the last preceding determination. The term business day,
as used herein and under "Redemption", shall exclude Saturdays, Sundays and the
following holidays as observed by the New York Stock Exchange, Inc.: New Year's
Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas Day. In addition, for the United Kingdom
Portfolio, "business day" shall exclude the following United Kingdom holidays:
Easter Monday, May Day, Autumn Bank Holiday, Summer Bank Holiday and Boxing Day;
for the Hong Kong Portfolio, "business day" shall exclude the following Hong
Kong holidays: Lunar New Year's Day and the following day, Ching Ming Festival,
Easter Monday, Queen's Birthday and the following Monday, Tuen Ng Festival,
Summer Bank Holiday, Liberation Day, Chinese Mid-Autumn Festival and the
following day, Chung Yeung Festival and the two weekdays following Christmas
Day.
The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge; thus on the date
of the Summary of Essential Information, the Initial Sales Charge, 0.90% of the
Public Offering Price, is $9 per 100 Units. The Initial Sales Charge paid by a
Unit Holder may be more or less than $9 per 100 Units based on the fluctuation
of the value of the Securities on the date of purchase. The Initial Sales Charge
is deducted from the purchase price at the time of purchase. The Deferred Sales
Charge will initially be $20.00 per 100 Units but will be reduced each month by
one tenth; the Deferred Sales Charge will be paid through monthly payments of
$2.00 per 100 Units per month commencing on the first Deferred Sales Charge
Payment Date as shown on page (ii) through the sale of Securities on each such
date or distribution of cash available for such payment. To the extent the
entire Deferred Sales Charge has not been so paid at the time of repurchase,
redemption or exchange of the Units, any unpaid amount will be deducted from the
proceeds or in calculating an in kind distribution. For purchases of Units with
a value of $50,000 or more, the Initial Sales Charge is reduced on a graduated
basis as shown below under "Volume Discount". Units purchased pursuant to the
Reinvestment Program are subject only to any remaining Deferred Sales Charge
deductions (see "Reinvestment Program").
PUBLIC DISTRIBUTION
Units issued on the Date of Deposit and Additional Units issued in respect
of additional deposits of Securities will be distributed to the public by the
Sponsor and through dealers at the Public Offering Price determined as provided
above. Unsold Units or Units acquired by the Sponsor in the secondary market
referred to below may be offered to the public by this Prospectus at the then
current Public Offering Price determined as provided above.
The Sponsor intends to qualify Units in states selected by the Sponsor for
sale by the Sponsor and through dealers who are members of the National
Association of Securities Dealers, Inc. Sales to dealers during the initial
offering period will be made at prices which reflect a concession of 70% of the
applicable sales charge, subject to change from time to time. In addition, sales
of Units may be made pursuant to distribution arrangements with certain banks
and/or other entities subject to regulation by the Office of the Comptroller of
the Currency (including NationsSecurities, a partnership created pursuant to a
joint venture between NationsBank of North Carolina, N.A. and an affiliate of
the Sponsor) which are acting as agents for their customers. These banks and/or
entities are making Units of the Trust available to their
11
<PAGE>
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to such banks or entities in an amount
equal to the fee customarily received by an agent for acting in such capacity in
connection with the purchase of Units. The Glass-Steagall Act prohibits banks
from underwriting certain securities, including Units of the Trust; however,
this Act does permit certain agency transactions, and banking regulators have
not indicated that these particular agency transactions are impermissible under
this Act. In Texas, as well as certain other states, any bank making Units
available must be registered as a broker-dealer in that State. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units.
SECONDARY MARKET
While not obligated to do so, it is the Sponsor's present intention to
maintain, at its expense, a secondary market for Units of this series of the
Dean Witter Select Equity Trust and to continuously offer to repurchase Units
from Unit Holders at the Sponsor's Repurchase Price. The Sponsor's Repurchase
Price is computed by adding to the aggregate U.S. dollar value of the Securities
in the Trust based on the mid close of the applicable exchange rate, any U.S.
dollar equivalent (based on the mid close of the applicable exchange rate) of
cash on hand in the Trust including dividends receivable on stocks trading
ex-dividend (other than money required to redeem tendered Units and cash
deposited by the Sponsor to purchase Securities or cash held in the Reserve
Account) and deducting therefrom expenses of the Trustee, Sponsor, counsel and
taxes, if any, any remaining unpaid portion of the Deferred Sales Charge and the
U.S. dollar equivalent (based on the mid close of the applicable exchange rate)
of cash held for distribution to Unit Holders of record as of a date on or prior
to the evaluation; and then dividing the resulting sum by the number of Units
outstanding, as of the date of such computation. In addition, after the initial
offering period the Sponsor's Repurchase Price will be reduced to reflect the
Trust's estimated costs of liquidating the Securities to meet redemption
requests. There is no sales charge incurred when a Unit Holder sells Units back
to the Sponsor other than the payment of the unpaid portion of the Deferred
Sales Charge. After the primary offering period, the repurchase and cash
redemption prices will be reduced to reflect the cost to the Trust (estimated as
shown on pages A-(ii) and A-(iii)) of liquidating Securities to meet the
redemption. Any Units repurchased by the Sponsor at the Sponsor's Repurchase
Price may be reoffered to the public by the Sponsor at the then current Public
Offering Price. Any profit or loss resulting from the resale of such Units will
belong to the Sponsor.
If the supply of Units exceeds demand (or for any other business reason),
the Sponsor may, at any time, occasionally, from time to time, or permanently,
discontinue the repurchase of Units of this series at the Sponsor's Repurchase
Price. In such event, although under no obligation to do so, the Sponsor may, as
a service to Unit Holders, offer to repurchase Units at the "Redemption Price".
Alternatively, Unit Holders may redeem their Units through the Trustee.
PROFIT OF SPONSOR
The Sponsor receives a sales charge on Units sold to the public and to
dealers. The Sponsor may have also realized a profit (or sustained a loss) on
the deposit of the Securities in the Trust representing the difference between
the cost of the Securities to the Sponsor and the cost of the Securities to the
Trust (for a description of such profit (or loss) and the amount of such
difference on the initial Date of Deposit see: "Schedule of Portfolio
Securities"). The Sponsor may realize a similar profit (or loss) in connection
with each additional deposit of Securities. In addition, the Sponsor may have
acted as broker in transactions relating to the purchase of Securities for
deposit in the Trust. During the initial public offering period the Sponsor may
realize additional profit (or sustain a loss) due to daily fluctuations in the
U.S. dollar aggregate value of the Securities in the Trust and thus in the
Public Offering Price of Units received by the Sponsor. Cash, if any, received
by the Sponsor from the Unit Holders prior to the settlement date for purchase
of Units or prior to the payment for Securities upon their delivery may be used
in the Sponsor's business and may be of benefit to the Sponsor.
The Sponsor may also realize profits (or sustain losses) while maintaining a
secondary market in the Units, in the amount of any difference between the
prices at which the Sponsor buys Units and the prices at which the Sponsor
resells such Units (such prices include a sales charge) or the prices at which
the Sponsor redeems such Units, as the case may be.
VOLUME DISCOUNT
Although under no obligation to do so, the Sponsor intends to permit volume
purchasers of Units to purchase Units at a reduced sales charge. The Sponsor may
at any time change the amount by which the sales charge is reduced, or may
discontinue the discount altogether.
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The sales charge of 2.90% of the Public Offering Price will be reduced
pursuant to the following graduated scale for sales to any person of at least
$50,000 during the Initial Offering Period but shall not be less than the
Deferred Sales Charge. The sales charge in the secondary market consists of an
Initial Sales Charge which will be reduced pursuant to the following graduated
scale and the remaining portions of the Deferred Sales Charge.
<TABLE>
<CAPTION>
INITIAL OFFERING PERIOD SALES CHARGE
-----------------------------------------------------------------
DOLLAR AMOUNT
PERCENT OF PERCENT OF DEFERRED
PUBLIC OFFERING PRICE NET AMOUNT INVESTED PER 100 UNITS
--------------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than $50,000............................ 2.90% 2.987% $ 20.00
$50,000 to $99,999........................... 20.00
$100,000 to $249,999......................... 20.00
$250,000 or more............................. 2.00 2.041 20.00
</TABLE>
<TABLE>
<CAPTION>
SECONDARY MARKET INITIAL SALES CHARGE
------------------------------------------
PERCENT OF PERCENT OF
PUBLIC OFFERING PRICE NET AMOUNT INVESTED
--------------------- -------------------
<S> <C> <C>
Less than $50,000.................................................. 0.90% 0.908%
$50,000 to $99,999.................................................
$100,000 to $249,999...............................................
$250,000 or more................................................... 0.00 0.000
</TABLE>
The reduced sales charges as shown on the chart above will apply to all
purchases of Units of this Trust on any one day by the same person, partnership
or corporation (other than a dealer), in the amounts stated herein.
Units held in the name of the purchaser's spouse or in the name of a
purchaser's child under the age 21 are deemed for the purposes hereof to be
registered in the name of the purchaser. The reduced sales charges are also
applicable to a trustee or other fiduciary, including a partnership or
corporation purchasing Units for a single trust estate or single fiduciary
account.
The dealer concession will be 70% of the sales charge per Unit.
REDEMPTION
RIGHT OF REDEMPTION
One or more Units represented by a Certificate may be redeemed at the
Redemption Price upon tender of such Certificate to the Trustee at its unit
investment trust office in the City of New York, properly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee (as set forth in the Certificate), and executed by the Unit Holder or
its authorized attorney. A Unit Holder may tender its Units for redemption at
any time after the settlement date for purchase, whether or not it has received
a definitive Certificate. The Redemption Price per Unit is calculated as set
forth under "Computation of Redemption Price". There is no sales charge incurred
when a Unit Holder tenders its Units to the Trustee for redemption other than
the payment of any Deferred Sales Charge then due. The London Stock Exchange and
the Hong Kong Exchange are open for trading on certain days which are U.S.
holidays on which the Trust will not transact business. The Securities will
continue to trade on those days and thus the value of the Portfolios may be
significantly affected on days when a Unit Holder cannot sell or redeem Units.
On the seventh calendar day following the tender to the Trustee of
Certificates representing Units to be redeemed (or if the seventh calendar day
is not a business day, on the first business day day prior thereto) the Unit
Holder will be entitled to receive monies per Unit equal to the Redemption Price
per Unit as determined by the Trustee as of the Evaluation Time next following
the tender of any Unit.
During the period in which the Sponsor maintains a secondary market for
Units, the Sponsor may repurchase any Unit presented for tender to the Trustee
for redemption no later than the close of business on the next business day
following such presentation.
Units will be redeemed by the Trustee solely in cash for any one Unit Holder
tendering less than 2,500 Units. With respect to redemption requests regarding
at least 2,500 Units, the Sponsor may determine, in its discretion, to direct
the Trustee to redeem Units "in kind" by distributing Portfolio Securities to
the redeeming Unit Holder. The Sponsor may direct the Trustee to redeem Units
"in kind" even if it is then maintaining a secondary market in Units of the
Trust. Unit Holders redeeming "in kind" will receive an amount and value of
Trust Securities per Unit equal to the Redemption Price Per Unit as determined
as of the Evaluation Time next following the tender as set forth herein under
"Computation of Redemption Price" below. The distribution "in kind" for
redemption of Units will be held by the Trustee for the account of, and for
disposition in accordance with the instructions of, the tendering Unit Holder.
The tendering Unit Holder will be entitled to receive whole shares of each of
the underlying Portfolio Securities, plus cash equal to the Unit Holder's pro
rata share of the cash balance of the Income and Principal Accounts and cash
from the Principal Account equal to the fractional shares to which such
tendering Unit Holder is entitled. The Trustee, in connection with implementing
the redemption "in kind" procedures outlined above, may make any adjustments
necessary to reflect differences between the Redemption Price of Units and the
value of the Securities distributed "in kind" as of the date of tender. If the
Principal Account does not contain amounts sufficient to cover the required cash
distribution to the tendering Unit Holder, the Trustee is empowered to sell
Securities in the Trust Portfolio in the manner discussed below. A Unit Holder
receiving redemption distributions of Securities "in kind"
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<PAGE>
may incur brokerage costs, odd-lot charges and other charges in converting
Securities so received into cash. The Trustee will assess transfer charges to
Unit Holders taking Securities "in kind" according to its usual practice. Any
stamp duty imposed on the transfer of shares from the United Kingdom Portfolio
or the Hong Kong Portfolio in connection with a redemption "in kind" will be
borne by the redeeming Unit Holder.
The portion of the Redemption Price which represents the Unit Holder's
interest in the Income Account shall be withdrawn from the Income Account to the
extent available. The balance paid on any redemption, including dividends
receivable on stocks trading ex-dividend, if any, shall be drawn from the
Principal Account to the extent that funds are available for such purpose. The
Trustee is authorized by the Agreement to sell Securities in order to provide
funds for redemption. To the extent Securities are sold, the size and diversity
of the Trust will be reduced. Such sales may be required at the time when
Securities would not otherwise be sold and might result in lower prices than
might otherwise be realized. The Redemption Price received by a tendering Unit
Holder may be more or less than the purchase price originally paid by such Unit
Holder, depending on the value of the Securities in the Portfolio at the time of
redemption. Moreover, due to the minimum lot size in which Securities may be
required to be sold, the proceeds of such sales may exceed the amount necessary
for payment of Units redeemed. Such excess proceeds will be distributed pro rata
to all remaining Unit Holders of record on the Distribution Date.
Securities to be sold for purposes of redeeming Units will be selected from
a list supplied by the Sponsor. If not so instructed by the Sponsor, the Trustee
will select the Securities to be sold so as to maintain, as closely as
practicable, the proportionate relationship between the number of shares of each
Security in the Trust.
COMPUTATION OF REDEMPTION PRICE
The Trust Evaluation per Unit is determined as of the Evaluation Time stated
under "Summary of Essential Information" above and (a) semiannually, on the last
business day of each of the months of June and December, (b) on the business day
on which any Unit of the Trust is tendered for redemption (unless tender is made
after the Evaluation Time on such day, in which case Tender shall be deemed to
have been made on the next business day subsequent thereto) and (c) on any other
business day desired by the Sponsor or the Trustee, (1) by adding:
a. The aggregate U.S. dollar value of Securities in the Trust (based on
the mid close of the applicable exchange rate), as determined by the
Trustee;
b. The U.S. dollar equivalent (based on the mid close of the applicable
exchange rate) of cash on hand in the Trust, including dividends receivable
on stocks trading ex-dividend, other than money deposited to purchase
Securities or money credited to the Reserve Account;
c. All other assets of the Trust.
(2) and then, by deducting from the resulting figure: amounts representing
the U.S. dollar equivalent (based on the mid close of the applicable exchange
rate) of any applicable taxes or governmental charges payable by the Trust for
the purpose of making an addition to the reserve account (as defined in the
Agreement, the "Reserve Account"), amounts representing estimated accrued fees
and expenses of the Trust (including legal and auditing expenses), amounts
representing unpaid fees of the Trustee, the Sponsor and counsel, any remaining
unpaid portion of the Deferred Sales Charge and monies held to redeem tendered
Units and for distribution to Unit Holders of record as of the business day
prior to the Evaluation being made on the days or dates set forth above and
then;
(3) by dividing the result of the above computation by the total number of
Units outstanding on the date of such Evaluation. The resulting figure equals
the Redemption Price for each Unit.
In addition, after the initial offering period, the Redemption Price will be
reduced to reflect the Trust's estimated costs of liquidating the Securities to
meet the redemption.
The aggregate value of the Securities shall be determined by the Trustee in
good faith in the following manner: If the Securities are listed on one or more
national securities exchanges, such valuation shall be based on the U.S. dollar
equivalent closing price (based on the applicable exchange rate) on such
exchange which is the principal market thereof deemed to be the London Stock
Exchange for the Securities in the United Kingdom Portfolio or the Hong Kong
Stock Exchange for the Securities in the Hong Kong Portfolio if the Securities
are listed thereon (unless the Trustee deems such price inappropriate as a basis
for valuation). If the Securities are not so listed, or, if so listed and the
principal market therefor is other than such exchange or there is no closing
price on such exchange, such valuation shall be based on the U.S. dollar
equivalent closing price (based on the applicable exchange rate) in the
over-the-counter market (unless the Trustee deems such price inappropriate as a
basis for valuation) or if there is no such closing price, by any of the
following methods which the Trustee deems appropriate: (i) on the basis of U.S.
dollar equivalent current bid prices (based on the applicable exchange rate) of
such Securities as obtained from investment dealers or brokers (including the
Depositor) who customarily deal in securities comparable to those held by the
Trust, or (ii) if such bid prices are not available for any of such Securities,
on the basis of U.S. dollar equivalent bid prices (based on the applicable
exchange rate) for comparable securities, or (iii) by appraisal of the value of
the Securities on the bid side of the market or by such other appraisal as is
deemed appropriate, or (iv) by any combination of the above. The relevant
exchange rate used for evaluations of the Securities will include the cost of
any forward foreign exchange contract in the relevant currency to correspond to
the Trustee's settlement requirement for redemption requests.
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<PAGE>
POSTPONEMENT OF REDEMPTION
The right of redemption may be suspended and payment of the Redemption Price
per Unit postponed for more than seven calendar days following a tender of Units
for redemption (i) for any period during which the New York Stock Exchange, Inc.
is closed, other than for customary weekend and holiday closings, or (ii) for
any period during which, as determined by the Securities and Exchange
Commission, either trading on the New York Stock Exchange, Inc. is restricted or
an emergency exists as a result of which disposal or evaluation of the
Securities is not reasonably practicable, or (iii) for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee is not
liable to any person or in any way for any loss or damage that may result from
any such suspension or postponement.
EXCHANGE OPTION
Unit Holders of any Dean Witter Select Trust or any holders of units of any
other unit investment trust (collectively, "Holders") may elect to exchange any
or all of their units for units of one or more of any series of the Dean Witter
Select Equity Trust or for units of any other Dean Witter Select Trusts, that
may from time to time be made available for such exchange by the Sponsor (the
"Exchange Trusts"). Such an exchange is implemented by a sale of the Units and a
purchase of units of an Exchange Trust. Such units may be acquired at prices
based on reduced sales charges per unit. The purpose of such reduced sales
charge is to permit the Sponsor to pass on to the Holder who wishes to exchange
units the cost savings resulting from such exchange. The cost savings result
from reductions in time and expense related to advice, financial planning and
operational expense required for the Exchange Option. The following Exchange
Trusts are currently available: the Dean Witter Select Municipal Trust, the Dean
Witter Select Government Trust, the Dean Witter Select Equity Trust, the Dean
Witter Select Investment Trust and the Dean Witter Select Corporate Trust.
Each Exchange Trust has different investment objectives: a Holder should
read the Prospectus for the applicable Exchange Trust carefully to determine the
investment objective prior to exercise of this option.
This option will be available provided the Sponsor maintains a secondary
market in units of the applicable Exchange Trust and provided that units of the
applicable Exchange Trust are available for sale and are lawfully qualified for
sale in the state in which the Holder is a resident. While it is the Sponsor's
present intention to maintain a secondary market for the units of Exchange
Trusts, there is no obligation on its part to do so. Therefore, there is no
assurance that a market for units will in fact exist on any given date in which
a Holder wishes to sell or exchange Units; thus, there is no assurance that the
Exchange Option will be available to any Unit Holder. The Sponsor reserves the
right to modify, suspend or terminate this option. Sixty days notice will be
given prior to the date of the termination of or a material amendment to the
Exchange Option except that no notice need be given in certain circumstances
approved by the Securities and Exchange Commission. In the event the Exchange
Option is not available to a Unit Holder at the time such Unit Holder wishes to
exercise such option, the Unit Holder will be immediately notified and no action
will be taken with respect to such tendered Units without further instruction
from the Unit Holder.
Exchanges will be affected in whole units only. Any excess proceeds from the
surrender of a Unit Holder's Units will be returned. Alternatively, Unit Holders
will be permitted to make up any difference between the amount representing the
Units being submitted for exchange and the amount representing the units being
acquired up to the next highest number of whole units.
An exchange of Units pursuant to the Exchange Option will constitute a
"taxable event" under the Code, i.e., a Holder will recognize a gain or loss at
the time of exchange, except that upon an exchange of Units for units of any
series of the Exchange Trusts which are grantor trusts for U.S. federal income
tax purposes the Internal Revenue Service may seek to disallow any loss incurred
upon such exchange to the extent that the underlying securities in each Trust
are substantially identical and the purchase of the units of an Exchange Trust
takes place less than thirty-one days after the sale of the Units. In order to
avoid the potential disallowance of losses for tax purposes, a Unit Holder may
notify the Sponsor that the Unit Holder desires to purchase units of the
Exchange Trust on the thirty-first day after the day of the sale of the units
exchanged. The proceeds of the Units surrendered will be deposited in the Unit
Holder's brokerage account at the Sponsor and may be withdrawn at any time. Cash
from the account will be utilized to purchase units of the Exchange Trust on the
thirty-first day after the day of sale of the Units exchanged in accordance with
the procedures set forth above. A Unit Holder may revoke the order to purchase
at any time prior to the purchase on the thirty-first day by calling his
financial advisor. Units will be purchased at a price based upon the net asset
value per unit plus the applicable sales charge of 2.0%. However, there can be
no assurance that a market for units will exist on such date or that units will
be available for purchase on such date. If units are unavailable, the Sponsor
may acquire units in the secondary market or create units as soon as possible
thereafter, which units will be sold by the Sponsor based on the net asset value
on the date of purchase of the units plus the applicable sales charge of 2.0%.
The order does not create a contract or option to acquire units. If units are
not held in the Sponsor's inventory on the 31st day or if the Sponsor does not
create additional units or is unable to acquire units in the secondary market,
units of the Exchange Trust will not be purchased and the cash will remain in
the Unit Holder's account. A Unit Holder who exchanges Units of one Trust for
units of another Trust should consult his or her tax advisor regarding the
extent to which such exchange results in the recognition of a loss for Federal
and/or state or local income tax purposes.
To exercise the Exchange Option, a Unit Holder should notify the Sponsor of
the desire to acquire units of one or more of the Exchange Trusts. Upon the
exchange of Units of the Trust, and Deferred Sales Charge balance will be
deducted from the exchange proceeds. If units of the
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<PAGE>
applicable outstanding series of the Exchange Trust are at that time available
for sale, the Unit Holder may select the series or group of series for which the
Units are to be exchanged. The Unit Holder will be provided with a current
prospectus or prospectuses relating to each series in which interest is
indicated.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, I.E., Units will be repurchased at a price
based upon the aggregate bid side evaluation per Unit of the Securities in the
Portfolio. Units of the Exchange Trust will be sold to the Unit Holder at a
price equal to the net asset value based on the offering or bid side evaluation
(as applicable) per unit of the securities in the Exchange Trust's Portfolio,
plus accrued interest, if any, and the applicable sales charge of 2.0% of the
Public Offering Price per Unit. If the Exchange Trust is a Series of Dean Witter
Select Equity Trust Select 10 International Series the applicable sales charge
on such Trust will be the deferred sales charge of such Trust.
REINVESTMENT PROGRAM
Unit Holders may elect to have the distributions with respect to their Units
automatically reinvested in additional Units of the Trust subject only to any
remaining portions of the Deferred Sales Charge. (Reinvestment Units are not
subject to the Initial Sales Charge.) The Unit Holder may participate in the
Trust's reinvestment program (the "Program") by filing with the Trustee a
written notice of election. The Unit Holder's completed notice of election to
participate in the Program must be received by the Trustee at least ten days
prior to the Record Date applicable to any distribution in order for the Program
to be in effect as to such distribution. Elections may be modified or revoked on
similar notice.
Such distributions, to the extent reinvested in the Trust, will be used by
the Trustee at the direction of the Sponsor in one or both of the following
manners: (i) the distributions may be used by the Trustee to purchase Units of
this Series of the Trust held in the Sponsor's inventory. The purchase price
payable by the Trustee for each of such Units will be equal to the applicable
Trust evaluation per Unit on (or as soon as possible after) the close of
business on the Distribution Date. The Units so purchased by the Trustee will be
issued or credited to the accounts of Unit Holders participating in the Program,
(ii) if there are no Units in the Sponsor's inventory, the Sponsor may purchase
additional Securities for deposit into the Trust (as described in "Prospectus
Part B--Introduction.") The additional Securities with any necessary cash will
be deposited by the Sponsor with the Trustee in exchange for new Units. The
distributions may then be used by the Trustee to purchase the new Units from the
Sponsor. The price for such new Units will be the applicable Trust evaluation
per Unit on (or as soon as possible after) the close of business on the
Distribution Date. (See "Public Offering of Units--Public Offering Price.") The
Units so purchased by the Trustee will be issued or credited to the accounts of
Unit Holders participating in the Program. The Sponsor may terminate the Program
if it does not have sufficient Units in its inventory or it is no longer deemed
practical to create additional Units.
No fractional Units will be issued under any circumstances. If, after the
maximum number of full Units has been issued or credited at the applicable
price, there remains a portion of the distribution which is not sufficient to
purchase a full Unit at such price, the Trustee will distribute such cash to
Unit Holders. The cost of administering the reinvestment program will be borne
by the Trust and thus will be borne indirectly by all Unit Holders.
RIGHTS OF UNIT HOLDERS
UNIT HOLDERS
A Unit Holder is deemed to be a beneficiary of the Trust created by the
Indenture and Agreement and vested with all right, title and interest in the
Trust created therein. A Unit Holder may at any time tender its Certificate to
the Trustee for redemption.
Ownership of Units is evidenced by registered Certificates of Beneficial
Interest issued in denominations of one or more Units and executed by the
Trustee and the Sponsor. These Certificates are transferable or interchangeable
upon presentation at the unit investment trust office of the Trustee, properly
endorsed or accompanied by an instrument of transfer satisfactory to the Trustee
and executed by the Unit Holder or its authorized attorney, together with the
payment of $2.00, if required by the Trustee, or such other amount as may be
determined by the Trustee and approved by the Sponsor, and any other tax or
governmental charge imposed upon the transfer of Certificates. The Trustee will
replace any mutilated, lost, stolen or destroyed Certificate upon proper
identification, satisfactory indemnity and payment of charges incurred. Any
mutilated Certificate must be presented to the Trustee before any substitute
Certificate will be issued.
Under the terms and conditions and at such times as are permitted by the
Trustee, Units may also be held in uncertificated form. The rights of any holder
of Units held in uncertificated form shall be the same as those of any other
Unit Holder.
CERTAIN LIMITATIONS
The death or incapacity of any Unit Holder will not operate to terminate the
Trust nor entitle the legal representatives or heirs of such Unit Holder to
claim an accounting or to take any other action or proceeding in any court for a
partition or winding up of the Trust.
No Unit Holder shall have the right to vote except with respect to removal
of the Trustee or amendment and termination of the Trust. (See: "Administration
of the Trust--Amendment" and "Administration of the Trust--Termination".) Unit
Holders shall have no right to control the
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operation or administration of the Trust in any manner, except upon the vote of
51% of the Unit Holders outstanding at any time for purposes of amendment, or
termination of the Trust or discharge of the Trustee, all as provided in the
Agreement; however, no Unit Holder shall ever be under any liability to any
third party for any action taken by the Trustee or Sponsor. Unit Holders will be
unable to dispose of any of the Securities in the Portfolio, as such, and will
not be able to vote the Securities. The Trustee, as holder of the Securities,
will have the right to vote all of the voting Securities held in the Trust, and
will vote such Securities in accordance with the instructions of the Sponsor, if
given, otherwise the Trustee shall vote as it, in its sole discretion, shall
determine.
EXPENSES AND CHARGES
INITIAL EXPENSES
All expenses and charges incurred prior to or in the establishment of the
Trust including the cost of the initial preparation, printing and execution of
the Indenture and Agreement and the Certificates, initial legal and auditing
expenses, the cost of the preparation and printing of this Prospectus and all
other advertising and selling expenses, have, or will be paid by the Sponsor and
not by the Trust.
FEES
The Sponsor's fee, earned for portfolio supervisory services, is based upon
the largest number of Units outstanding during the semiannual computation
period. The Sponsor's fee is as set forth in "Summary of Essential Information"
may exceed the actual costs of providing portfolio supervisory services for this
Trust, but at no time will the total amount the Sponsor receives for portfolio
supervisory services rendered to all series of the Dean Witter Select Equity
Trust in any calendar year exceed the aggregate cost to it of supplying such
services in such year.
Under the Indenture and Agreement for its services as Trustee and evaluator,
the Trustee receives the fee set forth in "Summary of Essential Information".
Certain regular expenses of the Trust, including certain mailing and printing
expenses, are borne by the Trust.
The Sponsor's fee and the Trustee's fees accrue daily but are payable only
on or before each Distribution Date from the Income Account, to the extent funds
are available and thereafter from the Principal Account. Any of such fees may be
increased without approval of the Unit Holders in proportion to increases under
the classification "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if no longer published, a
similar index. The Trustee, pursuant to normal banking procedures, also receives
benefits to the extent that it holds funds on deposit in various non-interest
bearing accounts created under the Indenture and Agreement.
OTHER CHARGES
The following additional charges are or may be incurred by the Trust as more
fully described in the Indenture and Agreement: (a) fees of the Trustee for
extraordinary services, (b) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (c) various
governmental charges, (d) expenses and costs of any action taken by the Trustee
to protect the Trust and the rights and interests of the Unit Holders, (e)
indemnification of the Trustee for any loss, liability or expenses incurred by
it in the administration of the Trust without gross negligence, bad faith,
wilful malfeasance or wilful misconduct on its part or reckless disregard of its
obligations and duties, (f) indemnification of the Sponsor for any losses,
liabilities and expenses incurred in acting as Sponsor or Depositor under the
Agreement without gross negligence, bad faith, wilful malfeasance or wilful
misconduct or reckless disregard of its obligations and duties, (g) expenditures
incurred in contacting Unit Holders upon termination of the Trust, and (h)
brokerage commissions or charges incurred in connection with the purchase or
sale of Securities.
The fees and expenses set forth herein are payable out of the Trust and when
so paid by or owing to the Trustee are secured by a lien on the Trust. Dividends
on the Securities are expected to be sufficient to pay the estimated expenses of
the Trust. If the balances in the Income and Principal Account are insufficient
to provide for amounts payable by the Trust, the Trustee has the power to sell
Securities to pay such amounts. To the extent Securities are sold, the size of
the Trust will be reduced and the proportions of the types of Securities may
change. Such sales might be required at a time when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. Moreover, due to the minimum lot size in which Securities may be
required to be sold, the proceeds of such sales may exceed the amount necessary
for the payment of such fees and expenses.
ADMINISTRATION OF THE TRUST
RECORDS AND ACCOUNTS
The Trustee will keep records and accounts of all transactions of the Trust
at its unit investment trust office at 101 Barclay Street, New York, New York
10286. These records and accounts will be available for inspection by Unit
Holders at reasonable times during normal business hours. The Trustee will
additionally keep on file for inspection by Unit Holders an executed copy of the
Indenture and Agreement together with a current list of the Securities then held
in the Trust.
17
<PAGE>
DISTRIBUTION
Dividends payable to the Trust as a holder of record of its Securities are
credited by the Trustee to an Income Account (after conversion into U.S. dollars
at an estimate of the exchange rate to be applicable upon receipt of the
dividends), as of the date on which the Trust is entitled to receive such
dividends. Other receipts, including return of investment and gain and amounts
received upon the sale, pursuant to the Indenture and Agreement, of rights to
purchase other Securities distributed in respect of the Securities in the
Portfolio, are credited to a Principal Account (after conversion into U.S.
dollars at the applicable rates). Any distribution for each Unit Holder as of
the Record Date will be made on the Distribution Date or shortly thereafter and
shall consist of an amount approximately equal to the dividend income per Unit,
after deducting estimated expenses, if any, plus such Holder's pro rata share of
the distributable cash balance of the Principal Account and after any adjustment
necessary to reflect changes in currency exchange rates. Proceeds received from
the disposition of any of the Securities which are not used for redemption of
Units will be held in the Principal Account to be distributed on the
Distribution Date following receipt of such proceeds. No distribution need be
made from the Principal Account if the balance therein is less than $1.00 per
100 Units outstanding. The amount received on a Distribution Date will change
with fluctuations in the relevant dividend rates and in the applicable currency
exchange rates as Securities are sold or as substitution Securities are
purchased. A Reserve Account may be created by the Trustee by withdrawing from
the Income or Principal Accounts, from time to time, such amounts as it deems
requisite to establish a reserve for any taxes or other governmental charges
that may be payable out of the Trust. Funds held by the Trustee in the various
accounts created under the Indenture are non-interest bearing to Unit Holders.
On each Deferred Sales Charge Payment Date Securities may be sold pro rata
in an amount equal to $2.00 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor.
The Trustee will follow a policy that it will place securities acquisition
or disposition transactions with a broker or dealer only if it expects to obtain
the most favorable prices and executions of orders. Transactions in securities
held in the Trust are generally made in brokerage transactions (as distinguished
from principal transactions) and the Sponsor may act as broker therein and
receive commissions thereon if the Trustee expects thereby to obtain the most
favorable prices and execution. The furnishing of statistical and research
information to the Trustee by any of the securities dealers through which
transactions are executed will not be considered in placing securities
transactions.
PORTFOLIO SUPERVISION
The original proportionate relationship between the number of shares of each
Security in the Trust will be adjusted to reflect the occurrence of a stock
dividend, a stock split, merger, reorganization or a similar event which affects
the capital structure of the issuer of a Security in the Trust but which does
not affect the Trust's percentage ownership of the common stock equity of such
issuer at the time of such event. If the Trust receives the securities of
another issuer as the result of a merger or reorganization of, or a spin-off,
split-off or split-up by the issuer of a Security included in the original
portfolio, the Trust may hold those securities as if they were one of the
Securities initially deposited and adjust the proportionate relationship
accordingly for all future subsequent deposits. The Portfolio of the Trust is
not "managed" by the Sponsor or the Trustee; their activities described below
are governed solely by the provisions of the Indenture and Agreement. The
Sponsor may direct the Trustee to dispose of Securities upon failure of the
issuer of a Security in the Trust to declare or pay anticipated cash dividends,
institution of certain materially adverse legal proceedings, default under
certain documents materially and adversely affecting future declaration or
payment of dividends, or the occurrence of other market or credit factors that
in the opinion of the Sponsor would make the retention of such Securities in the
Trust detrimental to the interests of the Unit Holders. The Sponsor will direct
the Trustee to sell Securities to pay portions of the Deferred Sales Charge.
Except as otherwise discussed herein, the acquisition of any Securities for the
Trust other than those initially deposited and deposited in order to create
additional Units, is prohibited. The Sponsor is authorized under the Indenture
to direct the Trustee to invest the proceeds of any sale of Securities not
required for the redemption of Units in eligible money market instruments
selected by the Sponsor which will include only negotiable certificates of
deposit or time deposits of domestic banks which are members of the Federal
Deposit Insurance Corporation and which have, together with their branches or
subsidiaries, more than $2 billion in total assets, except that certificates of
deposit or time deposits of smaller domestic banks may be held provided the
deposit does not exceed the insurance coverage on the instrument (which
currently is $100,000), and provided further that the Trust's aggregate holding
of certificates of deposit or time deposits issued by the Trustee may not exceed
the insurance coverage of such obligations and U.S. Treasury notes or bills
(which shall be held until the maturity thereof) each of which matures prior to
the earlier of the next following Distribution Date or 90 days after receipt,
the principal thereof and interest thereon (to the extent such interest is not
used to pay Trust expenses) to be distributed on the earlier of the 90th day
after receipt or the next following Distribution Date.
During the life of the Trust, the Sponsor, as part of its administrative
responsibilities, shall conduct reviews to determine whether or not to recommend
the disposition of Securities. In addition, the Sponsor shall undertake to
perform such other reviews and procedures as it may deem necessary in order for
it to give the consents and directions, including directions as to voting on the
underlying Securities, required by the Indenture and Agreement. For the
administrative services performed in making such recommendations and giving such
consents and directions, and in making the reviews called for in connection
therewith the Sponsor shall receive the portfolio supervisory fee referred to
under "Summary of Essential Information".
18
<PAGE>
VOTING OF THE PORTFOLIO SECURITIES
Pursuant to the Indenture and Agreement, voting rights with respect to the
Portfolio Securities and Replacement Securities, if any, will be exercised by
the Trustee in accordance with the Indenture or the directions given by the
Sponsor.
REPORTS TO UNIT HOLDERS
With each distribution, the Trustee will furnish to Unit Holders a statement
of the amount of income and other receipts distributed, including the proceeds
of the sale of the Securities (including the sale of any Securities to pay
portions of the Deferred Sales Charge), expressed in each case as a dollar
amount per Unit.
Within a reasonable period of time after the last business day in each
calendar year, but not later than February 15, the Trustee will furnish to each
person who at any time during such calendar year was a Unit Holder of record a
statement setting forth:
1. As to the Income and Principal Account:
(a) the amount of income received on the Securities;
(b) the amount paid for redemption of Units;
(c) the deductions for applicable taxes or other governmental
charges, if any, and fees and expenses of the Sponsor, the Trustee and
counsel;
(d) the deductions of portions of the Deferred Sales Charge;
(e) the amounts distributed from the Income Account;
(f) any other amount credited or deducted from the Income Account;
and
(g) the net amount remaining after such payments and deductions
expressed both as a total dollar amount and as a dollar amount per Unit
outstanding on the last business day of such calendar year.
2. The following information:
(a) a list of the Securities as of the last business day of such
calendar year;
(b) the number of Units outstanding as of the last business day of
such calendar year;
(c) the Unit Value (as defined in the Agreement) based on the last
Evaluation made during such calendar year; and
(d) the amounts actually distributed during such calendar year from
the Income and Principal Accounts, separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit outstanding on the
Record Dates for such distributions.
AMENDMENT
The Indenture and Agreement may be amended from time to time by the Trustee
and the Sponsor or their respective successors, without the consent of any of
the Unit Holders (a) to cure any ambiguity or to correct or supplement any
provision contained therein which may be defective or inconsistent with any
other provision contained therein; (b) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency exercising similar authority; or (c) to make such other provision in
regard to matters or questions arising thereunder as shall not adversely affect
the interest of the Unit Holders; provided, that the Indenture and Agreement may
also be amended from time to time by the parties thereto (or the performance of
any of the provisions of this Indenture and Agreement may be waived) with the
expressed written consent of Unit Holders evidencing 51% of the Units at the
time outstanding under the Indenture and Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture and Agreement or of modifying in any manner the rights of the Unit
Holders; provided, further however, that the Indenture and Agreement may not be
amended (nor may any provision thereof be waived) so as to (1) increase the
number of Units issuable in respect of the Trust above the aggregate number
specified in Part II of the Agreement or such lesser amount as may be
outstanding at any time during the term of the Indenture except as the result of
the deposit of Additional Securities, as therein provided, or reduce the
relative interest in the Trust of any Unit Holder without his consent, (2)
permit the deposit or acquisition thereunder of securities or other property
either in addition to or in substitution for any of the Securities except in the
manner permitted by the Trust Indenture as in effect on the date of the first
deposit of Securities or permit the Trustee to engage in business or investment
activities not specifically authorized in the Indenture and Agreement as
originally adopted or (3) adversely affect the characterization of the Trust as
a grantor trust for federal income tax purposes.
TERMINATION
The Indenture and Agreement provides that the Trust will be liquidated
during the Liquidation Period as set forth under "Summary of Essential
Information" and terminated at the end of such period. Additionally, if the
value of the Trust as shown by any Evaluation is less than forty percent (40%)
of the value of the Securities deposited in the Trust on the Date of Deposit and
thereafter, the Trustee will, if directed by the
19
<PAGE>
Sponsor in writing, terminate the Trust. The Trust may also be terminated at any
time by the written consent of Unit Holders owning 51% or more of the Units then
outstanding. Unit Holders will receive their final distributions (that is, their
pro rata distributions realized from the sale of Portfolio Securities plus any
other Trust assets, less Trust expenses) according to their Election
Instructions. The Election Instructions will provide for the following
distribution options: (1) cash distributions; (2) distributions "in kind"
available only to any Unit Holder owning at least 2,500 Units; or (3) to invest
the distributions attributable to the Unit Holder in units of a subsequent
series of the Dean Witter Select Equity Trust as designated by the Sponsor (the
"New Series") if such New Series is offered at such time (the "Rollover Option")
Unit Holders who do not tender properly completed Election Instructions to the
Trustee will be deemed to have elected a cash distribution.
Cash or "IN KIND" Distributions. Unit Holders holding less than 2,500 Units
will receive distributions in respect of their Units at termination solely in
cash. Unit Holders holding at least 2,500 Units may indicate to the Trustee that
they wish to receive termination distributions "in kind", by returning to the
Trustee properly completed Election Instructions distributed by the Trustee to
such Unit Holders of record 45 days prior to the Termination Date. The Trustee
will duly honor such election instructions received on or before the Mandatory
Termination Date. Such Unit Holder will be entitled to receive whole shares of
each of the underlying Portfolio Securities and cash from the Principal Account
equal to the fractional shares to which such tendering Unit Holder is entitled.
A Unit Holder receiving distributions of Securities "in kind" may incur
brokerage and odd-lot costs in converting Securities so received into cash. The
Trustee will transfer the Securities to be delivered in kind to the account of,
and for disposition in accordance with the instructions of, the Unit Holder.
THE ROLLOVER OPTION. A Unit Holder may elect to invest the distributions
attributable to the Unit Holder in units of a New Series subject only to the
deferred sales charge of the New Series. It is expected that the terms of the
New Series will be substantially the same as the terms of the Trust described in
this Prospectus, and that similar options in a subsequent series of the Trust
will occur in each New Series of the Trust approximately one year after that New
Series' creation. The availability of this option does not constitute a
solicitation of an offer to purchase Units of a New Series or any other
security. A Unit Holder's election to participate in this option will be treated
as an indication of interest only. At any time prior to the purchase by the Unit
Holder of units of a New Series, such Unit Holder may change his investment
strategy and receive, in cash, the proceeds of the sale of the Securities.
METHOD OF SECURITIES DISPOSAL. The Trustee will begin to sell the remaining
Securities held in the Trust on the next business day following the In-Kind
Date. Since the Trust is not managed, Securities in the Portfolio must be sold
in accordance with the Indenture, which provides for sales over a period of days
or on any one day during the Liquidation Period set forth in the "Summary of
Essential Information". Daily proceeds of such sales will be deposited into the
Trust, will be held in a non-interest bearing account until distributed and will
be of benefit to the Trustee. The sales of Portfolio Securities may tend to
depress the market prices for such Securities and thus reduce the proceeds
available to Unit Holders. The Sponsor believes that gradual liquidation of
Securities during the Liquidation Period may mitigate negative market price
consequences stemming from the trading of large volumes of Securities over a
short period of time. There can be no assurance, however, that such procedures
will effectively mitigate any adverse price consequences of heavy volume trading
or that such procedures will produce a better price for Unit Holders than might
have been obtained had all the Securities been sold on one particular day during
the Liquidation Period.
The Trustee will, after deduction of brokerage charges and costs incurred in
connection with the sale of Securities, any fees and expenses of the Trust and
payment into the Reserve Account of any amount required for taxes or other
governmental charges that may be payable by the Trust, distribute to each Unit
Holder, upon surrender for cancellation of its Certificate after due notice of
such termination, such Unit Holder's pro rata share in the Income and Principal
Accounts. The sale of 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. For this reason, among others, the amount realized by a Unit Holder
upon termination may be less than the amount paid by such Unit Holder for Units.
Section 17(a) of the Investment Company Act of 1940 restricts purchases and
sales between affiliates of registered investment companies and those companies.
Pursuant to a recent exemptive order, each terminating Select 10 Industrial
Portfolio Series can now sell securities to the next Series if those securities
continue to meet the Select 10 Strategy by remaining among the ten highest
dividend-yielding securities. The exemption will enable each Series to eliminate
commission costs on these transactions. The price for those securities will be
the closing sale price on the sale date on the exchange where the securities are
principally traded, as certified and confirmed by the Trustee of each Series.
RESIGNATION, REMOVAL AND LIABILITY
REGARDING THE TRUSTEE
The Trustee shall be under no liability for any action taken in good faith
in reliance on prima facie properly executed documents or for the disposition of
monies or Securities in the Trust, nor shall the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the
disposition of any Securities by the Trustee. However, the Trustee shall be
liable for wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under the Indenture and Agreement. In the event of a failure of the
Sponsor to act, the Trustee may act under the Indenture and Agreement and shall
not be liable for any such action taken by it in good faith. The Trustee shall
not be personally liable for any taxes or other governmental charges imposed
upon the
20
<PAGE>
Trust or in respect of the Securities or the interest thereon. The Agreement
also contains other customary provisions limiting the liability of the Trustee
and providing for the indemnification of the Trustee for any loss or claim
accruing to it without gross negligence, bad faith, wilful misconduct, wilful
misfeasance or reckless disregard of its duties and obligations under the
Agreement on its part.
The Trustee or any successor may resign by executing an instrument in
writing, filing the same with the Sponsor and mailing a copy of such notice of
resignation to all Unit Holders then of record. Upon receiving such notice the
Sponsor will use its best efforts to appoint a successor Trustee promptly. If
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities, or upon the determination of the Sponsor to
remove the Trustee for any reason, either with or without cause, the Sponsor may
remove the Trustee and appoint a successor as provided in the Agreement. If
within 30 days of the resignation of a Trustee no successor has been appointed
or, if appointed, has not accepted the appointment, the retiring Trustee may
apply to a court of competent jurisdiction for the appointment of a 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.
REGARDING THE SPONSOR
The Sponsor shall be under no liability to the Trust or to Unit Holders for
taking any action or for refraining from any action in good faith or for errors
in judgment. Nor shall the Sponsor be liable or responsible in any way for
depreciation or loss incurred by reason of the disposition of any Security. The
Sponsor will, however, be liable for its own wilful misfeasance, wilful
misconduct, bad faith, gross negligence or reckless disregard of its duties and
obligations under the Agreement.
If at any time the Sponsor shall resign under the Agreement or shall fail or
be incapable of performing its duties thereunder or shall become bankrupt or its
affairs are taken over by public authorities, the Agreement directs the Trustee
to either (1) appoint a successor Sponsor or Sponsors at rates of compensation
deemed reasonable by the Trustee not exceeding amounts prescribed by the
Securities and Exchange Commission, or (2) terminate the Trust Indenture and
Agreement and the Trust and liquidate the Trust.The Trustee will promptly notify
Unit Holders of any such action.
MISCELLANEOUS
SPONSOR
Dean Witter Reynolds Inc. ("Dean Witter") is a corporation organized under
the laws of the State of Delaware and is a principal operating subsidiary of
Dean Witter, Discover & Co. ("DWDC"), a publicly-held corporation. Dean Witter
is a financial services company that provides to its individual, corporate, and
institutional clients services as a broker in securities and commodities, a
dealer in corporate, municipal, and government securities, an investment banker,
an investment adviser, and an agent in the sale of life insurance and various
other products and services. Dean Witter is a member firm of the New York Stock
Exchange, the American Stock Exchange, the Chicago Board Options Exchange, other
major securities exchanges and the National Association of Securities Dealers,
and is a clearing member of the Chicago Board of Trade, the Chicago Mercantile
Exchange, the Commodity Exchange Inc., and other major commodities exchanges.
Dean Witter is currently servicing its clients through a network of
approximately 375 domestic and international offices with approximately 7,500
account executives servicing individual and institutional client accounts.
TRUSTEE
The Trustee is The Bank of New York. The Trustee is organized under the laws
of the State of New York, is a member of the New York Clearing House Association
and is subject to supervision and examination by the Superintendent of Banks of
the State of New York, the Federal Deposit Insurance Corporation and the Board
of Governors of the Federal Reserve System. Unit Holders should direct inquiries
regarding distributions, address changes and other matters relating to the
administration of the Trust to the Trustee at Unit Investment Trust Division,
P.O. Box 974, Wall Street Station, New York, New York 10268-0974.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Cahill
Gordon & Reindel, a partnership including a professional corporation, 80 Pine
Street, New York, New York 10005, as special counsel for the Sponsor.
AUDITORS
The Statement of Financial Condition and Schedule of Portfolio Securities of
this series of the Dean Witter Select Equity Trust included in this Prospectus
have been audited by DELOITTE & TOUCHE LLP, certified public accountants, as
stated in their report as set forth in Part A of this Prospectus, and are
included in reliance upon such report given upon the authority of that firm as
experts in accounting and auditing.
21
<PAGE>
- ----------------------------------- Sponsor: -----------------------------------
(DEAN WITTER REYNOLDS INC. LOGO)
Two World Trade Center - New York, New York 10048
- --------------------------------------------------------------------------------
37617
<PAGE>
PART II. ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This registration statement on Form S-6 comprises the following documents:
The facing sheet.
The Cross Reference Sheet.
The Prospectus.
The signatures.
Written consents of the following persons:
- Cahill Gordon & Reindel (included in Exhibit 5)
- Deloitte & Touche
The following Exhibits:
<TABLE>
<S> <C>
*EX-4.1 Trust Indenture and Agreement, dated September 30, 1993.
**EX-4.2 Draft of Reference Trust Agreement.
***EX-3(i) Certificate of Incorporation of Dean Witter Reynolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
Opinion of counsel as to the legality of the securities being
****EX-5 registered.
****EX-23.1 Consent of Independent Auditors.
****EX-23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5).
****EX-27 Financial Data Schedule.
<FN>
- ------------------------
* The Trust Indenture and Agreement is incorporated by reference to exhibit
of same designation filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Dean Witter Select Equity Trust,
Selected Opportunities Series 18, Registration number 33-50105.
** Filed herewith.
*** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement of Sears Tax-Exempt Investment Trust, Insured Long Term Series 33
and Long Term Municipal Portfolio Series 106, Registration numbers 33-38086
and 33-37629, respectively.
**** To be filed by amendment.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Dean Witter Select Equity Trust, Select 10 International Series 95-2, has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York and State of
New York on the 15th day of March, 1995.
DEAN WITTER SELECT EQUITY TRUST,
SELECT 10 INTERNATIONAL SERIES 95-2
(REGISTRANT)
BY: DEAN WITTER REYNOLDS INC.
(DEPOSITOR)
Michael D. Browne
Michael D. Browne
Authorized Signatory
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of Dean Witter Reynolds Inc.,
the Depositor, by the following person in the following capacities and by the
following persons who constitute a majority of the Depositor's Board of
Directors in the City of New York, and State of New York, on this 15th day of
March, 1995.
<PAGE>
DEAN WITTER REYNOLDS INC.
<TABLE>
<CAPTION>
NAME OFFICE
- ------------------------------------ ------------------------------------
<C> <S> <C>
Chairman & Chief )
Philip J. Purcell Executive Officer )
and Director* )
)
)
)
By
Michael D. Browne
Michael D. Browne
Attorney-in-fact*
<FN>
- ------------------------
* Executed copies of the Powers of Attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 for Dean Witter Select Equity Trust, Select 10
International Series 95-1, File No. 33-56389.
</TABLE>
<TABLE>
<CAPTION>
NAME OFFICE
- ------------------------------------------------------ ------------------------------------------------------
<C> <S>
Richard M. DeMartini Director*
Nancy S. Donovan Director*
Robert J. Dwyer Director*
Christine A. Edwards Director*
James S. Higgins Director*
Stephen R. Miller Director*
Richard F. Powers Director*
Philip J. Purcell Director*
<FN>
- ------------------------
* Executed copies of the Powers of Attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 for Dean Witter Select Equity Trust, Select 10
International Series 95-1, File No. 33-56389.
</TABLE>
<PAGE>
EXHIBIT INDEX
TO
FORM S-6
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT PAGE
- --------------- ------------------------------------------------------------------------------------------ ---------
<S> <C> <C>
*EX-4.1 Trust Indenture and Agreement, dated September 30, 1993
**EX-4.2 Draft of Reference Trust Agreement.
***EX-3(i) Certificate of Incorporation of Dean Witter Reynolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
****EX-5 Opinion of counsel as to the legality of the securities being registered.
****EX-23.1 Consent of Independent Auditors.
****EX-23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5).
****EX-27 Financial Data Schedule.
<FN>
- ------------------------
* The Trust Indenture and Agreement is incorporated by reference to exhibit
of same designation filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Dean Witter Select Equity Trust,
Selected Opportunities Series 18, Registration number 33-50105.
** Filed herewith.
*** Incorporated by reference to exhibit of same designation filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement of Sears Tax-Exempt Investment Trust, Insured Long Term Series 33
and Long Term Municipal Portfolio Series 106, Registration numbers 33-38086
and 33-37629, respectively.
**** To be filed by amendment.
</TABLE>
<PAGE>
EXHIBIT 4.2
DEAN WITTER SELECT EQUITY TRUST
SELECT 10 INTERNATIONAL SERIES 95-2
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated April , 1995 between DEAN WITTER
REYNOLDS INC., as Depositor, and The Bank of New York, as Trustee, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Dean Witter Select Equity Trust, Trust Indenture and
Agreement" (the "Basic Agreement") dated September 30, 1993. Such provisions as
are incorporated by reference constitute a single instrument (the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
I.
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained in
the Basic Agreement are herein incorporated by reference in their entirety and
shall be deemed to be a part of this instrument as fully and to the same extent
as though said provisions had been set forth in full in this instrument except
that the Basic Agreement is hereby amended as follows:
A. The first sentence of Section 2.01 is amended to add the following
language at the end of such sentence:
"and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase one or more of
such Securities which cash (or cash in an amount equal to
the face amount of the letter of credit), to the extent
not used by the Trustee to purchase such Securities within
the 90-day period following the first deposit of
Securities in the Trust, shall be distributed to Unit
Holders on the Distribution Date next following such
90-day period or such earlier date as the Depositor and
the Trustee determine".
B. The first sentence of Section 2.06 is amended to add the following
language after "Securities"))":
"and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase one or more
Additional Securities which cash (or cash in an amount
equal to the face amount of the letter of credit), to the
extent not used by the Trustee to purchase such Additional
Securities within the 90-day period following the first
deposit of Securities in the Trust, shall be distributed
to Unit Holders on the Distribution Date next following
such 90-day period or such earlier date as the Depositor
and the Trustee determine".
C. The third paragraph of Section 3.05 is hereby amended to add the
following sentence after the first sentence thereof:
"Depositor may direct the Trustee to invest the proceeds
of any sale of Securities not required for the redemption
of Units in eligible money market instruments selected by
the Depositor which will include only negotiable
certificates of deposit or time deposits of domestic banks
which are members of the Federal Deposit Insurance
Corporation and which have, together with their branches
or subsidiaries, more than $2 billion in total assets,
except that certificates of deposit or time deposits of
smaller domestic banks may be held provided the deposit
does not exceed the insurance coverage on the instrument
(which currently is $100,000), and provided further that
the Trust's aggregate holding of certificates of deposit
or time deposits issued by the Trustee may not exceed the
<PAGE>
insurance coverage of such obligations and U.S. Treasury
notes or bills (which shall be held until the maturity
thereof) each of which matures prior to the earlier of the
next following Distribution Date or 90 days after receipt,
the principal thereof and interest thereon (to the extent
such interest is not used to pay Trust expenses) to be
distributed on the earlier of the 90th day after receipt
or the next following Distribution Date."
D. The first sentence of each of Sections 3.10, 3.11 and 3.12 is amended
to insert the following language at the beginning of such sentence: "Except
as otherwise provided in Section 3.13".
E. The following new Section 3.13 is added:
SECTION 3.13. EXTRAORDINARY EVENT -- SECURITY RETENTION AND
VOTING. In the event the Trustee is notified of any action to be
taken or proposed to be taken by holders of the securities held by the
Trust in connection with any proposed merger, reorganization, spin-off,
split-off or split-up by the issuer of stock or securities held in the
Trust, the Trustee shall take such action or refrain from taking any
action, as appropriate, so as to insure that the securities are voted as
closely as possible in the same manner and in the same general proportion
as are the securities held by owners other than the Trust. If stock or
securities are received by the Trustee, with or without cash, as a result
of any merger, reorganization, spin-off, split-off or split-up by the
issuer of stock or securities held in the Trust, the Trustee at the
direction of the Depositor may retain such stock or securities in the
Trust. Neither the Depositor nor the Trustee shall be liable to any
person for any action or failure to take action with respect to this
section.
F. The following new Section 3.14 is added:
SECTION 3.14. FOREIGN EXCHANGE TRANSACTIONS; RECLAIMING FOREIGN
TAXES. (a) For any Trust holding Securities denominated in a
currency other than U.S. dollars, the Sponsor shall direct the Trustee
with respect to the circumstances under which foreign exchange
transactions are to be entered into and calculations under this Indenture
are to be made, in order to convert amounts receivable in respect of the
Securities in foreign currencies into U.S. dollars.
(b) The Trustee shall take such action as the Sponsor shall direct
or, if not so directed, use reasonable efforts to reclaim or recoup any
amounts of non-U.S. tax paid by the Trust or withheld from Income
received by the Trust to which the Trust may be entitled as a refund.
G. The following paragraph is inserted after the first paragraph in
Section 4.01:
"If the Trust holds securities denominated in a currency
other than U.S. dollars, the evaluations shall be
converted to U.S. dollars based on current exchange rates,
including the cost of a forward foreign exchange contract
in the relevant currency to correspond to the Trustee's
settlement requirement for redemption requests as quoted
to the Trustee by one or more banks designated by the
Sponsor, unless the Security is in the form of an American
Depositary Share or Receipt, in which case the evaluations
shall be based upon the U.S. dollar prices in the market
for American Depositary Shares or Receipts (unless the
Trustee deems such prices inappropriate as a basis for
valuation)."
H. Section 1.01 is amended to add the following definition:
(9) "Deferred Sales Charge" shall mean any deferred sales
charge payable in accordance with the provisions of
Section 3.15 hereof, as set forth in the prospectus for a
Trust. Definitions following this definition (9) shall be
renumbered.
I. Section 3.05 is hereby amended to add the following paragraph after
the end thereof:
"On each Deferred Sales Charge payment date set forth in
the prospectus for a Trust, the Trustee shall pay the
account created pursuant to Section 3.15 the amount of the
Deferred Sales Charge payable on each such date as stated
in the prospectus for a Trust. Such amount shall be
withdrawn from the Principal Account from the amounts
therein designated for such purpose."
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J. Section 3.06B(3) shall be amended by adding the following: "and any
Deferred Sales Charge paid".
K. Section 3.08 shall be amended by adding the following at the end
thereof:
"In order to pay the Deferred Sales Charge, the Trustee
shall sell or liquidate an amount of Securities at such
time and from time to time and in such manner as the
Depositor shall direct such that the proceeds of such sale
or liquidation shall equal the amount required to be paid
to the Depositor pursuant to the Deferred Sales Charge
program as set forth in the prospectus for a Trust."
L. Section 3.15 shall be added as follows:
SECTION 3.15. DEFERRED SALES CHARGE. If the prospectus for a
Trust specifies a Deferred Sales Charge, the Trustee shall, on the
dates specified in and as permitted by the prospectus, withdraw from the
Income Account if such account is designated in the prospectus as the
source of the payments of the Deferred Sales Charge, or to the extent
funds are not available in that account or if such account is not so
designated, from the Capital Account, an amount per Unit specified in the
prospectus and credit such amount to a special, non-Trust account
maintained at the Trustee out of which the Deferred Sales Charge will be
distributed to the Depositor. If the Income Account is not designated as
the source of the Deferred Sales Charge payment or if the balances in the
Income and Capital Accounts are insufficient to make any such withdrawal,
the Trustee shall, as directed by the Depositor, either advance funds in
an amount equal to the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional monies in
the Income Account or the Capital Account, sell Securities and credit the
proceeds thereof to such special Depositor's account or credit Securities
in kind to such special Depositor's Account. Such directions shall
identify the Securities, if any, to be sold or distributed in kind and
shall contain, if the Trustee is directed by the Depositor to sell a
Security, instructions as to execution of such sales. If a Unit Holder
redeems Units prior to full payment of the Deferred Sales Charge, the
Trustee shall, if so provided in the prospectus, on the Redemption Date,
withhold from the Redemption Price payment to such Unit Holder an amount
equal to the unpaid portion of the Deferred Sales Charge and distribute
such amount to such special Depositor's account or, if the Depositor
shall purchase such Unit pursuant to the terms of Section 5.02 hereof,
the Depositor shall pay the Redemption Price for such Unit less the
unpaid portion of the Deferred Sales Charge. The Depositor may at any
time instruct the Trustee to distribute to the Depositor cash or
Securities previously credited to the special Depositor's account.
II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
A. This Trust is denominated Dean Witter Select Equity Trust, Select 10
International Series 95-2 and consists of two separate unit investment
trusts (each a "Trust") denominated Select 10 United Kingdom Portfolio 95-2
(the "United Kingdom Trust") and Select 10 Hong Kong Portfolio 95-2 (the
"Hong Kong Trust").
B. The publicly traded stocks listed in Schedules A and B hereto are
those which, subject to the terms of this Indenture, have been or are to be
deposited in trust under this Indenture.
C. The term, "Depositor" shall mean Dean Witter Reynolds Inc.
D. The aggregate number of Units referred to in Sections 2.03 and 9.01
of the Basic Agreement is 25,000 for the United Kingdom Trust and 25,000 for
the Hong Kong Trust.
E. A Unit is hereby declared initially equal to 1/25,000th for the
United Kingdom Trust and 1/25,000th for the Hong Kong Trust.
F. The term "In-Kind Distribution Date" shall mean , for the United
Kingdom Trust and the Hong Kong Trust.
<PAGE>
G. The term "Record Date" shall mean ,
and such other date as the Depositor may direct for the United Kingdom Trust
and the Hong Kong Trust.
H. The term "Distribution Date shall mean ,
and such other date as the Depositor may direct for the
United Kingdom Trust and the Hong Kong Trust.
I. The term "Termination Date" shall mean ,
for the United Kingdom Trust and the Hong Kong Trust.
J. For purposes of this Series--Dean Witter Select Equity Trust, Select
10 International Series 95-2--the form of Certificate set forth in this
Indenture shall be appropriately modified to reflect the title of this
Series and such of the Special Terms and Conditions of Trust set forth
herein as may be appropriate.
K. The Depositor's Annual Trust Supervision Fee shall be a maximum of
$0.25 per 100 Units for the United Kingdom Trust and the Hong Kong Trust.
L. The Trustee's Annual Fee as defined in Section 6.04 of the Indenture
shall be $ per 100 Units for the United Kingdom Trust and $ per 100
Units for the Hong Kong Trust.
M. For a Unit Holder to receive "in-kind" distribution, such Unit Holder
must tender at least 2,500 Units for redemption, either during the life of
the Trust, or at its termination.
(Signatures and acknowledgments on separate pages)
The Schedules of Portfolio Securities for Select 10 United Kingdom Portfolio
95-2 and Select 10 Hong Kong Portfolio 95-2 in the prospectus included in this
Registration Statement are hereby incorporated by reference herein as Schedules
A and B hereto.
