File No. 333-83985 CIK #1025324
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 1 to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen Focus Portfolios, Series 172
(Exact Name of Trust)
Van Kampen Funds Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
VAN KAMPEN FUNDS INC. CHAPMAN AND CUTLER
Attention: A. Thomas Smith III, General Counsel Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on December 22, 2000 pursuant to paragraph (b) of Rule 485.
UTILITY & COMMUNICATIONS TRUST, SERIES 1
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 172
--------------------------------------------------------------------------------
PROSPECTUS PART ONE
NOTE: Part I of this Prospectus may not be distributed unless accompanied by
Part II.
Please retain both parts of this Prospectus for future reference.
--------------------------------------------------------------------------------
THE TRUST
Van Kampen Focus Portfolios, Series 172 is comprised of one unit investment
trust, Utility & Communications Trust, Series 1 (the "Trust"). The Trust seeks
to increase the value of your investment and provide dividend income by
investing in a diversified portfolio of stocks primarily issued by utility and
communications companies selected by Robert W. Baird & Co. Incorporated.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THE
UNITS OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER 22, 2000
BAIRD/
UTILITY & COMMUNICATIONS TRUST, SERIES 1
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 172
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF OCTOBER 3, 2000
SPONSOR: VAN KAMPEN FUNDS INC.
SUPERVISOR: VAN KAMPEN INVESTMENT ADVISORY CORP.
(AN AFFILIATE OF THE SPONSOR)
EVALUATOR: AMERICAN PORTFOLIO EVALUATION SERVICES
(A DIVISION OF AN AFFILIATE OF THE SPONSOR)
TRUSTEE: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
ROARING
2000S
TRUST
----------------
<S> <C>
GENERAL INFORMATION
Number of Units 624,245.640
Fractional Undivided Interest in Trust per Unit 1/624,245.640
Public Offering Price:
Aggregate Value of Securities in Portfolio (1) $ 6,385,840.37
Aggregate Value of Securities per Unit (including accumulated dividends) $ 10.2297
Sales charge 3.45% (3.573% of Aggregate Value of Securities excluding principal cash)
per Unit $ .3647
Public Offering Price per Unit (2) $ 10.5944
Redemption Price per Unit $ 10.2297
Secondary Market Repurchase Price per Unit $ 10.2297
Excess of Public Offering Price per Unit Over Redemption Price per Unit $ .3647
</TABLE>
Supervisor's Annual Supervisory Fee Maximum of $.0025 per Unit
Evaluator's Annual Fee Maximum of $.0025 per Unit
Evaluation Time Close of the New York Stock
Exchange
Initial Date of Deposit September 2, 1999
Mandatory Termination Date September 2, 2002
Minimum Termination Value........................... The Trust may be terminated
if the net asset value of such Trust is less than $500,000 unless the net
asset value of such Trust deposits has exceeded $15,000,000, then the Trust
Agreement may be terminated if the net asset value of such Trust is less
than $3,000,000.
Estimated Annual Dividends per Unit $.36985
Trustee's Annual fee $.008 per Unit
Income Distribution Record Date TENTH day of March, June,
September and December
Income Distribution Date TWENTY-FIFTH day of March,
June, September and December
--------------------------------------------------------------------------------
(1) Equity Securities are valued at the closing sale price, or if no such price
exists, at the closing bid price thereof.
(2) Anyone ordering Units will have added to the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
(3) Effective on each September 2, the secondary sales charge will decrease by
.5 of 1% to a minimum sales charge of 2.95%.
<TABLE>
<CAPTION>
PER UNIT INFORMATION
2000 (1)
------------
<S> <C>
Net asset value per Unit at beginning of period........................................................ $ 9.90
============
Net asset value per Unit at end of period.............................................................. $ 9.82
============
Distributions to Unitholders of investment income including accumulated dividends paid
on Units redeemed (average Units outstanding for entire period)..................................... $ 0.29
============
Distributions to Unitholders from Equity Security redemption proceeds (average Units
outstanding for entire period)...................................................................... $ --
============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).... $ 0.21
============
Distributions of investment income by frequency of payment
Quarterly........................................................................................... $ 0.29
Units outstanding at end of period..................................................................... 620,603
--------------------------------------------------------------------------------
(1) For the period from September 2, 1999 (date of deposit) through August
31, 2000.
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF VAN KAMPEN FUNDS INC. AND THE UNITHOLDERS OF
UTILITY & COMMUNICATIONS TRUST, SERIES 1 (VAN KAMPEN FOCUS PORTFOLIOS, SERIES
172):
We have audited the accompanying statement of condition (including the
analyses of net assets) and the related portfolio of Utility & Communications
Trust, Series 1 (Van Kampen Focus Portfolios, Series 172) as of August 31, 2000
and the related statements of operations and changes in net assets for the
period from September 2, 1999 (date of deposit) through August 31, 2000. These
statements are the responsibility of the Trustee and the Sponsor. Our
responsibility is to express an opinion on such statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurances about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at August 31, 2000 by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates made
by the Trustee and the Sponsor, as well as evaluating the overall financial
statement presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Utility & Communications Trust,
Series 1 (Van Kampen Focus Portfolios, Series 172) as of August 31, 2000 and the
results of operations and changes in net assets for the period from September 2,
1999 (date of deposit) through August 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.
GRANT THORNTON LLP
Chicago, Illinois
October 13, 2000
UTILITY & COMMUNICATIONS TRUST, SERIES 1
STATEMENTS OF CONDITION
AUGUST 31, 2000
UTILITY &
COMMUNICATIONS
TRUST
---------------
Trust property
Cash $ 25,610
Securities at market value, (cost $5,907,210)
(note 1) 6,038,220
Accumulated dividends 27,888
Receivable for securities sold --
---------------
$ 6,091,718
===============
Liabilities and interest to Unitholders
Cash overdraft $ --
Redemptions payable --
Interest to Unitholders 6,091,718
---------------
$ 6,091,718
===============
ANALYSES OF NET ASSETS
Interest of Unitholders (620,603 Units of fractional
undivided interest outstanding)
Cost to original investors of 635,618 Units (note 1) $ 6,537,406
Less initial underwriting commission (note 3) 277,955
---------------
6,259,451
Less redemption of 15,015 Units 144,487
---------------
6,114,964
Undistributed net investment income
Net investment income 209,837
Less distributions to Unitholders 177,917
---------------
31,920
Realized gain (loss) on Security sale (7,803)
Unrealized appreciation (depreciation) of
Securities (note 2) 131,010
Distributions to Unitholders of Security sale
proceeds --
Deferred sales charge (178,373)
---------------
Net asset value to Unitholders $ 6,091,718
===============
Net asset value per Unit (620,603 Units outstanding) $ 9.82
===============
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
UTILITY & COMMUNICATIONS TRUST, SERIES 1
STATEMENTS OF OPERATIONS
PERIOD FROM SEPTEMBER 2, 1999 (DATE OF DEPOSIT) THROUGH AUGUST 31, 2000
2000
--------------
<S> <C>
Investment income
Dividend income.................................................................................. $ 236,132
Expenses
Trustee fees and expenses..................................................................... 6,002
Evaluator fees................................................................................ 1,334
Organizational fees........................................................................... 17,613
Supervisory fees.............................................................................. 1,346
--------------
Total expenses............................................................................. 26,295
--------------
Net investment income......................................................................... 209,837
Realized gain (loss) for Securities sale
Proceeds......................................................................................... 368,728
Cost............................................................................................. 376,531
--------------
Realized gain (loss).......................................................................... (7,803)
Net change in unrealized appreciation (depreciation) of Securities.................................. 131,010
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ 333,044
==============
STATEMENTS OF CHANGES IN NET
ASSETS PERIOD FROM SEPTEMBER 2, 1999 (DATE OF
DEPOSIT) THROUGH AUGUST 31, 2000
2000
--------------
Increase (decrease) in net assets Operations:
Net investment income............................................................................ $ 209,837
Realized gain (loss) on Securities............................................................... (7,803)
Net change in unrealized appreciation (depreciation) of Securities............................... 131,010
--------------
Net increase (decrease) in net assets resulting from operations............................... 333,044
Distributions to Unitholders from:
Net investment income............................................................................ (177,917)
Security sale proceeds........................................................................... --
Redemption of Units.............................................................................. (144,487)
Deferred sales charge............................................................................ (178,373)
--------------
Total increase (decrease)..................................................................... (167,733)
Net asset value to Unitholders
Beginning of period.............................................................................. 144,599
Additional Securities purchased from the proceeds of Unit Sales.................................. 6,114,852
--------------
End of period (including undistributed net investment income of $31,920)......................... $ 6,091,718
==============
The accompanying notes are an integral part of these statements.
<CAPTION>
UTILITIES & COMMUNICATIONS TRUST, SERIES 1 PORTFOLIO AS OF AUGUST 31, 2000
------------------------------------------------------------------------------------------------------------------------
VALUATION OF
NUMBER MARKET VALUE SECURITIES
OF SHARES NAME OF ISSUER PER SHARE (NOTE 1)
--------------- ------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
6,416 Alliant Energy Corporation $ 29.2500 $ 187,668
--------------------------------------------------------------------------------------------------------------------------
2,709 ALLTEL Corporation 50.5625 136,974
--------------------------------------------------------------------------------------------------------------------------
4,067 AT&T Corporation 31.5000 128,110
--------------------------------------------------------------------------------------------------------------------------
4,106 BellSouth Corporation 37.3125 153,205
--------------------------------------------------------------------------------------------------------------------------
4,662 CenturyTel, Incorporated 28.8125 134,324
--------------------------------------------------------------------------------------------------------------------------
10,079 Chesapeake Utilities Corporation 17.0625 171,973
--------------------------------------------------------------------------------------------------------------------------
4,662 CMS Energy Corporation 26.1250 121,795
--------------------------------------------------------------------------------------------------------------------------
6,137 Comcast Corporation 36.6875 225,151
--------------------------------------------------------------------------------------------------------------------------
3,228 Duke Energy Corporation 74.8125 241,495
--------------------------------------------------------------------------------------------------------------------------
7,333 Edison International 20.6875 151,701
--------------------------------------------------------------------------------------------------------------------------
4,384 Enron Corporation 84.8750 372,092
--------------------------------------------------------------------------------------------------------------------------
3,987 Florida Progress Corporation 51.8750 206,826
--------------------------------------------------------------------------------------------------------------------------
3,427 FPL Group, Incorporated 53.3750 182,916
--------------------------------------------------------------------------------------------------------------------------
5,141 Hawaiian Electric Industries, Incorporated 32.7500 168,368
--------------------------------------------------------------------------------------------------------------------------
6,255 KeySpan Corporation 34.4375 215,407
--------------------------------------------------------------------------------------------------------------------------
7,850 MDU Resources Group, Incorporated 25.0000 196,250
--------------------------------------------------------------------------------------------------------------------------
10,399 Minnesota Power, Incorporated 22.1875 230,728
--------------------------------------------------------------------------------------------------------------------------
4,781 NICOR, Incorporated 36.8750 176,299
--------------------------------------------------------------------------------------------------------------------------
7,652 NiSource, Incorporated 23.9375 183,170
--------------------------------------------------------------------------------------------------------------------------
9,243 Otter Tail Power Company 20.8750 192,948
--------------------------------------------------------------------------------------------------------------------------
6,653 Reliant Energy, Incorporated 37.1250 246,993
--------------------------------------------------------------------------------------------------------------------------
3,827 SBC Communications, Incorporated 41.7500 159,777
--------------------------------------------------------------------------------------------------------------------------
8,288 Sempra Energy 19.5000 161,616
--------------------------------------------------------------------------------------------------------------------------
6,815 Southern Company 29.9375 204,024
--------------------------------------------------------------------------------------------------------------------------
4,186 Sprint Corporation 33.5000 140,231
--------------------------------------------------------------------------------------------------------------------------
8,806 TECO Energy, Incorporated 24.5625 216,297
--------------------------------------------------------------------------------------------------------------------------
3,067 Time Warner Incorporated 85.5000 262,229
--------------------------------------------------------------------------------------------------------------------------
8,047 UtilCorp United, Incorporated 23.8125 191,619
--------------------------------------------------------------------------------------------------------------------------
7,413 Wisconsin Energy Corporation 21.2500 157,526
--------------------------------------------------------------------------------------------------------------------------
3,648 WorldCom, Incorporated 36.5000 133,152
--------------------------------------------------------------------------------------------------------------------------
6,374 WPS Resources Corporation 30.0625 191,618
--------------------------------------------------------------------------------------------------------------------------
7,810 Xcel Energy Incorporated 25.0625 195,738
--------------- ---------------
191,452 $ 6,038,220
=============== ===============
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>
UTILITY & COMMUNICATIONS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
--------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities are valued at the last closing sales price
or, if no such price exists, at the closing bid price thereof.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange on the closing sale
prices on the exchange or the closing asked prices if not listed. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as described
in Note 1 and (3) accumulated dividends thereon, less accrued expenses of the
Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the trust and, accordingly, no provision has been made for
Federal Income Taxes.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at August 31, 2000 is as follows:
UTILITY &
COMMUNICATIONS
TRUST
----------------
Unrealized Appreciation $ 629,801
Unrealized Depreciation (498,791)
----------------
$ 131,010
================
NOTE 3- OTHER
Marketability - Although it is not obligated to do so, the Sponsor or the
Managing Underwriter intends to maintain a market for Units and to continuously
offer to purchase Units at prices, subject to change at any time, based upon the
value of the Securities in the portfolio of the Trust valued as described in
Note 1, plus accumulated dividends to the date of settlement. If the supply of
Units exceeds demand, or for other business reasons, the Sponsor or the Managing
Underwriter may discontinue purchases of Units at such prices. In the event that
a market is not maintained for the Units, a Unitholder desiring to dispose of
his Units may be able to do so only by tendering such units to the Trustee for
redemption at the redemption price.
Cost to Investors - The cost to original investors was based on adding to the
underlying value of the Securities per Unit on the date of an investor's
purchase, plus an amount equal to the difference between the maximum sales
charge of 3.95% of the public offering price which is equivalent to 4.112% of
the aggregate underlying value of the Securities and the maximum deferred sales
charge of ($0.295 per Unit). These investors paid a deferred sales charge of
$0.295 per Unit. Beginning September 2, 2000, the secondary sales charge will be
3.45% and will not include deferred payments. On each subsequent September 2,
the secondary market sales charge will decrease by .5 of 1% to a minimum sales
charge of 2.95%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.0025 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases under
the category "All Services Less Rent of Shelter" in the Consumer Price Index.
NOTE 4 - REDEMPTION OF UNITS
During the period ended August 31, 2000, 15,015 Units were presented for
redemption.
Baird/ (logo)
Utility & Communications Trust, Series 1
--------------------------------------------------------------------------------
Van Kampen Focus Portfolios, Series 172 includes the unit investment trust
described above (the "Trust"). The Trust seeks to increase the value of your
investment and provide dividend income by investing in a diversified portfolio
of stocks primarily issued by utility and communications companies selected by
Robert W. Baird & Co. Incorporated. Of course, we cannot guarantee that the
Trust will achieve its objective.
Prospectus Part II
You should read this prospectus and retain it for future reference.
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
This Prospectus is dated as of the date of the Prospectus Part I
accompanying this Prospectus Part II.
--------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved of the
Units or passed upon the adequacy or accuracy of this prospectus. Any contrary
representation is a criminal offense.
THE TRUST
--------------------------------------------------------------------------------
The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the Initial
Date of Deposit, among Van Kampen Funds Inc., as Sponsor, Van Kampen Investment
Advisory Corp. as Supervisor, The Bank of New York, as Trustee, and American
Portfolio Evaluation Services, a division of Van Kampen Investment Advisory
Corp., as Evaluator.
The Trust offers the opportunity to purchase Units representing proportionate
interests in a portfolio of stocks. The Trust may be an appropriate medium for
investors who desire to participate in a portfolio of stocks with greater
diversification than they might be able to acquire individually.
On the Initial Date of Deposit, the Sponsor deposited delivery statements
relating to contracts for the purchase of the Securities and an irrevocable
letter of credit in the amount required for these purchases with the Trustee. In
exchange for these contracts the Trustee delivered to the Sponsor documentation
evidencing the ownership of Units of the Trust. Unless otherwise terminated as
provided in the Trust Agreement, the Trust will terminate on the Mandatory
Termination Date and any remaining Securities will be liquidated or distributed
by the Trustee within a reasonable time. As used in this Prospectus the term
"Securities" means the securities (including contracts to purchase these
securities) listed in "Portfolio" in Part One and any additional securities
deposited into the Trust.
Additional Units may be issued at any time by depositing in the Trust (i)
additional Securities, (ii) contracts to purchase Securities together with cash
or irrevocable letters of credit or (iii) cash (or a letter of credit or the
equivalent) with instructions to purchase additional Securities. As additional
Units are issued by the Trust, the aggregate value of the Securities will be
increased and the fractional undivided interest represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits into the Trust
following the Initial Date of Deposit provided that the additional deposits will
be in amounts which will maintain, as nearly as practicable, the same
proportionate relationship among the number of shares of each Security in the
Trust's portfolio that existed immediately prior to the subsequent deposit.
Investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the Securities
between the time of the deposit and the purchase of the Securities and because
the Trust will pay the associated brokerage or acquisition fees.
Each Unit initially offered represents an undivided interest in the Trust. To
the extent that any Units are redeemed by the Trustee or additional Units are
issued as a result of additional Securities being deposited by the Sponsor, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase or decrease accordingly, although the actual interest in the Trust
will remain unchanged. Units will remain outstanding until redeemed upon tender
to the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
The Trust consists of (a) the Securities (including contracts for the
purchase thereof) listed under the "Portfolio" in Part One as may continue to be
held from time to time in the Trust, (b) any additional Securities acquired and
held by the Trust pursuant to the provisions of the Trust Agreement and (c) any
cash held in the related Income and Capital Accounts. Neither the Sponsor nor
the Trustee shall be liable in any way for any failure in any of the Securities.
OBJECTIVES AND SECURITIES SELECTION
--------------------------------------------------------------------------------
The objective of the Trust is to increase the value of your investment and
provide dividend income by investing in a diversified portfolio of stocks
primarily issued by utility and communications companies selected by Robert W.
Baird & Co. Incorporated (the "Underwriter"). We cannot guarantee that the Trust
will achieve its objective. The portfolio may offer a unique opportunity to
participate in the changing utility environment. Robert W. Baird & Co. selected
a portfolio that seeks to benefit from industry consolidation, technological
advances, and deregulation trends.
As with any investment, we cannot guarantee that the Trust will achieve its
objective. The value of your Units may fall below the price you paid for the
Units. You should read the "Risk Factors" section before you invest.
About Robert W. Baird & Co. Robert W. Baird & Co. Incorporated is one of the
nation's largest regionally-headquartered investment bankers, serving
individuals, corporations, municipalities and institutional investors. Founded
in Milwaukee in 1919, Baird has developed a strong presence in the Midwest and
has expanded into major markets outside America's Heartland. The firm has 75
offices in 14 states. Baird's research department is widely known and respected
for its equity research providing broad comprehensive coverage for its clients.
Baird's special expertise includes:
o Offering individuals a full range of high-quality investment services.
o Serving as a leading underwriter for corporations and municipalities.
o Offering a broad range of asset management services to individuals, pension
and profit-sharing plans, foundations and others.
o Providing highly-regarded investment research that enjoys an international
reputation.
o Working with institutional investors around the world.
Since 1982, Baird has been a member of the Northwestern Mutual Life Insurance
family of companies. Baird is a member of the New York Stock Exchange and other
principal exchanges, the National Association of Securities Dealers, Inc. and
the Securities Investor Protection Corporation. You can contact Baird at (800)
792-2473 or visit their website at www.rwbaird.com.
The Underwriter uses the list of Securities in its independent capacity as a
broker-dealer and investment adviser to various individuals and entities. The
Underwriter may also distribute this information to various individuals and
entities. The Underwriter may recommend or effect transactions in the
Securities. This may have an adverse effect on the prices of the Securities.
This also may have an impact on the price the Trust pays for the Securities and
the price received upon Unit redemptions or Trust termination.
The Underwriter acts as agent or principal in connection with the purchase
and sale of equity securities, including the Securities, and may act as a market
maker in the Securities. The Underwriter also issues reports and makes
recommendations on the Securities. The Underwriter's research department may
receive compensation based on commissions generated by research and/or sales of
Units.
You should note that the Underwriter applied the selection criteria to the
Securities for inclusion in the Trust as of the Initial Date of Deposit. After
this date, the Securities may no longer meet the selection criteria. Should a
Security no longer meet the selection criteria, we will generally not remove the
Security from the portfolio.
RISK FACTORS
--------------------------------------------------------------------------------
Price Volatility. The Trust invests in common stocks of U.S. companies. The
value of Units will fluctuate with the value of these stocks and may be more or
less than the price you originally paid for your Units. The market value of
common stocks sometimes moves up or down rapidly and unpredictably. Because the
Trust is unmanaged, the Trustee will not sell stocks in response to market
fluctuations as is common in managed investments. As with any investment, we
cannot guarantee that the performance of the Trust will be positive over any
period of time.
Dividends. Common stocks represent ownership interests in the issuers and are
not obligations of the issuers. Accordingly, common stockholders have a right to
receive dividends only after the company has provided for payment of its
creditors, bondholders and preferred stockholders. Common stocks do not assure
dividend payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
Utility Issuers. Many utility companies, especially electric and gas and
other energy related utility companies, are subject to various uncertainties,
including:
o risks of increases in fuel and other operating costs;
o restrictions on operations and increased costs and delays as a result of
environmental, nuclear safety and other regulations;
o coping with the general effects of energy conservation;
o technological innovations which may render existing plants, equipment or
products obsolete;
o the effects of local weather, maturing markets and difficulty in expanding
to new markets due to regulatory and other factors;
o the potential impact of natural or man-made disasters;
o difficulty obtaining adequate returns on invested capital, even if frequent
rate increases are approved by public service commissions;
o the high cost of obtaining financing during periods of inflation;
o difficulties of the capital markets in absorbing utility debt and equity
securities; and
o increased competition.
Any of these factors, or a combination of these factors, could affect the
supply of or demand for electricity, natural gas, water or other energy, which
could adversely affect the profitability of the issuers of the Securities and
the performance of the Trust.
Utility companies are subject to extensive regulation at the federal and
state levels in the United States. At the federal level, the Federal Energy
Regulatory Commission (the "FERC"), the Federal Trade Commission (the "FTC"),
the Securities and Exchange Commission (the "SEC"), and the Nuclear Regulatory
Commission (the "NRC") have authority to oversee electric and combination
electric and gas utilities. The value of utility company stocks may decline
because governmental regulation controlling the utilities industry can change.
This regulation may prevent or delay the utility company from passing along cost
increases to its customers. Furthermore, regulatory authorities, which may be
subject to political and other pressures, may not grant future rate increases,
or may impose accounting or operational policies, any of which could adversely
affect a company's profitability and its stock price. Mergers in the utility
industry may require approval from several federal and state regulatory
agencies, including FERC, the FTC, and the SEC. These regulatory authorities
could, as a matter of policy, reverse the trend toward deregulation and make
consolidation more difficult, or cause delay in the merger process, any of which
could cause the prices of these stocks to fall.
Telecommunications Issuers. The Trust invests significantly in
telecommunications companies. These companies are subject to substantial
governmental regulation. For example, the United States government and state
governments regulate permitted rates of return and the kinds of services that a
company may offer. This industry has experienced substantial deregulation in
recent years. Deregulation may lead to fierce competition for market share and
can have a negative impact on certain companies. Recent federal legislation
governing the United States telecommunications industry remains subject to
judicial review and additional interpretation, which may adversely affect the
companies whose securities are held by the Trust. Competitive pressures are
intense and telecommunications stocks can experience rapid volatility. Certain
telecommunications products may become outdated very rapidly. A company's
performance can be hurt if the company fails to keep pace with technological
advances. Certain smaller companies in the portfolio may involve greater risk
than larger, established issuers. Smaller companies may have limited product
lines, markets or financial resources. Their securities may trade in lower
volumes than larger companies. As a result, the prices of these securities may
fluctuate more than the prices of other issuers.
No FDIC Guarantee. An investment in your Trust is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
PUBLIC OFFERING
--------------------------------------------------------------------------------
General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the initial sales charge, and cash, if any,
in the Income and Capital Accounts. The "Summary of Essential Financial
Infformation" in Part One. On September 2, 2000, the secondary market sales
charge will be to 3.45%. This sales charge will reduce by 0.5% on each following
September 2, to a minimum of 2.95%.
Any sales charge reduction is borne by the selling broker, dealer or agent.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to brokers and
dealers for purchases by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered broker-dealers
who in each case either charge periodic fees for brokerage services, financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, (2) bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, (3) any person who for at least 90 days, has been an officer, director
or bona fide employee of any firm offering Units for sale to investors or their
spouses or children under 21 and (4) officers and directors of bank holding
companies that make Units available directly or through subsidiaries or bank
affiliates. Notwithstanding anything to the contrary in this Prospectus, such
investors, bank trust departments, firm employees and bank holding company
officers and directors who purchase Units through this program will not receive
sales charge reductions for quantity purchases.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of Van Kampen Funds Inc. and its affiliates, dealers
and their affiliates and vendors providing services to the Sponsor may purchase
Units at the Public Offering Price less the applicable dealer concession.
The minimum purchase is 100 Units (or $1,000) but may vary by selling firm.
However, in connection with fully disclosed transactions with the Sponsor, the
minimum purchase requirement will be that number of Units set forth in the
contract between the Sponsor and the related broker or agent.
Offering Price. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in Part One in
accordance with fluctuations in the prices of the underlying Securities in the
Trust. The initial price of the Securities was determined by Interactive Data
Corporation, a firm regularly engaged in the business of evaluating, quoting or
appraising comparable securities. The Evaluator will generally determine the
value of the Securities as of the Evaluation Time on each business day and will
adjust the Public Offering Price of Units accordingly. This Public Offering
Price will be effective for all orders received prior to the Evaluation Time on
each business day. The Evaluation Time is the close of the New York Stock
Exchange on each Trust business day. Orders received by the Trustee or Sponsor
for purchases, sales or redemptions after that time, or on a day which is not a
business day, will be held until the next determination of price. The term
"business day", as used herein and under "Rights of Unitholders--Redemption of
Units", excludes Saturdays, Sundays and holidays observed by the New York Stock
Exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange or The Nasdaq Stock Market this evaluation is generally based on the
closing sale prices on that exchange or market (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange or market, at the closing asked prices. If
the Securities are not listed on a national or foreign securities exchange or
The Nasdaq Stock Market or, if so listed and the principal market therefor is
other than on the exchange or market, the evaluation shall generally be based on
the current asked price on the over-the-counter market (unless it is determined
that these prices are inappropriate as a basis for evaluation). If current asked
prices are unavailable, the evaluation is generally determined (a) on the basis
of current asked prices for comparable securities, (b) by appraising the value
of the Securities on the asked side of the market or (c) by any combination of
the above. The value of any foreign securities is based on the applicable
currency exchange rate in U.S. dollars as of the Evaluation Time. The value of
the Securities for purposes of secondary market transactions and redemptions is
described under "Rights of Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities, taken as a whole, which are represented by the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. The Sponsor intends to
qualify Units for sale in a number of states. Brokers, dealers and others will
be allowed a concession or agency commission in connection with the distribution
of Units equal to 70% of the applicable sales charge.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. Notwithstanding anything to the
contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual transaction
exceed the total sales charge applicable to such transaction. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units and to change the amount of the concession or agency commission to dealers
and others from time to time.
Broker-dealers of the Trust, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Trust. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trust. These programs will not change the price Unitholders
pay for their Units or the amount that the Trust will receive from the Units
sold.
Sponsor and Underwriter Compensation. The Underwriter will receive a gross
sales commission equal to the total sales charge applicable to each transaction.
The Sponsor will receive from the Underwriter the difference between the gross
sales commission and an amount equal to the broker concessions or agency
commissions described under "Unit Distribution". Any sales charge discount
provided to investors will be borne by the selling dealer or agent. In addition,
the Sponsor will realize a profit or loss as a result of the difference between
the price paid for the Securities by the Sponsor and the cost of the Securities
to the Trust on the Initial Date of Deposit as well as on subsequent deposits.
The Sponsor has not participated as sole underwriter or as manager or as a
member of the underwriting syndicates or as an agent in a private placement for
any of the Securities. The Sponsor or Underwriter may realize profit or loss as
a result of the possible fluctuations in the market value of the Securities,
since all proceeds received from purchasers of Units are retained by the Sponsor
or Underwriter. In maintaining a secondary market, the Underwriter will realize
profits or losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge) or from a redemption of repurchased Units
at a price above or below the purchase price. Cash, if any, made available to
the Sponsor or Underwriter prior to the date of settlement for the purchase of
Units may be used in the Sponsor's or Underwriter's business and may be deemed
to be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934.
An affilliate of the Sponsor may have participated in a public offering of
one or more of the Securities. The Sponsor, an affiliate or their employees may
have a long or short position in these Securities. An affiliate may act as a
specialist or market marker for these Securities. An officer, director or
employee of the Sponsor or an affiliate may be an officer or director for
issuers of the Securities.
Market for Units. Although it is not obligated to do so, the Underwriter
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Underwriter may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market. The
Trustee will notify the Underwriter of any Units tendered for redemption. If the
Underwriter's bid in the secondary market equals or exceeds the Redemption Price
per Unit, it may purchase the Units not later than the day on which Units would
have been redeemed by the Trustee. The Underwriter may sell repurchased Units at
the secondary market Public Offering Price per Unit.
Tax-Sheltered Retirement Plans. Units are available for purchase in
connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The minimum
purchase for qualified retirement plans is 25 Units but may vary by selling
firm. The purchase of Units may be limited by the plans' provisions and does not
itself establish such plans.
RIGHTS OF UNITHOLDERS
--------------------------------------------------------------------------------
Distributions. Dividends, interest and any net proceeds from the sale of
Securities received by the Trust will generally be distributed to Unitholders on
each Distribution Date to Unitholders of record on the preceding Record Date.
These dates appear under "Summary of Essential Financial Information" in Part
One. A person becomes a Unitholder of record on the date of settlement
(generally three business days after Units are ordered). Unitholders may elect
to receive distributions in cash or to have distributions reinvested into
additional Units. You may also reinvest distributions in certain Van Kampen
mutual funds. See "Rights of Unitholders--Reinvestment Option".
Dividends and interest received by the Trust are credited to the Income
Account of the Trust. Other receipts (e.g., capital gains, proceeds from the
sale of Securities, etc.) are credited to the Capital Account. Proceeds received
on the sale of any Securities, to the extent not used to meet redemptions of
Units or pay deferred sales charges, fees or expenses, will be distributed to
Unitholders. Proceeds received from the disposition of any Securities after a
record date and prior to the following distribution date will be held in the
Capital Account and not distributed until the next distribution date. Any
distribution to Unitholders consists of each Unitholder's pro rata share of the
estimated annual income to be received by the Trust and any available amounts in
the Capital Account as of the related Record Date.
Reinvestment Option. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option (to the
extent Units may be lawfully offered for sale in the state in which the
Unitholder resides) through two options. Brokers and dealers can use the
Dividend Reinvestment Service through Depository Trust Company or purchase the
Automatic Reinvestment Option CUSIP. Unitholders will be subject to any
remaining deferred sales charge payments due on Units. To participate in this
reinvestment option, a Unitholder must file with the Trustee a written notice of
election, together with any certificate representing Units and other
documentation that the Trustee may then require, at least five days prior to the
related Record Date. A Unitholder's election will apply to all Units owned by
the Unitholder and will remain in effect until changed by the Unitholder. If
Units are unavailable for reinvestment, distributions will be paid in cash.
Purchases of additional Units made pursuant to the reinvestment plan will be
made at the net asset value for Units as of the Evaluation Time on the
Distribution Date.
Under the Guaranteed Reinvestment Option Unitholders may elect to have
distributions automatically reinvested in certain Van Kampen mutual funds (the
"Reinvestment Funds"). Each Reinvestment Fund has investment objectives which
differ from those of the Trust. The prospectus relating to each Reinvestment
Fund describes its investment policies and how to begin reinvestment. A
Unitholder may obtain a prospectus for the Reinvestment Funds from the Sponsor.
Purchases of shares of a Reinvestment Fund will be made at a net asset value
computed on the Distribution Date. Unitholders with an existing Guaranteed
Reinvestment Option account (whereby a sales charge is imposed on distribution
reinvestments) may transfer their existing account into a new account which
allows purchases of Reinvestment Fund shares at net asset value.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor, each Reinvestment Fund, and
its investment adviser shall have the right to suspend or terminate the
reinvestment plan at any time.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Trust business day, the date of tender is deemed
to be the next business day.
Unitholders tendering 1,000 or more Units (or $10,000) of the Trust for
redemption may request an in kind distribution of equity securities equal to the
Redemption Price per Unit on the date of tender. Unitholders may not request an
in kind distribution during the five business days prior to the Trust's
termination. An in kind distribution will be made by the Trustee through the
distribution of each of the euquity securities in book-entry form to the account
of the Unitholder's broker-dealer at Depository Trust Company. Amounts
representing fractional shares will be distributed in cash. The Trustee may
adjust the nujmber of shares of any Security included in a Unitholder's in kind
distribution of whole shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in-kind or sold, the size of the Trust will be, and
the diversity of the Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
at the time of redemption.
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in the Trust, determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust and (b) the accrued
expenses of the Trust. During the initial offering period, the redemption price
and the secondary market repurchase price will also include estimated
organizational costs. For these purposes, the Evaluator may determine the value
of the Securities in the following manner. If the Securities are listed on a
national or foreign securities exchange or The Nasdaq Stock Market, this
evaluation is generally based on the closing sale prices on that exchange or
market (unless it is determined that these prices are inappropriate as a basis
for valuation) or, if there is no closing sale price on that exchange or market,
at the closing bid prices. If the Securities are not so listed or, if so listed
and the principal market therefor is other than on the exchange or market, the
evaluation may be based on the current bid price on the over-the-counter market.
If current bid prices are unavailable or inappropriate, the evaluation may be
determined (a) on the basis of current bid prices for comparable securities, (b)
by appraising the Securities on the bid side of the market or (c) by any
combination of the above. The value of any foreign securities is based on the
applicable currency exchange rate in U.S. dollars as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the SEC determines that
trading on that Exchange is restricted or an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
for other periods as the SEC may permit.
Certificates. Ownership of Units is evidenced in book entry form unless a
Unitholder makes a written request to the Trustee that ownership be in
certificate form. Units are transferable by making a written request to the
Trustee and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not limited
to, trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Fractional Units will not
be issued. The Trustee may require a Unitholder to pay a reasonable fee for each
certificate reissued or transferred and to pay any governmental charge that may
be imposed in connection with each transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee of
satisfactory indemnity, evidence of ownership and payment of expenses incurred.
Mutilated certificates must be surrendered to the Trustee for replacement.
Reports Provided. Unitholders will receive a statement of dividends, interest
and other amounts received by the Trust for each distribution. Within a
reasonable time after the end of each year, each person who was a Unitholder
during that year will receive a statement describing dividends, interest and
capital received, actual Trust distributions, Trust expenses, a list of the
Securities and other Trust information. Unitholders may obtain the Evaluator's
evaluations of the Securities upon request.
TRUST ADMINISTRATION
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Portfolio Administration. The Trust is not a managed fund and, except as
provided in the Trust Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Trust based on advice from the Supervisor.
These situations may include events such as the issuer having defaulted on
payment of any of its outstanding obligations or the price of a Security has
declined to such an extent or other credit factors exist so that in the opinion
of the Sponsor retention of the Security would be detrimental to the Trust. If a
public tender offer has been made for a Security or a merger or acquisition has
been announced affecting a Security, the Trustee may either sell the Security or
accept a tender offer for cash if the Supervisor determines that the sale or
tender is in the best interest of Unitholders. The Trustee will distribute any
cash proceeds to Unitholders. In addition, the Trustee may sell Securities to
redeem Units or pay Trust expenses or deferred sales charges. The Trustee must
reject any offer for securities or property other than cash in exchange for the
Securities. If securities or property are nonetheless acquired by the Trust, the
Sponsor may direct the Trustee to sell the securities or property and distribute
the proceeds to Unitholders or to accept the securities or property for deposit
in the Trust. Should any contract for the purchase of any of the Securities
fail, the Sponsor will (unless substantially all of the moneys held in the Trust
to cover the purchase are reinvested in substitute Securities in accordance with
the Trust Agreement) refund the cash and sales charge attributable to the failed
contract to all Unitholders on or before the next distribution date.
When your Trust sells Securities, the composition and diversity of the
Securities in the Trust may be altered. In order to obtain the best price for
the Trust, it may be necessary for the Supervisor to specify minimum amounts
(generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of the Trust's portfolio securities, the Sponsor
may direct that orders be placed with and brokerage commissions be paid to
brokers, including brokers which may be affiliated with the Trust, the Sponsor
or dealers participating in the offering of Units. In addition, in selecting
among firms to handle a particular transaction, the Sponsor may take into
account whether the firm has sold or is selling units of unit investment trusts
which it sponsors.
Amendment of the Trust Agreement. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
Termination. The Trust will terminate on the Mandatory Termination Date or
upon the sale or other disposition of the last Security held in the Trust. The
Trust may be terminated at any time with consent of Unitholders representing
two-thirds of the outstanding Units or by the Trustee when the value of the
Trust is less than $500,000 ($3,000,000 if the value of the Trust has exceeded
$15,000,000) (the "Minimum Termination Value"). Unitholders will be notified of
any termination. The Trustee may begin to sell Securities in connection with a
Trust termination during a period beginning nine business days before, and no
later than, the Mandatory Termination Date. Approximately thirty days before
this date, the Trustee will notify Unitholders of the termination. Unitholders
will receive a final cash distribution within a reasonable time after the
Mandatory Termination Date. All distributions will be net of Trust expenses and
costs. Unitholders will receive a final distribution statement following
termination. The Information Supplement contains further information regarding
termination of the Trust. See "Additional Information".
Limitations on Liabilities. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability for taking any action or for refraining from taking any
action in good faith pursuant to the Trust Agreement, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad faith or gross
negligence (negligence in the case of the Trustee) in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder. The Trustee is not be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Securities. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and is not be liable for any action taken by it in good faith under
the Trust Agreement. The Trustee is not liable for any taxes or other
governmental charges imposed on the Securities, on it as Trustee under the Trust
Agreement or on the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Trust Agreement contains other
customary provisions limiting the liability of the Trustee. The Trustee, Sponsor
and Supervisor may rely on any evaluation furnished by the Evaluator and have no
responsibility for the accuracy thereof. Determinations by the Evaluator shall
be made in good faith upon the basis of the best information available to it.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Morgan Stanley Dean Witter & Co.
Van Kampen Funds Inc. specializes in the underwriting and distribution of unit
investment trusts and mutual funds with roots in money management dating back to
1926. The Sponsor is a member of the National Association of Securities Dealers,
Inc. and has its principal offices at 1 Parkview Plaza, Oakbrook Terrace, P.O.
Box 5555, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999, the
total stockholders' equity of Van Kampen Funds Inc. was $141,554,861 (audited).
Van Kampen Funds Inc. and your Trust have adopted a code of ethics requiring Van
Kampen's employees who have access to information on Trust transactions to
report personal securities transactions. The purpose of the code is to avoid
potential conflicts of interest and to prevent fraud, deception or misconduct
with respect to your Trust. The Information Supplement contains additional
information about the Sponsor.
If the Sponsor fails to perform any of its duties under the Trust Agreement
or becomes incapable of acting or declares bankruptcy or its affairs are taken
over by public authorities, then the Trustee may (i) appoint a successor Sponsor
at rates of compensation deemed by the Trustee to be reasonable and not
exceeding amounts prescribed by the Securities and Exchange Commission, (ii)
terminate the Trust Agreement and liquidate the Trust as provided therein or
(iii) continue to act as Trustee without terminating the Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. Additional information
regarding the Trustee is set forth in the Information Supplement, including the
Trustee's qualifications and duties, its ability to resign, the effect of a
merger involving the Trustee and the Sponsor's ability to remove and replace the
Trustee. See "Additional Information".
Performance Information. The Sponsor and Underwriter may from time to time in
advertising and sales materials compare the current returns on the Trust and
returns over specified time periods on other similar trusts (which may show
performance net of expenses and charges which the Trust would have charged) with
returns on other investments such as the common stocks comprising the Dow Jones
Industrial Average, the S&P 500, other investment indices, corporate or U.S.
government bonds, bank CDs, money market accounts or money market funds, or with
performance data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc. or various publications, each of which has characteristics
that may differ from those of the Trust. Information on percentage changes in
the dollar value of Units may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective Unitholders. Total return figures may not be averaged and may not
reflect deduction of the sales charge, which would decrease return. No provision
is made for any income taxes payable. Past performance may not be indicative of
future results. The Trust portfolio is not managed and Unit price and return
fluctuate with the value of the securities in the portfolio, so there may be a
gain or loss when Units are sold. As with other performance data, performance
comparisons should not be considered representative of the Trust's relative
performance for any future period.
TAXATION
--------------------------------------------------------------------------------
General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as capital assets
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust. For purposes of the following discussion and opinions, it is assumed
that each Security is equity for federal income tax purposes. In the opinion of
Chapman and Cutler, special counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes; each Unitholder will be treated as
the owner of a pro rata portion of each of the assets of the Trust under the
Code; and the income of the Trust will be treated as income of the Unitholders
thereof under the Code. Each Unitholder will be considered to have received his
pro rata share of income derived from each Security when such income is
considered to be received by the Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his pro rata portion of each Security when such dividends are considered to
be received by the Trust regardless of whether such dividends are used to pay a
portion of any deferred sales charge imposed. Unitholders will be taxed in this
manner regardless of whether distributions from the Trust are actually received
by the Unitholder or are automatically reinvested (see "Rights of
Unitholders--Reinvestment Option").
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder from the Trust as
described below). The price a Unitholder pays for his Units, generally including
sales charges, is allocated among his pro rata portion of each Security held by
the Trust (in proportion to the fair market values thereof on the valuation date
closest to the date the Unitholder purchases his Units) in order to determine
his initial tax basis for his pro rata portion of each Security held by the
Trust. Unitholders should consult their own tax advisers with regard to the
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of the dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to a Security held by the Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings and
profits". A Unitholder's pro rata portion of dividends paid on such Security
which exceed such current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, the holding period for such capital gain will be
determined by the period of time a Unitholder has held his Units.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss (except in the case of a dealer or a
financial institution). Unitholders should consult their tax advisers regarding
the recognition of gains and losses for federal income tax purposes. Unitholders
should consult their tax advisers regarding the recognition of gains and losses
for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends (other than corporate
Unitholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Final regulations have
been issued which address special rules that must be considered in determining
whether the 46 day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. Unitholders should
consult their tax advisors with respect to the limitations on and modifications
to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. As a result of the Tax Reform Act of 1986, certain miscellaneous
itemized deductions, such as investment expenses, tax return preparation fees
and employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of a Trust as miscellaneous
itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. The Internal Revenue Service Restructuring and
Reform Act of 1998 (the "1998 Tax Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as net long-term capital gain
over net short-term capital loss for the taxable year) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax rate of
20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust involved including his
pro rata portion of all Securities represented by a Unit. The Taxpayer Relief
Act of 1997 (the "1997 Tax Act") includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g., short sales, offsetting notional principal contracts, futures or
forward contracts, or similar transactions) as constructive sales for purposes
of recognition of gain (but not loss) and for purposes of determining the
holding period. Unitholders should consult their own tax advisers with regard to
any such constructive sales rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Rights of Unitholders--Redemption of
Units," under certain circumstances a Unitholder tendering Units for redemption
may request an In Kind Distribution of the Securities in the Trust. A Unitholder
may also under certain circumstances request an In Kind Distribution of the
Securities in the Trust upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units". The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such In Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Rights of Unitholders--Redemption of
Units". As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unitholder is considered as owning a pro rata
portion of each of the Trust's assets for federal income tax purposes. The
receipt of an In Kind Distribution will result in a Unitholder receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Security owned by the Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by the Trust, such Unitholder will generally
recognize gain or loss based upon the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an In
Kind Distribution will have to analyze the tax consequences with respect to each
Security owned by the Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss) recognized
under the rules described above by such Unitholder with respect to each Security
owned by the Trust. Unitholders who request an In Kind Distribution are advised
to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder for
his Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary income
as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporation for a three-year period ending with the close
of its taxable year preceding payment was not effectively connected to the
conduct of a trade or business within the United States. In addition, such
earnings may be exempt from U.S. withholding pursuant to a specific treaty
between the United States and a foreign country. Non-U.S. Unitholders should
consult their own tax advisers regarding the imposition of U.S. withholding on
distributions from the Trust.
It should be noted that payments to the Trust of dividends on Securities that
are attributable to foreign corporations may be subject to foreign withholding
taxes and Unitholders should consult their tax advisers regarding the potential
tax consequences relating to the payment of any such withholding taxes by the
Trust. Any dividends withheld as a result thereof will nevertheless be treated
as income to the Unitholders. Because, under the grantor trust rules, an
investor is deemed to have paid directly his share of foreign taxes that have
been paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect to such taxes.
The 1997 Tax Act imposes a required holding period for such credits. Investors
should consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The Trustee
will also furnish annual information returns to Unitholders and to the Internal
Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel for New York tax matters, the Trust is not
an association taxable as a corporation and the income of the Trust will be
treated as the income of the Unitholders under the existing income tax laws of
the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
in the Trust that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unitholder in paragraph (a) but whose
income from a Unit is effectively connected with such Unitholder's conduct of a
United States trade or business. The term also includes certain former citizens
of the United States whose income and gain on the Units will be taxable.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.
TRUST OPERATING EXPENSES
--------------------------------------------------------------------------------
Compensation of Sponsor, Supervisor and Evaluator. The Sponsor will not
receive any fees in connection with its activities relating to the Trust.
However, the Evaluator, which is an affiliate of the Sponsor, will receive the
annual fee for evaluation services set forth in the "Summary of Essential
Financial Information" in Part One. The Supervisor, which is also an affiliate
of the Sponsor, will receive the annual fee described in the "Summary of
Essential Financial Information" in Part One for portfolio supervisory services
for the Trust. These fees may exceed the actual costs of providing these
services to the Trust but at no time will the total amount received for
supervisory and evaluation services rendered to all Van Kampen unit investment
trusts in any calendar year exceed the aggregate cost of providing these
services in that year.
Trustee's Fee. For its services the Trustee will receive the fee from the
Trust set forth in the "Summary of Essential Financial Information" in Part One.
The Trustee benefits to the extent there are funds in the Capital and Income
Accounts since these Accounts are non-interest bearing to Unitholders and the
amounts earned by the Trustee are retained by the Trustee. Part of the Trustee's
compensation for its services to the Trust is expected to result from the use of
these funds.
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the Trust,
(b) fees of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any action
taken by the Trustee to protect the Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities held in the Trust
portfolio, (i) any offering costs incurred after the end of the initial offering
period and (j) expenditures incurred in contacting Unitholders upon termination
of the Trust. The Trust may pay the expenses of updating its registration
statement each year. Unit investment trust sponsors have historically paid these
expenses.
General. The fees and expenses of the Trust will accrue on a daily basis. The
fees and expenses are generally paid out of the Capital Account. When these
amounts are paid by or owing to the Trustee, they are secured by a lien on the
Trust's portfolio. Securities may be sold to pay these amounts which will result
in capital gains or losses to Unitholders. See "Taxation". The Supervisor's,
Evaluator's and Trustee's fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index or, if this
category is not published, in a comparable category.
OTHER MATTERS
--------------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
Independent Certified Public Accountants. The statement of condition and the
related portfolio included in this Prospectus have been audited by Grant
Thornton LLP, independent certified public accountants, as set forth in their
report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Trust with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Trust. Information about your Trust (including the Information
Supplement) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. You may obtain information about the Public Reference Room by
calling 1-202-942-8090. Reports and other information about your Portfolio are
available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained, after paying a
duplication fee, by electronic request at the following e-mail address:
[email protected] or by writing the SEC's Public Reference Section, Washington,
D.C. 20549-0102.
TABLE OF CONTENTS
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Title Page
----- ----
The Trust................................... 2
Objectives and Securities Selection......... 2
Risk Factors................................ 3
Public Offering............................. 4
Rights of Unitholders....................... 7
Trust Administration........................ 9
Taxation.................................... 11
Trust Operating Expenses.................... 15
Other Matters............................... 16
Additional Information...................... 16
PROSPECTUS
PART II
--------------------------------------------------------------------------------
Utility & Communications Trust,
Series 1
Baird / (logo)
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
1-800-RW-BAIRD
(1-800-792-2473)
www.rwbaird.com
Please retain this prospectus for future reference.
Information Supplement
Van Kampen Focus Portfolios, Series 172
--------------------------------------------------------------------------------
This Information Supplement provides additional information concerning the
risks and operations of the Trust which is not described in the Prospectus. This
Information Supplement should be read in conjunction with the Prospectus. This
Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in the Trust and
may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at 1 Parkview Plaza, P.O.
Box 5555, Oakbrook Terrace, Illinois 60181-5555 or by contacting your broker.
This Information Supplement is dated as of the date of the Prospectus and all
capitalized terms have been defined in the Prospectus.
Table of Contents
Page
Risk Factors 2
Sponsor Information 4
Trustee Information 5
Trust Termination 5
RISK FACTORS
Price Volatility. Because the Trust invests in common stocks, you should
understand the risks of investing in common stocks before purchasing Units.
These risks include the risk that the financial condition of the company or the
general condition of the stock market may worsen and the value of the stocks
(and therefore Units) will fall. Common stocks are especially susceptible to
general stock market movements. The value of common stocks often rises or falls
rapidly and unpredictably as market confidence and perceptions of companies
change. These perceptions are based on factors including expectations regarding
government economic policies, inflation, interest rates, economic expansion or
contraction, political climates and economic or banking crises. The value of
Units will fluctuate with the value of the stocks in a Trust and may be more or
less than the price you originally paid for your Units. As with any investment,
we cannot guarantee that the performance of a Trust will be positive over any
period of time. Because the Trust is unmanaged, the Trustee will not sell stocks
in response to market fluctuations as is common in managed investments. In
addition, because some Trusts hold a relatively small number of stocks, you may
encounter greater market risk than in a more diversified investment.
Dividends. Common stocks represent ownership interests in a company and are
not obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means that
common stockholders have a right to receive dividends only if a company's board
of directors declares a dividend and the company has provided for payment of all
of its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.
Liquidity. Whether or not the stocks in a Trust are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
Additional Units. The Sponsor may create additional Units of a Trust by
depositing into the Trust additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Trust will pay brokerage fees.
Voting. Only the Trustee may sell or vote the stocks in a Trust. While you
may sell or redeem your Units, you may not sell or vote the stocks in your
Trust. The Sponsor will instruct the Trustee how to vote the stocks. The Trustee
will vote the stocks in the same general proportion as shares held by other
shareholders if the Sponsor fails to provide instructions.
Utility Issuers. An investment in Units of the Trust should be made with an
understanding of the characteristics of the public utility industry and the
risks which such an investment may entail. General problems of the public
utility industry include the difficulty in obtaining an adequate return on
invested capital despite frequent increases in rates which have been granted by
the public service commissions having jurisdiction, the difficulty in financing
large construction programs during an inflationary period, the restrictions on
operations and increased cost and delays attributable to environmental, nuclear
safety and other regulatory considerations, the difficulty of the capital
markets absorbing utility debt and equity securities, the difficulty in
obtaining fuel for electric generation at reasonable prices, and the effects of
energy conservation. There is no assurance that public service commissions will
grant rate increases in the future or that any such increases will be timely or
adequate to cover operating and other expenses and debt service requirements.
All of the public utilities which are issuers of the Securities have been
experiencing many of these problems in varying degrees. Furthermore, utility
stocks are particularly susceptible to interest rate risk, generally exhibiting
an inverse relationship to interest rates. As a result, electric utility stock
prices may be adversely affected as interest rates rise. Similarly, the success
of certain companies is tied to a relatively small concentration of products or
technologies with intense competition between companies. There can be no
assurance that these customers will place additional orders, or that an issuer
of Securities will obtain orders of similar magnitude as past orders from other
customers. Accordingly, a decline in demand of such products, technologies or
from such customers could have a material adverse impact on issuers of the
Securities.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and the
appropriate rate of return on an approved asset base, which must be approved by
the state commissions. Certain utilities have had difficulty from time to time
in persuading regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment. Any unexpected
limitations could negatively affect the profitability of utilities whose budgets
are planned far in advance. In addition, gas pipeline and distribution companies
have had difficulties in adjusting to short and surplus energy supplies,
enforcing or being required to comply with long-term contracts and avoiding
litigation with their customers, on the one hand, or suppliers, on the other.
Certain of the issuers of the Securities may own or operate nuclear
generating facilities. Governmental authorities may from time to time review
existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating projects
in the electric utility industry have experienced substantial cost increases,
construction delays and licensing difficulties. These have been caused by
various factors, including inflation, high financing costs, required design
changes and rework, allegedly faulty construction, objections by groups and
governmental officials, limits on the ability to finance, reduced forecasts of
energy requirements and economic conditions. This experience indicates that the
risk of significant cost increases, delays and licensing difficulties remain
present until completion and achievement of commercial operation of any nuclear
project. Also, nuclear generating units in service have experienced unplanned
outages or extensions of scheduled outages due to equipment problems or new
regulatory requirements sometimes followed by a significant delay in obtaining
regulatory approval to return to service. A major accident at a nuclear plant
anywhere could cause the imposition of limits or prohibitions on the operation,
construction or licensing of nuclear units.
In view of the uncertainties discussed above, there can be no assurance
that any utility company's share of the full cost of nuclear units under
construction ultimately will be recovered in rates or the extent to which a
company could earn an adequate return on its investment in such units. The
likelihood of a significantly adverse event occurring in any of the areas of
concern described above varies, as does the potential severity of any adverse
impact. It should be recognized, however, that one or more of such adverse
events could occur and individually or collectively could have a material
adverse impact on a company's financial condition, the results of its
operations, its ability to make interest and principal payments on its
outstanding debt or to pay dividends.
Other general problems of the electric, gas and water utility industries
(including state and local joint action power agencies) include rising costs of
rail transportation to transport fossil fuels, the uncertainty of transmission
service costs for both interstate and intrastate transactions, changes in tax
laws which adversely affect a utility's ability to operate profitably, increased
competition in service costs, recent reductions in estimates of future demand
for electricity and gas in certain areas of the country, restrictions on
operations and increased cost and delays attributable to environmental
considerations, uncertain availability and increased cost of capital,
unavailability of fuel for electric generation at reasonable prices, including
the steady rise in fuel costs and the costs associated with conversion to
alternate fuel sources such as coal, availability and cost of natural gas for
resale, technical and cost factors and other problems associated with
construction, licensing, regulation and operation of nuclear facilities for
electric generation, including, among other considerations, the problems
associated with the use of radioactive materials and the disposal of radioactive
wastes, and the effects of energy and environmental conservation efforts. Each
of the problems referred to could adversely affect the ability of the issuers of
any Securities to make dividend payments and the value of such Securities on
redemption of your Units.
Telecommunications Issuers. Because the Trust is also concentrated in the
telecommunications industry, the value of the Units may be susceptible to
factors affecting the telecommunications industry. The telecommunications
industry is subject to governmental regulation, and the products and services of
telecommunications companies may be subject to rapid obsolescence. These factors
could affect the value of Units. Telephone companies in the United States, for
example, are subject to both state and federal regulations affecting permitted
rates of returns and the kinds of services that may be offered. Certain types of
companies represented in a portfolio are engaged in fierce competition for a
share of the market of their products. As a result, competitive pressures are
intense and the stocks are subject to rapid price volatility. Recent federal
legislation governing the United States telecommunications industry remains
subject to judicial review and additional interpretation, which may adversely
affect the companies whose securities are held by the Trust. While a portfolio
concentrates on the securities of established suppliers of traditional
telecommunication products and services, the Trust may also invest in smaller
telecommunications companies which may benefit from the development of new
products and services. These smaller companies may present greater opportunities
for capital appreciation, and may also involve greater risk than large,
established issuers. Such smaller companies may have limited product lines,
market or financial resources, and their securities may trade less frequently
and in limited volume than the securities of larger, more established companies.
As a result, the prices of the securities of such smaller companies may
fluctuate to a greater degree than the prices of securities of other issuers.
SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of your Trust.
The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van Kampen
Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc., which
in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
Morgan Stanley Dean Witter & Co., together with various of its directly and
indirectly owned subsidiaries, is engaged in a wide range of financial services
through three primary businesses: securities, asset management and credit
services. These principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring and other corporate
finance advisory activities; merchant banking; stock brokerage and research
services; credit services; asset management; trading of futures, options,
foreign exchange commodities and swaps (involving foreign exchange, commodities,
indices and interest rates); and real estate advice, financing and investing.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has its principal offices at 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999,
the total stockholders' equity of Van Kampen Funds Inc. was $141,554,861
(audited). (This paragraph relates only to the Sponsor and not to the Trust or
to any other Series thereof. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
As of September 30, 2000, the Sponsor and its Van Kampen affiliates managed
or supervised more than $100 billion of investment products. The Sponsor and its
Van Kampen affiliates offer more than 50 open-end mutual funds, 37 closed-end
funds, and have sponsored over 2,700 series of fixed income and equity unit
investment trusts.
If the Sponsor fails to perform any of its duties under the Trust Agreement
or becomes incapable of acting or becomes bankrupt or its affairs are taken over
by public authorities, then the Trustee may (i) appoint a successor Sponsor at
rates of compensation deemed by the Trustee to be reasonable and not exceeding
amounts prescribed by the Securities and Exchange Commission, (ii) terminate the
Trust Agreement and liquidate the Trust as provided therein or (iii) continue to
act as Trustee without terminating the Trust Agreement.
TRUSTEE INFORMATION
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust division
offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder. Such books and records shall be open to
inspection by any Unitholder at all reasonable times during the usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The Trustee is required to keep a certified copy or duplicate
original of the Trust Agreement on file in its office available for inspection
at all reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
TRUST TERMINATION
The Trust may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units of such Trust then outstanding or by the
Trustee when the value of the Securities owned by the Trust, as shown by any
evaluation, is less than $500,000 ($3,000,000 if the value of the Trust has
exceeded $15,000,000). The Trust will be liquidated by the Trustee in the event
that a sufficient number of Units of the Trust not yet sold are tendered for
redemption by the Sponsor, so that the net worth of such Trust would be reduced
to less than 40% of the value of the Securities at the time they were deposited
in the Trust. If the Trust is liquidated because of the redemption of unsold
Units by the Sponsor, the Sponsor will refund to each purchaser of Units the
entire sales charge paid by such purchaser. The Trust Agreement will terminate
upon the sale or other disposition of the last Security held thereunder, but in
no event will it continue beyond the Mandatory Termination Date.
Commencing during the period beginning nine business days prior to, and no
later than, the Mandatory Termination Date, Securities may begin to be sold in
connection with the termination of the Trust. The Sponsor will determine the
manner, timing and execution of the sales of the Securities. The Sponsor shall
direct the liquidation of the Securities in such manner as to effectuate orderly
sales and a minimal market impact. In the event the Sponsor does not so direct,
the Securities shall be sold within a reasonable period and in such manner as
the Trustee, in its sole discretion, shall determine. At least 30 days before
the Mandatory Termination Date the Trustee will provide written notice of any
termination to all Unitholders of the appropriate Trust. Unitholders will
receive a cash distribution from the sale of the remaining Securities within a
reasonable time following the Mandatory Termination Date. The Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated compensation of
the Trustee, costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. Any
sale of Securities in the Trust upon termination may result in a lower amount
than might otherwise be realized if such sale were not required at such time.
The Trustee will then distribute to each Unitholder of each Trust his pro rata
share of the balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in the
same manner.
EMSPRO172
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Van Kampen Focus Portfolios, Series 172, certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 22nd day of
December, 2000.
Van Kampen Focus Portfolios, Series 172
(Registrant)
By Van Kampen Funds Inc.
(Depositor)
By: Christine K. Putong
Assistant Secretary
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on August 25, 2000 by the
following persons who constitute a majority of the Board of Directors of Van
Kampen Funds Inc.:
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive Officer )
John H. Zimmermann III President )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President and Chief Operations )
and Technology Officer )
Christine K. Putong______________
(Attorney in Fact)*
--------------------
* An executed copy of each of the related powers of attorney is filed herewith
or was filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen Focus Portfolios, Series 136
(File No. 333-70897) and the same are hereby incorporated herein by this
reference.
