MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 176
The Prospectus filed with Amendment No. 1 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 176 on September 21, 1999. An effort has been
made to set forth below each of the major changes and also to reflect the same
by blacklining the marked counterparts of the Prospectus submitted with the
Amendment.
Cover Page. The date of the Prospectus has been completed.
Pages 2-3. "The Summary of Essential Financial Information" section and
"Fee Table" have been completed.
Pages 4-6. Revisions have been made and the portfolio has been completed.
Pages 7-9. The descriptions of the Securities issuers have been completed.
Pages 10-11. The Report of Independent Certified Public Accountants and
Statement of Condition have been completed.
FILE NO. 333-85255
CIK #1025330
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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.
A. Exact Name of Trust: VAN KAMPEN FOCUS PORTFOLIOS, SERIES 176
B. Name of Depositor: VAN KAMPEN FUNDS INC.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
CHAPMAN AND CUTLER VAN KAMPEN FUNDS INC.
Attention: Mark J. Kneedy Attention: A. Thomas Smith III, General Counsel
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of proportionate interest
F. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
/X/ Check box if it is proposed that this filing will become effective at 2:00
p.m. on September 21, 1999 pursuant to Rule 487.
Josephthal & Co. Inc.
JOSEPHTHAL RESEARCH SERIES
SMALL-CAP FOCUS PORTFOLIO I
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Van Kampen Focus Portfolios, Series 176 includes the unit investment trust
described above (the "Trust"). The Trust seeks to increase the value of your
Units by investing in a diversified portfolio of stocks of smaller companies. Of
course, we cannot guarantee that the Trust will achieve its objective.
SEPTEMBER 21, 1999
YOU SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
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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.
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
SEPTEMBER 21, 1999
PUBLIC OFFERING PRICE
Aggregate value of Securities per Unit (1) $ 9.900
Sales charge 0.295
Less deferred sales charge 0.195
Public offering price per Unit (2) $ 10.000
TRUST INFORMATION
Initial number of Units (3) 15,051
Aggregate value of Securities (1) $ 149,000
Estimated initial distribution per Unit (December 1999) (4) $ .01
Estimated annual dividends per Unit (4) $ 0.0497
Redemption price per Unit (5) $ 9.68
GENERAL INFORMATION
Initial Date of Deposit September 21, 1999
Mandatory Termination Date November 21, 2000
Record Dates June 10 and December 10
Distribution Dates June 25 and December 25
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(1) Each Security is valued at the last closing sale price on its principal
trading exchange or, if not listed, at the last asked price on the day
before the Initial Date of Deposit. You will bear all or a portion of the
expenses incurred in organizing and offering your Trust. The Public
Offering Price includes the estimated amount of these costs. The Trustee
will deduct these expenses from your Trust at the end of the initial
offering period (approximately two months). The estimated amount is
described on the next page.
(2) The Public Offering Price will include any accumulated dividends or cash in
the Income or Capital Accounts.
(3) The number of Units may be adjusted so that the Public Offering Price per
Unit equals $10 at the Evaluation Time on the Initial Date of Deposit. The
number of Units and fractional interest of each Unit will increase or
decrease to the extent of any adjustment.
(4) This estimate is based on the most recently declared quarterly dividends or
interim and final dividends accounting for any foreign withholding taxes.
Actual dividends may vary due to a variety of factors. See "Risk Factors".
(5) The redemption price is reduced by any remaining deferred sales charge. The
redemption price includes the estimated organizational and offering costs.
The redemption price will not include these costs after the initial
offering period. See "Rights of Unitholders--Redemption of Units".
FEE TABLE
TRANSACTION FEES (AS % OF OFFERING PRICE)
Initial sales charge (1).................................. 1.00%
Deferred sales charge (2)................................. 1.95%
----------
Maximum sales charge ..................................... 2.95%
==========
ESTIMATED ORGANIZATIONAL COSTS PER UNIT (3)............... $ 0.03167
==========
ESTIMATED ANNUAL EXPENSES PER UNIT
Trustee's fee and operating expenses...................... $ 0.01333
Evaluation fees........................................... $ 0.00250
Supervisory fees.......................................... $ 0.00250
----------
Estimated annual expenses per Unit........................ $ 0.01833
==========
ESTIMATED COSTS OVER TIME
One year.................................................. $ 35
Three years............................................... $ 39
Five years................................................ N/A
Ten years................................................. N/A
This fee table is intended to assist you in understanding the costs that you
will bear and to present a comparison of fees. The "Estimated Costs Over Time"
example illustrates the expenses you would pay on a $1,000 investment assuming a
5% annual return and redemption at the end of each period. This example assumes
that you roll your investment into a new trust at the end of each year. Of
course, you should not consider this example a representation of actual past or
future expenses or annual rate of return which may differ from those assumed for
this example. The sales charge and expenses are described under "Public
Offering" and "Trust Operating Expenses".
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(1) The initial sales charge is the difference between the maximum sales charge
and the deferred sales charge.
(2) The deferred sales charge is actually equal to $0.195 per Unit. This amount
will exceed the percentage above if the Public Offering Price per Unit
falls below $10 and will be less than the percentage above if the Public
Offering Price per Unit exceeds $10. The deferred sales charge accrues
daily and is assessed from December 10, 1999 through August 9, 2000.
(3) You will bear all or a portion of the expenses incurred in organizing and
offering your Trust. The Trustee will deduct the actual amount of these
expenses from your Trust at the end of the initial offering period.
SMALL-CAP FOCUS PORTFOLIO
The Trust seeks to provide the potential for capital appreciation by
investing in a portfolio of the largest small company stocks screened from the
Standard & Poor's Small Cap 600 Index. Small-cap companies are generally the
smallest of the publicly traded companies. The average market capitalization is
approximately $1.5 billion. The universe of small-cap stocks is very large and
fragmented, comprised of approximately 6,500 companies or approximately two
thirds of the publicly traded stocks in the U.S. market.
The portfolio consists of companies that passed the following screens:
o The sixty (60) companies with the largest market capitalization in the
Standard & Poor's Small Cap 600 Index averaging approximately $1.5
billion.
o Companies with a minimum average daily trading volume greater than
100,000 shares.
o Companies that represent 25% of the weighted value of the Standard &
Poor's Small Cap Index.
Small-cap companies tend to be in the early years of their business
evolution. Often, they are built around new, specialized, or unique products or
services. While they typically have greater risk that larger, more established
companies, small companies may offer greater earnings growth potential during
this early stage of development. According to Josephthal analysts, another
attraction for investors into the small-cap arena is that these shares are
currently undervalued relative to larger, blue chip company stocks.
Smaller companies may also be able to react more quickly to business
opportunities. For example, smaller companies may be able to take advantage of a
specific market niche or developing innovative products or services than larger
companies. Management may own a substantial stake in the business and the key
decision-makers may have a compelling incentive to work hard at increasing the
value of the company's share price.
According to Ibbotson and Associates, small company stocks have outperformed
their large-cap counterparts by an average annual return of approximately 2%
since 1926. This performance premium is known as the small-cap effect. While
this effect does not happen every year, and the premium may not seem like much,
compounding this 2% difference can result in dramatic out-performance over
longer investment horizons.
When this Trust terminates, Josephthal may offer a subsequent trust that
would allow you to roll your investment into a new trust at a reduced sales
charge. You may be able to achieve more consistent investment results over time
through this rollover strategy. This strategy may offer the ability to pursue a
longer-term investment strategy by investing in a series of successive trusts.
Of course, no one can guarantee that a subsequent trust will be available.
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 JOSEPHTHAL. Josephthal & Co. Inc. acts as the Underwriter and
Supervisor of the Trust. Josephthal is a full service investment banking and
brokerage firm headquartered in New York. It possesses an extensive retail
network with more than 1,200 employees spread across 21 offices in the United
States and one office overseas. Josephthal has been involved in investment
banking since 1910. Josephthal is a member of the New York Stock Exchange and
other principal exchanges, the National Association of Securities Dealers (NASD)
and the Securities Investor Protection Corporation (SIPC). You can contact us at
(212) 907-4000 or visit our website at www.josephthal.com.
<TABLE>
<CAPTION>
PORTFOLIO
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CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) TO TRUST (2)
- ----------- ----------------------------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
146 Acxiom Corporation $ 16.875 0.00% $ 2,463.75
97 American Management Systems, Inc 25.938 0.00 2,515.94
67 Barrett Resources Corporation 37.250 0.00 2,495.75
54 BISYS Group, Inc 46.250 0.00 2,497.50
60 Burr-Brown Corporation 42.000 0.00 2,520.00
33 Catalina Marketing Corporation 75.938 0.00 2,505.94
61 C-Cube Microsystems, Inc 40.813 0.00 2,489.56
57 Centura Banks, Inc 43.688 2.93 2,490.19
76 Cognex Corporation 32.563 0.00 2,474.75
59 Commerce Bancorp, Inc 41.438 2.12 2,444.81
109 Commercial Federal Corporation 22.563 1.15 2,459.31
68 CommScope, Inc 35.563 0.00 2,418.25
77 Corn Products International, Inc 32.188 0.99 2,478.44
43 CTS Corporation 56.938 0.21 2,448.31
103 Cullen/Frost Bankers, Inc 23.500 2.98 2,420.50
47 Dallas Semiconductor Corporation 53.188 0.38 2,499.81
115 DeVry, Inc 21.500 0.00 2,472.50
86 Ethan Allen Interiors, Inc 29.813 0.54 2,563.88
68 Expeditors International of Washington, Inc 36.750 0.54 2,499.00
29 Express Scripts, Inc 87.813 0.00 2,546.56
98 FirstMerit Corporation 25.438 3.14 2,492.88
114 Gentex Corporation 22.063 0.00 2,515.13
24 IDEC Pharmaceuticals Corporation 107.000 0.00 2,568.00
88 Jones Pharma, Inc 28.563 0.35 2,513.50
83 KEMET Corporation 30.188 0.00 2,505.56
77 Lattice Semiconductor Corporation 31.688 0.00 2,439.94
113 La-Z-Boy, Inc 21.938 1.46 2,478.94
66 Legg Mason, Inc 38.188 0.84 2,520.38
65 Linens 'n Things, Inc 37.563 0.00 2,441.56
54 Macromedia, Inc 45.750 0.00 2,470.50
73 MedQuist, Inc 33.063 0.00 2,413.56
41 Mercury Interactive Corporation 59.500 0.00 2,439.50
34 Metro Networks, Inc 72.250 0.00 2,456.50
51 Micrel, Inc 48.188 0.00 2,457.56
75 Mueller Industries, Inc 32.563 0.00 2,442.19
65 National Computer Systems, Inc 38.750 0.52 2,518.75
66 National Data Corporation 37.000 0.81 2,442.00
73 National Instruments Corporation 34.375 0.00 2,509.38
80 Newfield Exploration Company 30.625 0.00 2,450.00
<CAPTION>
PORTFOLIO (CONTINUED)
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CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) TO TRUST (2)
- ----------- ----------------------------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
37 Novellus Systems, Inc $ 67.750 0.00% $ 2,506.75
51 Orion Capital Corporation 48.125 1.50 2,454.38
55 Patterson Dental Company 45.188 0.00 2,485.31
60 Profit Recovery Group International, Inc 43.625 0.00 2,617.50
57 Radian Group, Inc 43.875 0.27 2,500.88
66 Roper Industries, Inc 37.500 0.69 2,475.00
27 SEI Investments Company 92.938 0.43 2,509.31
90 Smithfield Foods, Inc 27.500 0.00 2,475.00
69 True North Communications, Inc 35.500 1.69 2,449.50
74 United Water Resources, Inc 33.250 2.89 2,460.50
57 Unitrode Corporation 44.250 0.00 2,522.25
55 USFreightways Corporation 43.438 0.86 2,389.06
31 U.S. Trust Corporation 80.125 1.10 2,483.88
81 UST Corporation 30.625 1.96 2,480.63
54 Valassis Communications, Inc 45.500 0.00 2,457.00
59 Visio Corporation 42.125 0.00 2,485.38
51 Westwood One, Inc 48.625 0.00 2,479.88
81 Whittman-Hart, Inc 31.313 0.00 2,536.31
62 Williams-Sonoma, Inc 39.750 0.00 2,464.50
62 Zale Corporation 40.063 0.00 2,483.88
52 Zebra Technologies Corporation 48.125 0.00 2,502.50
- ----------- -------------
4,026 $ 148,999.98
=========== =============
See "Notes to Portfolio".
</TABLE>
NOTES TO PORTFOLIO
(1) The Securities are initially represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited
with the Trustee. Contracts to acquire Securities were entered into on
September 20, 1999 and have a settlement date of September 23, 1999 (see
"The Trust").
(2) The market value of each Security is based on the closing sale price on the
applicable exchange or, if not listed, the last asked price on the day
prior to the Initial Date of Deposit. Other information regarding the
Securities, as of the Initial Date of Deposit, is as follows:
PROFIT
COST TO (LOSS) TO
SPONSOR SPONSOR
-------------- --------------
$ 148,991 $ 9
"+" Indicates that the stock is issued by a foreign issuer and held in American
Depositary Receipt form.
(3) Current Dividend Yield for each Security is based on the estimated annual
dividends per share and the Security's market value as of the close of
trading on the day prior to the Initial Date of Deposit. Estimated annual
dividends per share are calculated by annualizing the most recently
declared dividends or by adding the most recent interim and final dividends
declared and reflect any foreign withholding taxes.
THE SECURITIES. A brief description of each of the issuers of the Securities
is listed below.
ACXIOM CORPORATION. Acxiom Corporation provides information management
solutions using customer consumer, and business data. The company offers a
variety of data products, data integration services modeling and analysis, and
information technology outsourcing services, as well as data warehousing and
decision support services. Acxiom has operations throughout the United States
and in the United Kingdom, France, and Spain.
AMERICAN MANAGEMENT SYSTEMS, INC. American Management Systems, Inc. provides
a range of consulting services. Services include business re-engineering, change
management, systems integration, and systems development and implementation. The
company services telecommunications firms, financial services institutions,
education organizations, local and federal government agencies, and other
corporate clients.
BARRETT RESOURCES CORPORATION. Barrett Resources Corporation explores for and
produces natural gas and crude oil. The company produces oil and gas in the
Rocky Mountain Region, the Mid-Continent Region, and the Gulf of Mexico Region.
Barrett also owns interests in and operates a natural gas gathering system, a
27-mile pipeline, and a natural gas processing plant in the Piceance Basin.
BISYS GROUP, INC. BISYS Group, Inc. provides technology outsourcing, check
imaging applications, and brokerage services to financial institutions
nationwide. The company distributes and administers over 60 families of mutual
funds as well as provides retirement plan record keeping services and insurance
distribution solutions, Internet/telephone marketing, and loan/deposit product
pricing research.
BURR-BROWN CORPORATION. Burr-Brown Corporation develops, manufactures, and
markets electronic components, including precision linear, data converters, and
mixed signal integrated circuits. The company's products address applications
for both analog and digital signal processing relating to industrial,
communications, consumer, and computing markets.
CATALINA MARKETING CORPORATION. Catalina Marketing Corporation provides a
network of marketing programs to consumer goods companies. The Catalina
Marketing Network provides purchase-based individually customized communications
and promotions that reach shoppers every week in installed supermarkets. The
company's network uses actual purchase behavior to impact the buying behavior of
consumers.
C-CUBE MICROSYSTEMS, INC. C-Cube Microsystems, Inc. designs, manufactures,
and sells semiconductors and systems for digital video applications. The company
sells its products to original equipment manufacturers and service providers in
the consumer and communications markets. Applications include use in DVD
players, digital VCR players, interactive set-top boxes, and broadcast encoders.
CENTURA BANKS, INC. Centura Banks, Inc. provides a complete line of banking,
investment insurance, leasing, and trust services to individuals and businesses
in North Carolina, South Carolina, and Virginia. The company provides its
services through a variety of delivery channels, including full-service
financial offices, automated teller machines, and through online money
management packages.
COGNEX CORPORATION. Cognex Corporation designs, develops, manufactures, and
markets machine vision systems. The company's systems are used to automate the
manufacture of a variety of discrete items and to assure their quality. Cognex
has regional offices located throughout North America, Japan, Europe, and
Southeast Asia.
COMMERCE BANCORP, INC. Commerce Bancorp, Inc. is a multi-bank holding company
with banking subsidiaries in New Jersey and Pennsylvania. The banks provide
retail and commercial banking services and products, including various checking
and savings accounts, safe deposit facilities, and a variety of loans.
COMMERCIAL FEDERAL CORPORATION. Commercial Federal Corporation is the parent
company of Commercial Federal Bank, a federal savings bank. The bank offers a
variety of banking services including mortgage banking, consumer and business
financing, insurance, and trust and investment services. Commercial Federal
operates offices in Iowa, Nebraska, Kansas, Colorado, Oklahoma, Missouri,
Minnesota, South Dakota, and Arizona.
COMMSCOPE, INC. CommScope, Inc. designs, manufactures, and markets coaxial
cables and other high-performance electronic and fiber optic cable products
primarily for communication applications. The company also provides premise
wiring for local area networks.
CommScope sells its products throughout the world.
CORN PRODUCTS INTERNATIONAL, INC. Corn Products International, Inc. refines
corn and produces sweeteners and starches. The company has customers in a wide
range of industries, including the food, soft drink, brewing, pharmaceutical,
corrugating, paper, and textile industries. Corn products has company-owned
operations, joint ventures, alliances, and technical licenses in countries
around the world.
CTS CORPORATION. CTS Corporation designs, manufactures, and sells electronic
components and custom electronic assemblies. The company sells its products to
original equipment manufacturers primarily in the communications equipment,
automotive, and computer equipment markets around the world.
CULLEN/FROST BANKERS, INC. Cullen/Frost Bankers, Inc. is the holding company
for The Frost National Bank and United States National Bank of Gavelston. The
banks provide commercial banking, consumer services, international banking,
trust services, correspondent banking, discount brokerage, and insurance
services through a network of offices in Texas.
DALLAS SEMICONDUCTOR CORPORATION. Dallas Semiconductor Corporation designs,
manufactures, and markets electronic chips and chip-based subsystems. The
company's markets include original equipment manufacturers in personal
computers, telecommunications, office equipment, instrumentation, factory
automation, medical equipment, and mainframe computers.
DEVRY, INC. DeVry, Inc. owns and manages higher education systems throughout
North America. The institutions are operated under the names "DeVry Institutes,"
"Keller Graduate School of Management," "Center for Corporate Education," and
"Becker CPA Review."
ETHAN ALLEN INTERIORS, INC. Ethan Allen Interiors, Inc. is an international
home furnishings company with saw mills and manufacturing facilities in the
United States. The company operates Ethan Allen stores in the United States,
Canada, Mexico, and overseas.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. Expeditors International of
Washington, Inc. is a global logistics company. The company provides air and
ocean freight forwarding, vendor consolidation, customs clearance, marine
insurance, distribution, and other value-added international logistics services.
EXPRESS SCRIPTS, INC. Express Scripts, Inc. is a full-service pharmacy
benefit management and specialty managed care company serving clients throughout
North America. The company's customers include managed care organizations,
insurance carriers, third-party administrators, employers, and union-sponsored
benefit plans. Express provides pharmacy network management, formulary
management, and other services.
FIRSTMERIT CORPORATION. FirstMerit Corporation operates primarily as a
multi-bank holding company. The banks attract deposits, originate loans, and
provide other banking services. The company's non-banking subsidiaries provide
securities brokerage, trust, equipment lease financing, insurance, and other
services. FirstMerit operates in Ohio.
GENTEX CORPORATION. Gentex Corporation designs, develops, manufactures, and
markets products that use electro-optic technology. The company's product lines
include automatic-dimming rearview mirrors and fire protection products.
Gentex's "Night Vision Safety Mirror" automatically darkens to the degree
required to eliminate rear-view headlight glare. The company sells its products
around the world.
IDEC PHARMACEUTICALS CORPORATION. IDEC Pharmaceuticals Corporation, a
biopharmaceutical company, researches, develops, and commercializes targeted
therapies for the treatment of cancer and autoimmune and inflammatory diseases.
The company's "Rtuxan" product treats certain B-cell NHLs. IDEC also develops
products for the treatment of certain solid tumor cancers and various autoimmune
diseases.
JONES PHARMA, INC. Jones Pharma, Inc. offers a variety of pharmaceuticals,
including endocrine, hospital, and veterinary products. The company's products
include pharmaceuticals for the treatment of hyperthyroidism and hypothyroidism,
as well as a variety of pharmaceuticals for veterinary use. Jones also markets
pharmaceuticals used in the operating room and products for emergency and skin
care.
KEMET CORPORATION. KEMET Corporation manufactures and sells solid tantalum
and multilayer ceramic capacitors. The company's products are used in a wide
variety of electronic applications, including communication systems, data
processing equipment, personal computers, and military and aerospace systems.
KEMET markets its capacitors to original equipment manufacturers around the
world.
LATTICE SEMICONDUCTOR CORPORATION. Lattice Semiconductor Corporation designs,
develops, and markets high-speed programmable logic devices. The company's
products provide electronic systems customers with quickly designed, easily
configured components. Lattice markets its products to original equipment
manufacturers of communication, computing, industrial, and military systems.
LA-Z-BOY, INC. La-Z-Boy, Inc. manufactures residential and office upholstered
furniture. The company's product lines include motion, stationary and modular
seating, desks, cabinets, conference tables, dining room and bedroom furniture,
and book cases. La-Z-Boy markets its products through department and furniture
stores, mass merchandisers, and La-Z-Boy showcase galleries.
LEGG MASON, INC. Legg Mason, Inc., through its wholly owned subsidiaries,
provides securities brokerage, investment advisory, investment banking, and
commercial mortgage banking services. The company serves individuals,
institutions, municipalities, and corporations in the United States and around
the world.
LINENS `N THINGS, INC. Linens `n Things, Inc. sells home textiles,
housewares, and home accessories. The company operates outlets in the United
States. Brands sold by the company include Wamsutta, Laura Ashley, Martex,
Waverly, Royal Velvet, Braun, Krups, Calphalon, Croscill, and Henckel. Linens `n
Things also sells merchandise under its own private label.
MACROMEDIA, INC. Macromedia, Inc. develops, markets, and supports software
products and technologies for the Web. The company's Web publishing products
enable designers and developers to create interactive Web experiences for
e-commerce, entertainment, news, and information.
MEDQUIST, INC. MedQuist, Inc. provides electronic transcription and health
information management solutions to the health care industry. The company
converts free-form medical dictation into electronically formatted patient
records, which health care providers use in connection with patient care and for
administrative purposes. MedQuist serves clients across the United States
through its service centers.
MERCURY INTERACTIVE CORPORATION. Mercury Interactive Corporation and its
subsidiaries develop, market, and support a suite of automated software testing
solutions. The company's products provide functional testing, load testing, and
test process management. Mercury's tools address the range of quality needs for
testing client/server, e-business, Year 2000, Euro, and packaged applications.
METRO NETWORKS, INC. Metro Networks, Inc. provides traffic reporting services
and supplies local news, sports, weather, video news, and other information
programming services to the television and radio broadcast industries. The
company's information reports are customized to meet the specific needs of each
of its individual radio and television station affiliates.
MICREL, INC. Micrel, Inc. designs, develops, manufactures, and markets analog
power integrated circuits and digital integrated circuits. The company's
products are used in a wide variety of electronic products, including those in
the communications, computer, and industrial markets. Micrel also manufactures
custom analog and mixed-signal circuits and provides wafer foundry services.
MUELLER INDUSTRIES, INC. Mueller Industries, Inc. manufactures and sells
brass, copper, plastic and aluminum products. The company's products include
copper tube and fittings; brass and copper alloy rods and bars; aluminum and
brass forgings; aluminum and copper impact extrusions; plastic fittings and
valves; refrigeration valves and fittings; and fabricated tubular products.
NATIONAL COMPUTER SYSTEMS, INC. National Computer Systems, Inc. is a global
information services company. The company provides software, services, and
systems for the collection, management, and interpretation of data. National
Computer develops and markets data collection services and systems for the
education market, as well as develops and markets enterprise application
software.
NATIONAL DATA CORPORATION. National Data Corporation provides information
services and systems to the health care and electronic commerce markets. The
company's products and services include electronic eligibility, claims
processing, adjudication and remittance services, practice management systems,
billing services, business office management services, data
warehousing/analysis, and other information based services.
NATIONAL INSTRUMENTS CORPORATION. National Instruments Corporation supplies
computer-based instrumentation hardware and software products for engineers and
scientists. The company's computer-based instrumentation systems are used in
test and measurement and industrial automation applications.
NEWFIELD EXPLORATION COMPANY. Newfield Exploration Company, an independent
oil and gas company, explores, develops, and acquires oil and natural gas
properties located primarily in the Gulf of Mexico.
NOVELLUS SYSTEMS, INC. Novellus Systems, Inc. manufactures, markets, and
services advanced automated wafer fabrication systems for the deposition of thin
films. The company supplies deposition systems used in the fabrication of
integrated circuits. Novellus has subsidiaries in the United Kingdom, France,
Germany, China, Japan, the Netherlands, Singapore, and Taiwan.
ORION CAPITAL CORPORATION. Orion Capital Corporation provides a variety of
property and casualty insurance products. The company offers workers
compensation, specialty commercial, and non-standard auto insurance. Orion
operates in the United States.
PATTERSON DENTAL COMPANY. Patterson Dental Company distributes dental
products to dentists, dental labora-tories, institutions, physicians, and other
healthcare providers. The company provides products such as x-ray film,
impression and restorative materials, hand instruments, sterilization products,
and front office forms. Patterson markets its products and services in the
United States and Canada.
PROFIT RECOVERY GROUP INTERNATIONAL, INC. Profit Recovery Group
International, Inc. provides accounts payable and other recovery audit services
to large businesses and certain governmental agencies. The company conducts
business in countries around the world.
RADIAN GROUP, INC. Radian Group, Inc. provides private mortgage insurance and
risk management services to mortgage lenders nationwide. The company's services
increase home ownership opportunities by helping people to buy homes with down
payments of less than 20 percent. Private mortgage insurance protects lenders
from default-related losses and facilitates the sale of loans.
ROPER INDUSTRIES, INC. Roper Industries, Inc. manufactures fluid handling,
industrial control, and analytical instrumentation products. The company's
products include leak detection equipment, petroleum analysis equipment,
electron microscopy control systems, and optical equipment. Roper sells its
products around the world.
SEI INVESTMENTS COMPANY. SEI Investments Company provides global investment
solutions and business solutions. The company integrates technology, research,
information services, financial products, and asset management advice to serve
banks, mutual fund and pension plan sponsors, insurance companies, money
managers, and individual investors.
SMITHFIELD FOODS, INC. Smithfield Foods, Inc. processes pork and produces
hogs through its meat processing and hog production groups. The meat processing
group produces a wide variety of fresh pork and processed meat products and
markets them in North America and international markets. The hog production
group operates various vertically integrated production facilities.
TRUE NORTH COMMUNICATIONS, INC. True North Communications, Inc. is a
communications company with operations worldwide. The company's subsidiaries
provide clients with advertising, public relations, and related services through
full-service offices. True North's subsidiaries include Foote, Cone & Belding
Worldwide and Bozell Worldwide, as well as other agencies.
UNITED WATER RESOURCES, INC. United Water Resources, Inc. is a holding
company that provides water and wastewater services in the United States and
Canada. The company also has investments in water and wastewater services
companies in Mexico and the United Kingdom. United Water provides contract
operations and maintenance services for water and wastewater facilities.
UNITRODE CORPORATION. Unitrode Corporation designs and manufactures
analog/linear and mixed-signal integrated circuits, modules, and non-volatile
products, primarily to perform power management, portable power, and interface
functions. The company's "Benchmarq" and "Unitrode" products are sold throughout
the world for a variety of computer, tele- and data-communications, and other
applications.
USFREIGHTWAYS CORPORATION. USFreightways Corporation provides a variety of
supply chain management services. The company's services include
less-than-truckload transportation, logistics, domestic and international
freight forwarding, and regional and national truckload transportation.
U.S. TRUST CORPORATION. U.S. Trust Corporation, through its subsidiaries,
provides investment management, fiduciary, and private banking services to
affluent individuals and their families, as well as institutions. The company
operates offices throughout the United States.
UST CORPORATION. UST Corporation is the holding company for USTrust and the
United States Trust Company. The banks provide a broad range of financial
services, including commercial banking, consumer financial services, trust and
money management, and equipment leasing. UST serves individuals and small and
medium-sized companies in New England.
VALASSIS COMMUNICATIONS, INC. Valassis Communications, Inc. prints and
publishes cents-off coupons and other consumer purchase incentives primarily for
package goods manufacturers. The company provides free-standing inserts, solo
specialized promotional programs, newspaper-delivered sampling programs,
consumer promotion and direct response merchandising, and advertising on the
pages of newspapers.
VISIO CORPORATION. Visio Corporation supplies enterprise-wide business
diagramming and technical drawing software. The company's products are available
in various language versions and are sold throughout the world. Visio's
customers include general business users, engineers, and information technology
professionals who represent a variety of industries.
WESTWOOD ONE, INC. Westwood One, Inc. operates a radio network. The company
provides news, sports, music, talk, entertainment programs, features, live
events, 24-hour formats, and Shadow Broadcast Services. Westwood One services
radio stations around the world.
WHITTMAN-HART, INC. Whittman-Hart, Inc. provides information technology (IT)
business solutions. The company's services include systems integration,
strategic IT planning, business process reengineering, package software
evaluation and implementation, and networking and connectivity, conventional and
multimedia documentation, and training. Whittman-Hart sells and delivers its
services through 17 offices.
WILLIAMS-SONOMA, INC. Williams-Sonoma, Inc. retails cooking and serving
equipment, home furnishings and home accessories through its retail stores and
mail order catalogs. The company offers its merchandise under the
"Williams-Sonoma," "Pottery Barn," " Pottery Barn Kids," "Hold Everything," and
"Chambers" concepts. Williams-Sonoma also operates "The Brookstone Gift
Collection" and "Hard-to-Find" catalogs.
ZALE CORPORATION. Zale Corporation operates retail jewelry stores under the
Zales, Gordon's, and Bailey, Banks & Biddle names. The company's stores are
located primarily in shopping malls in the United States and Puerto Rico. Zales
offers moderately priced jewelry, Gordon's offers merchandise at somewhat higher
prices, and Bailey, Banks & Biddle offers upscale jewelry.
ZEBRA TECHNOLOGIES CORPORATION. Zebra Technologies Corporation manufactures
and distributes a broad line of thermal transfer and direct thermal demand label
printers used in bar code applications. The company also produces plastic card
printers for the personal identification market. Zebra markets its products to
manufacturing and service organizations for use in data collection and automatic
identification systems.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF VAN KAMPEN FUNDS INC. AND THE UNITHOLDERS
OF VAN KAMPEN FOCUS PORTFOLIOS, SERIES 176:
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 176 as of September 21,
1999. The statement of condition and portfolio are the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of an irrevocable letter of credit
deposited to purchase securities by correspondence with the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall financial
statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Focus Portfolios,
Series 176 as of September 21, 1999, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
September 21, 1999
<TABLE>
STATEMENT OF CONDITION
AS OF SEPTEMBER 21, 1999
<CAPTION>
<S> <C>
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 149,000
-----------
Total $ 149,000
===========
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 477
Deferred sales charge liability (3) 2,935
Interest of Unitholders--
Cost to investors (4) 150,510
Less: Gross underwriting commission and organizational costs (2)(4)(5) 4,922
-----------
Net interest to Unitholders (4) 145,588
-----------
Total $ 149,000
===========
- --------------------------------------------------------------------------------
</TABLE>
(1) The value of the Securities is determined by Interactive Data Corporation
on the bases set forth under "Public Offering--Offering Price". The
contracts to purchase Securities are collateralized by an irrevocable
letter of credit which has been deposited with the Trustee.
(2) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the Trust.
The amount of these costs are set forth in the "Fee Table". A distribution
will be made as of the close of the initial offering period to an account
maintained by the Trustee from which this obligation of the investors will
be satisfied.
(3) Represents the amount of mandatory distributions from the Trust on the
bases set forth under "Public Offering".
(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering--Offering Price".
(5) Assumes the maximum sales charge.
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 date of
this Prospectus (the "Initial Date of Deposit"), among Van Kampen Funds Inc., as
Sponsor, Josephthal & Co. Inc., 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 actively traded equity securities. The Trust may be
an appropriate medium for investors who desire to participate in a portfolio of
common 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" 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 percentage
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" 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 provide capital appreciation by investing in
a portfolio of actively traded equity securities selected by Josephthal & Co.
Inc. (the "Underwriter"). We cannot guarantee that the Trust will achieve its
objective. In selecting the Securities, the Underwriter considered the factors
described under "Small-Cap Focus Portfolio".
The Underwriter uses the list of Securities in its independent capacity as an
investment adviser and distributes 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. 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. The stocks in this
Trust generally do not pay dividends.
Smaller Companies. The Trust invests in stocks of smaller companies. These
stocks often involve more investment risk than stocks of larger companies.
Smaller companies may have limited product lines, markets or financial
resources. These companies may lack management depth or experience and may
depend heavily on key personnel. These stocks may be less liquid and have less
information about their business available to the public. These stocks also tend
to be more vulnerable to adverse economic or market developments than larger
company stocks. Some of these companies may invest in, distribute or produce
products that have only recently been introduced. All of these factors could
affect the value of Units.
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.
Year 2000 Readiness Disclosure. The following two paragraphs constitute "Year
2000 Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem". The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental affect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
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 "Fee Table" describes the sales charge
in detail. If any deferred sales charge payment date is not a business day, we
will charge the payment to the Trust on the next business day. If you purchase
Units after the initial deferred sales charge payment, you will only pay the
remaining portion of the deferred sales charge. A portion of the Public Offering
Price includes an amount of Securities to pay for all or a portion of the costs
incurred in establishing your Trust. These costs include the cost of preparing
documents relating to the Trust (such as the prospectus, trust agreement and
closing documents), federal and state registration fees, the initial fees and
expenses of the Trustee and legal and audit expenses. The initial offering
period sales charge is reduced as follows:
Aggregate
Dollar Amount
of Units Purchased* Sales Charge
- --------------------- ----------------
$50,000 - $99,999 2.70%
$100,000 - $249,999 2.45
$250,000 - $499,999 2.20
$500,000 - $999,999 1.95
$1,000,000 or more 1.45
- ---------------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent.The reduced sales charge structure will also apply on all
purchases by the same person from any one dealer of units of Van
Kampen-sponsored unit investment trusts which are being offered in the initial
offering period (a) on any one day (the "Initial Purchase Date") or (b) on any
day subsequent to the Initial Purchase Date if the units purchased are of a unit
investment trust purchased on the Initial Purchase Date. In the event units of
more than one trust are purchased on the Initial Purchase Date, the aggregate
dollar amount of such purchases will be used to determine whether purchasers are
eligible for a reduced sales charge. Such aggregate dollar amount will be
divided by the public offering price per unit of each respective trust purchased
to determine the total number of units which such amount could have purchased of
each individual trust. Purchasers must then consult the applicable trust's
prospectus to determine whether the total number of units which could have been
purchased of a specific trust would have qualified for a reduced sales charge
and the amount of such reduction. To determine the applicable sales charge
reduction it is necessary to accumulate all purchases made on the Initial
Purchase Date and all purchases made in accordance with (b) above. Units
purchased in the name of the spouse of a purchaser or in the name of a child of
such purchaser ("immediate family members") will be deemed to be additional
purchases by the purchaser for the purposes of calculating the applicable sales
charge. The reduced sales charges will also be applicable to a trustee or other
fiduciary purchasing securities for one or more trust estate or fiduciary
accounts. If you purchase Units on more than one day to achieve the discounts
described in this paragraph, the discount allowed on any single day will apply
only to Units purchased on that day (a retroactive discount is not given on all
purchases).
During the initial offering period, unitholders of any Van Kampen-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase Units of the Trust at the Public Offering Price per Unit less 1%.
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 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 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 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 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, this evaluation is generally based on the closing sale prices on that
exchange (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, at the
closing ask prices. If the Securities are not listed on a national or foreign
securities exchange or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based on the current ask
price on the over-the-counter market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value of the
Securities on the ask 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. Units repurchased in the
secondary market, if any, may be offered by this Prospectus at the secondary
market Public Offering Price in the manner described above.
The Sponsor intends to qualify 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 during the initial offering period as
described below.
Aggregate Concession
Dollar Amount or Agency
of Units Distributed* Commission
- --------------------- ----------------
Up to $49,999 2.15%
$50,000 - $99,999 1.90
$100,000 - $249,999 1.65
$250,000 - $499,999 1.40
$500,000 - $999,999 1.15
$1,000,000 or more 0.65
- ---------------
*The breakpoint concessions or agency commissions are also applied on a Unit
basis using a breakpoint equivalent of $10 per Unit and will be applied on
whichever basis is more favorable to the distributor.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For transactions involving unitholders
of other Van Kampen unit investment trusts who use their redemption or
termination proceeds to purchase Units of the Trust, the total concession or
agency commission will amount to 1.15% per Unit. For all secondary market
transactions the total concession or agency commission will amount to 70% of the
applicable sales charge. 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". In addition, the Underwriter
will receive additional compensation during the initial offering period of 0.05%
of the Public Offering Price per Unit if it distributes at least $5 million,
0.12% of the Public Offering Price per Unit if it distributes at least $10
million and 0.15% of the Public Offering Price if it distributes $15 million or
more. 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. See "Notes to Portfolio". 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 Underwriterbusiness and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934.
An affiliate 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.
Units sold prior to the time the entire deferred sales charge has been collected
will be assessed the amount of any remaining deferred sales charge at the time
of sale. The Trustee will notify the Underwriter of any tendered of Units 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 and any net proceeds from the sale of Securities
received by a 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". A person
becomes a Unitholder of record on the date of settlement (generally three
business days after Units are ordered).
Dividends received by a 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
available cash in the Income and Capital Accounts as of the related Record Date.
Rollover. The Underwriter currently intends to offer a subsequent series of
the Trust when this series terminates. If you notify us at least five business
days prior to the Mandatory Termination Date, you will have the option to
participate in a rollover and have your Units reinvested into a subsequent Trust
series, if available. If you elect to participate in the rollover, the Trustee
will redeem your Units when the Trust terminates and reinvest the proceeds
(including dividends) in a new Trust series at the public offering price
applicable to rollover purchases for the new series. The Trustee will attempt to
sell Securities to satisfy the redemption as quickly as practicable on your
rollover date. The Sponsor does not anticipate that the sale period will be
longer than one day; however, certain factors could affect the ability to sell
the Securities and could affect the length of the sale period. The liquidity of
any Security depends on the daily trading volume of the Security and the amount
available for redemption and reinvestment on any day.
Of course, no one can guarantee that a subsequent trust or sufficient units
will be available or that any subsequent trusts will offer the same investment
strategies or objectives as the current Trust. No one can guarantee that the
rollover will avoid any negative market price consequences resulting from
trading large volumes of securities. Market price trends may make it
advantageous to sell or buy securities more quickly or more slowly than
permitted by the Trust procedures. The Sponsor may, in its sole discretion,
modify the rollover or stop creating units of a trust at any time regardless of
whether all proceeds of Unitholders have been reinvested in the rollover. If the
Underwriter decides not to offer a subsequent series of the Trust, we will
notify you prior to the Mandatory Termination Date. Cash which has not been
reinvested in the rollover will be distributed to you shortly after the Trust
terminates. If you participate in the rollover, you may receive realize taxable
dividends or capital gains which are reinvested in the rollover but you may not
be entitled to a deduction for capital losses due to the "wash sale" tax rules.
Due to the reinvestment in a subsequent trust, the Trust will not distribute
cash to pay any taxes. See "Taxation".
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 2,500 or more Units of the Trust for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. An in kind distribution will be made by the Trustee
through the distribution of each of the 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 number of shares of any Security included in a Unitholder's in kind
distribution to facilitate the 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. Special federal income tax consequences will result
if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust and (b) the accrued
expenses and sales charges 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, this evaluation is
generally based on the closing sale prices on that exchange (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, at the closing bid prices. If
the Securities are not so listed or, if so listed and the principal market
therefore is other than on the exchange, 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 certificates
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 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 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 a 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. 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 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 the 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 and provide a
form enabling qualified Unitholders to elect an in kind distribution of
Securities. See "Rights of Unitholders--Redemption of Units". This form must be
returned at least five business days prior to the Mandatory Termination Date.
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 offices at One Parkview Plaza, Oakbrook Terrace, Illinois 60181,
(630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). The Information Supplement contains
additional information about the Sponsor.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the 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. We 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 common stocks 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
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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 or her pro rata portion of each Security when such dividends are
considered to be received by the Trust. Unitholders will be taxed in this manner
regardless of whether distributions from the Trust are actually received by the
Unitholder.
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.
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 with their tax advisers with respect to
the limitations on and possible modifications to the dividends received
deduction.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes
sales charges, and such charges are not deductible. A portion of the sales
charge for the Trust is deferred. The income a Unitholder must take into account
for federal income tax purposes is not reduced by amounts deducted to pay the
deferred sales charge. Unitholders should consult their own tax advisers as to
the income tax consequences of the deferred sales charge.
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. Unitholders should consult with
their own tax advisors regarding the deductibility of Trust expenses.
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 tax-payers 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 of 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 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 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 corporations for a three-year period ending with the close
of its taxable year preceding payment was 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 consequenses 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
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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 "Fee Table". The Supervisor
will receive the annual fee described in the "Fee Table" 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 "Fee Table" (which includes the estimated amount of
miscellaneous Trust expenses). 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) 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
deferred sales charge, 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. It is expected that Securities will
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
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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
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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. The Information Supplement may be obtained by contacting the
Trustee at (800) 856-8487 or is available along with other related materials at
the SEC's internet site (http://www.sec.gov).
TABLE OF CONTENTS
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Title Page
----- ----
Summary of Essential Financial Information.. 2
Fee Table................................... 3
Small-Cap Focus Portfolio................... 4
Notes to Portfolio.......................... 7
The Securities.............................. 8
Report of Independent Certified
Public Accountants....................... 14
Statement of Condition ..................... 15
The Trust................................... A-1
Objectives and Securities Selection......... A-1
Risk Factors................................ A-2
Public Offering............................. A-3
Rights of Unitholders....................... A-6
Trust Administration........................ A-8
Taxation.................................... A-10
Trust Operating Expenses.................... A-14
Other Matters............................... A-15
Additional Information...................... A-15
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When Units of the Trust are no longer available, this prospectus may be used as
a preliminary prospectus for a future series of the Trust. If this prospectus is
used for future Trust series, you should note the following:
The information in this prospectus is not complete with respect to future Trust
series and may be changed. No person may sell Units of future Trust series until
a registration statement is filed with the Securities and Exchange Commission
and is effective. This prospectus is not an offer to sell Units and is not
soliciting an offer to buy Units in any state where the offer or sale is not
permitted.
PROSPECTUS
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September 21, 1999
Josephthal Research Series
Small-Cap Focus Portfolio I
Josephthal & Co. Inc.
200 Park Avenue
New York, New York 10166
(212)907-4000
www.josephthal.com
Please retain this prospectus for future reference.
Information Supplement
Van Kampen Focus Portfolios, Series 176
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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 One Parkview Plaza,
Oakbrook Terrace, Illinois 60181 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 2
Trustee Information 3
Trust Termination 4
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 the 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 the 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.
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 the 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 the 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 the Trust. While
you may sell or redeem your Units, you may not sell or vote the stocks in the
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.
Year 2000. The Trust could be negatively impacted if computer systems used
by the Sponsor, Evaluator, Supervisor or Trustee or other service providers to
the Trusts do not properly process date-related information after January 1,
2000. This is commonly known as the "Year 2000 Problem". The Sponsor, Evaluator,
Supervisor and Trustee are taking steps to address this problem and to obtain
reasonable assurances that other service providers to the Trust are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trust. This problem is expected to impact
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. We cannot predict what impact, if any,
this problem will have on the issuers of stocks in the Trust.
SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the Trust.
The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van Kampen
Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc., which
in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; asset
management; trading of futures, options, foreign exchange commodities and swaps
(involving foreign exchange, commodities, indices and interest rates); real
estate advice, financing and investing; global custody, securities clearance
services and securities lending; and credit card services.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has offices at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen's open-end funds, closed-ended funds and unit investment trusts are
professionally distributed by leading financial firms nationwide. Based on
cumulative assets deposited, the Sponsor believes that it is the largest sponsor
of insured municipal unit investment trusts, primarily through the success of
its Insured Municipals Income Trust(R) or the IM-IT(R) trust. The Sponsor also
provides surveillance or evaluation services at cost for approximately $13.4
billion of unit investment trust assets outstanding. Since 1976, the Sponsor has
serviced over two million investor accounts, opened through retail distribution
firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the 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 and in the case of a
Trust will include with such notice a form to enable Unitholders owning the
minimum number of Units described in the Prospectus to request an in kind
distribution of the Securities. To be effective, this request must be returned
to the Trustee at least five business days prior to the Mandatory Termination
Date. On the Mandatory Termination Date (or on the previous business day if a
holiday) the Trustee will deliver each requesting Unitholder's pro rata number
of whole shares of the Securities in the Trust to the account of the
broker-dealer or bank designated by the Unitholder at Depository Trust Company.
The value of the Unitholder's fractional shares of the Securities will be paid
in cash. Unitholders not requesting an in kind distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
following the Mandatory Termination Date. Regardless of the distribution
involved, 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.
CONTENTS OF REGISTRATION STATEMENTS
This Amendment No. 1 to the Registration Statement comprises the following
papers and documents:
The facing sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to the Federal Income tax status of securities
being registered.
3.3 Opinion and consent of counsel as to New York tax status of securities
being registered.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Accountants.
SIGNATURES
The Registrant, Van Kampen Focus Portfolios, Series 176, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7 and Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 176 has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and State of
Illinois on the 21st day of September, 1999.
Van Kampen Focus Portfolios, Series 176
By Van Kampen Funds Inc.
By Christine K. Putong
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below on September
21, 1999 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Christine K. Putong
(Attorney-in-fact*)
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*An executed copy of each of the related powers of attorney is filed
herewith or was filed with the Securities and Exchange Commission in connection
with the Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 136 (File No. 333-70897) and the same are hereby incorporated herein by
this reference.
EXHIBIT 1.1
VAN KAMPEN FOCUS PORTFOLIOS
SERIES 176
TRUST AGREEMENT
Dated: September 21, 1999
This Trust Agreement among Van Kampen Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Van Kampen Investment
Advisory Corp., as Evaluator, Josephthal & Co., Inc., as Supervisory Servicer,
and The Bank of New York, as Trustee, sets forth certain provisions in full and
incorporates other provisions by reference to the document entitled "Van Kampen
American Capital Equity Opportunity Trust, Series 87 and Subsequent Series,
Standard Terms and Conditions of Trust, Effective January 27, 1998" (herein
called the "Standard Terms and Conditions of Trust") and such provisions as are
set forth in full and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and Sections
are to Articles and Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(24), listed in the Schedule
hereto, have been deposited in trust under this Trust Agreement.
2. The fractional undivided interest in and ownership of the Trust
represented by each Unit is an amount the numerator of which is one and the
denominator of which is the amount set forth under "Summary of Essential
Financial Information - Initial Number of Units" in the Prospectus. Such
fractional undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03, (b) increased or decreased in
connection with an adjustment to the number of Units pursuant to Section 2.03,
or (c) decreased by the number of Units redeemed pursuant to Section 5.02.
3. The terms "Capital Account Record Date" and "Income Account Record Date"
shall mean the "Record Dates" set forth under "Summary of Essential Financial
Information" in the Prospectus.
4. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Distribution Dates" set forth under "Summary
of Essential Financial Information" in the Prospectus.
5. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial Information"
in the Prospectus.
6. Sections 1.01 (1), (3) and (4) shall be replaced in their entirety by
the following:
(1) "Depositor" shall mean Van Kampen Funds Inc. and its successors in
interest, or any successor depositor appointed as hereinafter provided.
(3) "Evaluator" shall mean American Portfolio Evaluation Services (a
division of a Van Kampen Investment Advisory Corp.) and its successors in
interest, or any successor evaluator appointed as hereinafter provided.
(4) "Supervisory Servicer" shall mean Josephthal & Co., Inc. and its
successors in interest, or any successor portfolio supervisor appointed as
hereinafter provided.
7. Section 1.01(25) shall be replaced in its entirety by the following:
(25) "Special Redemption Period" shall mean the "Mandatory Termination
Date" set forth under "Summary of Essential Financial Information" in the
Prospectus.
8. The term "Rollover Notification Date" shall mean a date approximately
thirty days prior to the "Mandatory Termination Date" set forth under "Summary
of Essential Financial Information" in the Prospectus.
9. The first three paragraphs of Section 5.05 shall be replaced in their
entirety by the following:
"Section 5.05. Rollover of Units. (a) If the Depositor shall offer a
subsequent series of the Trusts (the "New Series"), the Trustee shall,
thirty days prior to the first day of the Special Redemption Period,
include a form of election (which may be included in the notice sent to
Unitholders specified in Section 8.02) whereby Unitholders, whose
redemption distribution would be in an amount sufficient to purchase at
least one Unit of the New Series, may elect to have their Units redeemed in
kind in the manner provided in Section 5.02, the Securities included in the
redemption distribution sold, and the cash proceeds applied by the
Distribution Agent to purchase Units of the New Series, all as hereinafter
provided. The Trustee shall honor properly completed election forms
returned to the Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption request with
respect to uncertificated Units, by its close of business on the Rollover
Notification Date.
All Units so tendered by a Unitholder (a "Rollover Unitholder") shall
be redeemed and canceled on the date during the Special Redemption Period
instructed by such Rollover Unitholder provided that such Rollover
Unitholder has properly tendered such Units for redemption pursuant to
Section 5.02. Subject to payment by such Rollover Unitholder of any tax or
other governmental charges which may be imposed thereon, such redemption is
to be made in kind pursuant to Section 5.02 by distribution of cash and/or
Securities to the Distribution Agent on the date instructed by such
Rollover Unitholder of the net asset value (determined on the basis of the
Trust Evaluation as of such date in accordance with Section 4.01)
multiplied by the number of Units being redeemed (herein called the
"Rollover Distribution"). Any Securities that are made part of the Rollover
Distribution shall be valued for purposes of the redemption distribution as
of the date of the Rollover Distribution.
All Securities included in a Unitholder's Rollover Distribution shall
be sold by the Distribution Agent during the Special Redemption Period
specified in the Prospectus pursuant to the Depositor's direction, and the
Distribution Agent may employ the Depositor as broker or agent in
connection with such sales. For such brokerage services, the Depositor
shall be entitled to compensation at its customary rates, provided however,
that its compensation shall not exceed the amount authorized by applicable
Securities laws and regulations. In the event the Depositor does not direct
the manner in which Securities are to be sold, the Securities shall be sold
in such manner as the Distribution Agent, in its sole discretion, shall
determine. The Distribution Agent shall have no responsibility for any loss
or depreciation incurred by reason of any sale made pursuant to this
Section."
10. Section 6.01(e) is hereby replaced with the following:
(e) (1) Subject to the provisions of subparagraph (2) of this
paragraph, the Trustee may employ agents, sub-custodians, attorneys,
accountants and auditors and shall not be answerable for the default or
misconduct of any such agents, sub-custodians, attorneys, accountants or
auditors if such agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee shall be fully
protected in respect of any action under this Indenture taken or suffered
in good faith by the Trustee in accordance with the opinion of counsel,
which may be counsel to the Depositor acceptable to the Trustee, provided,
however that this disclaimer of liability shall not excuse the Trustee from
the responsibilities specified in subparagraph (2) below. The fees and
expenses charged by such agents, sub-custodians, attorneys, accountants or
auditors shall constitute an expense of the Trust reimbursable from the
Income and Capital Accounts of the affected Trust as set forth in section
6.04 hereof.
(2) The Trustee may place and maintain in the care of an Eligible
Foreign Custodian (which is employed by the Trustee as a sub-custodian as
contemplated by subparagraph (1) of this paragraph (e) and which may be an
affiliate or subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership interest) any investments (including foreign
currencies) for which the primary market is outside the United States, and
such cash and cash equivalents in amounts reasonably necessary to effect
the Trust's transactions in such investments, provided that:
(a) The Trustee shall perform all duties assigned to the Foreign
Custody Manager by Rule 17f-5 under the Investment Company Act of 1940
(17 CFR ss. 270.17f-5) ("Rule 17f-5"), as now in effect or as such
rule may be amended in the future. The Trustee shall not delegate such
duties.
(b) The Trustee shall exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping
of Trust assets would exercise, and shall be liable to the Trust for
any loss occurring as a result of its failure to do so.
(c) The Trustee shall indemnify the Trust and hold the Trust
harmless from and against any risk of loss of Trust assets held in
accordance with the foreign custody contract.
(d) The Trustee shall maintain and keep current written records
regarding the basis for the choice or continued use of a particular
Eligible Foreign Custodian pursuant to this subparagraph for a period
of not less than six years from the end of the fiscal year in which
the Trust was terminated, the first two years in an easily accessible
place. Such records shall be available for inspection by Unitholders
and the Securities and Exchange Commission at the Trustee's offices at
all reasonable times during its usual business hours.
(3) "Eligible Foreign Custodian" shall have the meaning assigned to it
in Rule 17f-5.
(4) "Foreign Custody Manager" shall have the meaning assigned to it in
Rule 17f-5.
11. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust and subject to the requirements set forth in this paragraph,
unless the Prospectus otherwise requires, the Sponsor may, on any Business Day
(the "Trade Date"), subscribe for additional Units as follows:
(a) Prior to the Evaluation Time on such Business Day, the Sponsor
shall provide notice (the "Subscription Notice") to the Trustee, by
telephone or by written communication, of the Sponsor's intention to
subscribe for additional Units. The Subscription Notice shall identify the
additional Securities to be acquired (unless such additional Securities are
a precise replication of the then existing portfolio) and shall either (i)
specify the quantity of additional Securities to be deposited by the
Sponsor on the settlement date for such subscription or (ii) instruct the
Trustee to purchase additional Securities with an aggregate value as
specified in the Subscription Notice.
(b) Promptly following the Evaluation Time on such Business Day, the
Sponsor shall verify with the Trustee the number of additional Units to be
created.
(c) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver or assign the additional Units
created hereby, the Sponsor shall deposit with the Trustee (i) any
additional Securities specified in the Subscription Notice (or contracts to
purchase such additional Securities together with cash or a letter of
credit in the amount necessary to settle such contracts) or (ii) cash or a
letter of credit in an amount equal to the aggregate value of the
additional Securities specified in the Subscription Notice, and adding and
subtracting the amounts specified in the first and second sentences of
Section 5.01, computed as of the Evaluation Time on the Business Day
preceding the Trade Date divided by the number of Units outstanding as of
the Evaluation Time on the Business Day preceding the Trade Date, times the
number of additional Units to be created.
(d) On the settlement date for such subscription, the Trustee shall,
in exchange for the Securities and cash or letter of credit described
above, deliver to, or assign in the name of or on the order of, the Sponsor
the number of Units verified by the Sponsor with the Trustee.
12. Section 3.15 of the Standard Terms and Conditions of Trust is hereby
replaced in its entirety by the following:
Section 3.15. Deferred Sales Charge. If the Prospectus related to the
Trust specifies a deferred sale charge, the Trustee shall, on each Deferred
Sales Charge Payment Date and as permitted by such Prospectus, withdraw
from the Capital Account an amount per Unit equal to the Deferred Sales
Charge Payment and credit such amount to a special non-Trust account
maintained at the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the Capital Account is
insufficient to make any such withdrawal, the Trustee shall, as directed by
the Depositor, either advance funds in an amount equal to the proposed
withdrawal and be entitled to reimbursement of such advance upon the
deposit of additional moneys in the Capital Account, sell Securities and
credit the proceeds thereof to such special Depositor's account or credit
(if permitted by law) Securities in kind to such special Depositor's
Account. If a Unitholder redeems Units prior to full payment of the
deferred sales charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to such special
Depositor's Account. The Depositor may at any time instruct the Trustee in
writing to distribute to the Depositor cash or Securities previously
credited to the special Depositor's account. Amounts to be credited to the
special Depositor's account with respect to each Deferred Sales Charge
Payment are due and payable to the Depositor on the related Deferred Sales
Charge Payment Date.
The term "Deferred Sales Charge Payment Dates" shall mean the 10th day
of each month beginning January 10, 2000 and continuing through August 10,
2000. If any Deferred Sales Charge Payment Date is not a Business Day, that
Deferred Sales Charge Payment Date shall be deemed to be the next business
day. The term "Deferred Sales Charge Payment" shall mean a fraction of the
total maximum deferred sales charge specified in the Prospectus, the
numerator of which is one and the denominator of which is equal to the
total number of Deferred Sales Charge Payment Dates.
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to
be executed and their corporate seals to be hereto affixed and attested; all as
of the day, month and year first above written.
Van Kampen Funds Inc.
By James J. Boyne
Senior Vice President
Attest:
By Weston B. Wetherell
Vice President
American Portfolio Evaluation Services,
a division of Van Kampen Investment Advisory Corp.
By James J. Boyne
Senior Vice President
Attest
By Weston B. Wetherell
Vice President
JOSEPHTHAL & CO., INC.
By Paul Fitzgerald
(SEAL) President
Attest
By Dennis P. McNamara
Assistant Secretary
The Bank of New York
By Jeffrey Cohen
Vice President
Attest
By Robert Weir
Assistant Treasurer
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED IN
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 176
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus.)
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 21, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen Focus Portfolios, Series 176
---------------------------------------
Gentlemen:
We have served as counsel for Van Kampen Funds Inc. as Sponsor and
Depositor of Van Kampen Focus Portfolios, Series 176 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery of a
Trust Agreement dated September 21, 1999, among Van Kampen Funds Inc., as
Depositor, American Portfolio Evaluation Services, a division of Van Kampen
Investment Advisory Corp., as Evaluator, Josephthal & Co., Inc., as Supervisory
Servicer, and The Bank of New York, as Trustee, pursuant to which the Depositor
has delivered to and deposited the Securities listed in the Schedule to the
Trust Agreement with the Trustee and pursuant to which the Trustee has provided
to or on the order of the Depositor documentation evidencing ownership of Units
of fractional undivided interest in and ownership of the Trust (hereinafter
referred to as the "Units"), created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units in the
Trust have been duly authorized; and
2. The certificates evidencing the Units in the Trust, when duly
executed and delivered by the Depositor and the Trustee in accordance
with the aforementioned Trust Agreement, will constitute valid and
binding obligations of such Trust and the Depositor in accordance with
the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-85255) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 21, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen Focus Portfolios, Series 176
---------------------------------------
Gentlemen:
We have acted as counsel for Van Kampen Funds Inc., Depositor of Van
Kampen Focus Portfolios, Series 176 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a Trust
Agreement dated September 21, 1999 (the "Indenture") among Van Kampen Funds
Inc., as Depositor, American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator, Josephthal & Co., Inc., as
Supervisory Servicer, and The Bank of New York, as Trustee. The Fund is
comprised of one unit investment trust, Small-Cap Focus Portfolio, Series 1 (the
"Trust").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of equity
securities (the "Equity Securities") as set forth in the Prospectus. For
purposes of this opinion, it is assumed that each Equity Security is equity for
federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
United States Federal income tax law:
(i) The Trust is not an association taxable as a corporation
for Federal income tax purposes but will be governed by the provisions
of subchapter J (relating to Trusts) of chapter 1, Internal Revenue
Code of 1986 (the "Code").
(ii) A Unitholder will be considered as owning a pro rata
share of each asset of the Trust in the proportion that the number of
Units held by him bears to the total number of Units outstanding. Under
subpart E, subchapter J of chapter 1 of the Code, income of the Trust
will be treated as income of each Unitholder in the proportion
described, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the Trustee.
Each Unitholder will be considered to have received his pro rata share
of income derived from each Trust asset when such income is considered
to be received by the Trust. A Unitholder's pro rata portion of
distributions of cash or property by a corporation with respect to an
Equity Security ("dividends" as defined by Section 316 of the Code )
are 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 which exceed such current and accumulated earnings
and profits will first reduce the Unitholder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unitholder's
tax basis in such Equity Security, shall be treated as gain from the
sale or exchange of property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of
each Equity Security held by 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 tax basis for his pro
rata portion of each Equity Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder (subject
to various nonrecognition provisions under the Code) upon redemption or
sale of his Units, except to the extent an in kind distribution of
Securities is received by such Unitholder from the Trust as discussed
below. Such gain or loss is measured by comparing the proceeds of such
redemption or sale with the adjusted basis of his Units. Before
adjustment, such basis would normally be cost if the Unitholder had
acquired his Units by purchase. Such basis will be reduced, but not
below zero, by the Unitholder's pro rata portion of dividends with
respect to each Equity Security which are not taxable as ordinary
income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder (subject
to various nonrecognition provisions under the Code) and the amount
thereof will be measured by comparing the Unitholder's aliquot share of
the total proceeds from the transaction with his basis for his
fractional interest in the asset disposed of. Such basis is ascertained
by apportioning the tax basis for his Units (as of the date on which
his Units were acquired) among each of the Trust assets (as of the date
on which his Units were acquired) ratably according to their values as
of the valuation date nearest the date on which he purchased such
Units. A Unitholder's basis in his Units and of his fractional interest
in each Trust asset must be reduced, but not below zero, by the
Unitholder's pro rata portion of dividends with respect to the Equity
Security which is not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or upon
the termination of the Trust. 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.
The receipt of an in kind distribution will result in a Unitholder
receiving an undivided interest in whole shares of stock and possibly
cash. The potential federal income tax consequences which may occur
under an in kind distribution with respect to each Equity Security
owned by the Trust will depend upon whether or not a Unitholder
receives cash in addition to Equity Securities. An "Equity 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 Equity Securities in exchange for his or her
pro rata portion in the Equity Securities held by the Trust. However,
if a Unitholder also receives cash in exchange for a fractional share
of an Equity 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 an Equity Security held by the Trust. The total amount of
taxable gains (or losses) recognized upon such redemption will
generally equal the sum of the gain (or loss) recognized under the
rules described above by the redeeming Unitholder with respect to each
Equity Security owned by the Trust.
A domestic corporation owning Units in the Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the Code 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 and are
attributable to domestic corporations), subject to the limitations imposed by
Sections 246 and 246A of the Code.
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.
Section 67 of the Code provides that certain itemized deductions, such
as investment expenses, tax return preparation fees and employee business
expenses will be deductible by individuals only to the extent they exceed 2% of
such individual's adjusted gross income. Unitholders may be required to treat
some or all of the expenses of the Trust as miscellaneous itemized deductions
subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of
his pro rata interest in an Equity Security is either sold by the Trust or
redeemed or when a Unitholder disposes of his Units in a taxable transaction, in
each case for an amount greater (or less) than his tax basis therefor, subject
to various non-recognition provisions of the Code.
It should be noted that payments to the Trust of dividends on Equity
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. A required holding period is imposed for such credits.
Any gain or loss recognized on a sale or exchange will, under current
law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
EXHIBIT 3.3
WINSTON & STRAWN
200 Park Avenue
New York, New York 10166-4193
September 21, 1999
Van Kampen Focus Portfolios, Series 176
c/o The Bank of New York, As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen Focus Portfolios,
Series 176 (the "Fund") consisting of Small-Cap Focus Portfolio 1 (individually
a "Trust" and, in the aggregate, the "Trusts") for purposes of determining the
applicability of certain New York taxes under the circumstances hereinafter
described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen Funds Inc. (the
"Depositor"), American Portfolio Evaluation Services, a division of an affiliate
of the Depositor, as Evaluator, Josephthal & Co., Inc., as Supervisory Servicer
(the "Supervisory Servicer"), and The Bank of New York, as trustee (the
"Trustee"). As described in the prospectus relating to the Fund dated today to
be filed as an amendment to a registration statement heretofore filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Prospectus") (File Number 333-85255), the objectives of the Fund are to
provide the potential for dividend income and capital appreciation through
investment in a fixed portfolio of actively traded equity securities of the type
denominated in the Trust's name. It is noted that no opinion is expressed herein
with regard to the Federal tax aspects of the securities, the Trusts, units of
the Trusts (the "Units"), or any income, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to the Trust the securities and/or contracts and cash for the
purchase thereof together with an irrevocable letter of credit in the amount
required for the purchase price of the securities comprising the corpus of the
Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities to
be deposited in the Trust, and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Trusts as more fully set forth in the Prospectus. The
Units, which are represented by certificates ("Certificates"), will be offered
to the public upon the effectiveness of the registration statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash dividends
received by the Fund and with the proceeds from the disposition of securities
held in the Fund and the proceeds of the treasury obligation on maturity and the
distribution of such cash dividends and proceeds to the Unit holders. The
Trustee will also maintain records of the registered holders of Certificates
representing an interest in the Fund and administer the redemption of Units by
such Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option.
Generally, equity securities held in the Trust may be removed therefrom
by the Trustee at the direction of the Depositor upon the occurrence of certain
specified events which adversely affect the sound investment character of the
Fund, such as default by the issuer in payment of declared dividends or of
interest or principal on one or more of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to sell
equity securities designated by the Supervisory Servicer only for the purpose of
redeeming Units tendered to it and of paying expenses for which funds are not
available. The Trustee does not have the power to vary the investment of any
Unit holder in the Fund, and under no circumstances may the proceeds of sale of
any equity securities held by the Fund be used to purchase new equity securities
to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on business
corporations, and, for purposes of that Article, Section 208(l) defines the term
"corporation" to include, among other things, "any business conducted by a
trustee or trustees wherein interest or ownership is evidenced by certificate or
other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which interest
or ownership is evidenced by certificate or other written
instrument includes, but is not limited to, an association
commonly referred to as a "business trust" or "Massachusetts
trust". In determining whether a trustee or trustees are
conducting a business, the form of the agreement is of
significance but is not controlling. The actual activities of the
trustee or trustees, not their purposes and powers, will be
regarded as decisive factors in determining whether a trust is
subject to tax under Article 9-A. The mere investment of funds
and the collection of income therefrom, with incidental
replacement of securities and reinvestment of funds, does not
constitute the conduct of a business in the case of a business
conducted by a trustee or trustees. 20 NYCRR 1-2.5(b)(2) (July
11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that where a
trustee merely invests funds and collects and distributes the income therefrom,
the trust is not engaged in business and is not subject to the franchise tax.
Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171 (3rd Dept. 1948), order
resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47 N.Y.
Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee of an
unincorporated investment trust was without authority to reinvest amounts
received upon the sales of securities and could dispose of securities making up
the trust only upon the happening of certain specified events or the existence
of certain specified conditions, the trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell equity securities contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such equity
securities is limited to circumstances in which the credit-worthiness or
soundness of the issuer of such equity security is in question or in which cash
is needed to pay redeeming Unit holders or to pay expenses, or where the Fund is
liquidated subsequent to the termination of the Indenture. In substance, the
Trustee will merely collect and distribute income and will not reinvest any
income or proceeds, and the Trustee has no power to vary the investment of any
Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust will be
deemed to be the owner of the trust under certain circumstances, and therefore
taxable on his proportionate interest in the income thereof. Where this Federal
tax rule applies, the income attributed to the grantor will also be income to
him for New York income tax purposes. See TSB-M-78(9)(c), New York Department of
Taxation and Finance, June 23, 1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be considered as
owning a share of each asset of the Trust in the proportion that the number of
Units held by such holder bears to the total number of Units outstanding and the
income of a Trust will be treated as the income of each Unit holder in said
proportion pursuant to Subpart E of Part I, Subchapter J of Chapter 1 of the
Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we specifically rely,
we are of the opinion that under existing laws, rulings, and court decisions
interpreting the laws of the State and City of New York:
1. Each of the Trusts will not constitute an association taxable
as a corporation under New York law, and, accordingly, will not be
subject to tax on its income under the New York State franchise tax or
the New York City general corporation tax.
2. The income of the Trusts will be treated as the income of the
Unit holders under the income tax laws of the State and City of New
York.
3. Unit holders who are not residents of the State of New York
are not subject to the income tax laws thereof with respect to any
interest or gain derived from the Fund or any gain from the sale or
other disposition of the Units, except to the extent that such
interest or gain is from property employed in a business, trade,
profession or occupation carried on in the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name and the
reference to our firm in the Registration Statement and in the Prospectus.
Very truly yours,
WINSTON & STRAWN
MNS:
EXHIBIT 4.1
Interactive Data
FINANCIAL TIMES Information
100 William Street, 15th Floor, New York, NY 10038 USA
Tel: (212) 269-6300 Fax: (212) 771-6445
September 20, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen Focus Portfolios, Series 176 Small-Cap Focus Portfolio 1, (A
Unit Investment Trust) Registered Under the Securities Act of 1933, File
No. 333-85255
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund, a copy of which is attached hereto.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as the
Evaluator, and to the use of the Obligations prepared by us which are referred
to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
Steve Miano
Director Fixed Income Data Operations
EXHIBIT 4.2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We have issued our report dated September 21, 1999 on the statement of
condition and related securities portfolio of Van Kampen Focus Portfolios,
Series 176 as of September 21, 1999 contained in the Registration Statement on
Form S-6 and Prospectus. We consent to the use of our report in the Registration
Statement and Prospectus and to the use of our name as it appears under the
caption "Other Matters-Independent Certified Public Accountants."
Grant Thornton LLP
Chicago, Illinois
September 21, 1999
