SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
TO
FORM
N-8B-2
File No. 811-08293
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS WHICH ARE
CURRENTLY ISSUING SECURITIES
May 15, 2000
Pursuant to Section 8(b) of the
Investment Company Act of 1940
SCHWAB TRUSTS, SCHWAB TEN TRUST, 2000 SERIES B
(AND SUBSEQUENT SERIES)
and any other future trusts for which
Charles Schwab & Co., Inc. and/or
ING Funds Distributor, Inc. act as Depositors
Name of Registrant
1475 Dunwoody Drive
West Chester, Pennsylvania 19380
Address and Principal Office of Registrant
X Not the issuer of periodic payment plan certificates.
- --
_____ Issuer of periodic payment plan certificates.
Amended items 1, 2, 3, 6, 23, 25, 27, 28, 29 and 59.
951424.1
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I. ORGANIZATION AND GENERAL INFORMATION
------------------------------------
1. (a) Furnish name of the trust and the Internal Revenue Service Employer
Identification Number.
Schwab Trusts, Schwab Ten Trust, 2000 Series B
(and Subsequent Series) and any other future
trusts for which Charles Schwab & Co., Inc. and/or
ING Funds Distributor, Inc. act as sponsors.
The Trust has no Internal Revenue Service Employer
Identification Number.
(b) Furnish title of each class or series of
securities issued by the trust.
CERTIFICATE OF OWNERSHIP
--evidencing--
An Undivided Interest
--in--
Schwab Trusts, Schwab Ten Trust, 2000 Series B
(and Subsequent Series)
2. Furnish name and principal business address and ZIP Code and the
Internal Revenue Service Employer Identification Number of each depositor of the
trust.
Charles Schwab & Co., Inc. ING Funds Distributor, Inc.
101 Montgomery Street 1475 Dunwoody Drive
San Francisco, California 94104 West Chester, Pennsylvania
Internal Revenue Service 19380
Employer Identification Internal Revenue Service
Number: 94-1737782 Employer Identification
Number: 42-1418588
3. Furnish name and principal business address and ZIP Code and the
Internal Revenue Service Employer Identification Number of each custodian or
trustee of the trust indicating for which class or series of securities each
custodian or trustee is acting.
Trustee:
The Chase Manhattan Bank The Bank of New York
4 New York Plaza 101 Barclay Street
New York, New York 10004 New York, New York 10286
Internal Revenue Service Internal Revenue Service
Employer Identification Employer Identification
Number: 13-4994650 Number: 13-5160382
951424.1
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6. (a) Furnish the dates of execution and termination of any indenture or
agreement currently in effect under the terms of which the trust was organized
and issued or proposes to issue securities.
The form of Trust Indenture and Agreement among
Charles Schwab & Co., Inc. and ING Funds
Distributor, Inc., as Depositors, ING Mutual Funds
Management Co. LLC, as Portfolio Supervisor and
The Chase Manhattan Bank, as Trustee, to be
employed by the Trust will be filed as Exhibit
99.1.1.1 to the Registration Statement on Form S-6
of the Trust.
The Indenture will be dated the initial date of
deposit of the securities in Schwab Trusts, Schwab
Ten Trust, 2000 Series B and shall terminate no later
than the disposition of the last security purchased
by the Trust but no later than the Mandatory
Termination Date which is approximately fifteen
months from the initial date of deposit.
Substantially identical but separate Reference Trust
Agreements will be executed for each Series of Trusts
between the Depositors, the Portfolio Supervisor and
Trustee. The respective Reference Trust Agreements
shall be dated the initial date of deposit of the
underlying securities for each Series and shall
terminate on the date of disposition of the last
security held in the Trust portfolio but no later
than the Mandatory Termination Date which is
approximately thirteen months from the initial date
of deposit.
(b) Furnish the dates of execution and termination of any indenture or
agreement currently in effect pursuant to which the proceeds of payment on
securities issued or to be issued by the trust are held by the custodian or
trustee.
See Item 6(a) above.
23. Describe any bonding arrangement for officers, directors, partners or
employees of the depositor or principal underwriter of the trust, including the
amount of coverage and the type of bond.
ING Funds Distributor, Inc. and its directors,
officers and employees are covered by a
Stockbrokers Blanket Bond in the amount of
$2,000,000, under a Financial Institution Bond
Form 14.
951424.1
2
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Charles Schwab & Co., Inc. and its directors,
officers and employees are covered by a Stockbrokers
Comprehensive Crime and Computer Crime Bond in the
amount of $110,000,000 aggregate.
II. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
-----------------------------------------------------------
Organization and Operations of Depositor
25. State the form of organization of the depositor of the trust, the name
of the state or other sovereign power under the laws of which the depositor was
organized and the date of organization.
Charles Schwab & Co., Inc. is a Corporation
organized in 1971 under the laws of the State of
California.
ING Funds Distributor, Inc. is a Corporation
organized in 1994 under the laws of the State of
Iowa.
27. Describe the general character of the business engaged in by the
depositor including a statement as to any business other than that of depositor
of the trust. If the depositor acts or has acted in any capacity with respect to
any investment company or companies other than the trust, state the name or
names of such company or companies, their relationship, if any, to the trust,
and the nature of the depositor's activities therewith. If the depositor has
ceased to act in such named capacity, state the date of and circumstances
surrounding such cessation.
See "Trust Administration - Sponsors" in
Exhibit 2. Each of the Depositors is engaged in
the underwriting and securities brokerage business
and is a member of the National Association of
Securities Dealers, Inc. Charles Schwab & Co.,
Inc. is a member of the New York Stock Exchange
and the Pacific Stock Exchange.
ING Funds Distributor, Inc., formerly known as
Equitable of Iowa Securities Network, Inc., is
also the wholesaler of 17 mutual funds and 1 money
market through affiliated and non-affiliated
broker/dealers as well as through broker/dealers
of selected banks.
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Officials and Affiliated Persons of Depositor
28. (a) Furnish as at latest practicable date the following information
with respect to the depositor of the trust, with respect to each officer,
director, or partner of the depositor, and with respect to each natural person
directly or indirectly owning, controlling or holding with power to vote 5% or
more of the outstanding voting securities of the depositor.
With respect to Charles Schwab & Co., Inc. see
Form BD No. 8-16514 for Charles Schwab & Co.,
Inc., which is incorporated herein by reference.
With respect to ING Funds Distributor, Inc.
reference is made to Exhibit F hereto.
(b) Furnish a brief statement of the business experience during the last
five years of each officer, director or partner of the depositor.
With respect to Charles Schwab & Co., Inc. see
Form BD No. 8-16514 for Charles Schwab & Co.,
Inc., which is incorporated herein by reference.
With respect to ING Funds Distributor, Inc.
reference is made to Exhibit F hereto.
Companies Owning Securities of Depositor
29. Furnish as at latest practicable date the following
information with respect to each company which directly or indirectly owns,
controls or holds with power to vote 5% or more of the outstanding voting
securities of the depositor.
With respect to Charles Schwab & Co., Inc. see
Form BD No. 8-16514 for Charles Schwab & Co.,
Inc., which is incorporated herein by reference.
With respect to ING Funds Distributor, Inc.
reference is made to Exhibit F hereto.
III. FINANCIAL AND STATISTICAL INFORMATION
-------------------------------------
59. Financial Statements filed herewith:
(c)(1) Balance Sheet of each of the Depositors for their last fiscal year.
951424.1
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With respect to Charles Schwab & Co., Inc.
incorporated by reference to Form 10-K filed on
March 28, 2000 (SEC File Number 001-09700).
With respect to ING Funds Distributor, Inc.
reference is made to Form X-17A-5 Part III
included as Exhibit G hereto.
(c)(2) Profit and Loss Statement and Statement of Surplus for
each of the Depositors for their last fiscal year.
With respect to Charles Schwab & Co., Inc.
incorporated by reference to Form 10-K filed on
March 28, 2000 (SEC File Number 001-09700).
With respect to ING Funds Distributor, Inc.
reference is made to Form X-17A-5 Part III
included as Exhibit G hereto.
951424.1
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
depositor of the registrant has caused this Registration Statement to be duly
signed on behalf of the registrant in the City and State of New York, on the
15th day of May, 2000.
SCHWAB TRUSTS, SCHWAB TEN TRUST,
2000 SERIES B
(and SUBSEQUENT SERIES)
By: CHARLES SCHWAB & CO., INC.
By: /s/ JAMES C. WHITE
-------------------
Name: James C. White
Title: Vice President
Attest: /s/ KATHRYN BATTLES
---------------------
Name: Kathryn Battles
Title: Director
ING FUNDS DISTRIBUTOR, INC.
By: /s/ PETER J. DEMARCO
--------------------
Name: Peter J. DeMarco
Title: Senior Vice
President
Attest: /s/ DONALD E. BROSTROM
-----------------------
Name: Donald E. Brostrom
Title: Chief Financial Officer
& Treasurer
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IV. EXHIBITS
--------
No. Description
1. Form of Trust Indenture and Agreement (filed as Exhibit
99.1.1.1 to the Registration Statement on Form S-6 of
the Trust).
2. Form of Prospectus for the Trust (filed with
Registration Statement on Form S-6 of the Trust).
3. Third Restated Certificate of Incorporation of Charles
Schwab & Co., Inc., as amended on May 6, 1996 (filed as
Exhibit 3.7 to Form 10-Q SEC File No. 001-09700 on
November 13, 1996 and incorporated herein by
reference).
4. Second Restated Bylaws of Charles Schwab & Co., Inc.,
as amended on July 17, 1996 (filed as Exhibit 3.8 to
Form 10-Q SEC File No. 001-09700 on November 13, 1996
and incorporated herein by reference).
5. Articles of Incorporation and Articles of Amendment of
ING Funds Distributor, Inc. (filed as Exhibit 99.1.3.5
to the Form S-6 Registration Statement of the Trust and
incorporated herein by reference).
6. Bylaws of ING Funds Distributor, Inc. (filed as
Exhibit 99. 1.3.6 to the Form S-6 Registration
Statement of the Trust and incorporated herein by
reference).
Exhibit F.
Exhibit G.
951424.1
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<TABLE>
<CAPTION>
<S> <C> <C>
EXHIBIT F
As of March 28, 2000
I. Information as to each officer, director or partner of ING
Funds Distributor, Inc., and with respect to each natural
person directly or indirectly owning, controlling or holding with power
to vote 5% or more of the outstanding voting securities of ING Funds
Distributor, Inc.
Name Title/Position Business Address
- ---- -------------- ----------------
John J. Pileggi Director and Chief Executive 1475 Dunwoody Drive
Officer West Chester, PA 19380
Donald E. Brostrom Director, Chief Financial 1475 Dunwoody Drive
Officer West Chester, PA 19380
and Treasurer
Mitchell J. Mellen Director and President 1475 Dunwoody Drive
West Chester, PA 19380
Eric M. Rubin Director and Senior Vice 4802 East Ray Road, Suite
President 22-228
Phoenix, AZ 85044
Peter J. DeMarco Senior Vice President 600 Fifth Avenue
New York, NY 10022
Rachelle I. Rehner Secretary 1475 Dunwoody Drive
West Chester, PA 19380
Gary Taiariol Assistant Treasurer 1475 Dunwoody Drive
West Chester, PA 19380
</TABLE>
As of the date hereof, none of the referenced persons own 5% or more of ING
Funds Distributor, Inc.
As of the date hereof, none of the referenced persons own any Units of the
Trust.
II. The business experience during the last five years of each
officer and director of ING Funds Distributor, Inc.
John Pileggi - Chief Executive Officer and Director of ING Funds
Distributor, Inc. since 1999. Mr. Pileggi has also served as
President and Chief Executive Officer for ING Mutual Funds
951424.1
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Management Co. LLC since 1998, as President, Chairman of the Board and Trustee
for ING Funds Trust, as Chief Executive Officer for ING Fund Services Co. LLC
and as President, Chief Executive Officer and Trustee for ING Variable Insurance
Trust. Mr. Pileggi has been a Director of Furman Selz LLC since 1994 and is also
a Trustee for the First Choice Funds, Intrust Funds and Performance Funds, ING
Canadian Funds, ING Global Brand Names Funds and ING American Fund.
Donald Brostrom - Chief Financial Officer, Treasurer and Director
of ING Funds Distributor, Inc. since April, 1999. Mr. Brostrom
has also served as Executive Vice President and Chief Operating
Officer for ING Mutual Funds Management Co. LLC since 1998, as
Treasurer for ING Funds Trust, as Chief Financial Officer for ING
Fund Services Co. LLC since October, 1998 and as Treasurer for
ING Variable Insurance Trust. Mr. Brostrom was a Managing
Director of Furman Selz LLC from 1984 to September, 1998.
Mitch Mellen - President and Director of ING Funds Distributor,
Inc. since July, 1999. Mr. Mellen was formerly the National
Sales Manager for New York Life Mainstay Funds from October, 1995
to July, 1998 and an investment broker with Piper Jaffrey from
May, 1993 to June, 1995.
Eric Rubin - Director of ING Funds Distributor, Inc. since April, 1999 and
Senior Vice President since January, 2000. Formerly Vice President of Sales of
First Data Investor Services Group from January, 1997 to June, 1998 and Managing
Director of Furman Selz, LLC from July, 1995 to January, 1997. Mr. Rubin has
also served as Vice President and Managing Director of Banc One Investment
Advisors from October, 1993 to July, 1995.
Peter DeMarco - Senior Vice President of ING Funds Distributor,
Inc. since October, 1999. Mr. DeMarco was an Executive Vice
President for Reich & Tang Asset Management LP from October,
1995 to October, 1999 and a Managing Director of Bear, Stearns &
Co. Inc. from 1981 to October, 1995.
Rachelle Rehner - Secretary of ING Funds Distributor, Inc. since
1999. Ms. Rehner has also served as Fund Legal Manager for ING
Mutual Funds Management Co. LLC since 1998. Ms. Rehner was a
senior legal assistant for Kramer, Levin, Naftalis & Frankel from
1995 to 1998 and a compliance administrator for BISYS from 1994
to 1995.
Gary Taiariol - Assistant Treasurer of ING Funds Distributor,
Inc. since April, 1999. Mr. Taiariol has also served as
Treasurer for ING Mutual Funds Management Co. LLC and ING Fund
Services Co. LLC since December, 1998. Mr. Taiariol was an
Accounting Manager for Novacare, Inc. from January, 1995, to
December, 1998 and a Senior Accountant for Christian Dior
Perfumes from June, 1992 to January, 1995.
951424.1
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<PAGE>
III. Each Company which directly or indirectly owns, controls or holds with
power to vote 5% or more of the outstanding voting securities of ING
Funds Distributor, Inc.
Equitable of Iowa Companies, Inc. 100% direct ownership of the
909 Locust Street Principal Underwriter
Des Moines, Iowa 50309
ING America Insurance Holdings, Inc. 100% direct ownership of
5780 Powers Ferry Road N.W. Equitable of Iowa Companies,
Atlanta, Georgia 30327 Inc.
ING Insurance International B.V. 100% direct ownership of ING
America Insurance Holdings,
Inc.
ING Verzekeringen, N.V. 100% direct ownership of ING
Insurance International B.V.
ING Groep N.V. 100% direct ownership of ING
Strawinskylaan 2631 Verzekeringen, N.V.
1077 ZZ
Amsterdam
The Netherlands
951424.1
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<PAGE>
EXHIBIT G
ING Funds Distributor, Inc.
Statements of Financial Condition
<TABLE>
<S> <C>
December 31
Assets 1999 1998
----------------------- -----------------------
Cash $ 88,071 $ 30,000
Short-term investments 755,000 --
Management fee receivable 440,821 --
Due from affiliate (including $3,002,709 in 1999
under tax allocation agreement) 3,352,513 --
Deferred sales costs 485,536 --
Prepaid expenses 219,805 --
---------------------- ------------------------
Total assets $ 5,341,746 $ 30,000
====================== ========================
Liability and stockholder's equity
Liability-- accounts payable and other accrued
expenses $ 686,196 --
Stockholder's equity:
Common stock, without par value (stated value
$1.00 per share) -- authorized 50,000 shares,
issued and outstanding 1,000 shares 1,000 $ 1,000
Additional paid-in capital 9,329,000 29,000
Retained earnings (deficit) (4,674,450) --
----------------------- ---- -------------------
Total stockholder's equity 4,655,550 30,000
----------------------- ---- -------------------
Total liability and stockholder's equity $ 5,341,746 $ 30,000
======================= =======================
</TABLE>
See accompanying notes.
951424.1
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ING Funds Distributor, Inc.
Statements of Operations
<TABLE>
<S> <C>
Year ended December 31
1999 1998
------------------------- ------------------------
Income:
Commissions $ 581,928 $ --
Distribution fees 475,307 --
Shareholder servicing fees 1,427,792 --
Interest 31,626 --
Other 1,100 --
Expense reimbursement from Equitable Life
Insurance Company of Iowa -- $ 8,545
------------------------- -----------------------
2,517,753 8,545
Expenses:
Commissions and promotional payments 4,138,008 --
Salaries and benefits 3,609,755 --
Travel and entertainment 1,519,342 --
Conferences 705,796 --
Professional fees 43,867 6,300
Other 178,144 2,245
----------------------- ------------------------
10,194,912 8,545
----------------------- ------------------------
Loss before income taxes (7,677,159) --
Income tax benefit (3,002,709) --
----------------------- ------------------------
Net loss $ (4,674,450) $ --
======================= ==== ===================
</TABLE>
See accompanying notes.
951424.1
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ING Funds Distributor, Inc.
Statements of Changes in Stockholder's Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Additional Retained Total
Common Paid-In Earnings Stockholder's
Stock Capital (Deficit) Equity
-------------- -------------------- ----------------------------------------------
Balance at January 1, 1998 $1,000 $24,000 -- $25,000
Contribution of capital -- 5,000 -- 5,000
-------------- -------------------- ----------------------------------------------
Balance at December 31, 1998 1,000 29,000 -- 30,000
Contribution of capital -- 9,300,000 -- 9,300,000
Net loss -- -- $(4,674,450) -4,674,450
-------------- -------------------- ----------------------------------------------
Balance at December 31, 1998 $1,000 $9,329,000 $(4,674,450) $4,655,550
============== ==================== ==============================================
See accompanying notes.
</TABLE>
951424.1
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ING Funds Distributor, Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
<S> <C>
Year ended December 31
1999 1998
------------------------- ------------------------
Operating activities
Net loss $ (4,674,450) --
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Management fee receivable (440,821) --
Due from affiliate (3,352,513) $1,550
Deferred sales costs (485,536) --
Prepaid expenses (219,805) --
Accounts payable and other accrued expenses 686,196 1,000
----------------------- ----------------------
Net cash provided by (used in) operating activities (8,486,929) 550
Financing activity
Contribution of capital by parent 9,300,000 5,000
----------------------- -----------------------
Net cash provided by financing activity 9,300,000 5,000
Investing activity
Purchase of short-term investments (755,000) --
----------------------- -----------------------
Net cash used in investing activity (755,000) --
----------------------- -----------------------
Increase in cash and cash equivalents 58,071 5,550
Cash at beginning of year 30,000 24,450
----------------------- -----------------------
Cash at end of year $ 88,071 $ 30,000
======================= =======================
See accompanying notes.
</TABLE>
951424.1
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ING Funds Distributor, Inc.
Notes to Financial Statements
December 31, 1999
1. Significant Accounting Policies
Organization
As of October 22, 1998, Equitable of Iowa Securities Network, a wholly owned
subsidiary of Equitable of Iowa Companies, Inc. ("EIC" or the "Parent"), was
renamed ING Funds Distributor, Inc. (the "Company"). EIC is an indirect wholly
owned subsidiary of ING Groep N.V., a global financial services holding company
based in The Netherlands. The Company engages primarily in the sale of shares of
mutual funds of sixteen open-end investment companies (the "Funds") comprising
the ING Funds Trust (the "Trust"), an affiliate. Pursuant to a distribution
agreement approved annually by the Trust's Board of Trustees, the Company
derives commission income from the sale of mutual fund shares, as well as
distribution and shareholder servicing fees from the Funds.
Prior to October 22, 1998, the Company operated as a broker-dealer, dealing
primarily in the sale of certain variable annuity contracts issued by Equitable
Life Insurance Company of Iowa Separate Account A. Commissions due on the sale
of certain variable annuity contracts issued by Equitable Life Insurance Company
of Iowa Separate Account A were paid by Equitable Life Insurance Company of Iowa
("Equitable Life"), an affiliate, directly to third-party wholesalers. On
October 28, 1998, the Company entered into a membership agreement with the
National Association of Securities Dealers, Inc. and began operating as a
broker-dealer dealing primarily with the distribution of mutual funds.
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or
less when purchased to be cash equivalents.
Deferred Income Taxes
Deferred income tax assets or liabilities are computed based on the difference
between the financial statement and income tax bases of assets and liabilities
using the enacted marginal tax rate. Deferred income tax expense or benefit are
based on the changes in the asset or liability from period to period.
951424.1
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Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles may require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of these financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 financial statement presentation.
2. Income Taxes
The results of the Company's operations are included in the consolidated tax
returns of EIC. The Parent and its subsidiaries each report current income tax
expense as allocated under a consolidated tax allocation agreement. Generally,
this allocation results in profitable companies recognizing a tax provision as
if the individual company filed a separate return and loss companies recognizing
benefits to the extent their losses contribute to reduce consolidated taxes.
Income tax benefit consists of the following:
Year ended December 31
1999 1998
--------------------- -----------------------
Federal $ (2,627,370) $ --
State (375,339) --
--------------------- -----------------------
$ (3,002,709) $ --
===================== =======================
Income tax benefit differs from the amount computed by applying the statutory
federal income tax rate to income before income taxes due to non-deductible
meals and entertainment and state income taxes.
3. Regulatory Requirements
The Company is subject to the Securities and Exchange Commission uniform net
capital rule (Rule 15c3-1), which requires the maintenance of minimum net
capital and requires that the ratio of aggregate indebtedness to net capital,
both as defined therein, shall not exceed 15 to 1. At December 31, 1999, the
Company had defined net capital of $582,596, which was $536,850 in excess of its
required net capital of $45,746. The Company's ratio of aggregate indebtedness
to net capital was 1.18 to 1.
951424.1
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4. Principal Broker-Dealer Agreement
Prior to October 22, 1998, pursuant to a Principal Broker-Dealer Agreement, the
operating costs paid by the Company were reimbursed by Equitable Life in
connection with services performed.
951424.1
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