As filed with the Securities and Exchange Commission on August 7 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
---------------------
A. EXACT NAME OF TRUST:
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust
B. NAME OF DEPOSITORS:
McLaughlin, Piven, Vogel Securities, Inc. Reich & Tang Distributors, Inc.
C. COMPLETE ADDRESS OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
McLaughlin, Piven, Vogel Securities, Inc. Reich & Tang Distributors, Inc.
30 Wall Street 600 Fifth Avenue
New York, New York 10005 New York, New York 10020
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
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COPY OF COMMENTS TO:
ALLAN M. VOGEL PETER J. DEMARCO MICHAEL R. ROSELLA, Esq.
President Reich & Tang Distributors, Inc. Battle Fowler LLP
McLaughlin, Piven, Vogel 600 Fifth Avenue 75 East 55th Street
Securities, Inc. New York, New York 10020 New York, New York 10022
30 Wall Street (212) 856-6858
New York, New York 10005
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E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of McLaughlin, Piven, Vogel Family of Trusts,
The Pinnacle Trust is being registered under the Securities Act of 1933
pursuant to Section 24(f) of the Investment Company Act of 1940, as
amended, and Rule 24f-2 thereunder.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE SECURITIES
BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
No filing fee required.
H. APPROPRIATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the Registration
Statement.
_____ Check if it is proposed that this filing will become effective
immediately upon filing pursuant to Rule 487.
The registrant hereby amends the registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
740248.2
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McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust
CROSS-REFERENCE SHEET
Pursuant to Rule 404 of Regulation C
Under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction as
to the Prospectus in Form S-6)
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Form N-8B-2 Form S-6
Item Number Heading in Prospectus
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I. Organization And General Information
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1. (a) Name of trust.............................................. Front cover of Prospectus
(b) Title of securities issued................................. Front cover of Prospectus
2. Name and address of each depositor.............................. The Sponsors
3. Name and address of trustee..................................... The Trustee
4. Name and address of principal underwriters...................... Distribution of Units
5. State of organization of trust.................................. Organization
6. Execution and termination of trust agreement.................... Trust Agreement, Amendment and Termination
7. Changes of name................................................. None
8. Fiscal year..................................................... Not applicable
9. Litigation...................................................... None
II. General Description of The Trust and Securities of the Trust
10. (a) Registered or bearer securities............................ Book-Entry Units
(b) Cumulative or distributive securities...................... Interest and Principal Distributions
(c) Redemption................................................. Trustee Redemption
(d) Conversion, transfer, etc.................................. Book-Entry Units, Sponsors Repurchase, Trustee
Redemption
(e) Periodic payment plan...................................... Not Applicable
(f) Voting rights.............................................. Trust Agreement, Amendment and Termination
(g) Notice to certificateholders............................... Records, Portfolio, Substitution of Securities, Trust
Agreement, Amendment and Termination, The
Sponsors, The Trustee
(h) Consents required.......................................... Trust Agreement and Amendment, Trust Termination
(i) Other provisions........................................... Tax Status
11. Type of securities comprising units............................. Objective, Portfolio, The Securities, Substitution of
Securities
12. Certain information regarding periodic payment certificates..... Not Applicable
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740248.2
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Form N-8B-2 Form S-6
Item Number Heading in Prospectus
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13. (a) Load, fees, expenses, etc.................................. Summary of Essential Information, Public Offering
Price, Discounts, Sponsors' Profits, Trust
Administration, Trust Expenses and Charges,
Reinvestment Plan
(b) Certain information regarding periodic payment
certificates.......................................... Not Applicable
(c) Certain percentages........................................ Summary of Essential Information, Public Offering
Price, Discounts
(d) Price differences.......................................... Discounts, Distribution of Units
(e) Other loads, fees, expenses................................ None
(f) Certain profits receivable by depositors, principal
underwriters, trustee or affiliated persons............ Trust Termination
(g) Ratio of annual charges to income.......................... Not Applicable
14. Issuance of trust's securities.................................. Organization, Book-Entry Units
15. Receipt and handling of payments from purchasers................ Public Offering Price
16. Acquisition and disposition of underlying securities............ Organization, Substitution of Securities, Portfolio,
Portfolio Supervision
17. Withdrawal or redemption........................................ Summary of Essential Information, Market for Units,
Sponsors Repurchase, Trustee Redemption
18. (a) Receipt, custody and disposition of income................. Distributions
(b) Reinvestment of distributions.............................. Reinvestment Plan
(c) Reserves or special funds.................................. Distributions
(d) Schedule of distributions.................................. Not Applicable
19. Records, accounts and reports................................... Records
20. Certain miscellaneous provisions of trust agreement
(a) Amendment.................................................. Trust Agreement and Amendment, Trust Termination
(b) Termination................................................ Trust Agreement and Amendment, Trust Termination
(c) and (d) Trustee, removal and successor..................... The Trustee
(e) and (f) Depositor, removal and successor................... The Sponsors
21. Loans to security holders....................................... None
22. Limitations on liability........................................ The Sponsors, The Trustee Evaluation of the Trust
23. Bonding arrangements............................................ Part II - Item A
24. Other material provisions of trust agreement.................... None
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of depositor....................................... The Sponsors
26. Fees received by depositor...................................... Not Applicable
27. Business of depositor.......................................... The Sponsors
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740248.2
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Form N-8B-2 Form S-6
Item Number Heading in Prospectus
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28. Certain information as to officials and affiliated persons of
depositor.................................................. Not Applicable
29. Voting securities of depositor.................................. Not Applicable
30. Persons controlling depositor................................... None
31. Payments by depositor for certain services
rendered to trust.......................................... Not Applicable
32. Payments by depositor for certain other services
rendered to trust.......................................... Not Applicable
33. Remuneration of employees of depositor for certain services
rendered to trust.......................................... Not Applicable
34. Remuneration of other persons for certain services
rendered to trust.......................................... Not Applicable
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities by states.................... Distribution of Units
36. Suspension of sales of trust's securities....................... None
37. Revocation of authority to distribute........................... None
38. (a) Method of distribution..................................... Distribution of Units
(b) Underwriting agreements.................................... Distribution of Units
(c) Selling agreements......................................... Distribution of Units
39. (a) Organization of principal underwriters..................... The Sponsors
(b) N.A.S.D. membership of principal underwriters.............. The Sponsors
40. Certain fees received by principal underwriters................. The Sponsors
41. (a) Business of principal underwriters......................... The Sponsors
(b) Branch offices of principal underwriters................... None
(c) Salesmen of principal underwriters......................... Not Applicable
42. Ownership of trust's securities by certain persons.............. Not Applicable
43. Certain brokerage commissions received by
principal underwriters..................................... Not Applicable
44. (a) Method of valuation........................................ Summary of Essential Information, Statement of
Financial Condition, Liquidity, Distributions
(b) Schedule as to offering price.............................. Summary of Essential Information
(c) Variation in offering price to certain persons............. Distribution of Units, Discounts
45. Suspension of redemption rights................................. Not Applicable
46. (a) Redemption valuation....................................... Summary of Essential Information, Market for Units,
Termination, Offering Price, Sponsors Repurchase,
Trustee Redemption
(b) Schedule as to redemption price............................ Summary of Essential Information
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740248.2
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Form N-8B-2 Form S-6
Item Number Heading in Prospectus
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47. Maintenance of position in underlying securities............ Market for Units, Offering Price, Sponsors Repurchase,
Trustee Redemption
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of trustee.......................... The Trustee
49. Fees and expenses of trustee.................................... Trust Expenses and Charges
50. Trustee's lien.................................................. Trust Expenses and Charges
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's securities...................... Not Applicable
VII. Policy of Registrant
52. (a) Provisions of trust agreement with respect to selection or
elimination of underlying securities....................... Portfolio Supervision, Substitution of Securities, Trust
Agreement and Amendment, Trust Termination
(b) Transactions involving elimination of underlying
securities............................................ Not Applicable
(c) Policy regarding substitution or elimination of underlying Portfolio Supervision, Substitution of Securities, Trust
securities............................................. Agreement and Amendment, Trust Termination
(d) Fundamental policy not otherwise covered.................... None
53. Tax status of trust............................................. Tax Status
VIII. Financial and Statistical Information
54. Trust's securities during last ten years........................ Not Applicable
55. Hypothetical account for issuers of periodic payment plans...... Not Applicable
56. Certain information regarding periodic payment certificates..... Not Applicable
57. Certain information regarding periodic payment plans............ Not Applicable
58. Certain other information regarding
periodic payment plans..................................... Not Applicable
59. Financial statements (Instruction 1(c) to Form S-6)............. Statement of Financial Condition
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740248.2
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Subject to completion, dated August 7, 1998
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INSERT LOGO
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MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE TRUST
The Trust is a unit investment trust designated McLaughlin, Piven, Vogel Family
of Trusts, The Pinnacle Trust (the "Trust"). The Sponsors are McLaughlin, Piven,
Vogel Securities, Inc. and Reich & Tang Distributors, Inc. The objective of the
Trust is to maximize total return through a combination of capital appreciation
and current dividend income. The Sponsors can not give any assurance that the
Trust's objective can be achieved. The Trust seeks to achieve its objective by
attempting to outperform the Dow Jones Industrial Average ("DJIA") by creating a
portfolio that combines the following three investment strategies: investing in
the DJIA's ten highest dividend yielding common stocks ("Top Ten"), investing in
the five lowest priced stocks of the Top Ten ("Focus Five") and investing in a
single stock which is the second-lowest priced of the Focus Five ("Penultimate
Pick"); each determined as of two business days prior to the Initial Date of
Deposit. The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc., which is not affiliated with the Sponsors and has not
participated in any way in the creation of the Trust or in the selection of the
stocks included in the Trust and has not reviewed or approved any information
included in this Prospectus. Dow Jones & Company, Inc. has not granted to the
Trust or the Sponsors a license to use the Dow Jones Industrial Average. The
value of the Units of the Trust will fluctuate with fluctuations in the value of
the underlying Securities in the Trust. Therefore, Unitholders who sell their
Units may receive more or less than their original purchase price upon sale. No
assurance can be given that dividends will be paid or that the Units will
appreciate in value. The Trust will terminate approximately fifteen months after
the Initial Date of Deposit. Minimum Purchase: 100 Units. [The minimum purchase
is 100 Units for individual purchasers, and 25 Units for purchases by custodial
accounts or Individual Retirement Accounts, self-employed retirement plans
(formerly Keogh Plans), pension funds and other tax-deferred retirement plans.]
This Prospectus consists of two parts. Part A contains the Summary of Essential
Information including descriptive material relating to the Trust and the
Statement of Financial Condition of the Trust. Part B contains general
information about the Trust. Part A may not be distributed unless accompanied by
Part B. Please read and retain both parts of this Prospectus for future
reference. The Securities and Exchange Commission ("SEC") maintains a website
that contains reports, proxy and information statements and other information
regarding the Trust which is filed electronically with the SEC. The SEC's
Internet address is http:www.sec.gov. Offering materials for the sale of these
Units available through the Internet are not being offered directly or
indirectly to residents of a particular state nor is an offer of these units
through the Internet specifically directed to any person in a state by, or on
behalf of, the issuer.
================================================================================
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC
OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED SEPTEMBER __, 1998
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any state.
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SUMMARY OF ESSENTIAL INFORMATION AS OF SEPTEMBER __, 1998:*
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DATE OF DEPOSIT: September __, 1998 MINIMUM VALUE OF TRUST: The Trust may be terminated if the
AGGREGATE VALUE OF SECURITIES $ value of the Trust is less than 40% of the aggregate value
AGGREGATE VALUE OF SECURITIES of the Securities at the completion of the Deposit Period.
PER 100 UNITS............................. $ MANDATORY TERMINATION DATE: The earlier of ____________,
NUMBER OF UNITS............................. 1999 or the disposition of the last Security in the Trust.
FRACTIONAL UNDIVIDED INTEREST IN CUSIP NUMBERS: Cash:
TRUST....................................... 1/ Reinvestment:
PUBLIC OFFERING PRICE TRUSTEE: The Chase Manhattan Bank
Aggregate Value of Securities in TRUSTEE'S FEE: $. per 100 Units outstanding
Trust**..................................... $ OTHER FEES AND EXPENSES: $. per 100 Units outstanding
Divided By ______ Units (times 100) ........ $ SPONSORS: McLaughlin, Piven, Vogel Securities, Inc. and
Plus Sales Charge of 3.395% of Public Reich & Tang Distributors, Inc.
Offering Price............................ $33.95 AGENT FOR SPONSORS: Reich & Tang Distributiors, Inc.
Public Offering Price per 100 Units+........ $1,000.00 [SPONSORS' PORTFOLIO SUPERVISORY, BOOKKEEPING AND
SPONSOR'S REPURCHASE PRICE AND ADMINISTRATIVE FEE:] Maximum of $.25 per 100 Units
REDEMPTION PRICE PER 100 UNITS++........... $ outstanding (see "Trust Expenses and Charges" in Part B).
EVALUATION TIME: 4:00 p.m. New York Time. EXPECTED SETTLEMENT DATEo: , 1998
MINIMUM INCOME OR PRINCIPAL RECORD DATES: December 15 and June 15
DISTRIBUTION: $1.00 per 100 Units DISTRIBUTION DATES: December 31 and June 30
LIQUIDATION PERIOD: Beginning 5 days prior to the ROLLOVER NOTIFICATION DATE***: _________,
Mandatory Termination Date. 1999 or another date as determined by the Sponsors.
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* The business day prior to the Initial Date of Deposit. The Initial Date
of Deposit is the date on which the Trust Agreement was signed and the deposit
of Securities with the Trustee made.
** Approximately $. of the proceeds from the Public Offering Price per
100 Units will be invested in Securities during, and liquidated at the
completion of, the initial offering period, to reimburse the Sponsor for the
payment of all or a portion of the estimated costs incurred in organizing the
Trust ("organization costs")--including costs of preparing the registration
statement, the trust indenture and other closing documents, registering units
with the SEC and the states and the initial audit of the Trust portfolio. The
reimbursement to the Sponsors for the organization costs will be paid to the
Sponsors from the assets of the Trust as of the close of the initial public
offering period. To the extent that actual organization costs are less than the
estimated amount, only the actual organization costs will be reimbursed to the
Sponsors. To the extent that actual organization costs are greater than the
estimated amount, only the estimated organization costs included in the Public
Offering Price will be reimbursed to the Sponsors and deducted from the assets
of the Trust. See "Risk Considerations" for a discussion of the impact of a
decrease in value of the Securities purchased with the Public Offering Price
proceeds intended to be used to reimburse the Sponsors.
*** If a Unitholder ("Rollover Unitholder") so specifies prior to the
Rollover Notification Date, the Rollover Unitholder's terminating distribution
will be reinvested as received in an available series of the [Pinnacle Trusts],
if offered (see "Trust Administration--Trust Termination").
+ Except for the amount representing the estimated organization costs, on
the Initial Date of Deposit there will be no cash in the Income or Principal
Accounts. Anyone purchasing Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts.
++ Any redemptions of over [2,500] Units may, upon request by a redeeming
Unitholder, be made in kind. The Trustee will forward the distributed securities
to the Unitholder's bank or broker-dealer account at The Depository Trust
Company in book-entry form. As of the close of the initial offering period, the
Sponsors' Repurchase Price and Redemption Price per 100 Units for the Trust will
be reduced to reflect its estimated organization cost per 100 Units. See
"Liquidity--Trustee Redemption" in Part B.
o The business day on which all contracts to purchase securities in the
Trust are expected to settle.
740253.2 A-2
<PAGE>
OBJECTIVE. The objective of the Trust is to maximize total return through
capital appreciation and current dividend income. The Trust seeks to achieve its
objective by attempting to outperform the Dow Jones Industrial Average ("DJIA")
(which is not affiliated with the Sponsors) by creating a portfolio that
combines the following three investment strategies: (1) investing in the DJIA's
ten (10) common stocks having the highest dividend yield (the "Top Ten"), (2)
investing in the DJIA's five (5) common stocks having the lowest per share stock
price of the Top Ten (the "Focus Five") and (3) investing in a single stock
which is the DJIA's second-lowest priced of the Focus Five (the "Penultimate
Pick"); each determined as of two business days prior to the Initial Date of
Deposit. The combination of the three investment strategies is hereinafter
referred to as the "Triple Strategy". The Trust's portfolio will be comprised of
ten (10) stocks. Approximately 20% of the Trust's assets will be allocated to
the Top Ten, approximately 60% will be allocated to the Focus Five and
approximately 20% will be allocated to the Penultimate Pick. Within these three
categories, stocks will be purchased in approximately equal dollar amounts. Due
to the fact that all of the Focus Five are also represented in the Top Ten, and
that the Penultimate Pick appears in both the Focus Five and Top Ten, overlap
will result in a difference in the actual weighting of the stocks in the
portfolio as well as the actual weighting of the three strategies relative to
each other in the portfolio on the Initial Date of Deposit. For the actual
percentage of each stock in the portfolio, see "Portfolio" herein. (Also, see
"The Trust--Objective" and "The Trust--The Securities" in Part B.) As used
herein, the term "highest dividend yield" means the yield for each Security
calculated by annualizing the last quarterly or semi-annual ordinary dividend
distributed on that Security and dividing the result by the market value of that
Security as of two business days prior to the Initial Date of Deposit. This rate
is historical, and there is no assurance that any dividends will be declared or
paid in the future on the Securities in the Trust. The Trust's annual total
return may not exceed the DJIA in any one year; however, historically, long term
cumulative returns from these strategies has outperformed the DJIA. As used
herein, the term "Securities" means the common stocks initially deposited in the
Trust and described in "Portfolio" in Part A and any additional common stocks
acquired and held by the Trust pursuant to the provisions of the Indenture.
Further, the Securities and therefore the Units may appreciate or depreciate in
value, dependent upon the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the price of
equity securities in general and the Securities in particular. Therefore, there
is no guarantee that the objective of the Trust will be achieved.
PORTFOLIO. The Portfolio contains 10 issues of common stock. 100% of the issues
are represented by the Sponsors' contracts to purchase. Based upon the principal
business of each issuer and current market values, the following industries are
represented in the Portfolio*: _________________. The Focus Five stocks are
___________________ ________________________ and the Penultimate Pick is
______________________, a ___________________company with a significant
concentration in the ____________________________ industry.
PUBLIC OFFERING PRICE. The Public Offering Price per 100 Units of the Trust is
equal to the aggregate value of the underlying Securities (the price at which
they could be directly purchased by the public assuming they were available) in
the Trust divided by the number of Units outstanding times 100 plus a sales
charge of 3.395% of the Public Offering Price per 100 Units or 3.51% of the net
amount invested in Securities per 100 Units. In addition, during the initial
offering period, the Public Offering Price will include an amount sufficient to
reimburse the Sponsors for the payment of all or a portion of the estimated
organization costs of the Trust. The price of a single Unit, or any multiple
thereof, is calculated by dividing the Public Offering Price per 100 Units by
100 and multiplying by the number of Units. Any cash held by the Trust will be
added to the Public Offering Price. For additional information regarding the
Public Offering Price, repurchase and redemption of Units and other essential
information regarding the Trust, see the "Summary of Essential Information."
[During the initial offering period orders involving at least 10,000 Units will
be entitled to a volume discount from the Public Offering Price.] The Public
Offering Price per Unit may vary on a daily basis in accordance with
fluctuations in the aggregate value of the underlying Securities and the price
to be paid by each investor will be computed as of the date the Units are
purchased. (See "Public Offering" in Part B.)
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* A trust is considered to be "concentrated" in a particular category or
industry when the securities in that category or that industry constitute
25% or more of the aggregate face amount of the portfolio.
740253.2 A-3
<PAGE>
ESTIMATED NET ANNUAL DISTRIBUTIONS. The estimated net annual distributions to
Unitholders (based on the most recent quarterly or semi-annual ordinary dividend
distributed with respect to the Securities) as of [the business day] prior to
the Initial Date of Deposit per 100 Units was $_____. This estimate will vary
with changes in the Trust's fees and expenses, actual dividends received, and
with the sale of Securities. In addition, because the issuers of common stock
are not obligated to pay dividends, there is no assurance that the estimated net
annual dividend distributions will be realized in the future.
DISTRIBUTIONS. Dividend distributions, if any, will be made semi-annually on the
Distribution Dates to all Unitholders of record on the Record Date. For the
specific dates representing the Distribution Dates and Record Dates, see
"Summary of Essential Information" in Part A. The final distribution will be
made within a reasonable period of time after the termination of the Trust. (See
"Rights of Unitholders--Distributions" in Part B.) Unitholders may elect to
automatically reinvest distributions (other than the final distribution in
connection with the termination of the Trust), into additional Units of the
Trust, which are subject to a reduced sales charge. See "Reinvestment Plan" in
Part B.
MARKET FOR UNITS. The Sponsors, although not obligated to do so, intend to
maintain a secondary market for the Units and to continuously offer to
repurchase the Units of the Trust both during and after the initial public
offering period. The secondary market repurchase price will be based on the
market value of the Securities in the Trust portfolio and will be the same as
the redemption price. (See "Liquidity--Sponsors Repurchase" for a description of
how the secondary market repurchase price will be determined.) If a market is
not maintained a Unitholder will be able to redeem his Units with the Trustee
(see "Liquidity--Trustee Redemption" in Part B). As a result, the existence of a
liquid trading market for these Securities may depend on whether dealers will
make a market in these Securities. There can be no assurance of the making or
the maintenance of a market for any of the Securities contained in the portfolio
of the Trust or of the liquidity of the Securities in any markets made. The
price at which the Securities may be sold to meet redemptions and the value of
the Units will be adversely affected if trading markets for the Securities are
limited or absent.
TERMINATION. During the [5-day] period prior to the Mandatory Termination Date
(the "Liquidation Period"), Securities will begin to be sold in connection with
the termination of the Trust and all Securities will be sold or distributed by
the Mandatory Termination Date. The Trustee may utilize the services of the
Sponsors for the sale of all or a portion of the Securities in the Trust. Any
brokerage commissions received by the Sponsor from the Trust in connection with
such sales will be in accordance with applicable law. The Sponsors will
determine the manner, timing and execution of the sales of the underlying
Securities. The Sponsors will attempt to sell the Securities as quickly as it
can during the Liquidation Period without, in its judgment, materially adversely
affecting the market price of the Securities, but all of the Securities will in
any event be disposed of by the end of the Liquidation Period. The Sponsors do
not anticipate that the period will be longer than 5 days, and it could be as
short as one day, depending on the liquidity of the Securities being sold.
Unitholders may elect one of the three options in receiving their terminating
distributions: (1) to receive their pro rata share of the underlying Securities
in-kind, [if they own at least 2,500 units,] (2) to receive cash upon the
liquidation of their pro rata share of the underlying Securities or (3) to
invest the amount of cash they would have received upon the liquidation of their
pro rata share of the underlying Securities in units of a future series of
[Pinnacle Trusts] (if one is offered) at a reduced sales charge (see "Rollover
Option"). See "Trust Administration--Trust Termination" in Part B for a
description of how to select a termination distribution option. [Unitholders who
have not chosen to receive distributions-in-kind will be at risk to the extent
that the Securities are not sold; for this reason the Sponsor will be inclined
to sell the Securities in as short a period as it can without materially
adversely affecting the price of the Securities.]
ROLLOVER OPTION. Unitholders may elect to rollover their terminating
distributions into the next available series of [Pinnacle Trusts] at a reduced
sales charge. Rollover Unitholders must make this election on or prior to the
Rollover Notification Date. Upon making this election, a Unitholder's Units will
be redeemed and the proceeds will be reinvested in units of the next available
series of [Pinnacle Trusts]. An election to rollover terminating distributions
will generally be a taxable event. See "Trust Administration--Trust Termination"
in Part B for details to make this election.
RISK CONSIDERATIONS. An investment in Units of the Trust should be made with an
understanding of the risks inherent in an investment in any of the Securities
including for common stocks, the risk that the financial condition of the
issuers of the Securities may become impaired or that the general condition of
the stock market may worsen (both of which may contribute directly to a decrease
in the value of the Securities and thus in the value of the Units). Further, the
nature of the combination of the three investment strategies in the portfolio
causes the Trust to be concentrated in the Penultimate Pick. The Penultimate
Pick is a company deriving a substantial portion of its income from the
_______________ industry, [the risk of investment in which may include changes
in governmental regulation.] Investors should consider the greater risk of the
Trust's concentration and the effect on their investment versus a more
diversified portfolio and should compare returns available on less concentrated
portfolios before making an investment decision. The portfolio of the Trust is
fixed and not "managed" by the Sponsors. Since the Trust will not sell
Securities in response to ordinary market fluctuation, but only (except for
certain extraordinary circumstances) at the Trust's termination or to meet
redemptions, the amount realized upon the sale of the Securities may not
740253.2 A-4
<PAGE>
be the highest price attained by an individual Security during the life of the
Trust. In connection with the deposit of Additional Securities subsequent to the
Initial Date of Deposit, if cash (or a letter of credit in lieu of cash) is
deposited with instructions to purchase Securities, to the extent the price of a
Security increases or decreases between the deposit and the time the Security is
purchased, Units may represent less or more of that Security and more or less of
the other Securities in the Trust. The Securities purchased with the portion of
the Public Offering Price intended to be used to reimburse the Sponsors for the
Trust's organization costs, may decrease in value during the initial offering
period. To the extent the proceeds from the sale of these Securities are
insufficient to repay the Sponsors for the Trust's organization costs, the
Trustee will sell additional Securities to allow the Trust to fully reimburse
the Sponsors. In that event, the net asset value per Unit will be reduced by the
amount of Securities sold. This will also result in an increase in the cost per
Unit of the reimbursement to the Sponsors. In addition, brokerage fees incurred
in purchasing Securities with cash deposited with instructions to purchase the
Securities will be an expense of the Trust. Price fluctuations during the period
from the time of deposit to the time the Securities are purchased, and payment
of brokerage fees, will affect the value of every Unitholder's Units and the
income per Unit received by the Trust.
The Sponsors cannot give any assurance that the business and investment
objectives of the issuers of the Securities will correspond with or in any way
meet the limited term objective of the Trust. (See "Risk Considerations" in Part
B of this Prospectus.)
REINVESTMENT PLAN. Unitholders may elect to automatically reinvest their
distributions, if any (other than the final distribution in connection with the
termination of the Trust) into additional units of the Trust at a reduced sales
charge of [1.00]%. See "Reinvestment Plan" in Part B for details on how to
enroll in the Reinvestment Plan.
UNDERWRITING. McLaughlin, Piven, Vogel Securities, Inc., 30 Wall Street, New
York, New York 10005, will act as Underwriter for all of the Units of
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust [The Underwriter
will distribute Units to its customers as well as through various
broker-dealers, banks and/or other eligible participants.] (See "Public
Offering--Distribution of Units" in Part B).
740253.2 A-5
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE TRUST
STATEMENT OF FINANCIAL CONDITION AS OF OPENING OF BUSINESS, SEPTEMBER __, 1998
ASSETS
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost $_______)
(Note 1)......................................................... $
Total $
==========
LIABILITIES AND INTEREST OF UNITHOLDERS
Reimbursement to Sponsors for Organization Costs (Note 2)......... $
Interest of Unitholders - Units of Fractional
Undivided Interest Outstanding (Series __: ______ Units)..... -----------
Total............................................................. $
===========
Net Asset Value per Unit.......................................... $
===========
- -------------------------
Notes to Statement:
(1) McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust (the
"Trust") is a unit investment trust created under the laws of the State of New
York and registered under the Investment Company Act of 1940. The objective of
the Trust, sponsored by McLaughlin, Piven, Vogel Securities, Inc. and Reich &
Tang Distributors, Inc. (the "Sponsors") is to maximize total return through
capital appreciation and current dividend income. On September __, 1998, the
"Date of Deposit", Portfolio Deposits were received by The Chase Manhattan Bank,
the Trust's Trustee, in the form of executed securities transactions, in
exchange for units of the Trust. An irrevocable letter of credit issued by
BankBoston in an amount of $_______ has been deposited with the Trustee for the
benefit of the Trust to cover the purchases of such Securities as well as any
outstanding purchases of previously-sponsored unit investment trusts of the
Sponsors. Aggregate cost to the Trust of the Securities listed in the Portfolio
is determined by the Trustee on the basis set forth under "Public
Offering--Offering Price" as of 4:00 p.m. on September __, 1998. The Trust will
terminate on December __, 1999 or earlier under certain circumstances as further
described in the Prospectus.
(2) A portion of the Public Offering Price consists of an amount sufficient
to reimburse the Sponsors for all or a portion of the costs of establishing the
Trust. These costs have been estimated at [$____] per 100 Units for the Trust. A
payment will be made as of the close of the initial public offering period to an
account maintained by the Trustee from which the obligation of the investors to
the Sponsors will be satisfied. To the extent that actual organization costs are
less than the estimated amount, only the actual organization costs will be
deducted from the assets of the Trust. To the extent that actual organization
costs are greater than the estimated amount, only the estimated organization
costs included in the Public Offering Price will be reimbursed to the Sponsors
and deducted from the assets of the Trust.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
740253.2 A-6
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE TRUST
PORTFOLIO
AS OF OPENING OF BUSINESS, SEPTEMBER __, 1998
Portfolio Number of
No. Shares Name of Issuer(1)
- ---------- ---------- -------------------
1
2
3
4
5
6
7
8
9
10
<TABLE>
<S> <C> <C> <C> <C> <C>
Market Value
of Stocks as Cost of
a Percentage Current Securities
Portfolio Ticker of the Dividend Market Value to the Trust
No. Symbol Trust(2) Yield (3) Per Share (4)
- ---------- ------ ----------- ------------- ------------- --------------
1
2
3
4
5
6
7
8
9
10
Total Investment in Securities ------ ------
100% $
====== ======
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on September __,
1998. All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be September __, 1998.
(2) Based on the cost of the Securities to the Trust.
(3) Current Dividend Yield for each security was calculated by annualizing
the last quarterly or semi-annual ordinary dividend received on the
security and dividing the result by its market value as of the close of
trading on [September __, 1998].
(4) Evaluation of Securities by the Trustee was made on the basis of closing
sales prices at the Evaluation Time on the day prior to the Initial Date
of Deposit. The Sponsors' Purchase Price is $_______. The Sponsors'
Gain/Loss on the Initial Date of Deposit is $___.
The accompanying notes form an integral part of the Financial Statements.
740253.2 A-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee and Unitholders,
McLaughlin, Piven, Vogel Family of Trusts,
The Pinnacle Trust
In our opinion, the accompanying Statement of Financial Condition,
including the Portfolio, presents fairly, in all material respects, the
financial position of McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle
Trust (the "Trust") at opening of business, September __, 1998, in conformity
with generally accepted accounting principles. This financial statement is the
responsibility of the Trust's management; our responsibility is to express an
opinion on this financial statement based on our audit. We conducted our audit
of this financial statement in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit, which
included confirmation of the contracts for the securities at opening of
business, September __, 1998, by correspondence with the Sponsors, provides a
reasonable basis for the opinion expressed above.
______________________________
September __, 1998
740253.2 A-8
<PAGE>
NOW YOU CAN TAKE ADVANTAGE OF THREE WINNING STRATEGIES
THE TRUST
- ----------
Investing in the stock market has proven year after year to be a good way
to beat inflation. The Dow Jones Industrial Average (DJIA)* is a leading stock
market indicator that provides the data for this fact. This average is a
sampling of thirty stocks that represent some of the largest and strongest
companies in the world. Their long record of steady earnings, financial
resources and economic power have earned them the investor confidence that has
given them the nickname "blue chip" stocks.
THE STRATEGY
- ------------
Now you have the opportunity to invest in three strategies simultaneously
that have been proven to "beat" the DJIA without having to spend the time,
effort and money to buy each stock individually. The Pinnacle Trust is a unit
investment trust portfolio designed to take advantage of three winning
strategies. Historically, these three strategies have each individually beaten
the returns of the DJIA over the past twenty-two years. The first strategy is to
pick the Top Ten highest yielding stocks of the thirty stocks that are contained
in the DJIA. The second strategy is to choose the five lowest priced stocks of
the Top Ten. These are called the Focus Five. The last strategy is to choose the
second lowest priced stock of the Focus Five. This is called the Penultimate
Pick. These three strategies are then combined to produce a portfolio of ten
stocks with the weighting among the strategies selected by the Sponsors. Each
stock's concentration will reflect the individual weightings of the three
strategies. Both Chart A and Chart B show the effect these strategies may have
on your investment. For example, if you had invested $10,000 in 1975 in the
DJIA, your investment would be worth approximately $250,000 today. But if,
hypothetically, you had invested the same $10,000 applying the Triple Strategy,
your investment would be worth approximately $1,000,000 today. These
hypothetical returns do not include sales charges, commissions, or reflect the
effect of market fluctuations if a stock in the portfolio of one of the
strategies was sold at any point in time. There can be no assurance that these
results will be achieved as past performance is no guarantee of future results.
[insert chart A] [insert chart B]
_______________________
* The DJIA is the property of Dow Jones & Company, Inc. and the company is
not affiliated with the Sponsors and has not participated in any way in
the creation of the trust or in the portfolio and has not approved any
information included herein.
740253.2
<PAGE>
THE TRUST'S CONCEPT
- -------------------
The Trust's concept is a simple one: To create a portfolio which combines
these three "winning" strategies. The diversification of the Top Ten stocks
combined with a concentration of the higher yielding Penultimate Pick and the
Focus Five stocks gives the Trust the opportunity to produce above average
returns. The portfolio is held for one year and then it is liquidated. (For more
information see "Options at termination" below.)
TRIPLE STRATEGY TRUST INVESTING:
- -------------------------------
Time Invested vs. Investment Timing - This Trust is based on the theory
that you are rolling over your portfolio each year. The Trust may not exceed the
DJIA in any one year; however, historically, long term cumulative returns from
this philosophy beat the DJIA. It's not the timing of the purchase that counts,
it's the length of time that you are invested.
Contrarian Reasoning - Buy what others are selling.
Dividends Count - Dividends contribute greatly to your total return.
Layered Strategies Work - Look at the charts and notice how the DJIA has
been beaten by these three strategies. It is our opinion that if one strategy
works well then three strategies may work better.
ONE PORTFOLIO, THREE STRATEGIES
---------------------------
IF YOU ARE LOOKING FOR A GOOD OPPORTUNITY TO INVEST WITH A STRATEGY THAT HAS
CONSISTENTLY OUTPERFORMED THE MOST POPULAR STOCK MARKET INDICATOR, THEN THIS MAY
BE THE INVESTMENT FOR YOU.
FEATURES and BENEFITS
Convenience - Ownership of ten blue chip stocks with the ease of a single
purchase.
Liquidity - You may sell your units on any business day at the then current
net asset value. However, since market values fluctuate, your units may be
worth more or less than your original investment.
Low minimum investment - May be as low as $1,000.
Options at termination - You may receive cash, stock-in-kind (unitholders
owning 2,500 units or more) or roll your proceeds into the new Triple
Strategy Trust, if available, at a reduced sales charge.
No management fees - This is an unmanaged portfolio and therefore no
additional management fees are charged.
Risk Considerations - An investment in Units of the Trust should be made with an
understanding of the risks associated with investments in common stocks, which
include the risk that the financial condition of the issuers may become impaired
or that the general condition of the stock market may worsen. In addition,
because the Trust may be considered to be "concentrated" in stocks of companies
deriving a substantial portion of their income from a singular industry, and
that the combination of the three investment strategies causes the Trust to be
"concentrated" in the Penultimate Pick, investors should consider the greater
risk of such concentrations and the effect on their investment versus a more
diversified portfolio and compare those returns before making an investment
decision. Units of the Trust are not deposits or obligations of, or guaranteed
by, any bank and Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including loss
of principal.
740253.2
<PAGE>
- --------------------------------------------------------------------------------
[INSERT LOGO]
- --------------------------------------------------------------------------------
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE TRUST
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUST
ORGANIZATION. McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust
consists of a "unit investment trust" designated as set forth in Part A. The
Trust was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement (the "Trust Agreement"), dated the Initial Date of
Deposit, among McLaughlin, Piven, Vogel Securities, Inc. and Reich & Tang
Distributors, Inc., as Sponsors, and The Chase Manhattan Bank, as Trustee.
On the Initial Date of Deposit, the Sponsors deposited with the Trustee
common stock, including funds and delivery statements relating to contracts for
the purchase of certain such securities (collectively, the "Securities") with an
aggregate value as set forth in Part A and cash or an irrevocable letter of
credit issued by a major commercial bank in the amount required for such
purchases. Thereafter the Trustee, in exchange for the Securities so deposited,
has registered on the registration books of the Trust evidence of the Sponsors'
ownership of all Units of the Trust. The Sponsors have a limited right to
substitute other securities in the Trust portfolio in the event of a failed
contract. See "The Trust--Substitution of Securities." The Sponsors may also, in
certain circumstances, direct the Trustee to dispose of certain Securities if
the Sponsors believe that, because of market or credit conditions, or for
certain other reasons, retention of the Security would be detrimental to
Unitholders. See "Trust Administration Portfolio--Supervision."
As of the Initial Date of Deposit, a "Unit" represents an undivided
interest or pro rata share in the Securities and cash of the Trust in the ratio
of one hundred Units for the indicated amount of the aggregate market value of
the Securities initially deposited in the Trust as is set forth in the "Summary
of Essential Information." As additional Units are issued by the Trust as a
result of the deposit of Additional Securities, as described below, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. To the extent that any Units are redeemed by the Trustee, the
fractional undivided interest or pro rata share in such Trust represented by
each unredeemed Unit will increase, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which may
include the Sponsors, or until the termination of the Trust Agreement.
DEPOSIT OF ADDITIONAL SECURITIES. With the deposit of the Securities in the
Trust on the Initial Date of Deposit, the Sponsors established a proportionate
relationship among the initial aggregate value of specified Securities in the
Trust. During the 90 days subsequent to the Initial Date of Deposit (the
"Deposit Period"), the Sponsors may deposit additional Securities in the Trust
that are substantially similar to the Securities already deposited in the Trust
("Additional Securities"), contracts to purchase Additional Securities or cash
with instructions to purchase Additional Securities, in order to create
additional Units, maintaining to the extent practicable the original
proportionate relationship of the number of shares of each Security in the Trust
portfolio on the Initial Date of Deposit. These additional Units, which will
result in an increase in the number of Units outstanding, will each represent,
to the extent practicable, an undivided interest in the same number and type of
securities of identical issuers as are represented by Units issued on the
Initial Date of Deposit. It may not be possible to maintain the exact original
proportionate relationship among the Securities deposited on the Initial Date of
Deposit because of, among other reasons, purchase requirements, changes in
prices, or unavailability of Securities. The composition of the Trust
740253.2 B-1
<PAGE>
portfolio may change slightly based on certain adjustments made to reflect the
disposition of Securities and/or the receipt of a stock dividend, a stock split
or other distribution with respect to such Securities, including Securities
received in exchange for shares or the reinvestment of the proceeds distributed
to Unitholders. Deposits of Additional Securities in the Trust subsequent to the
Deposit Period must replicate exactly the existing proportionate relationship
among the number of shares of Securities in the Trust portfolio. Substitute
Securities may be acquired under specified conditions when Securities originally
deposited in the Trust are unavailable (see "The Trust--Substitution of
Securities" below).
OBJECTIVE. The objective of the Trust is to maximize total return through
capital appreciation and current dividend income. The Trust seeks to achieve its
objective by attempting to outperform the Dow Jones Industrial Average ("DJIA")
(which is not affiliated with the Sponsors) by creating a portfolio that
combines the following three investment strategies: (1) investing in the DJIA's
ten (10) common stocks having the highest dividend yield (the "Top Ten"), (2)
investing in the DJIA's five (5) common stocks having the lowest per share stock
price of the Top Ten (the "Focus Five") and (3) investing in a single stock
which is the DJIA's second-lowest priced of the Focus Five (the "Penultimate
Pick"); each determined as of two business days prior to the Initial Date of
Deposit. The combination of the three investment strategies is hereinafter
referred to as the "Triple Strategy".The Trust's portfolio will be comprised of
ten (10) stocks. Approximately 20% of the Trust's assets will be comprised of
the Top Ten, approximately 60% will be comprised of the Focus Five and
approximately 20% will be comprised of the Penultimate Pick. Within these three
categories, stocks will be purchased in approximately equal dollar amounts. Due
to the fact that all of the Focus Five are also represented in the Top Ten, and
that the Penultimate Pick appears in both the Focus Five and Top Ten, overlap
will result in a difference in the actual weighting of the stocks in the
portfolio as well as the actual weighting of the three strategies relative to
each other in the portfolio on the Initial Date of Deposit. For the actual
percentage of each stock in the portfolio, see "Portfolio" in Part A. (Also see
"The Trust--Objective" and "The Trust--The Securities" in Part B.) As used
herein, the term "highest dividend yield" means the yield for each Security
calculated by annualizing the last quarterly or semi-annual ordinary dividend
distributed on that Security and dividing the result by the market value of that
Security as of two business days prior to the Initial Date of Deposit. This rate
is historical, and there is no assurance that any dividends will be declared or
paid in the future on the Securities in the Trust. As used herein, the term
"Securities" means the common stocks initially deposited in the Trust and
described in "Portfolio" in Part A and any additional common stocks acquired and
held by the Trust pursuant to the provisions of the Indenture.
Investing in DJIA stocks with the highest dividend yields may be effective in
achieving the Trust's investment objective because regular dividends are common
for established companies and dividends have accounted for a substantial portion
of the total return on DJIA stocks as a group. There can be no assurance that
the dividend rates will be maintained. Reduction or elimination of a dividend
could adversely affect the stock price as well. Purchasing a portfolio of these
stocks as opposed to one or two stocks can achieve a more diversified holding.
There is only one investment decision instead of ten. An investment in the Trust
can be cost-efficient, avoiding the odd-lot costs of buying small quantities of
securities directly. An investment in a number of companies with high dividends
relative to their stock prices is designed to increase the Trust's potential for
higher returns. The Trust's return will consist of a combination of capital
appreciation and current dividend income. The Trust will terminate in
approximately fifteen months, at which time investors may choose to either
receive the distributions in kind (if they own at least 2,500 Units), in cash or
reinvest in a subsequent series of [Pinnacle Trusts] (if available) at a reduced
sales charge. Further, the Securities may appreciate or depreciate in value,
dependent upon the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular. Investors should
note that the Trust's selection criteria was applied to the Securities two
business days prior to the Initial Date of Deposit. Since the Sponsors may
deposit additional Securities in connection with the sale of additional Units,
the yields on these Securities may change subsequent to the Initial Date of
Deposit. Therefore, there is no guarantee that the objective of the Trust will
be achieved.
THE SECURITIES. Each of the Securities has been taken from the Dow Jones
Industrial Average ("DJIA"). The DJIA comprises 30 common stocks chosen by the
editors of The Wall Street Journal as representative of the broad market and of
American industry. The companies are major factors in their industries and their
stocks are widely held by individuals and institutional investors. Changes in
the components of the DJIA are made entirely by the editors of The Wall Street
Journal without consultation with the companies, the stock exchange or any
official agency. For the sake of continuity, changes are made rarely. Most
substitutions have been the result of mergers, but from time to time, changes
may be made to achieve a better representation. The components of the DJIA may
be changed at any time for any reason. Any changes in the components of the DJIA
after the date of this Prospectus will not cause a change in the identity of the
common stocks included in the Trust's portfolio, including any Additional
Securities deposited in the Trust.
740253.2 B-2
<PAGE>
The first DJIA, consisting of 12 stocks, was published in The Wall Street
Journal in 1896. The list grew to 20 stocks in 1916 and to 30 stocks on October
1, 1928. Taking into account a number of name changes, 6 of the original
companies are still in the DJIA today. For two periods of 17 consecutive years
each, there were no changes to the list: March 1939 - July 1956 and June 1959 -
August 1976. The DJIA last changed on March 17, 1997.
List as of October 1, 1928 Current List
- -------------------------- ------------
Allied Chemical AT&T Corporation
American Can Allied Signal
American Smelting Aluminum Company of America
American Sugar American Express Company
American Tobacco Boeing Company
Atlantic Refining Caterpillar Inc.
Bethlehem Steel Corporation Chevron Corporation
Chrysler Corporation Coca-Cola Company
General Electric Company E.I. du Pont de Nemours & Company
General Motors Corporation Eastman Kodak Company
General Railway Signal Exxon Corporation
Goodrich General Electric Company
International Harvester General Motors Corporation
International Nickel Goodyear Tire & Rubber Company
Mack Trucks Hewlett-Packard Co.
Nash Motors International Business Machines Corporation
North American International Paper Company
Paramount Publix Johnson & Johnson
Postum, Inc. J.P. Morgan & Company
Radio Corporation of America (RCA) McDonald's Corporation
Sears, Roebuck & Company Merck & Company, Inc.
Standard Oil of New Jersey Minnesota Mining & Manufacturing Company
Texas Corporation Philip Morris Companies, Inc.
Texas Gulf Sulphur Proctor & Gamble Company
Union Carbide Corporation Sears, Roebuck & Company
United States Steel Company Travelers Corp. Inc.
Victor Talking Machine Union Carbide Corporation
Westinghouse Electric Corporation United Technologies Corporation
Woolworth Corporation Wal-Mart Stores, Inc.
Wright Aeronautical Walt Disney Company
The yield for each Security was calculated by annualizing the last
quarterly or semi-annual ordinary dividend distributed and dividing the result
by the market value of the Security as of two business days prior to the Initial
Date of Deposit. This formula (an objective determination) served as the basis
for the Sponsors' selection of the Top Ten. The companies represented in the
Trust are some of the most well-known and highly capitalized companies in
America. The Securities were selected irrespective of any research
recommendation by the Sponsors. Investing in the stocks of the DJIA may be
effective as well as conservative because regular dividends are common for
established companies and dividends have accounted for a substantial portion of
the total return on stocks of the DJIA as a group.
Although the McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust
was not available until this year, during the last 23 years, the strategy of
investing in approximately equal values of the ten highest yielding stocks each
year generally would have yielded a higher total return than an investment in
all 30 stocks which make up the DJIA. The following table shows the hypothetical
performance of investing approximately equal amounts in each of the Top Ten,
Focus Five, Penultimate Pick and the combined Triple Strategy at the beginning
of each year and rolling over the proceeds. The total returns do not reflect
sales charges, commissions or taxes. These results represent past performance of
the Top Ten, Focus Five, Penultimate Pick and Triple Strategy, and should not be
considered indicative of future results of the Trust. The Trust's annual total
return may not exceed the DJIA in any one year; however, historically, long term
cumulative total returns from these strategies has outperformed the cumulative
returns of the DJIA. The Top Ten, Focus Five, Penultimate Pick and Triple
Strategy each underperformed the DJIA in certain years. Also, investors in the
Trust may not realize as high a total return as on a direct
740253.2 B-3
<PAGE>
investment in each of the Top Ten, Focus Five, Penultimate Pick or Triple
Strategy since the Trust has sales charges and expenses and may not be fully
invested at all times. Unit prices fluctuate with the value of the underlying
stocks, and there is no assurance that dividends on these stocks will be paid or
that the Units will appreciate in value.
The following table compares the actual performance of the DJIA and
approximately equal values of each of the Top Ten, Focus Five, Penultimate Pick
or Triple Strategy in each of the past 23 years, as of December 31 in each of
these years:
COMPARISON OF TOTAL RETURNS(1)
<TABLE>
<CAPTION>
Dow Jones
Industrial
Penultimate Triple Average
Year Ended Top Ten(2) Focus Five(2) Pick(2) Strategy(3) (DJIA)
---------- ---------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
1975 55.90% 70.10% 157.20% 84.68% 44.40%
1976 34.80 40.76 55.10 42.46 22.70
1977 0.90 4.50 4.30 3.74 -12.70
1978 0.10 1.70 1.00 1.20 2.70
1979 12.40 9.90 -10.10 6.40 10.50
1980 27.22 40.52 50.60 39.86 21.50
1981 5.00 0.00 27.30 6.46 -3.40
1982 23.60 37.40 95.30 46.22 25.79
1983 38.70 36.11 36.10 36.62 25.70
1984 7.60 12.60 -2.80 8.52 1.10
1985 29.50 37.84 26.40 33.86 32.80
1986 32.10 27.90 29.60 29.08 26.90
1987 6.10 11.06 3.30 8.54 6.00
1988 22.90 18.40 19.50 19.52 16.00
1989 26.50 10.50 12.90 14.18 31.70
1990 -7.57 -15.27 -17.40 -14.12 -0.40
1991 39.30 61.79 185.60 82.12 23.90
1992 7.90 23.10 69.10 29.26 7.40
1993 27.30 34.30 39.10 33.86 16.80
1994 4.15 8.60 -37.40 -1.50 4.90
1995 36.70 30.50 21.70 29.98 36.40
1996 27.90 26.00 28.10 26.80 28.90
1997
</TABLE>
- --------------------------------
(1) Total Return represents the sum of Appreciation and Actual Dividend Yield.
(i) Appreciation for the Top Ten, Focus Five and Penultimate Pick is
calculated by subtracting the market value of these stocks as of the first
trading day on the New York Stock Exchange in a given year from the market
value of those stocks as of the last trading day in that year, and dividing
the result by the market value of the stocks as of the first trading day in
that year. Appreciation for the DJIA is calculated by subtracting the
opening value of the DJIA as of the first trading day in each year from the
closing value of the DJIA as of the last trading day in that year, and
dividing the result by the opening value of the DJIA as of the first
trading day in that year. (ii) Actual Dividend Yield for the Top Ten, Focus
Five and Penultimate Pick is calculated by adding the total dividends
received on the stocks in the year and dividing the result by the market
value of the stocks as of the first trading day in that year. Actual
Dividend Yield for the DJIA is calculated by taking the total dividends
credited to the DJIA and dividing the result by the opening value of the
DJIA as of the first trading day in that year. Total return does not take
into consideration any sales charges, commissions, expenses or taxes.
(2) The Top Ten, Focus Five and Penultimate Pick in any given year were
selected by ranking the dividend yields for each of the stocks in the DJIA
as of the beginning of that year, based upon an annualization of the last
quarterly or semi-annual regular dividend distribution (which would have
been declared in the preceding year) divided by that stock's market value
on the first trading day on the New York Stock Exchange in that year.
(3) The Triple Strategy combines the Total Return of the three investment
strategies, the Top Ten, Focus Five and Penultimate Pick, in any given year
based upon the same weighted average which the Trust will be employing: 20%
comprised of the Top Ten, 60% of the Focus Five and 20% of the Penultimate
Pick.
These results represent past performance and should not be considered
indicative of future results of the Trust. Unit prices may fluctuate with
the value of the underlying stocks, and there is no assurance that
dividends on these stock will be paid or that the Units will appreciate in
value.
740253.2 B-4
<PAGE>
The contracts to purchase Securities deposited initially in the Trust are
expected to settle in three business days, in the ordinary manner for such
Securities. Settlement of the contracts for Securities is thus expected to take
place prior to the settlement of purchase of Units on the Initial Date of
Deposit.
SUBSTITUTION OF SECURITIES. In the event of a failure to deliver any
Security that has been purchased for the Trust under a contract ("Failed
Securities"), the Sponsors are authorized under the Trust Agreement to direct
the Trustee to acquire other securities ("Substitute Securities") to make up the
original corpus of the Trust.
The Substitute Securities must be purchased within 20 days after delivery
of the notice of the failed contract. Where the Sponsors purchase Substitute
Securities in order to replace Failed Securities, the purchase price may not
exceed the purchase price of the Failed Securities and the Substitute Securities
must be substantially similar to the Securities originally contracted for and
not delivered.
Whenever a Substitute Security has been acquired for the Trust, the Trustee
shall, within five days thereafter, notify all Unitholders of the Trust of the
acquisition of the Substitute Security and the Trustee shall, on the next
Distribution Date which is more than 30 days thereafter, make a pro rata
distribution of the amount, if any, by which the cost to the Trust of the Failed
Security exceeded the cost of the Substitute Security plus accrued interest, if
any.
In the event no reinvestment is made, the proceeds of the sale of
Securities will be distributed to Unitholders as set forth under "Rights of
Unitholders--Distributions." In addition, if the right of substitution shall not
be utilized to acquire Substitute Securities in the event of a failed contract,
the Sponsor will cause to be refunded the sales charge attributable to such
Failed Securities to all Unitholders, and distribute the principal and
dividends, if any, attributable to such Failed Securities on the next
Distribution Date.
RISK CONSIDERATIONS
FIXED PORTFOLIO. The value of the Units will fluctuate depending on all of
the factors that have an impact on the economy and the equity markets. These
factors similarly impact the ability of an issuer to distribute dividends.
Unlike a managed investment company in which there may be frequent changes in
the portfolio of securities based upon economic, financial and market analyses,
securities of a unit investment trust, such as the Trust, are not subject to
such frequent changes based upon continuous analysis. All the Securities in the
Trust are liquidated during a 30-day period at the termination of the fifteen
month life of the Trust. Since the Trust will not sell Securities in response to
ordinary market fluctuation, but only at the Trust's termination or upon the
occurrence of certain events, the amount realized upon the sale of the
Securities may not be the highest price attained by an individual Security
during the life of the Trust. Some of the Securities in the Trust may also be
owned by other clients of the Sponsors and their affiliates. However, because
these clients may have differing investment objectives, the Sponsors may sell
certain Securities from those accounts in instances where a sale by the Trust
would be impermissible, such as to maximize return by taking advantage of market
fluctuations. Investors should consult with their own financial advisers prior
to investing in the Trust to determine its suitability. (See "Trust
Administration--Portfolio Supervision" below.)
ADDITIONAL SECURITIES. Investors should be aware that in connection with
the creation of additional Units subsequent to the Initial Date of Deposit, the
Sponsors may deposit Additional Securities, contracts to purchase Additional
Securities or cash with instructions to purchase Additional Securities, in each
instance maintaining the original proportionate relationship, subject to
adjustment under certain circumstances, of the numbers of shares of each
Security in the Trust. To the extent the price of a Security increases or
decreases between the time cash is deposited with instructions to purchase the
Security and the time the cash is used to purchase the Security, Units may
represent less or more of that Security and more or less of the other Securities
in the Trust. The Securities purchased with the portion of the Public Offering
Price intended to be used to reimburse the Sponsors for the Trust's organization
costs, may decrease in value during the initial offering period. To the extent
the proceeds from the sale of these Securities are insufficient to repay the
Sponsors for the Trust's organization costs, the Trustee will sell additional
Securities to allow the Trust to fully reimburse the Sponsors. In that event,
the net asset value per Unit will be reduced by the amount of Securities sold.
This will also result in an increase in the cost per Unit of the reimbursement
to the Sponsors. In addition, brokerage fees (if any) incurred in purchasing
Securities with cash deposited with instructions to purchase the Securities will
be an expense of the Trust. Price fluctuations between the time of deposit and
the time the Securities are purchased, and payment of brokerage fees, will
affect the value of every Unitholder's Units and the
740253.2 B-5
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Income per Unit received by the Trust. In particular, Unitholders who purchase
Units during the initial offering period would experience a dilution of their
investment as a result of any brokerage fees paid by the Trust during subsequent
deposits of Additional Securities purchased with cash deposited. In order to
minimize these effects, the Trust will try to purchase Securities as near as
possible to the Evaluation Time or at prices as close as possible to the prices
used to evaluate Trust Units at the Evaluation Time. In addition, subsequent
deposits to create such additional Units will not be deposit of a bank letter of
credit. In the event that the Sponsors do not deliver cash in consideration for
the additional Units delivered, the Trust may be unable to satisfy its contracts
to purchase the Additional Securities. The failure of the Sponsors to deliver
cash to the Trust, or any delays in the Trust receiving such cash, may have
significant adverse consequences for the Trust.
COMMON STOCK. Since the Trust contains common stocks of domestic issuers,
an investment in Units of the Trust should be made with an understanding of the
risks inherent in any investment in common stocks including the risk that the
financial condition of the issuers of the Securities may become impaired or that
the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights of
creditors of, or holders of debt obligations or preferred stock issued by the
issuer. Holders of common stocks have a right to receive dividends only when,
if, and in the amounts declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks usually have the right to receive dividends at a fixed rate
when and as declared by the issuer's board of directors, normally on a
cumulative basis. Dividends on cumulative preferred stock must be paid before
any dividends are paid on common stock and any cumulative preferred stock
dividend which has been omitted is added to future dividends payable to the
holders of such cumulative preferred stock. Preferred stocks are also usually
entitled to rights on liquidation which are senior to those of common stocks.
For these reasons, preferred stocks generally entail less risk than common
stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the Initial Date of Deposit.
PENULTIMATE PICK. The Trust may be considered to be "concentrated" in
common stock of a particular issuer. Information regarding such company is
available by inspecting or copying certain reports, proxies and informational
statements and other information filed by such company in accordance with the
Securities Exchange Act of 1934 at the public reference facilities maintained at
the Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies can be obtained from the Public Reference Section
of the Securities and Exchange Commission at the same address at prescribed
rates.
[TELEPHONE COMPANIES. The Trust may be considered to be concentrated in the
common stock of a company engaged in the telephone company industry and, as a
result, the value of the Units of the Trust may be susceptible to factors
affecting this industry. The telephone company industry is subject to
governmental regulation and the products and services of such companies may be
subject to rapid obsolescence. These factors could affect the value of the
Trust's Units.
Telephone companies in the United States, for example, are subject to both
state and federal regulations affecting permitted rates of returns and the kinds
of services that may be offered. The Act of 1996 ("Telecommunications Act")
enacted in February 1996 provides that local telephone companies, long-distance
carriers, and cable television operators could enter each others' markets. The
Telecommunications Act nationalized the interpenetration of markets which has
already existed
740253.2 B-6
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in certain parts of the country. For telephone companies, the ability to provide
all of these services is important for two reasons. First, if other market
participants are providing one-stop shopping, a company that doesn't do so would
be at a competitive disadvantage. Second, new services would obviously provide
new revenue sources, which would be increasingly important to companies that are
potentially losing customers in their core businesses.
For local telephone companies, long-distance carriers, and cable providers
alike, the deregulation triggered by the Telecommunications Act presents special
risks. On the one hand, a company can gain new revenue sources by providing new
services and entering new markets. However, the added competition in all
segments may result in tighter profit margins for all players. Although local
telephone operators and cable providers have operated in near-monopolies in the
past, the cable industry in offering local telephone services may compete with
the telephone companies because cable companies already have direct links to
customers, with active connections to more than 60% of all U.S. households.
Further, although already a highly competitive industry, the long-distance
business is facing new competition from the regional Bell operating companies.
Under the terms of the new federal law, the Bells may now offer long-distance
services to their cellular customers, and they may also provide traditional
landline long-distance services to customers outside their own operating
territories. The Bells will be allowed to offer in-region landline long-distance
service only after their own local markets are opened to competition. They must
first comply with a 14-point checklist before they can apply for Federal
Communications Commission ("FCC") authorization to offer in-region service. The
FCC is required to make this decision with input from the Department of Justice
("DOJ"), although no formal DOJ approval is required. The Bells, who could enter
the in-region long-distance market in 1997 or thereafter, with their direct
links to customers, will compete with the existing providers.
The Sponsors believe that the information summarized above for the
telephone companies describes some of the more significant aspects relating to
the risks associated with investing in the Trust which may have a
"concentration" in this industry. The sources of such information are obtained
from research reports as well as other publicly available documents. While the
Sponsors have not independently verified this information, they have no reason
to believe that such information is not correct in all material respects.]
YEAR 2000 ISSUE. Many existing computer programs use only two digits to
identify a year in the date field and were designed and developed without
considering the impact of the upcoming change in the century. Therefore, for
example, the year "2000" would be incorrectly identified as the year "1900". If
not corrected, many computer applications could fail or create erroneous results
by or at the Year 2000, requiring substantial resources to remedy. The Sponsors
and Trustee believe that the "Year 2000" problem is material to their business
and operations and could have a material adverse effect on the Sponsors' and the
Trustee's results of operations and, in turn, cash available for distribution by
the Trustee. Although the Sponsors and the Trustee are addressing the problem
with respect to their business operations, there can be no assurance that the
"Year 2000" problem will be properly or timely resolved. The "Year 2000" problem
may also adversely affect issuers of the Securities contained in the Trust to
varying degrees based upon various factors. The Sponsors are unable to predict
what effect, if any, the "Year 2000" problem will have on such issuers.
LEGISLATION. From time to time Congress considers proposals to reduce the
rate of the dividends-received deduction which is available to certain
corporations. Enactment into law of a proposal to reduce the rate would
adversely affect the after-tax return to investors that can take advantage of
the deduction. The House and Senate have passed and the President has stated
that he will sign, legislation that would reduce to more than 12 months (from
more than 18 months) the holding period required for non-corporate investors to
be eligible for the reduced tax rate of 20% for capital gains. Investors are
urged to consult their own tax advisers. Further, at any time after the Initial
Date of Deposit, legislation may be enacted, with respect to the Securities in
the Trust or the issuers of the Securities. Changing approaches to regulation,
particularly with respect to the environment or with respect to the petroleum
industry, may have a negative impact on certain companies represented in the
Trust. There can be no assurance that future legislation, regulation or
deregulation will not have a material adverse effect on the Trust or will not
impair the ability of the issuers of the Securities to achieve their business
goals.
LEGAL PROCEEDINGS AND LITIGATION. At any time after the Initial Date of
Deposit, legal proceedings may be initiated on various grounds, or legislation
may be enacted, with respect to the Securities in the Trust or to matters
involving the business of the issuer of the Securities. There can be no
assurance that future legal proceedings or legislation will not have
740253.2 B-7
<PAGE>
a material adverse impact on the Trust or will not impair the ability of the
issuers of the Securities to achieve their business and investment goals.
GENERALLY. There is no assurance that any dividends will be declared or
paid in the future on the Securities. Investors should be aware that there is no
assurance that the Trust's objective will be achieved.
PUBLIC OFFERING
OFFERING PRICE. In calculating the Public Offering Price, the aggregate
value of the Securities and any cash held to purchase Securities is divided by
the number of Units outstanding. In addition, during the initial offering period
a portion of the Public Offering Price per 100 Units also consists of an amount
sufficient to pay the per 100 Units portion of all or a part of the cost
incurred in organizing and offering the Trust. See "Trust Expenses and Charges."
The aggregate value of the Securities is determined in good faith by the Trustee
on each "Business Day" as defined in the Indenture in the following manner:
because the Securities are listed on a national securities exchange, this
evaluation is based on the closing sale prices on that exchange as of the
Evaluation Time (unless the Trustee deems these prices inappropriate as a basis
for valuation). If the Trustee deems these prices inappropriate as a basis for
evaluation, then the Trustee may utilize, at the Trust's expense, an independent
evaluation service or services to ascertain the values of the Securities. The
independent evaluation service shall use any of the following methods, or a
combination thereof, which it deems appropriate: (a) on the basis of current bid
prices for comparable securities, (b) by appraising the value of the Securities
on the bid side of the market or by such other appraisal deemed appropriate by
the Trustee or (c) by any combination of the above, each as of the Evaluation
Time.
[VOLUME AND OTHER] DISCOUNTS. [Units are available at a volume discount
from the Public Offering Price during the initial public offering based upon the
number of Units purchased. This volume discount will result in a reduction of
the sales charge applicable to such purchases. The amount of the volume discount
and the approximate reduced sales charge on the Public Offering Price applicable
to such purchases are as follows:
NUMBER OF UNITS APPROXIMATE REDUCED SALES CHARGE
--------------- --------------------------------
10,000 but less than 25,000 ____%
25,000 but less than 50,000 ____%
50,000 but less than 100,000 ____%
100,000 or more ____%]
[For transactions of at least 100,000 Units or more, the Sponsors intends
to negotiate the applicable sales charge and such charge will be disclosed to
any such purchaser.]
[These discounts will apply to all purchases of Units by the same purchaser
during the initial public offering period. Units purchased by the same
purchasers in separate transactions during the initial public offering period
will be aggregated for purposes of determining if such purchaser is entitled to
a discount provided that such purchaser must own at least the required number of
Units at the time such determination is made. Units held in the name of the
spouse of the purchaser or in the name of a child of the purchaser under 21
years of age are deemed for the purposes hereof to be registered in the name of
the purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.]
[The holders of units of prior series of [Pinnacle Trusts] (the "Prior
Series") may "rollover" into this Trust by exchanging units of the Prior Series
for Units of the Trust at their relative net asset values plus the applicable
sales charge. Unitholders maintaining an account at McLaughlin, Piven, Vogel
Securities, Inc. exercising this option, may purchase such Units subject to a
reduced sales charge of 2.395%. An exchange of a Prior Series for Units of the
Trust will generally be a taxable event. The rollover option described herein
will also be available to investors in the Prior Series who elect to purchase
Units of the Trust within 60 days of their liquidation of units in the Prior
Series (see "Trust Termination").]
Unitholders [with a brokerage account at McLaughlin, Piven, Vogel
Securities, Inc.] will receive one commission-free trade to buy equity
securities any time following the first settlement date of the Trust (see
"Summary of Essential Information" in Part A). Unitholders executing a
commission-free trade to buy equity securities will be charged a 14 1/2
cents processing fee.
740253.2 B-8
<PAGE>
Employees (and their immediate families) of McLaughlin, Piven, Vogel
Securities, Inc. and Reich & Tang Distributors, Inc. (and their affiliates) and
of the special counsel to the Sponsors, may, pursuant to employee benefit
arrangements, purchase Units of the Trust at a price equal to the aggregate
value of the underlying securities in the Trust during the initial offering
period, divided by the number of Units outstanding [at no sales charge.] Such
arrangements result in less selling effort and selling expenses than sales to
employee groups of other companies. Resales or transfers of Units purchased
under the employee benefit arrangements may only be made through the Sponsors'
secondary market, so long as it is being maintained.
[Investors in any open-end management investment company or unit investment
trust that have purchased their investment within a five-year period prior to
the date of this Prospectus can purchase Units of the Trust in an amount not
greater in value than the amount of said investment made during this five-year
period at a reduced sales charge of ____% of the public offering price.]
[Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a volume discount) less
the concession the Sponsors typically allow to brokers and dealers for purchases
(see "Public Offering--Distribution of Units") 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 immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in 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 the volume discount.]
DISTRIBUTION OF UNITS. During the initial offering period and thereafter to
the extent additional Units continue to be offered by means of this Prospectus,
Units will be distributed by the Sponsors [and dealers] at the Public Offering
Price. The initial offering period is thirty days after each deposit of
Securities in the Trust and the Sponsors may extend the initial offering period
for successive thirty day periods. [Certain banks and thrifts will make Units of
the Trust available to their customers on an agency basis. A portion of the
sales charge paid by their customers is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Units;
however, the Glass-Steagall Act does permit certain agency transactions and the
banking regulators have indicated that these particular agency transactions are
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.]
[The Sponsors intend to qualify the Units for sale in substantially all
States through dealers who are members of the National Association of Securities
Dealers, Inc. Units may be sold to dealers at prices which represent a
concession of up to ____% per Unit, subject to the Sponsors' right to change the
dealers' concession from time to time. In addition, for transactions of at least
100,000 Units or more, the Sponsors intend to negotiate the applicable sales
charge and such charge will be disclosed to any such purchaser. Such Units may
then be distributed to the public by the dealers at the Public Offering Price
then in effect. The Sponsors reserve the right to reject, in whole or in part,
any order for the purchase of Units. The Sponsors reserve the right to change
the discounts from time to time.]
[Broker-dealers of the Trust, banks and/or others are eligible to
participate in a program in which such firms receive from the Sponsors a nominal
award for each of their registered representatives who have sold a minimum
number of units of unit investment trusts created by the Sponsors during a
specified time period. In addition, at various times the Sponsors 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 Sponsors will reallow to any such brokers, dealers, banks and/or
others that Sponsors sales contests or recognition programs conforming to
criteria established by the Sponsors, or participate in sales programs sponsored
by the Sponsors, an amount not exceeding the total applicable sales charges on
the sales generated by such person at the public offering price during such
programs. Also, the Sponsors in their discretion may from time to time pursuant
to objective criteria established by the Sponsors pay fees to qualifying
brokers, dealers, banks and/or others for certain services or activities which
are primarily intended to result in sales of Units of the Trust. Such payments
are made by the
740253.2 B-9
<PAGE>
Sponsors out of their 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.]
SPONSORS' PROFITS. The Sponsors will receive a combined gross underwriting
commission equal to up to 3.395% of the Public Offering Price per 100 Units
(equivalent to 3.51% of the net amount invested in the Securities).
Additionally, the Sponsors may realize a profit on the deposit of the Securities
in the Trust representing the difference between the cost of the Securities to
the Sponsors and the cost of the Securities to the Trust (See "Portfolio"). The
Sponsors may realize profits or sustain losses with respect to Securities
deposited in the Trust which were acquired from underwriting syndicates of which
they were a member. All or a portion of the Securities deposited in the Trust
may have been acquired through the Sponsors.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
Initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsors for the Units. Cash, if any,
made available to the Sponsors prior to settlement date for the purchase of
Units may be used in the Sponsors' business subject to the limitations of 17 CFR
240.15c3-3 under the Securities Exchange Act of 1934 and may be of benefit to
the Sponsors.
Both upon acquisition of Securities and termination of the Trust, the
Trustee may utilize the services of the Sponsors for the purchase or sale of all
or a portion of the Securities in the Trust. The Sponsors may receive brokerage
commissions from the Trust in connection with such purchases and sales in
accordance with applicable law.
In maintaining a market for the Units (see "Sponsors Repurchase") the
Sponsors will realize profits or sustain losses in the amount of any difference
between the price at which it buys Units and the price at which it resells such
Units.
RIGHTS OF UNITHOLDERS
BOOK-ENTRY UNITS. Ownership of Units of the Trust will not be evidenced by
certificates. All evidence of ownership of the Units will be recorded in
book-entry form at The Depository Trust Company ("DTC") through an investor's
brokerage account. Units held through DTC will be deposited by the Sponsors with
DTC in the [Sponsors'] DTC account and registered in the nominee name CEDE & CO.
Individual purchases of beneficial ownership interest in the Trust will be made
in book-entry form through DTC. Ownership and transfer of Units will be
evidenced and accomplished directly and indirectly only by book-entries made by
DTC and its participants. DTC will record ownership and transfer of the Units
among DTC participants and forward all notices and credit all payments received
in respect of the Units held by the DTC participants. Beneficial owners of Units
will receive written confirmation of their purchases and sale from their
McLaughlin Piven representative, or the broker-dealer or bank from whom their
purchase was made. Transfer, and the requirements therefor, will be governed by
the applicable procedures of DTC and the Unitholder's agreement with the DTC
participant in whose name the Unitholder's Units are registered on the transfer
records of DTC.
DISTRIBUTIONS. Dividends received by the Trust are credited by the Trustee
to an Income Account for the Trust. Other receipts, including the proceeds of
Securities disposed of, are credited to a Principal Account for the Trust.
Distributions to each Unitholder from the Income Account are computed as of
the close of business on each Record Date for the following payment date and
consist of an amount substantially equal to such Unitholder's pro rata share of
the income credited to the Income Account, less expenses. Distributions from the
Principal Account of the Trust (other than amounts representing failed
contracts, as previously discussed) will be computed as of each Record Date, and
will be made to the Unitholders of the Trust on or shortly after the
Distribution Date. Proceeds representing principal received from the disposition
of any of the Securities between a Record Date and a Distribution Date which are
not used for redemptions of Units will be held in the Principal Account and not
distributed until the next Distribution Date. Persons who purchase Units between
a Record Date and a Distribution Date will receive their first distribution on
the Distribution Date after such purchase.
As of each Record Date, the Trustee will deduct from the Income Account of
the Trust, and, to the extent funds are not sufficient therein, from the
Principal Account of the Trust, amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Trust Expenses and Charges").
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges that may be payable
740253.2 B-10
<PAGE>
out of the Trust. Amounts so withdrawn shall not be considered a part of such
Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. In addition, the Trustee may withdraw
from the Income and Principal Accounts such amounts as may be necessary to cover
redemptions of Units by the Trustee.
The dividend distribution per 100 Units, if any, cannot be anticipated and
may be paid as Securities are redeemed, exchanged or sold, or as expenses of the
Trust fluctuate. No distribution need be made from the Income Account or the
Principal Account unless the balance therein is an amount sufficient to
distribute $1.00 per 100 Units.
RECORDS. The Trustee shall furnish Unitholders in connection with each
distribution a statement of the amount of dividends and interest, if any, and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per 100 Units. Within a reasonable time after the
end of each calendar year, the Trustee will furnish to each person who at any
time during the calendar year was a Unitholder of record, a statement showing
(a) as to the Income Account: dividends, interest and other cash amounts
received, amounts paid for purchases of Substitute Securities and redemptions of
Units, if any, deductions for applicable taxes and fees and expenses of the
Trust, and the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each 100 Units outstanding on the last business day of such
calendar year; (b) as to the Principal Account: the dates of disposition of any
Securities and the net proceeds received therefrom, deductions for payments of
applicable taxes and fees and expenses of the Trust, amounts paid for purchases
of Substitute Securities and redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed both as a total
dollar amount and as a dollar amount representing the pro rata share of each 100
Units outstanding on the last business day of such calendar year; (c) a list of
the Securities held, a list of Securities purchased, sold or otherwise disposed
of during the calendar year and the number of Units outstanding on the last
business day of such calendar year; (d) the Redemption Price per 100 Units based
upon the last computation thereof made during such calendar year; and (e)
amounts actually distributed to Unitholders during such calendar year from the
Income and Principal Accounts, separately stated, of the Trust, expressed both
as total dollar amounts and as dollar amounts representing the pro rata share of
each 100 Units outstanding on the last business day of such calendar year.
The Trustee shall keep available for inspection by Unitholders at all
reasonable times during usual business hours, books of record and account of its
transactions as Trustee, including records of the names and addresses of
Unitholders, a current list of Securities in the portfolio and a copy of the
Trust Agreement.
TAX STATUS
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 rendering the opinion set forth below, Battle Fowler LLP has examined
the Agreement, the final form of Prospectus dated the date hereof (the
"Prospectus") and the documents referred to therein, among others, and has
relied on the validity of said documents and the accuracy and completeness of
the facts set forth therein. In the Opinion of Battle Fowler LLP, special
counsel for the Sponsors, under existing law:
1. The Trust will be classified as a grantor trust for Federal income
tax purposes and not as a partnership or association taxable as a
corporation. Classification of the Trust as a grantor trust will cause the
Trust not to be subject to Federal income tax, and will cause the
Unitholders of the Trust to be treated for Federal income tax purposes as
the owners of a pro rata portion of the assets of the Trust. All income
received by the Trust will be treated as income of the Unitholders in the
manner set forth below.
2. The Trust is not subject to the New York Franchise Tax on Business
Corporations or the New York City General Corporation Tax. For a Unitholder
who is a New York resident, however, a pro rata portion of all or part of
the income of the Trust will be treated as income of the Unitholder under
the income tax laws of the State and City of New York. Similar treatment
may apply in other states.
740253.2 B-11
<PAGE>
3. During the 90-day period subsequent to the initial issuance date,
the Sponsors reserve the right to deposit Additional Securities that are
substantially similar to those establishing the Trust. This retained right
falls within the guidelines promulgated by the Internal Revenue Service
("IRS") and should not affect the taxable status of the Trust.
A taxable event will generally occur with respect to each Unitholder when
the Trust disposes of a Security (whether by sale, exchange or redemption) or
upon the sale, exchange or redemption of Units by such Unitholder. The price a
Unitholder pays for its Units, including sales charges, is allocated among its
pro rata portion of each Security held by the Trust (in proportion to the fair
market values thereof on the date the Unitholder purchases its Units) in order
to determine its initial cost for its pro rata portion of each Security held by
the Trust.
For Federal income tax purposes, a Unitholder's pro rata portion of
dividends paid with respect to a Security held by a Trust is taxable as ordinary
income to the extent of such corporation's current or accumulated "earnings and
profits" as defined by Section 316 of the Code. A Unitholder's pro rata portion
of dividends paid on such Security that 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 will generally be treated as capital gain.
A Unitholder's portion of gain, if any, upon the sale, exchange or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain and will be mid-term if the Unitholder
has held its Units for more than one year but not more than 18 months and
long-term if the Unitholder has held its Units for more than 18 months. Capital
gains are generally taxed at the same rates applicable to ordinary income,
although individuals who realize mid-term capital gains with respect to Units
held for more than 12 months may be subject to a reduced tax rate of 28% on such
gains, and a reduced rate of 20% long-term capital gains on assets held for more
than 18 months rather than the "regular" maximum tax rate of 39.6%. Under
legislation passed by the House and by the Senate, which the President has
stated that he will sign into law, the requirement of an 18-month holding period
has been eliminated, and non-corporate Unitholders will generally be eligible
for the 20% capital gains rate with respect to Units held for more than 12
months. Tax rates may increase prior to the time when Unitholders may realize
gains from the sale, exchange or redemption of the Units or Securities.
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 and will be long-term if the Unitholder has held its
Units for more than one year. Capital losses are deductible to the extent of
capital gains; in addition, up to $3,000 of capital losses recognized by
non-corporate Unitholders may be deducted against ordinary income.
Under Section 67 of the Code and the accompanying Regulations, a Unitholder
who itemizes its deductions may also deduct its pro rata share of the fees and
expenses of the Trust, but only to the extent that such amounts, together with
the Unitholder's other miscellaneous deductions, exceed 2% of its adjusted gross
income. The deduction of fees and expenses may also be limited by Section 68 of
the Code, which reduces the amount of itemized deductions that are allowed for
individuals with incomes in excess of certain thresholds.
After the end of each calendar year, the Trustee will furnish to each
Unitholder an annual 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, and the fees and expenses paid by
the Trust. The Trustee will also furnish annual information returns to each
Unitholder and to the Internal Revenue Service.
A corporation that owns Units will generally be entitled to a 70% dividends
received deduction with respect to its pro rata portion of dividends taxable as
ordinary income to Unitholders which are received by the Trust from a domestic
corporation under Section 243 of the Code or from a qualifying foreign
corporation under Section 245 of the Code in the same manner as if such
corporation directly owned the Securities paying such dividends. 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) during the 90-day period beginning on the date
that is 45 days before the date on which the stock becomes "ex-dividend."
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.
740253.2 B-12
<PAGE>
As discussed in the section "Termination", each Unitholder may have three
options in receiving his termination distributions, which are (i) to receive his
pro rata share of the underlying Securities in kind, (ii) to receive cash upon
liquidation of his pro rata share of the underlying Securities, or (iii) to
invest the amount of cash he would receive upon the liquidation of his pro rata
share of the underlying Securities in units of a future series of the Trust (if
one is offered). There are special tax consequences should a Unitholder choose
option (i), the exchange of the Unitholder's Units for a pro rata portion of
each of the Securities held by the Trust plus cash. Treasury Regulations provide
that gain or loss is recognized when there is a conversion of property into
property that is materially different in kind or extent. In this instance, the
Unitholder may be considered the owner of an undivided interest in all of the
Trust's assets. By accepting the proportionate number of Securities of the
Trust, in partial exchange for his Units, the Unitholder should be treated as
merely exchanging his undivided pro rata ownership of Securities held by the
Trust into sole ownership of a proportionate share of Securities. As such, there
should be no material difference in the Unitholder's ownership, and therefore
the transaction should be tax free to the extent the Securities are received.
Alternatively, the transaction may be treated as an exchange that would qualify
for nonrecognition treatment to the extent the Unitholder is exchanging his
undivided interest in all of the Trust's Securities for his proportionate number
of shares of the underlying Securities. In either instance, the transaction
should result in a non-taxable event for the Unitholder to the extent Securities
are received. However, there is no specific authority addressing the income tax
consequences of an in-kind distribution from a grantor trust.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trusts, are nevertheless taxed under Section 511 of the
Code on "unrelated business taxable income." Unrelated business taxable income
is income from a trade or business regularly carried on by the tax-exempt entity
that is unrelated to the entity's exempt purpose. Unrelated business taxable
income generally does not include dividend or interest income or gain from the
sale of investment property, unless such income is derived from property that is
debt-financed or is dealer property. A tax-exempt entity's dividend income from
the Trust and gain from the sale of Units in the Trust or the Trust's sale of
Securities is not expected to constitute unrelated business taxable income to
such tax-exempt entity unless the acquisition of the Unit itself is
debt-financed or constitutes dealer property in the hands of the tax-exempt
entity.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit-sharing retirement plan) should
consider among other things (a) whether the investment is prudent under the
Employee Retirement Income Security Act of 1974 ("ERISA"), taking into account
the needs of the plan and all of the facts and circumstances of the investment
in the Trust; (b) whether the investment satisfies the diversification
requirement of Section 404(a)(1)(C) of ERISA; and (c) whether the assets of the
Trust are deemed "plan assets" under ERISA and the Department of Labor
regulations regarding the definition of "plan assets."
Prospective tax-exempt investors are urged to consult their own tax
advisers concerning the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units prior to investing in the
trust.
RETIREMENT PLANS. This Trust may be well suited for purchase by Individual
Retirement Accounts ("IRAs"), Keogh plans, pension funds and other qualified
retirement plans. Generally, capital gains and income received in each of the
foregoing plans are exempt from Federal taxation. Except with respect to certain
IRAs known as Roth IRAs, distributions from such plans are generally treated as
ordinary income but may, in some cases, be eligible for special 5 or 10 year
averaging or tax-deferred rollover treatment. Five year averaging will not apply
to distributions after December 31, 1999. Ten year averaging has been preserved
in very limited circumstances. Holders of Units in IRAs, Keogh plans and other
tax-deferred retirement plans should consult their plan custodian as to the
appropriate disposition of distributions. Investors considering participation in
any such plan should review specific tax laws related thereto and should consult
their attorneys or tax advisors with respect to the establishment and
maintenance of any such plan. Such plans are offered by brokerage firms,
including McLaughlin, Piven, Vogel Securities, Inc., and other financial
institutions. Fees and charges with respect to such plans may vary.
Before investing in the Trust, the trustee or investment manager of an
employee benefit plan (e.g., a pension or profit sharing reitrement plan) should
consider among other things (a) whether the investment is prudent under the
Employee Retirement Income Security Act of 1974 ("ERISA"), taking into account
the needs of the plan and all of the facts and circumstances of the investment
in the Trust; (b) whether the investment satisfies the diversification
requirement of Section 404(a)(1)(C) of ERISA; and (c) whether the assets of the
Trust are deemed "plan assets" under ERISA and the Department of Labor regarding
the definition of "plan assets."
740253.2 B-13
<PAGE>
LIQUIDITY
SPONSORS REPURCHASE. Unitholders who wish to dispose of their Units should
inquire of the Sponsors as to current market prices prior to making a tender for
redemption. The aggregate value of the Securities will be determined by the
Trustee on a daily basis and computed on the basis set forth under "Trustee
Redemption." The Sponsors do not guarantee the enforceability, marketability or
price of any Securities in the Portfolio or of the Units. The Sponsors may
discontinue the repurchase of Units if the supply of Units exceeds demand, or
for other business reasons. The date of repurchase is deemed to be the date on
which redemption requests are received in proper form, by McLaughlin, Piven,
Vogel Securities, Inc., 30 Wall Street, New York, New York 10005 or Reich & Tang
Distributors Inc., 600 Fifth Avenue, New York, New York 10020. Redemption
requests received after 4 P.M., New York Time, will be deemed to have been
repurchased on the next business day. In the event a market is not maintained
for the Units, a Unitholder may be able to dispose of Units only by tendering
them to the Trustee for redemption.
Units purchased by the Sponsors in the secondary market may be reoffered
for sale by the Sponsors at a price based on the aggregate value of the
Securities in the Trust plus a 3.395% sales charge (or 3.51% of the net amount
invested) plus a pro rata portion of amounts, if any, in the Income Account. Any
Units that are purchased by the Sponsors in the secondary market also may be
redeemed by the Sponsors if they determine such redemption to be in its best
interest.
The Sponsors may, under certain circumstances, as a service to Unitholders,
elect to purchase any Units tendered to the Trustee for redemption (see "Trustee
Redemption"). Factors which the Sponsors will consider in making a determination
will include the number of Units of all Trusts which it has in inventory, its
estimate of the salability and the time required to sell such Units and general
market conditions. For example, if in order to meet redemptions of Units the
Trustee must dispose of Securities, and if such disposition cannot be made by
the redemption date (three calendar days after tender), the Sponsors may elect
to purchase such Units. Such purchase shall be made by payment to the Unitholder
not later than the close of business on the redemption date of an amount equal
to the Redemption Price on the date of tender.
TRUSTEE REDEMPTION. At any time prior to the Evaluation Time on the
business day preceding the commencement of the Liquidation Period (approximately
fifteen months from the Date of Deposit), Units may also be tendered to the
Trustee for redemption upon payment of any relevant tax by contacting the
Sponsors, broker, dealer or financial institution holding such Units in street
name. In certain instances, additional documents may be required, such as trust
instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian. At the present time there
are no specific taxes related to the redemption of Units. No redemption fee will
be charged by the Sponsors or the Trustee. Units redeemed by the Trustee will be
cancelled.
Within three business days following a tender for redemption, the
Unitholder will be entitled to receive an amount for each Unit tendered equal to
the Redemption Price per Unit computed as of the Evaluation Time set forth under
"Summary of Essential Information" in Part A 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 after the close of trading on the New
York Stock Exchange (4:00 p.m. Eastern Time), the date of tender is the next day
on which such Exchange is open for trading, and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at the Redemption
Price computed on that day.
A Unitholder will receive his redemption proceeds in cash and amounts paid
on redemption shall be withdrawn from the Income Account, or, if the balance
therein is insufficient, from the Principal Account. All other amounts paid on
redemption shall be withdrawn from the Principal Account. The Trustee is
empowered to sell Securities in order to make funds available for redemptions.
Such sales, if required, could result in a sale of Securities by the Trustee at
a loss. To the extent Securities are sold, the size and diversity of the Trust
will be reduced. The Securities to be sold will be selected by the Trustee in
order to maintain, to the extent practicable, the proportionate relationship
among the number of shares of each Stock. Provision is made in the Indenture
under which the Sponsors may, but need not, specify minimum amounts in which
blocks of Securities are to be sold in order to obtain the best price for the
Trust. While these minimum amounts may vary from time to time in accordance with
market conditions, the Sponsors believe that the minimum amounts which would be
specified would be approximately 100 shares for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in the
Trust determined by the Trustee on the basis of (i) the cash on hand in the
Trust or moneys in the process of being collected, (ii) the value of the
Securities in the Trust as
740253.2 B-14
<PAGE>
determined by the Trustee, less (a) amounts representing taxes or other
governmental charges payable out of the Trust, (b) the accrued expenses of the
Trust and (c) cash allocated for the distribution to Unitholders of record as of
the business day prior to the evaluation being made. As of the close of the
initial offering period the Redemption Price per 100 Units will be reduced to
reflect the payment of the per 100 Unit organization costs to the Sponsors. The
Trustee may determine the value of the Securities in the Trust in the following
manner: because the Securities are listed on a national securities exchange,
this evaluation is based on the closing sale prices on that exchange. Unless the
Trustee deems these prices inappropriate as a basis for evaluation or if there
is no such closing purchase price, then the Trustee may utilize, at the Trust's
expense, an independent evaluation service or services to ascertain the values
of the Securities. The independent evaluation service shall use any of the
following methods, or a combination thereof, which it deems appropriate: (a) on
the basis of current bid prices for comparable securities, (b) by appraising the
value of the Securities on the bid side of the market or (c) by any combination
of the above.
Any Unitholder tendering [2,500] Units or more of the Trust for redemption
may request by written notice submitted at the time of tender from the Trustee
in lieu of a cash redemption a distribution of shares of Securities and cash in
an amount and value equal to the Redemption Price Per Unit as determined as of
the evaluation next following tender. To the extent possible, in kind
distributions ("In Kind Distributions") shall be made by the Trustee through the
distribution of each of the Securities in book-entry form to the account of the
Unitholder's bank or broker-dealer at DTC. An In Kind Distribution will be
reduced by customary transfer and registration charges. The tendering Unitholder
will receive his pro rata number of whole shares of each of the Securities
comprising the Trust portfolio and cash from the Principal Accounts equal to the
balance of the Redemption Price to which the tendering Unitholder is entitled.
If funds in the Principal Account are insufficient to cover the required cash
distribution to the tendering Unitholder, the Trustee may sell Securities in the
manner described above.
The Trustee is irrevocably authorized in its discretion, if the Sponsors do
not elect to purchase a Unit tendered for redemption or if the Sponsors tender a
Unit for redemption, in lieu of redeeming such Unit, to sell such Unit in the
over-the-counter market for the account of the tendering Unitholder at prices
which will return to the Unitholder an amount in cash, net after deducting
brokerage commissions, transfer taxes and other charges, equal to or in excess
of the Redemption Price for such Unit. The Trustee will pay the net proceeds of
any such sale to the Unitholder on the day he would otherwise be entitled to
receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on that Exchange is restricted or during which
(as determined by the Securities and Exchange Commission) an emergency exists as
a result of which disposal or evaluation of the Bonds is not reasonably
practicable, or for such other periods as the Securities and Exchange Commission
may by order permit. The Trustee and the Sponsors are not liable to any person
or in any way for any loss or damage which may result from any such suspension
or postponement.
A Unitholder who wishes to dispose of his Units should inquire of his bank
or broker in order to determine if there is a current secondary market price in
excess of the Redemption Price.
TRUST ADMINISTRATION
PORTFOLIO SUPERVISION. The Trust is a unit investment trust and is not a
managed fund. Traditional methods of investment management for a managed fund
typically involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Portfolio of the Trust, however,
will not be managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its Securities from the portfolio.
Although the portfolio of the Trust is regularly reviewed, because of the
formula employed in selecting the Top Ten, Focus Five and Penultimate Pick, it
is unlikely that the Trust will sell any of the Securities other than to satisfy
redemptions of Units, or to cease buying Additional Securities in connection
with the issuance of additional Units. However, the Trust Agreement provides
that the Sponsors may direct the disposition of Securities upon the occurrence
of certain events including: (1) default in payment of amounts due on any of the
Securities; (2) institution of certain legal proceedings; (3) default under
certain documents materially and adversely affecting future declaration or
payment of amounts due or expected; (4) determination of the Sponsors that the
tax treatment of the Trust as a grantor trust would otherwise be jeopardized; or
(5) decline in price as a direct result of serious adverse credit factors
affecting the issuer of a Security which, in the opinion of the Sponsors, would
make the retention of the Security detrimental to the Trust or the Unitholders.
Furthermore, the Trust will likely continue to hold a Security and
740253.2 B-15
<PAGE>
purchase additional shares notwithstanding its ceasing to be included among the
Top Ten, Focus Five and Penultimate Pick, or even its deletion from the DJIA.
In addition, the Trust Agreement provides as follows:
(a) If a default in the payment of amounts due on any Security occurs
pursuant to provision (1) above and if the Sponsors fail to give immediate
instructions to sell or hold that Security, the Trustee, within 30 days of
that failure by the Sponsors, shall sell the Security.
(b) It is the responsibility of the Sponsors to instruct the Trustee
to reject any offer made by an issuer of any of the Securities to issue new
securities in exchange and substitution for any Security pursuant to a
recapitalization or reorganization, if any exchange or substitution is
effected notwithstanding such rejection, any securities or other property
received shall be promptly sold unless the Sponsors direct that it be
retained.
(c) Any property received by the Trustee after the Initial Date of
Deposit as a distribution on any of the Securities in a form other than
cash or additional shares of the Securities, which shall be retained, or
shall be promptly sold unless the Sponsors direct that it be retained by
the Trustee. The proceeds of any disposition shall be credited to the
Income or Principal Account of the Trust.
(d) The Sponsors are authorized to increase the size and number of
Units of the Trust by the deposit of Additional Securities, contracts to
purchase Additional Securities or cash or a letter of credit with
instructions to purchase Additional Securities in exchange for the
corresponding number of additional Units from time to time subsequent to
the Initial Date of Deposit, provided that the original proportionate
relationship among the number of shares of each Security established on the
Initial Date of Deposit is maintained to the extent practicable. The
Sponsors may specify the minimum numbers in which Additional Securities
will be deposited or purchased. If a deposit is not sufficient to acquire
minimum amounts of each Security, Additional Securities may be acquired in
the order of the Security most under-represented immediately before the
deposit when compared to the original proportionate relationship. If
Securities of an issue originally deposited are unavailable at the time of
the subsequent deposit, the Sponsors may (i) deposit cash or a letter of
credit with instructions to purchase the Security when it becomes
available, or (ii) deposit (or instruct the Trustee to purchase) either
Securities of one or more other issues originally deposited or a Substitute
Security.
TRUST AGREEMENT AND AMENDMENT. The Trust Agreement may be amended by the
Trustee and the Sponsors without the consent of any of the Unitholders: (1) to
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency; or (3) to make such other provisions in regard to matters arising
thereunder as shall not adversely affect the interests of the Unitholders.
The Trust Agreement may also be amended in any respect, or performance of
any of the provisions thereof may be waived, with the consent of investors
holding 66 2/3% of the Units then outstanding for the purpose of modifying the
rights of Unitholders; provided that no such amendment or waiver shall reduce
any Unitholder's interest in the Trust without his consent or reduce the
percentage of Units required to consent to any such amendment or waiver without
the consent of the holders of all Units. The Trust Agreement may not be amended,
without the consent of the holders of all Units in the Trust then outstanding,
to increase the number of Units issuable or to permit the acquisition of any
Securities in addition to or in substitution for those initially deposited in
such Trust, except in accordance with the provisions of the Trust Agreement. The
Trustee shall promptly notify Unitholders, in writing, of the substance of any
such amendment.
TRUST TERMINATION. The Trust Agreement provides that the Trust shall
terminate upon the maturity, redemption or other disposition, as the case may
be, of the last of the Securities held in such Trust but in no event is it to
continue beyond the Mandatory Termination Date. If the value of the Trust shall
be less than the minimum amount set forth under "Summary of Essential
Information" in Part A, the Trustee may, in its discretion, and shall, when so
directed by the Sponsors, terminate the Trust. The Trust may also be terminated
at any time with the consent of the investors holding 100% of the Units then
outstanding. The Trustee may utilize the services of the Sponsors for the sale
of all or a portion of the Securities in the Trust, and in so doing, the
Sponsors will determine the manner, timing and execution of the sales of the
underlying Securities. Any brokerage commissions received by the Sponsors from
the Trust in connection with such sales will be in accordance with
740253.2 B-16
<PAGE>
applicable law. In the event of termination, written notice thereof will be sent
by the Trustee to all Unitholders. Such notice will provide Unitholders with the
following three options by which to receive their pro rata share of the net
asset value of the Trust and requires their election of one of the three options
by notifying the Trustee by returning a properly completed election request (to
be supplied to Unitholders of at least [2,500] Units prior to the commencement
of the Liquidation Period):
1. A Unitholder [who owns at least 2,500 units] and whose interest in
the Trust would entitle it to receive at least one share of each underlying
Security will have its Units redeemed on commencement of the Liquidation
Period by distribution of the Unitholder's pro rata share of the net asset
value of the Trust on such date distributed in kind to the extent
represented by whole shares of underlying Securities and the balance in
cash within three business days next following the commencement of the
Liquidation Period. Unitholders subsequently selling such distributed
Securities will incur brokerage costs when disposing of such Securities.
Unitholders should consult their own tax adviser in this regard;
2. to receive in cash such Unitholder's pro rata share of the net
asset value of the Trust derived from the sale by the Sponsors as the
agents of the Trustee of the underlying Securities during the Liquidation
Period. The Unitholder's pro rata share of its net assets of the Trust will
be distributed to such Unitholder within three days of the settlement of
the trade of the last Security to be sold; and/or
3. to invest such Unitholder's pro rata share of the net assets of the
Trust derived from the sale by the Sponsors as agents of the Trustee of the
underlying Securities during the Liquidation Period, in units of a
subsequent series of [The Pinnacle Trusts] (the "New Series") provided one
is offered. It is expected that a special redemption and liquidation will
be made of all Units of this Trust held by a Unitholder (a "Rollover
Unitholder") who affirmatively notifies the Trustee on or prior to the
Rollover Notification Date set forth in the "Summary of Essential
Information" for the Trust in Part A. The Units of a New Series will be
purchased by the Unitholder within three business days of the settlement of
the trade for the last Security to be sold. Such purchaser will be entitled
to a reduced sales charge upon the purchase of units of the New Series. It
is expected that the terms of the New Series will be substantially the same
as the terms of the Trust described in this Prospectus, and that similar
options with respect to the termination of such New Series will be
available. The availability of this option does not constitute a
solicitation of an offer to purchase Units of a New Series or any other
security. A Unitholder's election to participate in this option will be
treated as an indication of interest only. At any time prior to the
purchase by the Unitholder of units of a New Series such Unitholder may
change his investment strategy and receive, in cash, the proceeds of the
sale of the Securities. An election of this option will not prevent the
Unitholder from recognizing taxable gain or loss (except in the case of a
loss, if and to the extent the New Series is treated as substantially
identical to the Trust) as a result of the liquidation, even though no cash
will be distributed to pay any taxes. Unitholders should consult their own
tax advisers in this regard.
Unitholders who do not make any election will be deemed to have elected to
receive the termination distribution in cash (option number 2).
The Sponsors have agreed that to the extent they effect the sales of
underlying securities for the Trustee in the case of the second and third
options during the Liquidation Period free of brokerage commissions. The
Sponsors, on behalf of the Trustee, will sell, unless prevented by unusual and
unforeseen circumstances, such as, among other reasons, a suspension in trading
of a Security, the close of a stock exchange, outbreak of hostilities and
collapse of the economy, by the last business day of the Liquidation Period. The
Redemption Price Per 100 Units upon the settlement of the last sale of
Securities during the Liquidation Period will be distributed to Unitholders in
redemption of such Unitholders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New
Series and the amount of other orders for Units in the New Series, the Sponsors
may purchase a large amount of securities for the New Series in a short period
of time. The Sponsors' buying of securities may tend to raise the market prices
of these securities. The actual market impact of the Sponsors' purchases,
however, is currently unpredictable because the actual amount of securities to
be purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the
Liquidation Period; depending on the number of sales required, the prices of and
demand for Securities, such sales may tend to depress the market prices and thus
reduce the proceeds of such sales. The Sponsors believe that the sale of
underlying Securities over the Liquidation Period described above is in the best
interest of a Unitholder and may mitigate the negative market price consequences
stemming from the trading of large amounts of Securities. The Securities may be
sold in fewer than five days if, in the Sponsor's judgment, such sales are in
the best interest of Unitholders. The Sponsors, in implementing
740253.2 B-17
<PAGE>
such sales of securities on behalf of the Trustee, will seek to maximize the
sales proceeds and will act in the best interests of the Unitholders. There can
be no assurance, however, that any adverse price consequences of heavy trading
will be mitigated.
The Sponsors may for any reason, in their sole discretion, decide not to
sponsor any subsequent series of the Trust, without penalty or incurring
liability to any Unitholder. If the Sponsors so decide, the Sponsors will notify
the Trustee of that decision, and the Trustee will notify the Unitholders. All
Unitholders will then elect either option 1, if eligible, or option 2.
By electing to "rollover" into the New Series, the Unitholder indicates his
interest in having his terminating distribution from the Trust invested only in
the New Series created following termination of the Trust; the Sponsors expect,
however, that a similar rollover program will be offered with respect to all
subsequent series of the Trust, thus giving Unitholders an opportunity to elect
to "rollover" their terminating distributions into a New Series. The
availability of the rollover privilege does not constitute a solicitation of
offers to purchase units of a New Series or any other security. A Unitholder's
election to participate in the rollover program will be treated as an indication
of interest only. The Sponsors intend to coordinate the date of deposit of a
future series so that the terminating trust will terminate contemporaneously
with the creation of a New Series. The Sponsors reserve the right to modify,
suspend or terminate the rollover privilege at any time.
THE SPONSORS. McLaughlin, Piven, Vogel Securities, Inc. ("MPV") is a New
York corporation engaged in the underwriting and securities brokerage business,
and in the investment advisory business. It is a member of the National
Association of Securities Dealers, Inc. MPV maintains its principal business
offices at 30 Wall Street, New York, New York 10005. The majority shareholder of
MPV is James J. McLaughlin. [Insert additional information.]
Reich & Tang Distributors, Inc., a Delaware corporation, is engaged in the
brokerage business and is a member of the National Association of Securities
Dealers, Inc. Reich & Tang is also a registered investment advisor. Reich & Tang
maintains its principal business offices at 600 Fifth Avenue, New York, New York
10020. The sole shareholder of Reich & Tang, Reich & Tang Asset Management, Inc.
("RTAM Inc.") is wholly owned by NEIC Holdings, Inc. which, effective December
29, 1997, was wholly owned by NEIC Operating Partnership, L.P. ("NEICOP").
Subsequently, on March 31, 1998, NEICOP changed its name to Nvest Companies,
L.P. ("Nvest"). The general partners of Nvest are Nvest Corporation and Nvest
L.P. As of March 31, 1998, Metropolitan Life Insurance Company ("MetLife") owned
approximately 47% of the partnership interests of Nvest. Nvest, with a principal
place of business at 399 Boylston Street, Boston, MA 02116, is a holding company
of firms engaged in the securities and investment advisory business. These
affiliates in the aggregate are investment advisors or managers to over 80
registered investment companies. Reich & Tang is Sponsor (and Co-Sponsor, as the
case may be) for numerous series of unit investment trusts, including New York
Municipal Trust, Series 1 (and Subsequent Series), Municipal Securities Trust,
Series 1 (and Subsequent Series), 1st Discount Series (and Subsequent Series),
Multi-State Series 1 (and Subsequent Series), Mortgage Securities Trust, Series
1 (and Subsequent Series), Insured Municipal Securities Trust, Series 1 (and
Subsequent Series), 5th Discount Series (and Subsequent Series), Equity
Securities Trust, Series 1, Signature Series, Gabelli Communications Income
Trust (and Subsequent Series) and Schwab Trusts.
MetLife is a mutual life insurance company with assets of $298 billion at
December 31, 1996. It is the second largest life insurance company in the United
States in terms of total assets. MetLife provides a wide range of insurance and
investment products and services to individuals and groups and is the leader
among United States life insurance companies in terms of total life insurance in
force, which totaled $1.6 trillion at December 31, 1996 for MetLife and its
insurance affiliates. MetLife and its affiliates provide insurance or other
financial services to approximately 36 million people worldwide.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsors and their ability
to carry out its contractual obligations. The Sponsors will be under no
liability to Unitholders for taking any action, or refraining from taking any
action, in good faith pursuant to the Trust Agreement, or for errors in judgment
except in cases of its own willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.
The Sponsors may each resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsors. If at any time either of the
Sponsors shall resign or fail to perform any of their duties under the Trust
Agreement or becomes incapable of acting or becomes bankrupt or their affairs
are taken over by public authorities, then the Trustee may either (a) appoint a
successor sponsor; (b) terminate the Trust Agreement and liquidate the Trust; or
(c) continue to act as
740253.2 B-18
<PAGE>
Trustee without terminating the Trust Agreement. Any successor sponsor appointed
by the Trustee shall be satisfactory to the Trustee and, at the time of
appointment, shall have a net worth of at least $1,000,000.
THE TRUSTEE. The Trustee is The Chase Manhattan Bank with its principal
executive office located at 270 Park Avenue, New York, New York 10017 (800)
428-8890 and its unit investment trust office at Four New York Plaza, New York,
New York 10004. The Trustee is subject to supervision by the Superintendent of
Banks of the State of New York, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to the
Trust Agreement, or for errors in judgment; or for any disposition of any
moneys, Securities or Units in accordance with the Trust Agreement, except in
cases of its own willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties; provided, however, that the Trustee
shall not in any event be liable or responsible for any evaluation made by any
independent evaluation service employed by it. In addition, the Trustee shall
not be liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or the Trust which it may be required to pay under
current or future law of the United States or any other taxing authority having
jurisdiction. The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities pursuant to the
Trust Agreement.
For further information relating to the responsibilities of the Trustee
under the Trust Agreement, reference is made to the material set forth under
"Rights of Unitholders."
The Trustee may resign by executing an instrument in writing and filing the
same with the Sponsors, and mailing a copy of a notice of resignation to all
Unitholders. In such an event the Sponsors are obligated to appoint a successor
Trustee as soon as possible. In addition, if the Trustee becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public authorities,
the Sponsors may remove the Trustee and appoint a successor as provided in the
Trust Agreement. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsors. If upon resignation of the Trustee no successor has
been appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
the Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. 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.
Any corporation into which the Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Trustee shall be a party, shall be the successor Trustee. The
Trustee must always be a banking corporation organized under the laws of the
United States or any State and have at all times an aggregate capital, surplus
and undivided profits of not less than $2,500,000.
EVALUATION OF THE TRUST. The value of the Securities in the Trust portfolio
is determined in good faith by the Trustee on the basis set forth under "Public
Offering--Offering Price." The Sponsors and the Unitholders may rely on any
evaluation furnished by the Trustee and shall have no responsibility for the
accuracy thereof. Determinations by the Trustee under the Trust Agreement shall
be made in good faith upon the basis of the best information available to it,
provided, however, that the Trustee shall be under no liability to the Sponsors
or Unitholders for errors in judgment, except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. The Trustee, the Sponsors and the Unitholders may rely
on any evaluation furnished to the Trustee by an independent evaluation service
and shall have no responsibility for the accuracy thereof.
TRUST EXPENSES AND CHARGES
Investors will reimburse the Sponsors on a per 100 Units basis, for all or
a portion of the estimated costs incurred in organizing the Trust--including the
cost of the initial preparation, printing and execution of the registration
statement and the indenture, Federal and State registration fees, the initial
fees and expenses of the Trustee, legal expenses and any other out-of-pocket
costs. The estimated organization costs will be paid from the assets of the
Trust as of the close of the initial public offering period. To the extent that
actual organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of the Trust. To the extent
that actual organization costs are greater than the estimated
740253.2 B-19
<PAGE>
amount, only the estimated organization costs included in the Public Offering
Price will be reimbursed to the Sponsors. Any balance of the costs incurred in
establishing the Trust, as well as advertising and selling costs, will be paid
by the Sponsors at no cost to the Trust.
The Sponsors will receive for portfolio supervisory services to the Trust
an Annual Fee in the amount set forth under "Summary of Essential Information"
in Part A. The Sponsors' fee may exceed the actual cost of providing portfolio
supervisory services for the Trust, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the Equity
Securities Trust in any calendar year exceed the aggregate cost to the Sponsors
of supplying such services in such year. (See "Portfolio Supervision.")
The Trustee will receive, for its ordinary recurring services to the Trust,
an annual fee in the amount set forth under "Summary of Essential Information"
in Part A. For a discussion of the services performed by the Trustee pursuant to
its obligations under the Trust Agreement, see "Trust Administration" and
"Rights of Unitholders."
The Trustee's fees applicable to a Trust are payable as of each Record Date
from the Income Account of the Trust to the extent funds are available and then
from the Principal Account. Both the Sponsors' and the Trustee's fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases in consumer prices for services as measured by the
United States Department of Labor's Consumer Price Index entitled "All Services
Less Rent."
The following additional charges are or may be incurred by the Trust: all
expenses (including counsel fees) of the Trustee incurred and advances made in
connection with its activities under the Trust Agreement, including the expenses
and costs of any action undertaken by the Trustee to protect the Trust and the
rights and interests of the Unitholders; fees of the Trustee for any
extraordinary services performed under the Trust Agreement; indemnification of
the Trustee for any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification of the
Sponsors for any losses, liabilities and expenses incurred in acting as sponsors
of the Trust without gross negligence, bad faith or willful misconduct on its
part; and all taxes and other governmental charges imposed upon the Securities
or any part of the Trust (no such taxes or charges are being levied, made or, to
the knowledge of the Sponsors, contemplated). The above expenses, including the
Trustee's fees, when paid by or owing to the Trustee are secured by a first lien
on the Trust to which such expenses are charged. In addition, the Trustee is
empowered to sell the Securities in order to make funds available to pay all
expenses.
Unless the Sponsors otherwise direct, the accounts of the Trust shall be
audited not less than annually by independent public accountants selected by the
Sponsors. The expenses of the audit shall be an expense of the Trust. So long as
the Sponsors maintain a secondary market, the Sponsors will bear any audit
expense which exceeds $.50 Cents per 100 Units. Unitholders covered by the audit
during the year may receive a copy of the audited financials upon request.
REINVESTMENT PLAN
Income and principal distributions on Units (other than the final
distribution in connection with the termination of the Trust) may be reinvested
by participating in the Trust's reinvestment plan. Under the plan, the Units
acquired for participants will be either Units already held in inventory by the
Sponsors or new Units created by the Sponsors' deposit of Additional Securities
as described in "The Trust-Organization" in this Part B. Units acquired by
reinvestment will be subject to a reduced sales charge of [1.00%]. Investors
should inform their broker, dealer or financial institution when purchasing
their Units if they wish to participate reinvestment plan. Thereafter,
Unitholders should contact their broker, dealer or financial institution if they
wish to modify or terminate their election to participate in the reinvestment
plan. In order to enable a Unitholder to participate in the reinvestment plan
with respect to a particular distribution on their Units, such notice must be
made at least three business days to the Record Day for such distribution. Each
subsequent distribution of income or principal on the participant's Units will
be automatically applied by the Trustee to purchase additional Units of the
Trust. The Sponsors reserve the right to demand, modify or terminate the
reinvestment plan at any time without prior notice. The reinvestment plan for
the Trust may not be available in all states.
740253.2 B-20
<PAGE>
[EXCHANGE PRIVILEGE AND CONVERSION OFFER]
[Unitholders will be able to elect to exchange any or all of their Units of
this Trust for Units of one or more of any available series of [Pinnacle
Trusts], Insured Municipal Securities Trust, Municipal Securities Trust, New
York Municipal Trust or Mortgage Securities Trust (the "Exchange Trusts")
subject to a reduced sales charge as set forth in the prospectus of the Exchange
Trust (the "Exchange Privilege"). Unit owners of any registered unit investment
trust for which there is no active secondary market in the units of such trust
(a "Redemption Trust") will be able to elect to redeem such units and apply the
proceeds of the redemption to the purchase of available Units of one or more
series of an Exchange Trust (the "Conversion Trusts") at the Public Offering
Price for units of the Conversion Trust subject to a reduced sales charge as set
forth in the prospectus of the Conversion Trust (the "Conversion Offer"). Under
the Exchange Privilege, the Sponsors' repurchase price during the initial
offering period of the Units being surrendered will be based on the market value
of the Securities in the Trust portfolio or on the aggregate offer price of the
Bonds in the other Trust Portfolios; and, after the initial offering period has
been completed, will be based on the aggregate bid price of the securities in
the particular Trust portfolio. Under the Conversion Offer, units of the
Redemption Trust must be tendered to the trustee of such trust for redemption at
the redemption price determined as set forth in the relevant Redemption Trust's
prospectus. Units in an Exchange or Conversion Trust will be sold to the
Unitholder at a price based on the aggregate offer price of the securities in
the Exchange or Conversion trust portfolio (or for units of [Pinnacle Trusts],
based on the market value of the underlying securities in the trust portfolio)
during the initial public offering period of the Exchange or Conversion Trust;
and after the initial public offering period has been completed, based on the
aggregate bid price of the securities in the Exchange or Conversion Trust
Portfolio if its initial offering has been completed plus accrued interest (or
for units of [Pinnacle Trusts], based on the market value of the underlying
securities in the trust portfolio) and a reduced sales charge.
Except for Unitholders who wish to exercise the Exchange Privilege or
Conversion Offer within the first five months of their purchase of Units of the
Exchange or Redemption Trust, any purchaser who purchases Units under the
Exchange Privilege or Conversion Offer will pay a lower sales charge than that
which would be paid for the Units by a new investor. For Unitholders who wish to
exercise the Exchange Privilege or Conversion Offer within the first five months
of their purchase of Units of the Exchange or Redemption Trust, the sales charge
applicable to the purchase of units of an Exchange or Conversion Trust shall be
the greater of (i) the reduced sales charge or (ii) an amount which when coupled
with the sales charge paid by the Unitholder upon his original purchase of Units
of the Exchange or Redemption Trust would equal the sales charge applicable in
the direct purchase of units of an Exchange or Conversion Trust.
In order to exercise the Exchange Privilege the Sponsors must be
maintaining a secondary market in the units of the available Exchange Trust. The
Conversion offer is limited only to unit owners of any Redemption Trust.
Exercise of the Exchange Privilege and the Conversion Offer by Unitholders is
subject to the following additional conditions (i) at the time of the
Unitholder's election to participate in the Exchange Privilege or Conversion
Offer, there must be units of the Exchange or Conversion Trust available for
sale, either under the initial primary distribution or in the Sponsor's
secondary market, (ii) exchanges will be effected in whole units only, (iii)
Units of the Mortgage Securities Trust may only be acquired in blocks of 1,000
Units and (iv) Units of the [Pinnacle Trusts] and the Equity Securities Trust
may only be acquired in blocks of 100 Units. Unitholders will not be permitted
to advance any funds in excess of their redemption in order to complete the
exchange. Any excess proceeds received from a Unitholder for exchange or from
units being redeemed per conversion, will be remitted to such Unitholder.
The Sponsors reserve the right to suspend, modify or terminate the Exchange
Privilege and/or the Conversion Offer. The Sponsors will provide Unitholders of
the Trust with 60 days' prior written notice of any termination or material
amendment to the Exchange Privilege and/or the Conversion Offer, provided that,
no notice need be given if (i) the only material effect of an amendment is to
reduce or eliminate the sales charge payable at the time of the exchange, to add
one or more series of the Trust eligible for the Exchange Privilege or the
Conversion offer, to add any new unit investment trust sponsored by McLaughlin,
Piven, Vogel Securities, Inc. and Reich & Tang or a sponsor controlled by or
under common control with McLaughlin, Piven, Vogel Securities, Inc. and Reich &
Tang, or to delete a series which has been terminated from eligibility for the
Exchange Privilege and/or the Conversion Offer, (ii) there is a suspension of
the redemption of units of an Exchange or Conversion Trust under Section 22(e)
of the Investment Company Act of 1940, or (iii) an Exchange Trust temporarily
delays or ceases the sale of its units because it is unable to invest amounts
effectively in accordance with its investment objectives, policies and
restrictions. During the 60-day notice period prior to the termination or
material amendment of the Exchange Privilege described above, the Sponsors will
continue to maintain a secondary market in the units of all Exchange Trusts that
740253.2 B-21
<PAGE>
could be acquired by the affected Unitholders. Unitholders may, during this
60-day period, exercise the Exchange Privilege in accordance with its terms then
in effect.
To exercise the Exchange Privilege, a Unitholder should notify the Sponsors
of his desire to exercise his Exchange Privilege. To exercise the Conversion
Offer, a unit owner of a Redemption Trust should notify his retail broker of his
desire to redeem his Redemption Trust Units and use the proceeds from the
redemption to purchase Units of one or more of the Conversion Trusts. If Units
of a designated, outstanding series of an Exchange or Conversion Trust are at
the time available for sale and such Units may lawfully be sold in the state in
which the Unitholder is a resident, the Unitholder will be provided with a
current prospectus or prospectuses relating to each Exchange or Conversion Trust
in which he indicates an interest. He may then select the Trust or Trusts into
which he desires to invest the proceeds from his sale of Units. The exchange
transaction will operate in a manner essentially identical to a secondary market
transaction except that units may be purchased at a reduced sales charge. The
conversion transaction will be handled entirely through the unit owner's retail
broker. The retail broker must tender the units to the trustee of the Redemption
Trust for redemption and then apply the proceeds to the redemption toward the
purchase of units of a Conversion Trust at a price based on the aggregate offer
or bid side evaluation per Unit of the Conversion Trust, depending on which
price is applicable, plus accrued interest and the applicable sales charge. The
certificates must be surrendered to the broker at the time the redemption order
is placed and the broker must specify to the Sponsors that the purchase of
Conversion Trust Units is being made pursuant to the Conversion Offer. The unit
owner's broker will be entitled to retail a portion of the sales charge.]
[TAX CONSEQUENCES OF THE EXCHANGE PRIVILEGE AND THE CONVERSION OFFER. A
surrender of Units pursuant to the Exchange Privilege or the Conversion Offer
will constitute a "taxable event" to the Unitholder under the Internal Revenue
Code. The Unitholder will realize a tax gain or loss that will be of a long- or
short-term capital or ordinary income nature depending on the length of time the
Units have been held and other factors. (See "Tax Status".) A Unitholder's tax
basis in the Units acquired pursuant to the Exchange Privilege or Conversion
Offer will be equal to the purchase price of such Units. Investors should
consult their own tax advisors as to the tax consequences to them of exchanging
or redeeming units and participating in the Exchange Privilege or Conversion
Offer.]
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to federal tax law have been passed upon by Battle Fowler LLP,
75 East 55th Street, New York, New York 10022 as counsel for the Sponsor.
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have acted
as counsel for the Trustee.
INDEPENDENT ACCOUNTANTS. The Statement of Financial Condition, including
the Portfolio, is included herein in reliance upon the report of _____________,
independent accountants, and upon the authority of said firm as experts in
accounting and auditing.
PERFORMANCE INFORMATION. Total returns, average annualized returns or
cumulative returns for various periods of the Top Ten, the Focus Five and the
Penultimate Pick, the related index and this Trust may be included from time to
time in advertisements, sales literature and reports to current or prospective
investors. Total return shows changes in Unit price during the period plus
reinvestment of dividends and capital gains, divided by the original public
offering price as of the date of calculation. Average annualized returns show
the average return for stated periods of longer than a year. Sales material may
also include an illustration of the cumulative results of like annual
investments in the Top Ten, the Focus Five and the Penultimate Pick during an
accumulation period and like annual withdrawals during a distribution period.
Figures for actual portfolios will reflect all applicable expenses and, unless
otherwise stated, the maximum sales charge. No provision is made for any income
taxes payable. Similar figures may be given for this Trust applying the Top Ten,
Focus Five and Penultimate Pick investment strategies to other indexes. Returns
may also be shown on a combined basis. Trust performance may be compared to
performance on a total return basis of the Dow Jones Industrial Average, the S&P
500 Composite Price Stock Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications such as
Money, The New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should not be
considered representative of a Trust's relative performance for any future
period.
740253.2 B-22
<PAGE>
Pending the approval of the SEC or the National Association of Securities
Dealers Regulation, the Sponsors may also include the performance of
hypothetical portfolios to which the Sponsors have applied the same investment
objectives and selection strategies as described in "The Trust--The Securities"
and which the Sponsors intend to apply to the selection of securities for the
Trust. This performance information is intended to illustrate the Trust's
strategies and should not be interpreted as indicative of the future performance
of the Trust.
740253.2 B-23
<PAGE>
[This page intentionally left blank]
740253.2 B-24
<PAGE>
No person is authorized to give any --------------------------------
information or to make any MCLAUGHLIN, PIVEN, VOGEL
representations not contained in Parts A FAMILY OF TRUSTS
and B of this Prospectus; and any --------------------------------
information or representation not THE PINNACLE TRUST
contained herein must not be relied upon --------------------------------
as having been authorized by the Trust,
the Trustee or the Sponsors. The Trust MCLAUGHLIN, PIVEN, VOGEL
is registered as a unit investment trust FAMILY OF TRUSTS
under the Investment Company Act of THE PINNACLE TRUST
1940. Such registration does not imply
that the Trust or any of its Units have (A UNIT INVESTMENT TRUST)
been guaranteed, sponsored, recommended
or approved by the United States or any PROSPECTUS
state or any agency or officer thereof.
------------------ DATED: SEPTEMBER __, 1998
This Prospectus does not constitute
an offer to sell, or a solicitation
of an offer to buy, securities
in any state to any person to whom it is SPONSORS:
not lawful to make such offer in such
state. MCLAUGHLIN, PIVEN, VOGEL
SECURITIES, INC.
30 Wall Street
Table of Contents New York, New York 10005
212-248-0750
Title Page
- ------ -----
PART A REICH & TANG DISTRIBUTORS, INC.
Summary of Essential Information..... A-2 600 Fifth Avenue
Statement of Financial Condition..... A-6 New York, New York 10020
Portfolio............................ A-7 212-830-5400
Report of Independent Accountants.... A-8
PART B
The Trust............................ B-1
Risk Considerations.................. B-5
Public Offering...................... B-8
Rights of Unitholders................ B-10 TRUSTEE:
Tax Status........................... B-11
Liquidity............................ B-14 THE CHASE MANHATTAN BANK
Trust Administration................. B-15 4 New York Plaza
Trust Expenses and Charges........... B-19 New York, New York 10004
Reinvestment Plan.................... B-20
Exchange Privilege and Conversion
Offer................................ B-21
Other Matters........................ B-22
Parts A and B of this Prospectus do
not contain all of the information set
forth in the registration statement and
exhibits relating thereto, filed with
the Securities and Exchange Commission,
Washington, D.C., under the Securities
Act of 1933, and the Investment Company
Act of 1940, and to which reference is
made.
<PAGE>
PART II -- ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM A -- BONDING ARRANGEMENTS
The employees of Reich & Tang Distributors, Inc. are covered under Brokers'
Blanket Policy, Standard Form 14, in the amount of $11,000,000 (plus
$196,000,000 excess coverage under Brokers' Blanket Policies, Standard Form 14
and Form B Consolidated). This policy has an aggregate annual coverage of $15
million.
The employees of McLaughlin, Piven, Vogel Securities, Inc. are covered
under Broker's Blanket Policy, Standard Form 14, in the amount of $1,000,000.
ITEM B -- CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons:
Battle Fowler LLP (included in Exhibit 3.1)
[Accountants]
The following exhibits:
*99.1.1 -- Reference Trust Agreement including certain amendments to
the Trust Indenture and Agreement referred to under Exhibit
99.1.1.1 below.
*99.1.1.1 -- Form of Trust Indenture and Agreement.
99.1.3.5 -- Certificate of Incorporation of Reich & Tang Distributors,
Inc. (filed as Exhibit 99.1.3.5 to Form S-6 Registration
Statement No. 333-44301 of Equity Securities Trust, Series
16, Signature Series, Zacks All-Star Analysts Trust III on
January 15, 1998 and incorporated herein by reference).
99.1.3.6 -- By-Laws of Reich & Tang Distributors, Inc.(filed as Exhibit
99.1.3.6 to Form S-6 Registration Statement No. 333-44301 of
Equity Securities Trust, Series 16, Signature Series, Zacks
All-Star Analysts Trust III on January 15, 1998 and
incorporated herein by reference).
99.1.3.7 -- Certificate of Incorporation of McLaughlin, Piven, Vogel
Securities, Inc. dated March 8, 1977 and as amended on
January 16, 1979, June 8, 1979, August 27, 1979, May 3,
1982, December 20, 1983 and September 25, 1989.
99.1.3.8 -- By-Laws of McLaughlin, Piven, Vogel Securities Inc.
*99.3.1 -- Opinion of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and to the use of their name under the
headings "Tax Status" and "Legal Opinions" in the
Prospectus, and to the filing of their opinion regarding tax
status of the Trust.
99.6.0 -- Power of Attorney of Reich & Tang Distributors, Inc., the
Depositor, by its officers and a majority of its Directors
(filed as Exhibit 99.6.0 to Form S-6 Registration Statement
No. 333-44301 of Equity Securities Trust, Series 16,
Signature Series, Zacks All-Star Analysts Trust III on
January 15, 1998 and incorporated herein by reference).
99.6.1 -- Power of Attorney of McLaughlin, Piven, Vogel Securities,
Inc.
*99.27 -- Financial Data Schedule (for EDGAR filing only).
- --------
* To be filed by amendment.
II-1
740248.2
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of New York and State of New York on the
6th day of August, 1998.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE TRUST
(Registrant)
McLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
(Depositor)
By /s/ ALLAN M. VOGEL
--------------------------------------
Allan M. Vogel
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, who
constitute the principal officers and a majority of the directors of McLaughlin,
Piven, Vogel Securities, Inc., the Depositor, in the capacities and on the dates
indicated.
Name Title Date
---- ----- ----
JAMES C. MCLAUGHLIN Chairman of the Board, Chief
Executive Officer and Director
ALLAN M. VOGEL President, Secretary, Chief Financial
Officer and Director
August 6, 1998
By /s/ ALLAN M. VOGEL
-----------------------
Allan M. Vogel
Attorney-In-Fact*
- ----------------
* An executed copy of a Power of Attorney is filed as Exhibit 99.6.1 hereto.
II-2
740248.2
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Trust has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of New York and State of New York on the
6th day of August, 1998.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE TRUST
(Registrant)
REICH & TANG DISTRIBUTORS, INC.
(Depositor)
By /s/ PETER J. DEMARCO
--------------------------------------
Peter J. DeMarco
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, who
constitute the principal officers and a majority of the directors of Reich &
Tang Distributors, Inc., the Depositor, in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
RICHARD E. SMITH III President and Director
PETER S. VOSS Director
G. NEAL RYLAND Director
EDWARD N. WADSWORTH Executive Officer
STEVEN W. DUFF Director
ROBERT F. HOERLE Managing Director August 6, 1998
PETER J. DEMARCO Executive Vice President
RICHARD I. WEINER Vice President By /s/ PETER J. DEMARCO
-------------------------------
BERNADETTE N. FINN Vice President Peter J. DeMarco
as Executive Vice President
LORRAINE C. HYSLER Secretary and Attorney-In-Fact*
RICHARD DE SANCTIS Treasurer
</TABLE>
- ---------------------
* Executed copies of Powers of Attorney were filed as Exhibit 99.6.0 to Form
S-6 Registration Statement No. 333-44301 on January 15, 1998.
II-3
740248.2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
registration statement on Form S-6 (the "Registration Statement") of our report
dated September __, 1998, relating to the Statement of Financial Condition,
including the Portfolio, of McLaughlin, Piven, Vogel Family of Trusts, The
Pinnacle Trust which appears in such Prospectus. We also consent to the
reference to us under the heading "Independent Accountants" in such Prospectus.
- ------------------------------
September __, 1998
II-4
740248.2
<PAGE>
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, SLAVIN INC.
Under Section 402 of the Business Corporation Law.
The undersigned, for the purpose of forming a corporation under
Section 402 of the Business Corporation Law of the State of New York does hereby
certify:
FIRST: The name of the proposed corporation shall be McLAUGHLIN,
SLAVIN INC.
SECOND: The purposes for which the corporation is to be formed are to
do any and all things set forth, to the same extent as natural born persons
might or could do, to wit:
A. To engage in and carry on the business of brokers and dealers in
securities of every kind, character or description whatsoever; to
underwrite and distribute on behalf of itself and of others,
securities of every kind, character or description whatsoever and
to participate with others in any such underwriting or
distribution; to negotiate private placements of any such
securities; to do a general securities business in all branches
thereof to the full extent permitted by law, including, without
limiting the generality of the foregoing, a general brokerage,
underwriting and investment business, and to do any and all
things which may be useful in connection with or incidental to
the conduct of such business.
B. To have, in addition to the powers and purposes herein
enumerated, the rights, powers, and privileges now or hereafter
conferred by the Laws of the State of New York upon corporations
organized under Section 402 of the Business Corporation Law,
together with all other powers that such
741977.1
-1-
<PAGE>
Corporation may exercise pursuant to Section 202 of the Business
Corporation Law.
THIRD: The corporation shall have the authority to issue 200 shares of
common stock without nominal or par value, all of which shares shall be of the
same class and identical with one another in all respects and each share shall
carry one vote.
FOURTH: The duration of the corporation is to be perpetual.
FIFTH: The principal office of the corporation is to be located in the
Borough of Manhattan, County of New York, City and State of New York.
SIXTH: The undersigned incorporator of this Certificate of
Incorporation is of full age.
SEVENTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner or as hereafter prescribed by law; and all rights hereby conferred on the
stockholders of the corporation are granted subject to this reservation.
EIGHTH: The Secretary of State is designated as the Agent of the
corporation upon whom process in any action or proceeding against it may be
served and the address to which the Secretary of State shall mail a copy of
process in any action or proceeding which may be served upon him in care of:
NATHAN RINGEL, ESQ.
111 Broadway
New York, New York 10006
741977.1
-2-
<PAGE>
NINTH: The accounting period which the corporation intends to
establish as its first calendar or fiscal year for reporting the franchise tax
on business corporations imposed by Article 9(a) of the Tax Law is December 31,
1977.
TENTH: (a) No contract or other transaction between the Corporation
and one or more of its directors, or between the corporation and any other
corporation, firm, association or other entity in which one or more of the
Corporation's directors are directors or officers, or are financially
interested, shall be either void or voidable for this reason alone or by reason
alone that such director or directors are present at the meeting of the Board
which approves such contract or transaction or that his or their votes are
counted for such purpose:
(1) If the fact of such common directorship, ownership or
financial interest is disclosed or known to the Board and the Board
approves such contract or transaction by a vote sufficient for such
purpose without counting the vote or votes of such interested director
or directors;
(2) If such common directorship, officership or financial
interest is disclosed or known to the shareholders entitled to vote
thereon, and such contract or transaction is approved by vote of the
shareholders; or
(3) If the contract or transaction is fair and reasonable as to
the Corporation at the time is approved by the Board or the
shareholders.
(b) Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board which approves such contract
or transaction.
741977.1
-3-
<PAGE>
ELEVENTH: (a) Any person made, or threatened to be made, a party to
any action or proceeding other than one by or in the rights of the Corporation
to procure a judgment in its favor, whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he, his
testator or intestate, is or was director or officer of the Corporation or of
any corporation which he served as such at the request of the Corporation, may
be indemnified by the Corporation against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees actually and
necessarily incurred by him as a result of such action or proceeding, or in
connection with any appeal therein, if such director or officer acted in good
faith, for a purpose which he reasonably believed to be in the best interest of
the Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) Any person made a party to an action by or in the right of
the Corporation to secure a judgment in its favor, by reason of the fact that
he, his testator or intestate, is or was a director or officer of the
Corporation, may be indemnified by the Corporation against reasonable expenses,
including attorneys' fees, actually and necessarily incurred by him in
connection with the defense of such action, or in connection with an appeal
therein, except in relation to matters as to which such director or officer is
adjudged to have breached his duty to the Corporation under Section 717 of the
Business Corporation Law. The indemnification authorized by this paragraph
ELEVENTH (b) shall not include (1) amounts paid in settling or otherwise
disposing of threatened action, or pending action, without court
741977.1
-4-
<PAGE>
approval, or (2) expenses incurred in defending a threatened action, or a
pending action which is settled or otherwise disposed of without court approval.
IN WITNESS WHEREOF, I have made, signed and acknowledged this
certificate this 25th day of February, 1977.
/s/ NATHAN RINGEL
----------------------------------
NATHAN RINGEL
111 Broadway
New York, New York 10006
741977.1
-5-
<PAGE>
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 25th day of February, 1977, before me personally came NATHAN
RINGEL, to me personally known and known to me to be the individual described in
and who executed in my presence the foregoing Certificate of Incorporation; and
he thereupon acknowledged to me that he had executed the same.
/s/ George Langberg
----------------------------------
Notary Public
741977.1
-6-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, SLAVIN INC.
Under Section 805 of the Business Corporation Law.
1. The name of the Corporation is McLaughlin, Slavin Inc. It has not
been changed at any time.
2. The Certificate of Incorporation of McLaughlin, Slavin Inc. was
filed by the Department of State on the 8th day of March, 1977.
3. The Certificate of Incorporation of McLaughlin, Slavin Inc. is
hereby amended pursuant to Section 801(b)7 of the Business Corporation Law to
increase the number of authorized shares, without par value, from 200, without
par value, to 3,000 without par value.
The Certificate of Incorporation of McLaughlin, Slavin Inc. is further
hereby amended pursuant to Section 801(b)14 of the Business Corporation Law to
add a new Article TWELFTH relating to the rights of the Corporation to purchase
shares of common stock from the holders thereof.
4. Article THIRD of the Certificate of Incorporation which sets forth
the number of authorized shares is hereby amended as follows:
741991.1
<PAGE>
"THIRD: The Corporation shall have the authority to issue 3,000
shares of common stock, without nominal or par value. All of which
shares shall be of the same class and identical with one another in
all respects and each share shall carry one vote."
5. The Certificate of Incorporation is hereby amended to set forth the
rights of the Corporation to purchase shares of common stock from the holders
thereof.
"TWELFTH: When Rights Arise. In order to enable the Corporation
to qualify for membership privileges on various securities exchanges,
board of trade, commodities exchanges, clearing corporations or
associations, and similar institutions located within and without the
United States, whether as a member corporation thereof or otherwise,
and to continue so qualified in good standing, and in order to insure
that the business of the Corporation will be carried on in a manner
consonant with the Corporation's responsibilities to the public as an
organization so qualified, the shares of Common Stock of the
Corporation shall be issued only in the name of the legal owner, and
no transfer of such shares shall be effected except on the stock books
of the Corporation upon surrender of the stock certificates duly
endorsed, and all shares of Common Stock of the Corporation shall at
all times be held subject to the conditions and restrictions set forth
in this Certificate of Incorporation, the provisions of which shall at
all times apply equally both to an original holder of shares and to
each and every subsequent holder thereof, and each holder of common
stock by acceptance of a
741991.1
-2-
<PAGE>
stock certificate representing such shares, agrees with the
Corporation and with each other holder of common stock, in
consideration of such agreement or each such other holder, to such
conditions and restrictions, including the following:
(a) No stockholder shall dispose of or transfer any of the
stock of the Corporation now or hereafter owned or held by him without
the consent, if required, of any Exchange, Board of Trade, clearing
corporation or other similar institution with which the Corporation
has member privileges.
(b) Any attempted or purported transfer of stock by any
stockholder in violation of the terms of this Certificate of
Incorporation shall be void and the Corporation shall reject and
refuse to transfer on the books any stock which may have been
transferred in violation of the provisions of this Certificate of
Incorporation, and said Corporation shall not recognize any person
receiving any stock as a stockholder, nor shall any such person have
any rights as a stockholder of the Corporation.
(c) The Corporation shall have the right and option to
redeem or convert to a fixed income security all or any part of the
outstanding shares of voting stock of the Corporation owned by any
stockholder required to be approved by the Board of Directors of the
New York Stock Exchange, Inc., as a Member, Allied Member or Approved
Person who ceases or fails to be so approved as may be necessary to
reduce such party's ownership of voting stock in the Corporation below
that level which would enable the stockholder to exercise controlling
influence over the management and policies of the Corporation. Such
redemption or conversion shall be on such terms and conditions and for
such consideration as the Board of Directors may from time to time
establish and as may be required by the New York Stock Exchange, Inc.
(d) Anything herein to the contrary notwithstanding, the
foregoing shall be subject to any stockholder's agreement approved by
the New York Stock Exchange, Inc.
6. The manner in which this amendment to the Certificate of
Incorporation of McLaughlin, Slavin Inc. was authorized was by the unanimous
written consent of all of the shareholders.
741991.1
-3-
<PAGE>
IN WITNESS WHEREOF we have signed this Certificate of Amendment on the
4th day of January, 1979 and we affirm the statements contained therein are true
under penalties of perjury.
/s/ JAMES J. MCLAUGHLIN
--------------------------------------------
James J. McLaughlin, President
/s/ JAMES C. MCLAUGHLIN
--------------------------------------------
James C. McLaughlin, Secretary
741991.1
-4-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, SLAVIN INC.
Under Section 805 of the Business Corporation Law.
1. The name of the Corporation is McLaughlin, Slavin Inc. It has not
been changed at any time.
2. The Certificate of Incorporation of McLaughlin, Slavin Inc. was
filed by the Department of State on the 8th day of March, 1977.
3. The Certificate of Incorporation of McLaughlin, Slavin Inc. is
hereby amended to provide restrictions upon the power of the Board of Directors
in accordance with Section 620 of the Business Corporation Law and it is further
amended to provide for the election of officers of the Corporation by the
Shareholders instead of the Board of Directors.
4. Article TWELFTH (c) is amended to read as follows:
"TWELFTH: (c) The Corporation shall have the right and option to
redeem or convert to a fixed income security all or any part of the
outstanding shares of voting stock of the Corporation owned by any
stockholder required to be approved by the Board of Directors of the
New York Stock Exchange, Inc., as a Member, Allied Member or Approved
Person who ceases or fails to be so approved as may be necessary to
reduce such party's ownership of voting stock in the Corporation below
that level which would enable the stockholder to exercise controlling
influence over the management and policies of the Corporation. Such
redemption or conversion shall be on such terms and conditions and for
such consideration as the shareholders may from time to time establish
and as may be required by the New York Stock Exchange, Inc."
741991.1
<PAGE>
Except as herein amended, Article TWELFTH shall remain in full force
and effect.
5. The Certificate of Incorporation is hereby further amended to
restrict the power of the Board of Directors by the addition of the following
provisions:
"THIRTEENTH: All managerial acts in the conduct of the corporate
affairs shall be authorized or consented to by the shareholders and
the board of directors shall have no discretion or power in connection
therewith."
6. The Certificate of Incorporation is hereby further amended to set
forth that officers shall be elected by the Shareholders instead of the Board of
Directors.
"FOURTEENTH: Election of Officers. All officers shall be elected
by the shareholders instead of the board of directors and shall hold
office for such term as may be prescribed by the shareholders."
7. The manner in which this Amendment to the Certificate of
Incorporation of McLaughlin, Slavin Inc. was authorized was by the unanimous
written consent of the holders of record of all outstanding shares of the stock
of the Corporation.
IN WITNESS WHEREOF, we have signed this Certificate of Amendment on
the 31st day of May, 1979 and we affirm that the statements contained therein
are true under penalty of perjury.
/s/ JAMES J. MCLAUGHLIN
----------------------------------------
James J. McLaughlin,
President
/s/ MARC S. PIVEN
----------------------------------------
Marc S. Piven, Secretary
741991.1
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, SLAVIN INC.
Under Section 805 of the Business Corporation Law.
1. The name of the Corporation is McLaughlin, Slavin Inc. It has not
been changed at any time.
2. The Certificate of Incorporation of McLaughlin, Slavin Inc. was
filed by the Department of State on the 8th day of March, 1977.
3. The Certificate of Incorporation of McLaughlin, Slavin Inc. is
hereby amended pursuant to Section 801(b)(1) of the Business Corporation Law.
4. Article FIRST of the Certificate of Incorporation is hereby amended
to read as follows:
"FIRST: The name of the Corporation is McLAUGHLIN, PIVEN, INC."
5. The manner in which this amendment to the Certificate of
Incorporation of McLaughlin, Slavin Inc. was authorized was by the unanimous
written consent of all the shareholders.
741991.1
<PAGE>
IN WITNESS WHEREOF, we have signed this Certificate of Amendment on
the 20th day of August, 1979 and we affirm the statements contained therein are
true under penalties of perjury.
/s/ JAMES J. MCLAUGHLIN
---------------------------------------
James J. McLaughlin, President
/s/ MARC S. PIVEN
---------------------------------------
Marc S. Piven, Secretary
741991.1
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, PIVEN INC.
Under Section 805 of the Business Corporation Law
************************
We, the undersigned, being respectively the Chairman of the Board and
Secretary of McLaughlin, Piven Inc., do hereby certify:
1. The name of the corporation is McLAUGHLIN, PIVEN INC. It was formed
under the name McLAUGHLIN, SLAVIN INC.
2. The Certificate of Incorporation was filed by the Department of
State on the 8th day of March, 1977.
3. (a) The Certificate of Incorporation is amended pursuant to Section
801(b)(1) of the Business Corporation Law to change the corporate name.
(b) To effect the foregoing, Article FIRST of the Certificate of
Incorporation is hereby amended to read as follows:
"FIRST: The name of the Corporation is McLAUGHLIN, PIVEN, VOGEL and
LoPRESTI, INC."
741991.1
<PAGE>
4. The amendment to the Certificate of Incorporation was authorized by
the unanimous written consent of the holders of all outstanding shares entitled
to vote on an amendment to the Certificate of Incorporation.
IN WITNESS WHEREOF, we have signed this Certificate on the 28th day of
April, 1982, and we affirm the statements contained therein as true under
penalties of perjury.
/s/ JAMES C. MCLAUGHLIN
----------------------------------
James C. McLaughlin
Chairman of the Board
/s/ MARC S. PIVEN
----------------------------------
Marc S. Piven
Secretary
741991.1
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
McLAUGHLIN, PIVEN, VOGEL AND LoPRESTI, INC.
Under Section 805 of the Business Corporation Law
*******************************
We, the undersigned, being respectively the President and the
Secretary of McLAUGHLIN, PIVEN, VOGEL and LoPRESTI, INC., do hereby certify:
1. The name of the corporation is "McLAUGHLIN, PIVEN, VOGEL and
LoPRESTI, INC." The corporation was formed under the name "McLAUGHLIN, SLAVIN
INC."
2. The Certificate of Incorporation was filed by the Department of
State on the 8th day of March, 1977.
3. (a) The Certificate of Incorporation is hereby amended pursuant to
Section 801(b)(1) of the Business Corporation Law to change the corporate name.
(b) To effect the foregoing, Article FIRST of the Certificate of
Incorporation is hereby amended to read as follows:
"FIRST: The name of the Corporation is McLAUGHLIN, PIVEN, VOGEL,
INC."
741991.1
<PAGE>
4. (a) The Certificate of Incorporation is amended pursuant to Section
801(b)(4) of the Business Corporation Law to change the post office address to
which the Secretary of State shall mail a copy of any process against the
corporation.
(b) To effect the foregoing, Article EIGHTH of the Certificates of
Incorporation is hereby amended to read as follows:
"EIGHTH: The Secretary of State is designated as the agent of the
corporation upon whom process in any action or proceeding may be
served. A copy of such process shall be mailed to:
Wofsey, Certilman, Haft, Lebow & Balin, Esqs.
805 Third Avenue
New York, New York 10022"
5. The above amendments to the Certificate of Incorporation were
authorized by the unanimous consent of the holders of all of the outstanding
shares entitled to vote on amendments to the Certificate of Incorporation.
IN WITNESS WHEREOF, we have signed this Certificate on the 15th day of
December, 1983, and we affirm the statements contained herein as true under
penalties of perjury.
/s/ MARC S. PIVEN
----------------------------------
Marc S. Piven, President
/s/ ALLAN M. VOGEL
----------------------------------
ALLAN M. VOGEL, Secretary
741991.1
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION OF
McLaughlin, Piven, Vogel Inc.
under Section 805 of the Business Corporation law
We, the undersigned, James Cecil McLaughlin, being the President and
Allan M. Vogel being the Secretary, respectively, of McLaughlin, Piven, Vogel
Inc., do hereby certify and set forth:
(1) The name of the corporation is:
McLaughlin, Piven, Vogel Inc.
(2) The Certificate of Incorporation of said Corporation was filed by
the Department of State of the State of New York on the 8th day of March, 1977,
under the name of McLaughlin, Slavin Inc.
(3) The amendment to the Certificate of Incorporation was authorized,
first by the Board of Directors, followed by an affirmative majority vote of the
holders, of all outstanding shares of stock with authority to vote thereon.
(a) To amend the Certificate of Incorporation as to change the
name of the corporation to McLaughlin, Piven, Vogel Securities, Inc.
Paragraph 1 of the Certificate of Incorporation is hereby amended
to read as follows:
(1) The name of the corporation is McLaughlin, Piven, Vogel
Securities, Inc.
IN WITNESS WHEREOF, I have signed this certificate on this 22nd day of
September, 1989, and affirm the statements made herein as true, under penalties
of perjury.
/s/ JAMES CECIL MCLAUGHLIN
---------------------------------------
James Cecil McLaughlin, President
/s/ ALLAN M. VOGEL
---------------------------------------
Allan M. Vogel, Secretary
741991.1
-3-
<PAGE>
BY-LAWS
of
MCLAUGHLIN, PIVEN, VOGEL INC.*
--------------------------------------
ARTICLE I. - OFFICES
--------------------
The principal office of the corporation shall be in the
of , County of New York, State of New
York. The Corporation may also have offices at such other places within or
without the State of New York as the board may from time to time determine or
the business of the corporation may require.
ARTICLE II. - SHAREHOLDERS
--------------------------
1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at the principal office of the
corporation or at such place within or without the State of New York as the
board shall authorize.
2. ANNUAL MEETING.
The annual meeting of the shareholders shall be held on the 2nd day of
April at _______ A.M. in each year if not a legal holiday, and, if a legal
holiday, then on the next business day following at the same hour, when the
shareholders shall elect a board and transact such other business as may
properly come before the meeting.
3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the board or by the
president and shall be called by the president or the secretary at the request
in writing of a majority of the board or at the request in writing by
shareholders owning a majority in amount of the shares issued and outstanding.
Such request shall state the purpose or purposes of the proposed meeting.
Business transacted at a special meeting shall be confined to the purposes
stated in the notice.
- -------------------
* The name of this company is now McLaughlin, Piven, Vogel Securities Inc.
743365.1
By-Laws A
<PAGE>
4. FIXING RECORD DATE.
For the purpose of determining the shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or to express
consent to or dissent from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the board shall
fix, in advance, a date as the record date for any such determination of
shareholders. Such date shall not be more than fifty nor less than ten days
before the date of such meeting, nor more than fifty days prior to any other
action. If no record date is fixed it shall be determined in accordance with the
provisions of law.
5. NOTICE OF MEETINGS OF SHAREHOLDERS.
Written notice of each meeting of shareholders shall state the purpose or
purposes for which the meeting is called, the place, date and hour of the
meeting and unless it is the annual meeting, shall indicate that it is being
issued by or at the direction of the person or persons calling the meeting.
Notice shall be given either personally or by mail to each shareholder entitled
to vote at such meeting, not less than ten nor more than fifty days before the
date of the meeting. If action is proposed to be taken that might entitle
shareholders to payment for their shares, the notice shall include a statement
of that purpose and to that effect. If mailed, the notice is given when
deposited in the United States mail, with postage thereon prepaid, directed to
the shareholder at his address as it appears on the record of shareholders, or,
if he shall have filed with the secretary a written request that notice to him
be mailed to some other address, then directed to him at such other address.
6. WAIVERS.
Notice of meeting need not be given to any shareholder who signs a waiver
of notice, in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him.
7. QUORUM OF SHAREHOLDERS.
Unless the certificate of incorporation provides otherwise, the holders of
a majority of the shares entitled to vote thereat shall constitute a quorum at a
meeting of shareholders for the transaction of any business, provided that when
a specified item of business is required to be voted on by a class or classes,
the holders of a majority of the shares of such class or classes shall
constitute a quorum for the transaction of such specified item of business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholders.
743365.1
By-Laws B
<PAGE>
The shareholders present may adjourn the meeting despite the absence of a
quorum.
8. PROXIES.
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except as otherwise provided by law.
9. QUALIFICATION OF VOTERS.
Every shareholder of record shall be entitled at every meeting of
shareholders to one vote for every share standing in his name on the record of
shareholders, unless otherwise provided in the certificate of incorporation.
10. VOTE OF SHAREHOLDERS.
Except as otherwise required by statute or by the certificate of
incorporation:
(a) directors shall be elected by a plurality of the votes cast at a
meeting of shareholders by the holders of shares entitled to vote in the
election;
(b) all other corporate action shall be authorized by a majority of the
votes cast.
11. WRITTEN CONSENT OF SHAREHOLDERS.
Any action that may be taken by vote may be taken without a meeting on
written consent, setting forth the action so taken, signed by the holders of all
the outstanding shares entitled to vote thereon or signed by such lesser number
of holders as may be provided for in the certificate of incorporation.
ARTICLE III. - DIRECTORS
------------------------
1. BOARD OF DIRECTORS.
Subject to any provision in the certificate of incorporation the business
of the corporation shall be managed by its board of directors, each of whom
shall be at least 18 years of age and be shareholders.
743365.1
By-Laws C
<PAGE>
2. NUMBER OF DIRECTORS.
The number of directors shall be four. When all of the shares are owned by
less than three shareholders, the number of directors may be less than three but
not less than the number of shareholders.
3. ELECTION AND TERM OF DIRECTORS.
At each annual meeting of shareholders, the shareholders shall elect
directors to hold office until the next annual meeting. Each director shall hold
office until the expiration of the term for which he is elected and until his
successor has been elected and qualified, or until his prior resignation or
removal.
4. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists, unless otherwise
provided in the certificate of incorporation. Vacancies occurring by reason of
the removal of directors without cause shall be filled by vote of the
shareholders unless otherwise provided in the certificate of incorporation. A
director elected to fill a vacancy caused by resignation, death or removal shall
be elected to hold office for the unexpired term of his predecessor.
5. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
shareholders or by action of the board. Directors may be removed without cause
only by vote of the shareholders.
6. RESIGNATION.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
7. QUORUM OF DIRECTORS.
Unless otherwise provided in the certificate of incorporation, a majority
of the entire board shall constitute a quorum for the transaction of business or
of any specified item of business.
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8. ACTION OF THE BOARD.
Unless otherwise required by law, the vote of a majority of the directors
present at the time of the vote, if a quorum is present at such time, shall be
the act of the board. Each director present shall have one vote regardless of
the number of shares, if any, which he may hold.
9. PLACE AND TIME OF BOARD MEETINGS.
The board may hold its meetings at the office of the corporation or at such
other places, either within or without the State of New York, as it may from
time to time determine.
10. REGULAR ANNUAL MEETING.
A regular annual meeting of the board shall be held immediately following
the annual meeting of shareholders at the place of such annual meeting of
shareholders.
11. NOTICE OF MEETINGS OF THE BOARD, ADJOURNMENT.
(a) Regular meetings of the board may be held without notice at such time
and place as it shall from time to time determine. Special meetings of the board
shall be held upon notice to the directors and may be called by the president
upon three days notice to each director either personally or by mail or by wire;
special meetings shall be called by the president or by the secretary in a like
manner on written request of two directors. Notice of a meeting need not be
given to any director who submits a waiver of notice whether before or after the
meeting or who attends the meeting without protesting prior thereto or at its
commencement, the lack of notice to him.
(b) A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of the
adjournment shall be given all directors who were absent at the time of the
adjournment and, unless such time and place are announced at the meeting, to the
other directors.
12. CHAIRMAN.
At all meetings of the board the president, or in his absence, a chairman
chosen by the board shall preside.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution adopted by a majority of the entire board, may
designate from among its members an executive committee and other committees,
each consisting of three or more directors. Each such committee shall serve at
the pleasure of the board.
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14. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance,
at each regular or special meeting of the board may be authorized. Nothing
herein contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE IV. - OFFICERS
----------------------
1. OFFICES, ELECTION, TERM.
(a) Unless otherwise provided for in the certificate of incorporation, the
board may elect or appoint a president, one or more vice-presidents, a secretary
and a treasurer, and such other officers as it may determine, who shall have
such duties, powers and functions as hereinafter provided.
(b) All officers shall be elected or appointed to hold office until the
meeting of the board following the annual meeting of shareholders.
(c) Each officer shall hold office for the term for which he is elected or
appointed and until his successor has been elected or appointed and qualified.
2. REMOVAL, RESIGNATION, SALARY, ETC.
(a) Any officer elected or appointed by the board may be removed by the
board with or without cause.
(b) In the event of the death, resignation or removal of an officer, the
board in its discretion may elect or appoint a successor to fill the unexpired
term.
(c) Any two or more offices may be held by the same person, except the
offices of president and secretary.
(d) The salaries of all officers shall be fixed by the board.
(e) The directors may require any officer to give security for the faithful
performance of his duties.
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3. PRESIDENT.
The president shall be the chief executive officer of the corporation; he
shall preside at all meetings of the shareholders and of the board; he shall
have the management of the business of the corporation and shall see that all
orders and resolutions of the board are carried into effect.
4. VICE-PRESIDENTS.
During the absence or disability of the president, the vice-president, or
if there are more than one, the executive vice-president, shall have all the
powers and functions of the president. Each vice-president shall perform such
other duties as the board shall prescribe.
5. SECRETARY.
The secretary shall:
(a) attend all meetings of the board and of the shareholders;
(b) record all votes and minutes of all proceedings in a book to be kept
for that purpose;
(c) give or cause to be given notice of all meetings of shareholders and of
special meetings of the board;
(d) keep in safe custody the seal of the corporation and affix it to any
instrument when authorized by the board;
(e) when required, prepare or cause to be prepared and available at each
meeting of shareholders a certified list in alphabetical order of the names of
shareholders entitled to vote thereat, indicating the number of shares of each
respective class held by each;
(f) keep all the documents and records of the corporation as required by
law or otherwise in a proper and safe manner;
(g) perform such other duties as may be prescribed by the board.
6. ASSISTANT-SECRETARIES.
During the absence or disability of the secretary, the assistant-secretary,
or if there are more than one, the one so designated by the secretary or by the
board, shall have all the powers and functions of the secretary.
743365.1
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7. TREASURER.
The treasurer shall:
(a) have the custody of the corporate funds and securities;
(b) keep full and accurate accounts of receipts and disbursements in the
corporate books;
(c) deposit all money and other valuables in the name and to the credit of
the corporation in such depositories as may be designated by the board;
(d) disburse the funds of the corporation as may be ordered or authorized
by the board and preserve proper vouchers for such disbursements;
(e) render to the president and board at the regular meetings of the board,
or whenever they require it, an account of all his transactions as treasurer and
of the financial condition of the corporation;
(f) render a full financial report at the annual meeting of the
shareholders if so requested;
(g) be furnished by all corporate officers and agents at his request, with
such reports and statements as he may require as to all financial transactions
of the corporation;
(h) perform such other duties as are given to him by these by-laws or as
from time to time are assigned to him by the board or the president.
8. ASSISTANT-TREASURER.
During the absence or disability of the treasurer, the assistant-treasurer,
or if there are more than one, the one so designated by the secretary or by the
board, shall have all the powers and functions of the treasurer.
9. SURETIES AND BONDS.
In case the board shall so require, any officer or agent of the corporation
shall execute to the corporation a bond in such sum and with such surety or
sureties as the board may direct, conditioned upon the faithful performance of
his duties to the corporation and including responsibility for negligence and
for the accounting for all property, funds or securities of the corporation
which may come into his hands.
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ARTICLE V. - CERTIFICATES FOR SHARES
------------------------------------
1. CERTIFICATES.
The shares of the corporation shall be represented by certificates. They
shall be numbered and entered in the books of the corporation as they are
issued. They shall exhibit the holder's name and number of shares and shall be
signed by the president or a vice-president and the treasurer or the secretary
and shall bear the corporate seal.
2. LOST OR DESTROYED CERTIFICATES.
The board may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the corporation,
alleged to have been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the board may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
give the corporation a bond in such sum and with such surety or sureties as it
may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
3. TRANSFERS OF SHARES.
(a) Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered on
the transfer book of the corporation which shall be kept at its principal
office. No transfer shall be made within ten days next preceding the annual
meeting of shareholders.
(b) The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of New York.
4. CLOSING TRANSFER BOOKS.
The board shall have the power to close the share transfer books of the
corporation for a period of not more than ten days during the thirty day period
immediately preceding (1) any shareholders' meeting, or (2) any date upon which
shareholders shall be called upon to or have a right to take action without a
meeting, or (3) any date fixed for the payment of a dividend or any other form
of distribution, and only those shareholders of record at the time the transfer
743365.1
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books are closed, shall be recognized as such for the purpose of (1) receiving
notice of or voting at such meeting, or (2) allowing them to take appropriate
action, or (3) entitling them to receive any dividend or other form of
distribution.
ARTICLE VI. - DIVIDENDS
-----------------------
Subject to the provisions of the certificate of incorporation and to
applicable law, dividends on the outstanding shares of the corporation may be
declared in such amounts and at such time or times as the board may determine.
Before payment of any dividend, there may be set aside out of the net profits of
the corporation available for dividends such sum or sums as the board from time
to time in its absolute discretion deems proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the board shall think
conducive to the interests of the corporation, and the board may modify or
abolish any such reserve.
ARTICLE VII. - CORPORATE SEAL
-----------------------------
The seal of the corporation shall be circular in form and bear the name of
the corporation, the year of its organization and the words "Corporate Seal, New
York." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be a facsimile, engraved or printed.
ARTICLE VIII. - EXECUTION OF INSTRUMENTS
----------------------------------------
All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other person
or persons as the board may from time to time designate.
ARTICLE IX. - FISCAL YEAR
--------------------------
The fiscal year shall begin the first day of in each year.
ARTICLE X. - REFERENCES TO CERTIFICATE OF INCORPORATION
-------------------------------------------------------
Reference to the certificate of incorporation in these by-laws shall
include all amendments thereto or changes thereof unless specifically excepted.
743365.1
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ARTICLE XI. - BY-LAW CHANGES
----------------------------
AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.
(a) Except as otherwise provided in the certificate of incorporation the
by-laws may be amended, repealed or adopted by vote of the holders of the shares
at the time entitled to vote in the election of any directors. By-laws may also
be amended, repealed or adopted by the board but any by-law adopted by the board
may be amended by the shareholders entitled to vote thereon as hereinabove
provided.
(b) If any by-law regulating an impending election of directors is adopted,
amended or repealed by the board, there shall be set forth in the notice of the
next meeting of shareholders for the election of directors the by-law so
adopted, amended or repealed, together with a concise statement of the changes
made.
743365.1
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that McLaughlin, Piven, Vogel
Securities, Inc., a New York corporation (the "Sponsor"), and each of the
undersigned officers and directors of the Sponsor, hereby constitutes and
appoints James C. McLaughlin and Allan M. Vogel, jointly and severally, his or
its attorneys-in-fact, each with the power of substitution for him or it in any
and all capacities, to sign on his or its behalf and in his or its name and to
file with the Securities and Exchange Commission a registration statement on
Form S-6 under the Securities Act of 1933, as amended, or any successor form or
forms, and the rules and regulations promulgated thereunder, and any and all
amendments thereto, exhibits and other appropriate documents in connection
therewith, relating to the proposed registration and issuance of units of
successive series of unit investment trusts of every kind and nature, including
but not limited to McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle
Trust, and each subsequent series of such Trust, as any attorney-in-fact shall
deem appropriate or similar titles, and hereby grants unto each of said
attorneys-in-fact full power and authority to do and perform each and every
lawful act and deed necessary to effectuate such registration statements, and to
maintain the effectiveness of registration statements for such unit investment
trusts, that each or any of them may lawfully do or cause to be done.
[SIGNATURES ON FOLLOWING PAGE]
741947.1
<PAGE>
IN WITNESS WHEREOF, the Sponsor has caused this power of attorney to
be executed in its name by its Chief Executive Officer, and the undersigned
directors and officers have hereunto set their hands and seals this 6th day of
August, 1998.
(Sponsor)
MCLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
/s/ JAMES C. MCLAUGHLIN
----------------------------------------
James C. McLaughlin
Chairman of the Board,
Chief Executive Officer and Director
/s/ ALLAN M. VOGEL
----------------------------------------
Allan M. Vogel
President, Chief Financial Officer
Secretary and Director
/s/ JAMES J. MCLAUGHLIN
----------------------------------------
James J. McLaughlin
Senior Vice President
and Director
On this 6th day of August, 1998 personally appeared before me, a
Notary Public in and for said County and State, the persons named above who are
known to me to be the persons whose names and signatures are affixed to the
foregoing Power of Attorney and who acknowledged the same to be their voluntary
act and deed for the intents and purposes therein set forth.
/s/CARLA VOGEL
--------------------------------------
Notary Public
Carla Vogel
Notary Public, State of New York
No. 02V05019906
Qualified in Bronx County
Commission Expires November 1, 1999
741947.1
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