As filed with the Securities and Exchange Commission on December 1, 1998
Registration No. 333-
===============================================================================
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
---------------------
<TABLE>
<S> <C> <C> <C>
A. EXACT NAME OF TRUST:
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth Strategy 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:
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
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of McLaughlin, Piven, Vogel Family of
Trusts, The Pinnacle Growth Strategy 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.
</TABLE>
/ / 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.
===============================================================================
783523.1
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS, THE PINNACLE GROWTH STRATEGY 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)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. Organization And General Information
<S> <C> <C>
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
</TABLE>
783523.1
-i-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C> <C>
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
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
</TABLE>
783523.1
-ii-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C> <C>
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
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
</TABLE>
783523.1
-iii-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C> <C>
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
</TABLE>
783523.1
-iv-
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 1, 1998
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
- --------------------------------------------------------------------------------
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS
- --------------------------------------------------------------------------------
THE PINNACLE GROWTH STRATEGY TRUST
A unit investment trust whose investment objective is to maximize total return
through a combination of capital appreciation and current dividend income by
creating a fixed portfolio of the ten stocks which have had the highest number
of shares traded on the Nasdaq* during the calendar year ending December 31,
1998. The Trust will terminate in approximately fifteen months. 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.
The Sponsors are McLaughlin, Piven, Vogel Securities, Inc. and Reich & Tang
Distributors, Inc.
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 and Part B must be distributed together.
* The National Association of Securities Dealers Automated Quotations System
("Nasdaq") 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.
================================================================================
================================================================================
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED JANUARY __, 1999
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
781452.2
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
As of January __, 1999, the business day prior to the Initial Date of Deposit.
<TABLE>
<S> <C> <C>
Initial Date of Deposit of Minimum Value of Trust: The Trust may
Securities in the Trust: . . . . . . . . .January __, 1999 be terminated if the value of the Trust is
Aggregate Value of Securities:. . . . . . . $__ less than 40% of the aggregate value of
Number of Units: . . . . . . . . . . . . . . . the Securities at the completion of the
Fractional Undivided Interest in initial offering period.
Trust: . . . . . . . . . . . . . . . . .1/ Cusip Numbers: Cash:
Public Offering Price per 100 Units: Reinvestment:
Aggregate Value of Securities in Trust . .$ Trustee: The Chase Manhattan Bank
Plus Estimated Organization Costs*. . . . $ Trustee's Fee per 100 Units: $.______
Divided By ___ Units (times 100). . . . . $ Other Fees and Expenses per 100 Units:
Plus Sales Charge of 3.995% of Public $___
Offering Price . . . . . . . . . . . . $ Sponsors: McLaughlin, Piven, Vogel
Public Offering Price . . . . . . . . . . $1,000.00 Securities, Inc. and Reich & Tang
Sponsor's Repurchase Price Distributors, Inc.
And Redemption Price per Agent for Sponsors: Reich & Tang
100 Units++:........................... $ Distributors, Inc.
Evaluation Time: 4:00 p.m. New York Time. Sponsors' Portfolio Supervisory, Book
Minimum Income or Principal keeping and Administrative Fee per
Distribution per 100 Units: $1.00 100 Units: Maximum of [$.30] (see
Liquidation Period: Beginning 5 days prior to the "Trust Expenses and Charges" in Part
Mandatory Termination Date. B).
Mandatory Termination Date: The earlier of April __, Expected Settlement Date of Securities in
2000 or the disposition of the last Security in the Trust. the Trust: January __, 1999
Rollover Notification Date**: March __, 2000 or Record Dates: June 15 and December 15
another date as determined by the Sponsors. Distribution Dates: June 31 and December
30
[Reinvestment Sales Charge: [1.00%]]
</TABLE>
------------------
* Investors will reimburse the Sponsors for all or a portion of the costs
incurred in organizing and offering the Trust. These "organization costs"
include 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 estimated organization costs will be
paid to the Sponsors from the assets of the Trust as of the close of the initial
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 amount, only the estimated organization costs included in the
Public Offering Price will be reimbursed to the Sponsors.
** The date by which a Rollover Unitholder must elect to reinvest its
terminating distribution in an available series of the Pinnacle Trusts, if
offered (see "Trust Administration--Trust Termination").
+ On the Initial Date of Deposit, the only cash in the Income or Principal
Accounts will represent the estimated organization costs. Anyone purchasing
Units after January __, 1999 will pay a Public Offering Price which includes a
pro rata share of any cash in such Accounts.
++ A Unitholder redeeming over 2,500 Units may request redemptions be made
in-kind. The Trustee will distribute securities to the Unitholder's McLaughlin,
Piven, Vogel 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 for the Trust will be reduced to reflect its
estimated organization cost. See "Liquidity--Trustee Redemption" in Part B.
A-2
781452.2
<PAGE>
INVESTMENT OBJECTIVE. The Trust seeks to maximize total return through a
combination of capital of appreciation and current dividend income. There is no
guarantee that the investment objective of the Trust will be achieved.
STRATEGY OF PORTFOLIO SELECTION. The Trust seeks to achieve its investment
objective by investing in a portfolio of the ten stocks which have had the
highest number of shares traded on the Nasdaq over the calendar year ending
December 31, 1998. This strategy consists of a 4-step selection process:
Step 1: Identify all the stocks listed on the Nasdaq.
Step 2: Calculate the number of shares traded daily, for each
company listed on the Nasdaq, on each day the Nasdaq was
open over the most recent twelve-month calendar year.
Step 3: Select the ten stocks which have traded the highest
number of shares over the calendar year immediately
preceding the Initial Date of Deposit of this Trust.
Step 4: Of the ten stocks selected for the Trust, weigh the top
five stocks with the highest volume of trading three times
more than the lower five stocks.
DESCRIPTION OF PORTFOLIO. The Portfolio contains 10 issues of common stock.
_____ issues are domestic companies and the remaining ___ issues are foreign
companies. 100% of the issues are represented by the Sponsors' contracts to
purchase. All of the stocks are listed on the Nasdaq. Based upon the principal
business of each issuer and current market values, the following industries are
represented in the Portfolio: Technology, __%; _________, __%; _________, __%;
_________, __%; _________, __%;_________, __%; _________, __%; and _________,
__%. [The Trust is concentrated in the technology industry.] 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 total
assets of the portfolio.
RISK CONSIDERATIONS. Unitholders can lose money by investing in this Trust. The
value of the Units and the Securities in the portfolio can each decline in
value. An investment in Units of the Trust should be made with an understanding
of the following risks:
o Since the portfolio of the Trust is fixed and "not managed", the
Sponsors can sell Securities only in the following three
circumstances: (i) at the Trust's termination, (ii) in order to meet
redemptions, or (iii) under extraordinary conditions which may
include when an issuer goes into bankruptcy. As a result, the price
at which each Security is sold may not be the highest price it
attained during the life of the Trust.
o When cash or a letter of credit is deposited with instructions to
purchase securities in order to create additional Units, an increase
in the price of a particular security between the time of deposit and
the time that securities are purchased will cause the Units to be
comprised of less of that security and more of the remaining
securities. In addition, brokerage fees incurred in purchasing the
Securities will be an expense of the Trust.
o [A decline in the value of the Securities during the initial offering
period may require additional Securities to be sold in order to
reimburse the Sponsors for organization costs. This would result in a
decline in value of the Unit. Include only if Sponsors are buying
securities for org expenses.]
o 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.
o An investment in common stocks include 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).
o All of the Securities are currently listed on the Nasdaq stock
market. The existence of a liquid trading market for certain
Securities may depend on whether dealers will make a market in such
Securities. There can be no assurance that a market will be made for
any of the Securities, that
A-3
781452.2
<PAGE>
any market for the Securities will be maintained or that any such
market will be or remain liquid. The price at which the Securities
may be sold and the value of the Trust will be adversely affected if
trading markets for the securities are limited or absent.
o There is no assurance that any dividends will be declared or paid in
future on the Securities.
o Since the Nasdaq is composed of domestic and foreign companies, the
Trust may have stocks of foreign issuers. An investor should be aware
of the risks involved in an investment in foreign companies. These
risks include (i) future foreign political and economic developments
and (ii) different legal systems and foreign government laws or
restrictions.
o Since the Trust is concentrated in stocks which derive a substantial
portion of their income from the technology industry, investors
should be familiar with the risks associated with the technology
industry which may include greater government regulations and
products that may become obsolete.
o Investors should also consider the greater risk of the Trust's
concentration and the effect on their investment versus a more
diversified portfolio. Investors should compare returns available in
less concentrated portfolios before making an investment decision.
PUBLIC OFFERING PRICE. On the Initial Date of Deposit, the Public Offering Price
per 100 units of the Trust is calculated by:
o dividing the aggregate value of the underlying securities and cash
held in the Trust by the number of units outstanding;
o adding a sales charge of 3.995% (______% of the net amount
invested); and
o multiplying the result by 100.
Afterwards, during the initial offering period, the Public Offering Price per
100 units will include a pro rata share of cash in 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. 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. During the initial offering
period, orders involving at least $100,000 will be entitled to a volume discount
from the Public Offering Price.
ESTIMATED NET ANNUAL DISTRIBUTIONS. The estimated net annual distributions to
Unitholders per 100 Units (based on the most recent quarterly or semi-annual
ordinary dividend distributed with respect to the Securities) as of ___________,
1999 was $________. This estimate will vary with (i) changes in the Trust's fees
and expenses, (ii) actual dividends received, and (iii) 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 received 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.
A-4
781452.2
<PAGE>
MARKET FOR UNITS. Units may be sold at any time to the Sponsors or the Trustee
without fee or penalty. The Sponsors intend to repurchase Units from Unitholders
throughout the life of the Trust at prices based upon the market value of the
underlying Securities. The Sponsors are not obligated to maintain a market and
may stop doing so without prior notice for any business reason. If a market is
not maintained, a Unitholder will be able to redeem his Units with the Trustee
at the same price. 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. The Trust will terminate in approximately fifteen months. At that
time, investors may choose one of the following three options:
o receive their terminating distribution in-kind, if they own at
least 2,500 Units;
o receive cash upon the liquidation of their pro rata share of the
Securities; or
o reinvest in a subsequent series of the Pinnacle Trusts (if one is
offered), at a reduced sales charge.
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. When Unitholders make this election, their 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.
REINVESTMENT PLAN. Unitholders may elect to automatically reinvest any
distributions they may receive (except the final distribution made at
termination) 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. with principal offices
at 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 Growth
Strategy Trust. (See "Public Offering--Distribution of Units" in Part B).
A-5
781452.2
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE GROWTH STRATEGY TRUST
STATEMENT OF FINANCIAL CONDITION, AS OF JANUARY __, 1999
ASSETS
<TABLE>
<S> <C>
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost $_______) (Note 1).......... $ _______
Cash..................................................................................... ___
---------------------
Total.................................................................................... $ _______
=====================
LIABILITIES AND INTEREST OF UNITHOLDERS
Reimbursement to Sponsors for Organization Costs (Note 2)................................ $ ___
Interest of Unitholders - Units of Fractional
Undivided Interest Outstanding (Pinnacle Trust: ______ Units)...................... _______
---------------------
Total.................................................................................... $ _______
=====================
Net Asset Value per Unit................................................................. $ ____
=====================
</TABLE>
- -------------------------
Notes to Statement of Financial Condition:
The preparation of financial statements in accordance with generally
accepted accounting principles requires Trust management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
(1) 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, jointly sponsored by McLaughlin, Piven, Vogel Securities, Inc. and
Reich & Tang Distributors, Inc., the Sponsors, is maximize total return through
a combination of capital appreciation and current dividend income. On January
__, 1999, 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 $400,000 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 January __, 1999. The Trust will
terminate on April __, 2000 or earlier under certain circumstances as further
described in the Prospectus.
(2) A portion of the Public Offering Price consists of cash in an amount
sufficient to reimburse the Sponsors for the per Unit portion of all or part 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.
A-6
781452.2
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE GROWTH STRATEGY TRUST
PORTFOLIO
AS OF JANUARY __, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Market Value of
Stocks as a Market Cost of
Portfolio Number of Name of Issuer (1) Ticker Percentage Value per Securities to
No. Shares Symbol of the Trust (2) Share the Trust (3)
- --------- --------- ------------------ ------ ---------------- --------- ---------------
1 % $ $
2
3
4
5
6
7
8
9
10 -------------- ---------------
Total Investment in Securities % $
============== ===============
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on January __,
1999. All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be January __, 1999.
(2) Based on the cost of the Securities to the Trust.
(3) 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' Loss
on the Initial Date of Deposit is $___.
The accompanying notes form an integral part of the Financial Statements.
A-7
781452.2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSORS AND TRUSTEE
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY TRUST
We have audited the accompanying statement of Financial Condition of
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth Strategy Trust,
including the Portfolio, as of January __, 1999. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation with The Chase Manhattan Bank, Trustee, of an irrevocable letter of
credit deposited for the purchase of securities, as shown in the financial
statement as of January __, 1999. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of McLaughlin, Piven, Vogel
Family of Trusts, The Pinnacle Growth Strategy Trust, at January __, 1999, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
January __, 1999
A-8
781452.2
<PAGE>
[This page intentionally left blank]
A-9
781452.2
<PAGE>
- --------------------------------------------------------------------------------
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS
- --------------------------------------------------------------------------------
THE PINNACLE GROWTH STRATEGY TRUST
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
DESCRIPTION OF THE TRUST
ORGANIZATION. The Trust was created under the laws of the State of New
York pursuant to a 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, (i) the Sponsors deposited with the
Trustee common stock, including 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, and (ii) the Trustee,
in exchange for the Securities, registered on the registration books of the
Trust the Sponsors' ownership of all Units of 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 Trust Indenture.
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
B-1
781452.2
<PAGE>
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 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).
INVESTMENT OBJECTIVE. The investment objective of the Trust is to maximize
total return through a combination of capital appreciation and current dividend
income. There is no guarantee that the investment objective of the Trust will be
achieved. 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. 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.
STRATEGY OF PORTFOLIO SELECTION. The Trust seeks to achieve its investment
objective by investing in a fixed portfolio of the ten stocks which have had the
highest number of shares traded on the Nasdaq during the calendar year ending
December 31, 1998. The stocks are not equally weighted. Instead, the top five
stocks with the highest volume of trading are weighted three times more than the
lower five stocks. This rate is historical.
THE SECURITIES. Each of the Securities is listed on the Nasdaq. Trading on
the Nasdaq Stock Market began in February 1971. Nasdaq stands for the National
Association of Securities Dealers Automated Quotations Systems. Nasdaq is an
electronic dealer exchange (there is no physical trading floor) on which dealers
trade securities by setting a buy and sell price. On Nasdaq, trading is executed
through a computer and telecommunications network and trades more shares per day
than any other major United States market. On average, in 1997, there were
approximately 647 million shares traded each day on Nasdaq. Approximately 5,400
domestic and foreign companies are listed on the Nasdaq. The Nasdaq Stock Market
is the United States' second-largest securities market after the New York Stock
Exchange. Nasdaq's share volume reached over 163.9 billion shares in 1997 and
dollar volume reached 4.4 trillion. In 1997, Nasdaq share volume was greater
than that of all other U.S. stock markets. In addition, in 1997 Nasdaq listed
83% of U.S. initial public offerings - that is 5 times more than any other U.S.
stock market.
The Nasdaq stock market is operated by the Nasdaq Stock Market, Inc., an
independent subsidiary of the National Association of Securities Dealers, Inc.
(NASD). Companies listed on the Nasdaq are separated into two major
classifications, the Nasdaq SmallCap Market, for small to medium-sized
companies, and the Nasdaq National Market, for larger companies with higher
capitalization. The Nasdaq Stock Market includes companies of every type and
every size, in every stage of development. Although companies listed on Nasdaq
represent a broad spectrum of industries including agriculture, mining,
construction, manufacturing, transportation, retail, banking and insurance, just
to name a few, the greatest industry
B-2
781452.2
<PAGE>
concentrations of companies listed on the Nasdaq are in information technology,
telecommunications, pharmaceuticals, biotechnology, finance, banking and
insurance.
The recent acquisition by the NASD of the American Stock Exchange (AMEX),
a floor-based trading system, has not altered or affected the Nasdaq system.
Each market will continue to function as an independent subsidiary.
B-3
781452.2
<PAGE>
The following table compares the actual performance of the Nasdaq against
the strategy of this Trust in each of the past 25 years. The table is based on
hypothetical data representing the total return of a $10,000 investment
utilizing the Trust's strategy.
COMPARISON OF TOTAL RETURNS(1)
BASED ON A HYPOTHETICAL $10,000 INVESTMENT
For Calendar Years ending December 31st
(Total Returns include sales charges, commissions, taxes and
other expenses)
Annual Cumulative
Total Return Total Return
Calendar Year Ended Nasdaq of Strategy of Strategy
------------------- ------ ----------- -----------
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
(1) The Total Return represents the sum of Appreciation and Actual Dividend
Yield: (i) Appreciation is calculated by subtracting the market value of
these stocks as of the first trading day on the Nasdaq in a given calendar
year from the market value of those stocks as of the last trading day in
that calendar year, and dividing the result by the market value of the
stocks as of the first trading day in that calendar year, and (ii) Actual
Dividend Yield is calculated by adding the total dividends received on the
stocks in the calendar year and dividing the result by the market value of
the stocks as of the first trading day in that calendar year. The top 5
stocks are then weighted 3 times more than the lower 5 stocks for
inclusion in the Trust. Total Return for Hypothetical Strategy is net of
sales charges (3.995% for the first year, ________% for each subsequent
year) and estimated expenses of .___%.
These results represent past performance and should not be considered
indicative of future results of this 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. Trust performance will differ from the Hypothetical Strategy
because (i) of commissions, (ii) the portfolio is established and
liquidated at different times during the year, (iii) stocks may be
purchased and sold at prices different from those used in determining unit
price, (iv) the Trust may not be fully invested at all times, and (v)
stocks may not be weighted equally. The Hypothetical Strategy may have
been concentrated in different industries than this Trust.
B-4
781452.2
<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.
In the event no substitution 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. 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 or distributed during the Liquidation
Period. 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
B-5
781452.2
<PAGE>
Securities in the Trust. 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 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 covered by the 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.
B-6
781452.2
<PAGE>
[TECHNOLOGY INDUSTRY. The Trust may be considered to be concentrated in
the common stock of companies engaged in the technology industry. As discussed,
the value of the Units of the Trust may be susceptible to various factors
affecting this industry. Companies in the rapidly changing field of technology
face special risks. For example, their products or services may not prove
commercially successful or may become obsolete quickly. As such, the Trust may
not be an appropriate investment for individuals who are not long-term investors
and who, their primary objective, require safety of principal or stable income
from their investments. The technology and technology-related industries may be
subject to greater governmental regulation than many other industries and
changes in governmental policies and the need for regulatory approvals may have
a material adverse effect on these industries. Additionally, companies in these
industries may be subject to risks of developing technologies, competitive
pressures and other factors and are dependent upon consumer and business
acceptance as new technologies evolve.]
The Sponsors believe that the information summarized above for the
[technology industry] 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.
FOREIGN SECURITIES. Nasdaq includes securities of issuers domiciled
outside of the United States. Investing in securities of foreign entities
involves certain risks not involved in domestic investments, including, but not
limited to:
o future foreign political and economic developments, and
o different legal systems and possible imposition of exchange controls
or other foreign government laws or restrictions.
With respect to certain foreign countries, there is the possibility of
expropriation of assets, confiscatory taxation, difficulty in obtaining or
enforcing a court judgment, economic, political or social instability or
diplomatic developments that could affect investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross domestic product, rates of
inflation, capital reinvestment, resources, self-sufficiency and balance of
payments position. Certain foreign investments also may be subject to foreign
withholding taxes. These risks often are heightened for investments in smaller,
emerging capital markets. Finally, accounting, auditing and financial reporting
standards in foreign countries are not necessarily equivalent to U.S. standards
and therefore disclosure of certain material information may not be made.
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 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.
B-7
781452.2
<PAGE>
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 change the rate would
adversely affect the after-tax return to investors that can take advantage of
the deduction. 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 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.
PUBLIC OFFERING
OFFERING PRICE. The calculation of the Public Offering Price of the Trust
is based largely on the aggregate value of the Securities. 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
last sale price 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 approximate reduced sales
charge on the Public Offering Price applicable to such purchases are as follows:
[NUMBER OF UNITS APPROXIMATE REDUCED SALES CHARGE
- ---------------- --------------------------------
25,000 but less than 50,000 3.245%
50,000 but less than 100,000 2.995%
100,000 or more 2.745%]
For transactions of at least 100,000 Units or more, the Sponsors may
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
B-8
781452.2
<PAGE>
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 [2.995%]. 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 (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 $14.50 processing fee.
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 without a sales charge at a price
equal to the aggregate value of the underlying securities in the Trust, divided
by the number of Units outstanding. 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.
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. The Sponsors intend to qualify the Units for
sale in certain states.
SPONSORS' PROFITS. The Sponsors will receive a combined gross underwriting
commission equal to up to 3.995% of the Public Offering Price per 100 Units
(equivalent to % 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
B-9
781452.2
<PAGE>
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
McLaughlin, Piven, Vogel brokerage account. Units held through DTC will be
deposited by the Sponsors with DTC in the McLaughlin, Piven, Vogel DTC account
and registered in the nominee name CEDE & COIN OPERATED. 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, Vogel
representative. 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 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.
B-10
781452.2
<PAGE>
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.
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 3.495% sales charge (or 3.621% of the net amount
invested) plus a pro rata portion of amounts, if any, in the Income Account. Any
Units that are
B-11
781452.2
<PAGE>
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 stability 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 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 canceled.
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
Nasdaq (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 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 public 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
B-12
781452.2
<PAGE>
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 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 Nasdaq 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
broker in order to determine if there is a current secondary market price in
excess of the Redemption Price.
AUTOMATIC REDEMPTION. In the event a transfer of Units from a Unitholder's
McLaughlin Piven Vogel brokerage account results in the automatic redemption of
those Units, Unitholders will receive an amount 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 transfer. Automatic redemption
proceeds will be paid within three business days following the tender of a
notification of transfer.
B-13
781452.2
<PAGE>
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 analyzes. 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 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
B-14
781452.2
<PAGE>
(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 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 the business day
preceding the 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
B-15
781452.2
<PAGE>
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 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.
B-16
781452.2
<PAGE>
Section 17(a) of the Investment Company Act of 1940 generally prohibits
principal transactions between registered investment companies and their
affiliates. Pursuant to an exemptive order issued by the SEC, each terminating
Pinnacle Trust can sell Duplicated Securities directly to a New Series. The
exemption will enable the Trust to eliminate commission costs on these
transactions. The price for those securities transferred will be the closing
sale price on the sale date on the national securities exchange where the
securities are principally traded, as certified and confirmed by the Trustee.
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. Mr. McLaughlin may be deemed to be a controlling
person of MPV.
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 Coin
operated-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.
B-17
781452.2
<PAGE>
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 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
B-18
781452.2
<PAGE>
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 for all or a portion of the
estimated costs incurred in organizing and offering the Trust (collectively, the
"organization costs")--including the cost of the initial preparation and
execution of the Trust Agreement, registration of the Trust and the Units under
the Investment Company Act of 1940 and the Securities Act of 1933 and state
registration fees, the initial fees and expenses of the Trustee, legal expenses
and other actual 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 (which may be between 30 and 90 days). 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. All advertising and selling expenses, as well as any
or organizational costs not paid by the Trust, will be borne 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."
B-19
781452.2
<PAGE>
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 financial statements 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 when purchasing their Units if they wish to
participate in the Reinvestment Plan. Thereafter, Unitholders should contact
their broker 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 prior to the Record Date
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.
TAX STATUS
This 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
B-20
781452.2
<PAGE>
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.
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 deposited in initially 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 long-term if the Unitholder
has held its Units for more than one year. Capital gains realized by
corporations are generally taxed at the same rates applicable to ordinary
income, although non-corporate taxpayers who realize long-term capital gains
with respect to Units held for more than one year may be subject to a reduced
tax rate of 20% on such gains, rather than the "regular" maximum tax rate of
39.6%. Tax rates may increase prior to the time when Unitholders may realize
gains from the sale, exchange or redemption of the Units or Securities.
B-21
781452.2
<PAGE>
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 ($1,500 for married
individuals filing separately) 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 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 "exclusive-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.
As discussed in the section "Termination", each Unitholder may have three
options in receiving his termination distributions, namely (i) to receive its
pro rata share of the underlying Securities in kind, (ii) to receive cash upon
liquidation of its pro rata share of the underlying Securities, or (iii) to
invest the amount of cash it would receive upon the liquidation of its 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 its Units, the Unitholder should be treated as
merely exchanging its 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 its
undivided interest in all of the Trust's Securities for its 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.
B-22
781452.2
<PAGE>
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.
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 McLauglin, Piven, Vogel
Securities, Inc. 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 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 regarding
the definition of "plan assets."
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 AUDITORS. The Statement of Financial Condition, including the
Portfolio, is included herein in reliance upon the report of Ernst & Young LLP,
independent auditors, 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 strategy, the related index and
this Trust may be included from time to time in
B-23
781452.2
<PAGE>
advertisements, sales literature and reports to current or prospective
investors. Total return shows changes in Unit price during the period plus any
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
strategy 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 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 Nasdaq or similar 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.
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.
B-24
781452.2
<PAGE>
[This page intentionally left blank]
B-25
781452.2
<PAGE>
<TABLE>
<S> <C>
No person is authorized to give any information or to MCLAUGHLIN, PIVEN, VOGEL
make any representations not contained in this Prospectus. FAMILY OF TRUSTS,
Any information or representation not contained herein must THE PINNACLE GROWTH STRATEGY TRUST
not be relied upon as having been authorized.
(A UNIT INVESTMENT TRUST)
------------------
PROSPECTUS
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any DATED: JANUARY __, 1999
person to whom it is not lawful to make such offer in such
state.
SPONSORS:
Table of Contents
McLAUGHLIN, PIVEN, VOGEL
Title Page SECURITIES, INC.
30 Wall Street
Part A New York, New York 10005
Summary of Essential Information...........................A-2 212-248-0750
Investment Summary.........................................A-3
Statement of Financial Condition...........................A-6 REICH & TANG DISTRIBUTORS, INC.
Portfolio..................................................A-7 600 Fifth Avenue
Report of Independent Auditors.............................A-8 New York, New York 10020
212-830-5400
Part B
Description of the Trust...................................B-1
Risk Considerations........................................B-5
Public Offering............................................B-8 TRUSTEE:
Rights of Unitholders.....................................B-10
Liquidity.................................................B-11 THE CHASE MANHATTAN BANK
Trust Administration......................................B-14 4 New York Plaza
Trust Expenses and Charges................................B-19 New York, New York 10004
Reinvestment Plan.........................................B-20
Tax Status................................................B-20
Other Matters.............................................B-23
</TABLE>
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the SEC,
Washington, D.C., under the Securities Act of 1933, and the Investment Company
Act of 1940, and to which reference is made. The SEC maintains a website that
contains reports, proxy and information statements and other information
regarding the Trust which are filed electronically with the SEC. The SEC's
Internet address is http:www.sec.gov.
Doc. 781452.2
781452.2
<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)
Ernst & Young LLP
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 (filed as
Exhibit 99.1.1.1 to Amendment No. 1 to Form S-6
Registration Statement No. 333-60915 of McLaughlin,
Piven, Vogel Family of Trusts, The Pinnacle Trust on
September 23, 1998 and incorporated herein by
reference).
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 (filed as Exhibit 99.1.3.7 to Form S-6
Registration Statement No. 333-60915 of McLaughlin,
Piven, Vogel Family of Trusts, The Pinnacle Trust on
August 7, 1998 and incorporated herein by reference).
99.1.3.8 -- By-Laws of McLaughlin, Piven, Vogel Securities Inc.
(filed as Exhibit 99.1.3.8 to Form S-6 Registration
Statement No. 333-60915 of McLaughlin, Piven, Vogel
Family of Trusts, The Pinnacle Trust on August 7, 1998
and incorporated herein by reference).
*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. (filed as Exhibit 99.6.1 to Form S-6
Registration Statement No. 333-60915 of McLaughlin,
Piven, Vogel Family of Trusts, The Pinnacle Trust on
August 7, 1998 and incorporated herein by reference).
*99.27 -- Financial Data Schedule (for EDGAR filing only).
- ------------------------------
* To be filed by amendment.
II-1
783523.1
<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 Growth
Strategy 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 1st day of December, 1998.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY 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.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
JAMES C. MCLAUGHLIN Chairman of the Board, Chief
Executive Officer and Director
ALLAN M. VOGEL President, Secretary, Chief Financial
Officer and Director
December 1, 1998
By /s/ ALLAN M. VOGEL
-----------------------------
Allan M. Vogel
Attorney-In-Fact*
</TABLE>
- -----------------------------
* An executed copy of a Power of Attorney was filed as Exhibit 99.6.1 to Form
S-6 Registration Statement No. 333-60915 on August 7, 1998.
II-2
783523.1
<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 Growth
Strategy 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 1st day of December, 1998.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY 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
December 1, 1998
ROBERT F. HOERLE Managing Director
PETER J. DEMARCO Executive Vice President
By /s/ PETER J. DEMARCO
RICHARD I. WEINER Vice President ------------------------------
Peter J. DeMarco
BERNADETTE N. FINN Vice President 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
783523.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference made to our firm under the Caption "Independent
Auditors" in Part B of the Prospectus and to the use of our report dated
December ___, 1998, in this Registration Statement (Form S-6 No. 333- ) of
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth Strategy Trust.
ERNST & YOUNG LLP
New York, New York
December ___, 1998
783523.1
