<PAGE>
As filed with the Securities and Exchange Commission on January 20, 1999
Registration No. 333-68169
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
----------------
A.EXACT NAME OF TRUST:
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
30 Wall Street Distributors, Inc.
New York, New York 10005 600 Fifth Avenue
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.
[_]Check if it is proposed that this filing will become effective
immediately upon filing pursuant to Rule 487.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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
----------- ---------------------
<S> <C>
I. Organization And General Information
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 Records, Portfolio, Substitution of
certificateholders............ 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 Objective, Portfolio, The Securities,
units......................... Substitution of Securities
12.Certain information regarding
periodic payment
certificates.................. Not Applicable
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C>
13.(a) Load, fees, expenses, Summary of Essential Information, Public
etc. ........................ 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
The Sponsors, The Trustee Evaluation of the
22.Limitations on liability....... Trust
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C>
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
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) NASD 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
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<S> <C>
(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 Market for Units, Offering Price, Sponsors
underlying securities......... Repurchase, Trustee Redemption
V. Information Concerning the Trustee or Custodian
48.Organization and regulation of
trustee....................... The Trustee
49.Fees and expenses of trustee.... Trust Expenses and Charges
50.Trustee's lien.................. Trust Expenses and Charges
VI. Information Concerning Insurance of Holders of Securities
51.Insurance of holders of trust's
securities.................... Not Applicable
VII. Policy of Registrant
52.(a) Provisions of trust
agreement with respect to Portfolio Supervision, Substitution of
selection or elimination of Securities, Trust Agreement and Amendment,
underlying securities......... Trust Termination
(b) Transactions involving
elimination of underlying
securities.................... Not Applicable
(c) Policy regarding substitution Portfolio Supervision, Substitution of
or elimination of underlying Securities, Trust Agreement and Amendment,
securities.................... 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>
-iv-
<PAGE>
- --------------------------------------------------------------------------------
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS
- --------------------------------------------------------------------------------
THE PINNACLE GROWTH
STRATEGY TRUST
A unit investment trust whose investment objective is to maximize total
return through capital appreciation by creating a fixed portfolio of the ten
stocks which have had the highest number of shares traded on the Nasdaq*
during the twelve-month period 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 20, 1999
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
As of January 19, 1999, the business day prior to the Initial Date of Deposit.
Initial Date of Deposit of
Securities in the Trust: January
20, 1999
<TABLE>
<S> <C>
Aggregate Value of Securities: $ 153,634
Number of Units: 16,042
Fractional Undivided Interest in
Trust: 1/16,042
Public Offering Price per 100
Units:
Aggregate Value of Securities in
Trust.......................... $ 153,634
Plus Estimated Organization
Costs*......................... $ 215
Divided By 16,042 Units (times
100)........................... $ 959.05
Plus Sales Charge of 4.095% of
Public Offering Price.......... $ 40.95
Public Offering Price+.......... $1,000.00
Sponsor's Repurchase Price And
Redemption Price per 100
Units++: $ 959.05
</TABLE>
Evaluation Time: 4:00 p.m. New York
Time.
Minimum Income or Principal
Distribution per 100 Units: $1.00
Liquidation Period: Beginning 5 days
prior to the Mandatory Termination
Date.
Mandatory Termination Date: The
earlier of April 24, 2000 or the
disposition of the last Security in
the Trust.
Rollover Notification Date**: April
3, 2000 or another date as
determined by the Sponsors.
Minimum Value of Trust: The Trust
may be terminated if the value of
the Trust is less than 40% of the
aggregate value of the Securities
at the completion of the initial
offering period.
Cusip Numbers: Cash: 58177K 10 0
Reinvestment: 58177K 11 8
Trustee: The Chase Manhattan Bank
Trustee's Fee per 100 Units: $.86
Other Fees and Expenses per 100
Units: $.15
Sponsors: McLaughlin, Piven, Vogel
Securities, Inc. and Reich & Tang
Distributors, Inc.
Agent for Sponsors: Reich & Tang
Distributors, Inc.
Sponsors' Portfolio Supervisory,
Bookkeeping and Administrative Fee
per 100 Units: Maximum of $.25 (see
"Trust Expenses and Charges" in
Part B).
Expected Settlement Date of
Securities in the Trust: January
25, 1999
Record Dates: June 15 and December 15
Distribution Dates: June 30 and
December 31
Reinvestment Sales Charge: 1.00%
- --------
* 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 20, 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
<PAGE>
FEE TABLE
- --------------------------------------------------------------------------------
This Fee Table is intended to help you to understand the costs and expenses
that you will bear directly or indirectly. See "Public Offering and Trust
Expenses and Charges." Although the Trust is a unit investment trust rather
than a mutual fund, this information is presented to permit a comparison of
fees, assuming the principal amount and contributions are rolled over each year
into a New Series subject only to a sales charge and trust expenses.
- --------------------------------------------------------------------------------
Unitholder Transaction Expenses
(fees paid directly from your investment)
<TABLE>
<CAPTION>
As a % of Amount
Initial per
Offering Price 100 Units
-------------- ---------
<S> <C> <C> <C> <C>
Maximum Sales
Charges Imposed
on Purchase..... 4.095% $40.95
Maximum Sales
Charge Imposed
Per Year on
Reinvested
Dividends....... 1.00% $10.00
Annual Trust
Organizational
Expenses........ .134% $ 1.34
</TABLE>
Estimated Annual Fund Operating Expenses
(Expenses that are deducted from Trust assets)
<TABLE>
<CAPTION>
As a % of Amount
Initial per
Net Assets 100 Units
---------- ---------
<S> <C> <C> <C> <C>
Trustee's Fee............................................ .086% $0.86
---- -----
Other Operating Expenses................................. .015% $0.15
---- -----
Portfolio Supervision, Bookkeeping and
Administrative Fees........................ .025% $0.25
---- -----
Total.................................................... .126% $1.26
==== =====
</TABLE>
Example
This Example is intended to help you compare the cost of investing in the Trust
with the cost of investing in other unit trusts.
<TABLE>
<CAPTION>
1 year 3 years
------ -------
<S> <C> <C>
This Example assumes that you invest $1,000 in the Trust for the
time periods indicated, assuming the Trust's estimated operating
expense ratio of .126% and a 5% return on the investment
throughout the period. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:....... $44 $122
</TABLE>
The Example does not reflect sales charges on reinvested dividends. The
Example assumes reinvestment of all dividends and distributions and utilizes a
5% annual rate of return as mandated by Securities and Exchange Commission
regulations applicable to mutual funds. The Example should not be considered a
representation of past or future expenses or an annual rate of return; the
actual expenses and annual rate of return may be more or less than those
assumed for purposes of the Example.
Although the Trust has a term of only approximately fifteen months and is a
unit investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees and expenses, assuming the principal amount and
distributions are rolled over each year into a New Series.
A-3
<PAGE>
INVESTMENT OBJECTIVE. The Trust seeks 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.
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 during the twelve-month period
ending December 31, 1998. This strategy consists of a 4-step selection process:
Step 1: 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 period.
Step 2: Eliminate non ordinary common shares (including preferred
securities, rights and warrants) and foreign issues (except
American Depository Receipts).
Step 3: Select the ten stocks which have traded the highest number of
shares during the twelve-month period ending December 31, 1998.
Step 4: Of the ten stocks selected for the Trust, weigh the top five stocks
with the highest volume of trading during this time period three
times more than the lower five stocks.
The volume of shares traded daily does not include shares represented by
options trading. The inclusion of shares represented by options may have
provided different results and therefore the selection of stocks for inclusion
in the portfolio may have differed. Within both the lowest and highest trading
volume category described in Step 4, each of the five stocks are purchased in
equal dollar value. Because of the weighting of the portfolio, the aggregate
value of the highest trading volume stocks is equal to three times the
aggregate value of the lowest trading volume category.
DESCRIPTION OF PORTFOLIO. The Portfolio contains 10 issues of common stock. All
ten issues are domestic 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: Computer-Networking,
25.04%; Computer-Hardware, 19.99%; Computer-Software, 20.01%; Electronic-
Semiconducters, 14.98%; Equipment-Semiconductors, 5.00% and Telephone-Long
distance, 14.98%. The Trust is concentrated in the computer 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:
. 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.
. 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.
. Securities 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.
A-4
<PAGE>
. An investment in common stocks includes 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).
. 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 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.
. There is no assurance that any dividends will be declared or paid in the
future on the Securities.
. Since the Trust is concentrated in stocks which derive a substantial
portion of their income from the computer technology industry, investors
should be familiar with the risks associated with the computer technology
industry which may include greater government regulations and products
that may become obsolete.
. 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:
. dividing the aggregate value of the underlying securities and cash held
in the Trust (representing the estimated organizational costs) by the
number of units outstanding;
. adding a sales charge of 4.095% (4.270% of the net amount invested); and
. multiplying the result by 100.
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 organizational
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 will
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.
A-5
<PAGE>
DISTRIBUTIONS. Dividend distributions received, if any, will be made semi-
annually on the Distribution Dates to all Unitholders of record on the Record
Date. For the specific dates representing the Distribution Dates and Record
Dates, see "Summary of Essential Information" in Part A. The final distribution
will be made within a reasonable period of time after the termination of the
Trust. (See "Rights of Unitholders--Distributions" in Part B.) Unitholders may
elect to automatically reinvest distributions (other than the final
distribution in connection with the termination of the Trust), into additional
Units of the Trust, at a reduced sales charge. See "Reinvestment Plan" in Part
B.
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 the
Securities in the Trust may depend on whether dealers will make a market in the
Securities in the Trust. 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.
AUTOMATIC REDEMPTION. Any transfer of Units by Unitholders from their
McLaughlin Piven Vogel brokerage account will result in the automatic
redemption of those Units.
TERMINATION. The Trust will terminate in approximately fifteen months. At that
time, investors may choose one of the following three options:
. receive their terminating distribution in-kind, if they own at least
2,500 Units;
. receive cash upon the liquidation of their pro rata share of the
Securities; or
. 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-6
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE GROWTH STRATEGY TRUST
STATEMENT OF FINANCIAL CONDITION, AS OF JANUARY 19, 1999
ASSETS
<TABLE>
<S> <C>
Investment in Securities -- Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost $153,634)
(Note 1)............................................................. $153,634
Cash.................................................................. 215
--------
Total................................................................. $153,849
========
LIABILITIES AND INTEREST OF UNITHOLDERS
Reimbursement to Sponsors for Organization Costs (Note 2)............. $ 215
Interest of Unitholders -- Units of Fractional
Undivided Interest Outstanding (Pinnacle Trust: 16,042 Units)........ 153,634
--------
Total................................................................. $153,849
========
Net Asset Value per Unit.............................................. $ 9.58
========
</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
can differ from those estimates.
(1) McLaughlin, Piven, Vogel Family of Trusts, the Pinnacle Growth Strategy
Trust (the "Trust") is a unit investment trust created under the laws of the
State of New York and registered under the Investment Company Act of 1940. The
objective of the Trust, jointly sponsored by McLaughlin, Piven, Vogel
Securities, Inc. and Reich & Tang Distributors, Inc., the Sponsors, is to
maximize total return capital appreciation. On January 20, 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 $200,000 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 19, 1999. The Trust will terminate
on April 24, 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 $1.34
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-7
<PAGE>
MCLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS
THE PINNACLE GROWTH STRATEGY TRUST
PORTFOLIO
AS OF JANUARY 19, 1999
<TABLE>
<CAPTION>
Market
Value of
Stocks as a
Number Percentage Market Cost of
Portfolio of Ticker of the Value Per Securities to
No. Shares Name of Issuer (1) Symbol Trust (2) Share the Trust (3)
--------- ------ ------------------ ------ ----------- --------- -------------
<C> <C> <S> <C> <C> <C> <C>
1 280 Dell Computer DELL 14.98% $ 82.1875 $ 23,013
Corporation
2 165 Intel Corporation INTC 14.98 139.4375 23,007
3 148 Microsoft Corporation MSFT 14.99 155.6250 23,033
4 217 Cisco Systems, Inc. CSCO 15.03 106.3750 23,083
5 298 MCI Worldcom, Inc. WCOM 14.98 77.2500 23,020
6 149 Oracle Corporation ORCL 5.02 51.8125 7,720
7 140 Applied Materials, Inc. AMAT 5.00 54.8750 7,683
8 168 3Com Corporation COMS 5.00 45.7500 7,686
9 86 Ascend Communications, ASND 5.01 89.5000 7,697
Inc.
10 73 Sun Microsystems, Inc. SUNW 5.01 105.3750 7,692
------ --------
Total Investment in 100.00% $153,634
Securities
====== ========
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on January 19, 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 25, 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 $153,774. The Sponsors' Loss on
the Initial Date of Deposit is $(140).
The accompanying notes form an integral part of the Financial Statements.
A-8
<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 19, 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 19, 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 19, 1999, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
January 19, 1999
A-9
<PAGE>
PINNACLE GROWTH STRATEGY TRUST
What's your strategy for earning higher returns?
Introducing a new strategy that may offer you the potential to earn higher
returns.
THE PINNACLE GROWTH STRATEGY TRUST
If you're searching for an investment that captures the energy of some of
today's most enterprising companies, The Pinnacle Growth Strategy Trust may be
for you.
The Trust offers you a unique opportunity to maximize total return by
investing in ten dynamic growth companies. This opportunity provides the
potential for above average total return through capital appreciation from a
portfolio comprised of the ten stocks with the highest volume of shares traded
on the NASDAQ* Stock Market during the twelve-month period ending December 31,
1998.
THE NASDAQ STOCK MARKET
The NASDAQ is the fastest growing stock market in the United States and the
world's first electronic stock market. It uses cutting-edge technology and
telecommunications to connect millions of investors around the world to one
integrated trading system. The NASDAQ trades more shares per day than any other
major market in this country.
Companies of all types and sizes and in all stages of development can be
found trading on the NASDAQ. In addition to large and established companies,
more new public companies choose to list on the NASDAQ than on any other U.S.
market. 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 concentrations of companies listed on the NASDAQ are in information
technology (including computer technology), telecommunications,
pharmaceuticals, biotechnology, finance, banking and insurance.
THE PINNACLE GROWTH STRATEGY:
The Pinnacle Growth Strategy is a simple strategy designed to offer high
return potential by investing in a portfolio of the ten stocks that have had
the highest number of shares traded on the NASDAQ over the twelve-month period
ending December 31, 1998. The strategy is that these companies represent the
strongest, most rapidly growing companies trading on the NASDAQ during that
period. The Pinnacle Growth Strategy consists of a 4-step selection process, in
which our experts:
1. Calculate the number of shares traded daily, for each company listed on
the NASDAQ, on each day the NASDAQ was open during the most recent
twelve-month period.
2. Eliminate non ordinary common shares (including preferred securities,
rights and warrants) and foreign issues (except American Depository
Receipts).
3. Select the ten stocks that have traded the highest number of shares
during the twelve-month period ending December 31, 1998.
4. Of the ten stocks selected for the Trust, weigh the top 5 stocks with
the highest volume of trading during this time period three times
greater than the lower five stocks.
- --------
* 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 in this
brochure.
(i)
<PAGE>
The portfolio is held for approximately 15 months, then liquidated. For more
information, please see "Three Options at Termination." The Pinnacle Growth
Strategy is based on the theory that an investor will roll over the units at
termination.
HIGHLIGHTS OF THE PINNACLE GROWTH STRATEGY TRUST
Disciplined Investing -- The buy-and-hold, fixed portfolio eliminates
management fees and reduces trading expenses. The savings are passed through to
investors. Investors purchasing units will be charged a sales charge.
Monitored Portfolio -- The stocks held in your portfolio are continuously
monitored, and under certain, limited, extraordinary circumstances, can be
removed from the portfolio.
Daily Pricing & Liquidity -- You have the flexibility to redeem your units at
the net asset value any day the NASDAQ stock market is open. Keep in mind that
the daily price will fluctuate with the underlying securities, and may be worth
more or less than you originally paid. Since all the securities in the Trust
are listed on the NASDAQ, the existence of a liquid trading market may depend
on whether dealers will make a market in such securities.
Low Minimum Investment -- The Trust is able to offer the Pinnacle Growth
Strategy for an initial investment that's as low as $1,000 or $250 for
qualified retirement plans or custodial accounts.
Compounded Returns -- You have the option to take advantage of the power of
compounding by having distributions, if any, automatically reinvested into
additional units of the Trust at a reduced sales charge.
Three Options at Termination -- When the Trust terminates, you have three
options, which may be subject to tax liability. You may:
1. Receive your distribution in cash,
2. Reinvest your proceeds into a new trust (if available) at a reduced
sales charge, or
3. Receive shares of the underlying stocks (minimums apply).
Risk Considerations:
An investment in Units of the Trust should be made with an understanding of
the risks associated with an investment in common stocks, which include the
risk that the financial condition of the issuer may become impaired or that the
general condition of the stock market may worsen, and the value of the equity
securities in the Trust's portfolio (and, therefore, the value of the Units)
may decline. Since the Trust may be concentrated in computer technology stocks,
investors should recognize that the risks associated with the computer
technology industry include government regulation and rapidly obsolete
products. In addition, the amount realized upon the sale of a security at
termination might not be the highest price attained by an individual security
during the life of the Trust.
(ii)
<PAGE>
[This page intentionally left blank]
<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 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
B-1
<PAGE>
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 capital appreciation. 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 twelve-month
period ending December 31, 1998. This performance is historical. The stocks are
not equally weighted. Instead, the top five stocks with the highest volume of
trading during this time period are weighted three times more than the lower
five stocks.
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 concentrations of companies listed on
the Nasdaq are in information technology (including computer technology),
telecommunications, pharmaceuticals, biotechnology, finance, banking and
insurance.
B-2
<PAGE>
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.
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,
B-3
<PAGE>
contracts to purchase Additional Securities or cash with instructions to
purchase Additional Securities, in each instance maintaining the original
proportionate relationship, subject to adjustment under certain circumstances,
of the numbers of shares of each Security in the Trust. To the extent the price
of a Security increases or decreases between the time cash is deposited with
instructions to purchase the Security and the time the cash is used to purchase
the Security, Units may represent less or more of that Security and more or
less of the other Securities in the Trust. 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 will 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 those 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 can 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,
B-4
<PAGE>
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.
COMPUTER TECHNOLOGY INDUSTRY. The Trust may be considered to be concentrated
in the common stock of companies engaged in the computer 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
computer 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 whose primary objective is safety of principal or
stable income from their investments. The computer technology and computer
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 computer technologies, competitive pressures and other factors
and are dependent upon consumer and business acceptance as new computer
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.
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, the
year "2000" will be incorrectly identified as the year "1900". If not
corrected, many computer applications can 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
B-5
<PAGE>
operations and may have a material adverse effect on the Sponsors' and the
Trustee's results of operations and, in turn, cash available for distribution
by the Trustee. Although the Sponsors and the Trustee are addressing the
problem with respect to their business operations, there can be no assurance
that the "Year 2000" problem will be properly or timely resolved. The "Year
2000" problem may also adversely affect issuers of the Securities contained in
the Trust to varying degrees based upon various factors. The Sponsors are
unable to predict what effect, if any, the "Year 2000" problem will have on
such issuers.
LEGISLATION. From time to time Congress considers proposals to reduce the
rate of the dividends-received deduction which is available to certain
corporations. Enactment into law of a proposal to change the rate will
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: (i) on the basis of current bid prices for
comparable securities, (ii) 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 (iii) 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 is as follows:
<TABLE>
<CAPTION>
Approximate
Reduced
Sales
Number of Units Charge
--------------- -----------
<S> <C>
25,000 but less than 50,000.................................... 3.595%
50,000 but less than 100,000................................... 3.345%
100,000 or more................................................ 3.095%
</TABLE>
B-6
<PAGE>
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. Such purchaser must own at least the required number of Units at
the time such determination is made. Units held in the name of the spouse of
the purchaser or in the name of a child of the purchaser under 21 years of age
are deemed for the purposes hereof to be registered in the name of the
purchaser. The discount is also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
The holders of units of prior series of Pinnacle Trusts (the "Prior Series")
may "rollover" into this Trust by exchanging units of the Prior Series for
Units of the Trust at their relative net asset values plus the applicable sales
charge. Unitholders maintaining an account at McLaughlin, Piven, Vogel
Securities, Inc. exercising this option, may purchase such Units subject to a
reduced sales charge of 3.595%. 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.
Investors who purchase Units of the Trust though an IRA, Keogh Plan, pension
fund or other qualified retirement plan maintained at McLaughlin, Piven, Vogel
Securities, Inc. will be subject to a reduced sales charge of 2.0%.
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 4.095% of the Public Offering Price per 100 Units
(equivalent to 4.270% 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
B-7
<PAGE>
deposited in the Trust which were acquired from underwriting syndicates of
which they were a member. All or a portion of the Securities deposited in the
Trust may have been acquired through the Sponsors.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
Initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsors for the Units. Cash, if any,
made available to the Sponsors prior to settlement date for the purchase of
Units may be used in the Sponsors' business subject to the limitations of 17
CFR 240.15c3-3 under the Securities Exchange Act of 1934 and may be of benefit
to the Sponsors.
Both upon acquisition of Securities and termination of the Trust, the Trustee
may utilize the services of the Sponsors for the purchase or sale of all or a
portion of the Securities in the Trust. The Sponsors may receive brokerage
commissions from the Trust in connection with such purchases and sales in
accordance with applicable law.
In maintaining a market for the Units (see "Sponsors Repurchase") the
Sponsors will realize profits or sustain losses in the amount of any difference
between the price at which it buys Units and the price at which it resells such
Units.
RIGHTS OF UNITHOLDERS
BOOK-ENTRY UNITS. Ownership of Units of the Trust will not be evidenced by
certificates. All evidence of ownership of the Units will be recorded in book-
entry form at The Depository Trust Company ("DTC") through an investor's
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 & CO. Individual purchases of
beneficial ownership interest in the Trust will be made in book-entry form
through DTC. Ownership and transfer of Units will be evidenced and accomplished
directly and indirectly only by book-entries made by DTC and its participants.
DTC will record ownership and transfer of the Units among DTC participants and
forward all notices and credit all payments received in respect of the Units
held by the DTC participants. Beneficial owners of Units will receive written
confirmation of their purchases and sale from their McLaughlin, Piven, 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, if any 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
B-8
<PAGE>
Record Date and a Distribution Date will receive their first distribution on
the Distribution Date following the next Record Date.
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.
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
(i) 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; (ii) 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;
(iii) 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; (iv) the Redemption
Price per 100 Units based upon the last computation thereof made during such
calendar year; and (v) 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
B-9
<PAGE>
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 4.095% sales charge (or 4.270% of the net amount invested)
plus a pro rata portion of amounts, if any, in the Income Account. Any Units
that are purchased by the Sponsors in the secondary market also may be redeemed
by the Sponsors if they determine such redemption to be in their 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 that the Sponsors will consider in making a
determination will include the number of Units of all Trusts which they have in
inventory, their 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, can 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
B-10
<PAGE>
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 will be specified will 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 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: (i) on the basis of current bid prices for comparable
securities, (ii) by appraising the value of the Securities on the bid side of
the market or (iii) 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 when 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
B-11
<PAGE>
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.
TRUST ADMINISTRATION
PORTFOLIO SUPERVISION. The Trust is a unit investment trust and is not a
managed fund. Traditional methods of investment management for a managed fund
typically involve frequent changes in a portfolio of securities on the basis of
economic, financial and market analyses. The Portfolio of the Trust, however,
will not be managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its Securities from the portfolio.
Although the portfolio of the Trust is regularly reviewed, because of the
formula employed in selecting the Securities, it is unlikely 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: (i) default in payment of amounts due on any of the Securities; (ii)
institution of certain legal proceedings; (iii) default under certain documents
materially and adversely affecting future declaration or payment of amounts due
or expected; (iv) determination of the Sponsors that the tax treatment of the
Trust as a grantor trust would otherwise be jeopardized; or (v) 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, will 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 ten highest traded stocks
of the Nasdaq, or even its deletion from the Nasdaq.
In addition, the Trust Agreement provides as follows:
1. If a default in the payment of amounts due on any Security occurs
pursuant to provision (i) 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.
2. 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.
3. 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, 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.
B-12
<PAGE>
4. The Sponsors are authorized to increase the size and number of Units
of the Trust by the deposit of Additional Securities, contracts to purchase
Additional Securities or cash or a letter of credit with instructions to
purchase Additional Securities in exchange for the corresponding number of
additional Units from time to time subsequent to the Initial Date of
Deposit, provided that the original proportionate relationship among the
number of shares of each Security established on the Initial Date of
Deposit is maintained to the extent practicable. The Sponsors may specify
the minimum numbers in which Additional Securities will be deposited or
purchased. If a deposit is not sufficient to acquire minimum amounts of
each Security, Additional Securities may be acquired in the order of the
Security most under-represented immediately before the deposit when
compared to the original proportionate relationship. If Securities of an
issue originally deposited are unavailable at the time of the subsequent
deposit, the Sponsors may (i) deposit cash or a letter of credit with
instructions to purchase the Security when it becomes available, or (ii)
deposit (or instruct the Trustee to purchase) either Securities of one or
more other issues originally deposited or a Substitute Security.
TRUST AGREEMENT AND AMENDMENT. The Trust Agreement may be amended by the
Trustee and the Sponsors without the consent of any of the Unitholders to: (i)
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (ii) change any provision thereof as may be required
by the Securities and Exchange Commission or any successor governmental agency;
or (iii) 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):
B-13
<PAGE>
1. A Unitholder who owns at least 2,500 units and whose interest in the
Trust will 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. This will be accomplished by
distribution of the Unitholder's pro rata share of the net asset value of
the Trust on such date distributed in kind to the extent represented by
whole shares of underlying Securities and the balance in cash within three
business days next following the commencement of the Liquidation Period.
Unitholders subsequently selling such distributed Securities will incur
brokerage costs when disposing of such Securities. Unitholders should
consult their own tax adviser in this regard;
2. To receive in cash such Unitholder's pro rata share of the net asset
value of the Trust derived from the sale by the Sponsors as the agents of
the Trustee of the underlying Securities during the Liquidation Period. The
Unitholder's pro rata share of its net assets of the Trust will be
distributed to such Unitholder within three days of the settlement of the
trade of the last Security to be sold; and/or
3. To invest such Unitholder's pro rata share of the net assets of the
Trust derived from the sale by the Sponsors as agents of the Trustee of the
underlying Securities during the Liquidation Period, in units of a
subsequent series of The Pinnacle Trusts (the "New Series") provided one is
offered. It is expected that a special redemption and liquidation will be
made of all Units of this Trust held by a Unitholder (a "Rollover
Unitholder") who affirmatively notifies the Trustee on or prior to the
Rollover Notification Date set forth in the "Summary of Essential
Information" for the Trust in Part A. The Units of a New Series will be
purchased by the Unitholder within three business days of the settlement of
the trade for the last Security to be sold. Such purchaser will be entitled
to a reduced sales charge upon the purchase of units of the New Series. It
is expected that the terms of the New Series will be substantially the same
as the terms of the Trust described in this Prospectus, and that similar
options with respect to the termination of such New Series will be
available. The availability of this option does not constitute a
solicitation of an offer to purchase Units of a New Series or any other
security. A Unitholder's election to participate in this option will be
treated as an indication of interest only. At any time prior to the
purchase by the Unitholder of units of a New Series such Unitholder may
change his investment strategy and receive, in cash, the proceeds of the
sale of the Securities. An election of this option will not prevent the
Unitholder from recognizing taxable gain or loss (except in the case of a
loss, if and to the extent the New Series is treated as substantially
identical to the Trust) as a result of the liquidation, even though no cash
will be distributed to pay any taxes. Unitholders should consult their own
tax advisers in this regard.
Unitholders who do not make any election will be deemed to have elected to
receive the termination distribution in cash (option number 2).
The Sponsors have agreed that to the extent they effect the sales of
underlying securities for the Trustee in the case of the second and third
options during the Liquidation Period such sales will be 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
B-14
<PAGE>
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.
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
B-15
<PAGE>
Operating Partnership, L.P. ("NEICOP"). Subsequently, on March 31, 1998, NEICOP
changed its name to Nvest Companies, L.P. ("Nvest"). The general partners of
Nvest are Nvest Corporation and Nvest L.P. As of March 31, 1998, Metropolitan
Life Insurance Company ("MetLife") owned approximately 47% of the partnership
interests of Nvest. Nvest, with a principal place of business at 399 Boylston
Street, Boston, MA 02116, is a holding company of firms engaged in the
securities and investment advisory business. These affiliates in the aggregate
are investment advisors or managers to over 80 registered investment companies.
Reich & Tang is Sponsor (and Co-Sponsor, as the case may be) for numerous
series of unit investment trusts, including New York Municipal Trust, Series 1
(and Subsequent Series), Municipal Securities Trust, Series 1 (and Subsequent
Series), 1st Discount Series (and Subsequent Series), Multi-State Series 1 (and
Subsequent Series), Mortgage Securities Trust, Series 1 (and Subsequent
Series), Insured Municipal Securities Trust, Series 1 (and Subsequent Series),
5th Discount Series (and Subsequent Series), Equity Securities Trust, Series 1,
Signature Series, Gabelli Communications Income Trust (and Subsequent Series)
and Schwab Trusts.
MetLife is a mutual life insurance company with assets of $330.6 billion at
December 31, 1997. 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 $1.7 trillion on December 31, 1997 for MetLife and its insurance
affiliates.
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 (i)
appoint a successor sponsor; (ii) terminate the Trust Agreement and liquidate
the Trust; or (iii) 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.
B-16
<PAGE>
For further information relating to the responsibilities of the Trustee under
the Trust Agreement, reference is made to the material set forth under "Rights
of Unitholders."
The Trustee may resign by executing an instrument in writing and filing the
same with the Sponsors, and mailing a copy of a notice of resignation to all
Unitholders. In such an event the Sponsors are obligated to appoint a successor
Trustee as soon as possible. In addition, if the Trustee becomes incapable of
acting or becomes bankrupt or its affairs are taken over by public authorities,
the Sponsors may remove the Trustee and appoint a successor as provided in the
Trust Agreement. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsors. If upon resignation of the Trustee no successor has
been appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
the Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. Upon execution of a written acceptance of such appointment
by such successor Trustee, all the rights, powers, duties and obligations of
the original Trustee shall vest in the successor.
Any corporation into which the Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Trustee shall be a party, shall be the successor Trustee. The Trustee
must always be a banking corporation organized under the laws of the United
States or any State and have at all times an aggregate capital, surplus and
undivided profits of not less than $2,500,000.
EVALUATION OF THE TRUST. The value of the Securities in the Trust portfolio
is determined in good faith by the Trustee on the basis set forth under "Public
Offering -- Offering Price." The Sponsors and the Unitholders may rely on any
evaluation furnished by the Trustee and shall have no responsibility for the
accuracy thereof. Determinations by the Trustee under the Trust Agreement shall
be made in good faith upon the basis of the best information available to it,
provided, however, that the Trustee shall be under no liability to the Sponsors
or Unitholders for errors in judgment, except in cases of its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. The Trustee, the Sponsors and the Unitholders may rely
on any evaluation furnished to the Trustee by an independent evaluation service
and shall have no responsibility for the accuracy thereof.
TRUST EXPENSES AND CHARGES
Investors will reimburse the Sponsors 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 organizational costs not paid by the Trust, will be borne by the Sponsors
at no cost to the Trust.
B-17
<PAGE>
The Sponsors will receive, for portfolio supervisory services to the Trust,
an Annual Fee in the amount set forth under "Summary of Essential Information"
in Part A. The Sponsors' fee may exceed the actual cost of providing portfolio
supervisory services for the Trust, but at no time will the total amount
received for portfolio supervisory services rendered to all series of the
Equity Securities Trust in any calendar year exceed the aggregate cost to the
Sponsors of supplying such services in such year. (See "Portfolio
Supervision.")
The Trustee will receive, for its ordinary recurring services to the Trust,
an annual fee in the amount set forth under "Summary of Essential Information"
in Part A. For a discussion of the services performed by the Trustee pursuant
to its obligations under the Trust Agreement, see "Trust Administration" and
"Rights of Unitholders."
The Trustee's fees applicable to a Trust are payable as of each Record Date
from the Income Account of the Trust to the extent funds are available and then
from the Principal Account. Both the Sponsors' and the Trustee's fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases in consumer prices for services as measured by the
United States Department of Labor's Consumer Price Index entitled "All Services
Less Rent."
The following additional charges are or may be incurred by the Trust: all
expenses (including counsel fees) of the Trustee incurred and advances made in
connection with its activities under the Trust Agreement, including the
expenses and costs of any action undertaken by the Trustee to protect the Trust
and the rights and interests of the Unitholders; fees of the Trustee for any
extraordinary services performed under the Trust Agreement; indemnification of
the Trustee for any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification of the
Sponsors for any losses, liabilities and expenses incurred in acting as
sponsors of the Trust without gross negligence, bad faith or willful misconduct
on its part; and all taxes and other governmental charges imposed upon the
Securities or any part of the Trust (no such taxes or charges are being levied,
made or, to the knowledge of the Sponsors, contemplated). The above expenses,
including the Trustee's fees, when paid by or owing to the Trustee are secured
by a first lien on the Trust to which such expenses are charged. In addition,
the Trustee is empowered to sell the Securities in order to make funds
available to pay all expenses.
Unless the Sponsors otherwise direct, the accounts of the Trust shall be
audited not less than annually by independent public accountants selected by
the Sponsors. The expenses of the audit shall be an expense of the Trust. So
long as the Sponsors maintain a secondary market, the Sponsors will bear any
audit expense which exceeds $.50 cents per 100 Units. Unitholders covered by
the audit during the year may receive a copy of the audited 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
B-18
<PAGE>
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 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 a capital gain.
B-19
<PAGE>
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.
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 "ex-dividend." Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable
to indebtedness incurred by such corporation.
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 will 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
B-20
<PAGE>
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 will 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.
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 whether (i) 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; (ii) the investment satisfies the diversification
requirement of Section 404(a)(1)(C) of ERISA; and (iii) the assets of the Trust
are deemed "plan assets" under ERISA and the Department of Labor regarding the
definition of "plan assets."
B-21
<PAGE>
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 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 The Wall
Street Journal, 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 National Association of Securities Dealers
Regulation, the Sponsors may also include in advertisements, sales literature
and reports to current or prospectus investors the performance of hypothetical
portfolios to which the Sponsors have applied the same investment objectives
and selection strategies, as well as back-tested data of the historical
performance of such 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-22
<PAGE>
No person is authorized to give any information or to make any
representations not contained in this Prospectus. Any information or
representation not contained herein must not be relied upon as having been
authorized.
----------------
This Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, securities in any state to any person to whom it is not
lawful to make such offer in such state.
Table of Contents
<TABLE>
<CAPTION>
Title Page
- ----- ----
<S> <C>
PART A
Summary of Essential Information........................................... A-2
Statement of Financial Condition........................................... A-7
Portfolio.................................................................. A-8
Report of Independent Auditors............................................. A-9
PART B
Description of the Trust................................................... B-1
Risk Considerations........................................................ B-3
Public Offering............................................................ B-6
Rights of Unitholders...................................................... B-8
Liquidity.................................................................. B-9
Trust Administration....................................................... B-12
Trust Expenses and Charges................................................. B-17
Reinvestment Plan.......................................................... B-18
Tax Status................................................................. B-19
Other Matters.............................................................. B-22
</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.
McLaughlin, Piven, Vogel
Family of Trusts,
THE PINNACLE GROWTH
STRATEGY TRUST
(A UNIT INVESTMENT TRUST)
PROSPECTUS
DATED: JANUARY 20, 1999
SPONSORS:
McLAUGHLIN, PIVEN, VOGEL
SECURITIES, INC.
30 Wall Street
New York, New York 10005
212-248-0750
REICH & TANG DISTRIBUTORS, INC.
600 Fifth Avenue
New York, New York 10020
212-830-5400
TRUSTEE:
THE CHASE MANHATTAN BANK
4 New York Plaza
New York, New York 10004
<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:
<TABLE>
<C> <S>
*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).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
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).
</TABLE>
- --------
* To be filed by amendment.
II-2
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth Strategy Trust
has duly caused this Amendment No. 2 to the 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 20th day of January, 1999.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY TRUST
(Registrant)
McLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
(Depositor)
/s/ Allan M. Vogel
By ___________________________________________
Allan M. Vogel
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the 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
---- ----- ----
<C> <S> <C>
JAMES C. MCLAUGHLIN Chairman of the Board,
Chief Executive Officer
and Director
ALLAN M. VOGEL President, Secretary, January 20, 1999
Chief Financial Officer
and Director
</TABLE>
/s/ Allan M. Vogel
By __________________________________
Allan M. Vogel
- -------- Attorney-In-Fact*
* 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-3
<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 Amendment No. 2 to the 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 20th day of January, 1999.
MCLAUGHLIN, PIVEN, VOGEL FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY TRUST
(Registrant)
REICH & TANG DISTRIBUTORS, INC.
(Depositor)
/s/ Peter J. DeMarco
By ___________________________________________
Peter J. DeMarco
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the 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
---- ----- ----
<C> <S> <C>
Richard E. Smith III President and Director
Peter S. Voss Director
G. Neal Ryland Director
Edward N. Wadsworth Executive Officer January 20, 1999
Steven W. Duff Director
Robert F. Hoerle Managing Director
/s/ Peter J. DeMarco
By _____________________
Peter J. DeMarco
Attorney-In-Fact*
Peter J. DeMarco Executive Vice President
Richard I. Weiner Vice President
Bernadette N. Finn Vice President
Lorraine C. Hysler Secretary
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-4
<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
January 19, 1999, in this Registration Statement (Form S-6 No. 333-68169) of
McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth Strategy Trust.
Ernst & Young LLP
New York, New York
January 19, 1999
II-5
<PAGE>
Exhibit 1.1
McLAUGHLIN, PIVEN, VOGEL
FAMILY OF TRUSTS,
THE PINNACLE GROWTH STRATEGY TRUST
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated January 20, 1999 among
McLaughlin, Piven, Vogel Securities, Inc., and Reich & Tang Distributors, Inc.,
as Depositors and The Chase Manhattan Bank, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle
Trust, and Subsequent Series, Trust Indenture and Agreement" dated September
23, 1998 and as amended in part by this Agreement (collectively, such documents
hereinafter called the "Indenture and Agreement"). This Agreement and the
Indenture, as incorporated by reference herein, will constitute a single
instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as defined in Section
1.1 of the Indenture, and shall be amended and modified from time to time by an
Addendum as defined in Section 1.1 (1) of the Indenture, such Addendum setting
forth any Additional Securities as defined in Section 1.1 (2) of the Indenture;
WHEREAS, the Depositors wish to deposit Securities, and any Additional
Securities as listed on any Addendums hereto, into the Trust and issue Units,
and Additional Units as the case maybe, in respect thereof pursuant to Section
2.5 of the Indenture; and
NOW THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the Depositors and the Trustee as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II hereof, all the provisions
contained in the Indenture are herein incorporated by reference in their
entirety and shall be deemed to be a part of this instrument as fully and to
the same extent as though said provisions had been set forth in full in this
instrument.
Section 2. This Reference Trust Agreement may be amended and modified by
Addendums, attached hereto, evidencing the purchase of Additional Securities
which have been deposited to effect an increase over the number of Units
initially specified in Part II of this Reference Trust Agreement ("Additional
Closings"). The Depositors and Trustee hereby agree that their respective
representations, agreements and certifications contained in the Closing
Memorandum dated January 20, 1999, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws and as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
<PAGE>
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are hereby agreed to:
(a) The Securities (including Contract Securities) listed in the Prospectus
relating to this series of McLaughlin, Piven, Vogel Family of Trusts (the
"Prospectus") have been deposited in the Trust under this Agreement (see
"Portfolio" in Part A of the Prospectus which for purposes of this Indenture
and Agreement is the Schedule of Securities or Schedule A).
(b) The number of Units delivered by the Trustee in exchange for the
Securities referred to in Section 2.3 is 15,617.
(c) For the purposes of the definition of Unit in item (24) of Section 1.1,
the fractional undivided interest in and ownership of the Trust initially is
1/15,617 as of the date hereof.
(d) The term Record Date shall mean the fifteenth day of June and December
commencing on June 15, 1999.
(e) The term Distribution Date shall mean the last business day of June and
December commencing on June 30, 1999.
(f) The First Settlement Date shall mean January 25, 1999.
(g) For purposes of Section 6.1(g), the liquidation amount is hereby
specified to be 40% of the aggregate value of the Securities as of the last
deposit of Additional Securities.
(h) For purposes of Section 6.4, the Trustee shall be paid per annum an
amount computed according to the following schedule, determined on the basis of
the number of Units outstanding as of the Record Date preceding the Record Date
on which the compensation is to be paid, provided, however, that with respect
to the period prior to the first Record Date, the Trustee's compensation shall
be computed at $.86 per 100 Units:
-2-
<PAGE>
<TABLE>
<CAPTION>
number of Units
rate per 100 units outstanding
------------------ ---------------
<C> <S>
$0.86 5,000,000 or less
$0.80 5,000,001--10,000,000
$0.74 10,000,001--20,000,000
$0.62 20,000,001 or more
</TABLE>
(i) For purposes of Section 7.4, the Depositors' maximum annual supervisory
fee is hereby specified to be $.25 per 100 Units outstanding.
(j) The Termination Date shall be April 24, 2000 or the earlier disposition
of the last Security in the Trust.
(k) The fiscal year for the Trust shall end on December 31 of each year.
IN WITNESS WHEREOF, the parties hereto have caused this Reference Trust
Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
-3-
<PAGE>
McLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
Depositor
/s/ Allan M. Vogel
By:
--------------------------------------
President
STATE OF NEW YORK
ss:
COUNTY OF NEW YORK
On this 19th day of January, 1999, before me personally appeared Allan M.
Vogel, to me known, who being by me duly sworn, said that he is the President
of McLaughlin, Piven, Vogel Securities, Inc., the Depositor, one of the
corporations described in and which executed the foregoing instrument, and that
he signed his name thereto by authority of the Board of Directors of said
corporation.
/s/ Carla Vogel
--------------------------------------
Notary Public
<PAGE>
REICH & TANG DISTRIBUTORS, INC.
/s/ Peter J. DeMarco
-----------------------------------
By:
Executive Vice President
STATE OF NEW YORK
ss:
COUNTY OF NEW YORK
On this 15th day of January, 1999, before me personally appeared Peter J.
DeMarco, to me known, who being by me duly sworn, said that he is an Executive
Vice President of Reich & Tang Distributors, Inc., one of the corporations
described in and which executed the foregoing instrument, and that he signed
his name thereto by authority of the Board of Directors of said corporation.
/s/ Teresa Scarfone
--------------------------------------
Notary Public
<PAGE>
THE CHASE MANHATTAN BANK
Trustee
/s/ Rosalia A. Raviele
By:
--------------------------------------
Vice President
(SEAL)
STATE OF NEW YORK
ss:
COUNTY OF NEW YORK
On this 19th day of January, 1999, before me personally appeared Rosalia A.
Raviele, to me known, who being by me duly sworn, said that he/she is an
Authorized Signator of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation and that he/she signed his/her name thereto by like
authority.
/s/ Ada Iris Vega
--------------------------------------
Notary Public
<PAGE>
Exhibit 3.1
Battle Fowler LLP
PARK AVENUE TOWER
75 EAST 55TH STREET
NEW YORK, N.Y. 10022-3205
(212) 856-7000
WRITER'S DIRECT DIAL NUMBER
WRITER'S DIRECT FACSIMILE NUMBER
WRITER'S DIRECT E-MAIL
2049 CENTURY PARK EAST CABLE ADDRESS
SUITE 2350 "COUNSELLOR"
LOS ANGELES, CA 90067-3101 FACSIMILE
TEL.: (310) 788-3000 (212) 339-9150
FAX: (310) 277-0336 www.battlefowler.com
January 12, 1999
McLaughlin, Piven, Vogel Securities, Inc.
30 Wall Street
New York, New York 10005
Reich & Tang Distributors, Inc.
600 Fifth Avenue
New York, New York 10020
Re: McLaughlin, Piven, Vogel Family of Trusts, The Pinnacle Growth
Strategy Trust
Dear Sirs:
We have acted as special counsel for McLaughlin, Piven, Vogel Securities,
Inc. and Reich & Tang Distributors, Inc., as Depositors, Sponsors and Principal
Underwriters (collectively, the "Depositors") of McLaughlin, Piven, Vogel
Family of Trusts, The Pinnacle Growth Strategy Trust (the "Trust") in
connection with the issuance by the Trust of units of fractional undivided
interest (the "Units") in the Trust. Pursuant to the Trust Agreements referred
to below, the Depositors have transferred to the Trust certain securities and
contracts to purchase certain securities together with an irrevocable letter of
credit to be held by the Trustee upon the terms and conditions set forth in the
Trust Agreements. (All securities to be acquired by the Trust are collectively
referred to as the "Securities".)
In connection with our representation, we have examined copies of the
following documents relating to the creation of the Trust and the issuance and
sale of the Units: (a) the Trust Indenture and Agreement and related Reference
Trust Agreement, each of even date herewith, relating to the Trust
(collectively, the "Trust Agreements") among the Depositors and The Chase
Manhattan Bank, as Trustee; (b) the Notification of Registration on Form N-8A
and the Registration Statement on Form N-8B-2, as amended, relating to the
Trust,
<PAGE>
Battle Fowler LLP Page
McLaughlin, Piven, Vogel Securities, Inc.
Reich & Tang Distributors, Inc.
January 20, 1999
as filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Investment Company Act of 1940 (the "1940 Act"); (c) the
Registration Statement on Form S-6 (Registration No. 333-68169) filed with the
Commission pursuant to the Securities Act of 1933 (the "1933 Act"), and all
Amendments thereto (said Registration Statement, as amended by said
Amendment(s) being herein called the "Registration Statement"); (d) the
proposed form of final Prospectus (the "Prospectus") relating to the Units,
which is expected to be filed with the Commission this day; (e) certified
resolutions of the Board of Directors of Reich & Tang Distributors, Inc. and of
the Board of Directors of McLaughlin, Piven, Vogel Securities, Inc. authorizing
the execution and delivery by the Depositors of the Trust Agreements and the
consummation of the transactions contemplated thereby; (f) the Certificate of
Incorporation of Reich & Tang Distributors, Inc.; (g) the Certificate of
Incorporation, the Certificates of Amendment of the Certificate of
Incorporation and the Bylaws of McLaughlin, Piven, Vogel Securities, Inc.; and
(h) a certificate of an authorized officer of Reich & Tang Distributors, Inc.
with respect to certain factual matters contained therein.
We have examined the Order of Exemption from certain provisions of Sections
11(a) and 11(c) of the 1940 Act, filed on behalf of Reich & Tang Distributors
L.P.(the predecessor to Reich & Tang Distributors, Inc.); Equity Securities
Trust (Series 1, Signature Series and Subsequent Series), Mortgage Securities
Trust (CMO Series 1 and Subsequent Series), Municipal Securities Trust, Series
1 (and Subsequent Series) (including Insured Municipal Securities Trust, Series
1 (and Subsequent Series and 5th Discount Series and Subsequent Series)); New
York Municipal Trust (Series 1 and Subsequent Series); and A Corporate Trust
(Series 1 and Subsequent Series) granted on October 9, 1996. In addition, we
have examined the Order of Exemption from certain provisions of Sections
2(a)(32), 2(a)(35), 22(d) and 26(a)(2) of the 1940 Act and Rule 22C-1
thereunder, filed on behalf of Reich & Tang Distributors L.P.; Equity
Securities Trust; Mortgage Securities Trust; Municipal Securities Trust
(including Insured Municipal Securities Trust); New York Municipal Trust; A
Corporate Trust; Schwab Trusts; and all presently outstanding and subsequently
issued series of these trusts and all subsequently issued series of unit
investment trusts sponsored by Reich & Tang Distributors L.P. granted on
October 29, 1997.
We have not reviewed the financial statements, compilation of the Securities
held by the Trust, or other financial or statistical data contained in the
Registration Statement and the Prospectus, as to which you have been furnished
with the reports of the accountants appearing in the Registration Statement and
the Prospectus.
In addition, we have assumed the genuineness of all agreements, instruments
and documents submitted to us as originals and the conformity to originals of
all copies thereof submitted to us. We have also assumed the genuineness of all
signatures and the legal capacity of all persons executing agreements,
instruments and documents examined or relied upon by us.
Statements in this opinion as to the validity, binding effect and
enforceability of agreements, instruments and documents are subject to: (i)
limitations as to enforceability imposed by bankruptcy, reorganization,
moratorium, insolvency and other laws of general application relating to or
affecting the enforceability of creditors' rights, and (ii) limitations under
equitable principles governing the availability of equitable remedies.
<PAGE>
Battle Fowler LLP Page
McLaughlin, Piven, Vogel Securities, Inc.
Reich & Tang Distributors, Inc.
January 20, 1999
We are not admitted to the practice of law in any jurisdiction but the State
of New York and we do not hold ourselves out as experts in or express any
opinion as to the laws of other states or jurisdictions except as to matters of
Federal and Delaware corporate law.
Based exclusively on the foregoing, we are of the opinion that under existing
law:
(1) The Trust Agreements have been duly authorized and entered into by an
authorized officer of each of the Depositors and are a valid and binding
obligation of the Depositors in accordance with their respective terms.
(2) The registration of the Units on the registration books of the Trust
by the Trustee has been duly authorized by the Depositors in accordance
with the provisions of the Trust Agreements and issued for the
consideration contemplated therein, will constitute fractional undivided
interests in the Trust, will be entitled to the benefits of the Trust
Agreements, and will conform in all material respects to the description
thereof contained in the Prospectus. Upon payment of the consideration for
the Units as provided in the Trust Agreements and the Registration
Statement, the Units will be fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration Statement
and in the Prospectus under the headings "Tax Status" and "Legal Opinions". We
authorize you to deliver copies of this opinion to the Trustee and the Trustee
may rely on this opinion as fully and to the same extent as if it had been
addressed to it.
This opinion is intended solely for the benefit of the addressees and the
Trustee in connection with the issuance of the Units of the Trust and may not
be relied upon in any other manner or by any other person without our express
written consent.
Very truly yours,
/s/ Battle Fowler LLP
-------------------------------------
Battle Fowler LLP
