<TABLE>
<CAPTION>
As filed with the Securities and Exchange Commission on December 28, 1999
Registration No. 333-92473
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 1
TO
FORM S-6
--------------------
For Registration Under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
--------------------
A. EXACT NAME OF TRUST:
The Pinnacle Family of Trusts, Large Cap Series IV
B. NAME OF DEPOSITORS:
<S> <C> <C>
McLaughlin, Piven, Vogel Securities, Inc. Reich & Tang Distributors, Inc.
C. COMPLETE ADDRESS OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
McLaughlin, Piven, Vogel Securities, Inc. Reich & Tang Distributors, Inc.
30 Wall Street 600 Fifth Avenue
New York, New York 10005 New York, New York 10020
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY OF COMMENTS TO:
ALLAN M. VOGEL PETER J. DEMARCO MICHAEL R. ROSELLA, Esq.
President Executive Vice President Battle Fowler LLP
McLaughlin, Piven, Vogel Reich & Tang Distributors, Inc. 75 East 55th Street
Securities, Inc. 600 Fifth Avenue New York, New York 10022
30 Wall Street New York, New York 10020 (212) 856-6858
New York, New York 10005
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of The Pinnacle Family of Trusts, Large Cap
Series IV are 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.
/X/ Check if it is proposed that this filing will become effective immediately upon filing pursuant to Rule 487.
================================================================================
</TABLE>
904795.1
<PAGE>
- -------------------------------------------------------------------------------
THE PINNACLE FAMILY OF TRUSTS
- -------------------------------------------------------------------------------
LARGE CAP SERIES IV
A unit investment trust
The investment objective of the Large Cap Trust is to maximize total return
through a combination of capital appreciation and current dividend income.
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 Statements of Financial Condition of the Trust. Part B contains general
information about the Trust. Part A and Part B must be distributed together.
Read and retain this Prospectus for future reference.
================================================================================
================================================================================
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 DECEMBER 28, 1999
A-1
<PAGE>
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE. The Large Cap Series IV (the "Large Cap 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 Large Cap Trust seeks to achieve its
investment objective by attempting to outperform the DJIA* (which is not
affiliated with the Sponsors) by creating a portfolio that combines the
following three investment strategies, each determined as of two business days
prior to the Initial Date of Deposit:
Strategy 1: invest in the DJIA's ten (10) common stocks having the
highest dividend yield (the "Top Ten"),
Strategy 2: invest in the DJIA's five (5) common stocks having the
lowest per share stock price of the Top Ten (the "Focus
Five") and
Strategy 3: invest in a single stock which is the DJIA's
second-lowest priced of the Focus Five (the "Penultimate
Pick").
The combination of the three investment strategies is hereinafter referred to as
the "Triple Strategy." The Trust's portfolio will be comprised of ten (10)
stocks. Approximately 20% of the Trust's assets will be allocated to the Top
Ten, approximately 60% will be allocated to the Focus Five and approximately 20%
will be allocated to the Penultimate Pick. Within the Top Ten and Focus Five
categories, stocks will be purchased in approximately equal dollar amounts.
DESCRIPTION OF THE TRUST. The Large Cap Trust contains 10 issues of common
stock. 100% of the issues are represented by the Sponsors' contracts to
purchase. All 10 of the stocks are listed on the NYSE. Based upon the principal
business of each issuer and current market values, the following industries are
represented in the Trust: Auto Manufacturing, 2.00%; Banking and Financial,
1.96%; Chemical, 1.99%; Consumer Products, 13.98%; Machinery, 34.04%;
Manufacturing, 2.01%; Oil, 1.97%; Paper, 14.02%; Photographic Products, 13.98%;
and Telephone, 14.05%. The Focus Five stocks are Caterpillar Inc., Eastman Kodak
Company, International Paper Co., Phillip Morris Companies, Inc. and SBC
Communications Inc. and the Penultimate Pick is Caterpillar Inc., a company with
a significant concentration in the machinery 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 the Trust. The
value of the Units and the Securities in the Trust can each decline in value. An
investment in Units of the Trust should be made with an
- ---------------
* The name "Dow Jones Industrial Average" (DJIA) is the property of Dow Jones
& Company, Inc., which is not affiliated with the Sponsors and has not
participated in any way in the creation of the Trust or in the selection of the
stocks included in the Trust and has not reviewed or approved any information
included in this Prospectus. Dow Jones & Company, Inc. has not granted to the
Trust or the Sponsors a license to use the Dow Jones Industrial Average.
A-2
<PAGE>
understanding of the following risks:
o 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).
o Since the portfolio of the Trust is fixed and "not managed," in
general, the Sponsors can sell Securities only at the Trust's
termination or in order to meet redemptions. As a result, the price at
which each Security is sold may not be the highest price it attained
during the life of the Trust.
o When cash or a letter of credit is deposited with instructions to
purchase securities in order to create additional Units, an increase in
the price of a particular security between the time of deposit and the
time that securities are purchased will cause the Units to be comprised
of less of that security and more of the remaining securities. In
addition, brokerage fees incurred in purchasing the Securities will be
an expense of the Trust.
o 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 each Unit and the income per
Unit received by the Trust.
o There is no assurance that any dividends will be declared or paid in
the future on the Securities.
o Investors should also consider the greater risk of the Trust's
concentration, in a particular industry or in a single stock, 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.
o The combination of the three investment strategies of the Large Cap
Trust causes the Trust to be concentrated in a single stock (the
Penultimate Pick). The Penultimate Pick is a company deriving a
substantial portion of its income from the machinery industry.
PUBLIC OFFERING PRICE. The Initial Public Offering Price per 100 units of the
Trust is calculated by:
o dividing the aggregate value of the underlying securities and cash held
in the Trust (representing the estimated organizational costs) by the
number of units outstanding;
o adding a sales charge of 3.695% (3.837% of the net amount invested);
and
o multiplying the result by 100.
In addition, during the initial offering period, the Public Offering Price per
100 units will include an amount sufficient to reimburse the Sponsors for the
payment of all or a portion of the estimated organizational costs of the
A-3
<PAGE>
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 each investor's purchase price will be computed as of the date
the Units are purchased. Orders involving at least 25,000 Units will be entitled
to a volume discount from the Public Offering Price.
MINIMUM PURCHASE. 100 Units for individuals and 25 Units for custodial accounts
and certain tax deferred retirement plans.
DISTRIBUTIONS. The Trust will distribute any dividends received, less expenses,
semi-annually. The first dividend distribution will be made on June 30, 2000 to
all Unitholders of record on June 15, 2000 and thereafter distributions will be
made on the last business day of every December and June. The final distribution
will be made within a reasonable period of time after the Trust terminates.
ESTIMATED NET ANNUAL DISTRIBUTION. As of two business days prior to the Initial
Date of Deposit, the estimated net annual distribution to Unitholders of the
Trust per 100 Units (based on the most recent ordinary dividend declared with
respect to the Securities) was $30.74. This estimate will vary with changes in
the Trust's fees and expenses, actual dividends received by the Trust, Units
outstanding and with the sale of Securities. In addition, because the issuers of
common stock are not obligated to pay dividends, there is no assurance that the
estimated net annual dividend distribution will be realized in the future.
MARKET FOR UNITS. Unitholders may sell their Units to the Sponsors or the
Trustee at any time, 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. However, 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 these Securities. There can be no assurance of the making
or the maintenance of a market for any of the Securities contained in the
portfolio of the Trust or of the liquidity of the Securities in any markets
made. The price at which the Securities may be sold to meet redemptions and the
value of the Units will be adversely affected if trading markets for the
Securities are limited or absent.
AUTOMATIC REDEMPTION. Any transfer of Units by Unitholders from their
McLaughlin, Piven, Vogel brokerage account will result in the automatic
redemption of those Units. Unitholders, excluding tax sheltered retirement
accounts, will generally incur a taxable gain or loss upon an involuntary
redemption. See "Tax Status" in Part B.
TERMINATION. The Trust will terminate in approximately fifteen months. During
the Liquidation Period, Securities will be sold in connection with the
termination of the Trust. All Securities will be sold or distributed by the
Mandatory Termination Date. The Sponsors do not anticipate that the Liquidation
Period will be longer than seven days, and it could be as short as one day,
depending on the liquidity of the Securities being sold. Unitholders may elect
one of the following three options in receiving their terminating distributions:
o receive their distribution in-kind, if they own at least 2,500 Units;
o receive cash upon the liquidation of their pro rata share of the
Securities; or
A-4
<PAGE>
o reinvest in a subsequent series of The Pinnacle Family of Trusts
(formerly known as the McLaughlin, Piven, Vogel Family of 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 The Pinnacle Family of 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 the Pinnacle Family of Trusts. An election to rollover
terminating distributions will generally be a taxable event. See "Administration
of the Trust--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 The Pinnacle Family of Trusts, Large Cap Series IV.
A-5
<PAGE>
FEE TABLE
- --------------------------------------------------------------------------------
This Fee Table is intended to help you understand the costs and expenses you
will bear directly or indirectly. See "Public Sale of Units" and "Trust Expenses
and Charges" in Part B. 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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Unitholder Transaction Expenses
(Fees paid directly from your investment)
Large Cap Trust
---------------
As a % Amount
Of Initial Per 100
Offering Units
Price -----
---------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchase................... 3.695% $ 36.95
Maximum Sales Charge Imposed Per Year on Reinvested
Dividends............................................... 1.00% $ 10.00
Estimated Organizational Expenses.......................... .129% $ 1.29
Maximum Annual Maintenance Fee for a McLaughlin,
Piven, Vogel Brokerage Account.......................... $ 69.50
Estimated Annual Fund Operating Expenses
(Expenses that are deducted from Trust assets)
</TABLE>
<TABLE>
<CAPTION>
Large Cap Trust
---------------
As a % Amount
Of Initial Per 100
Net Assets Units
---------- -----
<S> <C> <C>
Trustee's Fee......................... .089% $ .86
Other Operating Expenses.............. .047% $ .45
Portfolio Supervision,
Bookkeeping and
Administrative Fees.............. .026% $ .25
------- -----
Total................................. .136% $ 1.31
===== ======
</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. You would pay the following
expenses on a $10,000 investment in the Trust assuming estimated operating
expense ratio of .131% for the Trust 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:
1 year 3 years
Large Cap Trust.......................... $ 465 $ 1,298
For purposes of this example, the sales charge imposed on reinvested
dividends is not reflected until the year following payment of the dividend; the
cumulative expenses would be higher if sales charges on reinvested dividends
were reflected in the year of reinvestment. If these charges and fees were
included, your costs would be higher. 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 Annual Maintenance Fee is applicable to your entire brokerage account
regardless of account size or diversity of holdings and is not related solely to
the purchase of Units. Such account may entitle Unitholders to a commission
discount for equity trades. Contact your account representative for additional
information and see "Public Sale of Units" in Part B.
A-6
<PAGE>
<TABLE>
<CAPTION>
THE LARGE CAP TRUST
SUMMARY OF ESSENTIAL INFORMATION
As of December 27, 1999, the business day prior to the Initial Date of Deposit
Initial Date of Deposit of Securities in the
Trust: December 28, 1999
<S> <C> <C>
Aggregate Value of Securities: ..................... $148,723 Evaluation Time: 4:00 p.m. New York Time
Number of Units: ................................... 15,464 Minimum Value of Trust: The Trust may be
Fractional Undivided Interest in terminated if the value of the Trust is less than
Trust: .......................................... 1/15,464 40% of the aggregate value of the Securities at
Public Offering Price per 100 Units: the completion of the initial offering period.
Aggregate Value of Securities in Trust........... $148,723 Cusip Numbers: Cash: 72346A109
Divided By 15,464 Units (times 100).............. 961.76 Reinvestment: 72346A117
Plus Estimated Organization Costs*............... $1.29 Trustee: The Chase Manhattan Bank
Plus Sales Charge of 3.695% of Public Trustee's Fee per 100 Units: $.86
Offering Price................................... $36.95 Other Fees and Expenses per 100 Units: $.20
Public Offering Price+........................... $1,000.00 Sponsors: McLaughlin, Piven, Vogel Securities,
Sponsor's Repurchase Price And Inc. and Reich & Tang Distributors, Inc.
Redemption Price per 100 Units++: ............... $963.05 Agent for Sponsors: Reich & Tang Distributors,
Minimum Income or Principal Inc.
Distribution per 100 Units: ..................... $ 1.00 Sponsors' Portfolio Supervisory, Bookkeeping
Liquidation Period: A 40 day period And Administrative Fee per 100 Units:
beginning on the first business day Maximum of $.25 (see "Trust Expenses and Charges"
following the Termination Date. in Part B).
Termination Date: March 27, 2001 or Expected Settlement Date of Securities in the
the disposition of the last security in the Trust: December 31, 1999
Trust. Record Dates: June 15 and December 15
Mandatory Termination Date: The last Distribution Dates: June 30 and December 31
day of the liquidation period. Reinvestment Sales Charge: 1.00%
Rollover Notification Date**: March 13, 2001
or another date as determined by the Sponsors.
</TABLE>
- -------------
* Investors will reimburse the Sponsors for all or a portion of the costs
incurred in organizing and offering the Trust. These "organization costs"
include costs of preparing the registration statement, the Trust indenture
and other closing documents, registering units with the SEC and the states
and the initial audit of the Trust portfolio. The estimated organization
costs will be paid to the Sponsors from the assets of the Trust as of the
close of the initial offering period. To the extent that actual
organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of the Trust. To the
extent that actual organization costs are greater than the estimated
amount, only the estimated organization costs included in the Public
Offering Price will be reimbursed to the Sponsors.
** The date by which a Rollover Unitholder must elect to reinvest its
terminating distribution in an available series of the Pinnacle Family of
Trusts, if offered.
+ 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 such date will pay a Public Offering Price which includes a pro
rata share of any cash in such Accounts.
++ A Unitholder redeeming 2,500 Units or more 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.
A-7
<TABLE>
<CAPTION>
THE PINNACLE FAMILY OF TRUSTS
LARGE CAP SERIES IV
STATEMENT OF FINANCIAL CONDITION, AS OF DECEMBER 27, 1999
ASSETS
Large Cap
Trust
-----
<S> <C>
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost for
Large Cap Trust: $148,723) (Note 1).................................... $148,723
Cash....................................................................... 199
--------
Total...................................................................... $148,922
========
LIABILITIES AND INTEREST OF UNITHOLDERS
Reimbursement to Sponsors for Organization Costs (Note 2).................. $199
Interest of Unitholders--Units of Fractional Undivided Interest
Outstanding (Large Cap Trust: 15,464 Units)........................... 148,723
--------
Total...................................................................... $148,922
========
Net Asset Value per Unit................................................... $9.62
=====
</TABLE>
- ------
Notes to Statements 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) The Pinnacle Family of Trusts, Large Cap Series IV (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 Large
Cap Trust jointly sponsored by McLaughlin, Piven, Vogel Securities, Inc. and
Reich & Tang Distributors, Inc., the Sponsors, is to maximize total return
through a combination of capital appreciation and current dividend income. An
irrevocable letter of credit issued by BankBoston in an amount of $400,000 has
been deposited with the Trustee for the benefit of the Trust to cover the
purchases of such Securities. Aggregate cost to the Trust of the Securities
listed in the portfolios is determined by the Trustee on the basis set forth
under "Public Sale of Units--Public Offering Price" as of 4:00 p.m. on December
27, 1999. The Trust will terminate on March 27, 2001 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 $1.29
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-8
<PAGE>
<TABLE>
<CAPTION>
THE PINNACLE
FAMILY OF TRUSTS
LARGE CAP TRUST
PORTFOLIO
AS OF DECEMBER 27, 1999
Market
Value
of Stocks
as a Cost of
Port- Number Percentage Current Market Securities
folio Of Ticker of the Dividend Value Per to the
No. Shares Name of Issuer (1) Symbol Trust (2) Yield (3) Share Trust (4)
--- ------ ------------------ ------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1093 Caterpillar Inc. CAT 34.04% 2.81% 46.3125 $50,620
2 47 E.I duPont de Nemours and Co. DD 1.99 2.23 62.8750 2,955
3 324 Eastman Kodak Company EK 13.98 2.74 64.1875 20,797
4 36 Exxon Mobil Corporation XOM 1.97 2.17 81.2500 2,925
5 42 General Motors Corporation GM 2.00 2.83 70.7500 2,971
6 384 International Paper Co. IP 14.02 1.84 54.3125 20,856
7 23 J.P. Morgan & Company JPM 1.96 3.16 126.5000 2,909
8 32 Minnesota Mining & Manufacturing Co. MMM 2.01 2.39 93.5625 2,994
9 932 Philip Morris Companies, Inc. MO 13.98 8.61 22.3125 20,795
10 426 SBC Communications Inc. SBC 14.05 1.98 49.0625 20,901
------- --------
Total Investment in Securities 100.00% $148,723
======= ========
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on December 27,
1999. All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be December 31, 1999.
(2) Based on the cost of the Securities to the Trust.
(3) Current Dividend Yield for each security was calculated by annualizing the
last quarterly or semi-annual ordinary dividend declared on the security
and dividing the result by its market value as of the close of trading on
December 27, 1999.
(4) Evaluation of Securities by the Trustee was made on the basis of closing
sale prices at the Evaluation Time on the day prior to the Initial Date of
Deposit. The Sponsors' Purchase Price is $150,068. The Sponsors' Loss on
the Initial Date of Deposit is $1,345.
A-9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSORS AND TRUSTEE
THE PINNACLE FAMILY OF TRUSTS,
LARGE CAP SERIES IV
We have audited the accompanying Statement of Financial Condition of The
Pinnacle Family of Trusts, Large Cap Series IV Trust, including the Portfolio,
as of December 27, 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 statements. 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 December 27, 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 The Pinnacle Family of
Trusts, Large Cap Series IV Trust, at December 27, 1999, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
December 28, 1999
A-10
<PAGE>
THE PINNACLE FAMILY OF TRUSTS
LARGE CAP SERIES IV
One convenient trust comprised of three strategies that have historically
"Beaten the Dow."
Investing in the stock market has proven year after year to be a good way
to beat inflation. The Dow Jones Industrial Average (DJIA)* is a leading stock
market indicator that provides the data for this fact. This average is a
sampling of thirty stocks that represent some of the largest and strongest
companies in the world. Their long record of steady earnings, financial
resources and economic power has earned them the investor confidence that has
given them the nickname "blue chip" stocks.
The Concept--The Trust's concept is a simple one: To create a portfolio
which combines these three "winning" strategies. The diversification of the Top
Ten stocks combined with a concentration of the higher yielding Penultimate Pick
and the Focus Five stocks gives the Trust the opportunity to produce above
average returns. The portfolio is held for approximately 15 months and then it
is liquidated.
The Strategy--Now you have the opportunity to invest in three strategies
simultaneously that have been proven to "beat" the DJIA without having to spend
the time, effort and money to buy each stock individually. The Large Cap Series
IV Trust is a unit investment trust portfolio designed to take advantage of
three winning strategies. Historically, these three strategies have each
individually beaten the returns of the DJIA over the past twenty-five years.
The first strategy is to pick the ten highest-yielding stocks of the thirty
stocks that are contained in the DJIA. These are the Top Ten. The second
strategy is to choose the five lowest priced stocks of the Top Ten. These are
called the Focus Five. The last strategy is to choose the second lowest priced
stock of the Focus Five. This is the Penultimate Pick. The strategies are
combined to produce a portfolio of ten stocks with 20% of the Trust invested in
the Top Ten, 60% in the Focus Five and 20% in the Penultimate Pick. Although
stocks are purchased in equal dollar amounts, actual weightings of the
strategies and stocks overlap because the Penultimate Pick is included in the
Focus Five and both are included in the Top Ten.
The chart shows the effect these strategies may have on your investment.
For example, if in 1974 you had hypothetically invested $10,000 in the DJIA,
your investment would be worth approximately $290,145 today. But, if you had
hypothetically invested the same $10,000 applying this triple strategy, your
investment would be worth approximately $1,369,882 ($655,445 net of Trust sales
charges and expenses) today. These hypothetical returns do not include
commissions and taxes or reflect the effect of market fluctuations if a stock in
the portfolio of one of the strategies was sold at any point in time. There can
be no assurance that these results will be achieved as past performance is no
guarantee of future results.
- ------
* The DJIA is the property of Dow Jones & Company, Inc. and is not affiliated
with the Sponsors and has not participated in any way in the creation of the
Trust or in the portfolio and has not approved any information included
herein.
i
<PAGE>
Insert Chart
The chart assumes that all dividends during the one year are reinvested at
the end of that year. There can be no assurance that the Trust will outperform
the DJIA over its 15-month life or over consecutive roll over periods, if
available. The strategy outperformed the DJIA in 17 out of the past 25 years (13
years if trust sales charges and expenses were deducted from the hypothetical
performance). Of course, that also means the strategy underperformed the DJIA in
eight of those years.
**The performance of the hypothetical Triple Strategy is net of sales
charges (3.695% for the first year, and 3.195% for each subsequent year) and
estimated expenses of .260%.
Triple Strategy Trust Investing
o Time Invested vs. Investment Timing--This Trust is based on the theory
that you are rolling over your units at termination. The Trust may not
exceed the DJIA in any one year or consecutive roll over periods, if
available. However, historically, long term cumulative returns from
this philosophy beat the DJIA. It's not the timing of the purchase that
counts, it's the length of time that you are invested.
o Contrarian Reasoning--Buy what others are selling.
o Dividends Count--Dividends contribute greatly to your total return.
o Layered Strategies Work--Look at the chart and notice how the DJIA has
been beaten by these strategies. It is our opinion that if one strategy
works well, then three strategies may work better.
ii
<PAGE>
FEATURES OF THE LARGE CAP TRUST
Convenience--Ownership of ten blue chip stocks with the ease of a single
purchase.
Liquidity--You may sell your units on any business day at the then current
net asset value. However, since market values fluctuate, your units may be worth
more or less than your original investment.
Low minimum investment--May be as low as $1,000.
Options at termination--You may receive cash, stock-in-kind (unitholders
owning 2,500 units or more) or roll your proceeds into another series of The
Pinnacle Family of Trusts, if available, at a reduced sales charge. Unitholders
may be subject to tax liability at Trust Termination.
No Management Fees--This is an unmanaged portfolio and therefore no
additional management fees are charged.
Risk Considerations;
An investment in Units of the Trust should be made with an understanding of
the risks associated with investments in common stocks, which include the risk
that the financial condition of the issuers may become impaired or that the
general condition of the stock market may worsen. In addition, because the Trust
may be considered to be "concentrated" in stocks of companies deriving a
substantial portion of their income from a single industry, and that the
combination of the three investment strategies causes the Trust to be
"concentrated" in the Penultimate Pick, investors should consider the greater
risk of such concentrations and the effect on their investment versus a more
diversified portfolio and compare those returns before making an investment
decision.
iii
<PAGE>
THE PINNACLE FAMILY OF TRUSTS
LARGE CAP SERIES IV
(the "Large Cap Trust")
PROSPECTUS--PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY
PART A
THE TRUST
ORGANIZATION. The Trust was created under New York State law pursuant to an
Indenture and Trust Agreement ("Trust Agreement") 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") 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 Indenture.
As of the Initial Date of Deposit, a "Unit" represents a fractional
undivided interest or pro rata share in the Securities and cash of 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.
The contracts to purchase Securities deposited initially in the Trust is
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.
DEPOSIT OF ADDITIONAL SECURITIES. During the 90-day period following the
Initial Date of Deposit (the "Deposit Period"), the Sponsors may deposit (i)
additional Securities in the Trust that are substantially similar to the
Securities already deposited in the Trust ("Additional Securities"), (ii)
contracts to purchase Additional Securities or (iii) 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
B-1
<PAGE>
in the Trust's portfolio on the Initial Date of Deposit. These additional Units,
which will result in an increase in the number of Units outstanding, will each
represent, to the extent practicable, an undivided interest in the same number
and type of securities of identical issuers as are represented by Units issued
on the Initial Date of Deposit.
The proportionate relationship among the Securities in the Trust will be
adjusted to reflect the occurrence of a stock dividend, a stock split or a
similar event which affects the capital structure of the issuer of a Security in
the Trust but which does not affect the Trust's percentage ownership of the
common stock equity of such issuer at the time of such event. 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. 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's portfolio. Substitute
Securities may be acquired under specified conditions when Securities originally
deposited in the Trust are unavailable (see "The Trust--Substitution of
Securities").
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.
Achievement of the investment objective is dependent upon several factors
including any appreciation or depreciation in value of the Securities, 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. In addition, because of other factors (i.e.,
Trust sales charges and expenses, unequal weightings of stock, brokerage costs
and any delays in purchasing securities with cash deposited), investors in the
Trust may not realize as high a total return as the theoretical performance of
the underlying stocks in the Trust. 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 Large Cap Trust seeks to achieve its
objective by attempting to outperform the DJIA (which is not affiliated with the
Sponsors) by creating a portfolio that combines the following three investment
strategies each determined as of two business days prior to the Initial Date of
Deposit:
Strategy 1: investing in the DJIA's ten (10) common stocks having the
highest dividend yield (the "Top Ten "),
Strategy 2: investing in the DJIA's five (5) common stocks having the
lowest per share stock price of the Top Ten (the "Focus
Five") and
Strategy 3: investing in a single stock which is the DJIA's
second-lowest priced of the Focus Five (the "Penultimate
Pick").
The combination of the three investment strategies is hereinafter referred
to as the "Triple Strategy." The Trust's portfolio will be comprised of ten (10)
stocks. Approximately 20% of the Trust's assets will be allocated to the Top
Ten, approximately 60% will be allocated to the Focus Five and approximately 20%
will be allocated to the Penultimate Pick. Within the Top Ten and Focus Five,
stocks will be purchased in approximately equal dollar
B-2
<PAGE>
amounts. Due to the fact that all of the Focus Five are also represented in the
Top Ten, and that the Penultimate Pick appears in both the Focus Five and Top
Ten, overlap will result in a difference in the actual weighting of the stocks
in the portfolio as well as the actual weighting of the three strategies
relative to each other in the portfolio on the Initial Date of Deposit. As used
herein, the term "highest dividend yield" means the yield for each Security
calculated by annualizing the last dividend distributed on that Security and
dividing the result by the market value of that Security as of two business days
prior to the Initial Date of Deposit. This rate is historical, and there is no
assurance that any dividends will be declared or paid in the future on the
Securities in the Trust.
Investing in DJIA stocks with the highest dividend yields may be effective
in achieving the Trust's investment objective because regular dividends are
common for established companies and dividends have accounted for a substantial
portion of the total return on DJIA stocks as a group. There can be no assurance
that the dividend rates will be maintained. Reduction or elimination of a
dividend can adversely affect the stock price as well. Purchasing a portfolio of
these stocks as opposed to one or two stocks can achieve a more diversified
holding. There is only one investment decision instead of ten. An investment in
the Trust can be cost-efficient, avoiding the odd-lot costs of buying small
quantities of securities directly. An investment in a number of companies with
high dividends relative to their stock prices is designed to increase the
Trust's potential for higher returns. The Trust's return will consist of a
combination of capital appreciation and current dividend income.
B-3
<PAGE>
THE SECURITIES.
DJIA. The Dow Jones Industrial Average (DJIA) comprises 30 common stocks
chosen by the editors of The Wall Street Journal as representative of the broad
market and of American industry. The companies are major factors in their
industries and their stocks are widely held by individuals and institutional
investors. Changes in the components of the DJIA are made entirely by the
editors of The Wall Street Journal without consultation with the companies, the
stock exchange or any official agency. For the sake of continuity, changes are
made rarely. Most substitutions have been the result of mergers, but from time
to time, changes may be made to achieve a better representation. The components
of the DJIA may be changed at any time for any reason. Any changes in the
components of the DJIA after the date of this Prospectus will not cause a change
in the identity of the common stocks included in the Trust's portfolio,
including any Additional Securities deposited in the Trust.
The first DJIA, consisting of 12 stocks, was published in The Wall Street
Journal in 1896. The list grew to 20 stocks in 1916 and to 30 stocks on October
1, 1928. For two periods of 17 consecutive years each, there were no changes to
the list: March 1939-July 1956 and June 1959-August 1976. The DJIA last changed
on November 1, 1999.
Stocks Currently Comprising the DJIA
AT&T Corporation Intel Corporation
Allied Signal International Business Machines Corporation
Aluminum Company of America International Paper Company
American Express Company Johnson & Johnson
Boeing Company J.P. Morgan & Company
Caterpillar Inc. McDonald's Corporation
Citigroup Inc. Merck & Company, Inc.
Coca-Cola Company Microsoft Corporation
E.I. du Pont de Nemours & Company Minnesota Mining & Manufacturing Company
Eastman Kodak Company Philip Morris Companies, Inc.
Exxon Corporation Proctor & Gamble Company
General Electric Company SBC Communications Inc.
General Motors Corporation United Technologies Corporation
Hewlett-Packard Co. Wal-Mart Stores, Inc.
Home Depot Inc. Walt Disney Company
The yield for each Security was calculated by annualizing the last
quarterly or semi-annual ordinary dividend distributed and dividing the result
by the market value of the Security as of two business days prior to the Initial
Date of Deposit. This formula (an objective determination) served as the basis
for the Sponsors' selection of the Top Ten. The companies represented in the
Trust are some of the most well-known and highly capitalized companies in
America. The Securities were selected irrespective of any research
recommendation by the Sponsors. Investing in the stocks of the DJIA may be
effective as well as conservative because regular dividends are common for
established companies and dividends have accounted for a substantial portion of
the total return on stocks comprising the DJIA.
B-4
<PAGE>
Although the Trust was not available until September 1998, during the last
25 years, the strategy of investing in approximately equal values of the ten
highest yielding stocks each year generally would have yielded a higher total
return than an investment in all 30 stocks which make up the DJIA. The following
table shows the hypothetical performance of investing approximately equal
amounts in each of the Top Ten, Focus Five, Penultimate Pick and the combined
Triple Strategy at the beginning of each year and rolling over the proceeds. The
total returns do not reflect sales charges, except as indicated, commissions or
taxes. These results represent past performance of the Top Ten, Focus Five,
Penultimate Pick and Triple Strategy, and should not be considered indicative of
future results of the Trust. The Trust's annual total return may not exceed the
DJIA in any one year; however, historically, long term cumulative total returns
from these strategies has outperformed the cumulative returns of the DJIA. The
Top Ten, Focus Five, Penultimate Pick and Triple Strategy each underperformed
the DJIA in certain years. Also, investors in the Trust may not realize as high
a total return as on a direct investment in each of the Top Ten, Focus Five,
Penultimate Pick or Triple Strategy since the Trust has sales charges and
expenses and may not be fully invested at all times. Unit prices fluctuate with
the value of the underlying stocks, and there is no assurance that dividends on
these stocks will be paid or that the Units will appreciate in value.
The following table compares the actual performance of the DJIA and
approximately equal values of each of the Top Ten, Focus Five, Penultimate Pick
or Hypothetical Triple Strategy Trust in each of the past 25 years, as of
December 31 in each of these years:
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURNS(1)
For Calendar Years ending 12/31
(Unless indicated, Total Returns do not include sales
charges, commissions, taxes or other expenses)
Hypothetical
Dow Jones Triple Strategy
Calendar Industrial Top Focus Penultimate Hypothetical Trust--Net of
Year Average Ten of Five of Pick of Triple Strategy Sales Charges
Ended (DJIA) DJIA (2) DJIA (2) DJIA (2) Trust (3) & Expenses (3)(4)
----- ------ ---------- ---------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
1974 -23.10% -1.30% -3.80% -41.70% -10.88% -14.83%
1975 44.40 55.90 70.10 157.20 84.68 81.23
1976 22.70 34.80 40.80 55.10 42.46 39.01
1977 -12.70 0.90 4.50 4.30 3.74 0.29
1978 2.70 -0.10 1.70 1.00 1.20 -2.25
1979 10.50 12.40 9.90 -10.10 6.40 2.95
1980 21.50 27.20 40.50 50.60 39.86 36.41
1981 -3.40 5.00 0.00 27.30 6.46 3.01
1982 25.80 23.60 37.40 95.30 46.22 42.77
1983 25.70 38.70 36.10 36.10 36.62 33.17
1984 1.10 7.60 12.60 -2.80 8.52 5.07
1985 32.80 29.50 37.80 26.40 33.86 30.41
1986 26.90 32.10 27.90 29.60 29.08 25.63
1987 6.00 6.10 11.10 3.30 8.54 5.09
1988 16.00 22.90 18.40 19.50 19.52 16.07
1989 31.70 26.50 10.50 12.90 14.18 10.73
1990 -0.40 -7.60 -15.20 -17.40 -14.12 -17.57
1991 23.90 39.30 61.90 185.60 82.12 78.67
1992 7.40 7.90 23.10 69.10 29.26 25.81
1993 16.80 27.30 34.30 39.10 33.86 30.41
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
Hypothetical
Dow Jones Triple Strategy
Calendar Industrial Top Focus Penultimate Hypothetical Trust--Net of
Year Average Ten of Five of Pick of Triple Strategy Sales Charges
Ended (DJIA) DJIA (2) DJIA (2) DJIA (2) Trust (3) & Expenses (3)(4)
----- ------ ---------- ---------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
1994 4.90 4.10 8.60 -37.40 -1.50 -4.95
1995 36.40 36.70 30.50 21.70 29.98 26.53
1996 28.90 27.90 26.00 28.10 26.80 23.35
1997 24.70 21.60 20.00 49.90 26.30 22.85
1998 17.90 10.80 12.60 21.80 14.10 10.65
</TABLE>
(1) Total return does not take into consideration any sales charges,
commissions, expenses or taxes EXCEPT for total returns cited for the
Hypothetical Triple Strategy Trust. The Total Return represents the sum of
Appreciation and Actual Dividend Yield. (i) Appreciation for the Top Ten,
Focus Five and Penultimate Pick is calculated by subtracting the market
value of these stocks as of the first trading day on the New York Stock
Exchange in a given calendar year from the market value of those stocks as
of the last trading day in that calendar year, and dividing the result by
the market value of the stocks as of the first trading day in that calendar
year. Appreciation for the DJIA is calculated by subtracting the opening
value of the DJIA as of the first trading day in each calendar year from
the closing value of the DJIA as of the last trading day in that calendar
year, and dividing the result by the opening value of the DJIA as of the
first trading day in that calendar year. (ii) Actual Dividend Yield for the
Top Ten, Focus Five and Penultimate Pick is calculated by adding the total
dividends received on the stocks in the calendar year and dividing the
result by the market value of the stocks as of the first trading day in
that calendar year. Actual Dividend Yield for the DJIA is calculated by
taking the total dividends credited to the DJIA and dividing the result by
the opening value of the DJIA as of the first trading day in that calendar
year.
(2) The Top Ten, Focus Five and Penultimate Pick in any given calendar year
were selected by ranking the dividend yields for each of the stocks in the
DJIA as of the beginning of that calendar year, based upon an annualization
of the last quarterly or semi-annual regular dividend distribution (which
would have been declared in the preceding calendar year) divided by that
stock's market value on the first trading day on the New York Stock
Exchange in that calendar year.
(3) The Total Return Performance for the Hypothetical Triple Strategy Trust is
calculated by combining the Total Return, as calculated in footnote (1)
above, of the three investment strategies, the Top Ten, Focus Five and
Penultimate Pick, in any given calendar year based upon the same weighted
average which this Trust will be employing: 20% comprised of the Top Ten,
60% of the Focus Five and 20% of the Penultimate Pick. Within these three
categories, stocks will be purchased in approximately equal dollar amounts.
Footnote (2) above describes the selection process of each strategy.
(4) Total Return for Hypothetical Triple Strategy Trust is net of sales charges
(3.695% for the first year, 3.195% for each subsequent year) and estimated
expenses of .260%.
These results represent past performance and should not be considered
indicative of future results of this Trust. Unit prices may fluctuate with
the value of the underlying stocks, and there is no assurance that
dividends on these stock will be paid or that the Units will appreciate in
value. Trust performance will differ from the Hypothetical Triple Strategy
Trust because (i) of commissions, (ii) the portfolio is established and
liquidated at different times during the year, (iii) stocks may be
purchased and sold at prices different from those used in determining unit
price, (iv) the Trust may not be fully invested at all times, and (v)
stocks may not be weighted equally. The Triple Strategy Trust may have been
concentrated in different industries than this Trust.
B-6
<PAGE>
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
COMMON STOCK. An investment in Units 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
B-7
<PAGE>
subject to market fluctuations prior thereto), common stocks have neither fixed
principal amount nor a maturity and have values which are subject to market
fluctuations for as long as the common stocks remain outstanding. Common stocks
are especially susceptible to general stock market movements and to volatile
increases and decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Trust thus may be expected to fluctuate over the life of the Trust to
values higher or lower than those prevailing on the Initial Date of Deposit.
Unitholders will be unable to dispose of any of the Securities in the
Trust, and, as such, will not be able to vote the Securities. As the holder of
the Securities, the Trustee will have the right to vote all of the voting stocks
in the Trust and will vote in accordance with the instructions of the Sponsors.
MACHINERY COMPANIES. The Trust may be considered to be concentrated in the
common stock of a company engaged in the machinery industry and, as a result,
the value of the Units of the Trust may be susceptible to various factors
affecting this industry. The diversified machinery industry includes producers
of agricultural equipment, construction equipment, mining equipment, papermaking
machinery, machine tools, and an assortment of diverse products of specialty
machinery and equipment. Factors affecting the machinery industry, include, but
are not limited to, (1) products of companies in the machinery industry which
may be subject to rapid obsolescence; (2) cyclical business whose performance is
highly sensitive to the economic health of the U.S. and world economies; (3)
various environmental laws and regulations which can be expensive to comply with
and result in significant liability if not complied with; (4) changes in
legislation which could adversely affect a company; (5) competition on a global
scale, which subjects companies within this industry to added risks of foregin
markets, particularly risks associated with foreign economic crises and
political unrest; and (6) intense competition within the industry both
domestically and in foreign markets which can lead to intense bidding for
contracts which, in turn, could result ina winning bid which leaves little or no
profit margin. In addition, the demand for diversified machinery generally
fluctuates with the performance of the diverse industries relying on the
equipment these manufacturers provide. Therefore, the machinery industry is
susceptible to the fluctuations and risks inherent in agriculture, housing,
mining and manufacturing industries.
PENULTIMATE PICK. The Large Cap Trust will be "concentrated" in the common
stock of the Penultimate Pick. Information regarding such company is available
by inspecting or copyiong certain reports, proxies and informational statements
and otherr information filed by such company in accordance with the Securities
Exchange Act of 1934 at the public reference facilities maintained at the
Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by accessing its website at www.sec.gov. Copies can be
obtained from the Public Reference Section of the Securities and Exchange
Commission at the same address at prescribed rates.
The Sponsors believe that the information summarized above for the
machinery 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.
B-8
<PAGE>
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, the adverse financial condition of a company will
not result in the elimination of its securities from the portfolio of the Trust.
In the event a public tender offer is made for a Security or a merger or
acquisition is announced affecting a Security, the Sponsor may instruct the
Trustee to tender or sell the Security on the open market when, in its opinion,
it is in the best interests of the Unitholders to do so. 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. See
"Administration of the Trust--Trust Supervision." 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. Although the Trust is regularly reviewed and
evaluated and the Sponsor may instruct the Trustee to sell Securities under
certain limited circumstances, Securities will not be sold by the Trust to take
advantage of market fluctuations or changes in anticipated rates of
appreciation.
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 (i) Additional Securities, (ii) contracts to purchase
Additional Securities or (iii) 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 their 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.
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
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
B-9
<PAGE>
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.
TERMINATION. The Trust may be terminated at any time and all outstanding
Units liquidated if the net asset value of the Trust falls below 40% of the
aggregate net asset value of that Trust at the completion of the initial public
offering period. Investors should note that if the net asset value of the Trust
should fall below the applicable minimum value, the Sponsors may then terminate
the Trust, at their sole discretion, prior to the Termination Date specified in
the Summary of Essential Information.
LEGAL PROCEEDINGS AND LEGISLATION. 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, 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.
RETIREMENT PLANS. The 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 McLaughlin, 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's and the Department of Labor's definition of "plan
assets."
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PUBLIC SALE OF UNITS
PUBLIC OFFERING PRICE. The Public Offering Price of the Units for the Trust
is computed by adding the applicable initial sales charge to the aggregate value
of the Securities (as determined by the Trustee) and any cash held to purchase
Securities, divided by the number of Units of the Trust outstanding. Valuation
of Securities by the Trustee is made at the close of business on the NYSE on
each business day. Securities quoted on a national exchange or NASDAQ are valued
at the closing sale price. Securities not so quoted are valued in the manner
described in the Indenture.
PUBLIC DISTRIBUTION OF UNITS. Units will be distributed to the public at
the Public Offering Price through the Sponsors and may also be distributed
through dealers. The Sponsors intend to qualify the Units for sale in certain
states.
VOLUME AND OTHER DISCOUNTS. Units are available at a volume discount from
the Public Offering Price based upon the number of Units purchased. This volume
discount will result in the following reduction of the sales charge applicable
to such purchases:
Approximate
Reduced
Number of Units Sales Charge
--------------- ------------
25,000 but less than 50,000................. 3.345%
50,000 but less than 100,000................ 3.095%
100,000 or more............................. 2.845%
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.
Units purchased by the same purchasers in separate transactions 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.
Unitholders of prior series of The Pinnacle Family of Trusts (formerly
known as McLaughlin, Piven, Vogel Family of Trusts) (the "Prior Series") may
"rollover" into the 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 3.195% for the Large Cap Trust. An exchange of units 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 additional Units of the Trust (see "Administration of the
Trust--Trust Termination").
Unitholders with a brokerage account at McLaughlin, Piven, Vogel
Securities, Inc. will qualify to receive one trade to buy equity securities any
time following the first Settlement Date of the Trust and only be charged a
$19.50 processing fee.
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<PAGE>
During the initial offering period, Unitholders who have redeemed units of
the Trust, may purchase Units of this Trust in an amount up to the amount
redeemed, within thirty days after such redemption, at no sales charge.
Investors who purchase Units of the Trust through a Keogh Plan, pension
fund or other qualified retirement plan having 25 or more members 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.
SPONSORS' PROFITS. The Sponsors will receive a combined gross underwriting
commission equal to up to 3.695% of the Public Offering Price per 100 Units
(equivalent to 3.837% of the net amount invested in the Securities) for the
Large Cap Trust. 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" in Part A). The Sponsors may realize profits or sustain losses with
respect to Securities deposited in the Trust which were acquired from
underwriting syndicates of which they were a member. All or a portion of the
Securities deposited in the Trust may have been acquired through the Sponsors.
During the initial offering period and thereafter to the extent additional
Units continue to be offered by means of this Prospectus, the Underwriter may
also realize profits or sustain losses as a result of fluctuations after the
Initial Date of Deposit in the aggregate value of the Securities and hence in
the Public Offering Price received by the Sponsors for the Units. Cash, if any,
made available to the Sponsors prior to settlement date for the purchase of
Units may be used in the Sponsors' business subject to the limitations of 17 CFR
240.15c3-3 under the Securities Exchange Act of 1934 and may be of benefit to
the Sponsors.
Both upon acquisition of Securities and termination of the Trust, the
Trustee may utilize the services of the Sponsors for the purchase or sale of all
or a portion of the Securities in the Trust. The Sponsors may receive brokerage
commissions from the Trust in connection with such purchases and sales in
accordance with applicable law.
In maintaining a market for the Units (see "Liquidity-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
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<PAGE>
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 therefore, 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 Accounts of the Trust (other than amounts representing failed
contracts, as previously discussed) will be computed as of each Record Date, and
will be made to the Unitholders of the Trust on or shortly after the
Distribution Date. Proceeds representing principal received from the disposition
of any of the Securities between a Record Date and a Distribution Date which are
not used for redemptions of Units will be held in the Principal Account and not
distributed until the next Distribution Date. Persons who purchase Units between
a Record Date and a Distribution Date will receive their first distribution on
the Distribution Date 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 keeps records of the transactions of the Trust at its
corporate trust office including names, addresses and holdings of all
Unitholders of record, a current list of the Securities and a copy of the
Indenture. Such records are available to Unitholders for inspection at
reasonable times during business hours.
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<PAGE>
REPORTS TO HOLDERS. The Trustee will furnish Unitholders with each
distribution a statement of the amount of income 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.
Unitholders will be furnished with evaluations of Securities upon request
to the Trustee in order to comply with Federal and state tax reporting
requirements.
LIQUIDITY
SPONSORS REPURCHASE. Unitholders who wish to dispose of their Units should
inquire of the Sponsors as to current market prices prior to making a tender for
redemption. The aggregate value of the Securities will be determined by the
Trustee on a daily basis and computed on the basis set forth under "Trustee
Redemption." The Sponsors do not guarantee the enforceability, marketability or
price of any Securities in the Portfolio or of the Units. The Sponsors may
discontinue the repurchase of Units if the supply of Units exceeds demand, or
for other business reasons. The date of repurchase is deemed to be the date on
which redemption requests are received in proper form, by McLaughlin, Piven,
Vogel Securities, Inc., 30 Wall Street, New York, New York 10005 or Reich & Tang
Distributors Inc., 600 Fifth Avenue, New York, New York 10020. Redemption
requests received after 4 P.M., New York Time, will be deemed to have been
repurchased on the next business day. In the event a market is not maintained
for the Units, a Unitholder may be able to dispose of Units only by tendering
them to the Trustee for redemption.
B-14
<PAGE>
Units purchased by the Sponsors in the secondary market may be reoffered
for sale by the Sponsors at a price based on (i) the aggregate value of the
Securities in a Trust plus (ii) 3.695% sales charge (or 3.837% of the net amount
invested) for the Trust plus (iii) a pro rata portion of amounts, if any, in the
Income and Principal Accounts. 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
"Liquidity--Trustee Redemption"). Factors that the Sponsors will consider in
making a determination will include the number of Units of the Trust 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. For
Units received after the close of trading on the NASDAQ or NYSE (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 Accounts, or, if the balance
therein is insufficient, from the Principal Accounts. 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 practicable, the proportionate relationship
among the number of shares of each Security. 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 specified will
be approximately 100 shares for readily marketable Securities.
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<PAGE>
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
particular 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 national securities exchanges, this evaluation is based on the closing
sale prices on those exchanges. 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, NYSE, or AMEX 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 Securities is not
reasonably practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. The Trustee and the Sponsors are not liable to
any person or in any way for any loss or damage which may result from any such
suspension or postponement.
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
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<PAGE>
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.
ADMINISTRATION OF THE TRUST
TRUST 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 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 Top Ten, Focus Five and
Penultimate Pick, or even its deletion from the DJIA.
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 Accounts of the Trust.
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
in a Trust 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
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<PAGE>
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 as of the Evaluation Time on the business day preceding the
commencement of the Liquidation Period or 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 such 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:
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 or about 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;
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<PAGE>
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 in units of a subsequent series
of McLaughlin, Piven, Vogel Family of Trusts (the "New Series")
provided one is offered. It is expected that a special redemption and
liquidation will be made of all Units of the 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 that Securities contained in the New
Series are treated as substantially identical to Securities held by
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 the Securities by
the last business day of the Liquidation Period 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. The Redemption Price Per 100 Units upon the settlement
of the last sale of Securities during the Liquidation Period will be distributed
to Unitholders in redemption of such Unitholders' interest in the Trust.
Depending on the amount of proceeds to be invested in Units of the New
Series and the amount of other orders for Units in the New Series, the Sponsors
may purchase a large amount of securities for the New Series in a short period
of time. The Sponsors' buying of securities may tend to raise the market prices
of these securities. The actual market impact of the Sponsors' purchases,
however, is currently unpredictable because the actual amount of securities to
be purchased and the supply and price of those securities is unknown. A similar
problem may occur in connection with the sale of Securities during the
Liquidation Period; depending on the number of sales required, the prices of and
demand for Securities, such sales may tend to depress the market prices and thus
reduce the proceeds of such sales. The Sponsors believe that the sale of
underlying Securities over the Liquidation Period described above is in the best
interest of a Unitholder and may mitigate the negative market price consequences
stemming
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<PAGE>
from the trading of large amounts of Securities. The Securities may be sold in
fewer than seven 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 Family of Trusts 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 trusts 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.
In the event the Sponsors determine that a redemption in kind and
subsequent investment in a New Series by a Unitholder may be accomplished in a
manner that will not result in the recognition of gain or loss for Federal
income tax purposes with respect to any Securities included in the portfolio of
the New Series, Unitholders will be notified at least 30 days prior to the
Rollover Notification Date of the procedures and process necessary to facilitate
such tax treatment.
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-20
<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.
On October 12, 1999, Reich & Tang announced that it had reached an
agreement to transfer its unit investment trust business to ING Mutual Funds
Management Co. LLC ("ING"). The transaction is expected to close within 30 days
of the date of this Prospectus. Upon closing of the transaction, substantially
all of the unit trust personnel of Reich & Tang will become employees of ING and
ING will assume the ongoing business operations of Reich & Tang's unit
investment trust business. Upon closing, Reich & Tang will resign as sponsor of
the Trust and ING expects to be appointed by the Trustee as the successor
sponsor assuming all the sponsor's obligations and duties under the Indenture.
ING is a wholly owned indirect subsidiary of ING Group. ING Group, among the
leading global financial services organizations, is engaged in asset management,
banking and insurance activities in 60 countries worldwide with over 82,000
employees.
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 become incapable of acting or become 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
B-21
<PAGE>
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 Trusts 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. The Trustee has not participated in the selection of the
Trust's Securities.
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.
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
B-22
<PAGE>
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.
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
Pinnacle Family of Trusts in any calendar year exceed the aggregate cost to the
Sponsors of supplying such services in such year. (See "Administration of the
Trust--Trust 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 "Administration of the Trust" and
"Rights of Unitholders."
The Trustee's fees applicable to the Trust are payable as of each Record
Date from the Income Accounts of the Trust to the extent funds are available and
then from the Principal Accounts. 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: (i)
all expenses (including counsel fees) of the Trustee incurred and advances made
in connection with its activities under the Trust Agreements, including the
expenses and costs of any action undertaken by the Trustee to protect the Trust
and the rights and interests of the Unitholders; (ii) 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; (iii)
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 (iv) 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.
B-23
<PAGE>
REINVESTMENT PLAN
Income and principal distributions of Units (other than the final
distribution in connection with the termination of the Trusts) 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--Deposit of Additional Securities" in this Part B.
Units acquired by reinvestment will be subject to a reduced sales charge of
1.00%. Unitholders who participate in the Reinvestment Plan will nevertheless be
subject to tax on their distributions in the manner described under "Tax
Status." Investors should inform their broker when purchasing their Units if
they wish to participate in the Reinvestment Plan. Thereafter, Unitholders
should contact their broker if they wish to modify or terminate their election
to participate in the Reinvestment Plan. In order to enable a Unitholder to
participate in the Reinvestment Plan, with respect to a particular distribution
on their Units, such notice must be made at least three business days prior to
the Record Date for such distribution. Each subsequent distribution of income or
principal on the participant's Units will be automatically applied by the
Trustee to purchase additional Units of the Trust. The Sponsors reserve the
right to demand, modify or terminate the Reinvestment Plan at any time without
prior notice. The Reinvestment Plan for the Trust may not be available in all
states.
TAX STATUS
This is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code. 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 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.
B-24
<PAGE>
This retained right falls within the guidelines promulgated by the 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 the 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 the Trust is taxable as
ordinary income to the extent of such corporation's current or accumulated
earnings and profits. A Unitholder's pro rata portion of dividends paid on a
Security that exceed current and accumulated earnings and profits will first
reduce a Unitholder's tax basis in the Security, and to the extent that such
dividends exceed a Unitholder's tax basis in the Security will generally be
treated as a capital gain.
A Unitholder's portion of gain, if any, upon the sale, exchange or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain and will be long-term if the Unitholder
has held its Units (and the Trust has held the Securities) for more than one
year. Capital gains realized by corporations are generally taxed at the same
rates applicable to ordinary income, but non-corporate taxpayers who realize
long-term capital gains may be subject to a reduced tax rate of 20%, 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 (and the Trust has held the Securities) 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.
A Unitholder that 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 or from a
qualifying foreign corporation 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
B-25
<PAGE>
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 if a
corporate Unitholder owns stock (or Units) the financing of which is directly
attributable to indebtedness incurred by such corporation.
As discussed in the section "Administration of the Trust--Trust
Termination," each Unitholder may have three options in receiving its
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) at a
reduced sales charge. A Unitholder that chooses option (i) should be treated as
merely exchanging its undivided pro rata ownership of Securities held by the
Trust for sole ownership of a proportionate share of Securities, and therefore
the transaction should be tax free to the extent Securities are received.
Entities that generally qualify for an exemption from Federal income tax,
such as many pension trust, 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 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.
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
the 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. Average annualized returns show the average
return for stated periods of longer than a year. Sales material may also include
an
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<PAGE>
illustration of the cumulative results of like annual investments in a 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 the 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, NYSE or similar exchanges, as well as the DJIA, S&P 500 Index or
other similar indices. In addition, total return comparisons may be made to
performance data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Standard & Poor's CompuStat and Center for Research in
Security Prices (CRSP) at the University of Chicago 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 the 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 prospective 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.
SEC WEBSITE. The Securities and Exchange Commission ("SEC") maintains a
website that contains reports, proxy and information statements and other
information regarding the Trust which is filed electronically with the SEC. The
SEC's Internet address is http:www.sec.gov. Offering materials for the sale of
these Units available through the Internet are not being offered directly or
indirectly to residents of a particular state nor is an offer of these Units
through the Internet specifically directed to any person in a state by, or on
behalf of, the issuer.
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<TABLE>
<CAPTION>
<S> <C>
No person is authorized to give any information Large Cap Series IV
or to make any representations not contained in this
Prospectus and you should not rely on any other (A Unit Investment Trust)
information. The Trust are registered as a unit
investment trust under the Investment Company Act of PROSPECTUS
1940. Such registration does not imply that the Trust
or any of its Units have been guaranteed, sponsored, DATED: December 28, 1999
recommended or approved by the United States or any
state or any agency or officer thereof. SPONSORS:
Table of Contents McLAUGHLIN, PIVEN, VOGEL
Title Page SECURITIES, INC.
----- ---- 30 Wall Street
PART A New York, New York 10005
Investment Summary........................... A-2 212-248-0750
Fee Table.................................... A-6
Summary of Essential Information............. A-7 REICH & TANG DISTRIBUTORS, INC.
Statement of Financial Condition............. A-8 600 Fifth Avenue
Portfolio.................................... A-9 New York, New York 10020
Report of Independent Auditors............... A-10 212-830-5400
PART B
The Trust.................................... B-1 TRUSTEE:
Risk Considerations.......................... B-7
Public Sale of Units......................... B-11 THE CHASE MANHATTAN BANK
Rights of Unitholders........................ B-12 4 New York Plaza
Liquidity.................................... B-14 New York, New York 10004
Administration of the Trust.................. B-16
Trust Expenses and Charges................... B-22 This Prospectus does not constitute an offer to
Reinvestment Plan............................ B-24 sell, or a solicitation of an offer to buy,
Tax Status................................... B-24 securities in any state to any person to whom it is
Other Matters................................ B-26 not lawful to make such offer in such state.
</TABLE>
This Prospectus does not contain all of the
information set forth in the registration statement,
filed with the SEC, Washington, D.C., under the
Securities Act of 1933 (file no. 333-92473), and the
Investment Company Act of 1940 (file no. 811-08945),
and to which reference is made. Copies may be
reviewed and obtained from the SEC by:
- calling: 1-800-SEC-0330
- visiting the SEC Internet address: http://www.sec.gov
- writing: Public Reference Section of the
Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549-6009
LOGO
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 (incorporated by reference to the
Cross-Reference Sheets to the Registration Statements of McLaughlin,
Piven, Vogel Family of Trusts, Pinnacle Trust filed on August 7,
1998.)
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons:
Battle Fowler LLP (included in Exhibit 3.1)
Ernst & Young LLP
The following exhibits:
*99.1.1 -- Reference Trust Agreement including certain
amendments to the Trust Indenture and Agreement referred to
under Exhibit 99.1.1.1 below.
99.1.1.1 -- Form of Trust Indenture and Agreement (filed as
Exhibit 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).
II-1
904795.1
<PAGE>
99.1.3.6 -- By-Laws of Reich & Tang Distributors, Inc. (filed
as Exhibit 99.1.3.6 to Form S-6 Registration Statement No.
333-44301 of Equity Securities Trust, Series 16, Signature
Series, Zacks All-Star Analysts Trust III on January 15,
1998 and incorporated herein by Reference).
99.1.3.7 -- Certificate of Incorporation of McLaughlin, Piven,
Vogel Securities, Inc. dated March 8, 1977 and as amended
on January 16, 1979, June 8, 1979, August 27, 1979, May 3,
1982, December 20, 1983 and September 25, 1989 (filed as
Exhibit 99.1.3.7 to Form S-6 Registration Statement No.
333-60915 of McLaughlin, Piven, Vogel Family of Trusts, The
Pinnacle Trust on August 7, 1998 and incorporated herein by
reference).
99.1.3.8 -- By-Laws of McLaughlin, Piven, Vogel Securities
Inc. (filed as Exhibit 99.1.3.8 to Form S-6 Registration
Statement No. 333-60915 of McLaughlin, Piven, Vogel Family
of Trusts, The Pinnacle Trust on August 7, 1998 and
incorporated herein by reference).
*99.3.1 -- Opinion of Battle Fowler LLP as to the legality of
the securities being registered, including their consent to
the filing thereof and to the use of their name under the
headings "Tax Status" and "Legal Opinions" in the
Prospectus, and to the filing of their opinion Regarding
tax status of the Trust.
99.6.0 -- Power of Attorney of Reich & Tang Distributors,
Inc., the Depositor, by its officers and a majority of its
Directors (filed as Exhibit 99.6.0 to Form S-6 Registration
Statement No. 333-44301 of Equity Securities Trust, Series
16, Signature Series, Zacks All-Star Analysts Trust III on
January 15, 1998 and incorporated herein by reference).
99.6.1 -- Power of Attorney of McLaughlin, Piven, Vogel
Securities, Inc. (filed as Exhibit 99.6.1 to Form S-6
Registration Statement No. 333-60915 of McLaughlin, Piven,
Vogel Family of Trusts, The Pinnacle Trust on August 7,
1998 and incorporated herein by reference).
* Filed herewith
II-2
904795.1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
The Registrant hereby identifies McLaughlin, Piven, Vogel Family of
Trusts, Pinnacle Trust Large Cap Series II for the purposes of the
representations required by Rule 487 and represents the following:
1) That the portfolio securities deposited in the Series as to the
securities of which this registration statement is being filed do not
differ materially in type or quality from those deposited in such
previous series;
2) That, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the Series with respect to the securities of which
this registration statement is being filed, this registration
statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such
previous Series as to which the effective date was determined by the
commission or the staff; and
3) That is has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, The Pinnacle Family of Trusts, Large Cap Series IV has duly caused
this Amendment 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 27th day of December, 1999.
THE PINNACLE FAMILY OF TRUSTS, LARGE CAP
SERIES IV
(Registrant)
McLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
(Depositor)
By ALLAN M. VOGEL
---------------------------------
Allan M. Vogel
(Authorized Signator)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment 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
- ---- ----- ----
<S> <C> <C>
JAMES C. MCLAUGHLIN Chairman of the Board, Chief Executive Officer
and Director
ALLAN M. VOGEL President, Secretary, Chief Financial Officer December 27, 1999
and Director
By ALLAN M. VOGEL
----------------------------
Allan M. Vogel
Attorney-In-Fact*
</TABLE>
* An executed copy of a Power of Attorney was filed as Exhibit 99.6.1 to
Form S-6 Registration Statement No. 333-60915 on August 7, 1998.
II-3
904795.1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
The Registrant hereby identifies McLaughlin, Piven, Vogel Family of
Trusts, Pinnacle Trust Large Cap Series II for the purposes of the
representations required by Rule 487 and represents the following:
1) That the portfolio securities deposited in the Series as to the
securities of which this registration statement is being filed do not
differ materially in type or quality from those deposited in such
previous series;
2) That, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the Series with respect to the securities of which
this registration statement is being filed, this registration
statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such
previous Series as to which the effective date was determined by the
commission or the staff; and
3) That is has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, The Pinnacle Family of Trusts, Large Cap Series IV has duly caused
this Amendment 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 27th day of December, 1999.
THE PINNACLE FAMILY OF TRUSTS, LARGE CAP
SERIES IV
(Registrant)
REICH & TANG DISTRIBUTORS, INC.
(Depositor)
By PETER J. DEMARCO
------------------------------
Peter J. DeMarco
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment 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
---- ----- ----
<S> <C> <C>
RICHARD E. SMITH III President and Director
PETER S. VOSS Director
G. NEAL RYLAND Director
EDWARD N. WADSWORTH Executive Officer
STEVEN W. DUFF Director December 27, 1999
PETER J. DEMARCO Executive Vice President
RICHARD I. WEINER Vice President
BERNADETTE N. FINN Vice President
LORRAINE C. HYSLER Secretary
RICHARD DE SANCTIS Treasurer
By PETER J. DEMARCO
------------------------------
Peter J. DeMarco
as Executive Vice President
and Attorney-In-Fact*
</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
904795.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference made to our firm under the Caption
"Independent Auditors" in Part B of the Prospectus and to the use of our report
dated December 28, 1999, in this Registration Statement (Form S-6 No. 333-92473)
of The Pinnacle Family of Trusts, Large Cap Series IV.
ERNST & YOUNG LLP
New York, New York
December 28, 1999
II-5
<PAGE>
THE PINNACLE
FAMILY OF TRUSTS,
LARGE CAP SERIES IV
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated December 28,
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 except that the following section of the Indenture hereby are amended
as follows:
756777.2
<PAGE>
(a) All references to "McLaughlin, Piven Vogel Family of Trusts" are
replaced with "The Pinnacle Family of Trusts".
(b) Section 1.1 of the Agreement is amended to add the following
definitions:
"Distribution Agent" shall mean the Distribution Agent appointed in
the Distribution Agency Agreement, or its successor as appointed
pursuant to the Distribution Agency Agreement.
"Distribution Agency Agreement" shall mean the Distribution Agency
Agreement among the Depositors, Trustee and the Distribution Agent
dated as of December 28, 1999.
Definitions following these definitions shall be renumbered.
(c) Section 2.1 of the Agreement is amended by adding the following
paragraph after the second paragraph thereof:
"When and as directed by the Depositors, the Trustee or
Distribution Agent shall accept securities and cash to be
deposited in a New Series in exchange for Units of the New
Series from persons other than Unitholders participating in
a rollover option. Notwithstanding the fact that any
Unitholder may acquire Units of the Trust by purchase or by
in-kind contribution, the Depositors will not deposit
Securities received by the Depositors on termination, or
through a redemption of Units, of a series of the Trust to a
subsequent series of the Trust."
(d) Section 3.8 is amended to add a new paragraph (6), immediately
following paragraph (5), as follows:
"(6) that there has been a public tender offer made for a
Security or a merger or acquisition is announced affecting a
Security, and that in the opinion of the Depositors the sale
or tender of the Security is in the best interest of the
Unitholders."
(e) Section 5.2 of the Agreement is amended by adding the following
prior to the first paragraph thereof:
"In connection with each redemption of Units, the
Depositors shall direct the Trustee to redeem Units in
accordance with the procedures set forth in either (a) or
(b) of this Section 5.2. (a) Trustee."
(f) Section 5.2 of the Agreement is further amended by adding the
following three paragraphs after the ninth paragraph of such Section 5.2.:
756777.2
-2-
<PAGE>
"(b) Distribution Agent-On any Business Day on
which any Unit or Units are tendered for redemption (the
"Redemption Day") by a Unitholder or his duly authorized
attorney to the Trustee at its unit investment trust office
in the City of New York not later than the Evaluation Time,
such Units shall be redeemed by the Trustee on that
Redemption Day. Units in uncertificated form shall be
tendered by means of an appropriate request for redemption
in form approved by the Trustee. Unitholders must sign
exactly as their name appears on the register with the
signature guaranteed by a participant in a signature
guarantee program acceptable to the Trustee, or in such
other manner as may be acceptable to the Trustee. The
Trustee may also require additional documents such as, but
not limited to, trust instruments, certificates of death,
appointments as executor or administrator or certificates of
corporate authority. Subject to payment by such Unitholder
of any tax or other governmental charges which may be
imposed thereon, such redemption is to be made by
distribution to the Distribution Agent on behalf of the
redeeming Unitholder on the Redemption Day of (i) the
Unitholder's pro rata portion as of the Redemption Day of
the Securities in the Trust as designated by the Depositor
and (ii) the Unitholder's pro rata portion of the cash in
the Trust as of the Redemption Day (herein called the
"Redemption Distribution"). The Distribution Agent will
dispose of such assets in accordance with the provisions of
the Distribution Agent Agreement. Fractional interests in
shares distributed to the Distribution Agent, which are not
included in the Redemption Distribution, shall be held in
trust by the Distribution Agent, which is hereby designated
a subcustodian of the Trustee with respect to such
fractional interests, and shall be subject to such
disposition as the Depositor shall direct. Units received
for redemption by the Trustee on any date after the
Evaluation Time will be held by the Trustee until the next
Business Day on which the New York Stock Exchange is open
for trading and will be deemed to have been tendered on such
day for redemption at the Redemption Price computed on that
day. Units tendered for redemption by the Depositors on any
Business Day shall be deemed to have been tendered before
the Evaluation Time on such Business Day provided that the
Depositors advise the Trustee before the later of the
Trustee's close of business and 5:00 pm New York City time.
By such advice, the Depositors will be deemed to certify
that all Units so tendered were either (a) tendered to the
Depositors or to a retail dealer between the Evaluation Time
on the preceding Business Day and the Evaluation Time on
such Business Day or (b) acquired previously by the
Depositors but which the Depositors determined to redeem
prior to the Evaluation Time on such Business Day.
The portion of the Redemption Distribution which
represents the Unitholder's interest in the Income Account
shall be withdrawn from the Income Account to the extent
available. The balance paid on any redemption, including
dividends receivable on stocks trading ex dividend, if any,
shall be withdrawn from the Principal Account to the extent
that funds are available for such purpose. If such available
balance shall be insufficient, the Trustee shall advance
funds
756777.2
-3-
<PAGE>
sufficient to pay such amount to the Unitholder and shall be
entitled to reimbursement of such advance upon the deposit
of additional monies in the Income Account or Principal
Account, whichever happens first. Should any amounts so
advanced with respect to declared but unreceived dividends
prove uncollectible because of default in payment of such
dividends, the Trustee shall have the right immediately to
liquidate Securities in amount sufficient to reimburse
itself for such advances, without interest. In the event
that funds are withdrawn from the Principal Account for
payment of any portion of the Redemption Distribution
representing dividends receivable on stocks trading ex
dividend, the Principal Account shall be reimbursed when
sufficient funds are next available in the Income Account
for such funds so applied.
Unitholders requesting or required to receive a
cash distribution shall receive such distribution in
accordance with the applicable provisions of the
Distribution Agency Agreement."
(g) Section 6.2 of the Agreement is amended by adding the following at
the end of the second paragraph thereof:
"The Trustee shall maintain and provide, upon the request of
a Unitholder or the Depositors, the Unitholders or the
Unitholder's designated representative with the cost basis
of the Securities represented by the Unitholder's Units."
(h) Section 9.2 of the Agreement is amended by deleting the fourth
paragraph thereof and by adding the following paragraph in its place:
"In the event that the Trust terminates on the
Termination Date, the Trustee shall, not less than 30 days
prior to the Termination Date, send a written notice to each
Unitholder. Such notice shall allow each Unitholder of
record, to elect to redeem his Units at the net asset value
on the Termination Date and to receive, in partial payment
of the Redemption Price per Unit, an in-kind distribution of
such Unitholder's pro rata share of the Securities, to the
extent of whole shares. The Trustee will honor duly executed
requests for such in-kind distribution received by the close
of business on the Termination Date. Redemption of the Units
of Unitholders electing such in-kind distribution shall be
made on the third business day following the Termination
Date and shall consist of (1) such Unitholder's pro rata
share of Securities (valued as of the Termination Date) to
the extent of whole shares and (2) cash equal to the balance
of such Unitholder's Redemption Price. Unitholders who do
not effectively request an in-kind distribution shall
receive their distribution upon termination in cash. The
Trustee shall distribute the Unitholder's Securities to the
account of the Unitholder's bank or broker-dealer at
Depositary Trust Company. An in-kind distribution shall be
reduced by customary transfer and registration charges
incurred by the Trustee."
756777.2
-4-
<PAGE>
(i) Section 9.2 of the Agreement is further amended by deleting the
last paragraph thereof and by adding the following paragraph in its place:
"Upon the Depositors' request, the Trustee will
include in the written notice to be sent to Unitholders
referred to in the fourth paragraph of this section a form
of election whereby Unitholders may express interest in
investing their terminating distribution in units of another
series of The Pinnacle Family of Trusts, (formerly known as
the McLaughlin, Piven, Vogel Family of Trusts) (the "New
Series"). The Trustee will inform the Depositors of all
Unitholders who, within the time period specified in such
notice, express such interest. The Depositors will provide
to such Unitholders applicable sales material with respect
to the New Series and a form, acceptable to the Trustee,
whereby a Unitholder may appoint the Distribution Agent the
Unitholder's agent to apply the Unitholder's distribution
for the acquisition of a unit or units of the New Series (a
"Rollover"). Such form will specify, among other things, the
time by which it must be returned to the Trustee in order to
be effective and the manner in which such purchase shall be
made. Redemption of the Units of the Unitholders electing
such Rollover shall be made by distribution to the
Distribution Agent on behalf of redeeming Unitholder on a
date on or prior to the Termination Date selected by the
Depositors and specified in the notice (the "Rollover Date")
and shall consist of (1) such Unitholder's pro rata share of
Securities (valued as of the Rollover Date) and (2) cash
equal to the balance of the Unitholder's Redemption Price.
The Distribution Agent will dispose of such assets in
accordance with the provisions of the Distribution Agency
Agreement. In the event that the Depositors determine that
an in-kind deposit into the New Series pursuant to Section
1.02 of the Distribution Agency Agreement will not be
permitted, the Units owned by the Unitholders electing
investment in a New Series will be redeemed pursuant to
Section 5.2(a) and the above-described notice will include a
form, acceptable to the Trustee, whereby a Unitholder may
appoint the Trustee the Unitholder's agent to apply the
Unitholder's cash distribution for the purchase of a unit or
units of the New Series. This paragraph shall not obligate
the Depositors to create any New Series or to provide any
such investment election."
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 December 28, 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
756777.2
-5-
<PAGE>
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
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 The Pinnacle 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 15,464.
(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 1/15,464 as of the date hereof.
(d) The term Record Date shall mean the fifteenth day of June and
December commencing on June 15, 2000.
(e) The term Distribution Date shall mean the last business day of
June and December commencing on June 30, 2000.
(f) The First Settlement Date shall mean December 31, 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:
rate per 100 units number of Units outstanding
$0.86 5,000,000 or less
$0.80 5,000,001 - 10,000,000
756777.2
-6-
<PAGE>
$0.74 10,000,001 - 20,000,000
$0.62 20,000,001 or more
(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 March 27, 2001 or the earlier
disposition of the last Security in the Trust.
(k) The fiscal year for the Trust shall end on June 30 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]
756777.2
-7-
<PAGE>
McLAUGHLIN, PIVEN, VOGEL SECURITIES, INC.
Depositor
By: /s/ Allan M. Vogel
-----------------------------
President
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 21st day of December, 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
756777.2
-8-
<PAGE>
REICH & TANG DISTRIBUTORS, INC.
Depositor
By: /s/ Peter J. DeMarco
------------------------------
Executive Vice President
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 21st day of December, 1999, before me personally appeared
Peter DeMarco, to me known, who being by me duly sworn, said that he is
Executive Vice President of 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
756777.2
-9-
<PAGE>
THE CHASE MANHATTAN BANK
Trustee
By: /s/ Arthur Rieser
-----------------------------
Vice President
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 22nd day of December, 1999, before me personally appeared
Rosalia Raviele, to me known, who being by me duly sworn, said that (s)he is an
Authorized Signator of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that (s)he 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
756777.2
-10-
<PAGE>
BATTLE FOWLER LLP
A LIMITED LIABILITY PARTNERSHIP
75 East 55th Street
New York, New York 10022
(212) 856-7000
December 28, 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: The Pinnacle Family of Trusts, Large Cap Series IV
--------------------------------------------------
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 The Pinnacle Family of Trusts,
Large Cap Series IV (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".)
756754.1
<PAGE>
2
McLaughlin, Piven, Vogel Securities, Inc.
Reich & Tang Distributors, Inc.
December 28, 1999
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, 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- 92473) 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
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McLaughlin, Piven, Vogel Securities, Inc.
Reich & Tang Distributors, Inc.
December 28, 1999
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.
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.
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McLaughlin, Piven, Vogel Securities, Inc.
Reich & Tang Distributors, Inc.
December 28, 1999
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,
Battle Fowler LLP
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