<PAGE>
Rule 497(b)
Registration No. 333-31048
- --------------------------------------------------------------------------------
THE PINNACLE FAMILY OF TRUSTS
- --------------------------------------------------------------------------------
INTERNET TRUST SERIES I
A unit investment trust
The investment objective of the Internet Trust is to maximize total return
through capital appreciation.
The Sponsor is ING Funds Distributor, Inc.
This Prospectus consists of two parts. Part A contains the Summary of
Essential Information including descriptive material relating to the Trust
and the Statement of Financial Condition of the Trust. Part B contains
general information about the Trust. Part A and Part B must be distributed
together. 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 MARCH 28, 2000
<PAGE>
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE. The Internet Trust Series I (the "Internet Trust") seeks
to maximize total return through capital appreciation. There is no guarantee
that the investment objective of the Trust will be achieved.
STRATEGY OF PORTFOLIO SELECTION. The Internet Trust seeks to achieve its
investment objective by creating a portfolio using data from the Bloomberg U.S.
Internet Index that combines the following three steps, determined as of two
business days prior to the Initial Date of Deposit:
Step 1:eliminate all financial services companies from the Bloomberg U.S.
Internet Index,
Step 2: of the remaining companies, select the twenty-five (25) companies
having the highest capitalization (the "Top Twenty-Five"), and
Step 3:weigh the 25 stocks equally.
The Bloomberg U.S. Internet Index is a capitalization-weighted index comprised
of U.S. internet companies that have a market capitalization greater than $250
million. The index was developed with a base value of 100 as of December 31,
1998. IPO's that meet the minimum market capitalization are included in the
index after the first day of trading.
DESCRIPTION OF THE TRUST. The Internet Trust contains 25 issues of common
stock. 100% of the issues are represented by the Sponsor's contracts to
purchase. Based upon the principal business of each issuer and current market
values, the Trust is concentrated in the Internet 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.
PRINCIPAL 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
understanding of the following risks:
. Since the Trust is concentrated in stocks which derive a substantial
portion of their income from the Internet industry, investors should be
familiar with the risks associated with these industries which may
include the volatile price of internet, computer and technology stocks,
greater government regulations and products that may become obsolete.
. 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).
. Since the portfolio of the Trust is fixed and "not managed," in general,
the Sponsor 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.
A-2
<PAGE>
. When cash or a letter of credit is deposited with instructions to
purchase securities in order to create additional Units, an increase in
the price of a particular security between the time of deposit and the
time that securities are purchased will cause the Units to be comprised
of less of that security and more of the remaining securities. In
addition, brokerage fees incurred in purchasing the Securities will be an
expense of the Trust.
. Securities price fluctuations during the period from the time of deposit
to the time the Securities are purchased, and payment of brokerage fees,
will affect the value of each Unit and the income per Unit received by
the Trust.
. There is no assurance that any dividends will be declared or paid in the
future on the Securities.
. Investors should also consider the greater risk of the Trust's
concentration in a particular industry 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.
. Some of the Securities are currently listed on the NASDAQ stock market.
The existence of a liquid trading market for certain Securities may
depend on whether dealers will make a market in such Securities. There
can be no assurance that a market will be made for any of the Securities,
that any market for the Securities will be maintained or that any such
market will be or remain liquid. The price at which the Securities may be
sold and the value of the Trust will be adversely affected if trading
markets for the securities are limited or absent.
PUBLIC OFFERING PRICE. The Initial Public Offering Price per 100 units of the
Trust is calculated by:
. dividing the aggregate value of the underlying securities and cash held
in the Trust (representing the estimated organizational costs) by the
number of units outstanding;
. adding a sales charge of 5.495% (5.815% of the net amount invested); and
. 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 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.
A-3
<PAGE>
MARKET FOR UNITS. Unitholders may sell their Units to the Sponsor or the
Trustee at any time, without fee or penalty. The Sponsor intends to repurchase
Units from Unitholders throughout the life of the Trust at prices based upon
the market value of the underlying Securities. However, the Sponsor is 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 Sponsor does 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:
. receive their distribution in-kind, if they own at least 2,500 Units;
. receive cash upon the liquidation of their pro rata share of the
Securities; or
. reinvest in a subsequent series of The Pinnacle 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, Internet Trust Series I.
A-4
<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.
- --------------------------------------------------------------------------------
Unitholder Transaction Expenses
(Fees paid directly from your investment)
<TABLE>
<CAPTION>
Internet Trust
-----------------
As a % Amount
Of Initial per
Offering 100
Price Units
---------- ------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchase............. 5.495% $54.95
Maximum Sales Charge Imposed Per Year on Reinvested
Dividends........................................... 1.00% $10.00
Estimated Organizational Expenses.................... .136% $ 1.36
Maximum Annual Maintenance Fee for a McLaughlin,
Piven, Vogel Brokerage Account...................... $69.50
</TABLE>
Estimated Annual Fund Operating Expenses
(Expenses that are deducted from Trust assets)
<TABLE>
<CAPTION>
Internet Trust
----------------------
As a % Amount
Of Initial per
Net 100
Assets Units
---------- ------
<S> <C> <C> <C> <C>
Trustee's Fee..................................... .091% $ .86
Other Operating Expenses.......................... .040% $ .38
Portfolio Supervision, Bookkeeping and
Administrative Fees............................. .026% $.25
---- -----
Total............................................. .131% $1.24
==== =====
</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:
<TABLE>
<CAPTION>
1 year 3 years
------ -------
<S> <C> <C>
Internet Trust................................................... $644 $1,809
</TABLE>
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-5
<PAGE>
THE INTERNET TRUST
SUMMARY OF ESSENTIAL INFORMATION
As of March 27, 2000, the business day prior to the Initial Date of Deposit
<TABLE>
<S> <C>
Initial Date of Deposit of Secu-
rities in the Trust: March 28,
2000
Aggregate Value of Securities:.. $ 150,254
Number of Units:................ 15,922
Fractional Undivided Interest in
Trust:......................... 1/15,922
Public Offering Price per 100
Units:
Aggregate Value of Securities
in Trust...................... $ 150,254
Divided By 15,922 Units (times
100).......................... $ 943.69
Plus Estimated Organization
Costs*........................ $ 1.36
Plus Sales Charge of 5.495% of
Public Offering Price......... $ 54.95
Public Offering Price+......... $1,000.00
Sponsor's Repurchase Price And
Redemption Price per 100
Units++:....................... $ 945.05
Minimum Income or Principal
Distribution per 100 Units:.... $ 1.00
</TABLE>
Liquidation Period: A 40 day period beginning on the first business day
following the Termination Date.
Termination Date: June 26, 2001 or the disposition of the last security in the
Trust.
Mandatory Termination Date: The last day of the Liquidation Period.
Rollover Notification Date**: June 15, 2001 or another date as determined by
the Sponsor.
Evaluation Time: 4:00 p.m. New York Time.
Minimum Value of Trust: The Trust may be terminated if the value of the Trust
is less than 40% of the aggregate value of the Securities at the completion of
the initial offering period.
Cusip Numbers: Cash: 72346A166 Reinvestment: 72346A174
Trustee: The Chase Manhattan Bank
Trustee's Fee per 100 Units: $.86
Other Fees and Expenses per 100 Units: $.13
Sponsor: ING Funds Distributor, Inc.
Portfolio Supervisor: ING Mutual Funds Management Co. LLC
Portfolio Supervisory, Bookkeeping And Administrative Fee per 100 Units:
Maximum of $.25 (see "Trust Expenses and Charges" in Part B).
Expected Settlement Date of Securities in the Trust: March 31, 2000
Record Dates: June 15 and December 15
Distribution Dates: June 30 and December 31
Reinvestment Sales Charge: 1.00%
- --------
* Investors will reimburse the Sponsor 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 Sponsor 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 Sponsor.
** 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 Sponsor's Repurchase Price and Redemption Price for the Trust will be
reduced to reflect its estimated organization cost.
A-6
<PAGE>
THE PINNACLE FAMILY OF TRUSTS
INTERNET TRUST SERIES I
STATEMENT OF FINANCIAL CONDITION, AS OF MARCH 27, 2000
ASSETS
<TABLE>
<CAPTION>
Internet
Trust
--------
<S> <C>
Investment in Securities--Sponsor's Contracts to Purchase
Underlying Securities Backed by Letter of Credit (cost for
Internet Trust: $150,254) (Note 1)................................... $150,254
Cash.................................................................. 217
--------
Total................................................................. $150,471
========
LIABILITIES AND INTEREST OF UNITHOLDERS
Reimbursement to the Sponsor for Organization Costs (Note 2).......... $ 217
Interest of Unitholders--Units of Fractional Undivided Interest
Outstanding (Internet Trust: 15,922 Units)........................... 150,254
--------
Total................................................................. $150,471
========
Net Asset Value per Unit.............................................. $ 9.44
========
</TABLE>
- --------
Notes to Statement of Financial Condition:
The preparation of financial statements in accordance with generally accepted
accounting principles requires Trust management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
can differ from those estimates.
(1) The Pinnacle Family of Trusts, Internet Trust Series I (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
Internet Trust sponsored by ING Funds Distributor, Inc., the Sponsor, is to
maximize total return through capital appreciation. An irrevocable letter of
credit issued by SunTrust Bank in an amount of $200,000 has been deposited with
the Trustee for the benefit of the Trust to cover the purchases of such
Securities. 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 March 27, 2000. The
Trust will terminate on June 26, 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 Sponsor for the per Unit portion of all or part of
the costs of establishing the Trust. These costs have been estimated at $1.36
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 Sponsor will be satisfied. To the
extent that actual organization costs are less than the estimated amount, only
the actual organization costs will be deducted from the assets of the Trust.
A-7
<PAGE>
THE PINNACLE
FAMILY OF TRUSTS
INTERNET TRUST SERIES I
PORTFOLIO
AS OF MARCH 27, 2000
<TABLE>
<CAPTION>
Market Value
of Stocks as Market Cost of
Number a Value Securities
Portfolio of Ticker Percentage of Per to the
No. Shares Name of Issuer (1)* Symbol the Trust (2) Share Trust (3)
- --------- ------ ---------------------------------------- ------ ------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
1 29 Akamai Technologies, Inc. AKAM 4.03% $208.6875 $ 6,052
2 82 Amazon.com, Inc. AMZN 3.99 73.1250 5,996
3 81 America Online, Inc. AOL 4.01 74.3750 6,024
4 24 Ariba, Inc. ARBA 3.92 245.8125 5,899
5 183 At Home Corp. ATHM 4.00 32.8125 6,005
6 59 BEA Systems, Inc. BEAS 3.98 101.4375 5,985
7 91 BroadVision, Inc. BVSN 4.01 66.1875 6,023
8 52 CMGI, Inc. CMGI 4.02 116.2500 6,045
9 28 Commerce One, Inc. CMRC 3.97 213.3125 5,973
10 44 Digex, Inc. DIGX 4.03 137.7500 6,061
11 25 eBay, Inc. EBAY 3.99 239.8125 5,995
12 36 Exodus Communications, Inc. EXDS 4.02 167.8125 6,041
13 34 InfoSpace.com, Inc. INSP 4.04 178.3750 6,065
14 28 Inktomi Corp. INKT 3.93 210.7500 5,901
15 56 Internet Capital Group, Inc. ICGE 3.96 106.3750 5,957
16 22 Juniper Networks, Inc. JNPR 4.05 276.4375 6,082
17 29 Network Solutions, Inc. NSOL 4.04 209.0625 6,063
18 35 Phone.com, Inc. PHCM 3.99 171.2500 5,994
19 85 Portal Software, Inc. PRSF 3.98 70.3125 5,977
20 65 Priceline.com, Inc. PCLN 3.98 92.0000 5,980
21 83 RealNetworks, Inc. RNWK 4.01 72.6250 6,028
22 50 TIBCO Software, Inc. TIBX 4.03 121.0000 6,050
23 32 VeriSign, Inc. VRSN 4.03 189.2500 6,056
24 26 Vignette Corp. VIGN 3.98 230.0000 5,980
25 30 Yahoo! Inc. YHOO 4.01 200.7500 6,022
------ --------
Total Investments in Securities 100.00% $150,254
====== ========
</TABLE>
FOOTNOTES TO PORTFOLIO
(1) Contracts to purchase the Securities were entered into on March 27, 2000.
All such contracts are expected to be settled on or about the First
Settlement Date of the Trust which is expected to be March 31, 2000.
(2) Based on the cost of the Securities to the Trust.
(3) Evaluation of Securities by the Trustee was made on the basis of closing
sale prices at the Evaluation Time on the day prior to the Initial Date of
Deposit. The Sponsor's Purchase Price is $150,746. The Sponsor's Loss on
the Initial Date of Deposit is $492.
* None of the stocks in the portfolio paid out any dividends during the twelve
months preceding the Initial Date of Deposit.
A-8
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PINNACLE FAMILY OF TRUSTS,
INTERNET TRUST SERIES I
We have audited the accompanying Statement of Financial Condition of The
Pinnacle Family of Trusts, Internet Trust Series I, including the Portfolio, as
of March 27, 2000. 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 auditing standards generally
accepted in the United States. 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 March 27, 2000. 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,
Internet Trust Series I, at March 27, 2000, in conformity with accounting
principles generally accepted in the United States.
ERNST & YOUNG LLP
New York, New York
March 28, 2000
A-9
<PAGE>
THE PINNACLE FAMILY OF TRUSTS
THE INTERNET TRUST SERIES I
An investment designed for the 21st century.
Investing in the 21st century.
The Internet Trust is a new investment opportunity for individuals who want
to participate in the explosive potential of the Internet. The Internet Trust
is a unit investment trust that seeks capital appreciation by investing in a
portfolio of 25 of the largest Internet companies currently listed in a major
U.S. Internet index./1/ In fact, the Trust may include a broad range of
businesses driving the growth of the Internet--from companies that provide high
speed Internet connectivity to those companies that operate online marketplaces
and even Internet consulting and marketing businesses.
A New Era of Investing
At the dawn of the new millennium, the Internet has become central to the
lives of more people and businesses than anyone might have imagined. Moreover,
there is little question that the Internet will continue to fundamentally
transform our economic, social and political landscape. By dismissing the
entire sector as a fad, you may be missing out on a significant opportunity.
WHAT FACTORS MAKE THE INTERNET A FORCE TO BE RECKONED WITH?
. Current data estimates that the worldwide online population stands at 275.5
million users./2/
. In 1999, the U.S. online population increased by 29 percent over the previous
year./3/
. This year, the online U.S. population will increase to about 50 percent of
the overall population--137 million surfers./4/
. By 2001, the worldwide Internet economy is predicted to soar past the $1
trillion mark./5/
. Internet traffic has doubled every 100 days and Internet commerce will likely
surpass $600 million by 2002/6/
. By 2005, Internet usage is expected to skyrocket to 766 million users
worldwide./7/
Such magnitude is why many experts agree that despite periods of short-term
volatility, Internet-related companies, including those that indirectly benefit
from the power of the Internet, may continue to energize the financial markets,
as well as the economy. In addition, an investment that maximizes the
opportunities available in this sector, may help savvy investors meet their
financial goals more effectively.
- --------
/1/ The index used for creating the Trust is the Bloomberg U.S. Internet
Index. Bloomberg is not affiliated with the Sponsor and has not participated in
any way in the creation of the Trust or in the selection of the stocks included
in the Trust and has not reviewed or approved any information in this brochure.
The Bloomberg U.S. Internet Index is a capitalization weighted index of
domestic Internet-related companies that have a market capitalization greater
than $250 million. The Bloomberg U.S. Internet Index was developed with a base
value of 100 as of December 31, 1998. IPO's that meet the minimum market
capitalization are included in the index after the first day of trading. The
Sponsor has not independently verified this information.
Sources: /2/ Nua Ltd.; /3/ 1999 America Online/Roper Starch Cyberstudy;
/4/ International Data Corporation; /5/ International Data Corporation;
/6/ U.S. Commerce Department; /7/ The Standard.
i
<PAGE>
The Strategy
The Internet Trust offers high return potential through capital appreciation
by investing in a portfolio of 25 of the largest-capitalization domestic
Internet companies that comprise a leading U.S. Internet index.
The strategy employs a disciplined investment approach that helps to ensure
the portfolio includes those Internet companies holding dominant positions in
the marketplace. The selection process identifies the 25 companies in the index
with the highest market capitalizations. In order to maximize the Trust's
exposure to Internet stocks, all financial services companies are eliminated
from the portfolio. Finally, in creating the Trust, each of the 25 selected
stocks are equally weighted.
Risk Considerations:
An investment in Units of the Trust should be made with an understanding of
the risks associated with an investment in common stocks, which include the
risks that the financial condition of the issuer may become impaired or that
the general condition of the stock market may worsen, and the value of the
equity securities in the Trust's portfolio (and, therefore, the value of the
Units) may decline. Since the Trust is concentrated in Internet stocks,
investors should recognize the risks associated with the Internet, which may
include government regulation and obsolete products. In addition, the amount
realized upon the sale of a security at termination might not be the highest
price attained by an individual security during the life of the Trust.
THE VALUE OF THE INTERNET TRUST
Disciplined Investing--The buy-and-hold, fixed portfolio eliminates
management fees and reduces trading expenses. The savings are passed through to
investors. Investors purchasing units will be charged a sales charge.
A Monitored Portfolio--The stocks held in your portfolio are continuously
monitored, and under certain, limited, extraordinary circumstances, can be
removed from the portfolio.
Daily Pricing & Liquidity--You have the flexibility to redeem your units at
the net asset value any day the stock market is open. Keep in mind that the
daily price will fluctuate with the underlying securities, and may be worth
more or less than you originally paid.
Low Minimum Investment--The Trust is able to offer this portfolio comprised
primarily of Internet companies for an initial investment that's as low as
$1,000 or $250 for qualified retirement plans or custodial accounts.
Compounded Returns--You have the option to take advantage of the power of
compounding by having distributions, if any, automatically reinvested into
additional units of the Trust at a reduced sales charge.
Three Options at Termination--The Trust will terminate in approximately 15
months. When the Trust terminates, you have three options, which may be subject
to tax liability. You may:
1. Receive your distribution in cash,
2. Reinvest your proceeds into a new trust (if available) at a reduced
sales charge, or
3. Receive the shares of the underlying stocks (minimums apply).
ii
<PAGE>
THE PINNACLE FAMILY OF TRUSTS
INTERNET TRUST SERIES I
(the "Internet 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 and related Reference Trust Agreement ( "Trust
Agreement") among ING Funds Distributor, Inc., as Sponsor, ING Mutual Funds
Management Co. LLC, as Portfolio Supervisor, and The Chase Manhattan Bank, as
Trustee.
On the Initial Date of Deposit, (i) the Sponsor 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 Sponsor's 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 Sponsor, 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 Sponsor 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 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.
B-1
<PAGE>
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
capital appreciation. 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, 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 Sponsor 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 Internet Trust seeks to achieve its
objective by creating a portfolio using data from the Bloomberg* U.S. Internet
Index that combines the following three steps determined as of two business
days prior to the Initial Date of Deposit:
Step 1: eliminate all financial services companies from the Bloomberg U.S.
Internet Index,
Step 2: of the remaining companies, select the twenty-five (25) companies
having the highest capitalization (the "Top Twenty-Five"),
Step 3: weigh the 25 stocks equally.
The Bloomberg U.S. Internet Index is a capitalization-weighted index
comprised of U.S. internet companies that have a market capitalization greater
than $250 million. The index was developed with a base value of 100 as of
December 31, 1998. IPO's that meet the minimum market capitalization are
included in the index after the first day of trading.
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 twenty-five. 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 capitalizations is designed to
increase the Trust's potential for higher returns. The Trust's return will
consist of capital appreciation.
- --------
* Bloomberg is not affiliated with the Sponsor 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.
B-2
<PAGE>
THE SECURITIES
S&P 500 Index. The S&P 500 includes a representative example of leading
companies in leading industries. The S&P 500 is used by 97% of U.S. money
managers and pension plan sponsors and the market value of the 500 companies
contained in this index is approximately $12.318 trillion. Stocks in the S&P
500 represent approximately 80% of the market value of all publicly traded
common stock in the United States although the 500 companies represent only 7%
of the publicly traded companies in the United States.
The S&P 500 is widely regarded as the standard for measuring large-cap U.S.
stock market performance and is also a barometer for overall stock market
performance. The S&P 500 focuses on large cap U.S. companies in leading sectors
such as industrial, transportation, financial and utility. Stocks are chosen
for this index based on market size, liquidity and industry group
representation. NYSE companies make up approximately 90% of the S&P 500 and
NASDAQ companies account for approximately 10%.
NASDAQ. Trading on the NASDAQ Stock Market began in February 1971. NASDAQ
stands for the National Association of Securities Dealers Automated Quotations
Systems. NASDAQ is an electronic dealer exchange (there is no physical trading
floor) on which dealers trade securities by setting a buy and sell price. On
NASDAQ, trading is executed through a computer and telecommunications network
and trades more shares per day than any other major United States market.
Approximately 5,482 domestic and foreign companies are listed on the NASDAQ.
The NASDAQ Stock Market is the United States' second-largest securities market
after the New York Stock Exchange. NASDAQ's share volume reached over 272.6
billion shares in 1999 and dollar volume reached nearly $11,013.21 billion. In
1999, NASDAQ share volume was greater than that of all other U.S. stock
markets. In addition, in 1999 NASDAQ listed 485 U.S. initial public offerings,
which is four times more than any other U.S. stock market.
The NASDAQ stock market is operated by the NASDAQ Stock Market, Inc., an
independent subsidiary of the National Association of Securities Dealers, Inc.
(NASD). Companies listed on the NASDAQ are separated into two major
classifications, the NASDAQ SmallCap Market, for small to medium-sized
companies, and the NASDAQ National Market, for larger companies with higher
capitalization. The NASDAQ Stock Market includes companies of every type and
every size, in every stage of development. Although companies listed on NASDAQ
represent a broad spectrum of industries including agriculture, mining,
construction, manufacturing, transportation, retail, banking and insurance,
just to name a few, the greatest industry concentrations of companies listed on
the NASDAQ are in information technology (including computer technology),
telecommunications, pharmaceuticals, biotechnology, finance, banking and
insurance.
The recent acquisition by the NASD of the American Stock Exchange (AMEX), a
floor-based trading system, has not altered or affected the NASDAQ system. Each
market will continue to function as an independent subsidiary.
NYSE. The New York Stock Exchange (NYSE) is the world's largest equity
market. The NYSE is a floor-based, auction market trading system. In 1999,
there were approximately 809.2 million shares traded each day. Approximately
3,025 domestic and foreign companies are listed on the NYSE with over 280.9
billion shares outstanding and total market capitalization of nearly $12.3
trillion.
The NYSE consists of large, mid-sized and smaller companies in all business
sectors. Moreover, virtually every leading industrial, financial and service
corporation is listed on the NYSE. To be considered for listing on the NYSE, a
company must meet specified levels of net earnings, assets, and trading volume,
and its shares must be widely held by investors.
B-3
<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 Sponsor is 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 Sponsor purchases 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 subject to
market fluctuations prior thereto), common stocks have neither fixed principal
B-4
<PAGE>
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 Sponsor.
INTERNET COMPANIES. Companies in the Internet Trust are subject to the
problems and risks inherent in the technology sectors in general. In addition,
the market in which internet companies compete is characterized by rapidly
changing technology, rapid product and service obsolescence, cyclical market
patterns, intense competition, evolving industry standards and frequent new
product introductions. The success of the issuers of the Securities depends in
substantial part on the timely and successful introduction of new products. An
unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond in a timely manner to compete in the rapidly developing marketplace.
Based on the trading history of internet stocks, factors such as the
announcement of new products, the development of new technologies or the
general condition of the industry have caused and are likely to cause the
market price of these stocks to fluctuate substantially. In addition internet
stocks have experienced extreme price and volume fluctuations that often have
been unrelated to the operating performance of such companies. This market
volatility may adversely affect the market price of the Securities and
therefore the ability of a Unitholder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Many internet companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the Securities to protect their proprietary
rights will be adequate to prevent misappropriation of their technology or that
competitors will not independently develop technologies that are substantially
equivalent or superior to such issuers' technology. In addition, due to the
increasing public use of the internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of internet products and services. The adoption of
any such laws could have a material adverse impact on the Securities in the
Internet Trust. The above factors could adversely affect the value of the
Trust's Units.
The Trust's investments in securities of technology related companies present
certain risks that may not exist to the same degree in other types of
investments. Technology stocks, in general, tend to be relatively volatile as
compared to other types of investments. Any such volatility will be reflected
in the value of the Trust's Units. The technology and science areas may be
subject to greater governmental regulation than many other areas and changes in
governmental policies and the need for regulatory approvals may have a material
adverse effect on these areas. Additionally, companies in these areas may be
subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business
B-5
<PAGE>
acceptance as new technologies evolve. Competitive pressures may have a
significant effect on the financial condition of companies in the technology
sector. For example, if technology continues to advance at an accelerated rate,
and the number of companies and product offerings continues to expand, these
companies could become increasingly sensitive to short product cycles and
aggressive pricing. Further, companies in the technology industry spend heavily
on research and development and are subject to the risk that their products or
services may not prove commercially successful or may become obsolete quickly.
Certain companies whose securities are included in the Trust are engaged in
providing local, long-distance and wireless services, in the manufacture of
telecommunications products and in a wide range of other activities including
directory publishing, information systems and the operation of voice, data and
video telecommunications networks.
Payment on common stocks of companies in the telecommunications industry,
including local, long-distance and cellular service, the manufacture of
telecommunications equipment, and other ancillary services, is generally
dependent upon the amount and growth of customer demand, the level of rates
permitted to be charged by regulatory authorities and the effects of inflation
on the cost of providing services and the rate of technological innovation. To
meet increasing competition, companies may have to commit substantial capital,
particularly in the formulation of new products and services using new
technology. Telecommunications companies are undergoing significant change due
to varying and evolving levels of governmental regulation or deregulation and
other factors. As a result, competitive pressures are intense and the
securities of such companies may be subject to significant price volatility.
The domestic companies in the Trust may consist of former government owned
telecommunications systems that have been privatized in states. The Sponsor
cannot predict whether such privatization will continue in the future or what,
if any, effect this will have on the Trust.
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 Sponsor and their affiliates.
However, because these clients may have differing investment objectives, the
Sponsor 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
Sponsor 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
B-6
<PAGE>
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 Sponsor does 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 Sponsor 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 Sponsor and
Trustee believe that the "Year 2000" problem is material to their business and
operations and may have a material adverse effect on the Sponsor's and the
Trustee's results of operations and, in turn, cash available for distribution
by the Trustee. Although the Sponsor 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 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 Sponsor is 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 Sponsor may then terminate
the Trust, at its 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. Ten year averaging
B-7
<PAGE>
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."
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 Sponsor and may also be distributed through
dealers. The Sponsor intends 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:
<TABLE>
<CAPTION>
Approximate
Reduced
Number of Units Sales Charge
--------------- ------------
<S> <C>
25,000 but less than 50,000.................................. 4.995%
50,000 but less than 100,000................................. 4.745%
100,000 or more.............................................. 4.495%
</TABLE>
For transactions of at least 100,000 Units or more, the Sponsor 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
B-8
<PAGE>
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 4.995% for the Internet Trust. (See "Administration of the Trust--
Trust Termination".) The rollover option described herein will also be
available to investors in the Prior Series who elect to exchange units of a
Prior Series for Units of the Trust. An exchange or rollover of units of a
Prior Series for Units of the Trust will generally be a taxable event.
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.
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 ING Funds Distributor, Inc. (and their affiliates) and of
the special counsel to the Sponsor, 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 Sponsor's secondary market, so long as it is being
maintained.
SPONSOR'S PROFITS. The Sponsor will receive a combined gross underwriting
commission equal to up to 5.495% of the Public Offering Price per 100 Units
(equivalent to 5.815% of the net amount invested in the Securities) for the
Internet Trust. Additionally, the Sponsor may realize a profit on the deposit
of the Securities in the Trust representing the difference between the cost of
the Securities to the Sponsor and the cost of the Securities to the Trust (see
"Portfolio" in Part A). The Sponsor 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 Sponsor.
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 Sponsor for the Units. Cash, if any,
made available to the Sponsor prior to settlement date for the purchase of
Units may be used in the Sponsor's 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 Sponsor.
B-9
<PAGE>
Both upon acquisition of Securities and termination of the Trust, the Trustee
may utilize the services of the Sponsor for the purchase or sale of all or a
portion of the Securities in the Trust. The Sponsor may only 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-Sponsor Repurchase")
the Sponsor will realize profits or sustain losses in the amount of any
difference between the price at which it buys Units and the price at which it
resells such Units.
RIGHTS OF UNITHOLDERS
BOOK-ENTRY UNITS. Ownership of Units of the Trust will not be evidenced by
certificates. All evidence of ownership of the Units will be recorded in book-
entry form at The Depository Trust Company ("DTC") through an investor's
McLaughlin, Piven, Vogel brokerage account. Units held through DTC will be
deposited by the Sponsor 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
B-10
<PAGE>
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.
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.
B-11
<PAGE>
LIQUIDITY
SPONSOR REPURCHASE. Unitholders who wish to dispose of their Units should
inquire of the Sponsor 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 Sponsor does not guarantee the enforceability, marketability
or price of any Securities in the Portfolio or of the Units. The Sponsor 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 ING Funds
Distributor, Inc., 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.
Redemption requests received after 4 P.M., New York Time, will be deemed to
have been repurchased on the next business day. In the event a market is not
maintained for the Units, a Unitholder may be able to dispose of Units only by
tendering them to the Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be reoffered for
sale by the Sponsor at a price based on (i) the aggregate value of the
Securities in a Trust plus (ii) 5.495% sales charge (or 5.815% 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
Sponsor in the secondary market also may be redeemed by the Sponsor if it
determines such redemption to be in its best interest.
The Sponsor 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 Sponsor 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 Sponsor 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 Sponsor 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 Sponsor 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
B-12
<PAGE>
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 Sponsor 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 Sponsor believes that the minimum amounts specified
will be approximately 100 shares for readily marketable Securities.
The Redemption Price per Unit is the pro rata share of the Unit in the Trust
determined by the Trustee on the basis of (i) the cash on hand in the
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 Sponsor. 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 Sponsor does
not elect to purchase a Unit tendered for redemption or if the Sponsor tenders
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 or NYSE is closed, other than
B-13
<PAGE>
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
Sponsor 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 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 Sponsor 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 Sponsor that the tax treatment of the Trust as a grantor
trust would otherwise be jeopardized; (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 Sponsor, will make the retention of the Security detrimental
to the Trust or the Unitholders; or (vi) 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 Sponsor the sale or tender of the
Security is in the best interest of 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 Twenty-Five.
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 Sponsor fails to give immediate
instructions to sell or hold that Security, the Trustee, within 30 days of
that failure by the Sponsor, shall sell the Security.
2. It is the responsibility of the Sponsor 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 Sponsor directs 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
B-14
<PAGE>
be promptly sold unless the Sponsor directs 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 Sponsor is 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 Sponsor may
specify the minimum numbers in which Additional Securities will be
deposited or purchased. If a deposit is not sufficient to acquire minimum
amounts of each Security, Additional Securities may be acquired in the
order of the Security most under-represented immediately before the deposit
when compared to the original proportionate relationship. If Securities of
an issue originally deposited are unavailable at the time of the subsequent
deposit, the Sponsor 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.
In determining whether to dispose of or hold Securities, new securities or
property, the Sponsor may be advised by the Portfolio Supervisor.
TRUST AGREEMENT AND AMENDMENT. The Trust Agreement may be amended by the
Trustee and the Sponsor 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 Sponsor, 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 Sponsor for the sale of all or a portion of the Securities in
the Trust, and in so doing, the Sponsor will determine the manner, timing and
execution of the sales of the underlying
B-15
<PAGE>
Securities. 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;
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 Sponsor as agent of the Trustee of the
underlying Securities in units of a subsequent series of The Pinnacle
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 Sponsor has 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 Sponsor, 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
B-16
<PAGE>
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 Sponsor may
purchase a large amount of securities for the New Series in a short period of
time. The Sponsor's buying of securities may tend to raise the market prices of
these securities. The actual market impact of the Sponsor's 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 Sponsor believes that the sale of
underlying Securities over the Liquidation Period described above is in the
best interest of a Unitholder and may mitigate the negative market price
consequences stemming from the trading of large amounts of Securities. The
Securities may be sold in fewer than seven days if, in the Sponsor's judgment,
such sales are in the best interest of Unitholders. The Sponsor, 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 Sponsor may for any reason, in its sole discretion, decide not to sponsor
any subsequent series of the Trust, without penalty or incurring liability to
any Unitholder. If the Sponsor so decides, the Sponsor 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 Sponsor expects,
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 Sponsor intends 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 Sponsor reserves the right to modify,
suspend or terminate the rollover privilege at any time.
In the event the Sponsor determines 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 SPONSOR. ING Funds Distributor, Inc., an Iowa corporation, is a wholly
owned indirect subsidiary of ING Group. ING Group, among the leading global
financial services organizations, is engaged in
B-17
<PAGE>
asset management, banking and insurance activities in 60 countries worldwide
with over 82,000 employees. The Sponsor is a member of the National Association
of Securities Dealers, Inc.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations. The Sponsor 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 Sponsor may resign at any time by delivering to the Trustee an instrument
of resignation executed by the Sponsor. If at any time the Sponsor shall resign
or fail to perform any of its 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 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 Sponsor, and mailing a copy of a notice of resignation to all
Unitholders. In such an event the Sponsor is 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 Sponsor 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 Sponsor. 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
B-18
<PAGE>
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 Sponsor for all or a portion of the estimated
costs incurred in organizing and offering the Trust (collectively, the
"organization costs")--including the cost of the initial preparation and
execution of the Trust Agreement, registration of the Trust and the Units under
the Investment Company Act of 1940 and the Securities Act of 1933 and state
registration fees, the initial fees and expenses of the Trustee, legal expenses
and other actual out-of-pocket costs. The estimated organization costs will be
paid from the assets of the Trust as of the close of the initial public
offering period (which may be between 30 and 90 days). To the extent that
actual organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of the Trust. To the extent
that actual organization costs are greater than the estimated amount, only the
estimated organization costs included in the Public Offering Price will be
reimbursed to the Sponsor. All advertising and selling expenses, as well as any
organizational costs not paid by the Trust, will be borne by the Sponsor at no
cost to the Trust.
ING Mutual Funds Management Co. LLC, an affiliate of ING Funds Distributor,
Inc., 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.
This 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 ING Mutual Funds Management Co.
LLC 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 Portfolio Supervisor's 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
B-19
<PAGE>
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 Sponsor
for any losses, liabilities and expenses incurred in acting as sponsor 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 Sponsor, 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 Sponsor otherwise directs, the accounts of the Trust shall be
audited not less than annually by independent public accountants selected by
the Sponsor. To the extent lawful, the expenses of the audit shall be an
expense of the Trust. Unitholders covered by the audit during the year may
receive a copy of the audited financial statements upon request.
REINVESTMENT PLAN
Income and principal distributions 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 Sponsor or new Units created by the Sponsor's 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 Sponsor reserves 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 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
B-20
<PAGE>
validity of said documents and the accuracy and completeness of the facts set
forth therein. In the Opinion of Battle Fowler LLP, special counsel for the
Sponsors, under existing law:
1. The Trust will be classified as a grantor trust for Federal income tax
purposes and not as a partnership or association taxable as a corporation.
Classification of the Trust as a grantor trust will cause the Trust not to
be subject to Federal income tax, and will cause the Unitholders of the
Trust to be treated for Federal income tax purposes as the owners of a pro
rata portion of the assets of the Trust. All income received by the Trust
will be treated as income of the Unitholders in the manner set forth below.
2. The Trust is not subject to the New York Franchise Tax on Business
Corporations or the New York City General Corporation Tax. For a Unitholder
who is a New York resident, however, a pro rata portion of all or part of
the income of the Trust will be treated as income of the Unitholder under
the income tax laws of the State and City of New York. Similar treatment
may apply in other states.
3. During the 90-day period subsequent to the initial issuance date, the
Sponsors reserve the right to deposit Additional Securities that are
substantially similar to those deposited in initially establishing the
Trust. This retained right falls within the guidelines promulgated by the
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.
B-21
<PAGE>
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 is subject
to limitations 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 (other than an S corporation and certain ineligible
corporations) 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 there are 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 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 trusts, are nevertheless taxed under Section 511 of the
Code on unrelated business taxable income. Unrelated business taxable income is
income from a trade or business regularly carried on by the tax-exempt entity
that is unrelated to the entity's exempt purpose. Unrelated business taxable
income generally does not include dividend or interest income or gain from the
sale of investment property, unless such income is derived from property that
is debt-financed or is dealer property. A tax-exempt entity's dividend income
from the Trust and gain from the sale of Units in the Trust or the Trust's sale
of Securities is not expected to constitute unrelated business taxable income
to such tax-exempt entity unless the acquisition of the Unit itself is debt-
financed or constitutes dealer property in the hands of the tax-exempt entity.
Prospective 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.
B-22
<PAGE>
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain matters
relating to Federal tax law have been passed upon by Battle Fowler LLP, 75 East
55th Street, New York, New York 10022 as counsel for the Sponsor. Carter,
Ledyard & Milburn, Two Wall Street, New York, New York 10005 have acted as
counsel for the Trustee.
INDEPENDENT AUDITORS. The Statement of Financial Condition, including the
Portfolio, is included herein in reliance upon the report of Ernst & Young LLP,
independent auditors, and upon the authority of said firm as experts in
accounting and auditing.
PORTFOLIO SUPERVISOR. ING Mutual Funds Management Co. LLC, a Delaware limited
liability company, is a wholly-owned indirect subsidiary of ING Group and is an
affiliate of the Sponsor.
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 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 Bloomberg Financial Markets
LP, 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 Sponsor may also include, in advertisements, sales literature
and reports to current or prospective investors, the performance of
hypothetical portfolios to which the Sponsor has 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 Sponsor intends to apply to the selection of
securities for the Trust. This performance information is intended to
illustrate the Trust's strategies and should not be interpreted as indicative
of the future performance of the Trust.
B-23
<PAGE>
No person is authorized to give any information or to make any
representations not contained in this Prospectus and you should not rely on any
other information. The Trust is registered as a unit investment trust under the
Investment Company Act of 1940. Such registration does not imply that the Trust
or any of its Units have been guaranteed, sponsored, recommended or approved by
the United States or any state or any agency or officer thereof.
----------------
Table of Contents
<TABLE>
<CAPTION>
Title Page
- ----- ----
<S> <C>
PART A
Investment Summary......................................................... A-2
Fee Table.................................................................. A-5
Summary of Essential Information........................................... A-6
Statement of Financial Condition........................................... A-7
Portfolio.................................................................. A-8
Report of Independent Auditors............................................. A-9
PART B
The Trust.................................................................. B-1
Risk Considerations........................................................ B-4
Public Sale of Units....................................................... B-8
Rights of Unitholders...................................................... B-10
Liquidity.................................................................. B-12
Administration of the Trust................................................ B-14
Trust Expenses and Charges ................................................ B-19
Reinvestment Plan.......................................................... B-20
Tax Status................................................................. B-20
Other Matters.............................................................. B-23
</TABLE>
This Prospectus does not contain all of the information set forth in the
registration statement, filed with the SEC, Washington, D.C., under the
Securities Act of 1933 (file no. 333-31048), and the Investment Company Act of
1940 (file no. 811-08945), and to which reference is made. Information may be
reviewed and copied at the Commission's Public Reference Room, and information
on the Public Reference Room may be obtained by calling the SEC at 1-202-942-
8090. Copies may be obtained from the SEC by:
. visiting the SEC Internet address: http://www.sec.gov
. electronic request (after paying a duplicating fee) at the following E-
mail address: [email protected]
. writing: Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549-6009
----------------
The Pinnacle
Family of Trusts
----------------
Internet Trust Series I
(A Unit Investment Trust)
PROSPECTUS
DATED: March 28, 2000
SPONSOR:
ING FUNDS DISTRIBUTOR, INC.
1475 Dunwoody Drive
West Chester, Pennsylvania 19380
1-877-463-6464
TRUSTEE:
THE CHASE MANHATTAN BANK
4 New York Plaza
New York, New York 10004
----------------
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state to any person to whom it is not lawful to
make such offer in such state.
