As filed with the Securities and Exchange Commission on April 18, 1996
REGISTRATION NO. 333-00465
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
AMENDMENT NO. 1
TO
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:
EQUITY INCOME FUND
SELECT TEN PORTFOLIO
1996 INTERNATIONAL SERIES B HONG KONG PORTFOLIO
(FORMERLY 1996 INTERNATIONAL SERIES A1 (WINTER)(HONG KONG PORTFOLIO))
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, SMITH BARNEY INC. DEAN WITTER REYNOLDS INC.
FENNER & 388 GREENWICH STREET TWO WORLD TRADE
SMITH INCORPORATED 23RD FLOOR CENTER--59TH FLOOR
DEFINED ASSET FUNDS NEW YORK, N.Y. 10013 NEW YORK, N.Y. 10048
P.O. BOX 9051
PRINCETON, N.J.
08543-9051
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED
INCORPORATED 1285 AVENUE OF THE
ONE SEAPORT PLAZA AMERICAS
199 WATER STREET NEW YORK, N.Y. 10019
NEW YORK, N.Y. 10292
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LAURIE A. HESSLEIN LEE B. SPENCER, JR.
P.O. BOX 9051 388 GREENWICH STREET ONE SEAPORT PLAZA
PRINCETON, N.J. NEW YORK, N.Y. 10013 199 WATER STREET
08543-9051 NEW YORK, N.Y. 10292
COPIES TO:
ROBERT E. HOLLEY DOUGLAS LOWE, ESQ. PIERRE DE SAINT PHALLE,
1285 AVENUE OF THE 130 LIBERTY STREET--29TH ESQ.
AMERICAS FLOOR 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10019 NEW YORK, N.Y. 10006 NEW YORK, N.Y. 10017
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
$500 (as required by Rule 24f-2)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
EQUITY INCOME FUND The objective of this Defined Portfolio is total
SELECT TEN PORTFOLIO return through a combination of capital
1996 INTERNATIONAL appreciation and current dividend income.
SERIES B The common stocks in the Portfolio were selected
HONG KONG PORTFOLIO by following a strategy that invests for a period
(A UNIT INVESTMENT TRUST) of about one year in the ten common stocks in the
- ------------------------------Hang Seng Index having the highest dividend yields
/ / DESIGNED FOR TOTAL RETURN two business days prior to the date of this
/ / DEFINED PORTFOLIO OF 10 Prospectus.
HIGHEST DIVIDEND The Portfolio may be considered speculative and
YIELDING HANG SENG INDEXtherefore may be appropriate only for those
STOCKS investors able or willing to assume the increased
/ / SEMI-ANNUAL DIVIDEND risks of higher price volatility and currency
INCOME fluctuations associated with investments in
international equities. The Portfolio should be
considered a vehicle for investing a portion of an
investor's assets in foreign securities and not as
a complete equity investment program. The value of
units will fluctuate with the value of the common
stocks in the Portfolio and with currency
fluctuations and no assurance can be given that
dividends will be paid or that the units will
appreciate in value.
Unless otherwise indicated, all amounts herein are
stated in U.S. dollars computed on the basis of
the exchange rate for Hong Kong dollars on April ,
1996.
Minimum purchase: $1,000.
Minimum Purchase for Individual Retirement/Keogh
Accounts: $250.
-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities Prospectus dated April , 1996.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
- ----------------------------------------------------------------
Defining the Strategy
- ----------------------------------------------------------------
This Select Ten Portfolio follows a simple, time-tested Strategy: buy
approximately equal amounts of the ten highest dividend-yielding stocks of the
Hang Seng Index* and hold them for about one year. At the end of the year, the
Portfolio will be liquidated and the Strategy reapplied to the Hang Seng Index
to select a new portfolio. The Select Ten Portfolio is designed to be part of a
longer term strategy and investors are advised to follow the Strategy for at
least a three to five year period. So long as the Sponsors continue to offer new
portfolios, investors will have the option to reinvest into a new portfolio at a
reduced sales charge. The Sponsors reserve the right not to offer new
portfolios.
- ------------
* The publisher of this Index is not affiliated with the Sponsors, has not
participated in any way in the creation of the Portfolio or in the selection of
stocks included in the Portfolio and has not reviewed or approved any
information included in this Prospectus.
The Strategy provides a disciplined approach to investing based on a buy and
hold philosophy, which ignores market timing and investment research and rejects
active management of the Portfolio. The Sponsors anticipate that the Portfolio
will remain unchanged over its one-year life despite adverse developments
concerning an issuer, an industry or the economy or a stock market generally.
Although Select Ten International Portfolios were not available until 1993, a
strategy of investing in approximately equal values of the Strategy Stocks (but
not necessarily a given Portfolio) each year generally would have yielded a
higher total return than an investment in all of the stocks of the related
Index, on a hypothetical basis. Of course, past performance cannot guarantee
future results and there can be no assurance that any Portfolio will outperform
the related Index over its one-year life, especially because of sales charges
and expenses, or that the Strategy will not lose money over consecutive annual
periods.
- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------
Investing in the Portfolio, rather than in only one or two of the Hang Seng
Strategy Stocks, is a way to diversify your investment. Based upon the principal
business of each issuer and current market values, the following industries are
represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / Real Estate/Properties %
/ / Publishing
/ / Transportation
/ / Utilities
/ / Telecommunications
The Hong Kong Portfolio is concentrated in
stocks, and all of the stocks represent Hong Kong issuers. Investors should note
that Hong Kong will revert to Chinese sovereignty on July 1, 1997, which may
adversely effect real estate or property values or the market value of Hong Kong
stocks generally. The People's Republic of China has committed to preserve for
50 years the economic and social freedoms currently enjoyed in Hong Kong, but
there is no assurance that they will abide by this commitment. (See Risk Factors
in Part B.)
A-2
<PAGE>
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
The Hang Seng Strategy Stocks, as the 10 highest dividend yielding stocks in the
Hang Seng Index, generally share attributes that have caused them to have lower
prices or higher yields relative to the other stocks in the Hang Seng Index. The
Strategy Stocks may, for example, be experiencing financial difficulty, or be
out of favor in the market because of weak performance, poor earnings forecasts
or negative publicity; or they may be reacting to general market cycles. The
Strategy is therefore contrarian in nature. The Hang Seng Strategy Stocks are
chosen solely by application of the Strategy to determine the highest-yielding
Hang Seng Index stocks. The Portfolio does not reflect any investment
recommendations of the Sponsors and one or more of the stocks in the Portfolio
may, from time to time, be subject to sell recommendations from one or more of
the Sponsors.
The Portfolio is not an appropriate investment for those who are not comfortable
with the Strategy. The Portfolio may not be appropriate for investors seeking
either preservation of capital or high current income, nor would the Portfolio
be appropriate for investors unable or unwilling to assume the increased risks
of higher price volatility and currency fluctuations associated with investments
in international equities trading in non-U.S. currencies. The Portfolio should
be considered as a vehicle for investing a portion of an investor's assets in
foreign securities and not as a complete equity investment program.
There can be no assurance that the market factors that caused the relatively low
prices and high yields of the Strategy Stocks will change, that any negative
conditions adversely affecting the stock price will not deteriorate, that the
dividend rates on the Strategy Stocks will be maintained or that share prices
will not decline further during the life of the Portfolio, or that the Strategy
Stocks will continue to be included in the Hang Seng Index.
Unit price fluctuates with the value of the Portfolio, and the value of the
Portfolio could be affected by changes in the financial condition of the
issuers, changes in the various industries represented in the Portfolio,
movements in stock prices generally and in currency exchange rates, the impact
of purchase and sale of securities for the Portfolio (especially during the
primary offering period of units and during the rollover period) and other
factors. Also, the return on an investment in the Portfolio will be lower than
the hypothetical returns on Strategy Stocks because the Portfolio has sales
charges, brokerage commissions and expenses, purchases Strategy Stocks at
different prices and is not fully invested at all times and because of other
factors described under Performance Information.
Unlike mutual funds, the Portfolio is not actively managed and the Sponsors
receive no management fee. The adverse financial condition of an issuer or any
market movement in the price of a security will not require the sale of
securities from the Portfolio. Although the Sponsors may instruct the Trustee to
sell securities under certain limited circumstances, given the investment
philosophy of the Portfolio, the Sponsors are not likely to do so. The Portfolio
may continue to purchase or hold securities originally selected even though the
market value and yields on the securities may have changed or the securities may
no longer be included in the Hang Seng Index.
- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00
The Public Offering Price as of April , 1996 is based on the aggregate value
of the underlying securities and any cash held to purchase securities, divided
by the number of units outstanding times 1,000, plus the initial sales charge.
The Public Offering Price on any subsequent date will vary. The underlying
securities are valued by the Trustee on every business day on the basis of their
closing sale prices at 3:30 a.m. New York Time for the Hong Kong Stock Exchange.
SALES CHARGES
The total sales charge for this investment combines an initial up-front sales
charge and a deferred sales charge that will be deducted from the net asset
value of a Portfolio monthly beginning July 1, 1996 and thereafter on the 1st of
each month for the remaining nine months of the Portfolio.
ROLLOVER OPTION
When this Select Ten International Hong Kong Portfolio is about to terminate,
you may have the option to roll your proceeds into the next portfolio of the
then current Strategy Stocks. If you notify your financial consultant by April
25, 1997, your units will be redeemed and your proceeds will be reinvested in
units of the next Select Ten International Hong Kong Portfolio. If you decide
not to roll over your proceeds, you will receive a cash distribution after the
Fund terminates. Of course you can sell or redeem your Units at any time prior
to termination.
SEMI-ANNUAL DISTRIBUTIONS
You will receive distributions of any dividend income, net of expenses, on the
25th of October 1996 and February 1997, if you own units on the 10th of those
months.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into additional units
of the Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.
TAXES
In the opinion of counsel, you will be considered to have received all the
dividends paid on your pro rata portion of each security in the Portfolio when
those dividends are received by the Portfolio, even though a portion of the
dividend payments may be used to pay expenses of the Portfolio and regardless of
whether you reinvest your dividends in the Portfolio.
A-3
<PAGE>
TAX BASIS REPORTING
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and the charge for organizational expenses. In
addition, the annual statement and the relevant tax reporting forms you receive
at year-end will be based upon the amount paid to you (net of the deferred sales
charge and the charge for organizational expenses). Accordingly, you should not
increase your basis in your units by the deferred sales charge and the charge
for organizational expenses. (See Taxes).
TERMINATION DATE
The Portfolio will terminate by June 13, 1997. The final distribution will be
made within a reasonable time afterward. The Portfolio may be terminated earlier
if its value is less than 40% of the value of the securities when deposited.
SPONSORS' PROFIT OR LOSS
The Sponsors' profit or loss from the Portfolio will include applicable sales
charges, fluctuations in the Public Offering Price or secondary market price of
units and a gain or loss on the initial and subsequent deposits of securities
(see Defined Portfolio; Sponsors' and Underwriters' Profits in Part B).
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
SALES CHARGES
First-time investors pay a 1% maximum sales charge when they buy. For example,
on a $1,000 investment, $990 is invested in the Hang Seng Strategy Stocks. In
addition, a deferred sales charge of $1.75 per 1,000 units will be deducted from
a Portfolio's net asset value each month over the last ten months of the
Portfolio's life ($17.50 total). This deferred method of payment keeps more of
your money invested over a longer period of time. If you roll the proceeds of
your investment into the new portfolio, you will not be subject to the 1%
initial charge, just the $17.50 deferred fee. Although this is a unit investment
trust rather than a mutual fund, the following information is presented to
permit a comparison of fees and an understanding of the direct or indirect costs
and expenses that you pay.
As a %
of Initial
Public Amount per
Offering Price 1,000 Units
--------------- --------------
Maximum Initial Sales Charge 1.00% $ 10.00
Deferred Sales Charge per Year 1.75% 17.50
--------------- --------------
2.75% $ 27.50
--------------- --------------
--------------- --------------
Maximum Sales Charge Imposed Per
Year on Reinvested Dividends % $
ESTIMATED ANNUAL OPERATING EXPENSES
AS A % OF AMOUNT PER
NET ASSETS 1,000 UNITS
----------------- --------------
Trustee's Fee % $
Maximum Portfolio Supervision,
Bookkeeping and Administrative
Fees % $
Organizational Expenses % $
Other Operating Expenses % $
----------------- --------------
TOTAL % $
The Portfolio (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds.
These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.
A-4
<PAGE>
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:
1 Year 3 Years 5 Years 10 Years
$ $ $ $
Although the Portfolio has a term of only one year and 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 distributions are rolled
over each year into a new Portfolio subject only to the deferred sales charge
and fund expenses.
This example assumes reinvestment of all dividends and distributions and uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds. For purposes of the example, the deferred sales charge imposed on
reinvestment of 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.
The example should not be considered a representation of past or future expenses
or annual rates of return; the actual expenses and annual rates of return may be
more or less than the example. Reductions to the repurchase and cash redemption
prices in the secondary market to recoup the costs of liquidating securities to
meet redemption, currently estimated at $ per 1,000 units, have not been
reflected.
SELLING YOUR INVESTMENT
You may sell or redeem your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of April , 1996 was
$972.50 per 1,000 units ($27.50 per 1,000 units less than the Public Offering
Price). This price reflects deductions of the deferred sales charge which
declines over the last ten months of the Portfolio ($17.50 initially). If you
sell your units before the termination of the Portfolio, you will pay the
remaining balance of the deferred sales charge. In addition, after the initial
offering period, the repurchase and cash redemption prices for units will be
further reduced to reflect the estimated costs of liquidating securities to meet
the redemption. If you reinvest in the new Portfolio, you will pay your share of
any brokerage commissions on the sale of underlying securities when your units
are liquidated during the rollover.
A-5
<PAGE>
- -------------------------------------------------------------------------------
Defined Portfolio
- -------------------------------------------------------------------------------
Equity Income Fund
Select Ten Portfolio 1996 International Series B April , 1996
Hong Kong Portfolio
<TABLE><CAPTION>
PRICE COST
PER SHARE TO FUND
PERCENTAGE CURRENT TO PORTFOLIO IN IN U.S. DOLLARS
NAME OF ISSUER OF PORTFOLIO (1) DIVIDEND YIELD (2) U.S. DOLLARS (3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
----------------- -----------------
100.00% $
----------------- -----------------
----------------- -----------------
</TABLE>
- ------------------------------------
(1) Based on Cost to Fund in U.S. dollars.
(2) Current Dividend Yield for each security was calculated by adding the most
recent interim and final dividends declared on the security and dividing the
result by its market value as of the close of trading on April , 1996.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on April , 1996, converted into U.S. dollars on the offer
side of the exchange rate at the evaluation time on that date. Loss to the
Sponsors on deposit of the Securities was $ .
------------------------------------
The securities were acquired on April , 1996 and are represented entirely by
contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or co-managers of a public offering of the securities in
this Fund during the last three years. Affiliates of the Sponsors may serve as
specialists in the securities in this Fund on one or more stock exchanges and
may have a long or short position in any of these securities or in options on
any of them, and may be on the opposite side of public orders executed on the
floor of an exchange where the securities are listed. An officer, director or
employee of any of the Sponsors may be an officer or director of one or more of
the issuers of the securities in the Fund. A Sponsor may trade for its own
account as an odd-lot dealer, market maker, block positioner and/or arbitrageur
in any of the securities or in options on them. Any Sponsor, its affiliates,
directors, elected officers and employee benefits programs may have either a
long or short position in any securities or in options on them.
A-6
<PAGE>
- --------------------------------------------------------------------------------
Performance Information
- --------------------------------------------------------------------------------
The following table compares the actual performance of the Hang Seng Index and
the hypothetical performance of approximately equal amounts invested in each of
the Hang Seng Strategy Stocks (but not any Select Ten Portfolio) at the
beginning of each year and reinvesting the proceeds annually for the past 18
years as of December 31 in each of these years. These results represent past
performance of the Hang Seng Strategy Stocks, and may not be indicative of
future results of the Strategy or the Portfolio. The Hang Seng Strategy Stocks
underperformed the Hang Seng Index in certain years, including eight of the last
18 years. Also, an investment in the Hong Kong Portfolio will not realize as
high a total return as a direct investment in the Hang Seng Strategy Stocks,
since the Portfolio has sales charges and expenses and may not be fully invested
at all times. Actual performance of a Portfolio will also differ from quoted
performance of the Hang Seng Strategy Stocks and the Hang Seng Index because the
quoted performance figures are annual figures based on closing sales prices on
December 31, while the Portfolios are established and liquidated at various
times during the year. In addition, the Hang Seng Index is weighted by market
capitalization while the Portfolio stocks are more or less equally weighted.
Performance variances may also result because stocks are normally purchased or
sold at prices and currency exchange rates different from the closing price and
currency exchange rate used to determine the Portfolio's net asset value and not
all stocks may be weighted equally at all times. While the Hong Kong dollar
exchange rate has been pegged to the U.S. dollar since 1983, there can be no
assurance that this arrangement will continue in the future (see Risk
Factors--International Risk Factors, Generally in Part B).
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
(FIGURES REFLECT CONVERSION INTO U.S. DOLLARS AT APPLICABLE CURRENCY EXCHANGE
RATES
BUT NOT SALES CHARGES, FUND EXPENSES, COMMISSIONS OR TAXES)
<TABLE><CAPTION>
HANG SENG STRATEGY STOCKS(1) HANG SENG INDEX*
--------------------------------------------------------------- ---------------------------------------------
YEAR APPRECIATION(2) ACTUAL DIVIDEND YIELD(3) TOTAL RETURN(4) APPRECIATION(2) ACTUAL DIVIDEND YIELD(3)
- --------- ---------------- --------------------------- ---------------- ---------------- ---------------------------
<S> <C> <C> <C> <C> <C>
1978 19.82% 8.22% 28.04% 17.83% 5.68%
1979 72.63 9.65 82.28 72.27 6.06
1980 34.03 7.37 41.40 61.60 4.23
1981 -10.94 7.08 -3.86 -13.75 2.68
1982 -46.13 7.16 -38.97 -51.24 3.45
1983 -15.40 7.92 -7.48 -6.92 6.03
1984 53.82 11.50 65.32 36.45 6.09
1985 40.25 7.27 47.52 46.33 4.77
1986 54.50 5.99 60.49 46.90 4.26
1987 -2.15 5.18 3.03 -10.06 3.33
1988 28.02 6.02 34.04 16.07 4.53
1989 2.66 6.75 9.41 5.55 4.64
1990 -1.93 8.04 6.11 6.71 5.28
1991 40.07 8.44 48.51 42.41 5.84
1992 32.08 6.86 38.94 28.87 4.76
1993 100.80 6.19 106.99 116.14 4.97
1994 -34.93 3.48 -31.45 -31.22 2.39
1995 10.25 5.86 16.11 23.03 3.92
1996 12.83 0.26 13.09 8.77 0.86
(through 3/31)
</TABLE>
YEAR TOTAL RETURN(4)
- --------- ----------------
1978 23.51%
1979 78.33
1980 65.83
1981 -11.07
1982 -47.79
1983 -0.89
1984 42.54
1985 51.10
1986 51.16
1987 -6.73
1988 20.60
1989 10.19
1990 11.99
1991 48.25
1992 33.63
1993 121.11
1994 -28.83
1995 26.95
1996 9.63
(through
- ------------------------------------
* Source: Datastream International, Inc. The Sponsors have not independently
verified these data, but they have no reason to believe these data are
incorrect in any material respect.
(1) The Hang Seng Strategy Stocks for any given year were selected by ranking
the dividend yields for each of the stocks in the Hang Seng Index as of the
beginning of that year, as provided by Datastream International Inc. The
yields were generally computed by adding together the interim and final
dividends for each of the stocks (these companies generally pay one interim
and a final dividend per fiscal year) declared in the preceding year divided
by that stock's market value on the first trading day that year on the Hong
Kong Stock Exchange.
(2) Appreciation for the Hang Seng Strategy Stocks is calculated by subtracting
the market value of these stocks at the opening value on the first trading
day on the London Stock Exchange in a given year from the market value of
those stocks at the closing value on the last trading day in that year, and
dividing the result by the market value of the stocks at the opening value
on the first trading day in that year. Appreciation for the Hang Seng Index
is calculated by subtracting the opening value of the Hang Seng Index on the
first trading day in each year from the closing value of the Hang Seng Index
on the last trading day in that year, and dividing the result by the opening
value of the Hang Seng Index on the first trading day in that year.
(3) Actual Dividend Yield for the Hang Seng Strategy Stocks is calculated by
adding the total dividends received on the stocks in the year and dividing
the result by the market value of the stocks on the first trading day in
that year. Actual Dividend Yield for the Hang Seng Index is calculated by
taking the total dividends credited to the Hang Seng Index and dividing the
result by the opening value of the Hang Seng Index on the first trading day
of the year.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Total Return does not take into consideration any reinvestment of dividend
income.
A-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Income Fund, Select Ten Portfolio
1996 International Series B Hong Kong Portfolio, Defined Asset Funds (the
'Fund'):
We have audited the accompanying statement of condition and the related
portfolio included in the prospectus of the Fund as of April , 1996. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are 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 of the irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audits provide 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 Fund as of April , 1996
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
April , 1996
STATEMENT OF CONDITION AS OF APRIL , 1996
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$
Organizational Costs(2)..................................
--------------------
Total..........................................$
--------------------
--------------------
LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Payment of deferred portion of sales
charge(3)................................................$
Accrued Liability(2)
--------------------
Subtotal $
--------------------
Interest of Holders of Units of fractional undivided
interest outstanding(4):
Cost to investors(5)...................................$
Gross underwriting commissions(6)...................... ()
--------------------
Subtotal............................................$
--------------------
Total..........................................$
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio based on the U.S. dollar offer side value of the relevant exchange
rate determined by the Trustee at the evaluation time on April , 1996. The
contracts to purchase securities are collateralized by an irrevocable letter of
credit which has been issued by , New York Branch, in the amount
of $ and deposited with the Trustee. The amount of the letter of
credit includes $ for the purchase of securities.
(2) This represents a portion of the Fund's organizational costs which
will be deferred and amortized over the life of the Fund. Organizational costs
have been estimated based on projected total assets of $ million. To the
extent the Fund is larger or smaller, the estimates may vary.
(3) Represents the aggregate amount of mandatory distributions of $1.75
per 1,000 Units per month payable on July 1, 1996 and thereafter on the 1st day
of each month through April 1, 1997. Distributions will be made to an account
maintained by the Trustee from which the deferred sales charge obligation of the
investors to the Sponsors will be satisfied. If units are redeemed prior to
April 1, 1997, the remaining portion of the distribution applicable to such
units will be transferred to such account on the redemption date.
(4) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in these statements of
condition, the number of Units offered on the day following the Initial Date of
Deposit will be adjusted from the initial number of Units to maintain the $1,000
per 1,000 Units offering price.
(5) Aggregate public offering price computed on the basis of the U. S.
dollar value of the underlying securities based on the U.S. dollar offer side
value of the relevant exchange rate at the evaluation time on April , 1996.
(6) Assumes the maximum sales charge per 1,000 units of 2.75% of the
Public Offering Price.
A-8
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND SELECT TEN PORTFOLIO--INTERNATIONAL SERIES
HONG KONG PORTFOLIO
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
Index
PAGE
---------
Fund Description...................................... 1
Risk Factors.......................................... 3
How to Buy Units...................................... 6
How to Sell Units..................................... 7
Income, Distributions and Reinvestment................ 9
Portfolio Expenses.................................... 10
Taxes................................................. 10
PAGE
---------
Foreign Taxation...................................... 12
Records and Reports................................... 13
Trust Indenture....................................... 13
Miscellaneous......................................... 14
Exchange Option....................................... 15
Supplemental Information.............................. 16
FUND DESCRIPTION
THE STRATEGY
Simple strategies can sometimes be the most effective. The Fund seeks total
return by acquiring the ten highest yielding stocks in the Hang Seng Index, as
of the date indicated in Part A, after giving effect to any forthcoming changes
to the Index announced prior to those dates, and holding them for about one
year. This investment strategy is based on three time-tested investment
principles: time in the market is more important than timing the market; the
stocks to buy are the ones everyone else is selling; and dividends can be an
important part of total return. Today's global marketplace offers many
opportunities. Defined Asset Funds can make some of them available to investors
with the Select Ten International Portfolios. Global markets can move in
different directions. While some markets may be experiencing rapid growth,
others may be in decline. These markets can offer attractive growth
opportunities. An investment in the Fund can be cost-efficient, avoiding the
odd-lot costs of buying small quantities of securities directly. Purchasing a
portfolio of these stocks as opposed to one or two stocks provides a more
diversified holding. There is only one investment decision and two semi-annual
dividends. Investment in a number of companies with high dividends relative to
their stock prices is designed to increase the Portfolio's potential for higher
total returns. The Portfolio's return will consist of a combination of capital
appreciation and current dividend income. The Portfolio will terminate in about
one year, when investors may choose to either receive the distribution in cash
or reinvest in the next Series (if available) at a reduced sales charge. There
can be no assurance that the dividend rates on the selected stocks will be
maintained. Reduction or elimination of a dividend could adversely affect the
stock price as well.
The Hang Seng Index. The Hang Seng Index, first published in 1969, is a
recognized indicator of stock market performance in Hong Kong. It is computed on
an arithmetic basis, weighted by market capitalization, and represents
approximately 70% of the total market capitalization of stocks listed on the
Hong Kong Exchange. The companies represented are among the most highly
capitalized in Hong Kong. Index stocks include companies intended to represent
four major market sectors; commerce and industry, finance, properties and
utilities. The following are the stocks currently represented in the Hang Seng
Index.
1
<PAGE>
Amoy Properties Ltd.
Bank of East Asia Ltd.
Cathay Pacific
Cheung Kong
China Light & Power Co.
Citic Pacific
Great Eagle Holdings
Guangdong Investment Ltd.
Hang Lung Development Company
Hang Seng Bank
Hendersen Land Development
Hong Kong Aircraft Engineering
Hong Kong Electric
Hong Kong and China Gas
Hong Kong and Shanghai Hotels
Hong Kong Telecommunications
Hopewell Holdings
HSBC Holdings PLC
Hutchison Whampoa
Hysan Development Company
Johnson Electric Holdings Ltd.
Miramar Hotel & Investment
New World Development
Oriental Press Group Ltd.
Shangri-La Asia Ltd.
Shun Tak Holdings Limited
Sino Land Co. Ltd.
South China Morning Post
(Holdings)
Sun Hung Kai Properties
Swire Pacific (A)
Television Broadcasts
Wharf Holdings
Wheelock & Co.
PORTFOLIO SELECTION
The Fund consists of ten common stocks in the Hang Seng Index having the
highest dividend yield as of the date indicated in Part A. 'Highest dividend
yield' means the yield for each Security calculated by adding the most recent
interim and final dividends declared on that Security and dividing the result by
the market value of that Security. This rate is historical and there is no
assurance that any dividends will be declared or paid in the future on the
Securities. No leverage or borrowing is used nor does the Portfolio contain
other kinds of securities to enhance yield.
The Strategy selection process is a straightforward, objective,
mathematical application that ignores any subjective factors concerning an
issuer in the related index, an industry or the economy generally. The
application of the Strategy may cause the Portfolio to own a stock that the
Sponsors do not recommend for purchase and, in fact, the Sponsors may have sell
recommendations on a number of the stocks in the Portfolio at the time the
stocks are selected for inclusion in the Portfolio. Various theories attempt to
explain why a common stock is among the ten highest yielding stocks in an Index
at any given time: the issuer may be in financial difficulty or out of favor in
the market because of weak earnings or performance or forecasts or negative
publicity; uncertainties relating to pending or threatened litigation or pending
or proposed legislation or government regulation; the stock may be a cyclical
stock reacting to national or international economic developments; or the market
may be anticipating a reduction in or the elimination of the company's dividend.
Some of the foregoing factors may be relevant to only a segment of an issuer's
overall business yet the publicity may be strong enough to outweigh otherwise
solid business performance. In addition, companies in certain industries have
historically paid high dividends.
The deposit of the Securities in the Portfolio on the initial date of
deposit established a proportionate relationship among the number of shares of
each Security in the Portfolio. During the 90-day period following the initial
date of deposit the Sponsors may deposit additional Securities in order to
create new Units, maintaining to the extent possible that original proportionate
relationship. Deposits of additional Securities subsequent to the 90-day period
must generally replicate exactly the proportionate relationship among the number
of shares of each Security in the Portfolio at the end of the initial 90-day
period. The ability to acquire each Security at the same time will generally
depend upon the Security's availability and any restrictions on the purchase of
that Security under the federal securities laws or otherwise.
Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage fees will be an expense of the Portfolio. To minimize the risk of
price fluctuations when purchasing Securities, the Portfolio will try to
purchase Securities as close to the Evaluation Time or at prices as close to the
evaluated prices as possible and may purchase Securities on exchanges other than
the Hong Kong Exchange. The Portfolio may also enter into program trades with
unaffiliated broker/dealers, which could have the effect of increasing brokerage
commissions while reducing market risk.
Because the Portfolio in a Defined Asset Fund is a preselected portfolio,
you know the securities before you invest. Of course, the Portfolio will change
somewhat over time, as Securities are purchased upon creation of additional
Units, as Securities are sold to meet Unit redemptions or in other limited
circumstances.
2
<PAGE>
PORTFOLIO SUPERVISION
The Portfolio follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. In the event a public tender offer is made for a Security or a
merger or acquisition is announced affecting a Security, the Sponsors may
instruct the Trustee to tender or sell the Security in the open market when in
its opinion it is in the best interests of investors to do so. Otherwise,
although the Portfolio is regularly reviewed, because of the Strategy the
Portfolio is unlikely to sell any of the Securities other than to satisfy
redemptions of units, or to cease buying additional shares in connection with
the issuance of Additional Units. More specifically, adverse developments
concerning a Security including the adverse financial condition of the issuer, a
failure to maintain a current dividend rate, the institution of legal
proceedings against the issuer, a default under certain documents materially and
adversely affecting the future declaration of dividends, or a decline in the
price or the occurrence of other market or credit factors that might otherwise
make retention of the Security detrimental to the interest of investors, will
generally not cause the Portfolio to dispose of a Security or cease buying it.
Furthermore, the Portfolio will likely continue to hold a Security and purchase
additional shares notwithstanding its ceasing to be included among the ten
highest dividend yielding stocks in the Hang Seng Index or even its deletion
from that Index.
RISK FACTORS
An investment in the Portfolio entails certain risks, including the risk
that the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
relevant stock market worsens and the risk that holders of common stocks have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. 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 capital provided by debt securities. Common stocks in
general may be 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
Sponsors cannot predict the direction or scope of any of these factors.
INTERNATIONAL RISK FACTORS, GENERALLY
Foreign Issuers. Investments in securities of foreign issuers involve risks
that are different from investments in securities of domestic issuers. These
risks may include future political and economic developments, the possibility of
exchange controls or other governmental restrictions on the payment of
dividends, less publicly available information and the absence of uniform
accounting, auditing and financial reporting standards, practices and
requirements.
Volatility. Foreign stock prices may be more volatile than U.S. stock
prices. The following table demonstrates the volatility of the Hang Seng Index
in comparison to that of the Financial Times Industrial Ordinary Share Index (FT
Index) and the Dow Jones Industrial Average by showing for each index the number
of trading days during the period from January 1, 1989 through December 31,
1995, on which the value of the index in local currency gained or lost 1%, 2%
and 3% of its value as of the previous trading day.
<TABLE><CAPTION>
NUMBER OF TRADING DAYS WITH GAINS OR LOSSES SHOWN
---------------------------------------------------
PERCENTAGE GAINS OR LOSSES HANG SENG FT DOW JONES
IN VALUE OF INDEX INDEX INDEX INDUSTRIAL AVERAGE
- ----------------------------------------------- ------------- ------------- ---------------------
<S> <C> <C> <C>
1%............................................. 614 394 268
2%............................................. 226 41 35
3%............................................. 82 35 10
</TABLE>
Previous performance is no guarantee of future results; any index may
display more or less volatility in the future.
Foreign Exchange Rates. Because securities of non-U.S. issuers generally
pay dividends and trade in foreign currencies, there is the risk that the U.S.
dollar value of these securities will vary with fluctuations in foreign exchange
rates. Most foreign currencies have fluctuated widely in value against the U.S.
dollar because of changing investor perceptions, currency speculation by
institutional investors, supply and demand of the respective currency, the
soundness of the world economy and the relative strength of the respective
economy, the impact of actual and proposed government policies, interest rate
differentials between currencies and the balance of imports and exports of goods
and services and transfers of income and capital from one country to another.
3
<PAGE>
Since 1983, the Hong Kong dollar has been 'pegged' to the U.S. dollar
although there is no guarantee that the Hong Kong dollar will continue to be
pegged to the U.S. dollar in the future. If the Hong Kong dollar ceased to be
pegged to the U.S. dollar there could be an adverse effect on the value of the
Hong Kong Portfolio. Currencies are generally traded by leading international
commercial banks and institutional investors. From time to time, central banks
in a number of countries also are major buyers and sellers of foreign
currencies, mostly to prevent or reduce substantial exchange rate fluctuations.
The following table shows fluctuations in the value of the Hong Kong dollar
relative to the U.S. dollar in the past 20 years.
CHANGES IN FOREIGN CURRENCY EXCHANGE RATES
RANGE OF CHANGE IN
FLUCTUATIONS HONG KONG
HONG KONG DOLLAR/ DOLLAR/
PERIOD U.S. DOLLAR* U.S. DOLLAR**
- ----------- --------------------- ---------------
1976 5.042-4.666 7.15%
1977 4.717-4.618 1.24
1978 4.840-4.601 -4.07
1979 5.243-4.739 -3.02
1980 5.211-4.784 -3.68
1981 6.155-5.125 -10.62
1982 6.940-5.662 -14.45
1983 8.750-6.472 -19.78
1984 7.990-7.775 -0.55
1985 7.860-7.722 0.15
1986 7.825-7.766 0.20
1987 7.814-7.750 0.58
1988 7.824-7.768 -0.81
1989 7.816-7.773 0.10
1990 7.817-7.754 0.09
1991 7.875-7.711 0.27
1992 7.777-7.723 0.44
1993 7.766-7.723 0.25
1994 7.753-7.730 -0.18
1995 7.768-7.730 0.04
- ------------------
* DRI/McGrawHill.
** Ibbotson Associates.
The Portfolio's foreign exchange transactions may be conducted either on a
spot (i.e., cash) or forward foreign exchange basis. Foreign currency exchange
transactions are generally conducted on a principal basis and foreign exchange
dealers realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price at which
they are willing to sell the currency (offer price). The cost to the Portfolio
of engaging in these foreign currency transactions also varies with such factors
as the currency involved, the length of the contract period and the market
conditions then prevailing. Portfolio evaluations include the cost of buying or
selling a forward foreign exchange contract in the relevant currency to
correspond to the settlement period for purchases and redemptions of Units.
Exchange Controls. At the present time the Sponsors do not believe that any
of the Securities is subject to exchange control restrictions which would
materially interfere with payment to the Portfolio of amounts due on the
Securities. There can be no assurance that exchange control regulations might
not be adopted in the future which might adversely affect payments to the
Portfolio. In addition, the adoption of exchange control regulations or other
legal restrictions could have an adverse impact on the marketability of
international securities in the Portfolio and on the ability of the Portfolio to
satisfy redemptions.
Liquidity. Sales of foreign securities by a Portfolio in United States
securities markets are ordinarily subject to severe restrictions and will
generally be made only in foreign securities markets. Securities may be traded
in foreign countries where the securities markets are not as developed or
efficient and may not be as liquid as those in the United States. A foreign
market's liquidity might become impaired as a result of economic or political
turmoil in a country in whose currency a Portfolio had a substantial portion of
its assets invested, or should relations between the United States and such
foreign country deteriorate markedly. Additionally, the principal trading market
for the Securities, even if otherwise listed, may be the over-the-counter market
in which liquidity will depend on whether dealers will make a market in the
Securities.
4
<PAGE>
The information set forth below has been extracted from various
governmental and private publications, but no representation can be made as to
its accuracy; furthermore, no representation is made that any correlation exists
between the economy of Hong Kong and the value of any Securities held by the
Hong Kong Portfolio.
RISK FACTORS PARTICULAR TO HONG KONG
The Portfolio contains common stocks of companies trading on the Hong Kong
Exchange and engaged in such businesses as hotels, property and real estate,
textiles, telecommunications and utilities.
Hong Kong. Hong Kong, which has been a colony of Great Britain since the
1840's, will revert to the sovereignty of The People's Republic of China
('China') on July 1, 1997. Under British rule, the Hong Kong government has
generally followed a laissez-faire policy towards industry, and over the ten
year period between 1983 and 1993, Real Gross Domestic Product increased at an
average annual rate of approximately 6%. There are no major import, export or
foreign exchange restrictions, and regulation of business is generally minimal
with certain exceptions, including regulated entry into certain sectors of the
economy and a fixed exchange rate regime by which the Hong Kong dollar has been
pegged to the U.S. dollar. Although China has committed to preserve for 50 years
the economic and social freedoms currently enjoyed in Hong Kong, there can be no
assurances that China will abide by its commitment. In addition, the government
of China has no procedures for the orderly succession of its leadership. The
Sponsors cannot predict what effect the death of the current leadership, which
is very aged, may have on the prices of the stocks in the Hong Kong Portfolio.
Hong Kong Exchange. The Stock Exchange of Hong Kong Ltd. (the 'Hong Kong
Exchange'), with a total market capitalization as of July 31, 1995 of
approximately US$288.4 billion, is the second largest stock market in Asia,
measured by market capitalization, behind that of Japan. As of that date, 531
companies and 991 securities (including ordinary shares, warrants and other
derivative instruments) were listed on the Hong Kong Exchange. The Securities
and Futures Commission exercises supervision of the securities, financial
investment and commodities futures industry.
The Hang Seng Index is subject to change, and delisting of shares of any
issuers may have an adverse impact on the performance of the Portfolio, although
delisting would not necessarily result in the disposal of the stock of these
companies, nor would it prevent the Hong Kong Portfolio from purchasing such
Securities in connection with the issuance of additional Units or the purchase
of additional Hong Kong Securities. Jardine Matheson Holdings Ltd. and Jardine
Strategic Holdings Ltd. delisted from the Hong Kong Stock Exchange as of
November 30, 1994 and three other Jardine affiliates delisted as of February 28,
1995. The five Jardine companies represented almost 10% of total capitalization
of the Hang Seng Index.
Volatility of the Hang Seng Index. Securities prices on the Hang Seng Index
can be highly volatile and are sensitive to developments in Hong Kong and China,
as well as other world markets. For example, in 1989, the Hang Seng Index rose
to 3,310 in May from its previous year-end level of 2,687 but fell to 2,094 in
early June following the events at Tiananmen Square. The Hang Seng Index
gradually climbed in subsequent months but fell by 181 points on October 13,
1989 (approximately 6.5%) following a substantial fall in the U.S. stock
markets, and at the year end closed at a level of 2,837. Also, during 1994 the
Hang Seng Index lost approximately 31% of its value.
Hong Kong Real Estate Companies. The Hong Kong Portfolio is considered to
be concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sales and other related activities.
Many factors may have an adverse impact on the credit quality of companies in
this industry, including economic recession, the cyclical nature of real estate
markets, competitive overbuilding, unusually adverse weather conditions,
changing demographics, changes in governmental regulations (including tax laws
and environmental, building, zoning and sales regulations), increases in real
estate taxes or costs of material and labor, the inability to secure performance
guarantees or insurance as required, the unavailability of investment capital
and the inability to obtain construction financing or mortgage loans at rates
acceptable to builders and purchasers of real estate.
Additionally, certain Hong Kong real estate companies are now involved in
the purchase and development of real estate in southern China, which has
recently experienced a rise in real estate prices and construction costs, a
growing supply of real estate and a tightening of credit markets.
5
<PAGE>
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Portfolio, although pending litigation may have a material adverse effect
on the value of Securities in the Portfolio. In addition, at any time after the
initial date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in the Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on the Portfolio or will not impair the
ability of the issuers of the Securities to achieve their business goals.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units or
participating in a rollover. The Portfolio will be terminated no later than the
mandatory termination date specified in Part A of the Prospectus. They will
terminate earlier upon the disposition of the last Security in that Portfolio or
upon the consent of investors holding 51% of the Units. The Portfolio may also
be terminated earlier by the Sponsors once its total assets have fallen below
the minimum value specified in Part A of the Prospectus. A decision by the
Sponsors to terminate the Portfolio early, which will likely be made following
the rollover, will be based on factors such as its size relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in a Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price. The Public Offering Price varies
each Business Day with changes in the value of the Portfolio and other assets
and liabilities of the Fund.
PUBLIC OFFERING PRICE
Units are charged a combination of Initial and Deferred Sales Charges
equal, in the aggregate, to a maximum charge of 2.75% of the Public Offering
Price or, for quantity purchases of units of all Select Portfolios by an
investor and the investor's spouse and minor children, or by a single trust
estate or fiduciary account, made on a single day, the following percentages of
the public offering price:
APPLICABLE SALES CHARGE
(GROSS UNDERWRITING PROFIT)
------------------------------------
AS % OF PUBLIC AS % OF NET
AMOUNT PURCHASED OFFERING PRICE AMOUNT INVESTED
- ----------------------------------------- ----------------- -----------------
Less than $50,000........................ 2.75% 2.778%
$50,000 to $99,999....................... 2.50 2.519
$100,000 to $249,999..................... 2.00 2.005
$250,000 or more......................... 1.75 1.750
The Deferred Sales Charge is a monthly charge of $1.75 per 1,000 units and
is accrued in ten monthly installments commencing on the date indicated in Part
A of this Prospectus. Units redeemed or repurchased prior to the accrual of the
final Deferred Sales Charge installment will have the amount of any remaining
installments deducted from the redemption or repurchase proceeds or deducted in
calculating an in-kind distribution, although this deduction will be waived in
the event of the death or disability (as defined in the Internal Revenue Code of
1986) of an investor. The Initial Sales Charge is equal to the aggregate sales
charge, determined as described above, less the aggregate amount of any
remaining installments of the Deferred Sales Charge.
6
<PAGE>
It is anticipated that Securities will not be sold to pay the Deferred
Sales Charge until after the date of the last installment. Investors will be at
risk for market price fluctuations in the Securities from the several
installment accrual dates to the dates of actual sale of Securities to satisfy
this liability.
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units subject only to the
Deferred Sales Charge.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. In addition, the Hong
Kong Portfolio 'business day' shall also exclude the following Hong Kong
holidays: Lunar New Year's Day and the following day, Ching Ming Festival,
Easter Monday, Queen's Birthday and the following Monday, Tuen Ng Festival,
Summer Bank Holiday, Liberation Day, Chinese Mid-Autumn Festival and the
following day, Chung Yeung Festival and the two weekdays following Christmas
Day. If the Securities are listed on a securities exchange, evaluations are
generally based on closing sales prices on that exchange (unless the Trustee
deems these prices inappropriate) or, if closing sales prices are not available,
at the mean between the closing bid and offer prices. If the Securities are not
listed or if listed but the principal market is elsewhere, the evaluation is
generally determined based on sales prices of the Securities on the
over-the-counter market or, if sales prices in that market are not available, on
the basis of the mean between current bid and offer prices for the Securities or
for comparable securities or by appraisal or by any combination of these
methods. Neither the Sponsors nor the Trustee guarantee the enforceability,
marketability or price of any Securities. All evaluations are converted to U.S.
dollars at the then current exchange rates which include the cost of a forward
foreign exchange contract in the relevant currency to correspond to the
requirement that the Trustee settle redemption requests in U.S. dollars within
seven days.
NO CERTIFICATES
All investors are required to hold their Units in uncertifcated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company ('DTC').
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee (other than the remaining
deferred sales charge and deduction after the initial offering period for the
costs of liquidating Securities). The Sponsors (although not obligated to do so)
will normally buy any Units offered for sale at the repurchase price next
computed after receipt of the order. The Sponsors have maintained secondary
markets in Defined Asset Funds for over 20 years. Primarily because of the sales
charge and fluctuations in the market value of the Securities, the sale price
may be less than the cost of your Units. You should consult your financial
professional for current market prices to determine if other broker-dealers or
banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons. The Sponsors may reoffer
or redeem Units repurchased.
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request.
Signatures must be guaranteed by an eligible institution. In certain instances,
additional documents may be required such as a certificate of death, trust
instrument, certificate of corporate authority or appointment as executor,
administrator or guardian. If the Sponsors are maintaining a market for Units,
they will purchase any Units tendered at the repurchase price described above.
If they do not purchase Units tendered, the Trustee is authorized in its
discretion to sell Units in the over-the-counter market if it believes it will
obtain a higher net price for the redeeming investor.
The Hong Kong Exchange is open for trading on certain days which are U.S.
holidays on which the Fund will not transact business. The Securities will
continue to trade on those days and thus the value of the Portfolio may be
significantly affected on days when investors cannot sell or redeem Units.
7
<PAGE>
By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit determined as of the Evaluation Time next
following the tender and converted into U.S. dollars at the then current
exchange rate. Because of market or currency movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Securities, declared but unpaid dividends on the Securities, cash and the
value of any other Portfolio assets; deducting unpaid taxes or other
governmental charges, accrued but unpaid Fund expenses and remaining Deferred
Sales Charges, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units. All amounts are
reflected at their U.S. dollar equivalent at the bid side of the relevant
exchange rate (which is net of applicable commissions and stamp taxes).
Any investor owning Units representing at least the lesser of Securities
with a value of at least U.S.$500,000 or 10% of the net asset value of the
Portfolio who redeems those Units prior to the rollover notification date
indicated in Part A of the Prospectus may, in lieu of cash redemption, request
distribution in kind of an amount and value of Securities per Unit equal to the
otherwise applicable Redemption Price per Unit. Whole shares of each Security
together with cash from the Capital Account equal to any fractional shares to
which the investor would be entitled (less any Deferred Sales Charge payable)
will be paid over to a distribution agent and either held for the account of the
investor or disposed of in accordance with instructions of the investor. Any
brokerage commissions as well as any transfer and ongoing custodial fees on
sales of Securities in connection with in-kind redemptions will be borne by the
redeeming investors. The in-kind redemption option may be terminated by the
Sponsors at any time upon prior notice to investors.
After the initial offering period, the repurchase and cash redemption
prices will be reduced to reflect the cost to the Portfolio of liquidating
Securities to meet the redemption.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors in a manner designed to maintain, to the extent practicable, the
proportionate relationship among the number of shares of each Security. These
sales are often made at times when the Securities would not otherwise be sold
and may result in lower prices than might be realized otherwise and will also
reduce the size and diversity of the Fund.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Securities not reasonably
practicable, or for any other period permitted by the SEC.
ROLLOVER
In lieu of redeeming their Units or receiving liquidation proceeds upon the
termination of the Fund, investors may elect, by written notice to the Trustee
prior to the rollover notification date indicated in Part A, to apply their
proportional interest in the Securities and other Portfolio assets toward the
purchase of units of the Select Ten Portfolio 1997 International Series B Hong
Kong Portfolio (the '1997 B International Hong Kong Portfolio') (if available).
The 1997 B International Hong Kong Portfolio will invest in the ten highest
yielding stocks of the Hang Seng Index as of that time, and it is expected that
the terms of the 1997 B International Hong Kong Portfolio, including this
rollover feature, will be substantially the same as those of the Portfolio.
A rollover of an investor's units is accomplished by the in-kind redemption
of his Units followed by the sale of the underlying Securities by a distribution
agent on behalf of participating investors and the reinvestment of the sale
proceeds (net of brokerage fees, governmental charges and other sale expenses)
in units of the 1997 B International Hong Kong Portfolio at its net asset value.
The Sponsors intend to sell the distributed Securities, on behalf of the
distribution agent, as quickly as practicable and then to create units of the
1997 B International Hong Kong Portfolio as quickly as possible, subject in both
cases to the Sponsors' sensitivity that the concentrated sale and purchase of
large volumes of securities may affect market prices in a manner adverse to the
interest of investors. Accordingly, the Sponsors may, in their sole discretion,
undertake a more gradual sale of the distributed Securities and a more gradual
creation of units of the 1997 B International Hong Kong Portfolio to help
mitigate any negative market price consequences caused by this large volume of
securities trades. In order to minimize potential losses caused by
8
<PAGE>
market movement during the rollover period, the Sponsors may enter into program
trades, which could increase brokerage commissions payable by investors. There
can be no assurance, however, that any trading procedures will be successful or
might not result in less advantageous prices. Pending the investment of rollover
proceeds in the securities to comprise the 1997 B International Hong Kong
Portfolio, those moneys may be uninvested for up to several days. For those
Securities in the Portfolio that will also be in the 1997 B International Hong
Kong Portfolio, a direct sale of those securities between the two funds is now
permitted pursuant to an SEC exemptive order. These sales will be effected at
the securities' closing sale prices on the exchanges where they are principally
traded, free of any brokerage costs.
Investors participating in the rollover may realize taxable capital gains
from the rollover but will not be entitled to a deduction for certain capital
losses and, because of the rollover procedures, will not receive a cash
distribution with which to pay those taxes. Investors who do not participate
will continue to hold their Units until the termination of the Portfolio;
however, depending upon the extent of participation in the rollover, the
aggregate size of the Portfolio may be sharply reduced resulting in a
significant increase in per Unit expenses.
The Sponsors may, in their sole discretion and without penalty or liability
to investors, decide not to sponsor a Select Ten Portfolio 1997 B International
Hong Kong Series or to modify the terms of the rollover. Prior notice of any
decision would be provided to investors.
The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an 'exchange offer' for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsors have received exemptive orders under
Section 11(c) which they believe permit them to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsors' position and
additional regulatory approvals may be required.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The annual U.S. dollar income per Unit that is earned by the Portfolio,
after deducting estimated annual Portfolio expenses per Unit, will depend
primarily upon the amount of dividends declared and paid by the issuers of the
Securities, fluctuations in U.S. dollar exchange rates and changes in the
expenses of the Portfolio and, to a lesser degree, upon the level of purchases
of additional Securities and sales of Securities. There is no assurance that
dividends on the Securities will continue at their current levels or be declared
at all.
Each Unit in the Portfolio receives an equal share of distributions of
dividend income on the Securities in that Portfolio net of estimated expenses.
Because dividends on the Securities are not received at a constant rate
throughout the year, any distribution may be more or less than the amount then
credited to the Income Account. Dividends received are credited to an Income
Account (after conversion into U.S. dollars at the exchange rate to be
applicable upon receipt of the dividend) and other receipts to a Capital Account
(after conversion into U.S. dollars at the applicable rate). A Reserve Account
may be created by withdrawing from the Income and Capital Accounts amounts
considered appropriate by the Trustee to reserve for any material amount that
may be payable out of the Portfolio. Funds held by the Trustee in the various
accounts do not bear interest. In addition, distributions of amounts necessary
to pay the Deferred Sales Charge will be made from the Capital Account to an
account maintained by the Trustee for purposes of satisfying investors' sales
charge obligations. Although the Sponsors may collect the Deferred Sales Charge
monthly, to keep Units more fully invested the Sponsors currently do not
anticipate sales of Securities to pay the Deferred Sales Charge until after the
rollover notification date. Proceeds of the disposition of any Securities not
used to pay Deferred Sales Charge or to redeem Units will be held in the Capital
Account and distributed on the final Distribution Day or following liquidation
of the Portfolios.
REINVESTMENT
Principal and semi-annual income distributions on Units may be reinvested
by participating in the reinvestment plan. Under the plan, the Units acquired
for investors will be either Units already held in inventory by the Sponsors or
new Units created by the Sponsors' deposit of additional Securities, contracts
to purchase additional Securities or cash (or a bank letter of credit in lieu of
cash) with instructions to purchase additional Securities. Deposits or purchases
of additional Securities will generally be made so as to maintain the then
9
<PAGE>
existing proportionate relationship among the number of shares of each Security
in the Portfolio. Units acquired by reinvestment will not be subject
to the initial sales charge but will be subject to any remaining installments of
Deferred Sales Charge. The Sponsors reserve the right to amend, modify or
terminate the reinvestment plan at any time without prior notice. Investors
holding Units in 'street name' should contact their broker, dealer or financial
institution if they wish to participate in the reinvestment plan.
PORTFOLIO EXPENSES
Estimated annual Portfolio expenses are listed in Part A of the Prospectus;
if actual expenses exceed the estimate, the excess will be borne by the
Portfolio. The estimated expenses do not include any brokerage commissions
payable by the Portfolio in buying and selling Securities. The Trustee's annual
fee is payable in monthly installments. The Trustee also benefits when it holds
cash for a Portfolio in non-interest bearing accounts. Possible additional
charges include Trustee fees and expenses for extraordinary services, costs of
indemnifying the Trustee and the Sponsors, costs of action taken to protect the
Fund and other legal fees and expenses, Fund termination expenses and any
governmental charges. The Trustee has a lien on Portfolio assets to secure
reimbursement of these amounts and may sell Securities for this purpose if cash
is not available. The Sponsors receive an annual fee of a maximum of $0.35 per
1,000 Units to reimburse them for the cost of providing Portfolio supervisory
services. While the fee may exceed their costs of providing these services to
the Fund, the total supervision fees from all Series of Equity Income Fund will
not exceed their costs for these services to all of those Series during any
calendar year. The Sponsors may also be reimbursed for their costs of providing
bookkeeping and administrative services to the Portfolios, currently estimated
at $0.10 per 1,000 Units. The Trustee's and Sponsors' fees may be adjusted for
inflation without investors' approval.
Expenses incurred in establishing the Portfolio, including the cost of the
initial preparation of documents relating to the Portfolio, any foreign trading
costs (including commissions, custodial fees and stamp taxes), Federal and State
registration fees, the initial fees and expenses of the Trustee, legal expenses
and any other out-of-pocket expenses, will be paid by the Portfolio and
amortized over the life of the Portfolio. Advertising and selling expenses will
be paid from the Underwriting Account at no charge to the Portfolio. Defined
Asset Funds can be a cost-effective way to purchase and hold investments. Annual
operating expenses are generally lower than for managed funds. Because Defined
Asset Funds have no management fees, limited transaction costs and no ongoing
marketing expenses, operating expenses are generally less than 0.25% a year.
When compounded annually, small differences in expense ratios can make a big
difference in your investment results.
TAXES
U.S. TAXATION
The following discussion addresses only the tax consequences of Units held
as capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies.
As used herein, the term 'U.S. Investor' means an owner of a Unit in the
Portfolio that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, or (b) is not a U.S. Investor under (a) and whose income from a Unit is
effectively connected with such Investor's conduct of a United States trade or
business. The term also includes certain former citizens of the United States
whose income and gain on the Units will be taxable.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:
The Portfolio is not an association taxable as a corporation for federal
income tax purposes. Each U.S. Investor will be considered the owner of a
pro rata portion of each Security in the Portfolio under the grantor trust
rules of Sections 671-679 of the Internal Revenue Code of 1986, as amended
(the 'Code'). Each U.S. Investor will be considered to have received all of
the dividends paid on his pro rata portion of each Security when such
dividends are received by the Portfolio, regardless of whether such
dividends are used to pay a portion of the Portfolio's current ongoing
expenses or whether they are automatically reinvested (see Reinvestment
Plan). The amount of the dividend payment will be the U.S. dollar value
based on the exchange rate in effect on the date the dividend payment is
received by the Portfolio.
10
<PAGE>
Dividends considered to have been received by a U.S. Investor will not
qualify for the dividends-received deduction for corporate investors
because the dividends-received deduction is only available for dividends
received from domestic corporations.
An individual U.S. Investor who itemizes deductions will be entitled to
deduct his pro rata share of current ongoing expenses paid by the Fund only
to the extent that this amount together with the U.S. Investor's other
miscellaneous deductions exceeds 2% of his adjusted gross income.
The U.S. Investor's basis in his Units will equal the cost of his Units,
including the initial sales charge. A portion of the sales charge is
deferred until the termination of the Fund or the redemption of the Units.
The proceeds received by a U.S. Investor upon such event will reflect
deduction of the deferred amount (the 'Deferred Sales Charge' and a charge
for organizational expenses). The annual statement and the relevant tax
reporting forms received by U.S. Investors will be based upon the amounts
paid to them, net of the Deferred Sales Charge and the charge for
organizational expenses. Accordingly, U.S. Investors should not increase
their basis in their Units by the Deferred Sales Charge or any amount used
to pay organizational expenses.
A distribution of Securities by the Trustee to a U.S. Investor (or to
his agent) upon redemption of Units (or an exchange of Units for Securities
by the investor with the Sponsor) will not be taxable to the U.S. Investor
or to other investors. The redeeming or exchanging U.S. Investor's basis
for such Securities will equal his basis for the same Securities
(previously represented by his Units) prior to such redemption or exchange,
and his holding period for such Securities will include the period during
which he held his Units. A U.S. Investor will have a taxable gain or loss,
which will be a capital gain or loss, when the U.S. Investor (or his agent)
sells the Securities received in redemption for cash, when a redeeming or
exchanging U.S. Investor receives cash in lieu of fractional shares, when
the U.S. Investor sells his Units for cash or when the Trustee sells the
Securities from the Portfolio. However, deductions may be disallowed for
losses realized by U.S. Investors who invest their redemption proceeds in a
new 1997 Portfolio within 30 days of redemption to the extent that the
securities in the new series are substantially identical to the old
Securities.
Capital gains are currently taxed at the same rate as ordinary income.
However, the excess of net long-term capital gains over net short-term
capital losses may be taxed at a lower rate than ordinary income for
certain noncorporate taxpayers. A capital gain or loss is long-term if the
asset is held for more than one year and short-term if held for one year or
less. The deduction of capital losses is subject to limitations.
The lower net capital gain tax rate will be unavailable to those
noncorporate U.S. Investors who, as of the mandatory termination date (or
earlier termination of the Portfolio), have held their Units for less than
a year and a day. Similarly, with respect to noncorporate rollover U.S.
Investors, this lower rate will be unavailable if, as of the beginning of
the rollover period, those U.S. Investors have held their shares for less
than a year and a day. The deduction of capital losses is subject to
limitations.
Under the income tax laws of the State and City of New York, the
Portfolio is not an association taxable as a corporation and the income of
the Portfolio will be treated as the income of the U.S. Investors in the
same manner as for federal income tax purposes.
The foregoing discussion relates only to the tax treatment of U.S.
Investors with regard to federal and certain aspects of New York State and
City income taxes. U.S. Investors may be subject to taxation in New York or
in other jurisdictions and should consult their own tax advisors in this
regard.
* * * *
The foregoing discussion relates only to U.S. Investors (as defined above).
Since the Portfolio holds Securities of non-U.S. issuers, it is expected that
income earned by investors who are not U.S. Investors will not be treated as
U.S.-source income and should not be subject to any U.S. withholding tax.
At the termination of the Portfolio, the Trustee will furnish to each
investor an annual statement containing information relating to the dividends
received by the Portfolio on the Securities, the gross proceeds received by the
Portfolio from the disposition of any Security (resulting from redemption or the
sale by the Portfolio of any Security), and the fees and expenses paid by the
Portfolio. The Trustee will also furnish annual information returns to each
investor and to the Internal Revenue Service.
11
<PAGE>
FOREIGN TAXATION
HONG KONG TAXATION
The Sponsors have been advised by Johnson Stokes & Master, the Sponsors'
special Hong Kong counsel, that the following summary accurately describes the
Hong Kong tax consequences under existing law to all investors of Units of the
Hong Kong Portfolio. This discussion is for general purposes only and assumes
that the investor is not carrying on a trade, profession or business in Hong
Kong and has no profits arising in or derived from Hong Kong in respect of the
carrying on of such trade, profession or business. Investors should consult
their tax advisors as to the Hong Kong tax consequences of ownership of the
Units of the Hong Kong Portfolio applicable to their particular circumstances.
Taxation of Dividends. Amounts in respect of dividends paid to investors of
Units of the Hong Kong Portfolio are not taxable and therefore will not be
subject to the deduction of any withholding tax.
Profits Tax. An investor of Units of the Hong Kong Portfolio (other than a
person carrying on a trade, profession or business in Hong Kong) will not be
subject to profits tax on any gain or profits made on the realization or other
disposal of his units.
Hong Kong Estate Duty. Units of the Hong Kong Portfolio will not give rise
to a liability to Hong Kong estate duty.
* * *
The foregoing discussion addresses only the Hong Kong tax consequences to
investors of Units in the Hong Kong Portfolio. The taxation of non-U.S.
investors in their own countries of residence as a result of their ownership,
sale, exchange or other disposition of Units in the Hong Kong Portfolio will be
governed by the internal tax laws of the countries of residence of the non-U.S.
investors. Accordingly, non-U.S. investors should consult their tax advisors in
this regard.
RETIREMENT PLANS
This Series of Equity Income Fund may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from Federal taxation. All 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. Investors holding 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 of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisors with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of this Fund, and other
financial institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units may be purchased
by retirement plans established for self-employed individuals, partnerships or
unincorporated companies ('Keogh plans'). The assets of a Keogh plan must be
held in a qualified trust or other arrangement which meets the requirements of
the Code. Keogh plan participants may also establish separate IRAs (see below)
to which they may contribute up to an additional $2,000 per year ($2,250 in a
spousal account).
Individual Retirement Account--IRA. Any individual can establish an IRA or
make use of a qualified IRA arrangement for the purchase of Units of the Fund.
Any individual (including one covered by an employer retirement plan) can make a
contribution in an IRA equal to the lesser of $2,000 ($2,250 in a spousal
account) or 100% of earned income; the investment must be made in cash. However,
the deductible amount an individual may contribute will be reduced if the
individual or the individual's spouse is covered by an employer maintained
retirement plan and the individual's adjusted gross income exceeds $25,000 (in
the case of a single individual), $40,000 (in the case of married individuals
filing a joint return) or $200 (in the case of a married individual filing a
separate return). Certain transactions which are prohibited under Section 408 of
the Code will cause all or a portion of the amount in an IRA to be deemed to the
distributed and subject to tax at that time. Unless nondeductible contributions
were made in 1987 or a later year, all distributions from an IRA will be treated
as ordinary income but generally are eligible for tax-deferred rollover
treatment. Taxable distributions made before attainment of age 59 1/2, except in
12
<PAGE>
the case of the participant's death or disability or where the amount
distributed is part of a series of substantially equal periodic (at least
annual) payments that are to be made over the life expectancies of the
participant and his or her beneficiary, are generally subject to a surtax in
an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
Each Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Portfolio,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of a
Portfolio, the Trustee sends each investor of record a statement summarizing
transactions in the Portfolio's accounts including amounts distributed from
them, identifying Securities sold and purchased and listing Securities held and
the number of Units outstanding at termination and stating the Redemption Price
per 1,000 Units at termination, and the fees and expenses paid by the Portfolio,
among other matters. Portfolio accounts may be audited by independent
accountants selected by the Sponsors and any report of the accountants will be
available from the Trustee on request.
TRUST INDENTURE
The Portfolio is a 'unit investment trust' created under New York law by a
Trust Indenture among the Sponsors and the Trustee. This Prospectus summarizes
various provisions of the Indenture, but each statement is qualified in its
entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Portfolio
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsors will use their best
efforts to appoint a successor promptly; however, if upon resignation no
successor has accepted appointment within 30 days after notification, the
resigning Trustee may apply to a court of competent jurisdiction to appoint a
successor.
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains. A new Sponsor may be appointed by the remaining Sponsors and
the Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indentures and liquidate the Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.
The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indentures contain customary
provisions limiting the liability of the Trustee.
13
<PAGE>
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.
SPONSORS
The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-
owned subsidiary of The Travelers Inc.; Prudential Securities Incorporated, an
indirect wholly-owned subsidiary of the Prudential Insurance Company of America;
Dean Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter
Discover & Co., and PaineWebber Incorporated, a wholly-owned subsidiary of
PaineWebber Group Inc. Each Sponsor, or one of its predecessor corporations, has
acted as Sponsor of a number of series of unit investment trusts. Each Sponsor
has acted as principal underwriter and managing underwriter of other investment
companies. The Sponsors, in addition to participating as members of various
selling groups or as agents of other investment companies, execute orders on
behalf of investment companies for the purchase and sale of securities of these
companies and sell securities to these companies in their capacities as brokers
or dealers in securities.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above. The Sponsors
intend to qualify Units for sale in all states in which qualification is deemed
necessary through the Underwriting Account and by dealers who are members of the
National Association of Securities Dealers, Inc. The Sponsors do not intend to
qualify Units for sale in any foreign countries and this Prospectus does not
constitute an offer to sell Units in any country where Units cannot lawfully be
sold.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters, which are listed on the back
cover of the Prospectus, will be entitled to receive sales charges; each
Underwriters' interest in the Underwriting Account will depend on the number of
Units acquired through the issuance of additional Units. The Sponsors also
realize a profit or loss on deposit of the Securities equal to the difference
between the cost of the Securities to the Fund (based on the aggregate value of
the Securities on their date of deposit) and the purchase price of the
Securities to the Sponsors plus commissions payable by the Sponsors. In
addition, a Sponsor or Underwriter may realize profits or sustain losses on
Securities it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the initial date of deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any, made available by buyers of Units to the Sponsors prior to a
settlement date for the purchase of Units may be used in the Sponsors'
14
<PAGE>
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.
PERFORMANCE INFORMATION
Total returns, average annualized returns or cumulative returns for various
periods of Strategy Stocks, the related index, the current or one or more prior
Select Ten Portfolios may be included from time to time in advertisements, sales
literature and reports to current or prospective investors. Total return shows
changes in Unit price during the period plus reinvestment of dividends and
capital gains, divided by the maximum public offering price. Average annualized
returns show the average return for stated periods of longer than a year.
Figures for actual Portfolios (but not Strategy Stocks or related index) reflect
deduction of all Portfolio expenses and unless otherwise stated the maximum
sales charge. No provision is made for any income taxes payable. Similar figures
may be given for Strategy Stocks and other Select Ten Portfolios applying the
Strategy to other indexes. Returns of Strategy Stocks of multiple Select Ten
Strategies may also be shown on a combined basis. Investors should bear in mind
that this represents past performance and is no assurance of future results of
the current or any future Portfolio.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or regular current income consistent with the preservation of
principal. Unit investment trusts are particularly suited for investors who
prefer to seek long-term profits by purchasing and holding investments, rather
than through active trading. Few individuals have the knowledge, resources or
capital to buy and hold a diversified portfolio on their own; it would generally
take a considerable sum of money to obtain the breadth and diversity that
Defined Asset Funds offer. Your investment objectives may call for a combination
of Defined Asset Funds.
Defined Asset Funds reflect a buy and hold strategy that the Sponsors
believe can be more effective and less expensive than active management. This
strategy is premised on selection criteria and procedures, diversification and
regular monitoring by investment professionals. Various advertisements and sales
literature may summarize the results of economic studies concerning how stock
market movement has tended to be concentrated and how longer-term investments
can tend to reduce risk.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
EXCHANGE OPTION
You may exchange Fund Units for units of other Select Ten Portfolios
subject only to the remaining deferred sales charge on the units received. You
may exchange your units of any Select Ten Portfolio, of any other Defined Asset
Fund with a regular maximum sales charge of at least 3.50%, or of any
unaffiliated unit trust with a regular maximum sales charge of at least 3.0%,
for Units of this Fund at their relative net asset values, subject only to a
reduced sales charge, or to any remaining Deferred Sales Charge, as applicable.
To make an exchange, you should contact your financial professional to find
out what suitable exchange funds are available and to obtain a prospectus. You
may acquire units of only those exchange funds in which the Sponsors are
maintaining a secondary market and which are lawfully for sale in the state
where you reside. Except for the reduced sales charge, an exchange is a taxable
event normally requiring recognition of any gain or loss on the units exchanged.
However, the Internal Revenue Service may seek to disallow a loss if the
portfolio of the units acquired is not materially different from the portfolio
15
<PAGE>
of the units exchanged; you should consult your own tax advisor. If the proceeds
of units exchanged are insufficient to acquire a whole number of exchange fund
units, you may pay the difference in cash (not exceeding the price of a single
unit acquired).
As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
a Portfolio, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Fund.
16
<PAGE>
Defined
Asset FundsSM
SPONSORS AND UNDERWRITERS: EQUITY INCOME FUND
Merrill Lynch, SELECT TEN PORTFOLIO
Pierce, Fenner & Smith Incorporated1996 INTERNATIONAL SERIES B
Defined Asset Funds HONG KONG PORTFOLIO
P.O. Box 9051
Princeton, N.J. 08543-9051 This Prospectus does not contain all of the
(609) 282-8500 information with respect to the investment
Smith Barney Inc. company set forth in its registration
Unit Trust Department statement and exhibits relating thereto which
388 Greenwich Street--23rd Floor have been filed with the Securities and
New York, NY 10013 Exchange Commission, Washington, D.C. under
1-800-223-2532 the Securities Act of 1933 and the Investment
PaineWebber Incorporated Company Act of 1940, and to which reference
1200 Harbor Blvd. is hereby made.
Weehawken, N.J. 07087 ------------------------------
(201) 902-3000 No person is authorized to give any
Prudential Securities Incorporated information or to make any representations
One Seaport Plaza with respect to this investment company not
199 Water Street contained in its registration statement and
New York, N.Y. 10292 related exhibits; and any information or
(212) 776-1000 representation not contained therein must not
Dean Witter Reynolds Inc. be relied upon as having been authorized.
Two World Trade Center--59th Floor ------------------------------
New York, N.Y. 10048 When Units of this Fund are no longer
(212) 392-2222 available and for investors who will reinvest
TRUSTEE: into subsequent International Select Ten
The Chase Manhattan Bank, N.A. Portfolios, this Prospectus may be used as a
(a National Banking Association) preliminary prospectus for a future series,
Customer Service Retail Department in which case investors should note the
770 Broadway--7th Floor following:
New York, NY 10003 Information contained herein is subject to
1-800-323-1508 amendment. A registration statement relating
to securities of a future series has been
filed with the Securities and Exchange
Commission. These securities may not be sold
nor may offers to buy be accepted prior to
the time the registration statement becomes
effective.
This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any State in which such offer
solicitation or sale would be unlawful prior
to registration or qualification under the
securities laws of any such State.
--4/96
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
<TABLE><CAPTION>
SEC FILE OR
IDENTIFICATION DATE
NUMBER FILED
----------------------------------------
<S> <C> <C>
I. Bonding Arrangements and Date of Organization of the
Depositors filed pursuant to Items A and B of
Part II of the Registration Statement on Form
S-6 under the Securities Act of 1933:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-52691 1/17/95
Smith Barney Inc. .............................. 33-29106 6/29/89
PaineWebber Incorporated........................ 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-61418 4/26/78
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
II. Information as to Officers and Directors of the
Depositors filed pursuant to Schedules A and D
of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 8-7221 5/26/94, 6/29/92
Smith Barney Inc. .............................. 8-8177 8/29/94, 8/2/93
PaineWebber Incorporated........................ 8-16267 4/20/94, 7/31/86
Prudential Securities Incorporated.............. 8-27154 6/30/94, 6/20/88
Dean Witter Reynolds Inc. ...................... 8-14172 2/23/94, 4/9/91
III. Charter documents of the Depositors filed as
Exhibits to the Registration Statement on Form
S-6 under the Securities Act of 1933 (Charter,
By-Laws):
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-73866, 2-77549 9/22/81, 6/15/82
Smith Barney Inc. .............................. 33-20499 3/30/88
PaineWebber Incorporated........................ 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-52947 3/4/75
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsors and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 13-5674085
Smith Barney Inc. .............................. 13-1912900
PaineWebber Incorporated........................ 13-2638166
Prudential Securities Incorporated.............. 22-2347336
Dean Witter Reynolds Inc. ...................... 94-0899825
The Chase Manhattan Bank, N.A., Trustee......... 13-2633612
</TABLE>
The Sponsors undertake that they will not make any amendment to the
Supplement to this Registration Statement which includes material changes
without submitting the amendment for Staff review prior to distribution.
II-1
<PAGE>
SERIES OF EQUITY INCOME FUND,
INTERNATIONAL INCOME FUND,
CORPORATE INCOME FUND
AND DEFINED ASSET FUNDS MUNICIPAL INSURED SERIES
DESIGNATED PURSUANT TO RULE 487 UNDER THE SECURITIES ACT OF 1933
SEC
SERIES NUMBER FILE NUMBER
- -------------------------------------------------------------------------------
Equity Income Fund, Index Series, S&P 500 Trust 2 and S&P
Midcap Trust................................................ 33-44844
Equity Income Fund, Investment Philosophy Series 1991
Selected Industrial Portfolio............................... 33-39158
Equity Income Fund, Group One Overseas Index Fund Series 1
and 2....................................................... 33-05654
Equity Income Fund, Select Ten Portfolio--1995 Winter
Series...................................................... 33-55811
Equity Income Fund, Select Ten Portfolio--1995 Spring
Series...................................................... 33-55807
International Bond Fund, Australian and New Zealand Dollar
Bonds Series 19............................................. 33-15393
International Bond Fund, Australian and New Zealand Third
Short-Term Series........................................... 33-13200
International Bond Fund, Fourteenth Multi-Currency Series... 33-04447
Corporate Income Fund, First Short-Term Sterling Series..... 2-93990
Defined Asset Funds Municipal Insured Series................ 33-54565
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference from the
Cross-Reference Sheet of the Registration Statement of Defined Asset Funds
Municipal Insured Series, 1933 Act File No. 33-54565).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The following exhibits:
1.1 --Form of Trust Indenture (incorporated by reference to Exhibit 1.1 to
the Registration Statement of Equity Income Fund Select Ten
Portfolio--1995 Spring Series, 1933 Act File No. 33-55807).
1.1.1 --Form of Standard Terms and Conditions of Trust Effective as of October
21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series-48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement under the Securities Act
of 1933 of The Corporate Income Fund, One Hundred Ninety-Fourth
Monthly Payment Series, 1933 Act File No. 2-90925).
*3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their name under the headings
'Taxes' and 'Miscellaneous--Legal Opinion' in the Prospectus.
*5.1 --Consent of independent accountants.
*9.1 --Information Supplement.
- ------------------------------------
* To be filed by amendment.
R-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 18TH DAY OF
APRIL, 1996.
SIGNATURES APPEAR ON PAGE R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter
Reynolds Inc. has signed this Registration Statement or Amendment to the
Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of the Board of Directors under Form SE and the following
of Merrill Lynch, Pierce, 1933 Act File
Fenner & Smith Incorporated: Number: 33-43466
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-55073
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of the Executive Committee under the following 1933 Act File
of the Board of Directors Number: 33-55073
of PaineWebber Incorporated:
DONALD B. MARRON
JOSEPH J. GRANO, JR.
By ROBERT E. HOLLEY
(As authorized signatory for PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of the Board of Directors under Form SE and the following 1933
of Prudential Securities Incorporated: Act File Number: 33-41631
ALAN D. HOGAN
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of the Board of Directors under Form SE and the following
of Dean Witter Reynolds Inc.: 1933 Act File Number: 33-17085
NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By MICHAEL D. BROWNE
(As authorized signatory for Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
