AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1997
REGISTRATION NO. 333-18309
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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 RETIREMENT PORTFOLIO--SERIES 1997
DEFINED ASSET FUNDS
B. NAME OF DEPOSITOR:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, N.J.
08543-9051
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
COPIES TO:
TERESA KONCICK, ESQ. PIERRE DE SAINT PHALLE,
P.O. BOX 9051 ESQ.
PRINCETON, N.J. 450 LEXINGTON AVENUE
08543-9051 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)
H. APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the acquisition and deposit of the underlying
obligations.
/ x / Check box if it is proposed that this filing will become effective at 9:30
a.m. on February 11, 1997, pursuant to Rule 487.
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<PAGE>
DEFINED ASSET FUNDSSM
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EQUITY INCOME FUND The objective of this Defined Fund is total return
SELECT TEN RETIREMENT through a combination of capital appreciation and
PORTFOLIO current dividend income. The common stocks in the
SERIES 1997 Portfolio were selected by following a strategy
(A UNIT INVESTMENT that invests for a period of about one year in
TRUST) approximately equal values of the ten common
- ------------------------------stocks in the Dow Jones Industrial Average (DJIA)
/ / DESIGNED FOR TOTAL RETURN having the highest dividend yields two business
/ / DEFINED PORTFOLIO OF 10 days before the date of this Prospectus.
HIGHEST DIVIDEND The value of Units will fluctuate with the value
YIELDING DOW STOCKS of the common stocks in the Portfolio and no
/ / DIVIDEND INCOME assurance can be given that dividends will be paid
or that the Units will appreciate in value.
Units are offered only to employee benefit plans
established by Merrill Lynch & Co., Inc. and its
affiliates ('collectively, the ML Plan') as an
investment alternative for plan allocations to
help participants meet their personal retirement
needs and goals. The ML Plan will invest in Units
in accordance with allocation instructions
received from employees pursuant to the plan.
Accordingly, the interests of an employee in the
Units is subject to the terms of the ML Plan and
the terms on which Units are offered as an
investment alternative under the ML Plan. The
rights of the ML Plan as a Holder of Units should
be distinguished from the rights of an employee.
The term 'Holder' in this Prospectus refers to the
ML Plan.
-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Inquiries should be directed to the Trustee at
SPONSOR: 1-800-221-7771.
Merrill Lynch, Prospectus dated February 11, 1997.
Pierce, Fenner & Smith INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Incorporated AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
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Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over 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.
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Defining the Strategy
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The Select Ten Retirement Portfolio follows a simple, time-tested Strategy: buy
approximately equal amounts of the ten highest dividend-yielding common stocks
(Strategy Stocks) of the 30 stocks in the DJIA* (determined as of two business
days prior to the date of this Prospectus) and hold them for about one year. At
the end of the year, the Portfolio will be liquidated and the Strategy reapplied
to the DJIA to select a new portfolio. It is anticipated that a new Portfolio
will be offered each year to enable employees to continue the Strategy with
their ML Plan allocations. Each 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. For more than two decades, over those periods, the
Strategy has never lost money.
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. Merrill Lynch, Pierce, Fenner & Smith
Incorporated as sponsor of the Select Ten Retirement Portfolio (the 'Sponsor')
anticipates that the Portfolio will remain unchanged over its one-year life
despite any adverse developments concerning an issuer, an industry or the
economy or stock market generally. Although Select Ten Portfolios were not
available until 1991, a strategy of investing in approximately equal values of
Strategy Stocks (but not necessarily a given Portfolio) each year would have
yielded a higher total return than an investment in all of the stocks of the
DJIA, on a hypothetical basis in 12 of the last 20 years. Of course, past
performance of the Strategy can be no guarantee of future results and there can
be no assurance that the Portfolio will outperform the DJIA over its one-year
life, especially because of Portfolio expenses, or that the Strategy will not
lose money over its one-year life or over consecutive annual periods.
- ------------
* The name 'Dow Jones Industrial Average' is the property of Dow Jones &
Company, Inc., which is not affiliated with the Sponsor, 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.
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Defining Your Portfolio
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The Portfolio is diversified by industry. Based upon the principal business of
each issuer and current market values, the following industries are represented
in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / Oil and Gas 30%
/ / Automobile Manufacturing 10
/ / Financial Services and Banking 10
/ / Forest Products and Paper 10
/ / Manufacturing 10
/ / Rubber Manufacturing 10
/ / Telecommunications 10
/ / Tobacco and Food Processing 10
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Defining Your Risks
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The Strategy Stocks, as the 10 highest yielding stocks in the DJIA, generally
share attributes that have caused them to have lower prices or higher yields
relative to the other stocks in the DJIA. 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 Strategy Stocks are chosen solely by application of the Strategy to
determine the highest yielding DJIA stocks. The Portfolio does not reflect any
investment recommendations of the Sponsor and one or more of the stocks in the
Portfolio may, from time to time, be subject to sell recommendations by the
Sponsor.
The Portfolio is not an appropriate investment for those who are not comfortable
with the Strategy or for those who are unable or unwilling to assume the risk
involved generally with an equity investment. It may not be appropriate for
investors seeking either preservation of capital or high current income.
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 DJIA.
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, the impact of the purchase and sale of
securities for a Portfolio (especially during the rollover period) and other
factors. Additionally, equity markets are at
A-2
<PAGE>
historically high levels and no assurance can be given that these levels will
continue. Therefore, there is no guarantee that the objective of the Portfolio
will be achieved. Also, the return on an investment in the Portfolio will be
lower than the hypothetical returns on Strategy Stocks because the Portfolio
pays brokerage commissions and expenses, purchases Strategy Stocks at different
prices, is not fully invested at all times and because of other factors
described under Performance Information.
Unlike a mutual fund, the Portfolio is not actively managed and the Sponsor
receives no management fee. Therefore, 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 Sponsor may instruct the
Trustee to sell securities under certain limited circumstances, given the
investment philosophy of the Portfolio, the Sponsor is 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 DJIA.
In addition, the Portfolio is considered to be 'concentrated' in stocks of
companies deriving a substantial portion of their income from the oil and gas
industry. Investment in this industry may pose additional risks including the
volatility of oil prices, the level of demand for oil and petroleum products and
increasing costs associated with exploration, compliance with environmental
regulations and legislation. See Risk Factors--Oil and Gas Companies in Part B.
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Defining Your Investment
- ----------------------------------------------------------------
OFFERING OF UNITS
Units may be purchased by certain employee benefit plans established for
employees of Merrill Lynch & Co., Inc. and its affiliates. The ML Plan may buy
Units only directly from the Trustee and may realize the value of Units only by
tendering them for redemption. See Fund Description--ML Plan in Part B. Units of
this Portfolio may not be held outside of the ML Plan.
OFFER PRICE PER 1,000 UNITS $1,000.00
The Offer Price as of February 10, 1997, the business day prior to the initial
date of deposit is based on the aggregate value of the underlying securities
($107,662.50) and any cash held to purchase securities ($2,337.50), divided by
the number of units outstanding (110,000) times 1,000. The Offer Price on any
subsequent date will vary. The underlying securities are valued by the Trustee
on the basis of their closing sale prices at 4:00 p.m. Eastern time on every
business day.
SPONSOR'S ADMINISTRATIVE FEE
Units are subject to the Sponsor's Administrative Fee (for reimbursement of
direct expenses), accrued on a daily basis while the Units are held. Payment of
this fee will be made from dividend income from the stocks held in the
Portfolio. See Expenses.
ROLLOVER
If your ML Plan assets are invested in a Select Ten Retirement Portfolio at the
termination of the Portfolio, the Plan Administrator will redeem Plan units and
reinvest the proceeds in units of the successor Select Ten Retirement Portfolio.
The new Portfolio will hold the then current Strategy Stocks. Of course, if you
no longer wish to hold the Select Ten Retirement Portfolio, you can change your
Plan allocation instructions at any time as permitted by the ML Plan.
DISTRIBUTIONS
The ML Plan as Holder will receive distributions of any dividend income, net of
expenses, on the 11th of May, August and November 1997 and January 1998, for all
units owned on the 10th of those months.
A-3
<PAGE>
AUTOMATIC REINVESTMENT
Distributions to the ML Plan will be automatically reinvested into additional
Units of the Portfolio. Reinvesting helps to compound your income for a greater
total return.
TAXES
Because the ML Plan is exempt from tax under Section 501(a) of the Internal
Revenue Code of 1986, as amended, while Units are held by the ML Plan, neither
it nor any participating employee will be taxed on income from the Portfolio.
TERMINATION DATE
The Portfolio will terminate by February 11, 1998. The Portfolio may be
terminated earlier if its value is less than 40% of the value of the securities
when deposited.
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Defining Your Costs
- ----------------------------------------------------------------
Although each Portfolio has a term of only one year and is a unit investment
trust rather than a mutual fund, the following information is presented to
facilitate a comparison of fees and an understanding of the direct or indirect
costs and expenses that ML Plan participants bear.
SPONSOR'S ADMINISTRATIVE FEE
Maximum of $0.50 annually per 1,000 Units (0.050% of initial offering price),
accrued daily (not to exceed its direct expenses). See Fund Description--ML
Plan.
ESTIMATED ANNUAL FUND OPERATING EXPENSES
As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee .084% $ 0.84
Organizational Expenses .251% $ 2.51
Other Operating Expenses .031% $ 0.31
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TOTAL .366% $ 3.66
These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.
This 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.
COSTS OVER TIME
A participant would bear the following cumulative expenses, including the
administrative fee, 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
$4 $13 $23 $52
This information assumes the principal amount and distributions are rolled over
each year into a successor Portfolio.
The 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.
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.
SELLING YOUR INVESTMENT
The ML Plan as Holder may redeem Units at any time. The price will be based on
the then current net asset value. The redemption price as of February 10, 1997
was $1,000 per 1,000 units. If you reinvest in the new Series, you will pay your
share of any brokerage commissions on the sale of underlying securities when
your Units are liquidated during the rollover.
A-4
<PAGE>
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Defined Portfolio
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Equity Income Fund
Select Ten Retirement Portfolio--Series 1997 February 11, 1997
Defined Asset Funds
<TABLE>
<CAPTION>
PRICE
TICKER PERCENTAGE CURRENT PER SHARE COST
NAME OF ISSUER SYMBOL OF FUND (1) DIVIDEND YIELD (2) TO FUND TO FUND (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Philip Morris Companies, Inc. MO 10.05% 3.99% $ 120.250 $ 10,822.50
2. General Motors Corporation GM 9.92 3.54 56.500 10,678.50
3. American Telephone & Telegraph
Company T 10.11 3.38 39.000 10,881.00
4. J.P. Morgan & Company, Inc. (4) JPM 9.59 3.38 104.250 10,320.75
5. Texaco, Inc. TX 10.28 3.32 102.500 11,070.00
6. Chevron Corporation CHV 9.82 3.31 65.250 10,570.50
7. Exxon Corporation XON 10.04 3.16 100.125 10,813.50
8. International Paper Company (4) IP 10.18 2.38 42.000 10,962.00
9. Minnesota Mining & Manufacturing
Company (4)(5) MMM 9.77 2.35 83.500 10,521.00
10. Goodyear Tire & Rubber Company GT 10.24 2.10 53.250 11,022.75
----------------- -----------------
100.00% $ 107,662.50
----------------- -----------------
----------------- -----------------
</TABLE>
- ------------------------------------
(1) Based on Cost to Fund.
(2) Current Dividend Yield for each security was calculated by annualizing the
last quarterly or semi-annual ordinary dividend received on the security and
dividing the result by its market value as of the close of trading on
February 10, 1997.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on February 10, 1997.
(4) Merrill Lynch, Pierce, Fenner & Smith, Inc. was a manager of the most recent
public offering of securities of this company within the last three years.
(5) A director of this company is a director of Merrill Lynch & Co. Inc., which
is the parent company of Merrill Lynch, Pierce, Fenner & Smith, Inc.
------------------------------------
The securities were acquired on February 10, 1997 and are represented entirely
by contracts to purchase the securities. The Sponsor may have acted as
underwriter, manager or co-manager of a public offering of other securities in
this Fund during the last three years. Affiliates of the Sponsor 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 the Sponsor may be an officer or director of one or more of the
issuers of the securities in the Fund. The 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. The 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-5
<PAGE>
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Hypothetical Strategy Stock Performance Information
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Select Ten Portfolios are based on a strategy of investing equal amounts in the
10 highest dividend-yielding stocks ('Strategy Stocks') in the DJIA each year.
Although the Strategy Stocks underperformed the DJIA in 8 of the last 20 years
(11 years if Portfolio sales charges and expenses were deducted from Strategy
Stock performance), their total return over several years generally outperformed
the DJIA. This is why the Sponsors recommend following the Strategy for at least
three to five years. Only the average annualized total return figures at the
bottom of each column reflect reinvestment of dividends (at the end of each
year). The results below are hypothetical for the following reasons: None of
these figures reflects any sales charges, expenses or brokerage commissions
which investors in the Portfolio bear. Portfolio performance will also differ
from the hypothetical performance of Strategy Stocks because Select Ten
Portfolios are established at various times during a year, Portfolios may not be
fully invested at all times or equally weighted in all 10 stocks, and their
stocks are normally purchased or sold at prices different from the closing
prices used in buying and selling Portfolio units. Past performance is no
guaranty of future results of the Strategy or any Select Ten Portfolio.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
(FIGURES DO NOT REFLECT SALES CHARGES, COMMISSIONS, FUND EXPENSES OR TAXES)
<TABLE>
<CAPTION>
STRATEGY STOCKS(1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
----------------------------------------------------------------- ----------------------------------------------
YEAR APPRECIATION(2) ACTUAL DIVIDEND YIELD(3) TOTAL RETURN(4) APPRECIATION(2) ACTUAL DIVIDEND YIELD(3)
- --------- ----------------- --------------------------- ----------------- ----------------- ---------------------------
<S> <C> <C> <C> <C> <C>
1977 -6.75% 5.92% -0.83% -17.27% 4.56%
1978 -6.94 7.10 0.16 -3.15 5.84
1979 3.94 8.41 12.35 4.19 6.33
1980 17.83 8.54 26.37 14.93 6.48
1981 -0.94 8.41 7.47 -9.23 5.83
1982 17.24 8.22 25.46 19.60 6.19
1983 30.22 8.24 38.46 20.30 5.38
1984 0.69 6.65 7.34 -3.76 4.82
1985 21.66 6.97 28.63 27.66 5.12
1986 23.76 10.81 34.57 22.58 4.33
1987 1.87 5.10 6.97 2.26 3.76
1988 15.71 5.79 21.50 11.85 4.10
1989 20.35 6.95 27.30 26.96 4.75
1990 -13.00 5.06 -7.94 -4.34 3.77
1991 28.16 5.21 33.37 20.32 3.61
1992 3.62 4.70 8.32 4.17 3.17
1993 22.71 4.21 26.92 13.72 3.00
1994 -0.19 4.08 3.89 2.14 2.81
1995 32.45 4.03 36.48 33.45 3.03
1996 24.46 3.48 27.94 26.01 2.56
Average Annualized Total Return 17.41
<CAPTION>
YEAR TOTAL RETURN(4)
- --------- -----------------
<S> <C>
1977 -12.71%
1978 2.69
1979 10.52
1980 21.41
1981 -3.40
1982 25.79
1983 25.68
1984 1.06
1985 32.78
1986 26.91
1987 6.02
1988 15.95
1989 31.71
1990 -0.57
1991 23.93
1992 7.34
1993 16.72
1994 4.95
1995 36.48
1996 28.57
Average A 14.27
</TABLE>
- ------------------------------------
(1) The Strategy Stocks for any given year were selected by ranking the dividend
yields for each of the stocks in the DJIA as of the beginning of that year,
based upon an annualization of the last quarterly or semi-annual regular
dividend distribution (which would have been declared in the preceding year)
divided by that stock's market value on the first trading day that year on
the New York Stock Exchange.
(2) Appreciation for the Strategy Stocks is calculated by subtracting the market
value of these stocks at the opening value on the first trading day on the
New York 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 opeining value
on the first trading day in that year. Appreciation for the DJIA is
calculated by subtracting the opening value of the DJIA on the first trading
day in each year from the closing value of the DJIA on the last trading day
in that year, and dividing the result by the opening value of the DJIA on
the first trading day in that year.
(3) Actual Dividend Yield for the 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 DJIA is calculated by taking the total
dividends credited to the DJIA and dividing the result by the opening value
of the DJIA on the first trading day of the year.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Individual year Total Returns do not take into consideration any
reinvestment of dividend income.
A-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders of Defined Asset Funds, Equity Income Fund
Select Ten Retirement Portfolio--Series 1997, 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 February 11, 1997. 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of February 11,
1997 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, NY
February 11, 1997
STATEMENT OF CONDITION AS OF FEBRUARY 11, 1997
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 107,662.50
Cash..................................................... 2,337.50
Organizational Costs(2).................................. 75,330.00
--------------------
Total.........................................$ 185,330.00
--------------------
--------------------
LIABILITIES AND INTEREST OF HOLDERS
Accrued Liability(2)................................$ 75,330.00
--------------------
Interest of Holders of 110,000 Units of fractional
undivided interest outstanding:
Cost to investors(3)...................................$ 110,000.00
--------------------
Total.........................................$ 185,330.00
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio determined by the Trustee at 4:00 p.m., Eastern time on February 10,
1997. The contracts to purchase securities are collateralized by an irrevocable
letter of credit which has been issued by BNA Bank, New York Branch, in the
amount of $107,743.95 and deposited with the Trustee. The amount of the letter
of credit includes $107,662.50 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 $30 million. To the
extent the Fund is larger or smaller, the estimate may vary.
(3) Aggregate offer price computed on the basis of the value of the
underlying securities at 4:00 p.m., Eastern time on February 10, 1997. There is
no sales charge. Instead, Units are subject to accrual of a Sponsor's
administrative fee at the annual rate per 1,000 Units set forth under Defining
Your Costs.
A-7
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND SELECT TEN RETIREMENT PORTFOLIO
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS OF 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...................................... 4
How to Sell Units..................................... 5
Income, Distributions and Reinvestment................ 6
Expenses.............................................. 7
PAGE
---------
Taxes................................................. 7
Records and Reports................................... 7
Trust Indenture....................................... 7
Miscellaneous......................................... 8
Supplemental Information.............................. 9
FUND DESCRIPTION
THE STRATEGY
Simple strategies can sometimes be the most effective. The Fund seeks total
return by acquiring the ten highest dividend yielding stocks in the Dow Jones
Industrial Average as of the date indicated in Part A, 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. 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 provides a more diversified holding. There is only one investment decision
instead of ten, four quarterly dividends instead of 40. Investments in a number
of companies with high dividends relative to their stock prices is designed to
increase the Fund's potential for higher returns. Investing in these stocks of
the DJIA may be effective as well as conservative because regular dividends are
common for established companies and dividends have accounted for a substantial
portion of the total return on stocks of the DJIA as a group. The Fund's return
will consist of a combination of capital appreciation and current dividend
income. The Fund will terminate in about one year. 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 first DJIA, consisting of 12 stocks, was published in The Wall Street
Journal in 1896. The Dow Jones Industrial Average includes some of the most
well-known, widely followed and highly capitalized companies in America. These
companies are major factors in their industries. These companies file
information with the SEC which is available free of charge upon request from the
Trustee.
1
<PAGE>
LIST AS OF OCTOBER 1, 1928 CURRENT LIST
- ----------------------------------------------------------------------
Allied Chemical Allied Signal
American Can J.P. Morgan & Co.
American Smelting Minnesota Mining & Manufacturing
American Sugar Du Pont
American Tobbaco Eastman Kodak
Atlantic Refining Goodyear
Bethlehem Steel Bethlehem Steel
Chrysler IBM
General Electric General Electric
General Motors General Motors
General Railway Signal McDonald's
Goodrich Chevron
International Harvester Caterpillar
International Nickel Boeing
Mack Trucks Merck
Nash Motors Procter & Gamble
North American American Express
Paramount Publix International Paper
Postum, Inc. Philip Morris
Radio Corporation of America (RCA) United Technologies
Sears Roebuck Sears Roebuck
Standard Oil of New Jersey Exxon
Texas Corporation Texaco
Texas Gulf Sulphur Coca-Cola
Union Carbide Union Carbide
United States Steel Walt Disney
Victor Talking Machine AT&T
Westinghouse Electric Westinghouse Electric
Woolworth Woolworth
Wright Aeronautical Aluminum Co. of America
PORTFOLIO SELECTION
The Portfolio contains ten common stocks in the DJIA having the highest
dividend yields as of the date indicated in Part A. 'Highest dividend yield' is
calculated for each Security by annualizing the last quarterly or semi-annual
ordinary dividend distributed on the Security and dividing the result by its
closing sales price. This yield 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 DJIA, an industry or the economy generally. The application of the
Strategy may cause the Portfolio to own a stock that the Sponsor does not
recommend for purchase and, in fact, the Sponsor 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 the DJIA 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 and international economic developments; or the market may
be anticipating a reduction in or the elimination of the issuer'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 relatively high dividends.
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Additional Units may 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. 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.
The deposit of the Securities in the Fund on the initial date of deposit
established a proportionate relationship among the number of shares of each
Security. During the 90-day period following the initial date of deposit the
Fund may acquire additional Securities by investing the proceeds from selling
additional 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 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.
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. 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 (including a public
tender offer or a merger or acquisition transaction) that might otherwise make
retention of the Security detrimental to the interest of investors, will
generally not cause the Fund 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 DJIA or even its deletion from the DJIA.
ML PLAN
The Sponsor, as a 'party in interest' with respect to the ML Plan, is
prohibited by ERISA from selling Units to or buying them from the ML Plan.
Accordingly, the ML Plan will purchase Units directly from the Trustee and may
only tender Units to the Trustee for redemption. It is also prohibited from
acting as dealer, and from charging for its services as broker, for the Trust in
acquiring Securities with monies paid for Units, and in selling Securities to
pay redemptions of Units, by the ML Plan. In addition, ERISA prohibits the
Sponsor from receiving compensation or other consideration except for
reimbursement of its direct expenses. Therefore, the proceeds of the Sponsor's
administrative fee paid by the ML Plan will be used to reimburse the Sponsor for
these expenses, and the Sponsor will not collect the administrative fee on Units
held by the ML Plan at any time when it has no unreimbursed expenses. An
application may be filed with the Department of Labor for exemption from certain
of the ERISA prohibited transaction provisions so that the Sponsor, among other
things, may provide a secondary market for Units held by the ML Plan and may
charge certain fees and recover certain additional costs.
RISK FACTORS
An investment in the Fund 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
stock market worsens. The rights of holders of common stocks to receive payments
from the issuer are generally inferior to the rights of creditors of, or holders
of debt obligations or preferred stocks issued by, the issuer. Moreover, because
common stocks do not represent an obligation of the issuer they 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. Equity markets
can be affected by 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 Sponsor cannot predict the direction or scope of
any of these factors. Additionally, equity markets are at historically high
levels and no assurance can be given
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that these levels will continue. There can be no assurance that the Portfolio
will be effective in achieving its objective over the one-year life of the Fund
or that future portfolios selected through this process during consecutive
one-year periods will meet their objectives. The Portfolio is not designed to be
a complete investment program.
The Portfolio may be concentrated in one or more of types of issuers.
Concentration may involve additional risk because of the decreased
diversification of economic, financial and market risks. Set forth below is a
brief description of certain risks associated with Securities which may be held
by the Fund. Additional information is contained in the Information Supplement
which is available from the Trustee at no charge to the investor.
OIL AND GAS COMPANIES
Certain of the issuers of the Securities refine, market and transport oil
and related petroleum products. The principal risks faced by these companies
include the price and availability of oil, the level of demand for oil and
petroleum products, refinery capacity and operating margins, the cost of
financing required for exploration and expansion and increasing expenses
necessary to comply with environmental and other energy related laws and
regulations. Oil prices generally depend upon the available supply of crude oil
and the willingness and ability of companies to adjust production levels.
Declining U.S. crude oil production is likely to lead to increased dependence on
foreign sources of oil and to uncertain supply for refiners and the risk of
unpredictable supply disruptions. In addition, future scientific advances with
new energy sources could have an adverse impact on the petroleum and natural gas
industries.
LITIGATION AND LEGISLATION
The Sponsor does 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 Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. 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, particularly with
respect to the environment or with respect to the oil and gas or tobacco
industry, 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. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. This type of legislation,
if enacted into law, would adversely affect the after-tax return to investors
who can take advantage of the deduction. See Taxes.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
purchases and redemptions of Units that may occur from time to time.
Principally, this will depend upon the number of participants in the ML Plan who
are invested in the Portfolio. The Portfolio will be terminated no later than
the mandatory termination date specified in Part A of the Prospectus. It will
terminate earlier upon the disposition of the last Security or upon the consent
of investors holding 51% of the Units. The Portfolio may also be terminated
earlier by the Sponsor once its total assets have fallen below the minimum value
specified in Part A of the Prospectus. A decision by the Sponsor to terminate
the Portfolio early will be based on factors such as the size of the Portfolio
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 the ML Plan and
thereafter Units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the 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
UNIT OFFER PRICE
Units may be purchased by the ML Plan at the Offer Price by means of this
Prospectus. The Offer Price per Unit of the Fund is computed as of the
Evaluation Time by adding the evaluation of the underlying Securities, as
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determined by the Evaluator as described under How to Buy Units--Evaluations
below, and any cash held to purchase Securities, divided by the number of Units
outstanding. The Offer Price per Unit of a Trust will vary after the Evaluation
Date (set forth under Defining Your Investment) in accordance with fluctuations
in the evaluations of the underlying Securities. A proportionate share of any
cash held by the Portfolio in the Capital Account not allocated to purchase
Securities and net income in the Income Account on the date of delivery of the
Units to the Plan is added to the Offer Price.
No sales charge is payable when Units are purchased. Instead, Units are
subject to a Sponsor's administrative fee at the annual rate set forth under
Defining Your Costs. If a Holder sells or redeems Units before the maturity of a
Trust, only the administrative fees accrued to the date of sale or redemption
will be payable, and this will have the effect of reducing the rate of
administrative fees. Similarly, if Units are purchased after the Initial Date of
Deposit, the purchaser will not pay fees previously accrued and this will also
have the effect of reducing the rate of administrative fees.
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. If the Securities are
listed on a national 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.
NO CERTIFICATES
The ML Plan is required to hold the Units in uncertificated form.
HOW TO SELL UNITS
REDEMPTIONS
Units may be redeemed by the ML Plan by sending the Trustee a redemption
request.
By the seventh calendar day after tender the ML Plan will be wired an
amount equal to the Redemption Price per Unit. Because of market movements or
changes in the Portfolio, this price may be more or less than the cost of the
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 Fund assets; deducting unpaid taxes or other
governmental charges, accrued but unpaid Fund expenses including the
administrative fees, unreimbursed Trustee advances, cash held to redeem Units or
for distribution to the ML Plan and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Sponsor 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 of the Fund.
Provision is made under the Indenture for the Sponsor to specify the minimum
dollar amount in which blocks of Securities are to be sold in order to obtain
the best price for the Portfolio. While these minimum amounts may vary from time
to time in accordance with market conditions, the Sponsor believes that the
minimum dollar amount which would be specified would be approximately $25,000.
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.
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ROLLOVER
Upon termination of the Portfolio the Plan Administrator will redeem Units
held and invest the proceeds in the next Select Ten Retirement Portfolio. The
Plan Administrator may, however, stop offering the Select Ten Retirement
Portfolio as a Plan investment alternative at any time. The Sponsor may, in its
sole discretion and without penalty or liability to investors, decide not to
sponsor any successor Portfolio or decide to modify the terms of the rollover.
Prior notice of any decision would be provided to the Plan Administrator.
The rollover is accomplished by the in-kind redemption of 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
Successor Portfolio.
The Sponsor intends to sell the distributed Securities, on behalf of the
distribution agent, as quickly as practicable and then to create units of the
successor Portfolio as quickly as possible, subject in both cases to the
Sponsor's 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 Sponsor may, in its sole discretion, undertake a
more gradual sale of the distributed Securities and a more gradual creation of
units of the New Portfolio to help mitigate any negative market price
consequences caused by this large volume of securities trades. There can be no
assurance, however, that this procedure will be successful or might not result
in less advantageous prices than had this procedure not been practiced at all.
Pending the investment of rollover proceeds in the securities to comprise the
new Portfolio, those moneys may be uninvested for up to several days. For those
Securities in the Portfolio that will also be in the new 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.
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 Sponsor has received exemptive orders under
Section 11(c) which it believes permit it to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsor's position and
additional regulatory approvals may be required.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The annual income per Unit, after deducting estimated annual Fund expenses
per Unit, will depend primarily upon the amount of dividends declared and paid
by the issuers of the Securities and changes in the expenses of the Fund 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 receives an equal share of distributions of dividend income net
of estimated expenses and the administrative fee. 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 and other receipts
to a Capital Account. 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 Fund. Funds held
by the Trustee in the various accounts do not bear interest. Proceeds of the
disposition of any Securities not used to pay the administrative fee or to
redeem Units will be held in the Income and Capital Account, respectively, and
distributed on the final Distribution Date or following liquidation of the Fund.
REINVESTMENT
Income and principal distributions on Units will be reinvested by
participating in the Fund's reinvestment plan. Under the plan, the Units
acquired for investors will be new Units created by the deposit of 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 existing proportionate relationship among the
number of shares of each Security in the Fund. Units acquired by reinvestment
will be subject to any unaccrued Administrative
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<PAGE>
Fees. The Sponsor reserves the right to amend, modify or terminate the
reinvestment plan at any time without prior notice.
EXPENSES
SPONSOR'S ADMINISTRATIVE FEE
An administrative fee, to reimburse the Sponsor for certain expenses
described under Fund Description--ML Plan, at the rates set forth under Defining
Your Costs, calculated on a daily basis, will be deducted from the Income
Account on each Distribution Date and will be distributed to the Sponsor on
certification of its reimbursable expenses. Accrued administrative fees will be
deducted at the time of any interim redemption.
OTHER EXPENSES
Estimated Fund expenses are listed in Part A of the Prospectus; if actual
expenses exceed the estimate, the excess will be borne by the Fund. 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 the
Fund in non-interest bearing accounts. Possible additional charges include
Trustee fees and expenses for extraordinary services, costs of indemnifying the
Trustee and the Sponsor, 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 Fund assets to secure reimbursement of these amounts
and may sell Securities for this purpose if cash is not available.
Expenses incurred in establishing the Fund, including the cost of the
initial preparation of documents relating to the Fund, 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 Fund and amortized over
the life of the Fund. Advertising and selling expenses will be paid by the
Sponsor at no charge to the Fund. 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
The Fund is not an association taxable as a corporation for federal income
tax purposes. Because the ML Plan is exempt from tax under Section 501(a) of the
Internal Revenue Code of 1986, as amended, while Units are held by the ML Plan,
neither it nor any participating employee will be taxed on income from the
Portfolio.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
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
the Fund, the Trustee will send the participating ML Plan a statement
summarizing transactions in the Fund'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
Fund, among other matters. Fund accounts will be audited by independent
accountants selected by the Sponsor 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 between the Sponsor and the Trustee. This Prospectus summarizes
various provisions of the Indenture, but each statement is qualified in its
entirety by reference to the Indenture.
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<PAGE>
The Indenture may be amended by the Sponsor 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 Sponsor). 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 Fund
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 Sponsor. It may be removed by
investors holding 51% of the Units at any time or by the Sponsor 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 Sponsor will use its 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.
The Sponsor 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 Indenture contains customary
provisions limiting the liability of the Trustee.
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.
SPONSOR
The Sponsor is listed on the back cover of the Prospectus. Merrill Lynch,
Pierce, Fenner & Smith Incorporated is a wholly-owned subsidiary of Merrill
Lynch Co. Inc. The Sponsor has acted as principal underwriter and managing
underwriter of other investment companies. The Sponsor, in addition to
participating as a member of various selling groups or as agents of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of these companies and sells securities to these
companies in its capacities as brokers or dealers in securities.
PERFORMANCE INFORMATION
Total returns, average annualized returns and/or cumulative returns for
various periods of the Strategy Stocks, the related index, the current and/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. Sales material may also include an illustration
of the cumulative results of like annual investments in Strategy Stocks during
an accumulation period and like annual withdrawals during a distribution period.
Figures for actual Portfolios (but not Strategy Stocks or the related index)
reflect deduction of all Portfolio expenses and unless otherwise stated the
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<PAGE>
maximum sales charge. No provision is made for any income taxes payable. Similar
figures may be given for Strategy Stocks. The performance of Strategy Stocks may
also be shown in comparison to other indexes. Investors should bear in mind that
this represents past performance and is no assurance of future results of the
current or any future Portfolio.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
the Fund, 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.
9
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Defined
Asset FundsSM
SPONSOR: EQUITY INCOME FUND
Merrill Lynch, SELECT TEN RETIREMENT
Pierce, Fenner & Smith IncorporatedPORTFOLIO--SERIES 1997
Defined Asset Funds
P.O. Box 9051
Princeton, NJ 08543-9051 This Prospectus does not contain all of the
(609) 282-8500 information with respect to the investment
TRUSTEE: company set forth in its registration
The Bank of New York statement and exhibits relating thereto which
(a New York Banking Corporation) have been filed with the Securities and
P.O. Box 974 Exchange Commission, Washington, D.C. under
Wall Street Division the Securities Act of 1933 and the Investment
New York, NY 10268-0974 Company Act of 1940, and to which reference
1-800-221-7771 is hereby made.
------------------------------
No person is authorized to give any
information or to make any representations
with respect to this investment company not
contained in its registration statement and
related exhibits; and any information or
representation not contained therein must not
be relied upon as having been authorized.
------------------------------
When Units of this Fund are no longer
available this Prospectus may be used as a
preliminary prospectus for a future series.
11525--2/97
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PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositor is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
SEC FILE OR
IDENTIFICATION
NUMBER
--------------------
I. Bonding Arrangements and Date of Organization of the
Depositor 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 333-08241
II. Information as to Officers and Directors of the
Depositor 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
III. Charter documents of the Depositor 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 333-08241
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsor and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 13-5674085
The Bank of New York............................ 13-4941102
UNDERTAKING
The Sponsor undertakes that it 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
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SERIES OF EQUITY 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, Blue Chip Series........................ 33-05653
Equity Income Fund, 'Merit' 1987 Series..................... 33-10989
Equity Income Fund, Concept Series Real Estate Income
Fund........................................................ 33-51869
Equity Income Fund, Select Ten Portfolio--1995 Spring
Series...................................................... 33-55807
Equity Income Fund, Select Ten Portfolio--1997 Series A..... 333-15193
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 of
the Registration Statement of Equity Income Fund, Select Ten
Portfolio--Autumn 1995 International Series, 1933 Act File No.
33-59305).
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).
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 heading
'Miscellaneous--Legal Opinion' in the Prospectus.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Equity Income Fund, Select Ten
Portfolio, 1996 International Series B, 1933 Act File No. 333-00593).
R-1
<PAGE>
SIGNATURES
The registrant hereby identifies the series numbers of Equity Income Fund and
Defined Asset Funds Municipal Insured Series listed on page R-1 for the purposes
of the representations required by Rule 487 and represents the following:
1) That the portfolio securities deposited in the series as to which this
registration statement is being filed do not differ materially in type
or quality from those deposited in such previous series;
2) That, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential financial information
for, the series with respect to which this registration statement is
being filed, this registration statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
3) That it has complied with Rule 460 under the Securities Act of 1933.
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 11TH DAY OF
FEBRUARY, 1997.
SIGNATURES APPEAR ON PAGE R-3.
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.
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 under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, 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
EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
FEBRUARY 11, 1997
EQUITY INCOME FUND,
SELECT TEN RETIREMENT PORTFOLIO--SERIES 1997, DEFINED ASSET FUNDS
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, N.J. 08543-9051
(609) 282-8500
Dear Sirs:
We have acted as special counsel for you as sponsor (the 'Sponsor') of
Equity Income Fund, Select Ten Retirement Portfolio--Series 1997, Defined Asset
Funds (the 'Fund'), in connection with the issuance of units of fractional
undivided interest in the Fund (the 'Units') in accordance with the Trust
Indenture relating to the Fund (the 'Indenture').
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsor and (ii) the Units, when duly issued and delivered by
the Sponsor and the Trustee in accordance with the Indenture, will be legally
issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 3.1 to the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the heading 'Miscellaneous--Legal Opinion.'
Very truly yours,
DAVIS POLK & WARDWELL
EXHIBIT 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsor and Trustee of Equity Income Fund, Select Ten Retirement Portfolio
Series 1997, Defined Asset Funds:
We consent to the use in this Registration Statement No. 333-18309 of our
opinion dated February 11, 1997, relating to the Statement of Condition of
Equity Income Fund, Select Ten Retirement Portfolio Series 1997, Defined Asset
Funds and to the reference to us under the heading 'Miscellaneous-- Auditors' in
the Prospectus which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, N.Y.
February 11, 1997
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<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> FEB-11-1997
<INVESTMENTS-AT-COST> 107,663
<INVESTMENTS-AT-VALUE> 107,663
<RECEIVABLES> 0
<ASSETS-OTHER> 75,330
<OTHER-ITEMS-ASSETS> 2,337
<TOTAL-ASSETS> 185,330
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