<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 1998
REGISTRATION NO. 333-55793
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 INVESTOR FUND
SELECT S&P INDUSTRIAL PORTFOLIO 1998 SERIES E
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, SMITH BARNEY INC.
FENNER & SMITH 388 GREENWICH STREET
INCORPORATED 23RD FLOOR
DEFINED ASSET FUNDS NEW YORK, NY 10013
P.O. BOX 9051
PRINCETON, NJ 08543-9051
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE
AMERICAS
NEW YORK, NY 10019 DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ.
P.O. BOX 9051
PRINCETON, NJ 08543-9051 LAURIE A. HESSLEIN
388 GREENWICH ST.
NEW YORK, NY 10013
COPIES TO:
ROBERT E. HOLLEY PIERRE DE SAINT PHALLE, DOUGLAS LOWE, ESQ.
1285 AVENUE OF THE ESQ. DEAN WITTER REYNOLDS INC.
AMERICAS 450 LEXINGTON AVENUE TWO WORLD TRADE
NEW YORK, NY 10019 NEW YORK, NY 10017 CENTER--59TH FLOOR
NEW YORK, NY 10048
E. TITLE 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. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC.
As soon as practicable after the effective date of the registration statement.
/ x / Check box if it is proposed that this filing will become effective upon
filing on July 27, 1998, pursuant to Rule 487.
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<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
EQUITY INVESTOR FUND The objective of this Defined Fund is total return
SELECT S&P INDUSTRIAL through a combination of capital appreciation and
PORTFOLIO current dividend income. The Portfolio follows a
1998 SERIES E strategy of investing for a period of about one
(A UNIT INVESTMENT year in a portfolio of 15 stocks, selected from a
TRUST) pre-screened subset of the Standard & Poor's
- ------------------------------Industrial Index (the 'Index Subset'), with the
highest dividend yields four business days prior
to the date of this prospectus. The Standard &
Poor's Industrial Index consists of the stocks
comprising the industrial sector of the S&P 500
Composite Stock Price Index, which represent about
75 percent of the S&P 500 (exclusive of the
utility, financial and transportation sectors).
The value of units will fluctuate with the value
of the common stocks in the Portfolio and no
assurance can be given that dividends will be paid
or that the units will appreciate in value.
Minimum purchase: $250.
-------------------------------------------------
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
SPONSORS: OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Merrill Lynch, CONTRARY IS A CRIMINAL OFFENSE.
Pierce, Fenner & Smith Inquiries should be directed to the Trustee at
Incorporated 1-800-221-7771.
Smith Barney Inc. Prospectus dated July 27, 1998.
PaineWebber Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. 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.
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 bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International bond and equity 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 Portfolio follows a simple strategy; buy approximately equal amounts
of the 15 highest dividend-yielding common stocks (Strategy Stocks) in a
pre-screened subset of the Standard & Poor's Industrial Index (the Index Subset)
and hold them for about one year. At the end of the year, the Portfolio will be
liquidated and the Strategy reapplied to select a new portfolio. Each Select S&P
Industrial Portfolio is designed to be part of a longer term strategy and the
Sponsors believe that more consistent results are likely if the strategy is
followed for at least three to five years. So long as the Sponsors continue to
offer new portfolios, investors will have the option to reinvest into a new
portfolio each year at a reduced sales charge. The Sponsors reserve the right,
however, not to offer new portfolios.
The 15 common stocks in the Portfolio were selected through the following
four-step process. Beginning with the stocks in the Standard & Poor's Industrial
Index, any stock also included in the Dow Jones Industrial Average (DJIA) is
eliminated from the list of stocks to prevent duplication of stocks in other
funds offered by the Sponsors. Second, any stock not ranked either A or A+ by
Standard & Poor's Earnings and Dividend Rankings for Common Stocks ('Common
Stock Rankings') is also removed. Next, the remaining stocks are ranked by
market capitalization from highest to lowest and the lowest 25 percent are
eliminated. From the remaining stocks (the Index Subset), the 15 stocks with the
highest dividend yields were selected for the Portfolio. (See Portfolio
Selection in Part B.)
The Strategy provides a disciplined approach to investing, based on a buy and
hold philosophy, which ignores market timing and rejects active management. The
Sponsors anticipate 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.
- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------
Based upon the principal business of each issuer and current market values, the
following industries are represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / Food Processing 27%
/ / Brewery 7%
/ / Chemical Diversified 7%
/ / Electric Products 7%
/ / Food-Retail 7%
/ / Medical--Drugs 7%
/ / Office Automation & Equipment 7%
/ / Oil 7%
/ / Auto/Truck Equipment 6%
/ / Diversified Operations 6%
/ / Retail 6%
/ / Telecommunications 6%
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
The Strategy Stocks, as the 15 highest yielding stocks in the Index Subset,
generally share attributes that have caused them to have lower prices or higher
yields relative to the other stocks in the Index Subset. 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 could,
therefore, be considered contrarian in nature. 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 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 Standard & Poor's Industrial Index.
A-2
<PAGE>
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 purchase and sale of
securities for the Portfolio (especially during the primary offering period of
units and during the rollover period) and other factors. Additionally, equity
markets have been at historically high levels and no assurance can be given that
these levels will continue. 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 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 a mutual fund, the Portfolio is not actively managed and the Sponsors
receive no management fee. Therefore, any 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 Standard & Poor's Industrial
Index.
The Portfolio is considered to be 'concentrated' in stocks of the Food industry
(see Risk Factors--The Food Industry in Part B). One issuer is a foreign issuer
(see Risk Factors--Foreign Issuers in Part B).
- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00
The Public Offering Price as of July 24, 1998, the business day prior to the
initial date of deposit is based on the aggregate value of the underlying
securities ($398,943.76) and any cash held to purchase securities, divided by
the number of units outstanding (402,973) 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 the basis of their closing
sale prices at 4:00 p.m. Eastern time on every business day.
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 the Portfolio on October 1 and October 15, 1998 and thereafter on the
1st of each month through June 1, 1999.
ROLLOVER OPTION
When this Select S&P Industrial 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 hold your Units with one of the Sponsors and notify your
financial adviser by July 30, 1999, your units will be redeemed and certain
distributed securities plus the proceeds from the sale of the remaining
distributed securities will be reinvested in units of a new Select S&P
Industrial Portfolio 1999 Series. If you decide not to roll over your proceeds,
you will receive a cash distribution (or, if you so elect, an in-kind
distribution) after the Portfolio terminates. Of course you can sell or redeem
your Units at any time prior to termination.
DISTRIBUTIONS
You will receive distributions of any dividend income, net of expenses, on the
25th of October and December 1998 and March and June 1999, 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. (See Taxes in Part B.)
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 or the charge for
organizational expenses.
TERMINATION DATE
The Portfolio will terminate by August 27, 1999. 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 the receipt of
applicable sales charges, fluctuations in the Public Offering Price or secondary
market price of units, a loss of $430.00 on the initial deposit of the
securities and a gain or loss on subsequent deposits of securities (see
Sponsors' and Underwriters' Profits in Part B).
A-3
<PAGE>
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Defining Your Costs
- ----------------------------------------------------------------
SALES CHARGE
First-time investors pay a maximum sales charge of 2.75% of the offering price,
of which $17.50 per 1,000 units is deferred. For example, on a $1,000
investment, 2.75% less $17.50 (or about 1%) is deducted when they buy and the
remaining $990 is invested in the Strategy Stocks. The initial sales charge is
reduced on purchases of $50,000 or more, as described in Part B. In addition, a
deferred sales charge of $1.75 per 1,000 units will be deducted from the
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 a 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
--------------- --------------
Initial Sales Charge 1.00% $ 10.00
Deferred Sales Charge per Year 1.75% 17.50
--------------- --------------
Maximum Sales Charge 2.75% $ 27.50
--------------- --------------
--------------- --------------
Maximum Sales Charge on
Reinvested Dividends 1.40% $ 14.00
ESTIMATED ANNUAL PORTFOLIO OPERATING EXPENSES
As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee .074% $ 0.73
Portfolio Supervision,
Bookkeeping and Administrative
Fees .045% $ 0.45
Other Operating Expenses .053% $ 0.52
----------------- --------------
TOTAL .172% $ 1.70
These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.
ORGANIZATION COSTS
Investors will bear all or a portion of the expenses incurred in organizing the
Portfolio--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.
Estimated organization costs shown below are included in the public offering
price and will be deducted from the assets of the Portfolio as of the close of
the initial offering period.
Amount per
1,000 Units
---------------
Estimated Organization Costs $ 0.79
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
$30 $73 $118 $242
Although each 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 Portfolio expenses.
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. 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.
Reductions to the repurchase and cash redemption prices in the secondary market
to recoup the costs of liquidating securities to meet redemption (described
below) have not been reflected. 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.
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem or sell 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 July 24, 1998 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. As of the close of the initial offering period these
prices will be reduced to reflect the estimated organization costs shown above.
After the initial offering period, the repurchase and cash redemption prices for
units will be reduced to reflect the estimated costs of liquidating securities
to meet the redemption, currently estimated at $1.10 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
- --------------------------------------------------------------------------------
Equity Investor Fund
Select S&P Industrial Portfolio 1998 Series E July 27, 1998
Defined Asset Funds
<TABLE><CAPTION>
PRICE
PER SHARE
TICKER PERCENTAGE CURRENT TO PORTFO- COST
NAME OF ISSUER SYMBOL OF PORTFOLIO (1) DIVIDEND YIELD (2) LIO TO PORTFOLIO (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Royal Dutch Petroleum Company+ RD 6.61% 2.93% $ 52.7500 $ 26,375.00
2. Genuine Parts Company GPC 6.60 2.85 35.1250 26,343.75
3. Alltel Corporation AT 6.53 2.67 43.4375 26,062.50
4. Kellogg Company K 6.80 2.49 36.1875 27,140.63
5. Conagra Inc. CAG 6.67 2.35 26.6250 26,625.00
6. Heinz (H.J.) Company HNZ 6.89 2.29 55.0000 27,500.00
7. Winn-Dixie Stores Inc. WIN 6.93 2.21 46.0625 27,637.50
8. Anheuser-Busch Companies, Inc. BUD 6.66 2.11 53.1250 26,562.50
9. Emerson Electric Company EMR 6.74 1.97 59.7500 26,887.50
10. May Department Stores Company MAY 6.49 1.96 64.6875 25,875.00
11. Air Products and Chemicals,
Inc. APD 6.65 1.80 37.8750 26,512.50
12. Sara Lee Corporation SLE 6.74 1.71 53.7500 26,875.00
13. Pitney Bowes, Inc. PBI 6.66 1.69 53.1250 26,562.50
14. American Home Products
Corporation AHP 6.64 1.62 53.0000 26,500.00
15. Textron, Inc. TXT 6.39 1.57 72.8125 25,484.38
----------------- -----------------
100.00% $ 398,943.76
----------------- -----------------
----------------- -----------------
</TABLE>
- ------------------------------------
(1) Based on Cost to Portfolio.
(2) Current Dividend Yield for each security was calculated by annualizing the
last monthly, quarterly or semi-annual ordinary dividend declared on the
security and dividing the result by its market value as of the close of
trading on July 24, 1998.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on July 24, 1998, the business day prior to the initial date
of deposit. The value of the Securities on any subsequent business day will
vary.
+ The issuer is located in The Netherlands; the current semi-annual dividend
per share will be subject to withholding taxes of The Netherlands (see Risk
Factors--Foreign Issuers; Taxes in Part B).
------------------------------------
The securities were acquired on July 24, 1998 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 Portfolio during the last three years. Affiliates of the Sponsors may serve
as specialists in the securities in this Portfolio 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 Portfolio. 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-5
<PAGE>
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Past Performance of Prior S&P Industrial Portfolio
- --------------------------------------------------------------------------------
The following table shows the actual performance of certain Series of S&P
Industrial Portfolios. Past performance is no guarantee of future results of the
S&P Industrial Strategy or of any Portfolio currently offered.
<TABLE><CAPTION>
ANNUALIZED
---------------------------------------------- CUMULATIVE
DIVIDEND TOTAL TOTAL
SERIES A TERM YIELD(1) APPRECIATION(2) RETURN(3) RETURN
- --------------------------- ------------------------ ------------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
1997 1/22/97-3/13/98 2.92% 28.51% 31.43%
Average Annual
Total Return(4) 1/22/97-6/30/98 -- -- 20.52
Cumulative
Total Return 1/22/97-6/30/98 -- -- -- 30.74%*
SERIES B
- ---------------------------
1997 2/24/97-4/24/98 2.86 20.10 22.96
Average Annual
Total Return(4) 2/24/97-6/30/98 -- -- 20.98
Cumulative
Total Return 2/24/97-6/30/98 -- -- -- 29.20%*
SERIES C
- ---------------------------
1997 4/21/97-5/22/98 2.94 32.65 35.59
Average Annual
Total Return(4) 4/21/97-6/30/98 -- -- 29.85
Cumulative
Total Return 4/21/97-6/30/98 -- -- -- 36.52%*
SERIES D
- ---------------------------
1997 -- -- -- --
Average Annual
Total Return(4) 6/9/97-6/30/98 -- -- 17.26
Cumulative
Total Return 6/9/97-6/30/98 -- -- -- 18.34%*
</TABLE>
- ------------------------------------
(1) Dividends paid on the securities to the Portfolio less ongoing expenses,
divided by maximum initial public offering price.
(2) Represents the difference between initial unit price and redemption or
liquidation price on the ending date (reflecting payment of deferred sales
charges, brokerage commissions paid by the Portfolio and, organization
expenses, and assumes reinvestment of dividends on the distribution dates),
divided by the maximum initial public offering price.
(3) Appreciation plus Dividend Yield. Reflects reinvestment of dividends,
deduction of maximum applicable sales charges and ongoing expenses, but no
adjustment for taxes payable.
(4) Average Annual Total Return for a Series includes the brokerage commissions
paid in selling securities received in kind on annual rollovers and the
waiver of any up-front sales charge on those rollovers.
* These figures are not annualized.
A-6
<PAGE>
- --------------------------------------------------------------------------------
Hypothetical Performance Information
- --------------------------------------------------------------------------------
The table below compares hypothetical performance of approximately equal amounts
invested in each of the Strategy Stocks (but not any Select Portfolio) at the
beginning of each year with the actual performance of the S&P 500 Composite
Stock Price Index and the Dow Jones Industrial Average for those years. These
results represent past performance of the Strategy Stocks and may not be
indicative of future results of the Strategy or any Portfolio. For additional
differences between Strategy Stock performance and Select Portolios see the
discussion preceding the table on page A-7.
COMPARISON OF TOTAL RETURNS(1)
(STRATEGY STOCK FIGURES REFLECT DEDUCTION OF SALES CHARGES
AND EXPENSES BUT NOT BROKERAGE COMMISSIONS)
STRATEGY DOW JONES
YEAR STOCKS(2) S&P 500 INDEX(3) INDUSTRIAL AVERAGE (DJIA)(4)
- --------- ----------------- ---------------- ----------------------------
1973 -20.13% -14.66% -13.12%
1974 -5.35 -26.47 -23.14
1975 40.63 36.92 44.40
1976 30.89 23.53 22.72
1977 -6.53 -7.19 -12.71
1978 6.06 6.39 2.69
1979 26.47 18.02 10.52
1980 18.23 31.50 21.41
1981 7.67 -4.83 -3.40
1982 25.87 20.26 25.79
1983 24.72 22.27 25.68
1984 12.34 5.95 1.06
1985 29.98 31.43 32.78
1986 28.78 18.37 26.91
1987 2.52 5.67 6.02
1988 42.04 16.58 15.95
1989 35.40 31.11 31.71
1990 0.96 -3.20 -0.57
1991 27.06 30.51 23.93
1992 11.50 7.67 7.34
1993 2.28 9.97 16.72
1994 11.41 1.30 4.95
1995 36.68 37.10 36.48
1996 12.25 22.69 28.57
1997 33.34 33.10 24.78
1998 6.64 17.66 14.11
(through 6/30)
- ------------------------------------
(1) Total Return represents the change in stock prices or index value for the
year plus the amount of dividends that would have been received (not
reinvested), divided by the initial price or opening index value for that
year.
(2) The Strategy Stocks for any given period were selected by ranking the
dividend yields for each of the stocks in the Index Subset as of the
beginning of that year, based upon an annualization of the last monthly or
quarterly dividend declared, or the addition of the last interim and final
dividends for stocks making semi-annual dividend distributions (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.
(3) An unmanaged index of 500 stocks compiled by Standard & Poor's Corporation.
(4) An unmanaged index of 30 stocks compiled by Dow Jones & Company, Inc. The
name 'Dow Jones Industrial Average' is the property of Dow Jones & Company,
Inc.
A-7
<PAGE>
The following table compares the actual performance of the Standard & Poor's
Industrial Index (the Index) with the hypothetical performance of approximately
equal amounts invested in each of the Strategy Stocks selected by applying the
screening process described above at the beginning of each year. These results
represent past performance of the Strategy (but not any Select S&P Industrial
Portfolio), and may not be indicative of future results of the Strategy or the
Portfolio. An investment in the Portfolio will not realize as high a total
return as a direct investment in the Strategy Stocks, since the Portfolio bears
brokerage commissions in buying and selling Strategy Stocks. Actual performance
of a Portfolio will also differ from quoted performance of the Strategy Stocks
because the quoted performance figures are annual figures based on closing sales
prices on December 31 (or June 30, for 1998), while the Portfolios are
established and liquidated at various times during the year; the Portfolio may
not be fully invested at all times; stocks are normally purchased or sold at
prices different from the closing price used to determine the Portfolio's net
asset value and stocks may not be weighted equally at all times.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
(STRATEGY STOCK FIGURES REFLECT SALES CHARGES AND EXPENSES
BUT NOT BROKERAGE COMMISSIONS)
<TABLE><CAPTION>
STRATEGY STOCKS(1) STANDARD & POOR'S INDUSTRIAL INDEX (THE INDEX)
----------------------------------------------------------------- ----------------------------------------------
YEAR APPRECIATION(2) ACTUAL DIVIDEND YIELD(3) TOTAL RETURN(4) APPRECIATION(2) ACTUAL DIVIDEND YIELD(3)
- --------- ----------------- --------------------------- ----------------- ----------------- ---------------------------
<S> <C> <C> <C> <C> <C>
1973 -23.67% 3.54% -20.13% -17.24% 2.62%
1974 -10.92 5.57 -5.35 -29.93 3.39
1975 34.42 6.21 40.63 31.92 4.86
1976 25.93 4.96 30.89 18.42 4.18
1977 -11.07 4.53 -6.53 -12.35 4.14
1978 0.43 5.63 6.06 2.38 5.12
1979 20.13 6.34 26.47 12.88 5.52
1980 11.74 6.49 18.23 27.62 5.36
1981 1.22 6.45 7.67 -11.22 4.53
1982 19.02 6.85 25.87 14.95 5.19
1983 17.93 6.78 24.72 18.15 4.64
1984 6.59 5.74 12.34 0.06 4.03
1985 24.01 5.96 29.98 25.86 4.22
1986 23.85 4.92 28.78 15.07 3.47
1987 -1.33 3.85 2.52 5.90 3.23
1988 37.86 4.17 42.04 12.38 3.42
1989 30.67 4.72 35.40 25.59 3.71
1990 -2.88 3.84 0.96 -3.98 3.14
1991 23.05 4.00 27.06 27.17 3.22
1992 8.23 3.27 11.50 2.99 2.64
1993 -1.27 3.55 2.28 6.44 2.46
1994 7.45 3.96 11.41 1.35 2.40
1995 32.66 4.01 36.68 31.72 2.54
1996 9.16 3.09 12.25 20.62 2.08
1997 30.40 2.93 33.34 28.90 1.90
1998
(through
6/30) 5.49 1.16 6.64 18.00 0.72
</TABLE>
YEAR TOTAL RETURN(4)
- --------- -----------------
1973 -14.62%
1974 -26.54
1975 36.78
1976 22.60
1977 -8.21
1978 7.50
1979 18.40
1980 32.98
1981 -6.69
1982 20.14
1983 22.79
1984 4.09
1985 30.08
1986 18.54
1987 9.13
1988 15.80
1989 29.30
1990 -0.84
1991 30.39
1992 5.63
1993 8.90
1994 3.75
1995 34.26
1996 22.70
1997 30.80
1998
(through
6/30) 18.72
- ------------------------------------
(1) The Strategy Stocks for any given year were selected by ranking the dividend
yields for each of the stocks in the Index Subset as of the beginning of
that year, based upon an annualization of the last monthly or quarterly
dividend declared, or the addition of the last interim and final dividends
for stocks making semi-annual dividend distributions (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 the year, and
dividing the result by the market value of the stocks at the opening value
on the first trading day in that year. Sales charges are reflected.
Appreciation for the Index is calculated by subtracting the opening value of
the Index on the first trading day in each year from the closing value of
the Index on the last trading day in the year, and dividing the result by
the opening value of the Index 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 Index is calculated by taking the total
dividends credited to the Index and dividing the result by the opening value
of the Index 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-8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Select S&P Industrial
Portfolio 1998 Series E, Defined Asset Funds (the 'Portfolio'):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Portfolio as of July 27, 1998. 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 Portfolio as of July 27,
1998 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
July 27, 1998
STATEMENT OF CONDITION AS OF JULY 27, 1998
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 398,943.76
--------------------
Total.........................................$ 398,943.76
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsors for Organization
Expenses(2).......................................$ 318.35
--------------------
Subtotal 318.35
--------------------
Interest of Holders of 402,973 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)...................................$ 402,973.00
Gross underwriting commissions(5)(2)................... (4,029.24)
--------------------
Subtotal 398,943.76
--------------------
Total.........................................$ 398,943.76
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio determined by the Trustee at 4:00 p.m., Eastern time on July
24, 1998. The contracts to purchase securities are collateralized by an
irrevocable letter of credit which has been issued by DBS Bank, New York Branch,
in the amount of $399,373.76 and deposited with the Trustee. The amount of the
letter of credit includes $398,943.76 for the purchase of securities.
(2) A portion of the Public Offering Price consists of cash or
securities in an amount sufficient to pay all or a portion of the costs
incurrerd in establishing the Portfolio. These costs have been estimated at
$0.79 per 1,000 Units. A distribution will be made as of the close of the
initial offering period to an account maintained by the Trustee from which the
organizational expenses obligation of the investsors to the Sponsors will be
satisfied.
(3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on 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 only for that day. The Public Offering Price on any subsequent
business day will vary.
(4) Aggregate public offering price computed on the basis of the value
of the underlying securities at 4:00 p.m., Eastern time on July 24, 1998.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00%
of the Public Offering Price. A deferred sales charge of $1.75 per 1,000 Units
is payable on October 1 and October 15, 1998 and thereafter on the 1st day of
each month through June 1, 1999. 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 June
1, 1999, the remaining portion of the distribution applicable to such units will
be transferred to such account on the redemption date.
A-9
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INVESTOR FUND SELECT S&P INDUSTRIAL 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
---------
Portfolio Description................................. 1
Risk Factors.......................................... 3
How to Buy Units...................................... 4
How to Redeem or Sell Units........................... 5
Trust Termination..................................... 6
Rollover.............................................. 7
Income, Distributions and Reinvestment................ 8
Portfolio Expenses.................................... 8
PAGE
---------
Taxes................................................. 9
Records and Reports................................... 11
Trust Indenture....................................... 12
Miscellaneous......................................... 12
Exchange Option....................................... 15
Supplemental Information.............................. 15
Appendix A--The S&P Earnings and Dividend Rankings for
Common Stocks......................................... a-1
PORTFOLIO DESCRIPTION
THE STRATEGY
The Portfolio seeks total return by acquiring the 15 highest dividend
yielding stocks in a pre-screened subset of the Standard & Poor's Industrial
Index* 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. Because issuers of the Index Subset stocks tend to be highly
capitalized, established companies, they are generally able to survive adverse
developments. An investment in the Portfolio 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 15, four quarterly
dividends instead of 60. Investments in a number of companies with high
dividends relative to their stock prices is designed to increase the Portfolio's
potential for higher returns. Investing in these stocks of the Index Subset 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 Index Subset as a group. 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 Strategy Stocks will be maintained. Reduction or
elimination of a dividend could adversely affect the stock price as well.
The Standard & Poor's Industrial Index is a capitalization-weighted index
designed to measure the performance of the industrial sector of the S&P 500
Composite Stock Price Index. Standard & Poor's, a leading financial information
and investment research company since 1860, offers financial research,
benchmarks and market data.
- ------------------
* 'Standard & Poor's R', 'S&PR' and 'S&P 500R' are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use by the Agent for the
Sponsors. The Fund is not sponsored, managed, sold or promoted by Standard &
Poor's. Standard & Poor's is not affiliated with any of the Sponsors.
1
<PAGE>
PORTFOLIO SELECTION
The Portfolio contains 15 common stocks selected through the following
four-step process. Beginning with the stocks in the Standard & Poor's Industrial
Index, any stock also included in the Dow Jones Industrial Average (DJIA) is
eliminated from the list of stocks. Second, any stock not ranked either A or A+
by Standard & Poor's Common Stock Rankings is also removed (see a description of
the Common Stock Rankings in Appendix A). Next, the remaining stocks are ranked
by market capitalization from highest to lowest and the lowest 25 percent are
eliminated. The remaining stocks, which then comprise the Index Subset, are
ranked by dividend yield and the 15 highest-yielding stocks are selected for the
Portfolio. '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 which may cause the Portfolio to own a stock that the
Sponsors or Standard & Poor's do not recommend for purchase and, in fact, the
Sponsors or Standard & Poor's 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
15 highest yielding stocks in the Index Subset 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. While indexing attempts to mirror major market
trends, the Portfolio's screening process selects stocks from a major index for
a combination of value, capital appreciation potential and current dividend
income. This can help individual investors who lack the time or knowledge to
select a portfolio of stocks on their own. Because of the screening process, the
research is done for you. Because of the fund structure, you do not need to make
buy and sell decisions.
Investors should be aware that the Portfolio may not be able to buy each
Security at the same time because of availability of the Security, any
restrictions applicable to the Portfolio relating to the purchase of the
Security by reason of the federal securities laws or otherwise. Any monies
allocated to the purchase of a Security will generally be held for the purchase
of the Security.
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. 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 practicable 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.
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. The Portfolio may also enter into program trades
with unaffiliated broker/dealers, which will have the effect of increasing
brokerage commissions while reducing market risk. Portfolio investors may
benefit from reduced commissions and institutional prices available to the
Portfolio.
Because each 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. 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 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 15
highest dividend yielding stocks in the Index Subset or even its deletion from
the Standard & Poor's Industrial 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
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 are 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 Sponsors cannot predict the direction or scope of any of these
factors. Additionally, equity markets have been at historically high levels and
no assurance can be given 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 Portfolio 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 FOOD INDUSTRY
Investment in stocks of the food industry, including manufacturers of
packaged foods, processors of agricultural products and food distributors,
should be made with an understanding of the many factors that may have an
adverse impact on the value of the stocks of these companies and their ability
to pay dividends. These factors include the sensitivity of revenues, earnings,
and financial condition to economic conditions, changing consumer demands or
preferences, fluctuations in the prices of agricultural commodities,
fluctuations in the cost of other raw materials such as packaging, and the
effects of inflation on pricing flexibility. The revenues and earnings of these
companies can also be affected by extensive competition that can result in lost
sales or in lower margins resulting from efforts to maintain market share. Food
companies are also subject to regulation under various federal laws--such as the
Food, Drug, and Cosmetic Act--as well as state, local and foreign laws and
regulations. Costs associated with complying with changing regulatory
restrictions, such as food labeling requirements, could adversely affect
earnings. Food companies are also becoming increasingly exposed to risks
associated with international operation, including foreign currency fluctuations
and future political and economic developments in other countries. Other risk
factors include potential deterioration in financial condition resulting from
litigation related to product liability, accidents, or trademark or patent
disputes; unfunded pension liability; changing accounting standards, such as
Statement of Financial Accounting Standard No. 106, which requires accrual
accounting for postretirement benefits other than pensions; and leveraged
buyouts, takeovers, or recapitalizations.
FOREIGN ISSUERS
Investing in securities of foreign issuers involves risks that are
different from investments in securities of domestic issuers. These risks may
include future political and economic developments, the possibility of
withholding taxes,
3
<PAGE>
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.
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. 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 PORTFOLIO
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. 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 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 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. See Trust Termination.
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 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
Units are available from any of the Sponsors 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 Portfolio.
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 and Focus Portfolios,
and certain other selected Equity Investor Funds, 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 to $999,999................ 1.75 1.750
$1,000,000 or more.................. 1.00 1.000
4
<PAGE>
In addition, a portion of the Public Offering Price also consists of cash or
securities in an amount sufficient to pay for all or a portion of the costs
incurred in establishing the Portfolio, including the cost of the initial
preparation of documents relating to the Portfolio, federal and state
registration fees, and the initial fees and expenses of the Trustee, legal
expenses and any other out-of-pocket expenses. The estimated organization costs
will be deducted from the assets of the Portfolio as of the close of the initial
offering period.
Prudential Securities Incorporated, which will participate only in rollover
sales, will receive a preferred dealer concession of $13.00 per 1,000 Units of
this Portfolio.
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.
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, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. If the Securities are listed on a national securities exchange or the
Nasdaq National Market, evaluations are generally based on closing sales prices
on that exchange or that system (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
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 REDEEM OR SELL UNITS
You can redeem your Units at any time for net asset value. In addition, the
Sponsors have maintained an uninterrupted secondary market for Units for over 20
years and will ordinarily buy back Units at net asset value. The following
describes these two methods to redeem or sell Units in greater detail.
REDEEMING UNITS
You can always redeem your Units for net asset value. This can be done by
contacting your broker, dealer or financial institution that holds your Units in
street name. In certain instances, additional documents may be required such as
a trust instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.
Within seven days after the receipt of your request (and any necessary
documents), a check will be mailed to you in an amount equal to the net asset
value of your Units. Because of the sales charge, market movements or changes in
5
<PAGE>
the Portfolio, net asset value at the time you redeem your Units may be greater
or less than the original cost of your Units. Net asset value is calculated 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
Portfolio expenses and any remaining Deferred Sales Charges, unreimbursed
Trustee advances, cash held to redeem Units or for distribution to investors and
the value of any other Portfolio liabilities; and dividing the result by the
number of outstanding Units. After the initial offering period, net asset value
will be reduced to reflect the cost to the Portfolio of liquidating Securities
to pay the redemption price.
As long as the Sponsors are maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsors for net asset value. If the Sponsors are not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.
If cash is not available in the Portfolio's Income and Capital Accounts to
pay redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors based on market and credit factors determined to be in the best
interest of the Portfolio. 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 may also reduce the size and diversity of the
Portfolio. If Securities are being sold during a time when additional Units are
being created by the purchase of additional Securities (as described under
Portfolio Selection), Securities will be sold in a manner designed to maintain,
to the extent practicable, the proportionate relationship among the number of
shares of each Security in the Portfolio.
Any investor owning Units representing Securities with a value of at least
$250,000 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. Generally, 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 on sales of Securities in connection with
in-kind redemptions will be borne by the redeeming investors. The in-kind
redemption option is subject to all applicable legal restrictions and may be
terminated by the Sponsors at any time upon prior notice to investors.
Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Securities not
reasonably practicable or (iii) for any other period permitted by SEC order.
SPONSORS' SECONDARY MARKET FOR UNITS
The Sponsors, while not obligated to do so, will buy back Units at net
asset value without any other fee or charge as long as they are maintaining a
secondary market for Units. Because of the sales charge, market movements or
changes in the portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. The Sponsors may resell
the Units to other buyers or redeem the Units by tendering them to the Trustee.
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 the secondary market for Units without prior
notice if the supply of Units exceeds demand or for other business reasons.
Regardless of whether the Sponsors maintain a secondary market, you have the
right to redeem your Units for net asset value with the Trustee at any time, as
described above.
TRUST TERMINATION
Notice of impending termination of the Portfolio will be provided to
investors. A proportional share of the expenses associated with termination,
including brokerage costs incurred in disposing of Securities, will be borne by
investors remaining at that time. These expenses will reduce the amount of cash
or Securities those investors are to receive in any final distribution.
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Upon termination of the Portfolio, the Trustee will distribute the
Securities and any cash in the Portfolio to a distribution agent that will act
as agent for the investors. Unless an investor elects to receive an in-kind
distribution of Securities, as discussed below, the distribution agent will, as
promptly as practicable, sell the investor's pro rata share of the Securities
and distribute to the investor the proceeds of the sale, less brokerage and
other related expenses, and the investor's pro rata share of any cash from the
Portfolio.
Any investor holding units at the termination of the Portfolio may, by
written notice to the Trustee at least ten business days prior to termination,
elect to received an in kind distribution of the investor's pro rata share of
the Securities remaining in the Portfolio at that time (net of the investor's
share of expenses). Fractional shares of Securities will be sold by the
distribution agent and the net proceeds distributed to investors. Investors
subsequently selling Securities received in kind will incur brokerage costs at
that time which may exceed the value of any tax deferral obtained through the
in-kind distribution. Securities received in an in-kind termination distribution
may not be contributed to acquire units of another Series.
ROLLOVER
In lieu of redeeming their units or receiving liquidation proceeds in cash
or in kind upon termination of the Portfolio, investors who hold their Units
with one of the Sponsors may elect, by contacting their financial adviser prior
to the rollover notification date indicated in Part A, to exchange their Units
in the Portfolio for units of next year's corresponding S&P Industrial Portfolio
(if available). No election to roll over may be made prior to 30 days before the
date of the rollover, and any rollover election will be revocable at any time
prior to the date of the rollover. It is expected that the terms of the new
portfolio will be substantially the same as those of the Portfolio.
The rollover of an investor's Units is intended to be effected in a manner
that will not result in the recognition of either gain or loss for U.S. federal
income tax purposes with respect to Securities that are included in the new
portfolio ('Duplicated Securities'). Units held by an investor who elects the
rollover option will be redeemed through an in-kind distribution to a
distribution agent of the investor's pro rata share of Securities. The
distribution agent will then adjust the Securities distributed to the investor
so that its composition matches the investment profile of the new portfolio.
This adjustment will involve the sale of non-Duplicated Securities and,
possibly, of a portion of certain Duplicated Securities in order to rebalance
the portfolio, and the purchase of replacement Securities. Any excess sales
proceeds, net of sales related expenses, will be distributed to the investor.
After this adjustment the distribution agent will make an in-kind contribution
of the adjusted Securities to the new portfolio. Upon receipt of the in-kind
contribution, the trustee of the new portfolio will issue the appropriate number
of units in the new portfolio to the investor.
An investor who elects the rollover option will recognize capital gain or
loss with respect to the Securities, including fractional Securities, sold by
the distribution agent, but will not recognize gain or loss with respect to the
Duplicated Securities that are contributed in kind to the new portfolio. The
Sponsors intend to provide investors with information that will assist them in
determining their tax liability on an eventual sale of the Duplicated
Securities.
The Sponsors intend to cause the distribution agent to sell those
Securities that will not be contributed to the new portfolio, and then to create
units of the new portfolio, in each case as quickly as possible subject 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 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. In order to minimize potential losses caused
by market movement during the rollover period, the Sponsors may enter into
program trades, which may 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 securities to comprise the new portfolio,
those moneys may be uninvested for several days.
Investors who participate in the rollover will not be entitled to receive a
cash distribution with which to pay any taxes incurred as a result of the
rollover procedure. Investors who do not participate in the rollover or
otherwise redeem their Units 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 will be
reduced which could result in an increase in per Unit expenses.
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The Sponsors may, in their sole discretion and without penalty or liability
to investors, decide not to sponsor a new portfolio 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 income per Unit, 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 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 receives an equal share of distributions of dividend income 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 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 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 Portfolio.
REINVESTMENT
Income and principal 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
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 the brokerage commissions
payable by the Portfolio in purchasing and selling Securities. S&P receives a
minimal annual fee from the Portfolio to cover the license by Standard & Poor's
to the Agent for the Sponsors of the use of the trademarks and trade names
'Standard & Poor's', 'S&P' and other trademarks and trade names as well as the
license by Standard & Poor's to the Agent for the Sponsors of the S&P Industrial
Index and Common Stock Rankings in connection with selection of Strategy Stocks.
The Trustee's Fee shown in Part A of this Prospectus assumes that the Portfolio
will reach a size estimated by the Sponsors and is based on a sliding fee scale
that reduces the per 1,000 Units Trustee's fee as the size of the Portfolio
increases. The Trustee's annual fee is payable in monthly installments. The
Trustee also benefits when it holds cash for the Portfolio in non-interest
bearing accounts. Possible additional charges include Trustee fees and expenses
for
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extraordinary services, costs of indemnifying the Trustee and the Sponsors,
costs of action taken to protect the Portfolio and other legal fees and
expenses, Portfolio 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 currently estimated at $0.45 per 1,000 Units to reimburse
them for the cost of providing Portfolio supervisory, bookkeeping and
administrative services and for any other expenses properly chargeable to the
Portfolio. While the fee may exceed the amount of these costs and expenses
attributable to the Portfolio, the total of these fees from all Series of
Defined Asset Funds will not exceed the aggregate amount attributable to all of
those Series during any calendar year. The Trustee's and Sponsors' fees may be
adjusted for inflation without investors' approval.
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
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.
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 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 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 Portfolio expenses or whether they are
automatically reinvested (see Reinvestment).
Amounts considered to have been received by a corporate investor from
domestic corporations that constitute dividends for federal income tax
purposes will generally qualify for the dividends-received deduction, which
is currently 70%. Depending upon the particular corporate investor's
circumstances, limitations on the availability of the dividends-received
deduction may be applicable. Further, Congress from time to time considers
proposals that would adversely affect the after-tax return to investors
that can take advantage of the deduction. For example, the Taxpayer Relief
Act of 1997 requires that the 46-day holding period for the
dividends-received deduction must begin before and include each ex-dividend
date and excludes the purchase date and any days during which the
investor's investment is hedged. Investors are urged to consult their own
tax advisers in this regard.
An individual investor who itemizes deductions will be entitled to
deduct his pro rata share of current Portfolio expenses only to the extent
that this amount together with the investor's other miscellaneous
deductions exceeds 2% of his adjusted gross income. The Code further
restricts the ability of an individual investor with an adjusted gross
income in excess of a specified amount (for 1998, $124,500 or $62,250 for a
married person filing a separate return) to claim itemized deductions
(including his pro rata share of Portfolio expenses).
The 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 Portfolio or the redemption of the
Units. The proceeds received by an 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 investors will be based upon the amounts paid
to them, net of the Deferred Sales Charge and the charge for organizational
expenses. Accordingly, investors should not increase their basis in their
Units by the Deferred Sales Charge amount or any amount used to pay
organizational expenses.
An investor will generally recognize capital gain or loss when the
investor disposes of his Units for cash (by sale or redemption) or when the
Trustee disposes of the Securities from the Portfolio. An investor will not
recognize gain or loss upon the distribution of a pro rata amount of each
of the Securities by the Trustee to an investor
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(or to his agent) in redemption of Units or upon termination of the
Portfolio, except to the extent of cash received in lieu of fractional
shares. The redeeming investor's basis for the Securities will be equal to
his basis for the same Securities (previously represented by his Units)
prior to the redemption, and his holding period for the Securities will
include the period during which he held his Units.
An investor who elects to roll over into a new portfolio (a 'rollover
investor') will not recognize gain or loss either upon the distribution of
Securities by the Trustee to the distribution agent or upon the
contribution of Duplicated Securities (as defined under Rollover) to the
new portfolio. The rollover investor will generally recognize capital gain
or loss as a consequence of the distribution agent's sale of non-Duplicated
Securities. The rollover investor's basis for the Duplicated Securities
that are contributed in kind to the new portfolio will be equal to his
basis for the same Duplicated Securities prior to the rollover.
Net capital gain (the excess of net long-term capital gains over net
short-term capital losses) may be taxed at lower rates 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 rates will be unavailable to those
noncorporate investors who, as of the mandatory termination date (or
earlier termination of the Portfolio), have held their units for a year or
less. Similarly, with respect to noncorporate rollover investors, this
lower rate will be unavailable for gains on non-Duplicated Securities if,
as of the beginning of the rollover period, those investors have held their
units for a year or less. Investors will not be entitled to the new 20%
maximum federal tax rate for capital gains derived from the Portfolio
because they will not have held their Units for more than 18 months.
However, a rollover investor's holding period for the contributed
Duplicated Securities will include the period during which he held an
interest in the same Duplicated Securities through an investment in the
Portfolio and in prior years' corresponding S&P Industrial Portfolios.
Investors should consult their tax advisers regarding these matters.
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 investors in the same
manner as for federal income tax purposes.
The Portfolio will report as gross income earned by investors their pro
rata share of any dividends received by the Portfolio from a foreign
corporation in which the Portfolio holds stock as well as their pro rata
share of any amount withheld with respect to such dividends. (See Defined
Portfolio in Part A.) Those investors who hold Units on the relevant record
date for dividends on any such underlying foreign stock held by the
Portfolio should be entitled, subject to applicable limitations, to either
a credit or a deduction for foreign taxes payable with respect to such
dividend payments. Capital gain on a disposition of foreign stock (or a
proportionate share of Units), if any, will generally be U.S. source
income. Investors should consult their own tax advisers regarding these
matters.
The foregoing discussion summarizes only certain U.S. federal and New
York State and City income tax consequences of an investment in Units by
investors who are U.S. persons, as defined in the Code. Foreign investors
(including nonresident alien individuals and foreign corporations) not
engaged in U.S. trade or business will generally be subject to 30%
withholding tax (or lower applicable treaty rate) on distributions.
Investors may be subject to taxation in New York or in other U.S. or
foreign jurisdictions and should consult their own tax advisers in this
regard.
* * * *
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 cash 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.
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RETIREMENT PLANS
This Series of Equity Investor 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 (prior to the year 2000) or tax-deferred rollover treatment.
Investors in IRAs, Keogh plans and other tax-deferred retirement plans should
consult their plan custodian as to the appropriate disposition of distributions.
Investors considering participation in any of these plans should review specific
tax laws related thereto and should consult their attorneys or tax advisers with
respect to the establishment and maintenance of any of these plans. These plans
are generally offered by brokerage firms, including the Sponsors of this
Portfolio, 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 ($4,000 in a
spousal account).
Individual Retirement Account--IRA. Any individual can make use of a
qualified IRA arrangement for the purchase of Units. Any individual (including
one covered by an employer retirement plan) can make a contribution to an IRA
equal to the lesser of $2,000 ($4,000 in a spousal account) or 100% of earned
income; such investment must be made in cash. However, the deductible amount of
a contribution by an individual covered by an employer retirement plan will be
reduced if the individual's adjusted gross income exceeds $25,000 (in the case
of a single individual), $40,000 (in the case of a married individual filing a
joint return) or $200 (in the case of a married individual filing a separate
return). These income threshholds will gradually be increased by 2004 to $50,000
for a single individual and $80,000 for a married individual filing jointly.
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 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.
The 10% surtax will be waived for withdrawals for certain educational and
first-time homebuyer expenses. The Taxpayer Relief Act of 1997 also provides,
subject to certain income limitations, for a special type of IRA under which
contributions would be non-deductible but distributions would be tax-free if the
account were held for at least five years and the account holder was at least
59 1/2 at the time of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units.
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 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
the 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.
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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
Indenture and liquidate the Portfolio 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 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 the New
York 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.; PaineWebber Incorporated, a wholly-owned
subsidiary of PaineWebber Group Inc. and Dean Witter Reynolds Inc., a principal
operating subsidiary of Morgan Stanley Dean Witter & Co.
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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.
CODE OF ETHICS
The Agent for the Sponsors has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its personnel
who have access to information on Defined Asset Funds portfolio transactions.
The code is intended to prevent any act, practice or course of conduct which
would operate as a fraud or deceit on any Portfolio and to provide guidance to
these persons regarding standards of conduct consistent with the Agent's
responsibilities to the Defined Asset Funds.
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to designate
years. These systems may not be able to distinguish the Year 2000 from the Year
1900 (commonly known as the 'Year 2000 Problem'). Like other investment
companies and financial and business organizations, the Fund could be adversely
affected if the computer systems used by the Agent for the Sponsors or Fund
service providers do not properly address this problem prior to January 1, 2000.
The Agent for the Sponsors has established a dedicated group to analyze these
issues and to implement any systems modifications necessary to prepare for the
Year 2000. Currently, we do not anticipate that the transition to the 21st
century will have any material effect on the Fund. The Agent for the Sponsors
has sought assurances from the Fund's other service providers that they are
taking all necessary steps to ensure that their computer systems will accurately
reflect the Year 2000, and the Agent for the Sponsors will continue to monitor
the situation. At this time, however, no assurance can be given that the Fund's
other service providers have anticipated every step necessary to avoid any
adverse effect on the Fund attributable to the Year 2000 Problem.
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 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 Portfolio (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 Portfolio 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'
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 the Strategy Stocks, the related index or the current Select S&P
Industrial Portfolio 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
13
<PAGE>
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
maximum sales charge. No provision is made for any income taxes payable. Returns
of Strategy Stocks may also be shown in comparison to other indexes, to which
may be added by year various national and international political and economic
events, milestones in price and market indicators, and offerings of Defined
Asset Funds. This performance may also be compared for various periods with
investments in short-term U.S. Treasury securities. Investors should bear in
mind that this represents past performance and is no assurance of future results
of the current or any future Portfolio. Advertisements and other material
distributed to prospective investors may include the average annual compounded
rate of return on selected types of assets for periods of at least 10 years, as
compiled by Ibbotson Associates, compared to the rate of inflation over the same
period.
The following chart shows the average annual compounded rate of return of
selected asset classes over the 10-year and 20-year periods ending June 30,
1998, compared to the rate of inflation over the same periods. Of course, this
chart represents past performance of these investments and is no guarantee of
future results, either of these categories or of any Defined Fund. Defined Funds
also have sales charges and expenses which are not reflected in the chart.
Stocks (S&P 500)
20 yr 17.42%
10 yr 18.54%
Small-company stocks
20 yr 16.54%
10 yr 14.37%
Long-term corporate bonds
20 yr 10.62%
10 yr 10.72%
U.S. Treasury bills (short-term)
20 yr 7.26%
10 yr 5.42%
U.S. Inflation
20 yr 4.69%
10 yr 3.29%
Source: Ibbotson Associates. Used with permission. All rights reserved.
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 generally 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 review by investment professionals. Various advertisements and sales
literature may summarize the results of economic studies concerning how stock
movement has tended to be concentrated and how longer-term investments can tend
to reduce risk.
14
<PAGE>
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. Defined equity
funds offer growth potential and some protection against inflation.
EXCHANGE OPTION
You may exchange Units of this Portfolio for units of other Select or Focus
Series or certain other selected Equity Investor Series with one-or two-year
terms and a combination of initial and deferred sales charges. Select and Focus
Portfolios have a sales charge for first-time investors of 1% initially and
annual deferred sales charges of $17.50 per 1,000 units. On exchanges, the
initial sales charge is waived and units are acquired subject to any remaining
deferred sales charges. Investors can also exchange units of those Portfolios
and similar series of unaffiliated equity unit investment trusts for Portfolio
Units, subject only to the Portfolio's remaining deferred sales charges. In the
future, the Exchange Option may be extended to other series and types of trusts
with similar sales charge structures.
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 market and which are lawfully for sale in the state where you
reside. 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 of the units exchanged; you should consult your own
tax adviser. 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 market in any series, there
can be no assurance that units can be exchanged. 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
the 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 Portfolio.
15
<PAGE>
APPENDIX A
THE STANDARD & POOR'S EARNINGS AND DIVIDEND RANKINGS FOR COMMON STOCKS
(AS DESCRIBED BY STANDARD & POOR'S ITSELF)
The investment process involves assessment of various factors--such as products
and industry position, corporate resources and financial policy--with results
that make some common stocks more highly esteemed than others. In this
assessment, Standard & Poor's believes that earnings and dividend performance is
the end result of the interplay of these factors and that, over the long run,
the record of this performance has a considerable bearing on relative quality.
The rankings, however, do not pretend to reflect all of the factors, tangible or
intangible, that bear on stock quality.
Relative quality of bonds or other debt, that is, degrees of protection for
principal and interest, called credit worthiness, cannot be applied to common
stocks, and therefore rankings are not to be confused with bond quality ratings
which are arrived at by a necessarily different approach.
Growth and stability of earnings and dividends are deemed key elements in
establishing Standard & Poor's earnings and dividend rankings for common stocks,
which are designed to capsulize the nature of this record in a single symbol. It
should be noted, however, that the process also takes into consideration certain
adjustments and modifications deemed desirable in establishing such rankings.
The point of departure in arriving at these rankings is a computerized scoring
system based on per-share earnings and dividend records of the most recent ten
years--a period deemed long enough to measure significant time segments of
secular growth, to capture indications of basic change in trend as they develop,
and to encompass the full peak-to-peak range of the business cycle. Basic scores
are computed for earnings and dividends, then adjusted as indicated by a set of
predetermined modifiers for growth, stability within long-term trend, and
cyclicality. Adjusted scores for earnings and dividends are then combined to
yield a final score.
Further, the ranking system makes allowance for the fact that, in general,
corporate size imparts certain recognized advantages from an investment
standpoint. Conversely, minimum size limits (in terms of corporate sales volume)
are set for the various rankings, but the system provides for making exceptions
where the score reflects an outstanding earnings-dividend record.
The final score for each stock is measures against a scoring matrix determined
by analysis of the scores of a large and representative sample of stocks. The
range of scores in the array of this sample has been aligned with the following
ladder of rankings:
A + HIGHEST A - ABOVE AVERAGE B - LOWER
A HIGH B + AVERAGE C LOWEST
D IN
B BELOW AVERAGE REORGANIZATION
NR signifies no ranking because of insufficient data or because the stock is not
amenable to the ranking process.
The positions as determined above may be modified in some instances by special
considerations, such as natural disasters, massive strikes, and non-recurring
accounting adjustments.
A ranking is not a forecast of future market price performance, but is basically
an appraisal of past performance of earnings and dividends, and relative current
standing. A high-score stock may at times be so overpriced as to justify its
sale, while a low-score stock may be attractively priced for purchase. Rankings
based upon earnings and dividend records are no substitute for complete
analysis. They cannot take into account potential effects on management changes,
internal company policies not yet fully reflected in the earnings and dividend
record, public relations standing, recent competitive shifts, and a host of
other factors that may be relevant to investment status and decision.
THESE RANKINGS MUST NOT BE USED AS MARKET RECOMMENDATIONS.
Rankings are published by Standard & Poor's Equity Investor Services Group,
which is independent of, and has no access to information obtained by Standard &
Poor's Rating Services. Standard & Poor's Rating Services may from time to time
obtain information of a confidential nature.
a-1
<PAGE>
Defined
Asset FundsSM
SPONSORS: EQUITY INVESTOR FUND
Merrill Lynch, SELECT S&P INDUSTRIAL PORTFOLIO
Pierce, Fenner & Smith Incorporated1998 SERIES E
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
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
(212) 816-4000 the Securities Act of 1933 and the Investment
PaineWebber Incorporated Company Act of 1940, and to which reference
1200 Harbor Boulevard is hereby made. Copies of filed material can
Weehawken, NJ 07087 be obtained from the Public Reference Section
(201) 902-3000 of the Commission, 450 Fifth Street, N.W.,
Dean Witter Reynolds Inc. Washington, D.C. 20549 at prescribed rates.
Two World Trade Center--59th Floor The Commission also maintains a Web site that
New York, NY 10048 contains information statements and other
(212) 392-2222 information regarding registrants such as
TRUSTEE: Defined Asset Funds that file electronically
The Bank of New York with the Commission at http://www.sec.gov.
Unit Investment Trust Department ------------------------------
Box 974--Wall Street Division No person is authorized to give any
New York, NY 10268-0974 information or to make any representations
1-800-221-7771 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 are no longer available, or for
investors who will reinvest into subsequent
series of Select S&P Industrial Portfolios,
this Prospectus may be used as a preliminary
prospectus for a future series; in which case
investors should note the following:
Information contained herein is subject to
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.
70097--7/98
a-2
<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.
I. Bonding arrangements of each of the Depositors are incorporated by reference
to Item A of Part II to the Registration Statement on Form S-6 under the
Securities Act of 1933 for Municipal Investment Trust Fund, Monthly Payment
Series--573 Defined Asset Funds (Reg. No. 333-08241).
II. The date of organization of each of the Depositors is set forth in Item B
of Part II to the Registration Statement on Form S-6 under the Securities Act of
1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241) and is herein incorporated by reference
thereto.
III. The Charter and By-Laws of each of the Depositors are incorporated herein
by reference to Exhibits 1.3 through 1.12 to the Registration Statement on Form
S-6 under the Securities Act of 1933 for Municipal Investment Trust Fund,
Monthly Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositors has been filed
pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filings indicated and made a part of this Registration Statement:
Merrill Lynch, Pierce, Fenner & Smith Incorporated 8-7221
Smith Barney Inc. .............................. 8-8177
PaineWebber Incorporated........................ 8-16267
Dean Witter Reynolds Inc. ...................... 8-14172
------------------------------------
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
Dean Witter Reynolds Inc. ...................... 94-0899825
PaineWebber Incorporated ....................... 13-2638166
The Bank of New York, Trustee................... 13-4941102
UNDERTAKING
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 MUNICIPAL INVESTMENT TRUST FUND, 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
- --------------------------------------------------------------------------------
Municipal Investment Trust Fund, Multistate Series 325...... 333-50907
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, Select Ten Portfolio--1995 Winter
Series...................................................... 33-55811
Equity Income Fund, Select Ten Portfolio--1995 Spring
Series...................................................... 33-55807
Equity Income Fund, Select Ten Portfolio 1997 Series A...... 333-15193
Equity Income Fund, Select Growth Portfolio................. 33-51985
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 S&P
Industrial Portfolio 1997 Series A, 1933 Act File No. 333-05683.
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 (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Equity Income Fund, Select Ten
Portfolio, 1996 International Series B (United Kingdom and Japan
Portfolios), 1933 Act File No. 333-00593).
R-1
<PAGE>
SIGNATURES
The registrant hereby identifies the series numbers of Municipal Investment
Trust Fund, 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 27TH DAY OF
JULY, 1998.
SIGNATURES APPEAR ON PAGE R-3, R-4, R-5 AND R-6.
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 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 under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Numbers: 33-43466 and 33-51607
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
ROGER M. VASEY
ARTHUR H. ZEIKEL
By DANIEL C. TYLER
(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 Numbers:
33-49753,
33-55073,
333-10441 and
333-41765
JAMES DIMON
DERYCK C. MAUGHAN
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
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 2-61279
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
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-6
<PAGE>
EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
JULY 27, 1998
EQUITY INVESTOR FUND,
SELECT S&P INDUSTRIAL PORTFOLIO 1998 SERIES E
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
PAINEWEBBER 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 sponsors (the 'Sponsors') of
Equity Investor Fund, Select S&P Industrial Portfolio 1998 Series E, 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 Sponsors and (ii) the Units, when duly issued and delivered by
the Sponsors 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 headings 'Taxes' and 'Miscellaneous--Legal
Opinion.'
Very truly yours,
DAVIS POLK & WARDWELL
<PAGE>
EXHIBIT 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of Equity Investor Fund, Select S&P Industrial
Portfolio 1998 Series E
Defined Asset Funds:
We consent to the use in this Registration Statement No. 333-55793 of our report
dated July 27, 1998, relating to the Statement of Condition of Equity Investor
Fund, Select S&P Industrial Portfolio 1998 Series E, 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.
July 27, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> JUN-15-1998
<INVESTMENTS-AT-COST> 398,944
<INVESTMENTS-AT-VALUE> 398,944
<RECEIVABLES> 0
<ASSETS-OTHER> 375,250
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 774,194
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 375,250
<TOTAL-LIABILITIES> 375,250
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 398,944
<SHARES-COMMON-STOCK> 402,973
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 398,944
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 402,973
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
