<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
EQUITY INVESTOR FUND The objective of this Defined Fund is total return
CONCEPT SERIES through a combination of capital appreciation and,
TELE-GLOBAL TRUST 4 to a lesser extent, current income by investing
(A UNIT INVESTMENT for a period of about two years in a diversified
TRUST) portfolio of publicly traded common stocks issued
- ------------------------------by domestic and international companies engaged in
- -- PROFESSIONAL SELECTION a wide range of telecommunications activities.
- -- DIVERSIFICATION These issuers provide local, long distance,
- -- REINVESTMENT OPTION wireless telecommunications, cable television, and
internet services as well as telecommunications
equipment and networking. The telecommunications
industry is expected to continue to expand,
stimulated by competition, globalization and
introduction of new products and services. There
is no assurance that the Fund's objective will be
met.
The value of units will fluctuate with the value
of the common stocks in the Portfolio and no
assurance can be given that the underlying common
stocks will continue to pay dividends or that the
underlying common stocks or 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 August 13, 1998.
PaineWebber Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International equity and bond 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 Your Portfolio
- ----------------------------------------------------------------
The 36 stocks represented in the Fund are issued by companies that are expected
to benefit from strong growth in access lines as a result of internet growth,
globalization and consolidation of the telecommunications industry. Investing in
the Portfolio, rather than in only one or two of the underlying common stocks,
is a way to diversify your investment. Based upon the principal business of each
issuer and current market values, the following types of telecommunications
companies are represented in the Portfolio:
PORTFOLIO
PERCENTAGE
/ / Telecommunications Services
Regional Bells 10%
Independents 5%
Long Distance 5%
Wireless 5%
/ / Telecommunications Equipment 27%
/ / Telecommunications Networking 11%
/ / International 37%
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
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 telecommunications industry, movements in stock prices
generally, the impact of the Sponsors' purchase and sale of the securities
(especially during the primary offering period of units) and other factors.
Therefore, there is no guarantee that the objective of the Portfolio will be
achieved.
Unlike a mutual fund, the Portfolio is not actively managed and the Sponsors
receive no management fee. Therefore, the adverse financial condition of an
issuer or any market movement in the price of a security will not necessarily
require the sale of securities from the Portfolio or mean that the Sponsors will
not continue to purchase the security in order to create additional Units.
Although the Portfolio is regularly reviewed and evaluated and Sponsors may
instruct the Trustee to sell securities under certain limited circumstances,
securities will not be sold to take advantage of market fluctuations or changes
in anticipated rates of appreciation.
In addition, the Fund is concentrated in common stocks of telecommunications
companies and therefore is dependent to a significant extent on revenues
generated from those particular activities. In addition, 13 issuers (37% of the
Portfolio) are foreign issuers (see Risk Factors--The Telecommunications
Industry and Foreign Issuers in Part B).
A-2
<PAGE>
- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER 1,000 UNITS $999.95
The Public Offering Price as of August 12, 1998, the business day prior to the
initial date of deposit, is based on the aggregate value of the underlying
securities ($444,125.03) and any cash held to purchase securities, divided by
the number of units outstanding (448,611) times 1,000, plus the initial sales
charge. The Public Offering Price includes estimated organization costs of $1.97
per 1,000 Units, to which no sales charge has been applied. Units offered on the
Initial Date of Deposit will also be priced at $999.95 per 1,000 Units although
the aggregate value of the underlying securities, cash amount and number of
Units may vary. 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 in seven monthly payments each year of the Portfolio. If
you redeem or exchange your units prior to September 1, 1999, you will not pay
the deferred sales charge for the second year.
ROLLOVER/EXCHANGE OPTION
You may exchange your units of this Portfolio for units of any Select or Focus
Series or certain other Equity Investor Series any time prior to termination of
this Portfolio. If you continue to hold your units, when this Portfolio is about
to be liquidated you may have the option to roll your proceeds into the next
Series, if one is available. If you notify your financial professional by August
11, 2000, your units will be redeemed and your proceeds will be reinvested in
units of the next Portfolio, if available. 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 termination. Of course you can sell or redeem your Units at
any time prior to termination.
SEMI-ANNUAL INCOME DISTRIBUTIONS
Distributions of income, if any, will be paid on the 25th days of December,
1998, June and December, 1999 and June, 2000 to Holders of record on the 10th
day of those months. In order to meet certain tax requirements, a special
distribution of income including capital gains, may be paid to holders of record
as of a date in December.
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
Distributions that are taxable as ordinary income to investors will constitute
dividends for federal income tax purposes and may, subject to certain
limitations, be eligible for the dividends-received deduction for certain
corporations (see Taxes in Part B).
Investors who are individuals and have held their Units for more than 12 months
may be entitled to a 20% maximum federal income tax rate for gains from the sale
of these Units and for certain dividends from the Portfolio designated as
capital gains dividends.
Foreign holders should be aware that distributions from the Portfolio will
generally be subject to information reporting and withholding taxes. (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, after the initial offering period, the charge
for organization expenses. In addition, the annual statement and the relevant
tax reporting forms you receive at year-end will be based on the amount paid to
you (net of the deferred sales charge and, after the initial offering period,
the charge for organization expenses). Accordingly, you should not increase your
basis in your units by the deferred sales charge or the charge for organization
expenses.
TERMINATION DATE
The Portfolio will terminate by September 8, 2000. 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 $199.00 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>
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
SALES CHARGE
You will pay an initial sales charge of about 1.0%. In addition, seven monthly
deferred sales charges of $2.50 per 1,000 units ($17.50 annually) will be
deducted from the Portfolio's net asset value each year of the Portfolio's
two-year life (February 1 and February 15, 1999 through July 1, 1999 and
September 1, 1999 through March 1, 2000). This deferred method of payment keeps
more of your money invested over a longer period of time. The sales charge is
reduced on purchases of $50,000 or more as shown in Part B. If you exchange
units of a Select or Focus Series or certain other Equity Investor Series for
units of this Portfolio, or roll the proceeds of your investment into a new
portfolio, you will not be subject to the 1.0% initial charge. However, you will
be required to pay the balance of the deferred sales charge for the first
portfolio for the year in which you exchange your units, in addition to the
deferred sales charge for this Portfolio. (See How To Buy Units--Public Offering
Price.)
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. On a
$1,000 investment for 1,000 Units, you will pay the following charges:
As a %
of Initial Public
Offering Price
-----------------
Initial Sales Charge 1.00%
Deferred Sales Charge per Year 1.75%
Maximum Sales Charge 4.50%
Maximum Sales Charge Imposed on Reinvested
Dividends 3.50%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee .089% $ 0.88
Maximum Portfolio Supervision,
Bookkeeping and Administrative
Fees .046% $ 0.45
Other Operating Expenses .035% $ 0.35
----------------- --------------
TOTAL .170% $ 1.68
These estimates do not include the costs of purchasing and selling the
underlying securities.
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 $ 1.97
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
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
$31 $74 $120 $244
Although the Portfolio has a term of only two years and is a unit investment
trust rather than a mutual fund, this information is presented to permit a
comparison of fees, assuming the investment is rolled over 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 sell or redeem your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of August 12, 1998 was
$972.45 per 1,000 units ($27.50 per 1,000 units less than the Public Offering
Price). This price reflects deductions of the annual deferred sales charge which
declines over each year of the Portfolio ($17.50 initially). If you sell your
units before September 1, 1999, you will pay only the balance of any deferred
sales charge remaining for the first year. If you redeem or sell your units on
or after September 1, 1999, you will pay the remaining balance of the deferred
sales charge for the second year. After the initial offering period, the
repurchase and cash redemption prices for units may be reduced to reflect the
estimated costs of liquidating securities to meet the redemption, currently
estimated at $0.60 per 1,000 units. If you reinvest in a new Portfolio, you will
pay your share of any brokerage commissions on the sale of underlying securities
when your units are liquidated during the rollover.
A-4
<PAGE>
- --------------------------------------------------------------------------------
Defined Portfolio
- --------------------------------------------------------------------------------
Equity Investor Fund
Concept Series
Tele-Global Trust 4 August 13, 1998
<TABLE><CAPTION>
PRICE
TICKER PERCENTAGE PER SHARE COST
NAME OF ISSUER SYMBOL OF FUND (1) TO FUND TO FUND (2)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 3Com Corporation COMS 3.04% $ 30.0000 $ 13,500.00
2. ADC Telecommunications, Inc. ADCT 2.40 29.5625 10,642.50
3. AirTouch Communications, Inc. ATI 4.69 59.5625 20,846.88
4. Aliant Communications, Inc. ALNT 1.39 28.0000 6,160.00
5. ALLTEL Corporation AT 1.68 41.5000 7,470.00
6. Aspect Telecommunications
Corporation ASPT 3.11 30.0000 13,800.00
7. AT&T Corporation T 1.80 57.0000 7,980.00
8. Bell Atlantic Corporation BEL 1.96 41.5000 8,715.00
9. BellSouth Corporation BLS 1.93 66.0000 8,580.00
10. British Telecommunications PLC* BTY 1.50 133.3750 6,668.75
11. Cable & Wireless PLC* CWP 2.28 36.2500 10,150.00
12. Century Telephone Enterprises,
Inc. CTL 2.16 47.8750 9,575.00
13. CISCO Systems, Inc. CSCO 5.99 98.5625 26,611.88
14. ECI Telecommunications Limited+ ECILF 2.55 34.3750 11,343.75
15. FORE Systems, Inc. FORE 2.07 24.1875 9,191.25
16. France Telecom S.A.* FTE 1.54 68.4375 6,843.75
17. Frontier Corporation FRO 1.30 33.8750 5,758.75
18. Harris Corporation HRS 1.27 37.5000 5,625.00
19. KPN NV* KPN 1.82 40.3750 8,075.00
20. Lucent Technologies, Inc. LU 6.11 90.4375 27,131.25
21. Nokia Corporation* NOKA 3.04 79.5000 13,515.00
22. Northern Telecom Limited++ NT 3.05 54.1250 13,531.25
23. PairGain Technologies, Inc. PAIR 1.60 13.3750 7,088.75
24. Portugal Telecom S.A.* PT 1.83 54.2500 8,137.50
25. QUALCOMM, Inc. QCOM 4.71 55.0000 20,900.00
26. SBC Communications, Inc. SBC 3.93 38.8125 17,465.63
27. Scientific-Atlanta, Inc. SFA 1.55 24.6250 6,895.00
28. Sprint Corporation FON 2.20 69.6875 9,756.25
29. Symbol Technologies, Inc. SBL 2.20 44.3750 9,762.50
30. Tele Danmark A/S* TLD 2.27 48.0625 10,093.13
31. Telecom Italia S.p.A* TI 5.30 78.5000 23,550.00
32. Telefonaktiebolaget LM
Ericsson* ERICY 2.92 24.4375 12,951.88
33. Telefonica S.A.* TEF 3.21 142.6875 14,268.75
34. Tellabs, Inc. TLAB 4.39 72.1875 19,490.63
35. US West, Inc. USW 1.94 50.7500 8,627.50
36. Vodafone Group PLC* VOD 5.27 130.1250 23,422.50
-------------------- -----------------
100.00% $ 444,125.03
-------------------- -----------------
-------------------- -----------------
</TABLE>
- ------------------------------------
(1) Based on Cost to Fund.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on August 12, 1998.
* Indicates an American Depositary Receipt ('ADR') (see Risk Factors--Foreign
Issuers in Part B).
+ This is an Israeli corporation. The current annual dividends per share, if
any, will be subject to withholding tax.
++ This is a Canadian corporation. The current annual dividends per share, if
any, will be subject to withholding tax.
------------------------------------
The securities were acquired on August 12, 1998 and are represented entirely by
contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or comanagers of a public offering of the securities in
this Fund during the last three years. Affiliates of the Sponsors may serve as
specialists in the securities in this Fund on one or more stock exchanges and
may have a long or short position in any of these securities or in options on
any of them, and may be on the opposite side of public orders executed on the
floor of an exchange where the securities are listed. An officer, director or
employee of any of the Sponsors may be an officer or director of one or more of
the issuers of the securities in the Fund. A Sponsor may trade for its own
account as an odd-lot dealer, market maker, block positioner and/or arbitrageur
in any of the securities or in
A-5
<PAGE>
options on them. Any Sponsor, its affiliates, directors, elected officers and
employee benefits programs may have either a long or short position in any
securities or in options on them.
A-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Concept Series,
Tele-Global Trust 4, Defined Asset Funds (the 'Fund'):
We have audited the accompanying statement of condition and the defined
portfolio included in the prospectus of the Fund as of August 13, 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 Fund as of August 13, 1998
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 13, 1998
STATEMENT OF CONDITION AS OF AUGUST 13, 1998
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 444,125.03
--------------------
Total.........................................$ 444,125.03
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsors for Organization Expenses(2)...$ 883.76
--------------------
Subtotal............................................... 883.76
--------------------
Interest of Holders of 448,611 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)................................... 448,588.57
Gross underwriting commissions and organization
expenses(5)(2)....................................... (5,347.30)
--------------------
Subtotal............................................... 443,241.27
--------------------
Total.........................................$ 444,125.03
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio determined by the Trustee at 4:00 p.m., Eastern time on August 12,
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 $444,324.03 and deposited with the Trustee. The amount of the letter
of credit includes $444,125.03 for the purchase of securities.
(2) A portion of the Public Offering Price consists of securities in
an amount sufficient to pay all or a portion of the costs incurred in
establishing the Portfolio. These costs have been estimated at $1.97 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 organization
expenses obligation of the investors 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 $999.95 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 August 12, 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 $17.50 per 1,000 Units
is payable each year ($2.50 per 1,000 Units February 1 and 15, 1999, and
thereafter on the first of each month through July 1, 1999 and monthly September
1, 1999-March, 2000). 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.
A-6
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INVESTOR FUND
CONCEPT SERIES TELE-GLOBAL TRUST
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
INDEX
PAGE
---------
FUND DESCRIPTION............................. 1
RISK FACTORS................................. 2
HOW TO BUY UNITS............................. 5
HOW TO REDEEM OR SELL UNITS.................. 6
EXCHANGE OPTION.............................. 7
INCOME, DISTRIBUTIONS AND REINVESTMENT....... 8
FUND EXPENSES................................ 9
TAXES........................................ 9
RECORDS AND REPORTS.......................... 12
TRUST INDENTURE.............................. 12
MISCELLANEOUS................................ 12
SUPPLEMENTAL INFORMATION..................... 15
FUND DESCRIPTION
PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Securities for the Portfolio after
considering the Fund's investment objective as well as the quality of the common
stocks, the earning and dividend payment records of the issuers, the
capitalization of the issuers and the prices of the common stocks. The screening
process included (1) identifying companies with two-year growth potential, (2)
performing a thorough fundamental financial analysis, and (3) evaluating
liquidity, market share and timeliness of purchase. This Fund is invested in
telecommunications stocks (both domestic and foreign) believed to be well
positioned to take advantage over the next two years of advances in
telecommunications technology, increasing demand for telecommunications products
and services, and global expansion of telecommunications services (particularly
from privitization of government-owned facilities). Advertising and sales
literature may contain brief descriptions of the businesses of each of the
companies in the Portfolio and Defined Asset Funds research analysis of why they
were selected, as well as a chronology of developments in the telecommunications
industry.
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. 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. 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 Fund. To minimize these effects, the
Fund will try to purchase Securities as close to the Evaluation Time or at
prices as close to the evaluated prices as possible.
1
<PAGE>
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.
PORTFOLIO SUPERVISION
The Portfolio follows a buy and hold investment strategy that buys stocks
and generally holds them for two years, in contrast to the frequent portfolio
changes of a managed fund based on economic, financial and market analyses. In
the event a public tender offer is made for a Security or a merger or
acquisition is announced affecting a Security, the Sponsor may instruct the
Trustee to tender or sell the Security in the open market when in its opinion it
is in the best interests of investors to do so. While the Portfolio is not
actively managed, the Portfolio is regularly reviewed and evaluated and
Securities may be sold in the case of adverse developments concerning a
Security, including the adverse financial condition of the issuer, the
institution of legal proceedings against the issuer, or a decline in the price
or the occurrence of other market or credit factors that might make retention of
the Security detrimental to the interest of investors or if the disposition of
these Securities is necessary in order to enable the Portfolio to make
distributions of the Portfolio's capital gain net income or desirable in order
to maintain the qualification of the Portfolio as a regulated investment company
under the Internal Revenue Code. Securities can also be sold to meet redemption
of Units. In selling Securities the Portfolio will attempt to minimize any
current tax liability for current investors. The Sponsor is also authorized to
direct the reinvestment of the proceeds of the sale of Securities, as well as
moneys held to cover the purchase of Securities pursuant to contracts which have
failed, in additional Securities, including U.S. Treasury Securities. The
Portfolio may continue to hold a Security and purchase additional shares even
though the research analyst's opinion or the assessment of a Security or sector
may have changed or subsequent to the initial date of deposit a Security may no
longer satisfy the Portfolio's selection criteria.
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 life of the Portfolio or that any future portfolios selected through this
process during consecutive two-year periods will meet their objectives. The
Portfolio is not designed to be a complete investment program.
THE TELECOMMUNICATIONS INDUSTRY
The companies whose securities are included in the Portfolio are engaged in
providing local, long-distance, wireless, cable television and internet
services, in the manufacture of telecommunications products and in a wide range
of other activities including directory publishing, information systems and the
operation of voice, data and video telecommunications networks.
General. Payment on common stocks of companies in the telecommunications
industry, including local, long-distance, wireless, cable television and
internet services, the manufacture of telecommunications equipment, and other
ancillary services, is generally dependent upon the amount and growth of
customer demand, the level of rates permitted to be charged by regulatory
authorities and the effects of inflation on the cost of providing services and
the rate of technological innovation. The domestic telecommunications industry
is characterized by increasing competition in all sectors and regulation by the
Federal Communications Commission and various state regulatory authorities. To
meet increasing competition, companies may have to commit substantial capital,
particularly in the formulation of new products and services using new
technology. Telecommunications companies in both developed and emerging
countries are undergoing significant change due to varying and evolving levels
of governmental regulation or deregulation and other factors. As a result,
competitive pressures are intense and the securities of such companies may be
subject to significant price volatility. In addition, all telecommunications
companies in both developed and
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emerging countries are subject to the additional risk that technological
innovations will make their products and services obsolete.
The Telecommunications Act of 1996. The Telecommunications Act of 1996;
Communication Decency Act of 1996 (the 'Communications Act'), which became law
on February 8, 1996, permits greater competition in the local and long distance
telephone and equipment manufacturing markets. In addition, it changed the
regulatory structure governing the Regional Bell Operating Companies ('RBOCs')
from one based on rate of return to one based on price. The overall impact of
the Communications Act on the Portfolio is uncertain as full competition has not
yet set in.
Regional Bell Operating Companies. The Portfolio contains securities of the
five RBOCs. These corporations were spun off from AT&T in 1984. The RBOCs are
seeking to increase profits through the development and sale of new
high-margined products, such as caller ID, voicemail, call return, call waiting
and interactive multimedia, to their existing customer base. To the extent that
the demand for such products is less than anticipated, the price of securities
of RBOCs could be adversely affected. Many of the RBOCs are also aggressively
looking to expand into overseas markets through both direct and indirect
investment. The impact of this expansion on the price of securities of the RBOCs
is uncertain.
Wireless Telephone Companies. Wireless telephone companies provide wireless
services including paging, dispatch, cellular and Personal Communication Systems
('PCS') services throughout the United States and abroad. Most of the RBOCs as
well as long distance companies are seeking to increase their share of the
wireless market in view of perceived future growth prospects. It is unclear what
effect, if any, increased competition between wireless and traditional telephone
services will have on the Portfolio.
Telecommunications Equipment Manufacturers. While the worldwide market for
telecommunications equipment is expected to grow, the overall effect on the
Portfolio of factors such as competing technologies, increasing capital
requirements, protectionist actions by foreign governments and demand for new
technologies, is impossible to predict.
International Companies. The international companies in the Portfolio
consist predominantly of former government owned telecommunications systems that
have been privatized in stages. The Sponsors cannot predict whether such
privatization will continue in the future or what, if any, effect this will have
on the Portfolio.
FOREIGN ISSUERS
Certain of the Securities in a Portfolio may consist of securities of
foreign issuers. An investment in such a Fund involves some investment risks
that are different in some respects from an investment in a fund that invests
entirely in securities of domestic issuers. Those investment risks include
future political and economic developments and the adoption of withholding
taxes, exchange controls or other restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Securities. In
addition, there may be less publicly available information than is available
from a domestic issuer and foreign issuers are not necessarily subject to
uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. In addition,
earnings and dividends for foreign companies are in non-U.S. currencies.
Therefore, the U.S. dollar value of the stock and dividends for these issuers
will vary with fluctuations in the U.S. dollar foreign exchange rates for the
relevant currencies. Most foreign currencies have fluctuated widely in value
against the U.S. dollar for many reasons, including supply and demand for the
respective currency, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and other
countries.
American Depositary Shares and Receipts. Securities of foreign issuers may
be purchased in ADR form in the United States. ADRs evidence American Depositary
Shares which represent common stock deposited with a custodian in a depositary.
American Depositary Shares (ADSs) and receipts therefor (ADRs) are issued by an
American bank or trust company to evidence ownership of underlying securities
issued by a foreign corporation. These instruments may not necessarily be
denominated in the same currency as the securities into which they may be
converted. Generally, ADSs and ADRs are designed for use in the United States
securities markets. For purposes of this Prospectus, the term ADR generally
includes ADSs.
The terms and conditions of depositary facilities may result in less
liquidity or lower market prices for ADRs than for the underlying shares. For
those Securities that are ADRs, currency fluctuations will also affect the U.S.
dollar equivalent of the local currency price of the underlying domestic share
and, as a result, are likely to affect the value of the ADRs and consequently
the value of the Securities.
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LIQUIDITY
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Fund may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsors. The
price at which the Securities may be sold to meet redemptions and the value of
the Fund will be adversely affected if trading markets for the Securities are
limited or absent.
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 Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation 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. 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 will be
based on factors such as the size of the Portfolio relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus.
Notice of impending termination will be provided to 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 which
will aggregate 2.75% of the public offering price for the first year ($17.50
Deferred Sales Charge plus an Initial Sales Charge of about 1.0%, totaling 2.75%
of the public offering price) and approximately 1.75% for the second year.
Because the annual Deferred Sales Charge is $17.50 per 1,000 Units in the second
year regardless of the price you pay, the maximum sales charges expressed as a
percentage of the public offering price will vary with the price you pay. For
example, if you buy 1,000 Units for $1,050 (including an initial sales charge of
$11.38) and hold the Units until termination, you will pay a total sales charge
of $46.38 or 4.42% of the acquisition price on those Units. At an acquisition
price of $950 (including an initial sales charge of $8.63), you would pay a
total sales charge of $43.63 or 4.59% of the acquisition price.
For quantity purchases of units 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 will apply (assuming a $1,000 public
offering price for 1,000 Units):
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<TABLE><CAPTION>
SALES CHARGES IN FIRST YEAR CUMULATIVE SALES
DEALER CONCESSION CHARGES
-------------------------------------------------------------------
AS % OF
PUBLIC OFFERING
PRICE -------------------
AS % OF PUBLIC AS % OF NET ----------------------- AS % OF PUBLIC
AMOUNT PURCHASED OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- -------------------------- ----------------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Less than $50,000 2.75% 2.778% 2.00% 4.50%
$50,000 to $99,999 2.50 2.519 1.80 4.25
$100,000 to $249,999 2.00 2.005 1.45 3.75
$250,000 to $999,999 1.75 1.750 1.25 3.50
$1,000,000 or more 1.00 1.000 .50 2.75
</TABLE>
AS % OF PUBLIC
AMOUNT PURCHASED OFFERING PRICE
- -------------------------- ---------------------
Less than $50,000 4.712%
$50,000 to $99,999 4.439
$100,000 to $249,999 3.896
$250,000 to $999,999 3.627
$1,000,000 or more 2.828
In addition, a portion of the Public Offering Price also consists of securities
in an amount sufficient to pay for all or a portion of the costs incurred in
establishing the Portfolio, including the costs 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.
The annual Deferred Sales Charge is a charge of $17.50 per 1,000 units and
is accrued in seven monthly installments each year of the Portfolio, in the
months indicated in part A of this Prospectus. Units redeemed or repurchased
prior to the accrual of the final Deferred Sales Charge installment in the first
or second year will have the amount of any remaining installments deducted from
the redemption or repurchase proceeds or deducted in calculating an in-kind
redemption, although this deduction will be waived in the event of the death or
disability (as defined in the Internal Revenue Code) of an investor.
It is anticipated that Securities will not be sold to pay the Deferred
Sales Charge until after the date of the last installment in each year of the
Portfolio. 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. In selling Securities the
Portfolio will attempt to minimize any current tax liability for current
investors.
Selling dealers will be entitled to the concession stated in the table
above on Units sold or redeemed during the first year. On Units held in the
second year of the Portfolio, the selling dealer will be entitled to an
additional concession of $11 per 1,000 Units ($5 per 1,000 Units for purchases
of $1 million or more). Employees of certain Sponsors and Sponsor affiliates and
non-employee directors of certain of the Sponsors may purchase Units at a
reduced sales charge.
Commercial banks and their securities broker subsidiaries that have
agreements with the Sponsors may make Units available to their customers as
their agents. A portion of the sales charge (equal to the dealer commission
referred to above) will be retained or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Units; however, the
Glass-Steagall Act permits banks to act as agents of their customers on a
disclosed basis and federal banking regulations have approved similar
arrangements. In addition, state securities laws on this issue may differ from
the interpretation of federal law expressed above and banks and financial
institutions may be required to register as dealers pursuant to state law.
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').
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<PAGE>
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
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 Fund
Description--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.
6
<PAGE>
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.
EXCHANGE OPTION
You may exchange Units for units of Select or Focus Portfolios 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 Units, subject only to
the 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 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 or to
offer successor portfolios, there can be no assurance that units can be
exchanged. The Exchange Option may be amended or terminated at any time without
notice.
ROLLOVER
In lieu of redeeming their Units or receiving liquidation proceeds upon the
termination of the Fund, investors may elect, by written notice to the Trustee
prior to the rollover notification date indicated in Part A, to apply their
proportional interest in the Securities and other assets of the Fund toward the
purchase of units of a new portfolio (if available). It is expected that the
terms of any new portfolio, including this rollover feature, will be
substantially the same as those of the Fund.
A rollover of an investor's units is accomplished by the in-kind redemption
of his Units of the Fund followed by the sale of the underlying Securities by a
distribution agent on behalf of participating investors and the reinvestment of
the sale proceeds (net of brokerage fees, governmental charges and other sale
expenses) in units of the new portfolio at their net asset value.
The Sponsors intend to sell the distributed Securities, on behalf of the
distribution agent, as quickly as practicable and then to create units of the
new portfolio as quickly as possible, subject in both cases to the Sponsors'
sensitivity that the concentrated sale and purchase of large volumes of
securities may affect market prices in a manner adverse to the interest of
investors. Accordingly, the Sponsors may, in their sole discretion, undertake a
more gradual sale of the distributed Securities and a more gradual creation of
units of the new portfolio to help mitigate any negative market price
consequences caused by this large volume of securities trades. There can be no
assurance, however, that this procedure will be successful or might not result
in less advantageous prices than had this procedure not been practiced at all.
Pending the investment of rollover proceeds in the securities to comprise the
new portfolio, those moneys may be uninvested for up to several days. For those
Securities in the Portfolio that will also be in the new portfolio, a direct
sale of those securities between the two funds is now permitted pursuant to an
SEC exemptive order. These sales will be effected at the securities' closing
sale prices on the exchanges where they are principally traded, free of any
brokerage costs.
By participating in the rollover you may realize taxable capital gain on
the rollover but might not be entitled to a deduction for capital loss
recognized on the rollover. Because of the rollover procedures, you will not
receive a cash distribution with which to pay the taxes on any such capital
gain. You should consult your own tax advisers in this regard. Investors who do
not participate will continue to hold their Units until the termination of the
Portfolio; however, depending upon the extent of participation in the rollover,
the aggregate size of the Portfolio may be sharply reduced resulting in a
significant increase in per Unit expenses.
The Sponsors may, in their sole discretion and without penalty or liability
to investors, decide not to sponsor a new portfolio or to modify the terms of
the rollover. Prior notice of any decision would be provided to investors.
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<PAGE>
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 net annual income per Unit will depend primarily upon the amount of
dividends declared and paid by the issuers of the Securities and changes in the
expenses of the Fund and, to a lesser degree, upon the level of purchases of
additional Securities and sales of Securities. There is no assurance that
dividends on the Securities will continue at their current levels or be declared
or paid.
Each Unit receives an equal share of distributions of dividend income.
Because dividends on the Securities are not received at a constant rate
throughout the year, any income distribution may be more or less than the amount
then credited to the Income Account. Dividends payable to the Fund are credited
to an Income Account, as of the date on which the Fund is entitled to receive
the dividends, and other receipts are credited to a Capital Account. A Reserve
Account may be created by withdrawing from the Income and Capital Accounts
amounts considered appropriate by the Trustee to reserve for any material amount
that may be payable out of the Fund. Funds held by the Trustee in the various
accounts do not bear interest. Dividend income per Unit received by the Fund and
available for distribution and the distributable balance in the Capital Account
per Unit (other than capital gains) as of any particular record day will be
distributed on or shortly after the related distribution day to the holders of
record on that record day, provided that no distribution from the Capital
Account is required unless the distributable balance therein (excluding capital
gains) is at least $5.00 per 1,000 Units. There is no assurance that actual
distributions will be made since all dividends received may be used to pay
expenses.
An amount equal to any capital gain net income (i.e. the excess of capital
gains over capital losses recognized by the Fund in any taxable year) will be
distributed shortly after the end of the year. In order to meet certain tax
requirements the Fund may make a special distribution of income, including
capital gains, to holders of record as of a date in December. Proceeds received
from the disposition of any of the Securities which are not used to make the
distribution of capital gain net income, for redemption of Units or reinvested
in additional Securities will be held in the Capital Account to be distributed
on the next succeeding distribution day.
REINVESTMENT
Income and principal distributions on Units may be reinvested by
participating in the Fund's 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. Purchases
made pursuant to the Reinvestment Plan will be made without initial sales charge
at the net asset value for Units of the Fund (but will be subject to
subsequently deducted deferred sales charges). Under the Reinvestment Plan, the
Fund will pay the distributions to the Trustee which in turn will purchase for
the investor full and fractional Units of the Fund at the price determined as of
the close of business on the distribution day and will add the Units to the
investor's account and send the investor an account statement reflecting the
reinvestment. 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.
FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Portfolio.
The estimated expenses do not include any brokerage commissions payable by the
Portfolio in buying and selling securities. The Trustee's fee shown in Part A of
this Prospectus assumes that the Portfolio will reach a size estimated by the
Sponsors and are based on a sliding 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 Fund in non-interest bearing accounts. Possible additional charges
include Trustee fees and expenses for extraordinary services, costs of
indemnifying the Trustee and the Sponsors, costs of action taken to protect the
Portfolio and other legal fees and expenses, Fund termination expenses and any
governmental charges. The Trustee has a lien on Fund assets to secure
reimbursement of these amounts and may sell Securities for this purpose if cash
is not available. The Sponsors receive an annual fee currently estimated at
$0.45 per 1,000
8
<PAGE>
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
TAXATION OF THE FUND
The Portfolio intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Sections 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If the Portfolio
qualifies as a 'regulated investment company' and distributes to investors 90%
or more of its taxable income, excluding its net capital gain (i.e., the excess
of its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on the portion of its taxable income
(including any net capital gain) it distributes to investors in a timely manner.
In addition, the Portfolio will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to investors in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that the Portfolio will not
be subject to Federal income tax or the excise tax, because the Indenture
requires the distribution of the Portfolio's taxable income (including any net
capital gain) in a timely manner. Although all or a portion of the Portfolio's
taxable income (including any net capital gain) for any calendar year may be
distributed shortly after the end of the calendar year, such a distribution will
be treated for Federal income tax purposes as having been received by investors
during the calendar year.
DISTRIBUTIONS
Distributions to investors of the Portfolio's dividend income and net
short-term capital gain in any year will generally be taxable as ordinary income
to investors to the extent of the Portfolio's taxable income (other than taxable
income attributable to its net capital gain) for that year. Distributions in
excess of the Portfolio's taxable income will be treated as a return of capital
and will reduce the investor's basis in his Units and, to the extent that such
distributions exceed his basis, will be treated as a gain from the sale of his
Units as discussed below. It is anticipated that substantially all of the
distributions of the Portfolio's net capital gains will be designated as capital
gain dividends and that the Portfolio's dividend income and net short-term
capital gain will be taxable as ordinary income to investors.
Distributions that are taxable as ordinary income to investors will
constitute dividends for federal income tax purposes. Certain corporate
investors will be eligible for the 70% dividends-received deduction to the
extent that the distributions are appropriately designated by the Portfolio and
are attributable to eligible dividends received by the Portfolio from domestic
issuers with respect to whose Securities the Portfolio satisfies the
requirements for the dividends-received deduction. 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. Depending upon the particular corporate investor's
circumstances, additional limitations on the availability of the
dividends-received deduction may be applicable. Further, legislative and
regulatory proposals arise from time to time that may adversely affect the
after-tax returns to investors taking advantage of the deduction. Investors are
urged to consult their own tax advisers in this regard.
Distributions of the Portfolio's net capital gain that are designated as
capital gain dividends by the Portfolio will be taxable to investors as
long-term capital gain, regardless of the time the investor has held his Units.
However, if the Portfolio were to terminate in less than one year, the Portfolio
would not distribute any capital gain dividends.
An investor, other than a dealer in securities, will generally recognize
capital gain or loss when the investor disposes of his Units (by sale,
redemption or otherwise). In the case of a distribution of Securities to an
investor upon redemption of his Units, capital gain or loss will generally be
recognized in an amount equal to the difference between the investor's tax basis
in his Units and the fair market value of the Securities received in redemption.
Capital gain or loss is long-term if the asset is held for more than one year
and short-term if held one year or less. However, any capital
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loss on the sale or redemption of a Unit that an investor has held for six
months or less will be a long-term capital loss to the extent of any capital
gain dividends previously distributed to the investor by the Portfolio. The
deduction of capital losses is subject to limitations. Noncorporate investors
who have held their Units for more than 12 months may be entitled to a 20%
maximum federal tax rate for gains from the sale or redemption of these Units.
Investors should consult their tax advisers regarding these matters.
Any dividends received by the Fund from foreign issuers will in most cases
be subject to foreign withholding taxes, which will generally be reduced, though
not eliminated, by treaties between the United States and the relevant foreign
country. The Fund will not be eligible for an election that would enable
investors to credit foreign withholding taxes against their federal income tax
liability on distributions by the Fund.
The investor's basis in his Units will be equal to 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 relevant tax reporting forms received by investors will
reflect the actual amounts paid to them, net of the deferred sales charge.
Accordingly, investors should not increase their basis in their Units by the
deferred sales charge amount.
Investors will be taxed in the manner described above regardless of whether
distributions from the Portfolio are actually paid to the investor or are
reinvested. The federal tax status of each year's distributions will be reported
to investors and to the Internal Revenue Service. The Portfolio intends to
report to each investor, no later than January 31, the amount of distributions
to that investor.
The foregoing discussion summarizes only certain U.S. federal 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 dividend
distributions by the Portfolio (other than capital gain dividends). 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.
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.
Holders of Units in IRAs, Keogh plans and other tax-deferred retirement plans
should consult their plan custodian as to the appropriate disposition of
distributions. Investors considering participation in any 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
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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. Subject to certain income limitations, under a special type
of IRA, 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 Fund,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of
the Fund, the Trustee sends each investor of record a statement summarizing
transactions in the Fund's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price per
1,000 Units at termination, and the fees and expenses paid by the Fund, among
other matters. Fund accounts may be audited by independent accountants selected
by the Sponsors and any report of the accountants will be available from the
Trustee on request.
TRUST INDENTURE
The Fund 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 Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the 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 Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.
The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limitingthe liability of the Trustee.
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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 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. 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 Portfolio could be
adversely affected if the computer systems used by the Agent for the Sponsors or
Portfolio 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 Portfolio. The Agent
for the Sponsors has sought assurances from the Portfolio'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 Portfolio's other service providers have anticipated every
step necessary to avoid any adverse effect on the Portfolio 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 or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. 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.
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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 Fund (based on the
aggregate value of the Securities on their date of deposit) and the purchase
price of the Securities to the Sponsors plus commissions payable by the
Sponsors. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Securities it deposits in the Fund which were acquired from
underwriting syndicates of which it was a member. During the initial offering
period, the Underwriting Account also may realize profits or sustain losses as a
result of fluctuations after the initial date of deposit in the Public Offering
Price of the Units. In maintaining a secondary market for Units, the Sponsors
will also realize profits or sustain losses in the amount of any difference
between the prices at which they buy Units and the prices at which they resell
these Units (which include the sales charge) or the prices at which they redeem
the Units. Cash, if any, made available by buyers of Units to the Sponsors prior
to a settlement date for the purchase of Units may be used in the Sponsors'
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
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of dividends and capital gains
reinvested, may be included from time to time in advertisements, sales
literature, reports and other information furnished to current or prospective
investors. Total return figures are not averaged, and may not reflect deduction
of the sales charge, which would decrease the return. Average annualized return
figures reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance of any series may not be indicative of results of future
series. Fund performance may be compared to the performance of the DJIA, the S&P
500 Composite Price Stock Index, the S&P MidCap 400 Index, or performance data
from publications such as Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Money Magazine, The New York Times, U.S. News and World
Report, Barron's, Business Week, CDA Investment Technology, Inc., Forbes
Magazine or Fortune Magazine. Performance of the Stocks may be compared in sales
literature to performance of the S&P 500 Stock Price Composite Index, to which
may be added by year various national and international political and economic
events, and certain milestones in price and market indicators and in offerings
of Defined Asset Funds. This performance may also be compared for various
periods with an investment in short-term U.S. Treasury securities; however, the
investor should bear in mind that Treasury securities are fixed income
obligations, having the highest credit characterisitics, while the Stocks
involve greater risk because they have no maturities, and income thereon is
subject to the financial condition of, and declaration by, the issuers. Sales
literature may also describe certain historic milestones of the
telecommunications industry.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, 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.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
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SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
the Fund, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Fund.
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Defined
Asset FundsSM
SPONSORS: EQUITY INVESTOR FUND
Merrill Lynch, CONCEPT SERIES
Pierce, Fenner & Smith IncorporatedTELE-GLOBAL TRUST 4
Defined Asset Funds
P.O. Box 9051
Princeton, N.J. 08543-9051 This Prospectus does not contain all of the
(609) 282-8500 information with respect to the investment
Smith Barney Inc. company set forth in its registration
Unit Trust Department statement and exhibits relating thereto which
388 Greenwich Street--23rd Floor have been filed with the Securities and
New York, NY 10013 Exchange Commission, Washington, D.C. under
(212) 816-4000 the Securities Act of 1933 and the Investment
PaineWebber Incorporated Company Act of 1940, and to which reference
1200 Harbor Blvd. is hereby made.
Weehawken, N.J. 07087 ------------------------------
(201) 902-3000 No person is authorized to give any
Dean Witter Reynolds Inc. information or to make any representations
Two World Trade Center--59th Floor with respect to this investment company not
New York, N.Y. 10048 contained in its registration statement and
(212) 392-2222 exhibits relating thereto; and any
TRUSTEE: information or representation not contained
The Bank of New York therein must not be relied upon as having
P.O. Box 974 been authorized.
Wall St. Division ------------------------------
New York, N.Y. 10268-0974 When Units of this Fund are no longer
1-800-221-7771 available 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.
70102--8/98
