<PAGE>
DEFINED ASSET FUNDSSM
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EQUITY INVESTOR FUND
SELECT TEN PORTFOLIO
1999 SERIES 5
(A UNIT INVESTMENT TRUST)
O TOTAL RETURN FROM:
-- CAPITAL APPRECIATION
-- CURRENT DIVIDEND INCOME
O 10 HIGHEST DIVIDEND YIELDING DOW STOCKS
O OPTIONAL REINVESTMENT OF CASH DISTRIBUTIONS
-------------------------------------------------
SPONSORS: The Securities and Exchange Commission has not
Merrill Lynch, approved or disapproved these Securities or
Pierce, Fenner & Smith passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
Salomon Smith Barney Inc. offense.
PaineWebber Incorporated Prospectus dated November 22, 1999.
<PAGE>
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Defined Asset FundsSM
DEFINED ASSET FUNDSSM IS AMERICA'S OLDEST AND LARGEST FAMILY OF UNIT INVESTMENT
TRUSTS, WITH OVER $160 BILLION SPONSORED OVER THE LAST 28 YEARS. DEFINED ASSET
FUNDS HAS BEEN A LEADER IN UNIT INVESTMENT TRUST RESEARCH AND PRODUCT
INNOVATION. OUR FAMILY OF FUNDS HELPS INVESTORS WORK TOWARD THEIR FINANCIAL
GOALS WITH A FULL RANGE OF QUALITY INVESTMENTS, INCLUDING MUNICIPAL, CORPORATE
AND GOVERNMENT BOND PORTFOLIOS, AS WELL AS DOMESTIC AND INTERNATIONAL EQUITY
PORTFOLIOS.
DEFINED ASSET FUNDS OFFER A NUMBER OF ADVANTAGES:
O A DISCIPLINED STRATEGY OF BUYING AND HOLDING WITH A LONG-TERM VIEW IS THE
CORNERSTONE OF DEFINED ASSET FUNDS.
O FIXED PORTFOLIO: DEFINED FUNDS FOLLOW A BUY AND HOLD INVESTMENT STRATEGY;
FUNDS ARE NOT MANAGED AND PORTFOLIO CHANGES ARE LIMITED.
O DEFINED PORTFOLIOS: WE CHOOSE THE STOCKS AND BONDS IN ADVANCE, SO YOU KNOW
WHAT YOU'RE INVESTING IN.
O PROFESSIONAL RESEARCH: OUR DEDICATED RESEARCH TEAM SEEKS OUT STOCKS OR
BONDS APPROPRIATE FOR A PARTICULAR FUND'S OBJECTIVES.
O ONGOING SUPERVISION: WE MONITOR EACH PORTFOLIO ON AN ONGOING BASIS.
NO MATTER WHAT YOUR INVESTMENT GOALS, RISK TOLERANCE OR TIME HORIZON, THERE'S
PROBABLY A DEFINED ASSET FUND THAT SUITS YOUR INVESTMENT STYLE. YOUR FINANCIAL
PROFESSIONAL CAN HELP YOU SELECT A DEFINED ASSET FUND THAT WORKS BEST FOR YOUR
INVESTMENT PORTFOLIO.
CONTENTS
PAGE
-----------
RISK/RETURN SUMMARY..................................... 3
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT................ 8
INCOME............................................... 8
RECORDS AND REPORTS.................................. 8
THE RISKS YOU FACE...................................... 8
LITIGATION AND LEGISLATION RISKS..................... 8
SELLING OR EXCHANGING UNITS............................. 9
SPONSORS' SECONDARY MARKET........................... 9
SELLING UNITS TO THE TRUSTEE......................... 9
ROLLOVER/EXCHANGE OPTION............................. 10
HOW THE FUND WORKS...................................... 11
PRICING.............................................. 11
EVALUATIONS.......................................... 11
INCOME............................................... 11
EXPENSES............................................. 12
PORTFOLIO CHANGES.................................... 12
PORTFOLIO TERMINATION................................ 12
NO CERTIFICATES...................................... 13
TRUST INDENTURE...................................... 13
LEGAL OPINION........................................ 14
AUDITORS............................................. 14
SPONSORS............................................. 14
TRUSTEE.............................................. 14
UNDERWRITERS' AND SPONSORS' PROFITS.................. 14
PUBLIC DISTRIBUTION.................................. 14
CODE OF ETHICS....................................... 15
YEAR 2000 ISSUES..................................... 15
ADVERTISING AND SALES MATERIAL....................... 15
TAXES................................................... 16
SUPPLEMENTAL INFORMATION................................ 17
FINANCIAL STATEMENTS.................................... 18
REPORT OF INDEPENDENT ACCOUNTANTS.................... 18
STATEMENT OF CONDITION............................... 18
2
<PAGE>
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RISK/RETURN SUMMARY
1. WHAT IS THE PORTFOLIO'S OBJECTIVE?
O The Portfolio seeks total return through a combination of
current dividend income and capital appreciation.
You can participate in the Portfolio by purchasing units.
Each unit represents an equal share of the stocks in the
Portfolio and receives an equal share of dividend income.
2. WHAT IS THE PORTFOLIO'S INVESTMENT STRATEGY?
O Its strategy is to invest in a fixed portfolio of
approximately equal amounts of the 10 highest
dividend-yielding common stocks of the 30 stocks in the Dow
Jones Industrial Average, as of three business days prior
to the date of this prospectus.
O The Portfolio plans to hold the stocks in the Portfolio for
about one year. At the end of the year, we will liquidate
the Portfolio and apply the same Strategy to select a new
portfolio, if available.
o Each Select Ten Portfolio is designed to be part of a
longer term strategy. We believe that more consistent
results are likely if the Strategy is followed for at least
three to five years but you are not required to stay with
the Strategy or to roll over your investment. You can sell
your units any time.
3. WHAT INDUSTRIES ARE REPRESENTED IN THE PORTFOLIO?
Based upon the principal business of each issuer and
current market values, the Portfolio represents the
following industries:
APPROXIMATE
PORTFOLIO
PERCENTAGE
o Telecommunications 20%
o Auto Manufacturing 10
o Chemical Products 10
o Financial Services/Banking 10
o Machinery-Construction & Mining 10
o Diversified Manufacturing Operations 10
o Oil/Gas 10
o Photo Equipment/Supplies 10
o Tobacco/Food Processing 10
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o The common stocks in the Portfolio generally have
attributes that have caused them to have lower prices or
higher dividend yields relative to the other stocks in the
DJIA.
For example:
-- the issuers may be having financial problems;
-- the stocks may be out of favor with the market because
of weak performance, poor earnings forecasts, negative
publicity or litigation/legislation; and
-- the stocks may be reacting to general market cycles.
o The market factors that caused the relatively low prices
and high dividend yields of the stocks may not change.
o Stock prices can be volatile.
o Dividend rates on the stocks or share prices may decline
during the life of the Portfolio.
3
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Defined Portfolio
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Equity Investor Fund
Select Ten Portfolio 1999 Series 5
Defined Asset Funds
<TABLE>
<CAPTION>
PRICE
TICKER PERCENTAGE CURRENT PER SHARE COST
NAME OF ISSUER* SYMBOL OF PORTFOLIO (1) DIVIDEND YIELD (2) TO PORTFOLIO TO PORTFOLIO (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Philip Morris Companies, Inc. MO 10.03% 7.46% $ 25.7500 $ 49,955.00
2. General Motors Corporation GM 10.08 2.87 69.7500 50,220.00
3. J.P. Morgan & Company, Inc. JPM 9.88 2.86 138.6250 49,211.88
4. Eastman Kodak Company EK 10.02 2.68 65.6250 49,875.00
5. Caterpillar, Inc. CAT 9.88 2.64 49.1875 49,187.50
6. Du Pont (E.I.) De Nemours &
Company DD 9.93 2.29 61.0625 49,460.63
7. Exxon Corporation XON 10.08 2.21 79.6875 50,203.13
8. Minnesota Mining & Manufacturing
Company MMM 10.07 2.19 102.3125 50,133.13
9. SBC Communications, Inc. SBC 10.03 1.89 51.5000 49,955.00
10. AT&T Corporation T 10.00 1.89 46.5625 49,821.88
----------------- -----------------
100.00% $ 498,023.15
----------------- -----------------
----------------- -----------------
</TABLE>
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* We chose the 10 highest dividend-yielding stocks of the DJIA subject to any
appropriate adjustment to take into account mergers, announcements and other
factors.
(1) Based on Cost to Portfolio.
(2) Current Dividend Yield for each security was calculated by annualizing the
last monthly, quarterly or semi-annual ordinary dividend declared on the
security and dividing the result by its market value as of the close of
trading on November 19, 1999.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on November 19, 1999, the business day prior to the initial
date of deposit. The value of the Securities on any subsequent business day
will vary.
------------------------------------
The securities were acquired on November 19, 1999 and are represented entirely
by contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or co-managers of a public offering of the securities in
this Portfolio during the last three years. Affiliates of the Sponsors may serve
as specialists in the securities in this Portfolio on one or more stock
exchanges and may have a long or short position in any of these securities or
options on any of them, and may be on the opposite side of public orders
executed on the floor of an exchange where the securities are listed. An
officer, director or employee of any of the Sponsors may be an officer or
director of one or more of the issuers of the securities in the Portfolio. A
Sponsor may trade for its own account as an odd-lot dealer, market maker, block
positioner and/or arbitrageur in any of the securities or in options on them.
Any Sponsor, its affiliates, directors, elected officers and employee benefits
programs may have either a long or short position in any securities or in
options on them.
------------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
PROSPECTUS
FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT
STOCKS FROM THOSE DESCRIBED ABOVE.
<PAGE>
RISK/RETURN SUMMARY (Continued)
o The Portfolio may continue to purchase or hold the stocks
originally selected even though their market value or yield
may have changed or they may no longer be included in the
DJIA.
o Portfolio performance may vary from the Dow Jones
Industrial Average performance or the historical
performance of the Strategy.
o The Portfolio does not reflect any investment
recommendations of the Sponsors, and any one or more of the
stocks in the Portfolio may, from time to time, be subject
to sell recommendations from one or more of the Sponsors.
5. IS THIS PORTFOLIO APPROPRIATE FOR YOU?
Yes, if you want current dividend income and capital
appreciation. You will benefit from a professionally
selected and supervised portfolio whose risk is reduced by
investing in equity securities of different issuers in a
variety of industries.
The Portfolio is not appropriate for you if you are not
comfortable with the Strategy or are unwilling to take the
risk involved with an equity investment. It may not be
appropriate for you if you are seeking preservation of
capital or high current income.
6. WHAT ARE THE PORTFOLIO'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Portfolio.
ESTIMATED ANNUAL OPERATING
EXPENSES
AMOUNT
AS A % OF PER 1,000
NET ASSETS UNITS
---------- -----------
.070% $ 0.69
Trustee's Fee
.071% $ 0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees
.010% $ 0.10
Other Operating Expenses
---------- -----------
.151% $ 1.49
TOTAL
ORGANIZATION COSTS per 1,000 units $ 0.62
(deducted from Portfolio assets at
the close of the initial offering
period)
INVESTOR FEES
2.75%
Maximum Sales Fee (Load) on new
purchases (as a percentage of $1,000
invested)
You will pay an up-front sales fee of approximately 1.00%,
as well as a total deferred sales fee of $17.50 ($1.75 per
1,000 units deducted from the Portfolio's net asset value
on February 1, 2000, and thereafter on the first of each
month through November 1, 2000.
The maximum sales fees are as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
---------------------------------- -----------------
Less than $50,000 2.75%
$ 50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 or more 1.00%
EXAMPLE
This example may help you compare the cost of investing in
the Portfolio to the cost of investing in other funds.
The example assumes that you invest $10,000 in the
Portfolio for the periods indicated and sell all your units
at the end of those periods. The example also assumes a 5%
return on your investment each year and that the
Portfolio's operating expenses stay the same. Although your
actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
$299 $715 $1,157 $2,384
4
<PAGE>
7. HOW HAVE SELECT TEN PORTFOLIOS PERFORMED IN THE PAST?
The following table shows the actual annualized pre-tax returns to
investors who bought prior Portfolios beginning in 1991 and who rolled over
their investment into new Portfolios as they became available. The returns
assume that investors reinvested all dividends and paid the maximum sales fees.
The table also shows returns for the latest completed portfolios (through
termination, not rollover), which are, in some cases, higher than the cumulative
performance figures because market prices have declined since their completion
dates. These figures reflect terminations through the quarter ended September
30, 1999. Of course, past performance is no guarantee of future results.
CUMULATIVE PERFORMANCE
(INCLUDING ANNUAL
LATEST COMPLETED PORTFOLIO
ROLLOVERS) THROUGH
9/30/99
-------------------------
STARTING ANNUALIZED ----------------------------ANNUALIZED
SERIES DATE RETURN TERM RETURN
- --------- ------------ ----------- ------------------------- -----------
A 01/03/92 14.40% 01/28/98-03/05/99 5.33%
B 05/17/91 14.12 06/01/98-07/09/99 6.82
C 09/01/92 17.42 09/22/97-10/23/98 6.79
3 07/22/96 15.93 08/03/98-09/10/99 11.05
5 11/01/96 13.00 11/10/97-12/18/98 6.66
J 01/02/97 10.31 01/06/98-02/08/99 8.80
1 02/25/97 9.47 03/02/98-04/09/99 2.65
2 04/28/97 8.71 05/04/98-06/04/99 2.47
4 09/03/97 6.72 09/03/97-10/02/98 2.02
5
<PAGE>
8. HOW WOULD THE STRATEGY HAVE PERFORMED HISTORICALLY?
The following table compares constructed performance of the Strategy Stocks (but
not of any actual Portfolio) with actual performance of the Dow Jones Industrial
Average. Portfolio performance may vary from that of the index shown below for a
variety of reasons. For example, the Portfolio has invested in a limited subset
of index stocks, and therefore its performance may not keep pace with index
performance to the extent the index is driven by stocks not held in the
Portfolio. In addition, the Portfolio stocks may have been chosen for specific
characteristics that are at odds with the characteristics of the stocks driving
the market at a given time. For example, we may have chosen value stocks at a
time when growth stocks are performing well. Furthermore, the Portfolio stocks
are equally weighted while the DJIA stocks are capitalization weighted. This
constructed performance is no assurance of future results of either the Strategy
or any Portfolio.
COMPARISON OF TOTAL RETURNS(1)
(STRATEGY FIGURES REFLECT DEDUCTION OF SALES FEES AND EXPENSES)
DOW JONES
YEAR STRATEGY (2) INDUSTRIAL AVERAGE (DJIA)
- --------------------------------- ----------------- -------------------------
1973 -4.08% -13.12%
1974 -2.40 -23.14
1975 55.65 44.40
1976 33.25 22.72
1977 -2.90 -12.71
1978 -1.91 2.69
1979 10.48 10.52
1980 24.69 21.41
1981 5.51 -3.40
1982 23.78 25.79
1983 36.93 25.68
1984 5.41 1.06
1985 27.00 32.78
1986 32.96 26.91
1987 5.06 6.02
1988 22.44 15.95
1989 25.65 31.71
1990 -10.14 -0.57
1991 31.81 23.93
1992 6.44 7.34
1993 25.30 16.72
1994 1.95 4.95
1995 34.97 36.48
1996 26.34 28.57
1997 19.92 24.78
1998 8.55 18.00
1999 (through 9/30) 5.92 13.96
25.75 YEAR AVERAGE
ANNUAL RETURN 16.52 14.53
26.75 YEAR AVERAGE
ANNUAL RETURN 15.72 13.35
- ------------------------------------
(1) To compute Total Returns, we add changes in market value and dividends that
would have been received during the year, and divide the sum by the opening
market value for the year. Return from a Portfolio will differ from
constructed Strategy returns for several reasons including the following:
o each Portfolio bears brokerage commissions in buying and selling stocks;
Strategy returns do not reflect any commissions;
o Strategy returns are for calendar years, while Portfolios begin and end
on various dates;
o units are bought and sold based on the closing stock prices on the
exchange, while Portfolios may buy and sell stocks at prices during the
trading day;
o Portfolios may not be fully invested at all times; and
o stocks in a Portfolio may not be weighted equally at all times.
(2) When we ranked the common stocks by dividend yields (as described on page
3), we based the yields on the latest dividend and the stock price at the
market opening on the first trading day of the year.
6
<PAGE>
9. IS THE PORTFOLIO MANAGED?
Unlike a mutual fund, the Portfolio is not managed and
stocks are not sold because of market changes. The Sponsors
monitor the portfolio and may instruct the Trustee to sell
securities under certain limited circumstances. However,
given the investment philosophy of the Portfolio, the
Sponsors are not likely to do so.
10. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors. The Sponsors
are listed later in this prospectus.
UNIT PRICE PER 1,000 UNITS $999.99
(as of November 19, 1999)
Unit price is based on the net asset value of the Portfolio
plus the up-front sales fee. Unit price also includes the
estimated organization costs shown on page 4, to which no
sales fee has been applied.
The Portfolio stocks are valued by the Trustee on the basis
of their closing prices at 4:00 p.m. Eastern time every
business day. Unit price changes every day with changes in
the prices of the stocks.
11. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale, less any remaining deferred
sales fee and the costs of liquidating securities to meet
the redemption.
12. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Portfolio pays distributions of any dividend income,
net of expenses, on the 25th of March, May, July and
September, 2000 if you own units on the 10th of those
months. For tax purposes, you will be considered to have
received all the dividends paid on your pro rata portion of
each security in the Portfolio when those dividends are
received by the Portfolio regardless of when you receive
Portfolio distributions and regardless of whether you
reinvest your dividends in the Portfolio. A portion of the
dividend payments may be used to pay expenses of the
Portfolio. Foreign investors' shares of dividends will
generally be subject to withholding taxes.
13. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You may choose to reinvest your distributions into
additional units of the Portfolio. You will pay only the
deferred sales fee remaining at the time of reinvestment.
Unless you choose reinvestment, you will receive your
distributions in cash.
EXCHANGE PRIVILEGES
You may exchange units of this Portfolio for units of
certain other Defined Asset Funds. You may also exchange
into this Portfolio from certain other funds. We charge a
reduced sales fee on designated exchanges.
7
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME
The Portfolio will pay to you any income it has received four times during its
life. Because the Portfolio generally pays dividends as they are received,
individual income payments will fluctuate based upon the amount of dividends
declared and paid by each issuer. Other reasons your income may vary are:
o changes in the Portfolio because of additional securities purchases or
sales;
o a change in the Portfolio's expenses; and
o the amount of dividends declared and paid.
There can be no assurance that any dividends will be declared or paid.
RECORDS AND REPORTS
You will receive:
o a notice from the Trustee if new equity securities are deposited in exchange
or substitution for equity securities originally deposited;
o a final report on Portfolio activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of income received during the year. Please contact your tax adviser in
this regard.
You may inspect records of Portfolio transactions at the Trustee's office during
regular business hours.
THE RISKS YOU FACE
LITIGATION AND LEGISLATION RISKS
Philip Morris Companies common stock represents approximately 10% of the value
of the Portfolio. Pending or threatened legal proceedings against Philip Morris
cover a wide range of matters including product liability and consumer
protection. Damages claimed in many of the smoking and health cases alleging
personal injury (both individual and class actions), and in health cost recovery
cases brought by governments, unions and similar entities (the most recent suit
was filed by the Justice Department on September 22, 1999) seeking reimbursement
for healthcare expenditures, aggregate many billions of dollars.
On November 23, 1998, Philip Morris entered into a Master Settlement Agreement
with 46 state governments to settle the asserted and unasserted healthcare cost
recovery and certain other claims against them. The Agreement is subject to
final judicial approval in each of the settling states. As part of the
Agreement, Philip Morris and the three other major domestic tobacco
manufacturers have agreed to participate in the establishment of a $5.15 billion
trust fund. The trust is to be funded over 12 years beginning in 1999. PM Inc.
has agreed to pay $300 million into the trust in 1999. Philip Morris charged
approximately $3.1 billion as a pretax expense in 1998 as a result of the
settlement, and as of December 31, 1998, had accrued costs of its obligations
under the settlement and to tobacco growers aggregating $1.4 billion, payable
principally before the end of the year 2000. Philip Morris believes the
agreement will likely materially adversely affect the business, volume, cash
flows and/or operating income and financial position of the company in future
years. The degree of the adverse impact will depend, among other things, on the
rates of decline in United States cigarette sales in the premium and discount
segments, the company's share of the domestic premium and discount cigarette
segments, and
8
<PAGE>
the effect of any resulting cost advantage of manufacturers not subject to the
agreement.
The Sponsors cannot predict the outcome of the litigation pending against Philip
Morris or how the current uncertainty concerning the settlement will ultimately
be resolved. The Sponsors cannot predict whether these and other possible
developments will have a material effect on the price of Philip Morris stock
over the term of the Portfolio, which could in turn adversely affect Unit
prices.
Other than as described above we do not know of any pending litigation that
might have a material adverse effect upon the Portfolio.
Future tax legislation could affect the value of the Portfolio by:
o reducing the dividends-received deduction or
o increasing the corporate tax rate resulting in less money available for
dividend payments.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on their net asset value.
Your net asset value is calculated each business day by:
o adding the value of the Portfolio Securities, cash and any other Portfolio
assets;
o subtracting accrued but unpaid Portfolio expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors,
and any other Portfolio liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the Portfolio.
As of the close of the initial offering period, the price you receive will be
reduced to pay the Portfolio's estimated organization costs.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining payments will be deducted from your proceeds.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
less any remaining deferred sales fee and the cost of liquidating Securities to
meet the redemption. We may resell the units to other buyers or to the Trustee.
We have maintained a secondary market continuously for more than 28 years, but
we could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by contacting your broker, dealer or financial
institution that holds your units in street name. Sometimes, additional
documents are needed such as a trust document, certificate of corporate
authority, certificate of death or appointment as executor, administrator or
guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee will sell your units in the over-the-counter market if it
believes it can obtain a higher price. In that case, you will receive the net
proceeds of the sale.
9
<PAGE>
If the Portfolio does not have cash available to pay you for the units you are
selling, the agent for the Sponsors will select securities to be sold. These
sales could be made at times when the securities would not otherwise be sold and
may result in your receiving less than you paid for your unit and also reduce
the size and diversity of the Portfolio.
If you sell units with a value of at least $250,000, you may choose to receive
your distribution 'in kind.' If you so choose, you will receive securities and
cash with a total value equal to the price of your units. The Trustee will try
to distribute securities in the portfolio pro rata, but it reserves the right to
distribute only one or a few securities. The Trustee will act as your agent in
an in-kind distribution and will either hold the securities for your account or
transfer them as you instruct. You must pay any transaction costs as well as
transfer and ongoing custodial fees on sales of securities distributed in kind.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
securities not reasonably practicable; and
o for any other period permitted by SEC order.
ROLLOVER/EXCHANGE OPTION
When this Portfolio is about to terminate, you may have the option to roll your
proceeds into the next Select Ten Portfolio if one is available.
If you hold your Units with one of the Sponsors and notify your financial
adviser by December 1, 2000, your units will be redeemed and certain distributed
securities plus the proceeds from the sale of the remaining distributed
securities will be reinvested in units of a new Select Ten Portfolio. If you
decide not to roll over your proceeds, you will receive a cash distribution (or,
if you so choose, an in-kind distribution) after the Portfolio terminates.
The Portfolio will terminate by January 5, 2001. You may, by written notice to
the Trustee at least ten business days prior to termination, elect to receive an
in-kind distribution of your pro rata share of the Securities remaining in the
Portfolio at that time (net of your share of expenses). Of course you can sell
your Units at any time prior to termination.
If you continue to hold your Units, you may exchange units of this Portfolio any
time before this Portfolio terminates for units of certain other Defined Asset
Funds at a reduced sales fee if your investment goals change. In addition, you
may exchange into this fund from certain other Defined Asset Funds. To exchange
units, you should talk to your financial professional about what Portfolios are
exchangeable, suitable and currently available.
We may amend or terminate the options to exchange your units or roll your
proceeds at any time without notice.
10
<PAGE>
HOW THE FUND WORKS
PRICING
Units are charged a combination of initial and deferred sales fees.
In addition, during the initial offering period, a portion of the price of a
unit also consists of securities to pay all or some of the costs of organizing
the Portfolio including:
o cost of initial preparation of legal documents;
o federal and state registration fees;
o initial fees and expenses of the Trustee;
o initial audit; and
o legal expenses and 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 deferred sales fee is generally a monthly charge of $1.75 per 1,000 units
and is accrued in ten monthly installments. Units redeemed or repurchased prior
to the accrual of the final deferred sales fee installment will have the amount
of any remaining installments deducted from the redemption or repurchase
proceeds or deducted in calculating an in-kind distribution, however, this
deduction will be waived in the event of the death or disability (as defined in
the Internal Revenue Code of 1986) of an investor. The initial sales fee is
equal to the aggregate sales fee less the aggregate amount of any remaining
installments of the deferred sales fee.
It is anticipated that securities will not be sold to pay the deferred sales fee
until after the date of the last installment. Investors will be at risk for
market price fluctuations in the securities from the several installment accrual
dates to the dates of actual sale of securities to satisfy this liability.
EVALUATIONS
The Trustee values the securities on each business day (i.e., any day other than
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 or, if closing sales prices are not available, at the
mean between the closing bid and offer prices.
INCOME
o The annual income per unit, after deducting estimated annual Portfolio
expenses per unit, will depend primarily upon the amount of dividends declared
and paid by the issuers of the securities and changes in the expenses of the
Portfolio and, to a lesser degree, upon the level of purchases of additional
securities and sales of securities. There is no assurance that dividends on
the securities will continue at their current levels or be declared at all.
o Each unit receives an equal share of distributions of dividend income net of
estimated expenses. Because dividends on the securities are not received at a
constant rate throughout the year, any distribution may be more or less than
the amount then credited to the income account. The Trustee credits dividends
received to an Income Account and other receipts to a Capital Account. The
Trustee may establish a reserve account by withdrawing from these accounts
amounts it considers appropriate
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to pay any material liability. These accounts do not bear interest.
EXPENSES
The Trustee is paid a fee monthly. It also benefits when it holds cash for the
Portfolio in non-interest bearing accounts. The Trustee may also receive
additional amounts:
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Portfolio and other legal fees and
expenses;
o expenses for keeping the Portfolio's registration statement current; and
o Portfolio termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 70 cents per 1,000 units annually
for providing portfolio supervisory, bookkeeping and administrative services and
for any other expenses properly chargeable to the Portfolio. While this fee may
exceed the amount of these costs and expenses attributable to this Portfolio,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
Certain of these expenses were previously paid for by the Sponsors.
The Trustee's and Sponsors' fees may be adjusted for inflation without
investors' approval.
The deferred sales fees you owe are paid from the Capital Account. Although we
may collect the deferred sales charge monthly, to keep Units more fully invested
we do not currently plan to pay the deferred sales charge until after the
rollover notification date.
The Sponsors will pay advertising and selling expenses at no charge to the
Portfolio. If Portfolio expenses exceed initial estimates, the Portfolio will
owe the excess. The Trustee has a lien on Portfolio assets to secure
reimbursement of Portfolio expenses and may sell securities if cash is not
available.
PORTFOLIO CHANGES
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we may redeem units, which may affect the
composition of the portfolio.
We decide whether to offer units for sale that we acquire in the secondary
market after reviewing:
o diversity of the Portfolio;
o size of the Portfolio relative to its original size;
o ratio of Portfolio expenses to income; and
o cost of maintaining a current prospectus.
If a Portfolio is buying or selling a stock actively traded on a national
securities exchange or certain foreign exchanges, it may buy or sell to another
Defined Asset Fund at the stock's closing sale price (without any brokerage
commmissions). The Sponsors must certify to the Portfolio's Trustee that the
transaction meets the Portfolio's investment objectives. The Trustee will review
procedures designed to assure compliance with these requirements.
PORTFOLIO TERMINATION
When the Portfolio is about to terminate, you will receive a notice, and you
will be unable to sell your units after that time. Unless you choose to receive
an in-kind distribution of securities, we will sell any remaining securities,
and you will receive your final distribution in cash.
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You will pay your share of the expenses associated with termination, including
brokerage costs in selling securities. This may reduce the amount you receive as
your final distribution.
NO CERTIFICATES
All investors are required to hold their Units in uncertificated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company.
TRUST INDENTURE
The Portfolio is a 'unit investment trust' governed by a Trust Indenture, a
contract among the Sponsors and the Trustee, which sets forth their duties and
obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Portfolio without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties;
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities; or
o the Sponsors determine that its replacement is in your best interest.
Investors holding 51% of the units may remove the Trustee. The Trustee may
resign or be removed by the Sponsors without the consent of investors. The
resignation or removal of the Trustee becomes effective when a successor accepts
appointment. The Sponsors will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee may petition a court to appoint a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Portfolio; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee and the Sponsors.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
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AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
SELECTED DEALER
Dean Witter Reynolds Inc., Two World Trade Center--59th Floor,
New York, NY 10048, is a selected dealer for the Portfolio.
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, P.O. Box 5187, Bowling Green Station, New York, New
York 10274-5187, is the Trustee. It is supervised by the Federal Deposit
Insurance Corporation, the Board of Governors of the Federal Reserve System and
New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. Any cash made available
by you to the Sponsors before the settlement date for those units may be used in
the Sponsors' businesses to the extent permitted by federal law and may benefit
the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on stocks in the
Portfolio which were acquired from underwriting syndicates of which it was a
member.
During the initial offering period, the Sponsors also may realize profits or
sustain losses on units they hold due to fluctuations in price per unit. The
Sponsors experienced a loss of $262.35 on the initial deposit of the Securities.
Any profit or loss to the Portfolio will be effected by the receipt of
applicable sales charges and a gain or loss on subsequent deposits of
securities. In maintaining a secondary market, 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 or redeem them.
PUBLIC DISTRIBUTION
During the initial offering period, units will be distributed to the public by
the Sponsors and 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.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
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Prudential Securities Incorporated, which will participate only in rollover
sales, will receive a preferred dealer concession of $13.00 per 1,000 units of
this Portfolio.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
reporting of personal securities transactions by its employees with access to
information on portfolio transactions. The goal of the code is to prevent fraud,
deception or misconduct against the Portfolio and to provide reasonable
standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Portfolio. The Year 2000 Problem may adversely affect the issuers of the
securities contained in the Portfolio, but we cannot predict whether any impact
will be material to the Portfolio as a whole.
ADVERTISING AND SALES MATERIAL
Advertising and sales literature may contain cumulative past performance of the
hypothetical Strategy, either in dollars or average annualized returns (changes
in market prices with dividends reinvested at year ends) for various periods,
compared to the Standard & Poor's 500 Index, the S&P Industrial Index and the
Dow Jones Industrial Average. Strategy figures reflect deduction of Portfolio
sales charges and estimated expenses. Sales material may also illustrate
hypothetical Strategy results of regular accumulations and withdrawals of
specified sums and discuss possible tax savings.
This contrarian Strategy is based on principles that time in the market is more
important than timing the market, the stocks to buy are the ones others are
selling, and dividends can be an important part of total return. It seeks to
identify stocks that may be undervalued or out of favor. While indexing attempts
to mirror market trends, the Portfolio's screening process selects stocks from a
major index for a combination of value, capital appreciation potential and
current dividend income. Because of this disciplined screening process,
investors are relieved of making individual buy and sell decisions.
Sales material may discuss developing a long-term financial plan, working with
your financial professional; the nature and risks of various investment
strategies and Defined Asset Funds that could help you toward your financial
goals and the importance of discipline; how securities are selected for these
funds, how the funds are created and operated, features such as convenience and
costs, and options including automatic reinvestment, rollover, exchanges and
redemption. It may also summarize some similarities and differences with mutual
funds and discuss the philosophy of spending time in the market rather than
trying to time the market, including probabilities of negative returns over
various holding periods.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or
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subject to special rules. You should consult your own tax adviser about your
particular circumstances.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Portfolio will not be taxed as a corporation for federal income tax
purposes, and you will be considered to own directly your share of each Security
in the Portfolio. You will be considered to receive your share of any dividends
paid when those dividends are received by the Portfolio. Income from dividends
will be taxed at ordinary income rates. If you are a corporate investor, you may
be eligible for the dividends received deduction if you satisfy the applicable
holding period and other requirements. You should consult your tax adviser in
this regard.
GAIN OR LOSS UPON DISPOSITION
You will generally recognize gain or loss when you dispose of your units for
cash (by sale or redemption) when you exchange your units for units of another
Defined Asset Fund or when the Trustee disposes of the Securities in the
Portfolio. You generally will not recognize gain or loss on an 'in-kind'
distribution to you of your proportional share of the Portfolio Securities,
whether it is in redemption of your units or upon termination of the Portfolio.
Your holding period for the distributed Securities will include your holding
period in your units.
If you elect to roll over your investment in the Portfolio, you will recognize
gain or loss only with respect to your share of those Securities that are not
rolled over into the new portfolio. You will not recognize gain or loss with
respect to your share of those Securities that are rolled over and your basis in
those Securities will remain the same as before the rollover.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain or loss from the Portfolio will be long-term if you are considered
to have held your investment that produces the gain or loss for more than one
year and short-term otherwise. Because the deductibility of capital losses is
subject to limitations, you may not be able to deduct all of your capital
losses. You should consult your tax adviser in this regard.
YOUR TAX BASIS IN THE SECURITIES
Your aggregate tax basis in units that you have purchased for cash will be equal
to the cost of the units, including the sales fee. Your aggregate tax basis in
units that you hold as a result of a rollover from an earlier portfolio will
equal your basis in the Securities that were rolled over from the previous
portfolio plus the proceeds (other than proceeds that were paid to you) from the
sale of Securities from the portfolio which were not rolled over. You should not
increase your basis in your units by deferred sales charges or organizational
expenses. The tax reporting form and annual statements you receive will be based
on the net amounts paid to you, from which these expenses will already have been
deducted. Your basis for Securities distributed to you will be the same as the
portion of your basis in your units that is attributable to the distributed
Securities.
EXPENSES
If you are an individual who itemizes deductions, you may deduct your share of
Portfolio expenses, but only to the extent that
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your share of the expenses, together with your other miscellaneous deductions,
exceeds 2% of your adjusted gross income. Your ability to deduct Portfolio
expenses will be limited further if your adjusted gross income exceeds a
specified amount (currently, $126,600 or $63,300 for a married person filing
separately).
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Portfolio will
not be taxed as a corporation, and the income of the Portfolio will be treated
as the income of the investors in the same manner as for federal income tax
purposes.
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will be subject to 30% withholding tax (or a lower
applicable treaty rate) on your share of dividend income. You should consult
your tax adviser about the possible application of federal, state and local, and
foreign taxes.
RETIREMENT PLANS
You may wish to purchase units for an Individual Retirement Account ('IRAs') or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from these types
of plans are generally treated as ordinary income but may, in some cases, be
eligible for tax-deferred rollover treatment. You should consult your attorney
or tax adviser about the specific tax rules relating to these plans. These plans
are offered by brokerage firms, including the Sponsors of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Portfolio by
calling the Trustee. The supplemental information includes more detailed risk
disclosure and general information about the structure and operation of the
Portfolio. The supplemental information is also available from the SEC.
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REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Select Ten Portfolio
1999 Series 5, Defined Asset Funds (the 'Portfolio'):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Portfolio as of November 22, 1999.
This financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Portfolio as of November
22, 1999 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, NY
November 22, 1999
STATEMENT OF CONDITION AS OF NOVEMBER 22, 1999
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 498,023.15
--------------------
Total.........................................$ 498,023.15
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsors for organization
expenses(2).......................................$ 311.89
--------------------
Subtotal 311.89
--------------------
Interest of Holders of 503,053 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)...................................$ 503,047.97
Gross underwriting commissions and organization
expenses(5)(2)....................................... (5,336.71)
--------------------
Subtotal 497,711.26
--------------------
Total.........................................$ 498,023.15
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio determined by the Trustee at 4:00 p.m., Eastern time on
November 19, 1999. The contracts to purchase securities are collateralized by an
irrevocable letter of credit which has been issued by DG Bank, New York Branch,
in the amount of $498,285.50 and deposited with the Trustee. The amount of the
letter of credit includes $498,023.15 for the purchase of securities.
(2) A portion of the Unit 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 $0.62 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 will be satisfied. If the actual organization costs
exceed the estimated amount shown above, the Sponsors will pay for this excess
amount.
(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 to maintain the $999.99 per 1,000 Units offering price only for that
day. The Unit Price on any subsequent business day will vary.
(4) Aggregate Unit Price computed on the basis of the value of the
underlying securities at 4:00 p.m., Eastern time on November 19, 1999.
(5) Assumes the maximum initial sales fee per 1,000 units of 1.00% of
the Unit Price. A deferred sales charge of $1.75 per 1,000 Units is payable on
February 1, 2000 and thereafter on the 1st day of each month through November 1,
2000. Distributions will be made to an account maintained by the Trustee from
which the deferred sales fee obligation of the investors to the Sponsors will be
satisfied. If units are redeemed prior to November 1, 2000, the remaining
portion of the distribution applicable to such units will be transferred to such
account on the redemption date.
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<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? EQUITY INVESTOR FUND
Request the most SELECT TEN PORTFOLIO
recent free Information 1999 SERIES 5
Supplement that gives more (A Unit Investment Trust)
details about the Fund, ---------------------------------------
by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
333-90155) and
o Investment Company Act of 1940 (file
no. 811-3044).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
100452RR--11/99
