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DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
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EQUITY INVESTOR FUND
FOCUS SERIES
BIOTECHNOLOGY PORTFOLIO 2000 SERIES A
(A UNIT INVESTMENT TRUST)
- DESIGNED FOR CAPITAL APPRECIATION
- CONVENIENT WAY TO PARTICIPATE IN THE BIOTECHNOLOGY
SECTOR
SPONSOR: -----------------------------------------------------
MERRILL LYNCH, The Securities and Exchange Commission has not
PIERCE, FENNER & SMITH approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated March 2, 2000.
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Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- 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:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- 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.
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CONTENTS
PAGE
--
Risk/Return Summary.................. 3
What You Can Expect From Your
Investment......................... 6
Income............................. 6
Records and Reports................ 6
The Risks You Face................... 6
Concentration Risk................. 6
Litigation and Legislation Risks... 6
Selling or Exchanging Units.......... 7
Sponsors' Secondary Market......... 7
Selling Units to the Trustee....... 7
Rollover/Exchange Option........... 8
How The Fund Works................... 8
Pricing............................ 8
Evaluations........................ 9
Income............................. 9
Expenses........................... 10
Portfolio Changes.................. 11
Portfolio Termination.............. 11
No Certificates.................... 11
Trust Indenture.................... 11
Legal Opinion...................... 12
Auditors........................... 12
Sponsors........................... 12
Trustee............................ 13
Underwriters' and Sponsors'
Profits.......................... 13
Public Distribution................ 13
Code of Ethics..................... 14
Year 2000 Issues................... 14
Advertising and Sales Literature... 14
Taxes................................ 15
Supplemental Information............. 17
Financial Statements................. 18
Report of Independent Accountants.. 18
Statement of Condition............. 18
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RISK/RETURN SUMMARY
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1. WHAT IS THE PORTFOLIO'S OBJECTIVE?
The objective of this Defined Fund is
capital appreciation by investing for a
period of two years in a fixed portfolio
of stocks in the biotechnology sector of
the healthcare industry.
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
income distributions, if any.
2. WHAT IS THE PORTFOLIO'S INVESTMENT
STRATEGY?
The Portfolio contains 19 stocks in the
biotechnology sector of the healthcare
industry. Analysts from the Agent for the
Sponsors consider the stocks to be among
the most attractive in the biotechnology
sector. It is believed that these
companies possess the greatest potential
for new product development. The stocks
were also screened for market
capitalization and liquidity.
We believe a current opportunity exists
with biotechnology stocks because of:
- high levels of development of new
products and applications;
- the recently expedited FDA process;
- the importance of Biotechnology products
in health care;
- the seasoning of companies in this
industry;
- the resistance of demand to economic
downturns;
- the advantages over potential generic
competition;
- an aging population; and
- inter-company efforts to produce, develop
and market new drugs.
The Portfolio plans to hold the stocks in
the Portfolio for about two years. At the
end of approximately two years, we will
liquidate the Portfolio and apply a
similar Strategy to select a new
portfolio, if available.
3. WHAT INDUSTRY SECTORS ARE REPRESENTED IN
THE PORTFOLIO?
Based upon the principal business of each
issuer and current market values, the
Portfolio represents the following
industry group:
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- Biotechnology 100%
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4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO.
THIS CAN HAPPEN FOR VARIOUS REASONS, INCLUDING:
- Biotechnology stock prices can be extremely
volatile and therefore the Portfolio may be
considered speculative. Investors should assess
their risk tolerance and investment time horizon
before purchasing units of this Portfolio.
- Share prices may decline during the life of the
Portfolio.
- Because the Portfolio is concentrated in
biotechnology stocks, adverse developments in
this industry may affect the value of your units.
These risks are discussed later in the prospectus
under Concentration Risk.
- The Portfolio may continue to purchase or hold
the stocks originally selected even though their
market value may have changed.
- 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 capital appreciation. You will
benefit from a professionally selected and
supervised portfolio. Because this Portfolio
focuses on one industry sector, it should be
considered as a vehicle for investing a portion
of your assets and not as a complete equity
investment program.
The Portfolio is NOT appropriate for you if you
are unwilling to take the increased risk involved
with an aggressive growth equity investment or if
you are seeking preservation of capital or
current income.
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3
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Defined Portfolio
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Equity Investor Fund
Focus Series
Biotechnology Portfolio 2000 Series A
Defined Asset Funds
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PRICE
PER SHARE COST
TICKER PERCENTAGE TO PORTFOLIO TO PORTFOLIO (2)
NAME OF ISSUER SYMBOL OF PORTFOLIO (1) IN U.S. DOLLAR IN U.S. DOLLAR
<S> <C> <C> <C> <C>
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1. Abgenix, Inc. ABGX 2.60% $ 349.6250 $ 10,488.75
2. Affymetrix, Inc. AFFX 5.24 302.2500 21,157.50
3. Amgen, Inc. AMGN 7.90 65.0625 31,880.63
4. Ares-Serono Group*+** AREB SW** 8.11 3,272.9256 32,729.26
5. Biogen, Inc. BGEN 7.91 110.0625 31,918.13
6. Chiron Corporation CHIR 6.44 65.0000 26,000.00
7. CV Therapeutics, Inc. CVTX 2.83 57.0000 11,400.00
8. Genentech, Inc. DNA 7.91 212.8750 31,931.25
9. Genzyme Corporation GENZ 5.80 60.0000 23,400.00
10. Human Genome Sciences, Inc. HGSI 5.02 225.2500 20,272.50
11. IDEC Pharmaceuticals
Corporation IDPH 6.91 146.8125 27,894.38
12. ImClone Systems, Inc. IMCL 3.10 139.0781 12,517.03
13. Immunex Corporation IMNX 5.97 219.0000 24,090.00
14. Immunomedics, Inc. IMMU 4.08 32.2500 16,447.50
15. Inhale Therapeutic Systems,
Inc. INHL 4.06 102.2500 16,360.00
16. MedImmune, Inc. MEDI 7.16 206.3125 28,883.75
17. Regeneron Pharmaceuticals, Inc. REGN 2.91 53.4375 11,756.25
18. Teva Pharmaceutical Industries
Limited*+ TEVA 2.98 44.5000 12,015.00
19. Vertex Pharmaceuticals, Inc. VRTX 3.07 82.5625 12,384.38
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100.00% $403,526.31
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(1) Based on Cost to Portfolio.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on March 1, 2000, the business day prior to the initial date
of deposit. The value of the securities on any subsequent business day will
vary.
+ These issuers are foreign corporations; dividends, if any, may be subject to
withholding taxes.
* These stocks currently pay dividends.
** This security is listed on Zurich Stock Exchange and quoted in the Swiss
Franc.
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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.
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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.
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RISK/RETURN SUMMARY (CONTINUED)
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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
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Trustee's Fee .091% $ 0.90
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.071% $ 0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
.250% $ 2.48
Creation and
Development Fee
.051% $ 0.50
Other Operating Expenses
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.463% $ 4.58
TOTAL
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The Creation and Development Fee (estimated
$0.00248 per unit) is an annual fee that
compensates the Sponsors for the creation and
development of the Portfolio and is computed
based on the Portfolio's average daily net asset
value through the date of collection. This fee
historically had been included in the sales fee.
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ORGANIZATION COSTS per 1,000 units $2.03
(deducted from Portfolio assets at
the close of the initial offering
period)
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INVESTOR FEES
4.00%
Maximum Sales Fee (Load) during the
initial offering period on new
purchases (as a percentage of $1,000
invested)
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In the secondary market, this percentage will
vary depending on unit price.
You will pay an up-front sales fee of
approximately 1.00%. In addition, six monthly
deferred sales charges of $2.50 per 1,000 units
($15.00 annually) will be deducted from the
Portfolio's net asset value each year of the
Portfolio's two-year life (September 1, 2000
through February 1, 2001 and March 1, 2001
through August 1, 2001).
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:
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1 Year 3 Years 5 Years 10 Years
$319 $756 $1,219 $2,486
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The aggregate fees and expenses will not
exceed the applicable NASD limit which is
6.25% of the initial public offering
price.
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7. 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 if the
issuer no longer meets the selection
criteria or under certain other limited
circumstances.
8. HOW DO I BUY UNITS?
You can buy units from any of the
Sponsors and other broker-dealers. The
Sponsors are listed later in this
prospectus. Some banks may offer units
for sale through special arrangements
with the Sponsors, although certain legal
restrictions may apply. Employees of
certain Sponsors and Sponsor affiliates
and non-employee directors of certain of
the Sponsors may purchase Units at a
reduced sales charge.
The minimum investment is $250.
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UNIT PRICE PER 1,000 UNITS $999.88
(as of March 1, 2000)
Unit price is based on the net asset
value of the Portfolio plus the up-front
sales fee.
The Unit price includes the estimated
organization costs of $2.03 per 1,000
units, 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.
9. HOW DO I SELL UNITS?
You may sell your units at any time to
the Sponsors 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.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
Any dividend income that is received by
the Portfolio, it will be distributed to
investors on the 25th of March, 2001 if
they are record holders on the 10th of
that month. 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 even though 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.
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You may choose to reinvest any
distributions into additional units of
the Portfolio. You will pay only the
deferred sales charge remaining at the
time of reinvestment. Unless you choose
reinvestment, you will receive your
distribution 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.
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WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME
Any dividend income that is received by the Portfolio will be distributed to
investors on the 25th of March, 2001, if they are record holders on the 10th of
that month.
There can be no assurance that any dividends will be declared or paid.
RECORDS AND REPORTS
You will receive:
- - a notice from the Trustee if new equity securities are deposited in exchange
or substitution for equity securities originally deposited;
- - annual reports on Portfolio activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF INCOME RECEIVED. 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
CONCENTRATION RISK
When stocks in a particular industry make up 25% or more of the Portfolio, it is
said to be "concentrated" in that industry, which makes the Portfolio less
diversified.
Here is what you should know about the Portfolio's concentration in the
biotechnology sector of the healthcare industry.
- Biotechnology companies need to price drugs to cover costs. Increased
competition, managed care, larger provider networks and a planned medicare
program may make it difficult to raise prices, and in fact, may result in
price discounting.
- Biotechnology companies are regulated by the Food and Drug Administration.
Before any drug or medical device can be sold, it must receive FDA approval.
The process to obtain FDA approval has historically been long and costly,
and it is becoming increasingly difficult to recoup these costs.
- Biotechnology companies face the risk of large product liability suits and
consequently must carry expensive liability insurance.
- The biotechnology industry is an emerging growth industry, and therefore
biotechnology companies may be thinly capitalized and more volatile than
companies with greater capitalization.
- Biotechnology companies generally retain earnings to finance the company's
expansion, and as a result no dividends may be paid. Additional capital may
be required to market new products on a commercial basis.
- Biotechnology companies may be dependent for their revenues on only a few
products, and may depend on their competitors to produce and market their
products. These companies are therefore susceptible to product obsolescence,
a common problem in a rapidly developing area like biotechnology.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Portfolio.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on their net asset value.
Your
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net asset value is calculated each business day by:
- ADDING the value of the Portfolio Securities, cash and any other Portfolio
assets;
- 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
- 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.
If the Portfolio does not have cash available to pay you for the units you are
selling we 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
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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:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- 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
- 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 a new Biotechnology Portfolio if one is available.
If you notify your financial adviser by March 6, 2002, 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
Biotechnology Portfolio. If you decide not to roll over your proceeds, you will
receive a cash distribution (or, if you are eligible and you so choose, an
in-kind distribution) after the Portfolio terminates.
The Portfolio will terminate by April 10, 2002. However, the Sponsors may extend
the termination date for a period no longer than 30 days without notice to Unit
holders. 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 Series 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.
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:
- cost of initial preparation of legal documents;
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- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
The deferred sales fee is generally a monthly charge of $2.50 per 1,000 units
and is accrued in six monthly installments each year of the Portfolio's life.
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. (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). If
you redeem or sell your units before March 1, 2001, you will pay only the
balance of any deferred sales fee remaining for the first year. If you redeem or
sell your units on or after March 1, 2001 you will pay the remaining balance of
the deferred sales fee for the second year. 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
- - The annual income per unit, if any, 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 sales of securities.
There is no assurance that dividends on the securities will be declared or
paid.
- - Each unit receives an equal share of any 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 to pay any material liability. These accounts
do not bear interest.
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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:
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Portfolio and other legal fees and
expenses;
- expenses for keeping the Portfolio's registration statement current; and
- 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. Legal, typesetting,
electronic filing and regulatory filing fees and expenses associated with
updating the Portfolio's registration statement yearly are also now 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 Sponsors will receive an annual Creation and Development Fee of .25% of the
Portfolio's average daily net asset value through the date of collection. This
fee, which has historically been included in the gross sales fee, compensates
the Sponsors for the creation and development of the Portfolio's objective and
policies and portfolio composition and size, selection of service providers and
information services. No portion of the Creation and Development Fee is applied
to the payment of distribution expenses or as compensation for sales efforts.
The Trustee's and Sponsors' fees may be adjusted for inflation without
investors' approval.
The maximum sales fee is 4.00%. If you hold units in certain eligible accounts
offered by the Sponsors, you will pay no sales fee. Employees and non-employee
directors of the Sponsors may be charged a reduced sales fee of no less than
$5.00 per 1,000 Units. If your aggregate sales fee is less than the deferred
sales fee, you will be given additional units which will decrease the effective
maximum sales fee to the amount shown below.
The maximum sales fee is effectively reduced if you invest as follows:
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YOUR MAXIMUM SALES
IF YOU INVEST: FEE WILL BE:
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Less than $50,000 4.00%
$50,000 to $99,999 3.75%
$100,000 to $249,999 3.25%
$250,000 to $999,999 3.00%
$1,000,000 or more 2.50%
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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 will redeem units, which may affect the
composition of the portfolio.
We decide whether to offer for sale units that we acquire in the secondary
market after reviewing:
- diversity of the Portfolio;
- size of the Portfolio relative to its original size;
- ratio of Portfolio expenses to income; and
- 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 from or sell to
another Defined Asset Fund at the stock's closing sale price (without any
brokerage commissions).
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.
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:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
11
<PAGE>
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:
- it fails to perform its duties;
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities; or
- 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:
- remove it and appoint a replacement Sponsor;
- liquidate the Portfolio; or
- 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 Sponsor, has given an opinion that the units are validly
issued.
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
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
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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, Unit Trust Department, 4 New York Plaza--6th Floor,
New York, New York 10004, 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
The Sponsors receive sales fees when it sells units. Any cash made available by
you to the Sponsors before the settlement date for those units may be used in
the Sponsors' business to the extent permitted by federal law and may benefit
the Sponsors.
Each Sponsor may realize profits or sustain losses on stocks in the Portfolio
which were acquired from underwriting syndicates of which it was a member.
The Sponsors will receive an annual Creation and Development Fee of .25% of the
Portfolio's average daily net asset value through the date of collection. This
fee, which has historically been included in the gross sales fee, compensates
the Sponsors for the creation and development of the Portfolio's objective and
policies and portfolio composition and size, selection of service providers and
information services. No portion of the Creation and Development Fee is applied
to the payment of distribution expenses or as compensation for sales efforts.
During the initial offering period, the Sponsors may realize profits or sustain
losses on units it holds due to fluctuations in the price per unit. The Sponsors
experienced a profit of $400.08 on the initial deposit of the Securities. Any
profit or loss to the Portfolio will be effected by the receipt of applicable
sales fees 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 it
buys units and the prices at which it resells or redeems 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.
Dealers will be entitled to the concession stated below on Units sold or
redeemed during the first year. On Units held in the second year, the 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).
<TABLE>
<CAPTION>
DEALER CONCESSION AS
A % OF PUBLIC
AMOUNT PURCHASED OFFERING PRICE
---------------- --------------------
<C> <S> <C>
Less than $50,000 2.00%
$50,000 to $99,999 1.80%
$100,000 to $249,999 1.45%
$250,000 to $999,999 1.25%
$1,000,000 and over 0.50%
</TABLE>
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<PAGE>
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.
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"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the securities contained in the Portfolio. We
cannot predict whether any impact will be material to the Portfolio as a whole.
ADVERTISING AND SALES LITERATURE
Advertising and sales literature may include brief descriptions of the
businesses and products of the companies in the Portfolio. It may describe some
of the history and developments in the biotechnology industry. It may also
discuss Institutional Investors' ranking of Merrill Lynch equity research based
on the total number of All-American Research Team Analysts and the scope of
research coverage.
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 available for certain types of funds 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.
Advertising and sales literature may state past total return performance of the
Portfolio for various periods. Returns are computed by taking price changes for
the period plus income reinvested, divided by the initial public offering price,
and reflecting deduction of maximum Portfolio sales charges and expenses. For
periods of more than a year, average annualized returns shall be stated, which
may be accompanied with no greater prominence by statement of cumulatiave total
returns. Returns without reflecting deduction of sales charges or only of
deferred sales charges may also be stated with no greater prominence than total
returns reflecting deduction of all sales charges when the different basis of
computation is disclosed.
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<PAGE>
Sales literature and articles may state research opinions on the economy and
industry sectors and include a list of funds generally appropriate for pursuing
these recommendations.
TAXES
The following discussion summarizes the material 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 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 the Securities that produce 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
15
<PAGE>
portfolio will equal your basis in 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 that were not rolled over. You should not increase
your basis in your units by deferred sales fees, organizational expenses or by
any portion of the Creation and Development Fee. The tax reporting form and
annual statement 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 (including the appropriate portion of the Creation and
Development Fee), but only to the extent that 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 $128,950
($64,475 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 TAXES
Dividends paid with respect to any foreign Securities in the Portfolio will
generally be subject to foreign withholding taxes. You will be considered to
receive the entire amount of your share of these dividends, including your share
of foreign taxes withheld. You may be eligible for a credit or a deduction for
your share of these taxes to reduce your U.S. tax liability, subject to various
requirements and limitations. You should consult your tax adviser in this
regard.
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 dividends received by the Portfolio.
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. However, all distributions from
these types of plans are generally treated as ordinary income, subject to
tax-deferred rollover treatment in some cases. 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 Sponsor of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
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<PAGE>
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. You may
also obtain information about the issuers of the stocks in this Portfolio from
the SEC, because each company is a reporting company.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Focus Series,
Biotechnology Portfolio 2000 Series A, 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 March 2, 2000. 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 March 2,
2000 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, NY
March 2, 2000
STATEMENT OF CONDITION AS OF MARCH 2, 2000
TRUST PROPERTY
<TABLE>
<S> <C>
Investments--Contracts to purchase Securities(1)......... $ 403,526.31
--------------------
Total............................................ $ 403,526.31
====================
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsor for organization
expenses(2)......................................... $ 827.43
--------------------
Subtotal 827.43
--------------------
Interest of Holders of 407,602 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)................................... $ 407,553.09
Gross underwriting commissions and organization
expenses(5)(2)....................................... (4,854.21)
--------------------
Subtotal 402,698.88
--------------------
Total............................................ $ 403,526.31
====================
</TABLE>
- ------------
(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 March
1, 2000. 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 $403,126.23 and deposited with the Trustee. The amount of the
letter of credit includes $403,526.31 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 $2.03 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 expense obligation
of the investors will be satisfied. If the actual organization costs exceed the
estimated aggregate 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 $999.88 per 1,000 Units offering price only for that
day. The Unit 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 March 1, 2000.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00% of
the Unit Price. A deferred sales charge of $2.50 per 1,000 Units is payable on
September 1, 2000 and thereafter on the 1st day of each month through February
1, 2001 and monthly March 1, 2001 through August 1, 2001. Distributions will be
made to an account maintained by the Trustee from which the deferred sales
charge obligation of the investors to the Sponsor will be satisfied.
18
<PAGE>
Defined
Asset Funds
- -SM-
<TABLE>
<S> <C>
HAVE QUESTIONS ? EQUITY INVESTOR FUND
Request the most FOCUS SERIES
recent free Information BIOTECHNOLOGY PORTFOLIO 2000 SERIES A
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:
- Securities Act of 1933 (file no.
333-30434) and
- 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.
100642RR--3/00
</TABLE>
